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speedybure (< 20)

Why The Swine May Be Good For Mine



April 29, 2009 – Comments (0) | RELATED TICKERS: SLV , GLD , PAAS

Let me Clarify I think this is a terrible thing especially for those in Mexico who are unable to find or afford such things as Tamiflu. This post is merely an observation of this epidemics potenial effects in the investment world. 

This may be obvious to most of you who own physical or mining equities (as long as the majority is not concentrated in Mexico, that there is a fair chance of silver rising more than it would have otherwise.

Why would that be? 

1) Some mines will have to shut down for an indefinite period of time, depending on the duration and amplitude(going forward) of this epidemic. 

2) To the degree the former happens, supply will be cut off thus furthering the supply -demand dissconnect.

3) Silver has already seen a substancial decline in supplies due to the economic slowdown and this would only add to the case for silver. This slowdown is due to the fact the majority of silver is mined along/is a bi-product of base metals.

4) Of course, Silver demand is idle at this point in time, but when the BRIC countries resume double digit growth(Goldman Sachs recently updated thier GDP growth for China next year to a bit over 10%) and waves of inflation plague the U.S and Great Britain, Silver should skyrocket. Remember the historical Gold to Silver ratio is 55:1 (since the closing of the gold window) but is still hovering bewteen 70:1 - 73:1.

-The Swine Epidemic just adds to my very bullish case on silver (those who have read my previous posts know this). On the other side of the coin, this impact will be negative which may be the case for Pan-American Silver (PAAS) and possibly some others.

- Please no ridiculing replies, becuase I'm just trying to state a potential impact and hope this ends as soon as possible. 


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