Peak Silver? | Ryan Jordan

The idea of peak everything has made a comeback over the last ten years, and it may not be a coincidence that this discussion has paralleled the rising prices of many commodities since 2000. However, thinking about resource scarcity is nothing new. Many alive in the 1970s will remember the book Limits to Growth, which is still debated decades after its initial publication. Whether or not you agree with all aspects of that book’s arguments, you would have to concede that ever-increasing growth rates eventually lead to exponential (and therefore unsustainable) demand. Also, to say that something has “peaked” does not mean that we are going to run out of a certain resource. In many cases it simply means that the growth rate in resource production cannot keep up with population or economic growth.

In terms of precious metals, there has been significant discussion of peak gold, at least judging from the frequency of the term on google (for what this is worth). The term “peak gold” registers a far higher count than “peak silver,” and for good reason. Gold production- at least over the last decade- has failed to post the same 2-4% growth rates which occurred in the late 20th century. Silver mine production, on the other hand, has continued to grow at roughly the same rate (2-4%) as it did in the mid to late 20th centuries. So, at the most literal level, we will have to wait for peak silver. And it is not entirely clear that peak gold is a permanent phenomenon either, at least from a historical perspective. I say this because gold production has gone through periods of stagnation in the past, most recently from the 1930s through the 1950s. At that time, gold production stalled out around the 1000-1400 ton per year area, before resuming an upward move in the late 1950s. (This is according to USGS Gold Statistics).

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via Peak Silver? | Ryan Jordan | FINANCIAL SENSE.


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