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Gold/Mining/Energy : Pacific Rim Mining V.PFG
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To: Bill Jackson who wrote (13939)10/20/2000 2:20:08 PM
From: Claude Cormier  Read Replies (1) of 14627
 
Bill,

First silver is not going down. It is in a rather stable near $5 which is well up from its low at $3.25 in 1993.

Second, I agree that digital photography is increasing. But uses of silver is still growing at a 5% rate. The largest segment of this fabrication demand is comsumer film and takes 165 millions ounces a year. This is mostly Europe, Japan and the US. Asia is in for only 10M ounces or so. The costs of digital cameras will remain high for years...so Asia is buying those cheap film cameras. Silver consumption is expected to increase seriously from that source.

Silver goes down because there is enough supply coming on the market...for now. The question is where that supply is coming from. There are 3 sources, mine production, scrap and inventories. The first two sources fall short of total annual demand. So the deficit is filled by above ground inventories.

The theory is that these inventories available at cuirrent prices are nearly depleted. if this is true, silver prices will move higher. Now, this theory may be false despite what many experts say. But you have to prove it to me. I think it make sense as there is no other explanation for the current prices not going up despite a supply/demand shortfall that is still more than 100 millions ounces a year.

CC
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