A pretty picture for Silver demand in industry, better future
By Dr Jeffrrey Lewis
Beyond the typical underlying changes in money supply there are very important elements of demand that continue to push the price of physical silver higher and higher. This is despite the fact that silver has been money for much longer then gold.
One element is the elasticity of demand for silver, particularly in the manufacturing of electronics.
Silver is the best conductor of electricity known to man and even at a current prices, it is very inexpensive for use in consumer electronics.
Silver inelasticity
Silver cannot and will not be replaced by the industrial sector as a conductor of electricity for two reasons: 1) it is relatively inexpensive, and 2) it is the best product for the job.
When a computer manufacturer begins to source components to build its consumer products, the company buys tons of glass, pounds of silicon, and tiny amounts of silver.
When you buy a computer that costs $500-$1000, it contains, at most, 1 gram of silver. Most computers contain fractions of that amount, for a maximum cost of $.60.
Even if silver were to explode in price from $18 per ounce to $180 per ounce (which is a dramatic change) the price of the silver component in a computer would grow from $.60 to $6.
Thus, even after silver explodes in price, the computer manufacturers will still be very much willing to use silver since $6 on a $500 computer is just 1.2% of the price.