Nuclear Explosion in Price of Silver

November 14, 2004

I am extremely pleased to announce that I will be joining several mining industry professionals for an extensive 7 day trip from the 21st through the 28th of November to China's Northern silver mining districts.

Many of my readers have been patiently waiting for me to give some specific direction as to how I think they can profit from the privatization of silver mining assets in China. As I have been doing more and more research it has become obvious to me that China is committed to developing the supply side of their domestic silver markets by encouraging foreign partners to bring much needed capital and western geological methods of exploration and development. China does not wish to be reliant on other countries for silver or other base metals which they desperately need to support their rapid industrial revolution. Having spoken with many high-ranking Chinese officials it is my belief that China's insatiable thirst for silver will spur a Silver Rush similar to what we witnessed in the gold markets throughout North American history as miners realize the vast richness of China's silver landscape.

I believe that Soros, Buffett and Gates, all reputedly large investors in the silver markets, all understand the unfolding phenomenon that China's industrial appetite is going to cause on the world's silver supply. We all know that the US dollar is continuing to breakdown and that without demand for that paper currency it is doomed for failure. China offers hope as they continue to accept dollars in exchange for an accelerated industrial revolution, one that cash-starved country desperately needed once the mainland Chinese population started to get a taste of western material goods via the reversion of Hong Kong to Chinese control in 1997. Ever since, there has been domestic pressure for a better life demanded by the Chinese citizens themselves and the US and European banks have been smiling and supporting this much needed infusion of interest on the demand side of the paper money system in order to continue their money game. We all know that Americans have no credit demand left in their wallets. Without China the entire house of cards will collapse for the United States currency. All you need to do is look where Wall Street has been pouring billions of dollars of investment capital, both directly and indirectly, via the fortune 500 companies who also recognize that in order to meet their future earnings expectations they are going to need a major boost and China's the spring board.

Where the opportunity arises for investors is to look beyond the wall that represents the future fortunes for America and Europe's corporate elitists and take advantage of this once in a lifetime investment for yourself. Don't listen to the critics who play the 'made in America' tune because Wall-Mart has already been singing that one while American consumers have been gobbling up the Chinese imported goods they've been lining their shelves with.

In conclusion, China can't possibly compress 1/5th of the world's population into an industrial revolution that may only spawn a period of 20 years compared to America's 70-100 year industrial revolution without driving up the prices of strategic commodities - and none more than silver. And yes, the paper money machine will continue to finance this compressed revolution, and yes the technology and information sharing capabilities today far exceed those that existed when America was experiencing her enormous growth (with a fraction of the population I might add), but the big question is WHERE ARE THE COMMODITIES GOING TO COME FROM to satisfy this compressed industrial revolution. The answer my friends is blowin' in the wind, and that wind will come from mines which today cannot economically produce silver at these low prices but can when the price increases to a point where it is economic to produce the ore. The second area of supply side growth will come from the inevitability of new exploration successes and the modern development and geological advancement of historic silver deposits and it's precisely here where I believe China offers fantastic potential for investors.

The combination of a rapidly declining US dollar causing millions to turn to silver as a store of wealth, China's accelerated industrial revolution gobbling up the world's silver supply (being driven in large part by the desperate need of US and European banks to create a credit need), and China's untapped domestic potential for new exploration and development successes, make the future price of silver look like a pending nuclear explosion compared to any other mineral or metal I am aware of.

November 15, 2004

David Morgan
Stone Investment Group

David Morgan ( is a widely recognized analyst in the precious metals industry; he consults for hedge funds, high net-worth investors, mining companies, depositories and bullion dealers. He is the publisher of The Morgan Report on precious metals, the author of Get the Skinny on Silver Investing, and a featured speaker at investment conferences in North America, Europe and Asia. You can receive a free 30 day trial subscription here

During 1500s the Spaniards had taken 16,000,000 kilograms of silver from Peru.