J P

Limits to Gold and Silver Growth: Supply Having Trouble Meeting Demand

Of course, like all commodities bull markets, this one will probably far overshoot the correct new long-term price for gold and silver. At constant demand, the increased future supply will come from more expensive locations using more expensive processes (though some simply comes from more sophisticated geology allowing the finding of high grade ore in places we simply wouldn't have known to look before.)

The real reason for a bull market in gold and silver right now is not constraint on finding new reserves, but constraint on getting the mines and mills built to process them an bring them onto market... the permitting process, construction and finncing is what, 7 years?

But I think the real root cause is the decline in the dollar. Increased demand is due to people seeking a safer place for their dollars. As they do so, they decrease demand for the dollar, and decrease its relative value, prompting more people to seek a safer place for the dollar, a vicious cycle once it gets going. A lot of that money is going to try to crowd into the tiny gold market, since gold's only really useful purpose is to serve as money.