think it won't happen?, page-65

"In a chestnut shell: Silver has become one of the strongest performing metals of 2010. To illustrate just how strong: The Grand Poobah of precious metals, Gold, soared 26% in the last year. That's grapes compared to silver's 70%-plus rally to a 30-year high over the same period.

And, according to the mainstream experts, the wind of " fundamentals" is firmly at silver's back. The way they see it, there are three main factors that will contribute to the white metal's red hot winning streak:

1) Technological use: "Silver's... increasing demand for technology has helped drive prices higher. All those new TV's we're buying; every one of them has a unit of silver in it for reflective properties." (Financial Post)

2) Necessity premium: "Silver demand is largely price inelastic -- people will always buy it regardless of price." (Associated Press)

3) Demand outstrips supply: "The world supply of silver is being rapidly consumed... [leading to] the evaporation of stockpiles." (Commodity Online)

Sound familiar?

It absolutely should. See, in his brand-new December 15, 2010 Elliott Wave Theorist, EWI president Bob Prechter recalls how he "read about these" exact same bullish fundamentals in silver's DNA over 30 years ago -- in a famous 1982 book. In it, the author cited these "four primary causes for a renewed silver boom" --

1) "The electronics industry has exploded with new technology..."

2) "The soaring demands for silver are price inelastic."

3) "While demands for silver are soaring, market supplies are declining."

4) "The US Treasury" has stopped selling silver to "fill the gap between production and consumption."

As Bob Prechter observes:

"Every one of these statements was -- and still is -- correct. If markets follow the rules of mechanics, silver would have risen to the moon for the stated reasons. But silver had already peaked at $50 per ounce two years prior to the book's publication. It did not bottom until 13 years later after falling an incredible 93% in value..."

The question is -- will silver's history repeat itself now?"


http://elliottwave.com/freeupdates/archives/2010/12/16/Silver-Bulls-Silver-Bulls-It-s-Celebrating-Time-In-Precious-Metals.aspx