Hang on to your hats folks, Platinum is going to take us for one...

Hang on to your hats folks, Platinum is going to take us for one hell of a ride.

While USA hyperinflation takes off, people will flee to gold in unprecedented levels that will surely surpass the huge demand for the precious metal in the financial crisis today. There is talk out there in the market of Gold reaching levels between $5,000 and $10,000 an ounce.

Where then does this leave Platinum and Silver? Both Platinum and Silver are also precious metals and even more so than Gold. Silver is rarer than Gold and Platinum is even rarer than Silver. When the US dollar collapses, there are indications relative to Gold that silver could appreciate by as much as 40 times that of its current price it is currently so undervalued. Where to for Platinum then?

At the moment, Platinum is being held back because of the auto-industry demand issues distracting them from its scarcity and precious qualities not unlike Gold but further enhanced than its non-corrosive, non-tarnishing and heaver metal properties. It weighs more than gold and silver and melts at a much higher temperature and has very unique qualities with corrosion to why it is used in industry. Despite just bullion, it has precious qualities to the whole world. It has real worth. Platinum is a monetary commodity, a precious one.

However when gold begins to go through the roof due to its history in such times and people rush to throw everything they have in to a safe haven such as gold and the price substantially rises, people will look to other precious metals of value.

Now this is where the joker comes out of the pack. Platinum is so scarce so rare so tight on the supply side that any move to Platinum in a collapsing dollar scenario would send the platinum price beyond the moon and probably orbiting Saturn’s rings or something – it will be spectacular.

What occurred with the Great Depression, Gold demand actually increased in the years after the crash and during the industry recovery! As people found wealth, and industry returned and production increased people with money placed it in precious metals and in particular gold as a safe haven. So the demand for gold was even higher in the years after.

So let’s suppose that people turn to Platinum in a fashion like Gold during the dollar collapse, and let’s not forget that if you placed all the platinum ever mined in the world in a box, it would be not more that 25 foot square. And let’s suppose as in the recovery stages of the US dollar collapse that industry needs to buy more platinum as demand for industry comes back on-line despite the platinum price through the roof due to previous bullion safe haven status. And lets presume that current producers are just starting to get their platinum mines back up and running (it takes 6 months to get one going after it shuts down as that is how long it takes to smelter platinum from start to usable product). And let’s be aware that if mining of platinum stopped today there would only be 1 years supply in the world, compared to 25 years for gold.

What you have is platinum at $20,000 - $50,000 an oz. Don’t think it will happen? The fact that platinum is a precious metal haven from inflation, used highly in industry and is rarer than hen’s teeth at time when producers are shutting down will see something pretty spectacular occur in my view. People are so focused on auto-industry slow down demand for platinum in the early stages of this collapse they can’t see the wood for the trees.

Platinum is used in industry and as a precious metal, not just a precious metal. The demand for it in any recovery will be 2,3,20, 50 fold with lower production.
Yep, I think I’ll keep my Platinum Australia shares for a little longer. I’ll sell you mine when they hit $100 a share.

By the way folks, here is an interesting video on what's happening next year.

http://au.youtube.com/watch?v=6moe-mRDkDs

Cheers.

InTheGroove.