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Recent Indian Elections Usher in Potential for Unprecedented Silver Demand

Monday, June 2, 2014 14:53

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(Before It's News)

TND Guest Contributor: Nathan McDonald, Sprott Money Blog |

The biggest electoral win in three decades took place in India on May 16th. The Bharatiya Janata Party, led by Narendra Modi swept into power, crushing the opposition.

The importance of this for investors in the precious metals space is significant. Very significant.

The reason for this lies in the campaign promises of the party and their deep interest in solar power. The Bharatiya Janata Party has stated that they plan to harness solar power to enable every home to run at least one light bulb by 2019.

“We look upon solar as having the potential to completely transform the way we look at the energy space”

The ramifications of this are incredible. Above ground inventories of silver are already scarce. Demand is intense and is likely to remain so.

For those of us familiar with the solar and the silver market, we know that this is a deadly combination. The primary component in solar power is silver and the population of India is an estimated 1.27 billion people! To light one light bulb in every home would require an astronomical amount of silver.

About 400 million people in India are currently without power, more than the United States AND Canada combined! Think about this for a moment.

This is likely a pie in the sky goal that the government of India has called for, as this added demand would skyrocket the price of silver, making the project completely uneconomical.

Fortunately for those of us invested in silver, we are well aware of one well established trend, that governments don’t care how uneconomical, or how bogus an idea is. They will pursue that course of action until the walls come crashing down around them and they can proceed no further.

The demand for silver is not only here to stay, it’s going to explode.

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Nathan McDonald writes for Sprott Money Blog, part of Sprott Money Ltd., a leading precious metals dealer selling gold coins, silver coins and bullion bars online and over the phone. As one of Canada’s largest owners of gold and silver bullion, the company’s goal is to facilitate ownership of precious metals no matter how big or small the portfolio.