An innovative and economical mass production technology for building mobile phones, iPhones, picture-phones, and a host of other hand-held electronics allows components to be fastened both mechanically and electronically to printed circuit boards. The technology permits upwards of 200 contacts for components and connections on a small board, increasing the range of features possible in the device while keeping it extremely small.

This development will, according to The Silver Institute’s World Silver Survey, increase the proportion of silver used in electronic devices in the coming years. Also according to the World Silver Survey, 61.4 million ounces of silver were used for electrical and electronics fabrication in the US in 2008, with world use at 201.7 million ounces.

A more detailed discussion of this development and its impact on the silver market can be found in the 2009 Second Quarter issue of Silver News.

Silver News also reports continued improvement in the use of broad-spectrum antimicrobial properties of ionic silver in wound dressings. Antimicrobial ionic silver kills a broad range of pathogens and is being hailed as a major break through in wound dressings. Although antimicrobial ionic dressings now are used mostly in hospitals, products for over-the-counter sales are coming available.

Additional developments for uses of silver in the medical field are discussed in the 2009 Second Quarter issue of Silver News.

Additionally, Silver News reports on the development of a line of jewelry boxes that promise to keep silver tarnish free for up to 35 years. The boxes are lined with a cloth that absorbs gases that cause silver to tarnish, according to the developer, Wolf Designs, which has been making jewelry cases since 1834.

With gold just off all-time high prices, silver jewelry is gaining in popularity. Supposedly, Pandora Jewelry, which is basically silver jewelry, is now the best-selling jewelry in the world. Pandora’s success comes from the company offering a wide variety of attractive but inexpensive pieces.

Gene Arensberg, precious metals analyst and author of the popular Got Gold Report, reiterates in his recent report his bullishness for silver. Although Arensberg is bullish on gold over the longer term, he sees the potential for more immediate upside action in silver.

Arensberg notes that iShares Silver Trust (SLV), the largest silver ETF, lost no holdings in the last reporting week but gained 42.07 tons the prior week. Further, the trust continues to hold more silver than the original custodian agreement called for, now reporting 8,766.93 tons of the metal. SLV turned out to be much more successful than anticipated. Still, Arensberg recommends that SLV investors convert their shares to physical silver.

He notes that premiums on the common forms of physical silver are “. . . back to normal or near normal and availability seemingly adequate regionally, now might be an excellent time to convert shares of SLV into the real deal physical metal.” Later in the report, Arensberg says, “Call it intuition, or trader’s instinct, or whatever, we believe those planning to convert gold and silver ETFs into physical metal might want to do so with a sense of urgency now (emphasis his), as we doubt that premiums will remain near normal for an extended period. Regardless if gold and silver move substantially higher or lower we expect to see premiums moving higher toward the end of the year and maybe much sooner.

From my perspective, I see premiums on physical silver and gold products about as low as they are going to get.

Increasing Arensberg’s bullishness on silver is his analysis of the large commercials’ positions in the silver futures markets. The LCs have increased their short positions in gold, but have steadily refused to take bigger short positions in silver. See Arensberg’s Got Gold Report for his analysis.

Finally, Arensberg recommends that long-term precious metals holders consider switching from gold to silver because of not only market conditions but also because of the gold/silver ratio, which is hovering in the 70:1 area. This is a recommendation with which I agree.

Historically, silver has outperformed gold (on a percentage basis) in all precious metals bull markets. Now, the silver market is experiencing a genuine shortage that should cause silver to continue its trend of outperforming gold.

In an article posted on resourceinvestor.com, Scott Wright, an analyst for Zeal LLC, makes a case for speculating in small silver mining companies, commonly called “juniors.” In doing so, Wright uncovers one of the compelling reasons why silver production will suffer in the future.

Most small silver mining companies have little cash flow from which to fund exploration programs, or even to evaluate and develop deposits already discovered. Therefore, “junior” silver mining companies regularly sell shares to raise capital.

However, the recent global stock panic saw across-the-board selling of all assets and hit commodities stocks particularly hard. Many silver stocks saw 70%+ declines, with the juniors suffering the worst of the damage by far. With their shares selling at such low prices, the mining companies are not selling shares because doing so would cause them to give up huge percentages of their companies. Until investors regain faith in the junior silver mining companies’ stocks, those companies will be husbanding their resources, seeking first to survive, then to look for new deposits.

Although most silver investors buy silver because of concerns about the dollar, this development makes investing in silver bullion even more attractive. Here’s a link to Wright’s article, which provides other good insights into the silver market.

My April 13 article discussed Gene Arensberg’s theory that a short squeeze was developing in silver. The article further disclosed Arensberg’s evidence. With silver down sixty-five cents (as this is written) from yesterday’s New York COMEX close, one has to ask how a silver short squeeze is developing.

On a day-to-day basis, a short squeeze cannot be proved or disproved, just as one day of falling prices is not evidence of a bear market. Arensberg bases his position on ongoing developments: shrinking silver inventories in COMEX-approved warehouses, reduced large commercial traders’ short positions in silver futures contracts, and a flattening of the contango.

Following developments such as a potential short squeeze can be exciting, but CMI Gold & Silver Inc. clients need to remember their reasons for buying silver (and gold). Most probably, those reasons do not include the buying silver because of someone speculating about the potential development of a short squeeze. (Still, a short squeeze in silver, if one is developing, would be rewarding to silver investors.)

The primary reasons for buying silver and gold are the exploding federal budget deficit, the ever-increasing national debt, the crippling trade deficit and expectations of massive price inflation because of the massive monetary inflation associated with the exploding federal budget deficit. These four problems may be the Four Horsemen of the Apocalypse, but we still have the fact that many states and cites are bankrupt. And, let’s not forget the fragile condition of the world’s banks and the world’s monetary system.

There are lots of valid reasons for buying silver, other than the developing short squeeze in silver, but following the developments around any short squeeze certainly makes for an interesting and sometimes exciting silver market. Here is a link to the April 13 article: Silver squeeze developing? Here is still more information about investing in silver.

A recent mineweb.com article, Is gold the only salvation from this financial Armageddon?, suggests not only that gold offers a solution to the financial crisis but notes something of which many Americans are not aware: that European banks may be in worse shape than American banks. The author further asserts that the worst is yet to come as far as European banks are concerned. Massive inflation lies ahead for Europeans.

Gold aside, the Establishment solution to the problem is to print more money, both dollars and euros. I maintain that any official use of gold in the world’s monetary system will not come until forced upon governments by the people’s rejection of paper money. When freshly printed money will not longer buy what governments want, they will be forced then to return to gold. Until then, we will have inflation.

Meanwhile, the article is an excellent read in that it further clarifies the extent of the financial crises. Still, there is an issue I take exception with.

The author declares that silver is not really a monetary metal any longer. This position is often thrown around as a reason for not buying silver during financial crises. I disagree and submit that investors who eschew silver because of this position miss an opportunity to make still greater profits during this financial meltdown. (Actually, “profits” is not the right word. Generally, gold and silver buyers are not seeking profits but hedges against inflation and currency devaluation.)

Regardless, my studies and observations of the precious metals markets convince me that silver turns in greater returns in bull markets than does gold. The writer acknowledges as much when he notes that “even though history tells us that silver’s volatility leads it to perform better than gold in percentage terms on the upside and worse on the downside. . . We are in a different situation with silver not really a monetary metal any longer. Industrial demand pressures on silver may well mitigate any price rises here.”

Both metals have been used as money for thousands of years. Now, just because there are many industrial uses for silver, this writer – and others – assert silver is no longer a monetary metal. While it is true that the IMF, which keeps track of how much gold nations hold, does not care about silver, in the end it is really people – not governments or the IMF – that determine what is to serve as money.

Yes, today we’re using government-issued paper currencies and computer entries not redeemable in gold or silver as money. But, the flaws of such currencies are becoming readily apparent. Governments around the world are inflating their money supplies in efforts to stave of recessions (depressions?) And, the people are starting to move to protect the “fruits of their labors” from inflation by buying silver as well as gold.

And rightfully so. More people have used silver as money than have used gold. Because of Roosevelt’s 1933 gold call-in, Americans have not use gold as money for 76 years. Silver coins, however, were minted until 1965. Actually, silver has nearly always been the circulating medium in hard money monetary systems because gold has too much value for day-to-day transactions.

All this brings me to this point: when the masses come to the gold-silver market, they will buy silver instead of gold because with silver they get more physical metal for the money. Buying by the masses will, in my estimation, propel the price of silver much higher – on a percentage basis – than gold, driving the gold-silver price ratio to 30, perhaps even 20.

Now, that’s a bullish outlook for silver, a longtime monetary metal that just happens to have a myriad of industrial uses. The industrial demand for silver is not a negative, as the writer of the aforementioned article says, but is, in fact, a strong positive for silver.