Following Twitter, Elon Musk May Next Want to Acquire Silver / Commodities / Gold and Silver 2022
Elon Musk’s $44 billion purchase of Twitteris being hailed as a victory for free speech. Musk vows to make changes to thesocial media platform that will make it a true “digital town square” wherepeople are free to speak their minds, even if others take offense.
Of course, not everyone is excited aboutthe prospect.
“Biden officials worry Musk will allowTrump to return to Twitter,” CNBC informsus.
Musk, meanwhile, is worried that the Bidenadministration may launch retaliatory attacks by securities regulators. He isalso concerned by government policies that are stoking inflation.
The Tesla CEO noted in his company’s latestearnings call that "inflation is at like a 40 or 50-year high. And I thinkthe official numbers actually understate the true magnitude of inflation.”
Tesla factories depend on suppliers of rawmaterials including metals. And suppliers are raising prices.
"In some cases, we’re seeing suppliersrequest 20% to 30% cost increases for parts from last year to the end of thisyear," Musk said.
Of special importance is lithium, a metalneeded for Tesla’s battery systems. The problem is that demand for lithium isgrowing faster than supply, sending prices skyward.
Musk has suggested that he might have toget into the mining and refining business himself to secure adequate suppliesof lithium. He may decide it’s wise to invest in other scarce metals as well,including silver.
Each Tesla requires close to 50 grams of silver.It may not sound like a huge amount, but if Tesla is to meet its productiongoal of 19 million more vehicles by 2030, it will need over 30 million ounces of silver.
Silver, unlike lithium, currently remains cheapon an historical basis. But silver is also projected to be in a supply deficitthis year, with industrial demand set to hit a record high.
Rather than take on the risks of owning andoperating a silver mine, Musk could begin building stockpiles of the metalwhile it is still obtainable without having to pay a huge premium.
Tesla has already declared it will holdalternative assets such as cryptocurrencies on its balance sheet. While Musk isfamously fond of cryptos, they haven’t helped Tesla stay in front of thisyear’s inflation surge.
Both Bitcoin and Dogecoin prices havelagged in recent months. And neither does anything in particular to help Teslaobtain the basic materials it needs to build new vehicles.
Tesla’s 10-k filing from 2021 that statedin addition to holding Bitcoin, the company “may invest a portion of such cashin certain alternative reserve assets.” These include “gold bullion, goldexchange-traded funds and other assets as specified in the future.”
A single Elon Musk tweet about the value ofholding precious metals could move the markets.
But if he’s serious about acquiring gold ascash reserves and strategic metals including lithium and silver formanufacturing, he would understandably want to keep quiet while he’s stilltrying to accumulate at today’s prices.
The multi-billionaire was moved to acquireTwitter less because of its potential to generate revenue and more because ofhis vision for it to serve as bastion for free speech. Musk also has a visionto make all vehicles self-driving and develop the technologies needed forhumans to inhabit other planets.
It doesn’t take a visionary to see the needto protect against the corrosive forces of inflation. It just takes commonsense, which in practice means an ability to see through the officialpropaganda that underpins the Federal Reserve’s inflationary monetary policies.
Whether you’re an individual of modestmeans or the head of a trillion-dollar company, you face the same basic problemof how to plan for a future in which your dollars will purchase less and lessof what you need.
The solution is to become resilient todeclines in fiat currency value. A primary way of attaining such resilience isto own hard currency in the form of gold and silver.
Stefan Gleason isPresident of Money Metals Exchange, the national precious metals company named 2015"Dealer of the Year" in the United States by an independent globalratings group. A graduate of the University of Florida, Gleason is a seasonedbusiness leader, investor, political strategist, and grassroots activist.Gleason has frequently appeared on national television networks such as CNN, FoxNews,and CNBC, and his writings have appeared in hundreds of publications such asthe Wall Street Journal, Detroit News, Washington Times, and National Review.
© 2022 Stefan Gleason - All Rights Reserved
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