BMO On A "New Paradigm For Silver"

Tyler Durden's picture

Courtesy of the Village Whisperer, we are happy to present BMO's latest comprehensive report on silver titled "A new paradigm for silver." While we suggest readers skip the part about price expectations for gold, silver and other metals, which at this point nobody save for the Chairsatan has any clue where these will go (and Bernanke's mind is made up for him by Jan Hatzius, so as always pay attention to Goldman buy/sell signals on PMs), the report does have a very extensive section on the key supply and demand drivers, which for anyone new to the metal, is a must read. Additionally, the report covers virtually all the key silver miners of note (incidentally for those wondering, the San Critsobal strike was lifted earlier today).

In summary:

  • BMO Research has reviewed a number of supply and demand scenarios for silver through 2015E. The analysis suggests that the projected rise in mine supply should largely be consumed by rising industrial demand through to the end of 2012E.
  • The prospects of further quantitative easing combined with sovereign debt concerns, competitive ‘fiat’ currency devaluation in western economies, and the return of inflation could result in investment demand exceeding BMO Research’s projections and extending the supply deficit through 2014E.
  • This shift in the supply/demand dynamic lies in contrast to the broader investment perception for silver, which is rooted in the 1990’s when the metal was in abundance, driven by the demise of the photographic industry and Chinese selling.
  • The paradigm shift for silver suggests that the traditional benchmarks for silver, such as the long-term historical ratio with gold, are no longer valid. Accordingly, the markets are searching for a new set of criteria againstwhich to benchmark the price of silver, with a bias to the upside.

Full report:

BMO New Paradigm for Silver

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slow_roast's picture

Charisatan's hair is streaked with silver; coincidence?  I think not.

bankrupt JPM buy silver's picture

But but but, this guy just said, "Gold fetishists have fared much better - the metal has been hitting all-time highs - but one of their main reasons for owning it is that it’s the undollar. Once it becomes clear that quantitative easing is not killing the dollar, the true believers in gold may begin to have second thoughts. The fact that gold has underperformed many other commodities for several months suggests that it’s happening already."


Read it all here


Enjoy a good laugh.

NidStyles's picture

I think I just farted out braincells reading that. Do they actually believe the crap they are putting out, or is it just that they never check the fundamental's anymore?

Central Bankster's picture

They call it a new paradigm... then I look at their forecasted metals prices through 2014 and I laugh.  It is the same with all the major firms predicting unrealistically low prices for all precious metals and base metals indefinately.  They say supply shortages and inflation on one hand, and then their forecasts show declining metals prices.  *head explode*

akak's picture

Yes, they can envision a "new paradigm" for silver --- as long as it remains safely within every one of their OLD paradigms.


outamyeffinway's picture

New paradigm same as the old. I hate when I send shit out ot a bunch of people before I read it and it ends up being shit!!

Hedge Jobs's picture

sorry to jump in but this is relevant, worth watching and worth sending to others, fuck the FED criminals!

Ron Paul: People Need Currency Choices - Kitco News

vast-dom's picture

Silver.......the new gold.

Spitzer's picture

This is the bank that got money from the Fed.

tekhneek's picture

Mind bottling, even. Is ANYONE here remotely surprised by this?

I've been saying for some time now the Gold/Silver ratio will be thrown on its head and WILL overshoot even THAT mean. (think 50:1 silver/gold ratio instead of gold/silver ratio. I'm not saying it will hit 50:1 and stay there, I'm just saying... think about the possibility.)

So we'll hit peak production circa 2012E... meanwhile demands growing and diverging from spply... Then the U.S. geological society predicts Silver (Ag) will be the first element exctinct from the periodic table by 2020 so... yeah...

Siver for 10+ more years for me, bitchez.

Ergo's picture

My price target is $50-54 / oz.  Long futures 'till at least then. 

Action today was spectacular.  In a way, I hope Blythe does raid tomorrow, so I can get some more.  It's odd to be both happy and sad. 

AmazingLarry's picture


One cannot get upset about the shortside rollercoaster, just sit back and enjoy the up and down and just know where you're going to end up on the long end of the ride.

DoChenRollingBearing's picture

That (SGR of even 1) I doubt tekh-blythe, but I have enough silver to celebrate as well should your prediction come true.

I still like gold's price going way up when paper gold defaults.

I'm keeping both gold & silver!

RockyRacoon's picture

I'll post again here for those who may have missed it:

The Mint is back selling the 2010 silver quarter sets after taking them down from the website.  (Mint product: SV2)  The previous price was $32.99 as I recall.

The pricing is still very attractive for several reasons.  You all can figure out most of them, but for the tin-foil-hat crowd these are numismatic coins.   The possibility that they would become illegal to own is very slim to nonexistent.  

There is a tad  over 0.90 ounce of silver in the set (regular content of silver for pre-1965 coinage).   The Mint charges $4.95 for any purchase so that is all the charge for any size order. At $39.95 per set there isn't much downside.

I've got mine, so get what you want:

2010 United States Mint America the Beautiful Quarters Silver Proof Set

Chicken_Little's picture

Ted Butler's mentor Izzy Friedman said there'd be a point in the future when silver and gold would equal each other, 1:1. He also said to buy 2 big green monster boxes of silver eagles and put them underneath your bed and forget about them, and one of these days with the collapse in real estate you will be able to trade those 2 boxes for a condo in a Trump building. When TSHTF and most fiat curriencies have to be retired and the new ones tied to a gold/silver/oil standard, Izzy will be right. Physical Ag is already close to being extinct from the LBMA and COMEX warehouses. Get your 2 boxes ASAP. If you don't , you may be extinct element of the middle class.



mrgneiss's picture

It appears big buyers of silver ARE leaving the COMEX.  March 2010 deliveries of silver were over 20Moz, yet March 2011 were less than 10Moz.  Has demand dropped by half over the last year?  I don't think so.........

Creed's picture

2011 avg hi $30

2012           $27

2015           $17


I better sell now

Stuck on Zero's picture

I have an opportunity for you brave souls.  The control rods at the bottom of the Fukushima reactors are 85% silver and the rest cadmium and other metals.  That's tons of silver bitchez.  Go for it.

Scritchy's picture

Count me in. Ann Coulter says radiation is good for us, so I'll not only be rich but I'll live almost forever.

JLee2027's picture

Funny, but Coulter was poking fun at things. You guys should actually read the article she wrote ALL THE WAY THROUGH and not make these headline assumptions.

Scritchy's picture

Ok, no excuses, I like Ann and should have added a disclaimer that it was an attempt, albeit not entirely successful, at humor. I mean, I can actually see her making a joke along similar lines, just better than I did because I did the Tonight Show version.

rich_wicks's picture

Why would anybody read Coulter, or Limbaugh, or Al Franken, or any of these stupid blowhards?  You don't learn shit from them, why would you waste any time listening to them?

The only salient difference between the 2 parities today is their rhetoric, they do the same goddamned thing so why are you listening to a cheerleader for any one of them?

BigJim's picture

She was? I read the article, and my usually sensitive irony antennae didn't even twitch.

Maybe her particular brand of irony doesn't cross the pond very well.

OldPhart's picture

Radiation DOES preserve dead meat.  Microbes can't live in it.

akak's picture

So does formaldehyde, but I'd rather not consume any of that either.

Selah's picture


Are you sure?

A quick Google has Ag in PWR's. Boron is in BWR's like Fuku.

But you've got a good idea! How many tons if you are right?



samsara's picture

You saying it might be different this time?

SparkyvonBellagio's picture

LOL Silver is what silver always was.........NOTHING.

You can't eat it, drink it, or phuuuck it.

It's a worthless entity.



Bill DeBurgh's picture

I beg to differ. Nobel Peace Prize winners love to lob silver-laden cruise missles at tin-pot dictators.

CitizenPete's picture

Didn't you hear?  They (Obomba and his new freind Kristol) are avenging the deaths of the Lockerbie victims (according to the "Ed Show").  

Ahmeexnal's picture

Why would they have a buy price higher than spot? Because it's going to $50 in a matter of days!!

Imminent Crucible's picture

"You can't eat it, drink it, or phuuuck it."

So Sparky, which metals do you eat, drink and fornicate with?


akak's picture

Sparky, it was demeaning to have to even privately acknowledge your worthless post long enough to junk it.

But I will be happy to take as much "worthless" silver off your hands as you might have.

Hmmm, "Sparky" --- I seem to recall reading that that was Jon Nadler's nickname in grade school.

rich_wicks's picture

LOL Silver is what silver always was.........NOTHING.

I spy, with my little eye, somebody that knows nothing about material science.  You might be able to argue it's over-valued (possibly) at this point, but useless metal?  That's just stupid.

Long-John-Silver's picture

The computer you are using would not operate without the Silver it contains.


latcho's picture

at least I can pay somebody smart with it to punch you bigtime in the face

SparkyvonBellagio's picture

You idiots can all say whatever, I owned it, held it, it's a worthless metal.


You fools think it's the next Grail. Keep chasing it.

Vint Slugs's picture

And no doubt sold it at a loss, eh Troll?

Quinvarius's picture

It trades on FOREX.  It is money.

KTV Escort's picture

here's some Sparky is a moron info for any silver noobs lurking this evening...

Silver is, in fact, the superman of metals

Silver has the highest electrical and thermal conductivity of all metals. Every computer, server, monitor, cell phone and switch must have silver. Lasers, satellites, solar panels, high-tech weaponry (tomahawk cruise missiles contain 500 oz) and robotics, all require silver. Digital technology and telecommunications need silver. There's silver in every TV, washing machine, wall switch and refrigerator. Conductors, switches, contacts and fuses use silver because it does not corrode or cause overheating and fires. Silver is used heavily in photography and in prints. Batteries are now manufactured with silver alloys. Lead-free silver solder is used heavily for joining materials and producing leak-tight joints. Silver is also widely used in silk-screened circuit paths, membrane switches, electrically heated automobile windows, and adhesives.

Silver achieves the most brilliant polish of any metal and has the highest reflectivity of light of all the metals, allowing it to be used in mirrors and in coatings for glass, cellophane or metals. Double layers of silver on glass reflects away 95% of the hot rays of the sun. Silver has a variety of uses in pharmaceuticals as silver kills bacteria. Hospitals use silver coated devices in surgery to eliminate contamination and infection. Skin care products now use colloidal silver as it has been found to be a healing agent and disinfectant. Silver sulfadiazine is the most powerful compound for burn treatment. Catheters impregnated with silver eliminate bacteria. Silver is increasingly being tapped for water purification, silver ions used in pools and spas. To prevent growth of germs and fungus on surfaces silver ions are used in paints and coatings.

In the face of all these industrial uses there will be less silver available, plus, the unique properties of silver restrict its substitution in most applications. More silver will be used than can be produced.


Selah's picture


Is there anything Silver can't do?

Oh yeah, it can't be created out of thin air!


riphowardkatz's picture

I am starting to wonder. I use it for deodorant and it is awesome.

werealldoomed's picture

Yea, man, you're right. "Totally useless":

  • Jewelery
  • Dentistry
  • Medical
  • Photography
  • Solar panels
  • Coinage
  • Mirrors
  • Water filtration
  • Optics
  • Printed Circuits
  • RFID
  • Silver-oxide batteries
  • Control rods for reactors
  • Catalyst for oxidation reactions
  • Solder
  • Anti-bactieral applications


Please, stop embarrassing yourself and go to bed.

CitizenPete's picture

Is that it?


As Bugs Bunny says: "What a marooon". 

Vint Slugs's picture

Fundamental factors are always an important input in traditional commodities market price analyses.  Under less extreme circumstances than we are now facing, investors should pay attention to silver's supply/demand dynamics.  However, anyone with a shred of commonsense can see that silver is behaving more like its monetary senior, gold.  Both gold and silver markets are reverting to their true monetary basis and their price behavior is reflecting that reality.  For that reason, silver is heading toward its long-term 15 - 17 ratio with gold.  Industrial silver supply is going to be virtually non-existent before the current cycle is over, thus relegating its traditional supply/demand conditions to the scrap heap.