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Chinese Silver Demand Surges Four Fold in Just One Year

Tyler Durden's picture


Courtesy of GoldCore

Chinese Silver Demand Surges Incredible Four Fold in Just One Year

Gold is flat and silver marginally lower despite dollar weakness this morning. Some market participants are blaming the precious metal sell off on speculation that China may take more monetary action to curb surging inflation. This is unlikely to be the reason for the sharp selloff, rather it looks like another paper driven sell off in the futures market by leveraged players on Wall Street with various motives.

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The fact that silver is again in backwardation at the front end of the curve suggests that tightness in the physical bullion market continues and may even be deepening. Indeed, the massive increase in silver bullion demand from China (confirmed overnight - see below) suggests that silver’s bull market remains very much intact despite becoming overvalued in the short term towards the end of 2010.

Table Courtesy of Mitsui

Surging inflation in China, India, wider Asia and much of the world is of course positive for gold and silver as it will likely lead to an even greater appetite for the precious metals in order to protect against the ravages of inflation and the further depreciation of paper currencies.

China, Gold, Silver and the Western Financial and Monetary System

A theme we have written about for many years is China’s growing importance to global financial markets and the global economy. As the most populous and largest creditor nation in the world, China’s influence and power continues to grow. Chinese power is being seen in currency, bond, commodity and other financial markets.

It is particularly seen in China’s huge appetite for precious metals and this is only being appreciated gradually. Many in western markets and finance continue to not realise the profound changes and long term ramifications of China’s emergence as a global superpower.

The world has changed and we are not reverting to the financial, economic and geopolitical conditions of the late 20th Century.


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Silver in US Dollars – 40 Years (Quarterly)

China’s influence and massive appetite for precious metals is important both from a monetary and a geopolitical perspective. We warned of this some years ago – specifically writing about how the Chinese would gradually attempt to position the yuan as the global versus reserve currency, thereby replacing the petrodollar. We also wrote how the Chinese could use precious metals, and gold in particular, as a geopolitical weapon against the US and the west. Recently analysts, including the respected Jim Rikards, have eloquently outlined this real and growing risk.

China’s impact on the gold and silver markets will likely have ramifications for the western monetary and financial system and that is why China’s impact on the silver market is increasingly important. This is something we have wrote about for some time and one of the important factors driving silver’s bull market (see Money Week, August, 2007 article 'Why the Silver Price is Set to Soar'.

Silver’s Supply and Demand in China

Importantly and unknown to most analysts and people in the world is the fact that China was a net exporter of silver for many years – indeed China was a major component of global silver supply. This changed in 2007 when China became a net importer of silver.

The demand figures released by the General Administration of Customs in China overnight show the massive turnaround in China from large silver exporter to large silver importer.

China has gross exports of 1,575 tons of silver last year, down 58 percent from a year earlier, said customs. China’s gross imports of silver increased 15 percent to 5,159 tons in 2010, the customs agency said.

A longer term perspective is as ever important as are the net figures.

In 2005, China was a net exporter of nearly 3,000 tonnes (3 million kilogrammes) of silver. Last year, in 2010, China imported more than 3,500 tonnes of silver.

Incredibly, Chinese net imports of silver surged four fold in just one year from 2009 to 2010 (see table above).

Demand for silver in China has risen sharply in recent months and years. Growing middle classes and savers in China, India and other Asian countries have been turning to “poor man’s gold” and using silver as a store of value. Gold has risen above its historical nominal high in local currency terms internationally and silver is seen by many as a cheaper alternative.

Today buyers in China, Asia and internationally can buy some 50 ounces of silver for every one ounce of gold. The gold silver ratio today is 49.3 (gold at $1,342 per ounce divide by silver at $27.20 per ounce) meaning that 49.3 ounces of silver can be bought with every one ounce of gold.

Gold is increasingly unaffordable to the “man in the street” in China and wider Asia and this is leading to increased purchases of silver as a store of value, rather than gold. With the price of gold set to remain high in the coming years, this will continue.

Chinese and most Asians have experienced the decimation of their life savings through currency debasement and hyperinflation and unlike westerners understand the importance of owning gold and silver.

Besides huge demand for silver as a savings vehicle and a store of value in China, there is also very significant industrial demand in China and internationally.

There remain a huge range of industrial applications for silver. While demand from the photography sector has declined, demand from the medical, solar energy, water purification and many other sectors continue to rise significantly.

Today industrial uses account for 44% of worldwide silver consumption and in conjunction with investment and store of value demand, industrial demand continues to grow.


Investors and savers in the western world should familiarise themselves with monetary history and why paper currencies always depreciate over the long term and why gold (and also silver) are vital in order to protect and preserve savings and wealth over the long term.

The ‘GoldNomics Cash or Gold Bullion?’ video is a valuable tool in this regard.

It has gone viral with over 55,000 Views in just over two weeks. It is the most watched YouTube video on gold bullion in 2011.


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Fri, 01/21/2011 - 10:26 | Link to Comment Xibalba
Xibalba's picture

Apparently, silver isn't priced in terms of supply and demand.

Fri, 01/21/2011 - 10:29 | Link to Comment quasimodo
quasimodo's picture

True that, it is priced in terms of whatever the fuck "they" need it to be at

Fri, 01/21/2011 - 11:15 | Link to Comment Temporalist
Temporalist's picture

It is priced in Bernank Bux and Blythe Bullion.

Fri, 01/21/2011 - 14:35 | Link to Comment Turd Ferguson
Turd Ferguson's picture

I feel that this is very, very important. Please read this entire post:


Fri, 01/21/2011 - 15:13 | Link to Comment Temporalist
Temporalist's picture

Don't you worry Mr. Funny Hat I have your blog on my RSS.

Fri, 01/21/2011 - 11:45 | Link to Comment SilverIsKing
SilverIsKing's picture

It's not about price, it's about ounces.  For real silver bugs, a lower price is better.

Fri, 01/21/2011 - 10:28 | Link to Comment unwashedmass
unwashedmass's picture


i do hope these guys don't want the real, actual thing? they really aren't expecting to get this for the comex price, are they?

Fri, 01/21/2011 - 10:28 | Link to Comment jtmo3
jtmo3's picture

Ah, this must explain why both silver and gold are down again today.

Sat, 01/22/2011 - 15:57 | Link to Comment Math Man
Math Man's picture

The iShares trust lost 527 tons in the last 3 weeks.

Fri, 01/21/2011 - 10:29 | Link to Comment bigdumbnugly
bigdumbnugly's picture

another reason for them to whack silver down even a few more sheckles today.

Fri, 01/21/2011 - 10:29 | Link to Comment eigenvalue
eigenvalue's picture

Silver has been repeatedly nuked in the past 3 weeks. Already down $4. Fundamentals are almost meaningless now :(

Fri, 01/21/2011 - 11:18 | Link to Comment SilverRhino
SilverRhino's picture

Works for me .... BTFD already :-)


Fri, 01/21/2011 - 12:07 | Link to Comment MilleniumJane
MilleniumJane's picture

+1!  Preserve what you have, don't worry about price.  I buy physical just to maintain value in my savings, not to get rich.  Saving all of your money in the form fiat currency is dangerous right now.  Silver allows me to "diversify" that savings and spread the risk. 

Fri, 01/21/2011 - 10:30 | Link to Comment RobotTrader
RobotTrader's picture

Hedge funds are dumping silver en masse after getting burned by General Jim and Ted Butler's outlandish price predictions.

Fri, 01/21/2011 - 10:33 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

Yup, I'm sure all those hedge funds relied solely upon those two people for price guidance.

Fri, 01/21/2011 - 10:38 | Link to Comment Arius
Arius's picture

well, you make your own bed...

btw, it seems these pennies ad up....they are cleaning up the store being paid few dolars

Fri, 01/21/2011 - 11:16 | Link to Comment mrgneiss
mrgneiss's picture

Ya, I gues an 80% return between August and Dec sucks the big one, I bet they are kicking themselves over that trade.

Fri, 01/21/2011 - 10:39 | Link to Comment ColonelCooper
ColonelCooper's picture

Don't you have a 3 second chart to put up? 

Fri, 01/21/2011 - 10:40 | Link to Comment ColonelCooper
ColonelCooper's picture


Fri, 01/21/2011 - 10:41 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Take a piece of paper and a pen.  Draw supply/demand.  Move demand up (to the right).  What happens to price?

Now because silver is a finite resource let us consider, hypothetically as silver has not yet peaked, but let us consider a supply decrease.  Now move supply down (to the left).  Once again, what happens to price?

Fri, 01/21/2011 - 10:58 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

but catfish mouth you're on record as a PM bull as of yesterday. in the meantime why don't you share with us yesterday's news and act like you were on the right side of every development.

Fri, 01/21/2011 - 11:37 | Link to Comment GoinFawr
GoinFawr's picture

Mild mannered RT is really just a disguise; whenever disaster strikes he will always be there one day later... It's a Turd (no offense), it's insane, no it's

Captain Hindsight


Fri, 01/21/2011 - 11:03 | Link to Comment cowdiddly
cowdiddly's picture

No worrys Mate, Its just another rare earth metal to complete the trifecta.

Fri, 01/21/2011 - 12:11 | Link to Comment lieutenantjohnchard
lieutenantjohnchard's picture

now that gold and silver bullion are up for the day my guess is that old catfish mouth robo uber bull, after regalling us with tales of blowtorches reamed up the backside of said metals in pre-market, will tell us all that he was long afteral having bought from the weak hands.

Fri, 01/21/2011 - 12:50 | Link to Comment grey7beard
grey7beard's picture

>> Hedge funds are dumping silver en masse after getting burned by General Jim and Ted Butler's outlandish price predictions.


I'm guessing by General Jim,  you are referring to Jim Sinclair?  If so, I read JS web site on a regular basis.  I can't recall Jim ever speaking of silver, much less any kind of price predictions.

Fri, 01/21/2011 - 15:32 | Link to Comment Bastiat
Bastiat's picture

Accuracy is not high on Robo-trolls list of priorities.

Fri, 01/21/2011 - 17:51 | Link to Comment AUD
AUD's picture

General Jim did predict that gold would be trading at $1650 'shortly'. This was about 12 months ago, when I stopped visiting JS Mineset.

He has no great insight that others lack.

Mon, 01/24/2011 - 09:39 | Link to Comment fiftybagger
fiftybagger's picture

"Hedge funds are dumping silver en masse after getting burned by General Jim and Ted Butler's outlandish price predictions."


Seriously man.  Do you have some type of emotional problem?  Why do you always come on the board and make such absurd comments?  Yearly investment silver supply is only 100 million ounces.  That is not even large enough for one hedge fund to get involved much less many.  There's no way you can really be serious, so why are you here?

Fri, 01/21/2011 - 10:31 | Link to Comment FunkyMonkeyBoy
FunkyMonkeyBoy's picture

The metrics of supply and demand are irrelevant in these Bernank controlled 'markets'... therefore, these are not markets by definition.

Will he hang for his crimes? or course not, evil always win in this world, always has done, always will.

Fri, 01/21/2011 - 11:19 | Link to Comment Temporalist
Temporalist's picture

Believing there is such a thing as "evil" is your first problem.  Superstitious notions from voodoo, religion and mythology are fantasy.  Expecting human nature to always practice self-interest is the norm.  Even when the wealthy don't need more they do it because it is a defense mechanism to protect their nests. 

Fri, 01/21/2011 - 12:23 | Link to Comment MilleniumJane
MilleniumJane's picture

Evil is not superstition.  Evil is the shadow of ourselves and we are all capable of it in some form or another.  We all know that it is there but do we choose to deny it or do we deal with it?  I don't believe it is a "defense mechanism."  That is an excuse for bad behavior that is detrimental to society as a whole.  Altruism and empathy are the other half of our human nature.  We make the decision about which side motivates our intentions and actions.


Fri, 01/21/2011 - 10:31 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

When the only real enemy to the dream world is waking up, awareness and consciousness suddenly become the mortal enemies of the dream makers.

Sleep sweet precious metals, sleep.

Fri, 01/21/2011 - 10:32 | Link to Comment TraderMark
TraderMark's picture

Thoughts on balls to the wall David Tepper's interview

Fri, 01/21/2011 - 10:33 | Link to Comment unwashedmass
unwashedmass's picture


that is one fantastic video. are we going to try the makers on sex charges like julian?

Fri, 01/21/2011 - 10:33 | Link to Comment BrianOFlanagan
BrianOFlanagan's picture

silver = the most overhyped investment of the era

Fri, 01/21/2011 - 10:37 | Link to Comment cossack55
cossack55's picture

Don't care. If silver drops to $20 I'll buy more. If it drops to $10 I'll buy twice as much, if it drops to $1 I'll buy it all.  I may need another safe. 

Fri, 01/21/2011 - 10:55 | Link to Comment BrianOFlanagan
BrianOFlanagan's picture

if it drops to $10, I'll own it too.  Until then - it's all gold for me.

Fri, 01/21/2011 - 12:12 | Link to Comment tmosley
tmosley's picture

Well, at least you've got that going for you.

Fri, 01/21/2011 - 14:40 | Link to Comment dlmaniac
dlmaniac's picture

So many idiotic gold investors don't even understand supply & demand and price discovery.

Fri, 01/21/2011 - 16:12 | Link to Comment tmosley
tmosley's picture

Scratch "gold" from your comment, and it remains true.  Surprisingly few people really understand supply and demand.  If they did, they would all be shrieking in terror whenever someone offered them dollars for goods or services.

Fri, 01/21/2011 - 10:38 | Link to Comment FunkyMonkeyBoy
FunkyMonkeyBoy's picture

fiat currencies = the most wealth destructive scam ever concieved.

Fri, 01/21/2011 - 10:40 | Link to Comment Quintus
Quintus's picture

So...a few minor blogs and 'Fringe' writers recommend gold and silver.  On the other hand, we have mainstream 24 hour tv channels, magazines, Sell-side analysts reports etc. devoted exclusively to hyping stocks and bonds.  

% of population that own metals - maybe <1%

Percentage of population with some direct or indirect ownership of stocks and/or bonds >50%

Any your conclusion is that Silver is overhyped?



Fri, 01/21/2011 - 10:43 | Link to Comment ColonelCooper
ColonelCooper's picture

SOoo the Chinese, Indian and Russian Central Bank Directors got all their information from Goldline commercials while watching DVRs of Glenn Beck???

Fri, 01/21/2011 - 10:45 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

Apparently they are as slope headed as you.

Fri, 01/21/2011 - 10:47 | Link to Comment ColonelCooper
ColonelCooper's picture

Come on Shitfinger.  You can do better than that.


Fri, 01/21/2011 - 10:57 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

How's gold today?

Fri, 01/21/2011 - 11:58 | Link to Comment raya123
raya123's picture

It's up, that's how it is.

Fri, 01/21/2011 - 12:01 | Link to Comment GoinFawr
GoinFawr's picture

Gold and Silver are fine.

How's the dollar?

Fri, 01/21/2011 - 12:13 | Link to Comment tmosley
tmosley's picture

No, he really can't.

Fri, 01/21/2011 - 10:51 | Link to Comment SheepDog-One
SheepDog-One's picture

RIGHT! The Chinese, Russians, India, etc are all hoarding PM's like crazy because of some blog. Im sure youre right Quintus, its nothing else.

Fri, 01/21/2011 - 10:42 | Link to Comment KTV Escort
KTV Escort's picture

any silver hype is warranted

Fri, 01/21/2011 - 10:47 | Link to Comment EscapeKey
EscapeKey's picture

Yep, stick with your precious mass produced sheets of paper with ink.

Fri, 01/21/2011 - 11:01 | Link to Comment Non Passaran
Non Passaran's picture

Ha-ha-ha... You're a deep thinker - the arguments and all.

Fri, 01/21/2011 - 10:38 | Link to Comment ak_khanna
ak_khanna's picture

One thing I fail to understand is that why most analysts are recommending the purchase of Gold and Silver as a safe investment? The problem today is that the price of precious metals is not derived by it's physical demand or supply but more by the speculative positions standing long or short on the commodity exchange like any other traded commodity, stock or currency.

The basic mechanism of price discovery (based on demand and supply for actual use) of anything traded on an exchange has been terminally infected by speculators having access to unlimited funds and super fast computers for trading leading to volatile price swings. This has been made worse by the launch of ETFs for anything and everything under the sun by the financial community.

The price of everything including Gold and Silver is likely to suffer when the speculators unwind their positions due to some event that they have not anticipated or foreseen.

Fri, 01/21/2011 - 10:42 | Link to Comment Quintus
Quintus's picture

Has it become mandatory to post this crap on EVERY blog thread on ZH Now?  This fucking cut and paste job appears at least once a day now.  Enough already.

Fri, 01/21/2011 - 10:49 | Link to Comment EscapeKey
EscapeKey's picture

A significant amount of trolls/shills follow this pattern. Their aim is not being right, it's exhausting the argument and thereby winning by default.

It's a tried and tested old technique, and it works well to change the opinion of those not quite certain.

Of course, it's also completely fucking obvious, and the reason we could really do with an "ignore" button here at ZH.

Fri, 01/21/2011 - 11:26 | Link to Comment Temporalist
Temporalist's picture

My expectations for PMs increase with the amount of anti-PM trolls on ZH; for every article that has nothing to do with PMs they insert their moronic input and they think PM bulls are the voice drowning out the crowd lol.  Too the moon!

Fri, 01/21/2011 - 12:17 | Link to Comment tmosley
tmosley's picture

Doesn't work with everyone.  I fought with a gold troll for two years straight once.  It was hilarious.  I finally offered him a bet, that we would exchange an ounce of physical gold at that the price of that day, one year later.  He refused to accept it, as he, like all gold trolls, is a coward.  I kept rubbing the bet in his face, as it was actually never underwater by more than about $1.

Any gold trolls here, I'd be happy to make the same bet with you.  Though I would prefer to do it for a kilo of silver, but either way is fine by me.

Fri, 01/21/2011 - 13:14 | Link to Comment topcallingtroll
topcallingtroll's picture

What are your terms?

Fri, 01/21/2011 - 16:46 | Link to Comment tmosley
tmosley's picture

We would agree on a date, and arrange for an escrow account to be set up.  For a smaller wager, it could be done through Paypal or similar service.  For a larger one, it would be done through a law firm (subject to income verification, which would not be disclosed to either party).

Basically, what would happen is I put the money in escrow anytime before the end of the bet, but prior your purchase of the bullion.  You can buy it beforehand, but then you have no guarantee that I won't walk away.  Better to wait until all of the money is in escrow if you want to be safe.  I won't put it in until the end, because I want to make the fool who takes this bet sweat.  On the anointed day, the full amount will be in the escrow account.  At that point, you will purchase the bullion and have it shipped to my address (shipping and taxes are included in the bet, a quote will be taken on the day the bet is sealed).  Once received, I will release the funds from escrow.  

I prefer to keep lawyers out of it, so I tend to limit my offers to either one American Gold Eagle, or two rolls of American Silver Eagles.

The nice part about this bet is that it isn't absolutist, like Jim Rogers'.  Both parties are rewarded or punished according to how right or wrong they were.  If the price is unchanged at the end of the bet, then a 1 cent variation one way or another doesn't cost someone a million bucks.

Of course, if one party walks away without the consent of the other, they are fully liable to public humiliation.

Fri, 01/21/2011 - 11:26 | Link to Comment downwiththebanks
downwiththebanks's picture

Flagged, khanna.  You suck.

Fri, 01/21/2011 - 11:27 | Link to Comment Temporalist
Temporalist's picture

That stopped mattering in 2010. 

Fri, 01/21/2011 - 13:20 | Link to Comment topcallingtroll
topcallingtroll's picture

I will know the bottom is in silver when the zh silver bugs quit being so angry and starting the name calling and junk wars over what are reasonable alternatve viewpoint. That will be capitulation time and time for me to buy silver heavily.

Fri, 01/21/2011 - 12:52 | Link to Comment The Fonz
The Fonz's picture

You are right, these paper markets and speculation create massive false presure in price. The reason that price in PM's will not drop when the activity of the market declines due to regulation is that current speculation is driving price for PMs DOWN through manipulation.. not up.  


If it costs a dollar to buy a loaf of bread and a law is passed mandating 50 cent bread, all the bread sells out. That is what is happening in PM's artifical prices is that prices are being held down in part due to their strategic importance in our currency war. We are losing that war and in time the corruption of our system will be replaced, however long before then the REAL supply of PM's will become impossibly scarce. When the market corruption is wrung out those prices will climb.


Fri, 01/21/2011 - 15:00 | Link to Comment Duffminster
Duffminster's picture

ak flak

Silver prices are seriuosly out of line with long term inventory and supply.   We're having record sales and mints and major dealers running out of coins and with fabrication and industrial demand along accounting for about 1.1 billion ounces and minding supply about 710 million ounces in 2009 (latest available figures), and with a whole bunch of new applications for silver being found every year, it seems that the fact that available above ground inventories of silver bullion have dropped from about 10 billion ounces in 1940 to around 1 billion or so now and with central banks having virtually none of the stuff in reserve, silver is like a lot more precious than gold and should probably be trading at closer to $300 than $30.

Its not "failure of price discovery" its called an all out fraud in the derivatives market to artifically hold this most precious money metal down.

The day is coming when those giant shorts are going to have a price discovery revelation.  The sooner the majority of people understand the actual facts on silver the charade will be over and silver will be priced fairly.

With the JP having their man heading the White House Chief of Staff and the CTFC deciding to exclude JP's massive positions from position limits, expect the supression to continue a while longer.  In the meantime, I'm using the opportunity to take more deliveries of physical at these ridiculously low prices.


Disclosure: I'm all in.

Fri, 01/21/2011 - 19:45 | Link to Comment let-them-eat-cake
let-them-eat-cake's picture

Its not "failure of price discovery" its called an all out fraud in the derivatives market to artifically hold this most precious money metal down.

Of what madness do you speak? Will it be no WMDs in Iraq next from that crazy conspiratorial mind?.

Fri, 01/21/2011 - 10:40 | Link to Comment campag
campag's picture

ZH is the PM chearleader shame our team is going to get beat. I feel a lot of long and wrong.

Fri, 01/21/2011 - 10:44 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Why do Central Banks hold gold as (their only real) collateral?

Fri, 01/21/2011 - 10:52 | Link to Comment SheepDog-One
SheepDog-One's picture

Because a blog wrote about gold apparently.

Fri, 01/21/2011 - 11:27 | Link to Comment Temporalist
Temporalist's picture

I was trying to take credit for it...damn.

Fri, 01/21/2011 - 10:46 | Link to Comment chinaboy
chinaboy's picture

In downtown Nanjing (capital of Jiangsu province), the retail number was 1.1 ton silver bar last week. More retail sale is expected as Chinese new year approaching.

Fri, 01/21/2011 - 13:07 | Link to Comment Saxxon
Saxxon's picture

Greetings Chinaboy;

Have the Lao Bai Shin shown any interest in buying silver bullion? Probably not if they are spending so much on food. Any interest in silver coins? I smell a carry trade ...

Fri, 01/21/2011 - 10:46 | Link to Comment Himalaya
Himalaya's picture

its a sale offer for Chinese New Year from JPM, You can see the prices going normal after first week of FEB

Fri, 01/21/2011 - 10:48 | Link to Comment goldmiddelfinger
goldmiddelfinger's picture

Would a rise in Chinese silver demand have nothing to do with a substution for general patterns in gold demand.

Where is Chinese gold demand relative to silver YoY?

Fri, 01/21/2011 - 10:50 | Link to Comment Oh regional Indian
Oh regional Indian's picture

Real value is going to start telling now.

In the end, real value will be found in producing assets which pretty much means arable land and potable water first. 

I think the move seen in buying up farmland in Africa and Sud America will find it's way around the world.

The rats want out. seeing it happening big-time here in India. In bangalore, all the techies are out prospecting the countryside.

Ag and Ag.


Fri, 01/21/2011 - 10:51 | Link to Comment Lone Mad Minute...
Lone Mad Minute Medic's picture

Silver is in a short term correction, and until further notice, buyers beware. There is not going to be a straight shot up to the moon. No get rich quick schemes period. This whole thing has been played  out over and over again throughout history. Stop listening to all the noise and acting like a herd. There is too much emotions caught up in all this. If it was all so easy we would all be lighting up our cigars with hundred dollar bills.

Fri, 01/21/2011 - 11:29 | Link to Comment Temporalist
Temporalist's picture

Probably the only thing that dollar will be good for soon.

Fri, 01/21/2011 - 12:10 | Link to Comment GoinFawr
GoinFawr's picture

Indeud, if the monkey hammering (thanks smailes) of the dollar so far today is any indication of what's on its way.

Fri, 01/21/2011 - 13:10 | Link to Comment Strider52
Strider52's picture

Does the Monkey get hurt? Monkey...

Shock The Monkey.

Sun, 01/23/2011 - 21:00 | Link to Comment web dizajn
web dizajn's picture

well, call me stupid, given the choice of cash vs silver, I will still go for silver

Fri, 01/21/2011 - 10:52 | Link to Comment jakethesnake76
jakethesnake76's picture

Hey Tyler i don't know how to get this info to you but here it is... JP Morgan is profitting from Food Stamp  program.. wow

JP Morgan is the largest processor of food stamp benefits in the United States.  JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia.  JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes. 

Fri, 01/21/2011 - 10:52 | Link to Comment TWORIVER
TWORIVER's picture

What about the possibilty that people are selling their PM's to buy food?

Fri, 01/21/2011 - 11:01 | Link to Comment Hooter Shaker
Hooter Shaker's picture

I don't think anyone hoarding PM's is starving.

Fri, 01/21/2011 - 11:12 | Link to Comment TWORIVER
TWORIVER's picture

I agree, I was refering to regular type people who may have some personal belongings that they have to se.

Fri, 01/21/2011 - 11:30 | Link to Comment SheepDog-One
SheepDog-One's picture

TWORIVER fact is COMEX cant deliver, theyre trying to scare everyone out of their PM and going all out so the shorts can cover lower. Theyre in trouble! PM's are not going down because demand is going down, certainly not! Theyre rigging the shit out of it!

Fri, 01/21/2011 - 13:18 | Link to Comment Strider52
Strider52's picture

/me wonders how much they're paying if you sell to the Comex. Just call them up and ask if they'll pay $31 / oz. Just out of curiousity. I have pounds of the stuff, I'm not selling until I'm old and desperate. Well, the old part is pretty much there, and the way things are going with the dollar and inflation, we may all be a bit desperate soon. 

Fri, 01/21/2011 - 10:55 | Link to Comment awgee
awgee's picture

Ok, so there is huge physical demand.  Then why is the price of silver in dollars down 13% in the last couple weeks?

As far as I can tell, the spot price of gold is higher that the futures price.  Is that what is called backwardation?  And isn't the price supposed to scream higher when that happens?

Fri, 01/21/2011 - 11:15 | Link to Comment Trifecta Man
Trifecta Man's picture

It's called naked short manipulation, sanctioned by the CFTC, in an attempt to drive down the price, and also secure more sales of silver for someone.

Fri, 01/21/2011 - 11:17 | Link to Comment awgee
awgee's picture

I have reading that for years.  And at some point the shorts have to buy back, correct?  Haven't they been losing big time as silver has benn rising?  And they continue to short?

Fri, 01/21/2011 - 11:30 | Link to Comment Quintus
Quintus's picture

Why not?  The Bernank will make any losses they suffer go away, like always.  They can play the paper game indefinitely, or at least as long as the Fed owns a printing press.  The manipulation will end only when physical constraints prevent the honouring of delivery commitments.  It's coming soon....

Fri, 01/21/2011 - 10:57 | Link to Comment Spalding_Smailes
Spalding_Smailes's picture

What about money pouring out of gold/silver etf's ......

Fri, 01/21/2011 - 11:37 | Link to Comment Temporalist
Temporalist's picture

As in how the Sprott PSLV NAV went up even as the Ag spot fell?

"The Sprott silver fund PSIL,  or( PSLV) surprisingly saw its positive to NAV rise to 15.81% after the raid." - Harvey Organ

Fri, 01/21/2011 - 12:14 | Link to Comment GoinFawr
GoinFawr's picture

Oh Snap!

Nothing like an ETF without an egregious conflict of interest, eh?

Fri, 01/21/2011 - 12:28 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

President's Working Group on Financial Markets selling their shares.  Move along.

Fri, 01/21/2011 - 11:08 | Link to Comment KTV Escort
KTV Escort's picture

Chinese know how to save, especially the women, and you bet they're going to hedge with PMs

Fri, 01/21/2011 - 11:16 | Link to Comment Don Birnam
Don Birnam's picture


Fri, 01/21/2011 - 11:11 | Link to Comment topcallingtroll
topcallingtroll's picture

Chinese act like amelican retail investor, first sell low then buy vely vely high. China owned by jpm now. Teach chinese glasshoppah lesson.

Fri, 01/21/2011 - 13:10 | Link to Comment topcallingtroll
topcallingtroll's picture

Wow. Lighten up. I make fun of everyones accent. Besides it would be typical for an unsophisticated third world country to behave as stupidly as an american retail investor. In terms of racism the chinese dont hide theirs very well against africans and the blowback is starting. Nice book recommendation though.

Fri, 01/21/2011 - 16:39 | Link to Comment oddjob
oddjob's picture

 is that your fat and ugly,gimme 4 dbl. bacon cheeseburgers at the drive thru window accent?

Fri, 01/21/2011 - 11:11 | Link to Comment Glasgow Gary
Glasgow Gary's picture

I don't see any evidence of backwardation in the silver market.

Fri, 01/21/2011 - 11:14 | Link to Comment Kina
Kina's picture

One way to get silver and gold find true value is to disband the CFTC and put most of them in prison where they ought to be, and replace them with some non corrupt FBI.


See how many at jpm and hsbc like the prospect of prison when there are no corrupt mates to give them green lights.

Fri, 01/21/2011 - 11:30 | Link to Comment downwiththebanks
downwiththebanks's picture

In another world, perhaps.  

But it's just not going to happen with Uncle Sam's little government operating as a wholly owned subsidiary of JPM and GS. 

Fri, 01/21/2011 - 13:26 | Link to Comment Strider52
Strider52's picture

CFTC = Corruption For The Criminals.

Fri, 01/21/2011 - 15:47 | Link to Comment Bastiat
Bastiat's picture

" . . . replace them with some non corrupt FBI"

Right, FBI will put tape around the crime scene remove all the evidence and it will never be seen again.


Fri, 01/21/2011 - 15:59 | Link to Comment TheJudge2012
TheJudge2012's picture

China raised export quotas for silver for 2011 and may export a maximum of 5,670 tons of silver this year, compared with a maximum of 5,100 tons allowed in 2010.

570 more tons for the crimex?

570 tons * 32000 ounces per ton = 18,240,000 ounces

The US will pay thru the nose for it. Then China can buy it back on the open market.

Fri, 01/21/2011 - 22:37 | Link to Comment TheJudge2012
TheJudge2012's picture

Or it doesn't want to see rising commodity prices exacerbate its inflation, which it could remedy if it were to depeg.

Fri, 01/21/2011 - 11:45 | Link to Comment InconvenientCou...
InconvenientCounterParty's picture

If the asians are so bad-ass why don't they start their own commodities exchange? Clearly COMEX is an impaired market and an imperialist tool.


Fri, 01/21/2011 - 12:24 | Link to Comment GoinFawr
GoinFawr's picture

They haven't finished emptying it yet.

Fri, 01/21/2011 - 12:57 | Link to Comment cramers_tears
cramers_tears's picture

Comex/CFTC is a farce.  I think China could have a field day w/ an actual functioning Commodities Exchange (Think INVERSE CME/CMX/LBME) with real rules and regulations that are really enforced.  You know they take people out back and shoot them when they screw up really bad (Unless your Big Commie Party Official of course).  I always imagine Chinese justice portioned out to The Bernank, The Paulson, The JPMorgue, The Goldman Sachs, The GOV INC...  ohhh, I can dream can't I?

I sit and wonder why don't the Chinese just kill us...  I've got a 4th grade education and I could think of several ways if I was Chinese CB/Party that I could literally eviscerate the West.  I could literally smash the entire Western Economies against the wall.  But they don't, so either they're in on the scam, or maybe more likely - "The Chinese Water Torture" - death by a thousand drops...  You know those Chinese have been around for a very long time, they'll just continue to slowly drain our wealth, our intellectual property, our technology, diminish our need for natural resources and then when we're really just a shell of a country, they'll tie us to a log and just cut the rope and set us adrift.

Although, in the end, I guess they might have to absorb the shock and awe our military industrial complex could dish out?!?! but maybe, they just Manchurian Candidate GOV INC and just a couple of small skirmishes with the local populations are all that is needed.

Fri, 01/21/2011 - 11:52 | Link to Comment apberusdisvet
apberusdisvet's picture


Let's see:  the concerted raids, the disinfo psyops campaign.  COMEX must be in deep shit.  Hang tight folks.

Fri, 01/21/2011 - 12:00 | Link to Comment Stuck on Zero
Stuck on Zero's picture

Maybe the billionaires of Wall Street are getting ready to bail out of the country.  The question is how do they get their wealth out of the country and out of dollars.  The way to do it would be to put in vast numbers of naked shorts in PMs through a sacrificial Wall Street bank.  That drives the price down while they snap up the physical metals.  Eventually the whole things collapses and the sacrificial bank is collapsed but the upshot is that the perpetrators get the silver and gold.

Fri, 01/21/2011 - 12:26 | Link to Comment The Count
The Count's picture

i have been checking the actual prices paid on ebay during the last couple days for junk silver (like a roll of 40 pre 64 quarters, 90% silver) and guess what...? the prices have not budged a bit! people are still asking and getting between $210 and $225, same as when spot was above $30.  

Fri, 01/21/2011 - 12:30 | Link to Comment bigdumbnugly
bigdumbnugly's picture

my take and i agree with this from

"I have had quite a few readers ask for clarifications on this story, Is JPM Covering Up a Naked Silver Short Held by China as a Claim Against the Yanks? The story offers one possible explanation for the overly large and quite possibly undeliverable short position at the Comex.

This is my interpretation of the China silver short theory as expressed by others, but especially the respected analyst Harvey Organ. As you may recall, Harvey was the trader who helped to identify the notable lack of actual bullion in the vaults of Scotia Mocatta, causing a minor scandal.   There have also been other claims of a significant leverage or ‘fractional reserve selling’ in the physical bullion markets, with a circumstantial evidence of a potential 100 to 1 leverage involving unallocated bars and claims of cross ownership of bullion held by some of the large ETFs.

Several other well known analysts and academics have pointed to China as the source of the oversized silver short position, including Ted Butler and Professor Antal Fekete. However to my knowledge they have not fleshed it out in the same way that Harvey has done. If they have done so and I have not seen it I apologize in advance.

I have not been researching this aspect of the story before now. I have merely been watching the US markets train wreck unfolding without necessarily understanding the root causes. I still prefer to think of this as a rogue trading operation involving JPM, HSBC, and quite possibly a Chinese sovereign producer or wealth investment entity. There is some precedent for this.

Imagine you are China.

At some point, probably shortly after the year 2000, a large US bank comes to you via the US Treasury discreetly and asks to borrow 300 million ounces of silver. The deal is that the Treasury/Fed will provide you with US Treasury bills as collateral. The US sweetens the deal by granting the unrelated negotiating point of most favored nation trading status, and explicitly but verbally guarantees the deal with its full faith and credit. The Bank, with explicit US backing, promises to return your silver on demand after four years.

Some six years later you come back and ask the Bank for your $300 million ounces of silver. They say that the silver is gone, having been sold into the physical bullion market.

So you ask, well, what did you do with it?

And the Treasury answers, we lent it to the bullion banks and JPM, who sold it in the markets as a part of our plan to keep the prices of gold and silver from rising, in order to sound a warning about our monetization of the reserve currency using Treasuries.

So you approach the US Treasury and complain, asking them to honor the agreement. The Administration says, “we are sorry, but we no longer have the silver and we do not have any in our reserves. So you can keep our paper IOUs we offered as collateral instead.”

You are very angry as you do not wish to own more paper, but instead the bullion which is a legacy asset.  You, as China, consider the situation, and start selling silver short on the Comex, using HSBC and JPM as your agents. They sell the entire 300 million ounces of silver short. On the side and through other sources, you are using other agents to buy this same silver in the form of physical bullion for your own reserves. You consider this an equitable return of your bullion at a relatively neutral price compared to that at which you lent it.

When JPM and HSBC need the silver to cover the pledges on the short sale as more people demand delivery and existing supplies become tighter, you as China offer the pledge of the US for your 300 million ounces of silver as collateral and says “collect it from your colleagues at the US government.”

Technically the short sale is ‘hedged’ because the US offers little counter-party risk, and it is their IOU that is the basis of the short sale. The problem is that the collateral is in dispute between two sovereign nations.

But in point of fact the US does not have and cannot obtain this quantity of silver without severely disrupting the silver market, or demanding the output of its own silver mines which is unconstitutional. They do have the power to force a ‘cash settlement’ for the short positions, but this would be viewed as precipitating a major default on the Comex and with the Fed’s “house bank” JPM. Not exactly a trust builder in already shaky markets tainted by scandals of fraudulently valued paper.

And so the market remains at an impasse with a tremendous undeliverable short in silver with the US and JPM in a very embarrassing position of being entrapped in what China considers their own scheme by one of the few entities capable of standing up to them – their major creditor China."


i wonder if this activity has been sanctioned by our gov't. however, and is not some conundrum as inferred here .



Fri, 01/21/2011 - 14:42 | Link to Comment Duffminster
Duffminster's picture

There are lots of reasons to like silver long and short term.  Short term because the coordinated take down on silver the last week or so has given buyers a last opportunity to get in at these prices.

One other reason I discovered recently is because silver is such an excellent anti-microbial and anti-bacterial material and can be readily particilized and included in compounds to deal with anti-microbial and anti-bacterial requirements through a vast spectrum of industrial and medical and clothing applications.

While the attack on Silver by the operatives of the US and UK monetary authorities remains in full swing in their futile attempt to mask the avalanche of inflation and devaluation of the dollar, "which is a promise to pay nothing," it turns out that one of the largest likely future applications that will greatly benefit humans in the battle against germs is of all things Silver. It turns out that silver is not only an outstanding anti-bacterial substance but also an extremely effective anti-microbial agent. This and its long lasting properties and its ability to easily be microtized into various compounds to do things like keep odors out of shoes and keep medical clothing germ free are likely going to be a massively utilized process and put yet one more large input factor on silver demand. This technology is already being used broadly, including in the army to keep troops feet from getting foot diseases when wearing combat boots for long period and in very tough environmental conditions. You can get the full scoop on this growing application by reading Jeff Nielson's blog at Seeking Alpha: Silver and Germ-Warfare

After reading this, keep in mind the long term fundamentals on silver and remember that despite the long term manipulations and fear and greed of the paper markets, that inventory, supply and demand are what affect the real price and long term value. Silver is volatile because it is a very small market, and silver is far more rare in my opinion than gold. Far more useful as well and in far shorter supply. I think silver is far more precious and rare than Gold these days. Here are some of the reasons I believe this is so:

1. Above ground Available Silver bullion inventories have declined from about10 billion ounces in 1940 to around 1 billion today.

2. There is now approximately 3.8 billion ounces of above ground gold available.

3. Silver is not only a monetary precious metal but a highly useful and irreplaceable industrial metal used in high technology, medical and other manufacturing applications.

4. Very little of the silver used in industry is recycled.

5. The historic ratio between silver and gold is about 16.

6. The current ratio between silver and gold prices is about 48.

7. Physical demand for physical silver and silver coins is at all time highs and accelerating.

8. New applications of of silver (almost all non-recyclable) such as HeiQ Materials, which "manufactures high-performance textile effects for the most demanding functionalities," in the area of anti microbial and other anti-germ technology using silver compounds are expanding even as silver mining production is just beginning to break a long term down trend line even with prices over double where the were just over a year ago.

So, silver is actually substantially more rare than gold and yet the price ratios do not reflect the physical reality yet. This means that the long term price suppression of silver via the extreme concentrations of short positions by one or two of the largest Bullion banks has created a sling shot of potential upward price energy. If the CTFC investigation into silver price suppression or any of the current law suites, class action or otherwise, fully reveals the degree and level of ongoing suppression, silver may quickly revert to its historical ratios, and given its increasing rarity and industrial and technological usefulness, climb well beyond its less rare cousin, gold.


Fri, 01/21/2011 - 16:12 | Link to Comment gwar5
gwar5's picture

Flash: Silver in backwardation -- out one year, James Turk, KWN


My Blog


Fri, 01/21/2011 - 16:14 | Link to Comment bullionbaron
bullionbaron's picture

American demand is also soaring. Annual ASE sales are closing in on US annual US mine production. I discuss some recent ASE figures (including charting ASE sales vs price) in a blog here:

Does anyone know if the US has also become a net importer of Silver given the high number of ASE sales over the past two years?

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