Eric Sprott: "There Is No More Silver Left"

Tyler Durden's picture

Eric Sprott made an appearance at Casey Research Gold and Resource Summit where in addition to providing a succinct summary of all his monthly letters from the past year, whose forecasts are all gradually panning out, he spoke about the prospects for gold, and particularly silver. We will leave it to readers to parse through the brief must watch clip, but here is the punchling for those wondering why increasingly more distributors are reporting indefinite lack of physical silver inventory: "There's $22 billion of silver available in the world, of which the ETFs
already own half, and between you guys and us we probably own the other
half... Which means there's nothing left."

h/t John

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ZeroPower's picture

But every ZHer has, like, truckloads of this PM.

He must be missing something. 

nope-1004's picture

If you had watched it instead of race to post #1, you'd hear him explain why the reported numbers and reality don't jive.  The fact that every ZHer has silver support his claim that "there is no silver left" in the vaults.  It's all a shell game now.


ZeroPower's picture

1- already seen it and 2- i respect and agree with most of what he has to say.

Your jealousy for a 1st post is clear. Better luck next time - if you try hitting F5 every 5 seconds on the main page you should 'win' next time.

Zero Govt's picture

ZeroPower  -  do you agree/know ETF's "own half the Silver" as he says?  . . . . sounds like bollocks, thought the ETF's traded on derivatives of the smoke fumes from Silver smelters!

ZeroPower's picture

I don't particularly know, but i do tend to agree with whatever information there is available.

SLV, SIVR, etc, they all state "The silver bullion held by the trust is inspected biannually by the independent metal assayer, Inspectorate International." So, unlike an oil ETF, these are actually supposed to hold the underlying and not just swaps and futures based on the commodity.

You could reach your own conclusions by the info presented here and elsewhere.

66Sexy's picture

Silver has become a hoarded investment grade commodity; and the physical investment demand is consuming any areas where industrial demand has tapered off...  any significant price drops, try and acquire the physical metal. But as theres so much pent up demand, I cant get myself to pay 5 bucks over when i can play something like Sprott.


BTW: wtf happened to palladium over the last 2 days? buy op?

Pladizow's picture

Only problem I see is historically over 1000's of years the gold:silver ratio has been 16:1 (I think based on in ground ratio) - but for the last 100 years it has been where it roughly is now 40:1.

So why cant it stay around this area for sometime and not take decades if not centuries to get back to 16:1, let alone overshoot like Sprott mentions?

I fully understand the manipulation argument but how long have US interests been engaged in such activity - maybe 60-80 years?

Fred Hayek's picture

Ted Butler says that the price manipulation of silver at the Comex dates back to the mid 1980's.  Before that, the typical historic price ratio was largely holding.  For instance, the peaks of price of gold and silver circa 1980 were just over $800 and just over $50 respectively, 16:1.

tmosley's picture

Silver was never CONSUMED in industrial applications until the invention of photography.  Since that time, world stockpiles have been almost totally wiped out.  

Any attempt to make a "reversion to the mean" argument is thus useless.  That is, unless we have been dumping an equivalent proportion of our gold stockpiles into the Mariana Trench.

Supply, meet demand, and aggressive price suppression policies that have encouraged overconsumption.

VegasBob's picture

In the 40s, 50s and early 60s gold was artificially priced at $35/oz, and the govt made every effort to hold silver below $1.29/oz (which I think was the melt value of silver coinage).  That was a ratio of 27:1...

The govt gave up in 1965 and went to the current clad coinage.

DosZap's picture

"The silver bullion held by the trust is inspected biannually by the independent metal assayer, Inspectorate International."


Doesn't stop them from LEASING it the rest of the year.

And, w/only one or two exceptions, you cannot redeem shares for the REAL thing.


GoinFawr's picture


2. Hard to believe considering your sardonic post and general bashing of the PM's.

3.If you only agree with 'most' of what Mr.Sprott said, name something you disapprove of and why, please.

ZeroPower's picture

Thats fine, i actually stopped PM bashing since around last summer when i could clearly take a hint that we're in the next bull market in them. I do however still bash the Nostradamus' who appear here once in a while claiming $50,000/oz anything.

I like his views on precious metals in general, but more specifically, he believes Au:Ag ratio should be 16:1 (way too high for Ag - eoy was ~45:1). Also, being a huge energy bull, he's been massively wrong on Nat Gas since 2008 when i first heard his views on it (to be fair, many people have).

Finally, he's heavily short (CAD/US) financials and cons. discretionary - something which i would be very cautious doing in this uber-liquidity-pump environment.


GoinFawr's picture

Well, even though I don't generally like to make specific 'price' calls, and while those 'Au to 50,000 fiatscos!' Nostradami may certainly seem unrealistic today, I always keep in mind the deluge of derision I received when, not so very long ago, I was telling my peers 'Au to 1200'.

As far as Mr. Sprott's energy strategy goes, well there has been 'money' to make in Natty as well as Oil since March'09, though granted not playing the natgas bull etf's (unless you were the proprietor of one, or you have HFT skillz unmatched by any human/machine combo I have ever met), but there have definitely been profitable plays in that sector.

Mr. Sprott is not saying that 16:1 ratio has to happen, he's just using it as a measure, a tell, an indicator, an historical marker. And that is all he is suggesting anyone else do, IMO. If you have a more conservative number in mind, good for you. Bonne Chance!

Personally, risky or not, I think the financial shorts are right in line with his PM outlook. You're right, insomuch as the game can keep going for quite some time, but bullshit is always forced to walk eventually.

OTOH all these things that you allege to 'disagree' with are small potatoes compared to his PM position, so you'll have to forgive me if I find your disparagement of Mr.Sprott's strategy wholly persnickety.

Which makes me wonder whether or not you truly have altered your perspective for the wiser.

ZeroPower's picture

Persnickety - great word :)

As i said, you don't have to disagree with me because, as i stated: "i respect and agree with most of what he has to say."

Whether or not my perspective is perceived as 'wise' to an outsider matters zero to me; what i do enjoy is participating in discussions such as these where one can share his thesis and commend/bash fellow posts.

takeaction's picture

That is funny.  Thanks....F5...F5....F5....F5....F5.....

savagegoose's picture


ALT+F4 is what elite pwner users hit to get 1st post

Cognitive Dissonance's picture

There's something even easier to do. Just enter into a Vulcan Mind Meld with Tyler and know instantly when he's going to post the next article.

Just understand that it's pretty cluttered in Tyler's mind. Not for the squeamish or under 21.

Goldilocks's picture

I am pretty sure that was some kind of insult (yet again).

We all see and hear what we want to see and hear. It's just that some of us are worse than others. The very worse are afflicted with Cockatoo disease, constantly repeating whatever confirms their belief system.


Polly wanna cracker?

i.knoknot's picture

there's this whole quantity vs quality thing goin' on here too.

so, i'm the first to reply to the second reply to the second reply to the first.

somehow, i don't expect extra-credit for this week's contribution.

(f5 -f5 - f5 - f5 :^)

EDIT - someone snuck in on me while i wrote! now i'm the second to reply to the second reply to the third reply to the first.

unwashedmass's picture

god, i love eric.

you go boy, you go.

Judge Judy Scheinlok's picture

Get a room.

If there was no more silver left why is the price only ~$33.0 to $34.0 fiatcons / oz?

If there was really none left wouldn't you think the price would exceed $34?

Just a silly question..... Don't get all crazy.

JohnG's picture



Me loves my PSLV!

Judge Judy Scheinlok's picture

God, I love the ZHeeple. I do. An entertaining group with NO charge for admission.

Does anyone factor industrial demand into the equation?

GoinFawr's picture



Judge Judy Scheinlok's picture

<~allcaps/~>You better watch out for the Cap Police! It's serious biznass.

MayIMommaDogFace2theBananaPatch's picture

I don't miss the ALLCAPS but please resume with addressing us as if we were the jackasses who show up in your courtroom.  Love that bit (without the caps).

tmosley's picture

Graphene will likely replace silver in numerous applications.  That will take a while though.

Temporalist's picture

Will it be highly reflective and anti-bacterial too?  Can you eat it?

tmosley's picture

It's not reflective, but it does kill bacteria.  My company has something quite a bit better for that though.  Use of silver on devices won't continue for more than 5-10 years, as out product is literally 1000 times cheaper, and lasts forever (it catalyzes production of oxygen radicals that kill anything that tries to attach, but has no effect beyond a few cell lengths).

long-shorty's picture

Graphene, bitchez!

(sorry, had to. long CVV)

Judge Judy Scheinlok's picture

Yea new he, just started yesterday. How 'bout you Belgian Waffle?

unununium's picture

> If there was really none left wouldn't you think the price would exceed $34?

You may regret writing that rather than doing something about it.

Hard1's picture

Doesn't he know that the FED can print commodities now?...oil, silver, whatever u need.

Just Observing's picture

Yeah.....but can Sir Bernake pull a sword out of a stone ?

e_goldstein's picture

he's got to take his dick out of the world's ass, first.

quasimodo's picture

I replied to the first post-do I win a prize?

Motorhead's picture

I can't view the video clip.  Anybody else have this problem?  Thanks.

Gold 36000's picture

I can't view it on my android mobile.  Probably just as well since I am driving.

Zero Govt's picture

there is some left, my teeth fillings and girlfriends earings are in the Oven smelting at this very opportune moment