• Monetary Metals
    05/02/2016 - 01:28
    The price of gold shot up this week, and silver moved proportionally. Headlines are screaming for gold to hit $10,000 or $50,000. Does this alleged new bull market have legs?

Guest Post: Bottleneck Or Supply Deficit?

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Thu, 02/17/2011 - 18:20 | 971968 TeamAmerica
TeamAmerica's picture

Tungsten shortage?

Thu, 02/17/2011 - 18:28 | 971997 Temporalist
Temporalist's picture

No it's just a bottleneck :D

Thu, 02/17/2011 - 18:37 | 972025 JonNadler
JonNadler's picture

still no word from Bigger Dickus or any new name he might have to have assumed

Thu, 02/17/2011 - 18:43 | 972051 lieutenantjohnchard
lieutenantjohnchard's picture

cats like him are cowards. big mouth, no substance. next time silver drops a dime you'll see him come shooting out the stall like a crazed bull.

Thu, 02/17/2011 - 18:47 | 972059 mynhair
mynhair's picture

Hey!  Don't be dissing cats, ya heavyweight!  Silver better drop more than a buck, so I can get more.

Thu, 02/17/2011 - 18:54 | 972101 lieutenantjohnchard
lieutenantjohnchard's picture

i'm with ya brother. if it pulls back i'll step up and buy some more. btw: i'm not a heavyweight. more of a jake leg than anything. apologies also to cats if you're a cat lover.

Thu, 02/17/2011 - 23:08 | 972976 mynhair
mynhair's picture

I am a frigging cat.  Got this dumbass human to trade for me.

Fri, 02/18/2011 - 04:02 | 973398 GoinFawr
GoinFawr's picture

hehe. Sounds like a frigging cat to me!

Fri, 02/18/2011 - 05:39 | 973447 fatcat
fatcat's picture

It's not that funny.. They just clean up after our mess and do our bidding. It's quite pleasant, actually.

Thu, 02/17/2011 - 19:14 | 972165 grekko
grekko's picture

Why wait, they are predicting a low end at $50/oz by end of year.  Silver is still cheap historically (price corrected for inflation, it could hit over $125/oz, depending on Helicopter Benny)

Thu, 02/17/2011 - 21:35 | 972699 unwanted flatulence
unwanted flatulence's picture

have you looked at the premium?  on 1000z bar apmex wants 4.50/z over that nearly 16%.

thats screams no phys

 

Thu, 02/17/2011 - 21:38 | 972704 unwanted flatulence
unwanted flatulence's picture

 

 

Thu, 02/17/2011 - 21:38 | 972705 unwanted flatulence
unwanted flatulence's picture

 

 

Thu, 02/17/2011 - 23:12 | 972982 mynhair
mynhair's picture

quit farting, women are present

Thu, 02/17/2011 - 19:40 | 972249 topcallingtroll
topcallingtroll's picture

They should never have used biggus dickus in the user name instructions. There are so many variations i cant keep up. I know major.dickus is a pm bug. I finally.capitulated and rebought into silvwr so the top is.for sure in.

Fri, 02/18/2011 - 02:04 | 973279 JW n FL
JW n FL's picture

***** "I finally.capitulated and rebought into silvwr so the top is.for sure in." *****

 

Thats funny... no worries Bro! no one will be trading oz gold rounds for a loaf of bread or cup of coffee... siler rounds will be the new, new normal for purchases... you will be able to do lots of things with silver that you just dont want to use gold for.

 

Hang in there... physical solar is a great idea too.

Fri, 02/18/2011 - 10:40 | 972326 Bay of Pigs
Bay of Pigs's picture

And don't forget Billy the Bastard. He's slamming me on the day silver takes out a 30 year high.

Guess what Bill, $50 is the last barrier to Blue Sky. It might take some time, but it will come as surely as day follows night.

 

Thu, 02/17/2011 - 23:39 | 973028 Thomas
Thomas's picture

The whole article is a stupid premise: what about price? Nowhere in the article does the author mention the concept of price discovery.

Fri, 02/18/2011 - 02:07 | 973283 JW n FL
JW n FL's picture

whne people stop taking paper from you for goods.. or when your arms get tiered of carrying / push a wagon filled with paper to buy a loaf of bread... you will have that price discovery you are looking for.

Fri, 02/18/2011 - 09:31 | 973657 DaddyO
DaddyO's picture

 

Are you intellectualy blind or retarded?

The whole article screams about price without ever saying it.

Low supply coupled with high demand equals higher price? right, RIGHT!

DaddyO

Thu, 02/17/2011 - 21:38 | 972718 DosZap
DosZap's picture

IMHO, the miners are not playing this smart.

I would on purpose slow down the operations, and instead of a bottleneck, there really would be a shortage.

Prices(earnings for them) would skyrocket, and for US, the prices and availability would make the prices,and product moonshot.On Gld and Silver.

Hell, Wall St has done it for years, I say its our turn.

Thu, 02/17/2011 - 23:14 | 972990 mynhair
mynhair's picture

Like the miners do jack.  Commods are going down Fri, cuz Imadinnerjerk is a jerk.

BTFD.

Fri, 02/18/2011 - 07:38 | 973495 tonyw
tonyw's picture

Would you recommend the same action for oil and farmers:-)

Thu, 02/17/2011 - 18:21 | 971976 franzpick
franzpick's picture

If the goal of the fed-backed PM short-sellers over the years has been to contain metal prices, they have failed, but I think their self-perceived task over the decades-old credit/debt/world U$D extravaganza has been to be ready to kill any sudden, mass, panic flight out of FRNs, debt and equity paper - into PMs, consummables, storable commodities, farm land and survival gear.

And I suspect the post Carter-Mexico panic flight quickly pushing Au to $800 showed them how flimsy public confidence is, and what it is they never want to see again.   Just an idea... (from my earlier post)

Thu, 02/17/2011 - 21:03 | 972547 DavidPierre
DavidPierre's picture

Nothing is confirmed until it has been officially denied.

Kitco:http://www.kitco.com/reports/KitcoNews20110216DeC_CPM.html

 

The source is CPM group.

No one there has a name since the actual source was not published but of course it's that pompous ass, '100:1 Jeffy Christian', the spokes-ass for that group, and the commentary today comes right off his media notes.

What's funny in that article is that several bullion vendors report they have plenty of silver, including Kitco.

Well thats nice.

Kitco is in trouble for operating pooled accounts that own nothing but paper silver. If this is true then it should surprise no one that they are right there telling the world there is plenty of silver and their own reporter has used them as a source in her article.

On an unrelated note...

The Mafia told reporters that they are legitimate business people that are not involved in any crime. Oh, and this just in: there is no Mafia.*

Noticed there was absolutely no mention in that article of the shrinking inventory levels for silver at the COMEX.

You would think that would be of interest in a story about shortages. Not to mention the huge open interest still outstanding with just 8 days until first notice for delivery.

So to recap, there is plenty of silver lying around according to Kitco.

The refined silver deliverable to industrial consumers is not the same as the silver cast into bars for those pesky investors.

What the good people at CPM fail to understand is that the silver market includes both industrial consumption and investment demand. If you are unable to supply one part of a market, then there IS a shortage.

Being able to identify outlets that report a few hundred thousand ounces of silver available only establishes that silver has not been sold out worldwide to the last ounce.

 There have been numerous times when vendors sold out of hundreds of thousands of ounces of supply in a day or less. Just a few weeks ago the largest bullion vendor in Canada was reported to be completely sold out of 100-oz silver bars. Did Kitco report on that.

The bullion retail business will be laughing all the way to the bank when stories of shortages start to circulate. Why would a vendor like Kitco go out of their way to put out such a one-sided article to discourage buyers?

Wait and see the shrill denials and the lame commentary pumped out to explain when the COMEX eventually defaults.

What excuse will they come up with at Kitco if the pooled accounts are revealed to be a total scam? It is just a matter of time.

 

via leMet

*a very irresponsible statement, comparing the Mafia to the criminals that are manipulating silver. This association with a band of disgusting crooks is grossly unfair and damaging to the reputation of the Mafia.

Thu, 02/17/2011 - 23:15 | 972991 mynhair
mynhair's picture

So, Imadinnerjerk denied he is a jerk.

BTFD.

Fri, 02/18/2011 - 04:02 | 973399 Snidley Whipsnae
Snidley Whipsnae's picture

John Nadler of Kitco is quoted several times in this article regarding the possibility of China backing their currency with gold... Most here already know of Nadler's constant negative articles about PMs. The question that no one has answered to my satisfaction is why a company selling/buying PMs would hire a person, like Nadler, to put down the product that they are selling.

From 'The Street'...'A Chinese Gold Standard?'

http://www.thestreet.com/story/11009124/1/a-chinese-gold-standard.html#

Fri, 02/18/2011 - 10:56 | 973940 Imminent Crucible
Imminent Crucible's picture

Nadler is employed by Kitco specifically to keep a damper on investment demand for PMs.  The reason should be obvious: Kitco is not a producer, but a distributor whose main customers are fabricators.  Kitco knows that an investment mania for gold or silver will disrupt their business model and make it difficult for them to keep longstanding accounts supplied.

Investment fads come and go, but the jewelry biz, electronics biz and other industrial consumers have been their steady bread and butter.  It's just self-interest, which is what makes the world go 'round.

Fri, 02/18/2011 - 04:52 | 973421 Alert
Alert's picture

Well written, and good observation!

Thu, 02/17/2011 - 18:23 | 971980 lieutenantjohnchard
lieutenantjohnchard's picture

i think the demand side of the equation is really building. several folks i know that normally wouldn't buy bullion have in the past few weeks stepped up and taken possession of physical in size.

bullion is available. but ya gotta pay up.

Thu, 02/17/2011 - 18:25 | 971986 Bruno the Bear
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All the gold that's ever been mined in the world, according to the World Council..."

"all of which would fit into a crate of 20 cubic metres"

 

Or as the president of a mining company today was quoted as saying all the gold in the world would only fill up two olympic sized swimming pools.

Thu, 02/17/2011 - 19:29 | 972208 akak
akak's picture

That would be a pretty sight, but I would stay away from the diving boards.

Thu, 02/17/2011 - 18:29 | 971995 mynhair
mynhair's picture

Not sure if there is a difference between bottleneck and supply.

Former, with sustained demand, leads to the prior.

Could be some job opportunities here...

Thu, 02/17/2011 - 19:41 | 972251 dearth vader
dearth vader's picture

There's ample supply of bottlenecks, it seems...

Thu, 02/17/2011 - 23:19 | 972995 mynhair
mynhair's picture

Hey!  My TAP comes in cans...

Thu, 02/17/2011 - 18:29 | 971998 Sean7k
Sean7k's picture

Imagine if bankers were not allowed to leverage the markets with worthless paper to the extent of 100 to 1. Imagine if the market was transparent. Imagine if aliens rode unicorns on rainbow bridges to heaven.

If you don't own gold or silver, you don't have any money of value. It is that simple. They could push out metal for the next 200 years and never begin to cover the amount of currency, deriviatives and other credit instruments in circulation.

Thu, 02/17/2011 - 18:32 | 972009 mynhair
mynhair's picture

For some strange reason, I prefer Ag to Au.  Think it's the constant polishing...

Fri, 02/18/2011 - 07:49 | 973503 zhandax
zhandax's picture

Why? Never heard of APMEX sending a 100 oz bar back because it wasn't shiny enough.  We won't be selling the bars any time soon and by that time, the gas station will take a dirty '53 quarter.  Besides, if you have it that easy to access, you don't have much margain for error on security.  Polish your money clip or whatever other silver you carry on you.

Fri, 02/18/2011 - 08:01 | 973513 mick_richfield
mick_richfield's picture

You like Ag better than Au because some part of you remembers that, while gold is pretty, silver is magic.

 

here's a shocker for you:  if you scraped together all the gold in the Earth, and all the silver in the Earth, the piles would have about the same weight. 

The reason silver is more (used to be more) plentiful in human commerce is that there is a lot more silver (about 15x) in the crust of the Earth than there is gold.  I believe that is because silver is more chemically active than gold, and its compounds have a much easier time getting carried to within mining distance of the surface.

Eventually, silver will return to something like 0.07x gold value, but before then I expect it will overshoot its proper value because of the decades-long Perversion.  I bet it will overshoot by a factor of 2 or 3 -- reaching as high as 0.2 Au value, or even 0.3.    If that happens, sell your silver for gold.

Under no circumstances sell your silver for pictures on paper whose value derives from the full faith and credit of institutions with neither.

Fri, 02/18/2011 - 15:55 | 975329 akak
akak's picture

Under no circumstances sell your silver for pictures on paper whose value derives from the full faith and credit of institutions with neither.

 

Concisely and beautifully said MR.

Thu, 02/17/2011 - 18:29 | 972000 gwar5
gwar5's picture

So, with higher prices, why aren't the miners and refiners keen to fix the bottleneck?

Bottleneck or no, if the Chinese say gold and silver are money, then I do to.

If pension funds and Chinese flock to PMs it's a tsunami. Getcha some now.

Thu, 02/17/2011 - 19:35 | 972225 trav7777
trav7777's picture

Fix it how?  They are gov't agencies, not going to onboard a lot of new minting equipment.  There's a whole supply chain involved between raw gold and then refining to blanks and then finished products that isn't apparently amenable to just bringing on new production capacity.

The Mints are probably banging these coins flat-out but because all of the "respected" talking heads say gold is stupid and a bubble (the people who don't own it and don't want to own it and most importantly don't want to deal with what it'd mean if you have to own it), so why would the gov encourage more production?

Thu, 02/17/2011 - 18:31 | 972005 buzlightening
buzlightening's picture

Franken financial bankster fraudsters cluster fuckin in empty bullion vaults!! bwahahahahahahahahaha!

Thu, 02/17/2011 - 18:32 | 972008 Big Corked Boots
Big Corked Boots's picture

For silver, everyone cries shortage but Tulving claims to have half a million ounces. Is he lying? Why would he? I just don't think the shortage idea is real, otherwise premiums would be much higher than they are.

Of course if demand spikes with the Great Understanding that may come about fiat, that's a different thing entirely.

Thu, 02/17/2011 - 18:50 | 972074 Idiot Savant
Idiot Savant's picture

Until I hear that Tulving and APMEX have shortages, I consider it a non-issue.

Thu, 02/17/2011 - 20:08 | 972365 JLee2027
JLee2027's picture

By that time, Silver will be 500 an ounce. 

Thu, 02/17/2011 - 20:12 | 972385 tmosley
tmosley's picture

I guess you missed the part where the US mint sold 16 times that much in a single month.

No "Great Understanding" required.  Just the tiny amount we have now appears to be doing the trick.

Thu, 02/17/2011 - 18:34 | 972013 DeweyLeon
DeweyLeon's picture

“Based on what I know, it’s my opinion that if 5% of this country put 5% of their money into gold, there would be nothing left tomorrow morning.”

 

Then we have nothing to worry about.  This is an oft used phrase here but I AM the only person I know who buys physical.  To this day people either look at me like I'm crazy or their eyes glaze over when I talk about buying gold/silver. 

I've had one guy ask me about how to buy silver recently, but after a few minutes I could tell he was all hat and no cattle. I could hear him figuring "hey, why park my money in bullion when I could "invest" it in -insert-stupid-hobby-here.

Thu, 02/17/2011 - 18:58 | 972117 Iam Rich
Iam Rich's picture

Then you need to step up to 30% and fill in for them.

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