This page has been archived and commenting is disabled.

Guest Post: Bottleneck Or Supply Deficit?

Tyler Durden's picture


By Jeff Clark of Casey Research

Bottleneck or Supply Deficit?

There have been numerous reports of bullion shortages in many parts around the world, along with rising premiums. And the two explanations – we’re running out of gold! and, it’s just a manufacturing bottleneck – are at odds with one another. So, who’s right?

First, the data. The following has been reported since New Year’s eve horn-blowers were put away:

   1. Report from China: “…premiums for gold bars jumped to their highest level in two years.”

   2. A director at Cheong Gold Dealers in Hong Kong: "I don't have any gold. Premiums are very high. Some say they have no stocks on hand."

   3. A dealer in Singapore: "There's a sudden surge in demand. Demand from China is very strong and they are paying very high premiums. Refiners can't meet the demand.”

   4. World Gold Council report: “…gold imports by India likely reached a record last year due to increased investment demand. Imports will probably be the highest for India in its history.”

   5. Nigel Moffatt, treasurer of the Perth Mint: “…demand for gold bullion has been unrelenting since gold dropped below $1,400 an ounce. At the moment demand is such that we cannot meet all the enquiries we are getting. Demand for our coins and medallions is strong, but the biggest demand is coming from banks and traders looking for kilo bars.”

   6. Eric Sprott, chief investment officer of Sprott Asset Management, after having difficulty locating enough bullion for their new silver fund: "Frankly, we are concerned about the illiquidity in the physical silver market. We believe the delays involved in the delivery of physical silver to the Trust highlight the disconnect that exists between the paper and physical markets for silver."

   7. 2010 gold Buffalo coins are largely unavailable from dealers.

   8. Sales of silver Eagles set a new record in January – by the 19th of the month. Already, 4.6 million coins have been sold, an all-time monthly high since the coin's release in 1986.

Based on this data alone, you might come to the conclusion that yes, we’re running low on bullion supply. But most industry execs I spoke to insist this is a “bottleneck” issue: current demand is greater than current stock on hand, or is coming in faster than mints can produce. In other words, it’s a fabrication issue, not a supply deficit. A Treasury rep said as much.

You’ll recall from 2008 how supply was difficult to come by and premiums were roughly double what they are now. Some think it will be “lesson learned” this time around; mints now know how to prepare for another spike in demand. Many have added workers, shifts, and facilities. The U.S. Mint stopped producing the less popular coins and now focuses on those that are most in demand.

To a large extent, I believe the bottleneck argument is exactly what’s happening. It’s no different than the store that sells old-fashioned wooden rocking chairs suddenly getting swamped with customers when an antique dealer declares they’ll be valuable collectibles in the future. Collectors rush to buy, and the store doesn’t have enough rocking chairs in its warehouse. But they’re not running out of wood. And they’ll likely be better prepared when they hear the dealer is coming out with a book.

It’s true there’s only so much gold coming to market every year (total 2010 supply is estimated to have been about 115 million ounces), but in the big picture, there’s been enough. It’s also true that orders from the 2008 rush were eventually filled. However, I think the “bottleneck” and “we’re running out” arguments miss the point, because they both focus on supply.

Demand is what I’m concerned about. Now try this data:

   1. According to International Strategy and Investment Group, gold ownership currently represents 0.6% of total financial assets. If it rose to just 1.2% – still less than half its 1980 level – it would require an additional 917.1 million ounces, or 16% of aggregate gold worldwide. This amount is equal to about 10 years of current global production.

   2. Investment demand represented 53% of all gold demand in 1979; today, it represents just 32%. Coin demand represented 37% of all demand in 1979; today it’s less than 14%.

   3. Gold and gold mining stocks represented 26% of all global assets in 1981 (high inflation), and 20% in 1932 (high deflation). Today, gold and gold mining shares represent about 1% of global assets.

   4. The market cap of the entire gold industry is about the size of Microsoft, is less than Exxon Mobil, and is 10 times smaller than the banking industry. The whole of the silver industry is smaller than Starbucks.

   5. Silver mine production is insufficient to meet current demand. The only way silver needs are fulfilled is from scrap coming to market. Miners don’t produce enough on their own.

   6. There are approximately 40% more earthlings right now than there are ounces of gold that have ever been mined. That includes every ounce used in jewelry, electronics, and dental. Further, if every ounce of supply last year were made into coins and bars for investment purchase, it would amount to less than two one-hundredths of an ounce, or about half a gram, for every man, woman, and child on earth. This means 0.018% of the global population – about one in every 55 people – could buy a one-ounce gold coin this year.

Yes, there is a bottleneck. But with this recent spike in demand, it appears some mints still aren’t equipped to keep up. Are we nearing a tipping point where in spite of the increased efficiency and preparedness, requests from buyers will outweigh available supply? Imagine demand continuing to accelerate, and you can see where this might be headed. I think this is the side of the equation to watch.

Andy Schectman of bullion dealer Miles Franklin told me last summer that, “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.” In other words, even if supply is sufficient at present, what happens if demand, say, doubles, as the above data show is possible?

Right now in North America you can still get bullion, but we’re clearly on a path where demand could overwhelm the system, making purchases very difficult. When that point arrives, many investors will wish they hadn’t worried so much about price.

Imagine Doug Casey is right about the future value of the dollar: zero. Imagine how high inflation would rocket in such a scenario.

Bottleneck, meet desperation.


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
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!


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.


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.



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.


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?'

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
Bruno the Bear's picture

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.

Thu, 02/17/2011 - 19:36 | 972231 trav7777
trav7777's picture

I knew one guy who had some physical but he sold it to raise cash because he wanted an M3

Thu, 02/17/2011 - 20:10 | 972377 BigDuke6
BigDuke6's picture

Well ya cant take it with you....

And with silver looking so good it becomes hard to store unless you got a gun cabinet.

A bit of lead to look after that silver.

Thu, 02/17/2011 - 23:23 | 972999 mynhair
mynhair's picture

What do you have against werewolves?  Racist!

Fri, 02/18/2011 - 09:35 | 973675 tarsubil
tarsubil's picture

My investments go in this order: Pb, Ag, then Au.

Thu, 02/17/2011 - 18:35 | 972020 lieutenantjohnchard
lieutenantjohnchard's picture

fwiw twice in the past 8 trading days slv has been green on the hourly all day. i can't remember that ever happening before, although i'm sure it has.

Thu, 02/17/2011 - 18:49 | 972071 mynhair
mynhair's picture

Frigging paper.  Watch SLW, if you must.

Fri, 02/18/2011 - 00:33 | 973126 bluebare
bluebare's picture

that's me.

Fri, 02/18/2011 - 08:01 | 973507 zhandax
zhandax's picture

PSLV; 1000 shares at their purchase cost is basis equivalent to 400oz.  This is the often mentioned Eric Sprott Silver Trust.  Watch the NAV premium though, not that you can do much about it at the moment.

Thu, 02/17/2011 - 18:44 | 972050 dryam
dryam's picture

Soon it will be very clear why PRECIOUS metals are called precious.


Thu, 02/17/2011 - 18:47 | 972062 Idiot Savant
Idiot Savant's picture

Keep your mouth shut about your physical holdings! How many times does this have to be said? Don't tell your buddies, or even your SO if you can avoid it. Loose lips sink ships.

Man robbed of 750K worth of silver -

Thu, 02/17/2011 - 18:53 | 972079 mynhair
mynhair's picture

That should teach you dumb-ass Canucks about outlawing guns!

Christ, can't even wire a shotgun to the front door....

Thu, 02/17/2011 - 20:25 | 972432 Dr. Porkchop
Dr. Porkchop's picture

Guns aren't outlawed in Canada, you just have to get a license. Restricted license for handguns. You can buy a Glock here if you want.

Thu, 02/17/2011 - 20:46 | 972499 impending doom
impending doom's picture

Doesn't it have to have at least 5" barrel, though? Plus zero chance of ever taking it outside the house. I fervently hate Amerikkka, but I feel like Hunter S. Thompson, basking in the absurdity of what I can do: SBR, SBS, full-auto, suppressor, etc. BTW, just took the new mac-10 to the range yesterday. What a blast. 1st firearm purchase was in 2009. I'd encourage everyone to get at least one. Cheaper and more fun than golf, imho.


Fri, 02/18/2011 - 09:39 | 973691 tarsubil
tarsubil's picture

I thought suppressors were illegal in the US.

Sun, 02/20/2011 - 17:26 | 980062 impending doom
impending doom's picture

Nope, you have to survive the background check and pay the $200 tax, but they are quite obtainable... The funny part (to me anyway) is that the $200 tax stamp originated in the Al Capone days; that was a lot of FRN's back then, now, not so much...

Fri, 02/18/2011 - 09:41 | 973692 tarsubil
tarsubil's picture


Thu, 02/17/2011 - 19:25 | 972193 dwdollar
dwdollar's picture

Slivers?  Is thut what dey make forrks out of?

Thu, 02/17/2011 - 23:25 | 973007 mynhair
mynhair's picture

Oh, fork you.

Thu, 02/17/2011 - 21:49 | 972741 DosZap
DosZap's picture

Mark my words, dudeski........Inside Job.

No idiot alive stores that kind of metals at his house, and goes around blabbing about it.

IF he had it , it should have been in a vault of same design as a regular FDIC Bank.

This smells like shit, and I just check ed my shoes.

Thu, 02/17/2011 - 22:13 | 972825 MonsterBox
MonsterBox's picture

yeah, probably didn't want to try the "boating accident" gambit. 

cops probably wouldn't believe anyone could load $750,000 of silver into a boat anyways

Thu, 02/17/2011 - 23:52 | 973045 pvzh
pvzh's picture

$750,000 worth of silver in current prices like 0.77 ton (770 kg). Regular boat can hold that much, I believe.

Fri, 02/18/2011 - 08:11 | 973522 zhandax
zhandax's picture

If it was Montreal, I would bet you ounces gold to silver it was an insurance job.  Don't know much about BC.

Fri, 02/18/2011 - 09:43 | 973704 tarsubil
tarsubil's picture

He didn't have insurance because it was too expensive.

Thu, 02/17/2011 - 18:52 | 972085 disabledvet
disabledvet's picture

Oil shortages right now.  Smoke 'em if you got 'em boyz.

Thu, 02/17/2011 - 18:55 | 972103 mynhair
mynhair's picture

Shortages?  Where?

Thu, 02/17/2011 - 20:48 | 972512 impending doom
impending doom's picture


Thu, 02/17/2011 - 18:52 | 972086 TooBearish
TooBearish's picture

All I hear is there only 2 olympic sized swimming pools of all the gold ever mined in the world... it looks like to me these 2 pools have 1000x owners than there is gold in them pools....

Thu, 02/17/2011 - 18:58 | 972121 buzlightening
buzlightening's picture

Yup! Certifiable insane leverage and stampeding minions wanting redemption!! hehehehehehe! Bullion run!!

Thu, 02/17/2011 - 18:54 | 972096 RobotTrader
RobotTrader's picture

PM stocks are lagging badly behind the bullion.

I'm desperately trying to seek a place to offload some of these horrid gold stocks I have held in my IRA account for years, like GOLD, AEM, KGC which are total dogs.

When the gold uptrend breaks again, I'm going to eject these things and sit back and wait for the next washout low in stocks, and then I'll be buying Fed-Sponsored, PPT-Supported issues like retail and consumer discretionary equities.

I am still suffering from "Scroomers Remorse" by listening to the likes of General "This Is It!" Jim, Eric "Is It Not?" King, Jimmy Pup, Jim Rogers, etc. who keep forecasting a parabolic boom in inflation which never seems to happen.

Instead, the inflationary boom have been in tech stocks and consumer stocks.....

Luckily I played those consumer stocks last year in my taxable account, I was stupid not to trade the IRA account, I just let those gold and resource stocks sit around and do nothing.

Still kicking myself, I promise I will never make that mistake ever again.

Yes, I still have some bullion laying around and it has performed well, but nothing like the NDX Screamers like NFLX, ARUN, ARMH, AAPL, etc.

Live and learn.


Thu, 02/17/2011 - 18:58 | 972118 mynhair
mynhair's picture

No AUY or ABX?  No wonder you are in deep doo-doo.

Try some AVL, while you can.  Geez, some dufus rating outfit came out with a C10.50 call today.  I was there 2 weeks ago.  But, given Fx, C10.50 could be my $13.30 call.

Thu, 02/17/2011 - 19:02 | 972131 lieutenantjohnchard
lieutenantjohnchard's picture

well coming from the world's greatest stock picker i'm surprised to hear you listen to the scroomers as you call them. i thought you let the market talk to you? and now you tell us that you listen to scroomers. that actually tells us a lot about you.

btw: the best way to desperately get rid of a stock is to ... wait for it ... sell it. then you can buy jkhy and fico as you posted about earlier today.

gentleman jim sinclair sends his regards to you.

Thu, 02/17/2011 - 19:15 | 972170 mynhair
mynhair's picture

Go Dude!  No chicks from RT deserves it!

Thu, 02/17/2011 - 19:06 | 972148 dryam
dryam's picture

Hey dumbfuck, why didn't you get in on Great Panter or First Majestic Silver?  I guess you aren't into 200+% returns.

Thu, 02/17/2011 - 19:22 | 972185 RobotTrader
RobotTrader's picture

I repeat.  I do not buy low crap penny stocks.  Only big cap names.  I have survived 15 years of trading following this rule.  And I never trade options, either.  I was able to trade successfully the last 3 years to retire last year.  I'm working again, but only temporarily, since I sold much of my stock in December and do not want to touch my nest egg until we get another giant selloff.

My biggest mistake was not trading some of my IRA account, I could have doubled my money in one year if that account wasn't invested in so many gold stocks.  I bought a lot of those golds in 2002 - 2003 and swore I wouldn't touch them until gold reached a blowoff.  Well, it did reach a blowoff last year, and I should have gotten rid of them when the getting was good.

Thu, 02/17/2011 - 19:32 | 972217 lieutenantjohnchard
lieutenantjohnchard's picture

sounds real fishy. if you owned gold stocks in 2008/9 or anything else (long) you were crushed. you wouldn't have gotten flat until recently.

Thu, 02/17/2011 - 21:43 | 972729 Bringin It
Bringin It's picture

Lt. John are why are you making this bs statement?;ran...

Fri, 02/18/2011 - 10:01 | 973759 lieutenantjohnchard
lieutenantjohnchard's picture

read the thread again. i'm calling bs on what he's saying, my friend.

Thu, 02/17/2011 - 19:38 | 972224 akak
akak's picture

RobotAssWipe, I keep waiting for you to make a blowoff, but your cluelessness, complicity, venality, dishonesty and arrogance somehow keep rising parabolically with no end in sight. 

Drop dead already, you amoral, soulless, Bernochio sycophant.

Thu, 02/17/2011 - 19:39 | 972243 sellstop
sellstop's picture

So it is all downhill from here for those gold stocks, eh? But you can't sell them unless you sell at the top. But you didn't recognize the top? How will you recognize the next top? When they sell for the same as the last top? If they sell for that price again, why would you think it is "the" top?

Gold reached a blowoff? Well it is only a few percentage points from the all time high. What are you waiting for? You won't sell those stocks until they drop like stones in the next credit contraction/deflation. You know why. Because you are emotionally attached to them. You won't sell them until they break your heart!

You don't trade. You hope!

Tell me I am wrong.

Thu, 02/17/2011 - 19:50 | 972288 akak
akak's picture

Trying to argue logically, and in any timeframe beyond the next 24 hours, is utterly alien to RobotLemming.  You may as well try to plow the sea.

Thu, 02/17/2011 - 20:09 | 972372 Bay of Pigs
Bay of Pigs's picture

The only thing clear is that you know nothing about gold and yet you try to convince us that you do.


Fri, 02/18/2011 - 00:53 | 973167 akak
akak's picture

But like his hero Bernanke, RoboTroll is never going to let reality get in the way of his theories --- or his illusory profi(a)ts.

Thu, 02/17/2011 - 23:29 | 973013 mynhair
mynhair's picture

AVL ain't crap, it's spec. does not absolve your lack of chicks.

Thu, 02/17/2011 - 23:41 | 973034 Astute Investor
Astute Investor's picture

I repeat.  I do not buy low crap penny stocks.  Only big cap names.

Except NFLX, ARUB, ARMH were not even close to being "big cap" names at the time you likely bought them...

Fri, 02/18/2011 - 04:38 | 973415 Snidley Whipsnae
Snidley Whipsnae's picture

RT... Perhaps you are unaware of the collusion between some large gold miners, some large banks and those wishing to suppress PM prices...

"In 2003, the world's largest gold mining company, Barrick Gold Corp. and J.P. Morgan & Co. were sued by Blanchard and Company, a large gold coin and bullion dealer. In its defense of the lawsuit, Barrick outlined exactly the gold suppression scheme described by GATA, and acknowledged Barrick's participation in it. Barrick successfully argued, however, that because central banks were sovereign and Barrick was working at the behest of the central banks, and because other gold mining companies which participated in the scheme were not also sued; Barrick was immune to liability for its role."

Thu, 02/17/2011 - 19:16 | 972174 Silversinner
Silversinner's picture

Think quality mining stocks could be an excellent hedge

for the coming years.With these metal prices a lot

of them can be expected to create a lot of shareholders

value.Every body I remember was very happy owning

tech stocks in 1999,a year later most of them were broke.


Thu, 02/17/2011 - 19:41 | 972254 trav7777
trav7777's picture

that's strange, because some of the few miner mooch funds out there have the best 1, 3, and 5-yr returns among the entire products list.

Individual stock picking in miners is troublesome and sticking to giant caps in miners?  LOL.  Wrong sector, dude.  If you were a real picker, you'd have been in FRG or SLW or even Troy. 

You want large cap index momo, you're in the wrong industry.

Fri, 02/18/2011 - 00:40 | 973096 Flakmeister
Flakmeister's picture

   Hey Robo et al... 

 I will gladly post my prints for FRG, AVR.TO, IPT.TO, TRGD, EFR.TO, ORV.TO. hell I stlll have 3000 shares of GWG.TO that I picked up at 0.09... I do my research on stocks and identify the winners.... I turned $370 in TRGD into a Picasso...

Here are some free gifts, do your own research to verify


Re: FRG, most of you know I have touted that stock on numerous occasions, ~6000 shares at avg. cost of ~5, sorry if you missed the boat. I even stated that NEM would take them out 6 months ago.

I did seriously fuckup my trading of SLW and TCK, picking each up at around 5, I dumped them too soon... TCK is now 58 or so. Can't win em all I guess.

Thu, 02/17/2011 - 19:57 | 972319 disabledvet
disabledvet's picture

supply shortages and an epic battle between food and energy companies "keeps inflation under control."  unfortunately "it doesn't prevent food and energy riots."  this is the tip of an iceberg that has just ripped HMS Bernanke's hull from stem to stern.  governments have been collapsing starting with Greece "and all they say is no biggie."  Well..."here's Biggie now."

Thu, 02/17/2011 - 21:53 | 972753 DosZap
DosZap's picture


Quit moaning about woulda,coulda,shoulda.

YOU MADE $$$$$$$$$$.You could have lost your ass.

Be happy..............I would be beside myself, greed is a green eyed monster.

Like JDR said when  asked HOW much is enough?, he said, Just a LITTLE more.

Thu, 02/17/2011 - 22:01 | 972764 DavidPierre
DavidPierre's picture

Go back two years to March 2008 when Gold was $1000 and Silver $20.50. Comparing today's prices Gold is up 38% and silver 50%.

How have four miners performed?

Barrick has done best trading today at $50.62 compared to $54.74 back then. So gold is up 38% and Barrick is down 7.5%. Well, that's Barrick, the hedger, so who cares, right?

But wait.

Agnico Eagle is down 12.3%, Kinross is down 39.6% and Pan American is down 21.6% from their March 2008 highs.

Think about that for a moment.

It's March 2008, Silver is just over $20, you buy the premier silver producer and two years later with Silver over $30 the share price is down 21.6%. Makes sense if Pan Am suffered some disastrous accident, but no. The same thing has happened to all the majors!

Its called discouragement.

Unlike the Chinese government, which is encouraging its citizens to protect themselves by buying precious metals.....well you know the rest.

Unfortunately for the cartel fiends every action has its unintended consequences. By allowing this on going manipulation of the shares investors have correctly picked bullion as the better choice and thus the record Silver Eagle sales in January.

This has led to such extreme under valuations that you can now buy Silver Standard for about $1 per silver ounce in the ground. Pan American is not far behind.


Fri, 02/18/2011 - 08:20 | 973531 zhandax
zhandax's picture

Look at the bright side, won't be dead fuckin broke come Christmas

Thu, 02/17/2011 - 18:54 | 972098 kanga
kanga's picture

On e-bay a 1 oz. krug is going for $1,550 for the buy-it-now price.

silver is going for around spot for the most part. Some around $35, but others at spot.

Thu, 02/17/2011 - 21:55 | 972759 DosZap
DosZap's picture

Spot for Silver is a deal, the Krug is a screwing.

Fri, 02/18/2011 - 02:30 | 973305 StychoKiller
StychoKiller's picture

Maybe it's autographed by Nelson Mandela...

Thu, 02/17/2011 - 18:54 | 972102 QEsucks
QEsucks's picture

Agreed. I use Tulving as a barometer and they seem to have a good supply but I just visited the site and noted that their premiums are now eyepopping c/w 08/09. Sometime in 2010 they redid the site with buy prices and this is the first time I'm seeing A PREMIUM to spot on the buy side for gold. It was formerly negative. They also seem to be out of 10oz Credit Suisse and kilo bars. DISCLOSURE: No position in barbaric relic. You can't eat it. ETC. ETC.

Thu, 02/17/2011 - 18:56 | 972106 buzlightening
buzlightening's picture

hehehehehehehehe! As if another concentric circle of derivatives to the enth could push out pulp fiction-ed fiat paper money for another 200 years!! Stick a fork in the dollar! It's daze off the gold standard are over!! The Keynesian paper ponzi experiment is over!! No suckers left for our world wide fiat, debt based currencies for expansion!! Imploding global shit house of charmin irredeemable ass wipe!! A mouse fart could topple US econophiles instantly! In a heart beat! As a theif in the night!!

Thu, 02/17/2011 - 18:57 | 972111 NotApplicable
NotApplicable's picture

The bottle-neck is the lack of a free market. The only time there is ever a shortage in a market is when the price is being held down. Let the price discovery mechanism (the "invisible hand") have a free reign, and one will find all the supply they need.

Thu, 02/17/2011 - 19:06 | 972130 mynhair
mynhair's picture

Wrong.  A bottleneck is in lack of production.  Could be lack in supply, or processing.

I think it is in processing.  Visualize a bunch of stoned Libs going "what, we have to work"?

Stoned Conservatives would be feeding the fires, to watch the pretty colors.

Thu, 02/17/2011 - 19:04 | 972141 Belrev
Belrev's picture

I still vividly remember how back in 2005 we had a shortage of land and houses, and back in 1999 internet domains were difficult to obtain. Go figure.

Thu, 02/17/2011 - 19:08 | 972151 mynhair
mynhair's picture

Shortage of land.  Damn weed.  Go figure.  Missed the expansion of the continent.

Thu, 02/17/2011 - 19:08 | 972156 Belrev
Belrev's picture

The argument was that they don't make land anymore and population is growing.

Thu, 02/17/2011 - 19:11 | 972158 mynhair
mynhair's picture

Plenty of land out there.  It's waterfront that is limited.

Sailboat access waterfront.

Thu, 02/17/2011 - 19:47 | 972277 topcallingtroll
topcallingtroll's picture

I think you all are intentionally missing the point just to annoy him. I hear you belrev. I think they really did understand!

Thu, 02/17/2011 - 19:30 | 972207 Bobbyrib
Bobbyrib's picture

All my suppliers are fine with their supplies. If the PM markets get into a frenzy it could lead to a bubble then PMs will crash.

Thu, 02/17/2011 - 19:44 | 972261 topcallingtroll
topcallingtroll's picture

Just remember the troll capitulated and rebought back into silver at 29 something. With my luck these last two months my capitulation and joining the bull camp means the top is in for sure....just watch....the market gods are against me for some reason.

Thu, 02/17/2011 - 21:00 | 972563 impending doom
impending doom's picture

TCT, is there a certain spot price at which you'd leave ZH forever?

Thu, 02/17/2011 - 19:46 | 972270 Bastiat
Bastiat'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.”


5% of 5% ??  Bubble! 

Fri, 02/18/2011 - 10:00 | 973758 tarsubil
tarsubil's picture

Yeah, this is what gets me. I remember the housing bubble. Everyone was flipping houses and dealers had a bunch of houses they didn't live in. Housing was going up everywhere. I don't know anyone (maybe a couple might be keeping it under wraps) that own silver or gold.

Thu, 02/17/2011 - 20:13 | 972396 BigDuke6
BigDuke6's picture

Look at the pure silver plays out there.

In Oz we have PEM - Perilya Mining, up 15% in the last month, which you wouldn't kick out the bed for farting.

You lot made me believe in silver which wasn't easy for this goldbug.

cheers cobbers.

Thu, 02/17/2011 - 20:22 | 972424 Papaneuf
Papaneuf's picture

Gold & Silver Bitchez!

There is a bottleneck! We have to find a way to move it from Mars to Earth!

Thu, 02/17/2011 - 21:20 | 972641 DavidPierre
DavidPierre's picture

Why are mining CEO's still silent?

CNBC this morning... the President and CEO of Barrick Resources was interviewed regarding the 80% year over year increase in their earnings.

Of course the questions as always were skewed toward "how come the earnings weren't better?" even though they were "better than expected?". Imagine if this were Apple or Intel, CNBC's hosts would all have their party hats on and be break dancing!

At the end of the interview, John Paulson (not of hedge fund fame) the "snotty know it all" guest (shill) asked "but isn't Gold artificially propped up by loose monetary policy? What will happen once the Fed begins to tighten and the economy begins to roll along? Won't Gold simply collapse?".

Barrick's CEO basically said "we believe Gold has had a steady rise and is a currency reflecting the Euro debt problems, monetary easing etc. etc, basically blah, blah, blah.

The reason mining executives do not want to speak the truth for fear of bank (cartel) retribution and being cutoff from financings.

So here it is, these CEO cowards need just ONE "truthspeaker" to step up and tell the truth which is...


With just one CEO stepping forward with the truth, the rest of the lemming cowards can follow.

NOW is the time for these politically correct pansies! Now? Yes NOW!

Someone needs to say that the "hour glass" was tipped upside down years ago by some Alice in Wonderland character.

Metals prices have gotten to the point where they will soon allow mining companies to "name their terms".

In other words, they won't need the banks anymore as they will be able to go to the marketplace and bypass the banks. They will have investors lining up to do financings for the construction of their mines!

THEY will have the power that was for so long artificially stripped from them.

The mines will become banks to which the fiat banks will need to beg the mines for financings and recapitalization's!

Yes, THIS is exactly where we are headed, "back to the future".

100 years ago the mines were huge percentage capitalization's of the stock market and were THE "Blue Chips" that widows and orphans could rely on.

We are heading "back to the future" where the mines will be the banking system because it is where capital IS created!

Remember "owning mining shares will make you a charter member of the next banking system".

This will come to pass!

via leMet

Thu, 02/17/2011 - 22:09 | 972809 DosZap
DosZap's picture

Metals prices have gotten to the point where they will soon allow mining companies to "name their terms".


THey are there now, of they used their heads and SLOWED production down.

Squeeze Play, and we own the place.

Name your price, Gold is from $350-$500.00 an oz to get out, depending on who.

And all the biggies stopped hedging, and even bought back all the previous  hedges the bulk of them months ago.

By slacking off, they could raise the prices X's 10, without even trying.

Thu, 02/17/2011 - 22:54 | 972938 DavidPierre
DavidPierre's picture

Interviewed today by King World News, GoldMoney founder and GATA consultant James Turk says all the indicators for silver are bullish and that the short squeeze now under way could be "the big one." Excerpts from the interview can be found at the King World News blog here:

Fri, 02/18/2011 - 02:35 | 973314 SilverRhino
SilverRhino's picture

>> Metals prices have gotten to the point where they will soon allow mining companies to "name their terms".

Hope you are correct.

Fri, 02/18/2011 - 04:33 | 973412 Snidley Whipsnae
Snidley Whipsnae's picture

DP...don't know if you are aware of this interesting case...

Blanchard (a gold dealer) vs Barrick and JP Morgan

"In 2003, the world's largest gold mining company, Barrick Gold Corp. and J.P. Morgan & Co. were sued by Blanchard and Company, a large gold coin and bullion dealer. In its defense of the lawsuit, Barrick outlined exactly the gold suppression scheme described by GATA, and acknowledged Barrick's participation in it. Barrick successfully argued, however, that because central banks were sovereign and Barrick was working at the behest of the central banks, and because other gold mining companies which participated in the scheme were not also sued; Barrick was immune to liability for its role"...

Thu, 02/17/2011 - 22:18 | 972845 franzpick
franzpick's picture

Decades ago after Nixon withdrew gold backing, we joked that only 2 people in the world understood gold:  one a retired Swiss banker, the other a London bank vault manager. Unfortunately, they disagreed. 

Here we are, 1000% higher, a majority still 'disagreeing' with gold, and when QE 3, 4, and 5 prove nothing, and after new IMF/world currency substitutes are rejected and trade collapses, sending gold parabolic to $5k plus, most will still dislike Au, after which I am going to have my favorite quote, Mankind Swims Regularly in the Sea of Knowledge, Emerging Completly Dry, engraved on a large gold plaque and placed in a small fountain.

Fri, 02/18/2011 - 08:32 | 973541 zhandax
zhandax's picture

If you want to look at miners, be sure to look at their financing structure; particularly their loan agreements.  Let's not forget the 'short of product derivative' even though it got 'disapeared' last time it was mentioned.  Still not clear on why that happened (was asleep at the time)

Do NOT follow this link or you will be banned from the site!