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Guest Post: How Much More Demand Can Silver Handle?

Tyler Durden's picture


From Jeff Clark of Casey Research

How Much More Demand Can Silver Handle?

The numbers for silver demand are starting to make some market-watchers nervous. The U.S. Mint sold over 6.4 million silver Eagles in January, more than any other month since the coin’s introduction in 1986. China’s net imports of silver quadrupled in 2010, to 122.6 million ounces, roughly 13.7% of global production. Meanwhile, mine production can’t meet worldwide demand; the only way demand gets fulfilled is from scrap supply.

That is some very hungry demand. Which raises the question, how long can this pace continue?

This is important for various reasons, starting with how demand contributes to price. If demand falls off, our investments could, too.

While I’ve discussed the concern regarding the lack of supply before, which has its own implications for the silver market, let’s focus on investment demand. Frankly, is there room for it to continue to grow? After all, how long can investors continue to set records?

There are a number of ways to measure this – the amount of money available to invest, its percent of total financial assets, its contrast to demand in the last bull market, etc. – but I think the bottom line to answering the question is to compare the biggest silver investments to some popular equities. If they rival that of the stocks we always see on the news and analysts constantly talk about and every fund manager wants to own, then it might be reasonable to assume demand could be nearing its pinnacle.

So how do the world’s largest silver ETF and one of the biggest silver producers compare to the more fashionable equities?

The largest silver ETF, iShares Silver Trust, has net assets of $9.6 billion (as of February 4). This pales in comparison to the more popular stocks trading in the U.S. In fact, SLV has roughly 3% the market cap of Apple. It would have to grow over 43 times to match Exxon Mobil.

Pan American Silver, the largest pure silver producer trading on a major U.S. exchange, has a market cap of $3.72 billion. This is 4.7% the size of McDonald’s. The market cap would have to increase more than 53 times to match Walmart. It is over 62 times smaller than Microsoft.

This isn’t to suggest SLV and PAAS will match the market cap of these other companies, but clearly the masses are still demanding much more of them than the biggest of silver’s investment vehicles.

So how much more demand can silver handle? As much as it takes to make it the household name I’m convinced it will be before this is all over. When SLV is a favorite of fund managers. When Silver Wheaton is a market darling of the masses. When Pan American is Wall Street’s top pick for the year.

Imagine what those bars on the right will look like when most everyone you know is talking about poor man’s gold. The rise could be breathtaking.

Remember that silver rose over 3,646% from trough to peak in the last precious metals bull market; it’s up about 630% in our current run. A return matching the 1970s advance would push the price to $152. This price level is further supported by the fact that this is about where it would be when inflation-adjusted for its 1980 peak.

When you look at the potential growth in market cap of the world’s biggest silver investments, it becomes easy to view any downdraft in price as nothing but a buying opportunity. I know I do.


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Wed, 02/16/2011 - 19:24 | 968330 trav7777
trav7777's picture

Silver, bitchez

Wed, 02/16/2011 - 19:32 | 968363 nope-1004
nope-1004's picture

This is an analysis based on market cap and excludes the very pervasive Blythe money laundering machine.

When it becomes common knowledge that the ETF's don't have the metal to back up all that paper issued, the shit will really hit the fan.  I don't even look at price in fiat anymore, because the OI in the metals markets are downright scary.  The greedy hedgies are all going to stand for higher and higher premiums to delivery in delivery months, which will push the whole thing overboard.

At that point, you better own some physical.


Wed, 02/16/2011 - 19:38 | 968386 sellstop
sellstop's picture

As soon as it becomes evident that the ETF's don't have the physical, all those paper shares will be sold with the click of a mouse and the physical will drop like a rock.


You better hope they have the physical.


Wed, 02/16/2011 - 19:42 | 968399 scattergun
scattergun's picture

A very interesting way to look at the situation.

Wed, 02/16/2011 - 20:57 | 968633 tmosley
tmosley's picture

Only if by "interesting" you mean "stupid".

It's like claiming that a default by an ETN would drive the price of the commodity it tracks to zero.  That is just stupid.  The price of GLD does not directly interface with the price of gold, except that they supposedly buy gold from the market.  The only effect selling GLD will have when the market learns they have no gold is that people will flood from GLD to miners and physical, or something else.  There is no method by which such an event could have a negative effect on the price of gold.  

Or did you think that China selling plastic rice drove down the price of rice on the world market?  It might have done so while they were fooling people, but not after they were found out.  Same principle here, just a lot more money involved.

Wed, 02/16/2011 - 22:53 | 968947 BigJim
BigJim's picture

I'm bullish silver, so, yes, I expect the price to go up. A lot.

But why do commentators think the price will rise in proportion to its previous peak in 1980 when the Hunt brothers were attempting to corner the market?

Wed, 02/16/2011 - 23:38 | 969062 Backspin
Backspin's picture

Good question.  I think a lot of people point to the previous peak simply as an example of what is possible, and then it's fun to inflation-adjust the numbers.  But I agree that things are totally different this time:  supplies down, demand up, and central banks inflating the fiat currencies.  It's a different ball game this time, it seems to me.

Thu, 02/17/2011 - 01:09 | 969278 Fred G Sanford
Fred G Sanford's picture

We have the Ben Bernanke dollar tsunami in progress.

Thu, 02/17/2011 - 02:08 | 969346 Backspin
Thu, 02/17/2011 - 04:00 | 969446 phil silver
phil silver's picture

I'm not a betting man. so Silver and Gold rising are a certainty.

There's no way I would bet on Fiat Paper maintaining its value. Hyperinflation is comin.

I admit that I like the thought of thrashing JP's organ, by buying Silver.


Wed, 02/16/2011 - 22:55 | 968951 william the bastard
william the bastard's picture

As soon as you use the word "price" in relation to gold you killed your argument (which is none other than the same tired spume you offer daily)

You're a pimp, nothing more.

Wed, 02/16/2011 - 23:26 | 969030 Burnbright
Burnbright's picture

insert "value" with "price" problem solved.


Wed, 02/16/2011 - 23:50 | 969057 william the bastard
william the bastard's picture

Your koolade cherry?

Thu, 02/17/2011 - 00:12 | 969132 tmosley
tmosley's picture

You need a new bib.  This one is full.

Thu, 02/17/2011 - 01:00 | 969261 william the bastard
william the bastard's picture

What Chu Talkin Bout Willis!!

Wed, 02/16/2011 - 23:59 | 969111 sellstop
sellstop's picture

But they do have physical. These arguments are old. If you conspiracy theory nuts convince GLD holders to sell, you shoot yourselves in the foot.

Fact is, they hold the physical. And it can get sold at the click of a mouse. That is what scares you. Knowing you are in bed with a bunch of white shirt and tie wearing, office dwelling city folks that may decide to sell your precious metal before Armageddon arrives.



Thu, 02/17/2011 - 00:23 | 969159 Bay of Pigs
Bay of Pigs's picture

Wrong. Try to get your facts straight before you attempt to bullshit a crowd that knows way more than you sonny boy. 

Thu, 02/17/2011 - 00:22 | 969160 tmosley
tmosley's picture

Pfft, whatever.  Yeah, like a million people just "decide" to sell GLD and SLV all at once without proof one way or another.  That the dumbest thing I've heard in the last five seconds (sorry, Dim Willy above is hard to beat).  

Either they have the physical, and no-one sells, because its safe, or they don't have the physical, and GLD implodes along with the entire gold and silver complex, and you and Dim Willy fight to the death for a position on my septic system cleaning crew.

But hey, don't think that I want you to buy gold or silver.  I couldn't care less what you, or any of the other people here do.  I just tell the truth.  Believe it or not, and you'll get what you deserve. 

Thu, 02/17/2011 - 00:39 | 969206 SilverIsKing
SilverIsKing's picture

Morons abound so I suggest ignoring them.  When the sheeple discover the ETF fraud, they might dump the ETFs but that money is going to ricochet right into physical which will be unavailable.  Paper prices won't be relevant then.

Thu, 02/17/2011 - 01:02 | 969265 william the bastard
william the bastard's picture

You stressing about someone selling what you proport to hold for a hundred years? You ain't man enough for this gig Wainwright! 

Thu, 02/17/2011 - 01:28 | 969309 SilverIsKing
SilverIsKing's picture

Who you callin Wainwright?

Thu, 02/17/2011 - 00:54 | 969207 SilverIsKing
SilverIsKing's picture

(duplicate post deleted)

Wed, 02/16/2011 - 19:46 | 968409 NotApplicable
NotApplicable's picture

Umm... as soon as the ETF's are exposed as having no physical, they will go no bid, while physical goes parabolic.

Increasing scarcity means increasing prices for physical.

Wed, 02/16/2011 - 20:15 | 968495 william the bastard
william the bastard's picture

Pay the offer. It's the bubble way.

Hurry!! Supplies won't last!!!

"Operators" are standing by.



Wed, 02/16/2011 - 20:22 | 968509 unwashedmass
unwashedmass's picture

there's HL, EXK and CDE as well.

Wed, 02/16/2011 - 20:28 | 968536 william the bastard
william the bastard's picture

SIL, the ETF, boasts the inclusion of 30+ silver miners. There's a shortage especially as to Canadian listings.

Thu, 02/17/2011 - 04:16 | 969458 minus dog
minus dog's picture

"Umm... as soon as the ETF's are exposed as having no physical"

Or as soon as that instrument on paper becomes inaccessible for any near-term transaction due to government shenannigans...

Thu, 02/17/2011 - 07:51 | 969544 johnQpublic
johnQpublic's picture

heres my take on all this...

in late '08 when silver was 8 bucks, you could buy all the paper silver you wanted

you could get it thru major sources, if you were willing to wait six weeks for delivery


but on ebay, it was going for close to 25 an ounce

thats where the rubber hits the road

people wanted physical right damn now, and were willing to pay a premium to get it

right now on ebay, it goes around spot or there abouts

you can buy below spot on craigslist if you search hard enuf

i could see the bottom fall out of paper silver, while at the same time tripling in price for physical, right now type delivery

when i can contact a redneck from Dover delaware, and they shoot the word contango back at me, even if improperly used, i'm a buyer to 70/oz   (he said cotango, but dammit,close enuf)

all the way up, all the way down

people selling right now around here need heating oil....this wont last much longer(spring is in the air)

people get what is going on to some extent, but they dont know what to do about it

poor mans gold folks

straight to the moon alice,straight to the moon

Wed, 02/16/2011 - 19:47 | 968412 JonNadler
JonNadler's picture

that's shameless even for me. Sell SLV and physical goes down? To terrify the gold bugs the statement has to have some plausability to it.

Wed, 02/16/2011 - 21:08 | 968663 Temporalist
Temporalist's picture

Don't you know SLV is more valuable than silver?

Wed, 02/16/2011 - 22:57 | 968956 Bay of Pigs
Bay of Pigs's picture

Jon, Please get your li'l protege here sellstop up to speed. He's confused.

Wed, 02/16/2011 - 19:53 | 968434 Pladizow
Pladizow's picture

To: sellstop

I think your reasoning may be flawed.

If the reason the SLV shares get sold is because it is discovered they are commiting fraud, I doubt it will have a negative impact on physical.

Perhaps even the opposite.

Thu, 02/17/2011 - 00:11 | 969131 sellstop
sellstop's picture

See my other reply.

SLV does hold physical. It can be sold at the click of a mouse. The problem from the "physical" holders point of view is not that the ETF's don't have the metal, the problem is that they do! And it can be so easily bought and sold. The volatility is increased in anything that can be instantly and widespreadily (?) bought and sold. Especially when the "little guys" get in on the act. And that was the whole point of ETF's. To make physical available to everybody.

so be careful what you wish for.

And for your information, I own paper silver, and physical silver. The timeframe of the two holdings is very different because I recognize the volatility and can vary my bet size depending on conditions more easily with the paper. The physical is for that worst case, and long term scenario that may or may not happen. But that is what my 26 acres, cattle, garden, shop, gravity feed water, and wood heat is for. Besides the quality of life......

Best of luck,

Know yourself.


Thu, 02/17/2011 - 01:06 | 969273 nope-1004
nope-1004's picture

I recognize the volatility and can vary my bet size

That's exactly the casino mentality that physical holders don't buy into.  All you "brokers" huddled in your cubicles staring at a computer screen placing bets on pokerstars and futures markets doesn't "scare the hell outta me", it makes me realize how disconnected from reality you paper pushing criminals are.

But don't buy physical.  I suggest you keep your ways, place your bets, and keep anti-ing up to stay afloat.  When it crashes, I'll have my burger without onions, please.


Thu, 02/17/2011 - 01:11 | 969281 MsCreant
MsCreant's picture

Why is the Comex settling in cash instead of delivering silver?

Thu, 02/17/2011 - 18:53 | 972087 nope-1004
nope-1004's picture

They are bribing the hedgies and offering as much as 30% (by some accounts) premium to spot.

Thu, 02/17/2011 - 02:24 | 969361 Ahmeexnal
Ahmeexnal's picture

Your 26 acres, cattle, garden, shop, gravity feed water, wood heat, flux capacitor and your quality of life will be taxed to death when TSHTF. Good luck trying to move your 26 acres. Remember Rome. Remember Zimbabwe. You have been scrood, just like everyone else.

Strike hard, strike first, strike the head. Or get down on 20 nails and pray 5 times a day towards anywhere the power elite tell you to.

Wed, 02/16/2011 - 20:45 | 968591 SRV - ES339
SRV - ES339's picture

Well... if you're going to be wrong, you may as well go "all in!"

You better stick to mutual funds.

Wed, 02/16/2011 - 20:47 | 968600 SRV - ES339
SRV - ES339's picture

Well, if you're going to be wrong, you might as well go "all in!"

You better stick to mutual funds.

Wed, 02/16/2011 - 20:48 | 968607 sleestak
sleestak's picture

sellstop, wtf? the people who own SLV today do so in hopes that this paper vehicle will gain them exposure to the actual price of physical silver, yes? once aware the counterparty trusted to maintain this link has defrauded them, yes, they will sell. however, their initial reason for being attracted to silver (supply demand imbalance, fiat profligacy, etc.) will persist, only they and their ilk will have fewer vehicles with which to play it. supply is essentially further reduced.  holding demand static (or increasing it in a newly aware panic at the extent to which the fiat ponzi is willing to go to prevail), while reducing supply = price increase. 

or did you have some other logic that made sense to you?

Thu, 02/17/2011 - 00:15 | 969144 sellstop
sellstop's picture

WTF! You believe rumors about fraud and base your investment decisions on conspiracy theories.


Fri, 02/18/2011 - 03:53 | 969412 GoinFawr
GoinFawr's picture

'Rumours', hunh....pending lawsuits aside?

What about all the outflows of actual real silver from SLV as of late, even as spot increases and the futures go into steeper and steeper backwardation? Remind me again who runs that particular 'license to shoot myself in the face' ETF?

 It may be time to upgrade that 'conspiracy theory', IMHO. But fill your boots with long ZSL, if you're so damn certain, paperbuoy.

Fri, 02/18/2011 - 20:50 | 976225 sleestak
sleestak's picture

sellstop, wtf, again?  nowhere in my post did i suggest an investment thesis.  i made the case that a fraud at SLV would send the price of physical silver higher. can you really dispute that?  or are you just mad that i disagree with you and so i must have some inane investment thesis based on rumors?

do you know what i own?

know yourself? please.

get a grip.



Wed, 02/16/2011 - 21:47 | 968764 Quinvarius
Quinvarius's picture

If SLV defaulted silver would be over 50 in about an hour.

Wed, 02/16/2011 - 22:16 | 968847 UncleFester
UncleFester's picture

More like 10.2 seconds.

Wed, 02/16/2011 - 23:22 | 969017 JLee2027
JLee2027's picture

Silver is money, paper is not. Once the public remembers that, the demand will be virtually infinite and so will the price.

Thu, 02/17/2011 - 00:02 | 969116 UncleFester
UncleFester's picture

I'm not sure about infinite, but I get your point.

Thu, 02/17/2011 - 04:57 | 969482 Overflow-admin
Overflow-admin's picture

I think it's more accurate to say silver has a value much higher than paper.


Money is what your country accept for paying taxes. It could be anything (shellfish, gold, tally sticks, paper, et.). Money is a wealth vehicle.

Wed, 02/16/2011 - 22:16 | 968845 Bagbalm
Bagbalm's picture

Yeah if the physical is not backed by paper I'll just throw it in the street. You work for JPM or are you drunk?

Wed, 02/16/2011 - 22:34 | 968886 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture


Wed, 02/16/2011 - 22:34 | 968885 bruinjoe93
bruinjoe93's picture

sellstop = bullion banker

Wed, 02/16/2011 - 22:56 | 968952 Calmyourself
Calmyourself's picture

Who buys these you?  If so we need to talk, I've got some land you should see pictures of and bring cash.. Pictures are enough right, you don't need to actually see it do you...

Wed, 02/16/2011 - 19:42 | 968395 ReallySparky
ReallySparky's picture

I think we are one "Mad Hedge Fund Trader" away from a comex crash. 

Wed, 02/16/2011 - 23:29 | 969034 Burnbright
Burnbright's picture


Wed, 02/16/2011 - 20:42 | 968580 bankrupt JPM bu...
bankrupt JPM buy silver's picture

We got 182 "I hate Blythe's" today, check it out...going to try to get to 500, on days Blythe puts the hammer down


Wed, 02/16/2011 - 19:35 | 968375 JW n FL
JW n FL's picture

In Multiples!!!! Fuck Inflation, Buy Silver!!!!

Wed, 02/16/2011 - 20:05 | 968466 SilverRhino
SilverRhino's picture

>>That is some very hungry demand. Which raises the question, how long can this pace continue?

A VERY long time ...  300 million in the US. 500 million in the EU, 2.3 billion in India/China ... even if 10-20% say "Let's buy an ounce or two." 

Wed, 02/16/2011 - 20:17 | 968501 DosZap
DosZap's picture

According to Larry on UnCommon Wisdom, there is 5000 tons available on the market now.

Wed, 02/16/2011 - 21:21 | 968697 WryObserver
WryObserver's picture

300 million dollars total value of that 5000 tons is not a lot. An individual could buy all of it. 

Wed, 02/16/2011 - 21:39 | 968739 Sig Sauer
Sig Sauer's picture

uh, check your math. 

Wed, 02/16/2011 - 21:48 | 968767 tmosley
tmosley's picture

$4.4 billion.  Well within the capabilities of some individuals.

Wed, 02/16/2011 - 22:18 | 968853 UncleFester
UncleFester's picture

And that's not including leverage.

Wed, 02/16/2011 - 23:52 | 969093 TeMpTeK
TeMpTeK's picture

Larry said stay away from gold and silver 2 weeks ago..If you can get him to say that every day, we'll all be rich.

Thu, 02/17/2011 - 04:29 | 969466 Tapeworm
Tapeworm's picture

As much as I like some of your more wordy comments, I have to ask you to get real about the purchasing power parity of spot silver right now. Do a chart of silver vs just about any real commodity, and tell me how much more price appreciation is there other than a possible short squeeze.

 The price of silver on spot markets is at 30.74x.718 oz/USD of 1964 coin, or 22 present dollars for an old silver dollar.

 I'd rather cash out silver to buy foodstuffs that are now at near record lows in silver.

 I dissuade anyone that has a small amount of cash to convert to silver to instead buy storage food.

Wed, 02/16/2011 - 19:24 | 968331 jobs1234
jobs1234's picture

As long as Bernanke/Shrute bucks get printed, silver and other PMs are going up

Wed, 02/16/2011 - 19:26 | 968337 gniuz
gniuz's picture

Today showed us a true fight! Can't wait to see how this performance unfolds..

Wed, 02/16/2011 - 19:28 | 968343 Flakmeister
Flakmeister's picture

PAAS....snarf, BTFD today after earnings...

Wed, 02/16/2011 - 19:28 | 968345 yabyum
yabyum's picture

Silver is easy to buy easy to own. Thursday is the day you find out who your local coin guy is( maybe more than one) go buy a few old dimes, get started, have some fun and corn hole a banker:))

Wed, 02/16/2011 - 19:39 | 968387 JW n FL
JW n FL's picture



Buy Silver!!!


Fuck the FED!!!!


Fuck a Banker!!!!


Fuck Inflation!!!!


Protect your hard earned dollars!!!!

Wed, 02/16/2011 - 20:12 | 968490 william the bastard
william the bastard's picture

Don't take you bib off.

Wed, 02/16/2011 - 21:02 | 968649 tmosley
tmosley's picture

Stop assuming everyone is like you.  Most people don't need bibs to stop the drool from ruining their t-shirts.

Wed, 02/16/2011 - 23:22 | 969019 william the bastard
william the bastard's picture

I am destroyed!

Thu, 02/17/2011 - 00:30 | 969178 tmosley
tmosley's picture

Indeed you are, though you did it to yourself.  You clearly have no purpose in your life.  Why don't you just seek the sweet release of death instead?

No, actually, don't do that.  I want you to see the world for what it really is when you stand at the bottom, and those that you trolled so very weakly stand at the top.  I want you to savor the humiliation, poverty, and hunger that comes from that realization that your pride and ignorance lead you to lose everything.  That is a fitting fate for the likes of you.

Thu, 02/17/2011 - 01:21 | 969289 william the bastard
william the bastard's picture

You're a sick motherfucker.

Seek help! Seriously. Church, clinical counseling, AA, psychological.

Thu, 02/17/2011 - 01:30 | 969310 akak
akak's picture

If I could send a bullet through the internet into your pathetically diseased and worthless brain, I would gladly do so.  Count yourself among the walking dead, you sick and malignant son of a bitch.

Thu, 02/17/2011 - 02:31 | 969369 Ahmeexnal
Ahmeexnal's picture

Blythe is about to shit brix!

BTW, how much does Blythe pay trolls like you?  Wait, don't tell me you get food stamps. Can you eat those?

Wed, 02/16/2011 - 20:17 | 968496 gall batter
gall batter's picture

Buy silver.  Fuck the FED.  Fuck a Banker.  Then, marry a banker to protect your hard-earned dollars.  And fuck 'til you're inflated.  

Wed, 02/16/2011 - 20:29 | 968538 william the bastard
william the bastard's picture

You should shower after you crap.

Wed, 02/16/2011 - 21:03 | 968653 tmosley
tmosley's picture

You should learn to wipe your ass like a big boy.  Most of us know how to already.

Wed, 02/16/2011 - 22:58 | 968958 william the bastard
william the bastard's picture

Weak. Like your life.

Thu, 02/17/2011 - 00:35 | 969196 tmosley
tmosley's picture

Nope, my life is awesome.  Rich and getting richer, great job curing diseases (no, not like you, important ones that people actually care about, like prostate cancer), great family, etc.  It would be hard for my life to get any better.  

You, on the other hand, are no better than the semen you leave on the sheets for your mother to clean.  I can't imagine how terrible it must be to be so totally unwanted, unimportant, unneeded by anyone :(

Thu, 02/17/2011 - 01:04 | 969271 william the bastard
william the bastard's picture

You're a sick motherfucker.

Thu, 02/17/2011 - 07:06 | 969526 StychoKiller
StychoKiller's picture

You two need to get a room, and no, I don't want to know who gets the handcuffs! :>D

Wed, 02/16/2011 - 23:11 | 968995 Triggernometry
Triggernometry's picture

I had a hot banker, and I fucked her silly. Still miss that sweet ass, but the pillow talk was horrible.

Wed, 02/16/2011 - 19:29 | 968351 High Plains Drifter
High Plains Drifter's picture

Hey Jefro, why don't you go ask Blythe how long it can last?  Forget those ETF's. They don't have the product. They are lying, except Sprott.  Paper silver is only paper.

Thu, 02/17/2011 - 03:43 | 969432 Sopra Tutt1
Sopra Tutt1's picture

Except that Sprott is keeping it with the Canadian Mint in Ottawa, Canada... a Crown Corporation, owned by the... Canadian government. Guess what will the Canadian government tell to Sprott if the silver paper will prove not to have much physical behind it, and Sprott will ask for its physical share to deliver it to the rightful owners?


Better get physical or don't get involved at all.

Wed, 02/16/2011 - 19:30 | 968352 NOTW777
NOTW777's picture

maybe the miners should start selling bars to the public

Wed, 02/16/2011 - 19:34 | 968368 Flakmeister
Flakmeister's picture

Check out First Majestic.... AG on NYSE

Wed, 02/16/2011 - 20:24 | 968519 DosZap
DosZap's picture

Ck out SVM

Wed, 02/16/2011 - 20:26 | 968526 NOTW777
NOTW777's picture

does it sell direct?

thanks - I'll check it out

Wed, 02/16/2011 - 20:23 | 968502 DosZap
DosZap's picture

Rumor is some Miners are hedging.

Wed, 02/16/2011 - 21:06 | 968629 DavidPierre
DavidPierre's picture


U.S. Silver is hedged!

"...u.s. silver is heavily hedged at least 20% and maybe more....owned 600,000 shares when we heard they hedged we sold all of them
the same day.  They did this in
november three months ago..."

via lemet

Wed, 02/16/2011 - 22:22 | 968858 UncleFester
UncleFester's picture

Shocked...just shocked, I tell you.

Thu, 02/17/2011 - 04:00 | 969427 GoinFawr
GoinFawr's picture

I heard 70 mm ounces to 2013 is the best they've been able to get. Won't help our friends for March anyway. Besides, 35mm/yr is piss up a rope.

"On January 11, Minera Frisco announced that it had presold 70 million ounces of silver that it expects to produce between now and 2013."

Heh, looks like someone wants to be the 'Ashanti' of the silver space. Whoops.

Oh wait, mb 70 million is a stretch:


"Frisco estimates the new mines in Mexico will produce 19.1 million ounces of silver after reaching capacity, compared with 5.5 million ounces from existing mines in 2010, according to an e-mailed statement yesterday to Mexico’s stock exchange. "

Wow, that's quite the feat: increase production almost four fold in a year, I guess you get motivated when you get a cheque for funny money to pull 70mm ounces of silver.... good luck amigos!

But still not much help there BM, not for awhile anyway. Just more paper ammo that no one seems to want to roll over to, maybe those 'yet to be realized' ounces can act as SLV share stand ins? Better get a move on Frisco! Blythe is crackin' the whip!

Thu, 02/17/2011 - 04:43 | 969472 Tapeworm
Tapeworm's picture

They would be insane not to hedge at these prices. If I had a silver mine I would forward sell six months minimum at the prevailing price.

 Then again, why worry as the management can issue a boatload of shares to management at five percent of the current share price. Most miners are scams that are even worse than NFLX. It isn't exactly what miners were in the 1980's, and not at all like some of the semi-honest South African mines of ten years ago.

 Profit stripping isn't just for tech stocks.

Thu, 02/17/2011 - 15:23 | 970012 GoinFawr
GoinFawr's picture

Yeah yeah yeah. Ashanti thought the same thing when they took the banks' advice and hedged their gold 1000 US bitz of paper/oz ago.Barrick too. Whoops.

So your message is 'do your own due diligence, but NFLX is a better deal than scammy miners, if I was smart I'd sell forward all my ounces, blah blah blah', gotcha.

And you're right, profit stripping isn't just for tech stocks, it's for HFT algo's, which is why everyone is doing the Olivia Neutron Bomb and getting physical; "Lemme see your bullshit walk, your bullshit walk. Lemme see your bullshit walk..."

Wed, 02/16/2011 - 20:24 | 968518 sandvikpanther
sandvikpanther's picture

Definitely, direct sales. The miners should sell shares directly as well.  It would be good to take delivery here as well.  This may seem a retrograde step until you consider the recent judgement on MERS.  Everyone is assuming a final receiver to unwind all these frauds, maybe not.

Thu, 02/17/2011 - 00:42 | 969217 Non Passaran
Non Passaran's picture

What difference would that make?

Wed, 02/16/2011 - 19:29 | 968353 Hugh G Rection
Hugh G Rection's picture

How much more silver demand can the JP Morgue handle?  Thats what i'm interested in.


You factor in scarcity, fraud and a default at the COMEX... $152 is beyond a lowball estimate.


$450/oz by 2012.

Wed, 02/16/2011 - 20:43 | 968583 silvertrain
silvertrain's picture

 If it hits $450 it will be priced in SDR's..

Wed, 02/16/2011 - 23:25 | 969024 JLee2027
JLee2027's picture

No, the SDR scam would require a 2/3 majority in the Senate to pass the Obama-signed treaty agreement. Won't ever happen.

Wed, 02/16/2011 - 20:59 | 968643 Just Observing
Just Observing's picture

TO quote the Mogambo: "Wheeeeee this investing stuff is easy ! "


Let's 150/oz, those 90% bags I paid 3500 few years back, will be selling for over 100 grand.



Wed, 02/16/2011 - 19:33 | 968356 EscapeKey
EscapeKey's picture

Silver open interest down 1,869 contracts today in the front delivery month. Gold significantly up, though.

Gold Open Int Change Silver Open Int Change

GC G1 699 -20 SI G1 88 -33

GC H1 1,504 -84 SI H1 59,851 -1,869

GC J1 306,330 7,358 SI J1 43 4

Wed, 02/16/2011 - 19:30 | 968357 disabledvet
disabledvet's picture

As oil trucks move in North Dakota so mine trucks move in Nevada.  And yet again Wall Street is surprised.

Wed, 02/16/2011 - 19:36 | 968376 Clint Liquor
Clint Liquor's picture

World production of Silver per year equals 800 Million ounces. 800 Million times $31 equals $24.8 Billion. US Budget deficit for January 2011 equals $48.9 Billion.

When it takes the entire World's production of Silver for two years to pay for one month of US Budget deficit, demand will grow.

Wed, 02/16/2011 - 20:19 | 968504 william the bastard
william the bastard's picture

There no logic whatsoever in your statement. None. Why not price Egypt's budget in cotton..or tourism? That at least makes some sense.

Wed, 02/16/2011 - 20:57 | 968630 sleestak
sleestak's picture

i think he's just trying to offer some perspective on the extent of the fiat folly we're in and the likely cost of a remedy in terms of real money. the difference between the us budget deficit, paid for in virtually in entirety by fed issuance of the global reserve currency, and the egyptian budget denominated in cotton, should be apparent to you.

Wed, 02/16/2011 - 21:07 | 968660 tmosley
tmosley's picture

Leave it to a drooling baby with filthy shorts to fail to understand the difference between money, goods, and services.

Might I suggest you try  Might be more fitting to your disposition and level of development.

Wed, 02/16/2011 - 23:24 | 968962 william the bastard
william the bastard's picture

Do you best. Come on.  Oooo! That hurts.

Thu, 02/17/2011 - 08:49 | 969586 Husk-Erzulie
Husk-Erzulie's picture

Is that a douche bag on yer head Bill?

Wed, 02/16/2011 - 20:30 | 968542 sandvikpanther
sandvikpanther's picture

A good point stated in a unique way.  The point is the fiat has to be replaced by gold and silver and what will that ratio be assuming it happens in an orderly fashion?  Egypt is not issuing the Reserve Currency.  So will it be 30 Bernankies for every oz of silver- that hardly seems likely.  300?  3 Billion?  Pick any number.  We have to knock about 9 zeroes off our current sums.  Money has to be real at the end of the day.

Wed, 02/16/2011 - 20:37 | 968563 william the bastard
william the bastard's picture

"Money has to be real at the end of the day"

They took mine today. You want to tell me it was bogus?

Wed, 02/16/2011 - 20:52 | 968613 Dr. Richard Head
Dr. Richard Head's picture

Your slip is showing Bill the bitchtard.  Your currency was exchanged for goods.  The Federal Reser e Note is missing on property of money.  Let's see if you can indentify which proerty of money your shit paper be missing.

Wed, 02/16/2011 - 23:25 | 968976 william the bastard
william the bastard's picture

When you buy toilet paper (they say it's better than your hand ya know) the seller will require you monetize your gold bars to complete the transaction and then you can take this new discovery home.

Wed, 02/16/2011 - 23:51 | 969091 Dr. Richard Head
Dr. Richard Head's picture

No dispute there Paco Fish Taco.  I don't rely on a pile of currency for long term saving.  The currency market, stocks included,are needed for short-term planning and tranactions.  What I am saying, along with many others here, is the to save currency is to promise lose in the negative interest rate environment.  This environment cannot change without dire consequences to the masters of currency. Now money,that is a different story.  I will save money, but spend currency.  While you fight against, you make great points with.  Stick that in your pie hole bastard.  Fuck qwerty for any and all typos.

Thu, 02/17/2011 - 01:09 | 969277 william the bastard
william the bastard's picture

Put the bottle down. You're unintelligible. I did try read it. I did. Seek help man.


Wed, 02/16/2011 - 20:58 | 968636 Bendromeda Strain
Bendromeda Strain's picture

Exponentially increasing bogosity...

Wed, 02/16/2011 - 23:01 | 968966 Calmyourself
Calmyourself's picture

Seriously wtb, not your best effort.  Ignoring all other factors being discussed does not make them go away, just makes you look obtuse.

Wed, 02/16/2011 - 19:36 | 968379 AUD
AUD's picture

Backwardation in COMEX silver is becoming rather extreme, at this rate the entire forward curve will be backwardated by the end of the week.

COMEX may not be the final word in silver but it seems this is unprecedented.

Wed, 02/16/2011 - 20:29 | 968528 DosZap
DosZap's picture

Hasn't been in backwardation for a spell.A long spell.

If Gold does too, we have trouble in river city.

The Chinese are doing to SLV the same thing their doing yo GLD now.

Wed, 02/16/2011 - 22:05 | 968819 h3m1ngw4y
h3m1ngw4y's picture


little or much underlying silver or gold in SLV or GLD is irrelevant. it is taken out as we speak. dropping tonnage is very bullish for me. when these buffers are empty all bets are off. no mental accounting in $ or EUR anymore.

Wed, 02/16/2011 - 23:28 | 969032 JLee2027
JLee2027's picture

Backwardation in COMEX silver is becoming rather extreme,

Turd Ferguson says the Morgue is shorting future contracts because they are out of options to reduce open interest 

Wed, 02/16/2011 - 19:36 | 968380 bob_dabolina
bob_dabolina's picture

You can not eat this shit. It is worthless.

Wed, 02/16/2011 - 19:58 | 968444 the rookie cynic
the rookie cynic's picture

Bob must prefer FRN fetuccini and T-bill toasties.

Wed, 02/16/2011 - 20:02 | 968460 bob_dabolina
bob_dabolina's picture

Naw. Bob likes municipal munchies.

Wed, 02/16/2011 - 20:19 | 968503 printmemoney
printmemoney's picture

worthless?, you must own a farm then.......or do you just have a ton of food hanging around the house........maybe you keep some space ice cream in a safe deposit box

Wed, 02/16/2011 - 20:28 | 968534 bob_dabolina
bob_dabolina's picture

Dollars are the only investment I will ever wish to own because they retain their value over time.

Thu, 02/17/2011 - 00:43 | 969220 akak
akak's picture

Are you sure you aren't that TV reporter who was caught on camera jibbering nonsense as if it all somehow made some kind of sense?

Wed, 02/16/2011 - 21:02 | 968650 Ahmeexnal
Ahmeexnal's picture

All those placing their faith in farmland are doomed. All agricultural activity will be highly taxed when TSHTF. Taxed to death. Remember Rome.

Wed, 02/16/2011 - 23:04 | 968977 Calmyourself
Calmyourself's picture

Whats your plan,high rise section 8 housing?  Remember you cannot eat it, but your tenants will eat you when the checks stop..

Wed, 02/16/2011 - 20:30 | 968539 DosZap
DosZap's picture


Is ONE brave mutha.

Wed, 02/16/2011 - 20:07 | 968474 asdasmos
asdasmos's picture

But you can ear dollars right. Mind sharing some recipes?

Wed, 02/16/2011 - 20:15 | 968491 bob_dabolina
bob_dabolina's picture

No you can't ear dollars.

Do I have to announce being sarcastic after every facetious comment?

Wed, 02/16/2011 - 20:28 | 968500 asdasmos
asdasmos's picture


Wed, 02/16/2011 - 20:37 | 968555 william the bastard
william the bastard's picture

Can eat dollars? Not very origional. Maybe I'll get the humor sometime later yo.

Thu, 02/17/2011 - 00:21 | 969158 Richard Head
Richard Head's picture

You take the prize for most juvenile and worthless commenter on ZH.  Why do you even bother?  Go watch WWE and save us the inconvenience of scrolling past your drivel.

Thu, 02/17/2011 - 01:11 | 969282 william the bastard
william the bastard's picture

America's ace arbitor of taste: A troll called "Dick Head" .


Wed, 02/16/2011 - 22:08 | 968826 whether underground
whether underground's picture


"Do I have to announce being sarcastic after every facetious comment?"


Wed, 02/16/2011 - 23:14 | 968874 UncleFester
UncleFester's picture

No, but I'll take anounce for everyone of your facetious comments.

Wed, 02/16/2011 - 20:35 | 968558 Blank Reg
Blank Reg's picture

Au contraire, mon frère. Check out this site.

Wed, 02/16/2011 - 20:58 | 968635 Treeplanter
Treeplanter's picture

Me and Bob  are way long Chevy Volts.  That's where it's at.

Wed, 02/16/2011 - 22:45 | 968920 MayIMommaDogFac...
MayIMommaDogFace2theBananaPatch's picture

People are lining up around the block, even bringing their own extension cords...  </sarc>

Wed, 02/16/2011 - 23:06 | 968985 Calmyourself
Calmyourself's picture

Hey TD as long as we are on the Chevy subject why no thread on the GM bonus situation?

Wed, 02/16/2011 - 19:44 | 968392 DavidPierre
DavidPierre's picture
Thieves steal $750K in silver bullion

RCMP in the Fraser Valley are searching for clues to identify who stole three quarters of a million dollars worth of silver bullion during a recent home invasion.

It happened Feb. 9 in Chilliwack around 1:40 p.m. PT.

Police said two men believed to be leaders of the infamous GATA GANG, entered a house in the 10000 block of Imperial Street and made off with thousands of ounces of bullion.

Const. Tracy Wolbeck said the suspects... believed to be Chris Powell, of no fixed address, and Bill Murphy, who has recently moved to Vancouver,  were wearing tin foil hats. They bruised the sole occupant of the home during the robbery.

"Police are in the preliminary stages of investigating this incident," said Wolbeck. "We are hopeful that given the time of day, someone saw something and can give us some helpful information."

Wolbeck said people should think twice about storing valuables and cash in the home.

"Do not keep a significant amount of precious metal or money in your home like that. And if you do that, be sure to keep that information to yourself because obviously these people knew what they were looking for," said Wolbeck.

Wolbeck said investigators don't know why the victim was collecting silver bars.

Read more:

Wed, 02/16/2011 - 20:22 | 968513 asdasmos
asdasmos's picture

The actual article:


RCMP in the Fraser Valley are searching for clues to identify who stole three quarters of a million dollars worth of silver bullion during a recent home invasion.

It happened Feb. 9 in Chilliwack around 1:40 p.m. PT.

Police said two men entered a house in the 10000 block of Imperial Street and made off with thousands of ounces of bullion.

Const. Tracy Wolbeck said the suspects, who may have been wearing a uniform, bruised the sole occupant of the home during the robbery.

"Police are in the preliminary stages of investigating this incident," said Wolbeck. "We are hopeful that given the time of day, someone saw something and can give us some helpful information."

Wolbeck said people should think twice about storing valuables and cash in the home.

"[Do not] keep a significant amount of precious metal or money in your home like that. And if you do that, be sure to keep that information to yourself because obviously these people knew what they were looking for," said Wolbeck.

Wolbeck said investigators don't know why the victim was collecting silver bars.


Wed, 02/16/2011 - 20:32 | 968544 william the bastard
william the bastard's picture

If you can't think for yourself, don't cut and paste.

Wed, 02/16/2011 - 21:12 | 968675 tmosley
tmosley's picture

Instead, leave idiotic one liners EVERYWHERE!

Wed, 02/16/2011 - 21:43 | 968752 asdasmos
asdasmos's picture


Wed, 02/16/2011 - 23:08 | 968988 william the bastard
william the bastard's picture

Now THAT was origional asswipemos !! Oh! and you achieved your useless point within one line!! hehe

Thu, 02/17/2011 - 00:24 | 969163 Richard Head
Richard Head's picture

$50 says you have not one friend in the world, WTB.

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