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So About That Speculative, And Undisputed, Silver Bubble...

Tyler Durden's picture





 

Lately, everyone and their grandmother speaks with 100% conviction that over the past week what happened in the silver market was nothing but a speculative bubble popping. After all, 5 consecutive margin hikes would mean that uber-levered terrorist speculators must have been scrambling with the urgency of an E-trade baby checking his voicemail and getting 99 margin call messages. So certain seems to be conventional wisdom in this allegation that nobody appears to have even checked the facts. Well, we did. For that we went to the usual place that provides a definitive breakdown of speculative indications: the CFTC's Commitment of Traders report, and specifically the non-commercial specs which after netting shorts from longs would be expected to be at some parabolically unseen level ever in the history of the CFTC. Much to our surprise we found this...

Yes: according to the CFTC, the level of non-commercial net longs in silver is, in the week ending May 3, at the lowest since July 28, 2009. So while one could speculate that silver may have been in some pseudo-bubble back in October 2010, when net specs hit over 50,000 contracts, the most recent reading of 23,354, which is merely the latest in a downward sloping trend starting in February, alas throws a lot of very cold water over the whole silver bubble popping thesis.

And yes, going forward we urge readers to always check with primary sources such flamboyant claims as those uttered every single day by the CNBC peanut gallery about record this and bubble that. Oddly enough, nobody on CNBC will ever mention that the one true bubble continues to be in stocks, where the net speculative leverage on the NYSE as expressed by surging margin debt total and declining positive investor net  worth, is at the second lowest ever, meaning investors are more levered into the beta rally than just one time in history: the very peak of the credit/housing bubble in 2007!

 


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Mon, 05/09/2011 - 19:58 | Link to Comment CPL
CPL's picture

It's not speculation when it has become a real currency that trade, goods and services are now being traded for.

Mon, 05/09/2011 - 20:20 | Link to Comment fuu
fuu's picture

Silver bitches!

Mon, 05/09/2011 - 20:39 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Now that the terrorist Kuato has been killed, the world is a safer place.

Mon, 05/09/2011 - 22:14 | Link to Comment laserjock
laserjock's picture

C'mon Cohagen you got what you want -  Give these people air!

Mon, 05/09/2011 - 22:55 | Link to Comment TwoShortPlanks
TwoShortPlanks's picture

*Asuming you weren't being sarcastic in citing Kuato*

The greatest threat to global security is US Foreign Policy. Time for people to wake-up and realise that if it wasn't Bin Laden (or Sadam Insane) it would have been some other person, or some other excuse to wage war.

Here's just one of many real reasons why the US is currently a walking Zombie; http://www.cdi.org/issues/milspend.html

Of course, the more Full Retard Knuckle Dragging Neanderthals that are out there hypnotised by 'So You Think You Can Dance' or 'CSI-Everywhere', the less crowded it is for me.

For a country that raves-on about how intelligent they all are, it sure is taking a long time for the Arm Chair Academics to see the bloody obvious.

Fuck turning-on the "Air", let them suffocate; it's more humane than letting them live their lives in the manner in which they do.

Tue, 05/10/2011 - 05:21 | Link to Comment agNau
agNau's picture

I believe the weapon of mass destruction of Sadam Hussein was accepting only Euro's for his oil. And I believe Libya's Kadaffy was as well. Lot's of hatin on Iran.....wonder if they are doing the same?! It truly would be a destructive weapon, just like all those terrorist's buying physical silver.

Mon, 05/09/2011 - 22:59 | Link to Comment WeekendAtBernankes
WeekendAtBernankes's picture

You think this is the real Quaid?

Hahaha.

It is.

Mon, 05/09/2011 - 20:19 | Link to Comment Don Quixotic
Don Quixotic's picture

Tell me where this is... because I definitely haven't seen anywhere I can go buy a burrito for a bit of silver.... yet.

Mon, 05/09/2011 - 20:23 | Link to Comment hack3434
hack3434's picture

Go to Tijuana. 

Mon, 05/09/2011 - 20:32 | Link to Comment UGrev
UGrev's picture

Pay in dimes.. ?

sorry, I'm being pedantic. 

Mon, 05/09/2011 - 21:24 | Link to Comment Keri at Bankste...
Keri at Bankster Report's picture

Forgive me if this was already posted, but here's Peter Schiff explaining why gasoline is at an "all time low:"

http://www.youtube.com/watch?v=8-Sv3g7XZdM&feature=player_embedded

Dimes, indeed.

Mon, 05/09/2011 - 23:27 | Link to Comment ZFiNX
Tue, 05/10/2011 - 08:48 | Link to Comment dussasr
dussasr's picture

Don, come to my house.  I'll make you a nice burrito for 1 oz of silver.  Hell, I'll even throw in a Dos Equis for you to wash it down with!

Mon, 05/09/2011 - 20:30 | Link to Comment VegasBD
VegasBD's picture

argentina, or any country who's currency has been destroyed recently

Mon, 05/09/2011 - 20:38 | Link to Comment N_Jones
N_Jones's picture

Utah has already passed a preliminary bill through congress to allow federally minted gold and silver coins to be accepted as currency at their weight value and not just their face value. Colorado and South Carolina also have similar bills in their respective houses.

Mon, 05/09/2011 - 20:49 | Link to Comment Jendrzejczyk
Jendrzejczyk's picture

Come to my house. I'll sell you one hell of a big burrito for your silver.

Mon, 05/09/2011 - 22:42 | Link to Comment Creed
Creed's picture

a note to the Tylers

since installing IE 9 today I have to hit disable rich text to be able to post

Mon, 05/09/2011 - 23:17 | Link to Comment Calmyourself
Calmyourself's picture

If you can tell me how to get this crap IE9 off my computer and go back to 8 I'll buy you a burrito.. Same problem here..

Mon, 05/09/2011 - 23:57 | Link to Comment gosseyn
gosseyn's picture

First, Dbl click My Computer.  Click Help > on the menu bar click Help and Support Center.  Under the Additional Resources header, click System Restore.  Create a Restore Point.  After that completes, exit.

Then click > Start > Control panel > Add or Remove Programs.  When the list updates, scroll down to Windows Internet Explorer 9 and highlight it.  Click Remove.

Fee:  one thin pre-1965 dime:  .07 oz silver ~ $2.60 at current levels.  You can Paypal me.

Tue, 05/10/2011 - 00:17 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

slewie losing it over the pic!  awesome!

Tue, 05/10/2011 - 04:49 | Link to Comment bigkahuna
bigkahuna's picture

I just use Chrome and Firefox now. To heck with IE.

Tue, 05/10/2011 - 03:23 | Link to Comment fredquimby
fredquimby's picture

Yeah I have to do that on my ipad too. A bloody disgrace. I will eat it if you don't do something TD.

Mon, 05/09/2011 - 23:01 | Link to Comment 20smoney
20smoney's picture

I think silver trades massively lower towards $20 before resuming a long-term climb.  Near term could be ugly.  Long physical.  Sold all my paper silver above $43.

Mon, 05/09/2011 - 23:13 | Link to Comment WeekendAtBernankes
WeekendAtBernankes's picture

Oh man, I hope you're right!

Mon, 05/09/2011 - 20:02 | Link to Comment bankrupt JPM bu...
bankrupt JPM buy silver's picture

whats with all this silver talk thing? Isnt there a royal wedding to talk about still?

www.silvergoldsilver.blogspot.com

 

Mon, 05/09/2011 - 20:06 | Link to Comment CPL
CPL's picture

I for one welcome the new prince into the Kingdom of Tongo of polynesia, may he be as honest and noble as his King.

Mon, 05/09/2011 - 20:11 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

The May King.

Mon, 05/09/2011 - 20:11 | Link to Comment Long-John-Silver
Long-John-Silver's picture

The other brother is still a bachelor.

Mon, 05/09/2011 - 20:15 | Link to Comment Piranhanoia
Piranhanoia's picture

I just found out,  the cake was made of silver and gold and as small as those colonoidal microparticles and nanobytes were, it was too much weight for their weakened inbred DNA and they all collapsed into a rich jelly. Oh,  and the proles lived happily ever after.

Mon, 05/09/2011 - 21:29 | Link to Comment Harlequin001
Harlequin001's picture

Nobody puts on a show like the British, eh...

Tue, 05/10/2011 - 04:50 | Link to Comment bigkahuna
bigkahuna's picture

Anyone who spends other peoples' money will gladly put on one heck of a show.

Mon, 05/09/2011 - 19:59 | Link to Comment Ronium
Ronium's picture

Bought me a bunch on sale last week!

Mon, 05/09/2011 - 22:57 | Link to Comment tickhound
tickhound's picture

Good... glad someone did.  With all the "run for the hills", CRash, sky is falling, suddenly the fundamental trend of hard goods is shot, foflack... Ray Charles saw this bounce coming.  Freaking puzzies.

Mon, 05/09/2011 - 20:02 | Link to Comment camaro68ss
camaro68ss's picture

Cool, so when is the SHTF happening? I still need to get a few more supplys.

Mon, 05/09/2011 - 20:07 | Link to Comment CPL
CPL's picture

It's been cancelled until a lot of people die.  Until then think of it as hedging inflation which should take care of that eventuality.

Mon, 05/09/2011 - 20:00 | Link to Comment tmosley
tmosley's picture

I'm sure Meth Man will come up with a good retort.

Mon, 05/09/2011 - 20:14 | Link to Comment akak
akak's picture

Oh, I'm sure that Methy is positively itching to dive in here and come back with a retort --- but I doubt very much that it will be a good one.  When has anything he has ever posted here on silver not been irrelevant, dishonest, disingenuous, or an outright lie?

For the record, though, I still like:

"Only $5 to dig from the ground."

"The shit is fucking everywhere!"

Mon, 05/09/2011 - 20:32 | Link to Comment FriedEggs
FriedEggs's picture

"It costs an average of $5.00/oz to produce the stuff..." Jon Nadler at the 1.50min mark.

http://watch.bnn.ca/#clip463498

I posted this link on another post, sorry for the repeat - but when i seen that famous line again, i remembered hearing something very similiar just today...hence the link again.

Lol, do you think that qualifies as the same thing (as 'only 5ive to dig from gound')?

 

Btw, nothing available for us Canadians on Kitco these days...

 

Fried(e)

Mon, 05/09/2011 - 21:09 | Link to Comment akak
akak's picture

I saw that BNN interview with that snake bastard Nadler today too, and was so outraged that I sent the following letter to BNN:

 

Dear BNN,

I felt forced to write to you to express my dismay and disappointment at your willingness to continue posting interviews with the universally discredited Jon Nadler, and with your pretense of presenting him as an objective and honest analyst of the precious metals markets.

Given his abominable years-long record of being almost 100% incorrect in ALL of his bearish price predictions on gold and silver, I find it odd indeed that your network apparently believes that this person has any reputable standing in speaking on the precious metals markets.  Furthermore, given Mr. Nadler's well-known and  vile record of daily propagandizing against the precious metals, and in explicit favor of the financial and banking status-quo, often using near-hysterical histrionics in attacking the advocates of gold and silver ---- even to the point of repeatedly referring to them as "Radical Goldbug Extremists" --- I feel it would behoove your network, if indeed your desire is to present honest and reputable analysis instead of pro-Wall Street, pro-central banking disinformation, to re-examine your inclusion of the disingenuous anti-gold and anti-silver misinformation and deceptive propaganda spread by Jon Nadler.  While you may not be aware of it, he is literally nothing but a laughingstock among the entire precious metals and mining communities, and you only discredit yourselves by allowing him to disseminate his malicious half-truths, misinformation and outright lies on BNN.

Sincerely,

MethMan

Mon, 05/09/2011 - 22:17 | Link to Comment nmewn
nmewn's picture

ROTFL!!!

Mon, 05/09/2011 - 23:23 | Link to Comment JW n FL
JW n FL's picture

that is worth a trillion oz's of gold!

Tue, 05/10/2011 - 09:08 | Link to Comment Aulieude
Aulieude's picture

+lots and lots

I was almost ready to propose marriage as I read your deliciously eloquent letter...and then I reached the signature and almost spat my wine onto my key board...very very funny!

Mon, 05/09/2011 - 20:34 | Link to Comment Math Man
Math Man's picture

I never lie, you guys just accuse me because you're too afraid to admit the truth.

 

It does only cost $5 bucks.

Primary silver mine cash costs remained relatively flat year-on-year, falling by less than 1 percent to $5.27/oz. from a revised $5.29/oz. in 2009.

http://www.silverinstitute.org/supply_demand.php

 

The shit is every where.  1,056mm ounces supplied last year.  But only 35mm turned in to US Silver Eagles...  most of it is made in to shot for industrial users.   There are not shortages,  only refining bottlenecks.  Problem is most of it is made in to shot because that is how industrial users want it. 

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

 

And backwardation has been caused by producer hedging... 

 

http://www.ft.com/cms/s/0/af6a0ca8-386c-11e0-959c-00144feabdc0.html

Mon, 05/09/2011 - 20:46 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Why don't you just go out and take a ride on your bike you idiot? Make that a bumpy ride without a seat.

Mon, 05/09/2011 - 20:50 | Link to Comment Rynak
Rynak's picture

Oh methman..... you're disappointing me. Recently i told some of your buddies, that he is a lazy slacker for recycling 2 month old posts (including 2 month old spotprices!), and that he should take you as an example, because you at least come up with new shit all the time....

.... and now THIS again?

...yawn....

Or were you in a crypted way just attempting to show some humor, by pulling a running gag?

Mon, 05/09/2011 - 20:49 | Link to Comment tmosley
tmosley's picture

You fucking moron.  If it really only costs $5, then production would have risen between 2009 and 2010 by more than 2.5%.  Why didn't it?

Because it really costs $5 plus the money recovered from all other mine products plus millions in capital plus millions in exploration costs.  You fucking retard.

Tue, 05/10/2011 - 03:36 | Link to Comment fredquimby
fredquimby's picture

Language, language dear tmosely. No need to spit your dummy out because someone has a different opinion/angle/understanding of something!

From Hecla Mining: HL

What are Hecla's production costs of silver?:

For 2010, total cash cost per ounce for silver was a negative $1.46, net of by-products.. Total cash cost in 2011 is estimated to be approximately zero dollars per ounce of silver produced, net of by-product credits, based on current metals prices of $1,350 per ounce of gold and $1.05 per pound for zinc and lead.

Does Hecla have an hedged silver?:

No.

 


 

Tue, 05/10/2011 - 08:06 | Link to Comment tmosley
tmosley's picture

Your point is what, exactly?

Three years ago (back when I still played around with paper), their net cost was something like -$7 per oz.  Guess what?  Demand for zinc and lead have not increased.  As such, silver production has only increased slightly, nd it moved their cost by $5 an oz.  They have only a little bit more room to move to produce more without higher demand for base metals.

Maybe you don't get it, but Math Man is a lying shill, and will say literally anything, misrepresent any fact or statement made by anyone in order to separate people from their silver.  He's not doing this out of the kindness of his heart.  He is doing it because he has an agenda.

Tue, 05/10/2011 - 09:26 | Link to Comment Math Man
Math Man's picture

Sorry Tmo, I only deal in facts.  Unlike you.

My agenda to protect people like you from losing their life's savings.

Tue, 05/10/2011 - 11:49 | Link to Comment tmosley
tmosley's picture

False facts are still facts, I guess.

Why did silver production only rise 2.5% in 2010? The price just about doubled, but they were only able to manage a 2.5% increase? I thought it only cost $5 to get out of the ground, and that it was "fucking everywhere".

But then, since you think a full water reservoir is the same as a flood, I'm not sure how anyone could expect you to have even the tiniest modicum of common sense.

Mon, 05/09/2011 - 20:50 | Link to Comment Botox4U2
Botox4U2's picture

"most of it is made in to shot for industrial users."

 

I hope there is some left over for you to shot yourself

Mon, 05/09/2011 - 21:04 | Link to Comment FriedEggs
FriedEggs's picture

Nadler is either a gov shill or has some other agenda, hence why i posted it. A guy thats been always wrong for years on pm's...always, consistently!

Nadler made that comment for a reason...conditioning the general public to lies...that 'its cheap' and 'junk' and its really not valuable and he just calls it - 'the stuff' - not silver - but, 'stuff.' He has 6 mintues to say what he has to say and the words and things you say are chosen wisely for the gp to soak up in the brain.

Sheeple just want a 2 mintue report on whats going on -THATS IT.  

Fried(e)

Mon, 05/09/2011 - 21:09 | Link to Comment JimBowie1958
JimBowie1958's picture

Why do you believe that $5 production costs equates to market value?

Mon, 05/09/2011 - 21:14 | Link to Comment akak
akak's picture

By his own perverted "logic", MethMan should march into his nearest grocery store and demand that they sell him a loaf of bread for only 25 cents --- because that is all that it costs to grow the wheat in that bread.

Mon, 05/09/2011 - 22:00 | Link to Comment CrockettAlmanac.com
CrockettAlmanac.com's picture

Momma's little baby loves shorting bread.

Mon, 05/09/2011 - 22:08 | Link to Comment Hephasteus
Hephasteus's picture

You bastard you're going to get that song stuck in my head!!!

Mon, 05/09/2011 - 22:22 | Link to Comment nmewn
nmewn's picture

Me too...just damn.

Mon, 05/09/2011 - 23:02 | Link to Comment nmewn
nmewn's picture

I immediately went to Jimi ;-)

http://www.youtube.com/watch?v=cnFSaqFzSO8

Tue, 05/10/2011 - 00:14 | Link to Comment Keri at Bankste...
Keri at Bankster Report's picture

Mathman, it costs 12 cents to make a $100 FRN.  And $2 to make $80 Nikes.  And $150 to make a $600 iphone.  And $25,000 to make a $65,000 Cadillac Escalade.  And $80,000 to build a house on $1 million property.  So what is your point?

Companies do not go through the trouble of mining simply to break even.  There is considerable overhead in any operation, specifically operations like mining which are inherently temporary...and mining is at least actually a real GDP boosting exercise.  People will run into coming traffic to retrieve a little peice of cotton with magic images on it, and you're harping on the production costs?  People will trade food and water and essentials for bits of paper blessed with the correct important looking people and mystical images, and you're thinking that pure logic in involved in this?

I'm a bug, but I have never bought the "instintric" value argument for gold or anything else.  Maybe its the anthropology degree contaminating my mind:  "value" is never intrinsic, it is always installed.  Gold has some (percieved) kind of value because people think it does, simple as that.  The pratical monetary usefulness of a non-corrosive , rare metallic element is a more complex characteristic of gold and is another story, but at its core value is always percieved.  Markets are based much more on thoughts than facts.

Perhaps you need to put down the math books for a little while and read some anthropolgy and human history.  The world is not a math operation: humans are much more complex than 2 + 2 = 4.  (In fact, a lot of people would apparently believe that 2 + 2 = PINK, to quote the little bears, if the right person told them, and such obsequiousness is nothing new in human history.)  Tulips, anyone?

I'm curious: you appear very frustrated with silver.  Why you waste your time here is beyond me, because I can tell you right now, I don't go to anti-PM sites and post comments trying to make people love PM's.  Life is too short for that: I'd rather read the articles here and drink some tasty coffee.  But, anyways, why are you not as frustrated with the price of USD as you are with the price of silver?  If you extend your own analysis to USD, then $100 should be worth 12 cents, or 99.88% less than it currently "is" (or actually, much less because there are NO supply constrictions on USD and that shit literally is everywhere).  What's good for the goose isn't suitable for the gander?

I understand that you are trying to make some kind of sense of a market in which you see no fundamentals: I don't have an issue with you not agreeing with PM's or anything else, but I will point out that if you are going to rely on your numerical analysis of one market, silver, and then just completely shelf that exact same analysis when it comes to another market, USD, you are being inconsistent.  Like I said, that's fine with me because I don't care what you think or buy or believe---markets need and breed valuation disagreements.   I would just posit to you that you are not being consistent with your application of methods.  If I'm wrong, then please explain why no one wants to sell me a $100 bill for 12 cents.

 

Tue, 05/10/2011 - 00:49 | Link to Comment 55 men
55 men's picture

What he said...

+1

Tue, 05/10/2011 - 03:39 | Link to Comment fredquimby
fredquimby's picture

++

Tue, 05/10/2011 - 00:57 | Link to Comment Math Man
Math Man's picture

See my comments below...  the five dollar production costs just means we're going to see a lot more supply over the coming years.  Even when silver falls back to $20.

You guys are going to have to find a lot more investment demand to pick up the surplus. 

Given the low production costs, the supply demand equation is not sustainable.

Tue, 05/10/2011 - 01:03 | Link to Comment akak
akak's picture

Yeah, yeah, Jon Nadler, you've been harping on that same tired and discredited meme for literally a decade now.

No, we are NOT "going to have to find a lot more investment demand", although I think that it is all but assured, the reason for both being the one most pertinent fact that you ALWAYS avoid discussing: the ongoing depreciation of the US dollar (and all other world currencies), and the possibility, going on likelihood, of a sudden and unprecedented collapse in the value of that dollar.

Tue, 05/10/2011 - 01:40 | Link to Comment Keri at Bankste...
Keri at Bankster Report's picture

Math Man, over those same coming years we are going to likewise be looking at $16 Trillion in debt, probably a few more wars, a Treasury-packed Fed balance sheet likely over $3 Trillion, a 10-15% decrease in Chinese Treasury holdings, unstable EUR, a much longer list of very USD-negative events.

Take whatever short term position you'd like, I'm simply saying that you have to use your same metrics on USD: if you think the supply of silver coming over the market in the next 5 years is high, what the hell are you going to say when the Fed stops paying interest on reserves and the banks remove $1,470,000,000,000 of "their" money from the Fed's special anti-inflation room and bring it back into the market in the never-ending search for yield?

http://www.bloomberg.com/news/2011-04-24/dudley-seeing-interest-on-reser...

What are your going to say about USD supply when the Fed starts dropping its $1 Trillion plus in Treauries?  What are you going to say when China starts dropping Treasuries?  Japan?  Everyone else?  You are correct to point out that silver is in all-time zone...but you aren't also mentioning that so are Treasuries.  You apparently don't think that people are going to refuse to sell their $35 silver when the market drops to $20, but you apparently do think that people/countries/funds are going to somehow refuse to sell their 96.80 10-years when Treasuries drop to 90? or to 85%? or to 82%, like they did in the 1980's?  You are not being consistent: these things are in the same universe.

I will not disagree with you that increased supply is a downward price pressure when not matched with increased demand: what I'm saying is that, personally, I see nooooo hurdles for silver greatly increasing its investor base over the next five years specifically because of what is happening with supply in USD---supply which is not and will not be met with increased demand.  USD is already over saturated: the Fed's need to buy Treasuries reflects this, yet most people don't even know about silver yet.  Which one do you think has more room to grow: a $100 Quadrillion USD market, or a $3 Billion silver market?  This is when you can use your math, bro!

We both know that USD is not going to be under decreased supply in the years to come when silver is under increased supply, because we for know for FACT that nobody has to take those several trillions USD out the ground to cause a massive supply increase for USD.  There's no supply-line delay or credit-line disruptions, no strikes, no bad weather: nah, they just have to press "enter."  The Fed cannot print money forever, and one of the first fingers to lose grip might just be when (and who knows when) the IOR payments to banks stop and banks are forced to inject those trillions back into the market.  How much more supply can USD take?  Where does it break?  Why are these events a threat to silver and not a friend? 

Tue, 05/10/2011 - 01:51 | Link to Comment akak
akak's picture

Keri, another outstanding post!

You said all the things that I would have liked to say, in much more detail than I would have been able to say it.

I hope you continue to comment here --- your views and arguments are very well spoken and erudite.

Tue, 05/10/2011 - 09:25 | Link to Comment Math Man
Math Man's picture

When the fed stops buying, real rates go postive and the PM complex will REALLY collapse.

Tue, 05/10/2011 - 11:50 | Link to Comment tmosley
tmosley's picture

The US will go first.

But you are too stupid to understand that the whole economy is 100% reliant on low interest rates.

Tue, 05/10/2011 - 09:46 | Link to Comment dussasr
dussasr's picture

Math Man, do you know what the marginal cost of new production of silver is?  The $5 number may be accurate (I don't know), but the marginal cost of adding new production should be higher. 

My experience with this is in the oil and gas industry.  Each field has a cost of production and some are much higher than others and are only brought on line when prices justify it.  I imagine things are the same for silver, but I've never seen a chart showing the cost of production for each mine as well as the estimated cost of putting known deposits into new production.

If anyone has this data it would be a lot more useful than just calling each other fucking retards...

Tue, 05/10/2011 - 11:45 | Link to Comment JimBowie1958
JimBowie1958's picture

MM, but that $5 to dig up silver is the dollar at what year's value?

I doubt that it will cost only $5 using 2013 USD and that is what I am hoping to hedge against.

Tue, 05/10/2011 - 00:57 | Link to Comment akak
akak's picture

Keri: Trollslayer

Tue, 05/10/2011 - 21:34 | Link to Comment Nnthnt1
Nnthnt1's picture

im not trying to take a stance in this discussion but the prices differentials of goods you bring up are all non-commodities and the products are not even standarised so they cannot be treated as commodities which pretty much falsifies your economic knowledge

Mon, 05/09/2011 - 22:53 | Link to Comment Stares straight...
Stares straight ahead's picture

It takes more than $5 just to take physical delivery, let alone dig it out of your ass!

 

...And someone better pay me a whole lot more to do that.

Mon, 05/09/2011 - 23:35 | Link to Comment JW n FL
JW n FL's picture
by Math Man
on Mon, 05/09/2011 - 20:34
#1257539

****************************************************

 

So you think that a Hong Kong Crimex will stifel the physical buying in the far east? enough for the margin hikes, or squeezing of the leveraged returns.. to take hold.. for a LARGE price reduction?

 

How about this.. since you like to talk about the truth.

 

1. silver and gold had a price in 2008 of?

http://research.stlouisfed.org/fred2/series/BASE which should be 3 X's that price today based on the monetary base being grown.. alone, with no new interest.. although we have interest of 300% more.. 10M oz's in Eagles (silver) to 30M for the last 3 years running..

 

Yearly prodcution within the U.S. for silver is? not world wide, U.S. where the Mint has to purchase from?

 

so, you have a 300% increase in interest and a 300% devaluation of the monetary base.. which equals a 600% pricing pressure.

 

and the demand.. to turn paper into metal.. is not going anywhere soon given the fact that the FED needs $2T just to continue on.

 

Now if the FED fails! or if the debt cap is not raised and the World loses faith in the Dollar.. well that metal maybe worth something after all, dont ya think?

 

So, either way? metal looks like a solid (pun intended) investment.

 

I might add that the pricing of Silver or Gold from 1980 / 1984 in inflation adjusted dollars.. is well beyond what we now see.

Mon, 05/09/2011 - 23:42 | Link to Comment John Wilmot
John Wilmot's picture

The price of a good is not determined by its production cost alone. See: anything anywhere anytime ever.

Tue, 05/10/2011 - 00:10 | Link to Comment gosseyn
gosseyn's picture

Math man,  why haven't you posted the latest at FooFoo's site for all the unenlightented here at ZH?  Can't believe that there has not been a reference to this Costata essay.  Probably no ref because it has scared the s*** out of all the penny ante silver longs.  Here you go, guys and dolls, read it and shiver -- http://fofoa.blogspot.com/2011/05/costatas-silver-open-forum.html

Tue, 05/10/2011 - 00:11 | Link to Comment Math Man
Math Man's picture

I did post it earlier.  It just got moved down the list because of Tmo and the other silver bull trolls. 

Tue, 05/10/2011 - 00:19 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

i went to it and found it 2B as advertiZed:  looong & useful. 

Tue, 05/10/2011 - 00:25 | Link to Comment gosseyn
gosseyn's picture

Sri, I came in on the thread late and hadn't reached your link.  Fyi, also posted lower down to Tmos re his allegation that dlrs don't have supply.  Hannes Tulving has inventory and is discounting it relative to his usual list prices.  Maybe little retail-tards who are buying coins and piss-ant ozs are finding it hard to buy from coin shops but there's not shortage of quantity from volume dlrs such as Tulving, Kitco, etc.

Tue, 05/10/2011 - 00:38 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

i'm a fan of US Mint gold & silver coins, and they are available locally.  certainly 90%, including dollars, but not the Eagles, except in gold. the "ask" side of the spread had gone up a tic. 

Mon, 05/09/2011 - 20:19 | Link to Comment bob_dabolina
bob_dabolina's picture

Thanks tmosely. 

Following your prediction of a "trendline towards 0" I was able to buy at fairly close to the bottom of that move. I made SHIT tons of money...in fairness to you I was planning on buying in the mid-low 30's (as I stated publicly here when silver was @ $49) However, when I saw your projections for a trendline to $0 when silver was trading @ $34 and change I made the plunge (also publicly stated)....now back out of silver. 

Anyways....I just wanted to thank you for the confidence you instilled in me with your Crameresque like precision. You gave me that last drip of confidence I needed to pull the trigger. You're a good guy, keep it up....I look forward to making money off of you in the future.

Mon, 05/09/2011 - 20:28 | Link to Comment tmosley
tmosley's picture

I certainly hope you aren't holding any physical silver or gold, because that is all I hold.

Be contrary to that and you will get what you deserve--in spades.  

Also, you are fucking stupid.  I am up 400% since I started investing in silver, with 200% on the cost average.  My predictions are for long term investors, not dumbshit traders like you.  Feel free to be a contrary little shit, though.  I can't wait to see you come crying that you lost all your money because of big, bad tmosley.

Mon, 05/09/2011 - 20:34 | Link to Comment bob_dabolina
bob_dabolina's picture

One of us is gona' come cryin' 

It's not gona' be me. 

On a scale of 1-10 how bullish are you? 

I need to know how much to short.

Mon, 05/09/2011 - 20:47 | Link to Comment tmosley
tmosley's picture

I somehow doubt that.  I don't start "cryin" until silver is below $16, my dollar cost average.

But then, you are just being a little twat, so it doesn't really matter.  

I'm 10 on physical silver, 7 on paper, since China is opening up a 24 hour bullion exchange.

I have a feeling I will be loling at your mindless ass losing everything over the next few months.

I'm not sure how you can short physical silver.  Maybe you could call a bookie in Vegas and get a pool going.

Mon, 05/09/2011 - 20:53 | Link to Comment bob_dabolina
bob_dabolina's picture

Thanks tmosely. 

You're the best :)

Mon, 05/09/2011 - 20:58 | Link to Comment tmosley
tmosley's picture

Don't use any leverage.  Don't put all your eggs in one basket either.

lol

Mon, 05/09/2011 - 21:12 | Link to Comment bob_dabolina
bob_dabolina's picture

Sounds like you have all your eggs in one silver basket. 

I'll use leverage if I want...thanks for your advice though.....no really, thanks for your advice.

Mon, 05/09/2011 - 21:13 | Link to Comment akak
akak's picture

Sorry that we can't say the same about you, dipshit --- you're quite a mediocre troll.

Do they pay you less than MethMan accordingly?  At least he is funny; you are just a bore.

Mon, 05/09/2011 - 21:31 | Link to Comment Rynak
Rynak's picture

Actually, i'm sceptical that he's "purely" a troll. I at first considered him as such, but then noticed, that he has his "phases"..... for a while, he discusses normally and brings up interesting points.... and then suddenly he goes into all out troll mode, preferably against tmosley.

Hows that for the nazi rynak, who cannot distinguish trolls from contrary opinion (while strangly sometimes posting non-consensus opinion himself and getting junked for it by a handful of tools)? He even does such weird things, as to differentiate between people who do nothing else than troll, and "part-time trolls".

Mon, 05/09/2011 - 21:36 | Link to Comment Math Man
Math Man's picture

Tmosely is the only real troll around here...

He never add anything factual or interesting, just calls people fucktards and liars if they don't agree with him.

 

 

Mon, 05/09/2011 - 21:50 | Link to Comment tmosley
tmosley's picture

Herp a durp.

These trolls aren't readers on the whole, apparently.  Or at least, the pretend that any arguments that run counter to their line of thought don't exist.

Mon, 05/09/2011 - 22:22 | Link to Comment Teamtc321
Teamtc321's picture

That's not true meth, he is being personally attacked by some people. I sure you have viewed the post as well.

 

I have probably been called a dumb ass here a few times for buying put's on slv, but I do my physical with the profits lol.

--------------------------------------------------------------------------

 


World:  Global Asia: Prices of silver and other commodities herald a new crisis After rising for years, the price of silver, oil and other commodities has collapsed. This is not a good sign. A new crisis is in the making. In addition to its financial aspects, it involved public debt and an endless depression or hyperinflation. All this is connected to the price of gold and ...

Here is an interesting read if anyone cares to view.

http://www.speroforum.com/site/article.asp?id=53515&t=Asia%3A+++Prices+o...

 

 

 

Mon, 05/09/2011 - 22:38 | Link to Comment Creed
Creed's picture

(while strangly sometimes posting non-consensus opinion himself and getting junked for it by a handful of tools)?

only a tool would consider everyone who junks him a tool

bwahahaha

don't take that personally, I enjoyed your troll list immensely, you fucking Nazi!

Mon, 05/09/2011 - 21:44 | Link to Comment bob_dabolina
bob_dabolina's picture

Baby, they pay me $500,000 a year for these comments. I'm in the champagne category of trollers. 

You just bullshit from the corners of your mothers basement. You're a spider web troller.

....uh oh silver is falling ;)

Mon, 05/09/2011 - 21:51 | Link to Comment tmosley
tmosley's picture

Nobody gives a fuck about the two second chart except you.

Mon, 05/09/2011 - 22:03 | Link to Comment bob_dabolina
bob_dabolina's picture

And some other guy named George Soros who strangely was selling @ the same time I was saying to sell (while you were saying to buy)

Fuck that guy, he's an idiot.

Mon, 05/09/2011 - 22:22 | Link to Comment Hephasteus
Hephasteus's picture

Hey would it upset you if I called you a dickweed?

 

Mon, 05/09/2011 - 22:27 | Link to Comment bob_dabolina
bob_dabolina's picture

Oh, ok. 

This is like a "feelings" engagement. 

Yes. I would be upset if you name called me. 

I wouldn't appreciate that.

Mon, 05/09/2011 - 22:29 | Link to Comment Hephasteus
Hephasteus's picture

So you've never suffered any sort of dickweed trauma before?

Mon, 05/09/2011 - 21:14 | Link to Comment tmosley
tmosley's picture

I'm going to enjoy watching you go bankrupt.  To be honest, I will enjoy it more than any of the numerous other troll corpses I have left in my wake.  Remember, those who have gone against me have a 100% bankruptcy rate, on average taking a little under 8 months to go bankrupt.

Enjoy those stats, idiot.

Mon, 05/09/2011 - 21:55 | Link to Comment bob_dabolina
bob_dabolina's picture

ha

 

ha

You're about to get paid right? 100% in silver. Do it.

Mon, 05/09/2011 - 22:23 | Link to Comment tmosley
tmosley's picture

95% silver, 5% gold.

I am NOT sweating.  You are nothing but a little troll speedbump.  You will have your time for the remainder of the correction, possibly even more should the COMEX continue to gyrate and grind paper silver to zero (though the trend in paper may start going back up after the new HK exchange opens).  You may make some money by being short, because the fact is you aren't short the underlying, but rather you are short a fraudulent company, like being short Enron rather than being short energy.  But then, maybe they aren't fraudulent, and you get destroyed.  Either way, I win, because I hold physical.  Can't short that, bitch.

Mon, 05/09/2011 - 22:42 | Link to Comment bob_dabolina
bob_dabolina's picture

If you say so tmosely, I know it to be true.

Mon, 05/09/2011 - 23:07 | Link to Comment tmosley
tmosley's picture

Feel free to not believe me.  You will get what you deserve for such foolishness.

Tue, 05/10/2011 - 08:08 | Link to Comment tmosley
tmosley's picture

How's that short position treating you?

lol

Mon, 05/09/2011 - 23:13 | Link to Comment buck4free
buck4free's picture

Tmos,

I'd like to ask you (and anyone else thats interested) an honest quesion. I bought in Dec '08 and a little bit more in Jan '09. I'm no timing genius, it was a total F'ing panic buy when I thought the paper-house was coming down. I intend to hold physical for the long term, so the recent price crash doesnt phase me, however...

The level of 'polite disagrement' in here, along with a handful of other very public, and well timed 'top-calls' (even if only interim) have caused me to revisit my position and do a lot of thinking. Specifically, Eric Janszen's call of a bottoming at 20-25/oz has been gnawing away at me for the past week (link below). Bottom line is I whipped up my own chart in an attempt to disprove him and was 'horrified' to see silver (at today's prices) 35% overvalued relative to gold on a 15yr chart with a correlation of 95%.  

I have 2 questions: 1) Even if I am long phys, why would I NOT still sell here (I don't short) and rebuy later? Because by the amount of this disconnect, pushing +50% at the peak, it could potentially be a long correction.  2) Do you believe the gold/silver ratio is going to signifigantly disconnect (long term), and why?

Sincerely,

 

Link: http://www.itulip.com/forums/showthread.php/showthread.php?p=196900#poststop

Mon, 05/09/2011 - 23:39 | Link to Comment tmosley
tmosley's picture

You don't sell your physical for the same reason you don't cancel your insurance.  Your house might not burn down in the next two months, but are you SURE!!!???

The COMEX could literally collapse at ANY TIME.  Physical premiums are exploding all around.  You might think you have made a bunch of money, but find that when you go to repurchase your physical, you can't buy as much as you had before--ESPECIALLY after you realize taxable gains.

Further, I am of the opinion that gold will rise, but that physical silver will rise faster, especially as industrial users panic at the prospect or fact of a COMEX default, and that in that panic, they will bid up the price of silver to parity with gold, or even beyond.  I start trading silver for gold at 10:1, and continue on until I have traded away 80% of my silver at 1:10.  I don't really think it will get THAT high, but I don't want to be caught without silver if it does.  After the industrial panic, silver recycling will pick up, and demand will be supplied, but at a higher level, as all world stockpiles will have been depleted.  I am thinking a new gold to silver ratio will establish itself between 1:10 and 1:2 (this has historical precedent, prior to the start of silver accumulation by nation states in Ancient Egypt and China).  This ratio will stand for some time, since gold has not been consumed, and silver will not likely increase in production significantly past 2021 (projected "peak" silver).

Basically, hold physical silver, and you will do fine on ANY time scale.  If you want to sell and hold out for a lower price, you are better off opening a brokerage account and playing in paper.  If you are going to do this, I would suggest you do  a volatility play, as the volatility of paper silver will likely continue to rise as the exchanges fall apart.  TAKE PROFITS from this and reinvest in physical.  Never have a position you aren't willing to lose 100% of, because you WILL LOSE 100% at some point, when the COMEX defaults (declares Force Majeure) and all paper written against it becomes invalid (shorts will make out like bandits at this point, though, as they are paid up front).

Remember that historical gold:silver ratios are based on a system where both gold and silver are hoards, and neither are consumed.  This is no longer the case, and you must resign yourself to that fact.  You must also resign yourself to the fact that in "markets" ruled by mad printing press operators, literally ANYTHING can happen, though in the long run, "anything" will do nothing but drive up the purchasing power of your physical silver.

Mon, 05/09/2011 - 23:45 | Link to Comment bob_dabolina
bob_dabolina's picture

Track record = 0% on par with Cramer. 

Good luck.

*I make $ doing the opposite of what this guy says. That's the bottom line.

Tue, 05/10/2011 - 08:09 | Link to Comment tmosley
tmosley's picture

Uhh, for like two seconds.  You're down today.  I've been making vast sums of money for years.  It's all very easy to track.

But then, you are a little shit of a troll, so you are doing your damnedest to discredit me.  Good luck with that.  Everyone can see you for what you are, troll.

Tue, 05/10/2011 - 01:02 | Link to Comment Keri at Bankste...
Keri at Bankster Report's picture

Personally, I don't see anything near a 10:1 or 2:1 GSR....honestly, ever.  Tmosley's correct that in ancient Egypt silver was was more precious than gold; but in the 1800's, aluminium was more precious than silver.  Then along came electricity for extraction, and we realized that aluminum is the 3rd most prevelant element in the Earth's crust.  Given that the actual ratio (by modern estimates, which could be totally inaccurate) in the Earth's crust of silver to gold is right about 1:17, and given the most recent hard-money history peg of 16:1, personally I see these numbers as a serious, serious floor to penetrate.

Mind you, also, that if we ever return to these kinds of ratios, it will only be after a bloodbath with the banks.  A considerable aspect of the industrial component of silver goes out of the window, in my opinion, as well in this case because the same industrial end-users of silver are incredibly debt-heavy and credit-dependant treadmills, just like most companies, and when the banks snap credit again--which I think they most certainly will do is gold and silver start becoming popular hard money again---these companies will suffer.  A stable move to 15:1 on the GSR would VASTLY increase the price of silver-containg end products; the banks will be fighting tooth and nail, and 2008 will look stable.  Regular won't have the "money," whatever that means at the time, to get discretionary items, and there is nothing you absolutely need that contains silver.  The government would another disaster, because a move back to monetary gold would totally undermine USD, and on, and on, and on...

You didn't ask for all of that.  :)  You didn't mention whether you have any gold or not.  If you're all silver, I would say why not use the current spread to move a little of that over to gold?  Silver is volatile, volatile, volatile, and any move it makes once it tends to make about four times, on four different occassions from each direction, before picking a side for a short time.  I think silver has a better chance of doubling to $50 after a slide back to $25 or $30 than it does from doubling here to $75 of $80.  But who knows.  Maybe think about a little hedge in moving some silver over to gold at this 40:1 GSR.  I don't know.

Tue, 05/10/2011 - 08:15 | Link to Comment tmosley
tmosley's picture

The thing is, all the silver ever mined has been consumed.  All the gold ever mined is still there.  We have about 100 years of modern production level supply above ground, and arguably a few months to a few years of silver available.  Certainly not 100 year's worth.

One thing FOFOA got right is that stock to flow ratio is VERY important.  There is more gold on the face of the Earth right now than there is silver.

Tue, 05/10/2011 - 13:24 | Link to Comment buck4free
buck4free's picture

Keri/Tmos,

Obviously the 17:1 ratio would be a serious floor. My more midterm concern is whether we actually will move from the wild decade long fluctuations towards a sustainable divergence from the 'industrial age' average (around 60ish)... in our 'investable lifetimes'. Yes Tmos the stock/flow argument is THE argument (on a fundamental basis), however it rings a bit much like peak oil. Of course the thesis is sound, but who wants to arrive three decades too early to the party?

BTW Keri, I've heard that the amount used in electronic application is so miniscule that it adds only a neglible fraction of cost (to say a $1500 pc, etc) that can easily be tacked on to the consumer (for the time being anyway).

Tmos, Ben Davies gave an interesting interview at King World News a week back, and he was reporting that increased recycling is already taking place, due to the recent runup in price. He was theorizing a decent amount of small time recycling to continue 'coming out of the woodwork' providing volume that would have to be 'chewed through for some months' before $50/oz is taken out with authority... something he claims but also happened (recycling) to put the hold on gold at 1k for some time.

Just some stuff to think about.

Mon, 05/09/2011 - 22:36 | Link to Comment Creed
Creed's picture

The funny thing about bob_crabolina is that I don't recall him posting venemous anti metalbug posts prior to the metals takedown

or is it just anti mosley posting?

Mon, 05/09/2011 - 22:52 | Link to Comment Hephasteus
Hephasteus's picture

Funny thing is all the trolls get up on mosleys nuts for some reason. He's like troll flypaper. Maybe they have a thing for monkees and being spanked.

http://www.youtube.com/watch?v=hfoSnXbh5tE&feature=related

If you're going to go multi channel schizophrenia I prefer something darker.

http://www.youtube.com/watch?v=Z8ojGVvk8IM&feature=related

 

Mon, 05/09/2011 - 23:40 | Link to Comment tmosley
tmosley's picture

It's because they are all reincarnations of trolls I have slain in the past.  There are so many--and they ALL hate my guts.  To the point of obsession, as has been seen with long juan silver.

Mon, 05/09/2011 - 20:41 | Link to Comment Math Man
Math Man's picture

I'm sure Meth Man will come up with a good retort.

 

This one is pretty good.  But long.

http://fofoa.blogspot.com/2011/05/costatas-silver-open-forum.html

 

 

Mon, 05/09/2011 - 20:56 | Link to Comment Lets_Eat_Ben
Lets_Eat_Ben's picture

No fucking way I'm reading that whole thing...unless someone I respect suggests it.

Mon, 05/09/2011 - 22:18 | Link to Comment Sophist Economicus
Sophist Economicus's picture

You may not respect me, but it is worth the read.    But, as an aside, just because something costs $5 to produce (BTW, that is not the right number to use) doesn't mean that it is the starting point for what it is worth.

What Meth-Idiot doesn't tell you is that the marginal utility of a product is DIFFERENT than marginal cost.   For example, suppose that you hav ethe last silver mine in the world, and it really costs you only $5 an ounce to mine.   Does that mean that $5 is the starting point for your selling?    I don't think so.   In this example, you may be selling for thousands an ounce.    Cost of manufacturing silver is irrelevant.   Look at pharma companies, ipads, toothpaste, corn flakes, etc

Meth-Idiot is an uneducated slob that trolls on weak, intuition-pump statements

 

All this said, read the FOFOA article -- a must read for silver.    BTW, this has been know for a while and IMHO, is true.

Mon, 05/09/2011 - 22:27 | Link to Comment Math Man
Math Man's picture

I think you misuderstand the point of the 'it only costs $5 bucks to dig it out of the ground' argument.

The point is that mine supply will increase dramatically over the next several years, EVEN when silver is back at $20.  And that you will continue to need more and more investment demand to keep the price high...

There is a lag time on new mine supply - and that is the reason the '09 to '10 increase was small.  The Silver Price collapsed in the 2nd half on '08 and projects were put on hold.

Mon, 05/09/2011 - 23:08 | Link to Comment tmosley
tmosley's picture

Except it didn't from 2009-2010, and it isn't in 2010-2011, and it won't in 2011.

You are talking shit about things you don't know the slightest bit about.  What kind of moron thinks you can flip a switch and $5 silver flows out of the ground?  Oh right, your kind of idiot.

Mon, 05/09/2011 - 23:31 | Link to Comment Math Man
Math Man's picture

Did you miss the part about lag times for new mines?

 

Mon, 05/09/2011 - 23:38 | Link to Comment Math Man
Math Man's picture

Or may you could read this one:

http://www.kitco.com/reports/KitcoNews20110509TWKN_silver_supply.html

CPM said increased capital expenditures in the mining sector, higher metals prices and low silver mining cash costs relative to market prices are all factors have helped push silver production up over the past few years. They are expected to continue to boost silver mine production in the future. Silver mine production is forecast at 689.6 million ounces in 2011. Total newly refined supply is forecast to cross one billion ounces for the first time in history in 2011 reaching 1.03 billion ounces.

Tue, 05/10/2011 - 05:27 | Link to Comment Hephasteus
Hephasteus's picture

Well well. Here's the thing. First off you'll be lucky to produce 500 million ounces this year. You don't get just one goddamn metal out of it. You get several. it's a byproduct of copper and zinc and lead mining. And you get tons and tons of zinc and lead for millions of ounces of silver and a million or so ounces of gold. So the problem is balance fuckwad. See here's the thing. You got people who are buying silver and NOTHING ELSE. They aren't buying mcmansions where you can make up your costs in copper sales. And you get a bunch of explosive shit out of mining as well.

JPMorgan wants the explosive shit and they damn sure want the silver. Which is why when there's a slowdown you get all these shovel ready shit projects and IBM out wanting to upgrade the electrical system with smart grid. They just want funding and actiivity in areas that makes their explosives and silver electronics market cheap. Were buying up the lead bullets right and fucking left which is making mexico too fucking rich because it's got the most tin/lead/silver mining. And were buying up the silver right and left screwing up your wet fucking dream of solar power for everyone except the government and military. IE green power which just means don't waste our good stuff you slovenly pig dog peasants we got fucking enemies and we need horsepower and explosive shit.

All we have to do is stay the fuck out of copper, buy silver right and left and we can make your fucking explosives and electronics too damn expensive for you. So people if you got 2 or 3 thousand bullets stop fucking buying them. Once that is done your little pimp my war machine project will go from subsidized by handing out electronic gizmo scraps to paying full fucking price. And all the lame ass attempts to sell copper "investment" ingots won't work. And all your lame ass attempts to keep copper hoving up over 4 bucks to supplement your meat grinder machine will eventually fail just like they fucking did in great depression when copper PLUMMETED. So you'll do the same damn thing you did then. Raise a hitler. Only it will be inside america and everyone white will be a jew and everyone tan will be a terroist and legalizing ultra strong pot to chill everybody out won't work and doing the same stupid thing again will fire up all the people in the ghost region that went through your stupid shit and they'll use thier weapons of mass destruction.

http://www.universetoday.com/18046/pictures-of-the-sun/

So just shut your fucking propaganda hole and bring us fucking Petraus or Jeb "The Psycho" Bush or whichever nutball you think is going to put a stop to all this rebellion. And when you die. Die screaming perferably "Fuck you internet!!!!, Fuck You!!!"

Mon, 05/09/2011 - 23:39 | Link to Comment tmosley
tmosley's picture

What is that lag time, exactly?

Oh yeah, TEN YEARS!

Tue, 05/10/2011 - 00:01 | Link to Comment dogbreath
dogbreath's picture

there are very few primary silver mines though with the increasing prices some mines may be reclassified as the metal values change.  Most silver is a by-product of gold and base metal mines.  Its not like these deposits are waiting for the price to improve and the decision to develop will occur.  The deposits have to be discovered first. 

Tue, 05/10/2011 - 00:17 | Link to Comment Math Man
Math Man's picture

You are neglecting to mention taht mines that have been closed because of high costs that can reopen in the higher price environment.

Tue, 05/10/2011 - 00:50 | Link to Comment akak
akak's picture

Now you are just pulling specious bullshit directly out of your ass.

There are NO such mines, and if you knew (as I do, having worked in mining) the desperate lengths to which ANY operating mine will go to avoid shutting down operations, you would not dare repeat such nonsense and lies.

Tue, 05/10/2011 - 01:32 | Link to Comment dogbreath
dogbreath's picture

Hypothetically you are right but there aren't any mines that i am aware of that meet your conditions.

Silver Valley,  Idaho.    Reopened

Keno Hill  , Yukon      Reopened

Lotsa Places,  Mexico    Reopened

When the bull took off in 02 those historic properties were the first to get grabbed up.  The decisions to revisit them and to decide to reopen them was made years ago.  Many are already pouring silver.   

             

Tue, 05/10/2011 - 07:05 | Link to Comment Al Gorerhythm
Al Gorerhythm's picture

Why am I reading this shit? Someone fell out of the dumb fuck tree and hit every branch on the way down, landing finally on his head. Who's the bigger idiot? I'm actually reading this shit!

Mon, 05/09/2011 - 23:35 | Link to Comment Sophist Economicus
Sophist Economicus's picture

MM, you make valid points.   The same was said for the silver shortage in the 70s and 80s.    Even then. prices were predicted to go higher than gold because of industrial use, etc.

 

That all said, you cannot discount the demand for silver as a monetary metal.   Unlike copper and other metals, silver does have a history of being hoarded.    Yes, that hoarding will be 'dis-hoarded' given the right 'fiat' or gold-to-silver substitution price, but as I hope you noticed hanging around ZH for a while, silver has stong believers and if more convert over -- especially if there is a currency crisis -- what it costs to mine, or what incremental supply might come on to market, is not going to mean anything to demand side.   Or, as economists say -- marginal utility is going to swamp marginal costs

 

Tue, 05/10/2011 - 00:29 | Link to Comment gosseyn
gosseyn's picture

You don't know me so how could you respect my opinion?  But isn't my icon worth something -- it's Blythe (but not Masters). 

You should read the link.

Tue, 05/10/2011 - 00:46 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

LOL   i read the link.  any blythe in a storm!  Aaarnrrhhrrrgghhrrrgh!

Tue, 05/10/2011 - 08:28 | Link to Comment gall batter
gall batter's picture

it's blythe danner.

Mon, 05/09/2011 - 21:24 | Link to Comment Hephasteus
Hephasteus's picture

Enough of your tired worn out lies. What do you think of this story. It's kind of punching you in the face and calling you a liar.

You keep doubling down on that denial and propaganda. I've seen people have a psychotic break. Sure it was terrifying to them but I'm sure you're tougher.

Mon, 05/09/2011 - 21:44 | Link to Comment Math Man
Math Man's picture

FOFOA has its faults (many), but the silver article is a very interesting discussion on how the cornering of the silver market could have gone down...  

Mon, 05/09/2011 - 22:38 | Link to Comment Ahmeexnal
Ahmeexnal's picture

It's a stupid fantasy. Just like your whole fuckin life.

Relay this message to your gay overlords (Damian and Bliphe): BUY PHYSICAL.

Mon, 05/09/2011 - 21:36 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Nice try.  But if it's only in my mind...why is Dr. Edgemar sweating?

Nope, you are lying MethMan.

Mon, 05/09/2011 - 21:38 | Link to Comment Ronium
Ronium's picture

Read it.  It doesn't adequately describe the silver shortage.

Mon, 05/09/2011 - 21:42 | Link to Comment Math Man
Math Man's picture

It does.  There WAS no shortage.  Only bottlenecks for retail.

Which is what I've been saying for the last several months.

Mon, 05/09/2011 - 21:48 | Link to Comment Ronium
Ronium's picture

The references it gives are small time articles as well as the Perth Mint.  Read what the perth mint states but still not convincingly.  Perth mint probably doesnt have a shortage due its high premiums.

Mon, 05/09/2011 - 22:07 | Link to Comment Math Man
Math Man's picture

I didn't read all the links in the article -

Was this one included?

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

(from Kitco)

Mon, 05/09/2011 - 22:32 | Link to Comment Ronium
Ronium's picture

Yes like that one. Kitco recieved this info from a consulting group.  But Kitco does not reference anyone else but the consulting group.  I agree that in the scheme of silver, investment is only a small part meaning they do have to produce the majority in industrial grade like silver shot or flake.  Investment silver is only about 10% of the total. Interesting thing is the total production/mining only increased by 2.5 to 5% but industrial demand increased by 30%.

Mon, 05/09/2011 - 22:45 | Link to Comment Math Man
Math Man's picture

Industrial demand just moved back to where it was in '07/'08.

After industrial demand (and the price) declined at the end of '08 and continued through '09, many projects were put on hold, hence only the small 2.5% increase in mine supply in 2010. 

Even if the prices fall back down below $20, you're going to see a lot more supply come on line.

 

 

Mon, 05/09/2011 - 22:48 | Link to Comment Ronium
Ronium's picture

Except the industrial demand in 2011 is already outpacing 2007 and 2008 industrial numbers.

Mon, 05/09/2011 - 23:02 | Link to Comment Hephasteus
Hephasteus's picture

No industrial demand is in gutter. And presently boring towards the center of the earth.

40 million ounces was a couple months back for the mint. People busted up 60 million ounces recently. Mines are controlled by banks to create whatever fantasy or illusion they want to create. You'll never get the truth out of them.

The whole dog and pony green shoots and recovery show was a test. The more they lied the more people entrenched. They lied more people entrenched more.

You've got people lying about output to get other people to sell oil cheaper you got people lying about everything. China industrial demand was probably 30 million ounces at peak with 40 million being told to cover up fraud. People have no idea what the supply curve for silver looks like. But they are going to keep buying it till it breaks and then demanding numbers.

Mining is a very linear chart and you got people throwing out insane exponential mine output charts to cover up insane exponential fiat currencies. It's a pound of flesh but it's really a ton.

Mon, 05/09/2011 - 23:07 | Link to Comment Ronium
Ronium's picture

I am quoting the Silver Institute for the industrial numbers which could be a lie like you state.  My point with Mathman was that with the current supply of silver, there is a shortage because of the supposed increase in industrial demand.

Mon, 05/09/2011 - 23:42 | Link to Comment Math Man
Math Man's picture

Where are you getting your 2011 Industrial demand numbers from?  I haven't seen any yet.

Tue, 05/10/2011 - 00:20 | Link to Comment Hephasteus
Hephasteus's picture

Well you threw out a date 2007. That's when the computer industry went full retard batshit crazy and just started fucking making up sales like crazy. If the computer industry had sold what it said it sold we'd have people googling the fuck out of africa and all over frikkin asia. AND WE DON'T.

You can go on chinese sites and they will actually talk about 100 million nettop sales projections a year. It's just fucking crazy like they don't understand that there are only 7 billion people on this planet and you would completely saturate a market in 2 months at those rates.

There's a shortage because a facade of supply was created and  people ripped the cupboards open and stripped it clean as an inflation hedge. If you simply use common sense numbers going on the silver supply from jewelry and dimes and stuff from the pre gold close and think about how fast that got chewed up and then think about how fast what china gave to us to suppress it's price got chewed up (it started running out in 2004) you can very frikkin easily come to the conclusion that silver is in fact fuckered down from a 16:1 ratio with gold all the way down to 12 10 even 8:1 ratio. And it's been at stupid 35:1 and higher ratios just to keep it cheap for the IT revolution so texas instruments of death could be more deadly and more instrumental and less texas.

And you can very quickly come to the conclusion that 3 of the highest market cap stocks apple ibm and microsoft would turn to a shit sandwich even though they don't actually fuckin use the stuff. The banks control the miners and the money. The miners are manipulated to appear to match the money. And "official" supply is so nutty it watches one flew over the cookoo's nest and thinks damn I'm 5 orders of magntude crazier than that. They took it from straight jacket in a padded room crazy to straight jacket in a padded room inside a virtual reality nut with a chocolate insanity coating.

Silver buyers are depantsing the fucking banks and sticking a ruler up to the peepee and not measuring in internet inches and it's really pissing them off as well as their ability to fuck gullible people.

 

Tue, 05/10/2011 - 00:38 | Link to Comment gosseyn
gosseyn's picture

The SIA are  consumers.  They are liars when it comes to figures.  Go back to 1980 and read what they said about suppy then.  Same story now, only the dates have changed.

Thu, 08/18/2011 - 05:01 | Link to Comment mediahuset
mediahuset's picture

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