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Third Largest Producer Of Silver Says Production Is Now "Totally Paralyzed" Following Week-Long Strike

Tyler Durden's picture


In news that should move the precious metals market, we learn that the world's third largest producer of silver (as well as zinc and lead) has announced its production is now totally paralyzed. From Reuters: "A week-old strike at Bolivia's San Cristobal mine has totally paralyzed production and exports of silver, zinc and lead, a union leader said on Wednesday. San Cristobal is the world's third-largest producer of silver and the sixth-largest producer of zinc, according to Japan's Sumitomo Corp, which owns the mine." For those who recall basic central planning economics this means that silver should plunge immediately, and should react even more adversely on news that crude supplies in the US are surging. After all, oil supply demand is far more critical to silver price discovery than the actual supply of a metal that unlike gold, is used in various industrial and peacebringing applications (see Operation Odyssey Dawn).


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Wed, 03/30/2011 - 11:57 | 1117261 Theta_Burn
Theta_Burn's picture

LOL at opening Mis

Wed, 03/30/2011 - 11:59 | 1117284 Buckaroo Banzai
Buckaroo Banzai's picture


Wed, 03/30/2011 - 12:37 | 1117516 Oh regional Indian
Oh regional Indian's picture

If someone had taken my advice to sell gold into silver on 18th October 2010, they would have been sitting on a hefty return (Gold from 1370 to 1420, 5 % or less and Silver from 26 to 37.XX a 36% return). It's the only "call" I ever made, time stamped.

I'll say the same again, now. Sell your gold into silver. Or don't. All good.



Wed, 03/30/2011 - 12:49 | 1117567 IQ 145
IQ 145's picture

 Been sayin it so long, I'm tired. Nobody listens. Cut in production is "alright with me" !!

Wed, 03/30/2011 - 13:12 | 1117699 SilverIsKing
SilverIsKing's picture

Q: Guess what time it is?

A: Time for you to make another call.

Wed, 03/30/2011 - 13:53 | 1117960 Cash_is_Trash
Cash_is_Trash's picture

Cisne Negro putazzz = Black Swan bitchezzz

Wed, 03/30/2011 - 15:02 | 1118311 Lord Koos
Lord Koos's picture

In Oct 2010 the gold to silver ratio was 60:1 -- it is now 38:1 so your advice might not be so handy this time.

Wed, 03/30/2011 - 23:51 | 1120227 Oh regional Indian
Oh regional Indian's picture

I know. I am saying it has a lot further to correct. Pendulum+Reality.


Wed, 03/30/2011 - 12:02 | 1117304 truont
truont's picture

In news that should move the precious metals market...

silver is used in various industrial and peacebringing applications (see Operation Odyssey Dawn)....


Wed, 03/30/2011 - 12:08 | 1117337 francis_sawyer
francis_sawyer's picture

++ "peacebringing applications" - ror

Wed, 03/30/2011 - 12:14 | 1117377 Imminent Crucible
Imminent Crucible's picture

Don't laugh, it's called OBHA:  Ordnance-Based Humanitarian Assistance.

Give Obama another Nobel Peace Prize.

Wed, 03/30/2011 - 12:16 | 1117401 francis_sawyer
francis_sawyer's picture

Yeah... Because his "Peacemakers" pack a helluva whallop...

Wed, 03/30/2011 - 13:06 | 1117673 Stuck on Zero
Stuck on Zero's picture

There is peace in death.

Wed, 03/30/2011 - 13:33 | 1117843 tmosley
tmosley's picture

Rest in pieces. 

Wed, 03/30/2011 - 17:30 | 1118986 akak
akak's picture

So sayeth the Obamessiah, bankster blessings and taxpayer funds be upon him.

Wed, 03/30/2011 - 13:37 | 1117861 sunkeye
sunkeye's picture

@imcru re  'OBHA:  Ordnance-Based Humanitarian Assistance.'

this is pure genius hope you dont mind my submitting this for an orwell award

you sir are a double speak savant i ever hold pol offc you gotta be press officer pls man dont hold out on me then duty calls and we'll needya

hell forget me you just run and handle your own press sparring sessions

Wed, 03/30/2011 - 23:56 | 1120247 Oh regional Indian
Oh regional Indian's picture

That is a good one Imminent.

How about OBAHA: Ordenance Based Assymetric Humanitarian Assistance.

Now it rhymes with certain namez, taking namez!


Wed, 03/30/2011 - 12:02 | 1117311 YouBetYourLife
YouBetYourLife's picture

Yet despite news like this, and the increasing interest in CBs to own PMs, etc., the bankers apparently today have once again initiated a bear raid which is keeping PM and miner prices from rising as much as they should be.

Harvey Organ mentions these coordinated raids all the time. It's criminal collusion that should result in many perp walks.  But nothing happens.  

Wed, 03/30/2011 - 12:04 | 1117313 Robot Traders Mom
Robot Traders Mom's picture

AAPL down over $2 today...Go to yahoo finance and you can see the bloodbath for yourself. Looks like the golden age of tech stocks is coming to an end! At this rate, AAPL will be on the pink sheets by the end of the year.

Goodbye Robot!!!

Wed, 03/30/2011 - 12:10 | 1117345 umop episdn
umop episdn's picture

I maked you a tech bubble but I popped it. Ooopsie!

Wed, 03/30/2011 - 12:13 | 1117367 ghostfaceinvestah
ghostfaceinvestah's picture

LOL!  Good one.

Wed, 03/30/2011 - 15:47 | 1118516 lincolnsteffens
lincolnsteffens's picture

What bloodbath? It is low volume down day. In fact check out DIA it probably won't break 4mil. shares! This market is gliding on lower warm air currents every week. Just like gliders when the updraft ends you either spiral down rapidly or descend orderly to try a smooth landing.

Wed, 03/30/2011 - 12:02 | 1117314 99er
Wed, 03/30/2011 - 12:03 | 1117315 InconvenientCou...
InconvenientCounterParty's picture

"peacebringing applications"

hehehehe. That's what the Borg call it too.

Wed, 03/30/2011 - 12:05 | 1117321 Bleeping Fed
Bleeping Fed's picture

And thus continues the crack-up boom alternate universe, where less oil demand equals higher prices, more bad news equals more equity inflows, and where cats chase dogs.  Shortly to follow will be the return back through the wormhole into reality and descent into the abyss.

Wed, 03/30/2011 - 12:15 | 1117380 ghostfaceinvestah
ghostfaceinvestah's picture

It all makes sense when you figure the unit of measure is being changed/debased.

Put another way, if someone shortened the length of an inch by 90%, we would all be over 50 ft tall.  Doesn't mean we would be any taller.

Wed, 03/30/2011 - 12:06 | 1117324 Bansters-in-my-...
Bansters-in-my- feces's picture lots of the stuff.....

Jon's loaded....

Wed, 03/30/2011 - 17:35 | 1119002 akak
akak's picture

Jonny N., of Kitco infamy, is certainly full of something, but I strongly suspect that it is not silver (nor its "evil" stepsibling, gold).

Wed, 03/30/2011 - 12:05 | 1117326 chinaman
chinaman's picture

see ya, gold at US5000 and silver US320 based on 1:16 ratio.

yee ha !!

Wed, 03/30/2011 - 12:05 | 1117329 Long-John-Silver
Long-John-Silver's picture

Oil Demand Destruction + Silver production strike = BULLS Bitchez!



Wed, 03/30/2011 - 12:18 | 1117407 Weisbrot
Weisbrot's picture

does that mean that the silver sheep dont get sheared yet?

Wed, 03/30/2011 - 12:10 | 1117349 Quintus
Quintus's picture

Ha ha ha.  

Like that old-fashioned supply/demand thing has anything whatsoever to do with the price of Silver.  Everybody knows we've moved on from that old paradigm of markets setting prices.  

Wed, 03/30/2011 - 12:26 | 1117458 Mr Anderson
Mr Anderson's picture

Econ 360 The supply curve has been renamed the Big Ben Curve, the demand curve Tiny Tim.

Wed, 03/30/2011 - 12:09 | 1117355 tmosley
tmosley's picture

Yes, that's right.  We will blame the upcoming silver derivatives explosion on the STRIKERS!


Oh well.  I've got mine, bitchez.

Wed, 03/30/2011 - 12:20 | 1117411 francis_sawyer
francis_sawyer's picture

Unfortunately - the "paper shorts" have scabs that busted the union lines and so the factory there is still in operation...

Wed, 03/30/2011 - 12:09 | 1117359 koeleköpke
koeleköpke's picture

is Blythe the strike-master ?

Wed, 03/30/2011 - 13:41 | 1117890 Cash_is_Trash
Cash_is_Trash's picture

Somebody's playing with the boiler in this too hot, too cold market manipulation.

Bolivia nationalization bitchezz

Wed, 03/30/2011 - 12:10 | 1117362 LudwigVon
LudwigVon's picture



For those who recall basic central planning economics this means that silver should plunge immediately, and should react even more adversely on news that crude supplies in the US are surging

Wed, 03/30/2011 - 12:12 | 1117365 surfersd
surfersd's picture

Supply who cares about freaking supply? Oh maybe Blythe does!! 

Wed, 03/30/2011 - 12:11 | 1117369 DocLogo
DocLogo's picture

long bullets, long cruise missiles

Wed, 03/30/2011 - 12:14 | 1117376 Josh Randall
Josh Randall's picture

Attica! Attica! Attica!

Wed, 03/30/2011 - 12:15 | 1117385 ghostfaceinvestah
ghostfaceinvestah's picture

Wait until the entire country of Peru goes offline.

Wed, 03/30/2011 - 12:21 | 1117415 SilverRhino
SilverRhino's picture

It should, but Blythe and Bitches Inc. will continue to suppress the price.   I have silver pegged as trading flat/sideways for a few weeks.

37 is a good support at this point though.  Of course I would LOVE to be smoking crack and totally wrong.  ;-)


Wed, 03/30/2011 - 12:25 | 1117433 Sophist Economicus
Sophist Economicus's picture

Prechter just lowered his stop loss on his top calling silver short to $37.80.


So much for Deflationist vision of running into toilet paper, ehm, cash

Wed, 03/30/2011 - 12:39 | 1117513 barkster
barkster's picture

Prechter is half right. He is right in that we will have deflation. Where he fails to see is that the deflation will only be in terms of real money (gold and silver). Prices relative to gold and silver will drop. Prices in fiat currencies will not. Unfortunately for him, being half right in this case is the same as being wrong.

Wed, 03/30/2011 - 12:42 | 1117539 CH1
CH1's picture

Excellent observation! That's what happened in Weimar.


Wed, 03/30/2011 - 12:44 | 1117545 Sophist Economicus
Sophist Economicus's picture

Ageed.   He seems to have a real hard time making this transition.   He is stuck in the commodity mentality for Ag and Au.  Hope I'm around to see this all play out

Wed, 03/30/2011 - 12:28 | 1117474 SubjectivObject
SubjectivObject's picture

My Subjectivness intuits extendend sideways until the fundamental demand pressure is fully sufficient to overwhelm the unregulated paper threats and preprog algo antics.

Wed, 03/30/2011 - 13:28 | 1117797 DosZap
DosZap's picture

Breaking $38.00 and holding it is key.

$36.00 is painful, $38.00 is murder for the Bmasters Beasts.

It will cost JPM Billions.

Good thing they went to Cu.

Wed, 03/30/2011 - 12:21 | 1117418 tekhneek
tekhneek's picture

Definitely bearish for silver. Tyler, any word on their estimated output in 2011, or the numbers from 2010? I see they had about 42.6 million ounces in 2009 (Sourve: silver institute)

Is there any way we can determine the supply lost in this strike? In 2009 they would have lost 1.2 million/week from my calculations.

Wed, 03/30/2011 - 12:44 | 1117546 JLee2027
JLee2027's picture

 The company plans to raise lead output to 76,000 tons in 2010 from 70,000 tons in 2009, while silver production will fall to 12.1 million ounces from 16.1 million ounces, he said.

Wed, 03/30/2011 - 12:50 | 1117572 tekhneek
tekhneek's picture

Oh so my initial thoughts still win.

"Buy more physical silver."

Thanks JLee.

Wed, 03/30/2011 - 12:22 | 1117425 MrBoompi
MrBoompi's picture

Severe physical shortages of precious metals don't lead to an increase in prices?

I'm shocked, I really am.....

Tell the electronics manufacturers and jewelers to buy some paper from JP Morgan and STFU.

Wed, 03/30/2011 - 12:24 | 1117427 Bagbalm
Bagbalm's picture

So the loss of another producer would reduce silver to a worthless base metal since you can't get any no how?

Wed, 03/30/2011 - 12:27 | 1117447 Sophist Economicus
Sophist Economicus's picture

...At least people won't starve

Wed, 03/30/2011 - 12:26 | 1117441 cat2
cat2's picture

They will just make more silver in the printing press to meet demand.  It's simple.

Wed, 03/30/2011 - 12:25 | 1117450 Sqworl
Sqworl's picture

Watch Peru...this could really shag everybody!!!

Wed, 03/30/2011 - 12:27 | 1117463 Quinvarius
Quinvarius's picture

The global insurrection continues!

Wed, 03/30/2011 - 12:29 | 1117477 6 String
6 String's picture

This levitatition is stocks is amazing. The banking cartels are fighting for fiat with everything they have now...

Truly fucking amazing. And JP Morgan will now settle physical delivery with paper mechanisms.

If this weren't all so tragic it would be funny.

Wed, 03/30/2011 - 12:29 | 1117479 tony bonn
tony bonn's picture

another reason silver should plunge is that you can't eat it.

Wed, 03/30/2011 - 12:55 | 1117607 gametracker
gametracker's picture

ahh, but yes you can eat it...


Johnny Silver invests his $20K in silver @ $4/oz
Fiat Freddy invests his $20K in the Dow

Johnny Silver’s $20K is now worth $180K
Fiat Freddy’s $20K is now worth $25K

Who’s family can now eat better?

(Note: Project out another 5 years for similar results)

Wed, 03/30/2011 - 13:07 | 1117663 CH1
CH1's picture

I need recipes for Fedeal Reserve Notes... you can eat those, right?


Wed, 03/30/2011 - 13:29 | 1117764 Hearst
Hearst's picture

Actually Silver is quite edible.  Collodial Silver is intended for consumption and has health benefits.  Just make sure you buy a reputable brand or you could end up looking like this guy

Wed, 03/30/2011 - 12:31 | 1117483 Manthong
Manthong's picture

So what's next, pics of 1.9m oz being delivered to the JPM vault?  

Wed, 03/30/2011 - 14:45 | 1118216 stuartbushcraftblog
stuartbushcraftblog's picture

The only thing getting delivered to JPM's newly minted Comex vault is a pepperoni pizza,some Vagina cream for Blythe and a shit load of new post it notes to write all of their paper silver I.O.U.s on.



Wed, 03/30/2011 - 12:31 | 1117488 tweake
tweake's picture

You the one from the eighth dimension?

Wed, 03/30/2011 - 12:34 | 1117499 blazen
blazen's picture

Technically - you (FED's perspective) cannot win with silver. Ben's economy improves - silver should go up because it's industrial metal. Ben's economy doesn't recover - silver goes up too because it's recognized as precious metal & value store (in 20years there could be no silver at all).

At current rate of suppression (the money for Blythe's shorts has to come from somewhere, sorry) and inflation doing knock-knock on the door we'll soon wake up with pepsi can costing $50. But Silver will be still 38 because JPM didn't have any short derivatives position in pepsi cans.


Wed, 03/30/2011 - 12:35 | 1117503 lsbumblebee
lsbumblebee's picture

In the meantime, an independent mediator has recommended that JPM add to their insanely bloated short position while the CFTC continues its two-year-old investigation of silver price manipulation.

Wed, 03/30/2011 - 12:37 | 1117515 CD
CD's picture

Slightly more detail:

"Managers at Bolivia's San Cristobal mine said on Tuesday they have yet to start talks with workers to resolve a six-day-old strike that has paralyzed the Andean nation's largest silver mine. [...] A strike last year brought several mines to a halt for almost three weeks, including San Cristobal and Coeur D'Alene's (CDE.N) San Bartolome, the world's largest pure silver mine."

Wed, 03/30/2011 - 12:49 | 1117561 earnulf
earnulf's picture

Can you say "contaigon"?

Wed, 03/30/2011 - 12:48 | 1117569 Debtless
Debtless's picture

Suck it Blythe.

Suck it, you dirty cheatin' bitch.

Wed, 03/30/2011 - 12:53 | 1117590 Infinite QE
Infinite QE's picture

Blythe got the order from Dimon: "Short silver or you're going to Fukushima bitch!"


Wed, 03/30/2011 - 12:55 | 1117602 Debtless
Debtless's picture

You help suck it too Dimon.

Suck it, both you dirty cheatin' bitchez.

Wed, 03/30/2011 - 12:57 | 1117616 trav7777
trav7777's picture

Paper silver is just as good

Wed, 03/30/2011 - 17:07 | 1118857 Hook Line and S...
Hook Line and Sphincter's picture

Actually, I'm getting the sense that paper silver IS just as good for many of those playing the in the COMEX sandbox. Nevermind the Forwards, many will always just keep rolling it over ad infinitum, but look at those who are settling for paper + premium. The word is out, and the game seems to be stay in the market until the raunchy rotten coochie smell of default enters the room. 

Yep, you heard it right, longs and shorts in the CRIMEX game DON'T want the game to end and are gladly picking up the extra change, likely surreptitiously picking up PHYS on the sly (milking the SLV udder with large 10 mil orders then collecting).

Don't expect default as soon as you may want it to appear, or as soon as it may appear 'obvious', as the LONGS are in on the game.

They keep taunting the stenchina to the door, then locking her out and giggling about it like a group of little hotos..

Now what diagnostics or tools being used with those in the know to time this event think...who knows? They do think, however, that everybody else will be out after they are. Some of them are going to get burned by the anal-prod badly.

Hook Line & Sphincter, Rectifying the Conversation

Wed, 03/30/2011 - 12:57 | 1117617 Thunder Dome
Thunder Dome's picture

Earlier, sell off reversed when someone bid for 2 million ounces at $36.975.

Wed, 03/30/2011 - 13:10 | 1117683 SilverRhino
SilverRhino's picture

How do you find that information out?   Bloomberg terminal or some other mechanism?

Wed, 03/30/2011 - 16:40 | 1118759 PrDtR
PrDtR's picture

Where can WE verify that information?

Wed, 03/30/2011 - 13:11 | 1117695 Infinite QE
Infinite QE's picture

Obama's reaction: "Can't we just print more silver? I've got another round of golf to get to"

Wed, 03/30/2011 - 13:14 | 1117710 luk427
luk427's picture

US has given Libya over 3 tons of silver. Not bad for a weeks work. It was gift wrapped in Tomahawk missiles.

Wed, 03/30/2011 - 13:21 | 1117750 plata pura
plata pura's picture

A GSR of 38.001 be intolerable.

Wed, 03/30/2011 - 13:23 | 1117761 DNB-sore
DNB-sore's picture

I'm very content today as I have rediscovered my double bullish item that was lost for some years. It is a 4inch high silver oil drum of 6oz that was issued as a gift for the board for the opening of a BP refinery in the netherlands in 1968. Double shortage

Wed, 03/30/2011 - 13:28 | 1117784 No Bid
No Bid's picture

You highlighted the wrong words.  These are the correct ones: "a union leader said"

Wed, 03/30/2011 - 13:34 | 1117849 Panga Man
Panga Man's picture

Yall go easy on me but i cant figure this out... Why is it that there is a spot price reduction when the supply has been disrupted?? maybe I read it wrong, but I would think it would be the opposite.

Wed, 03/30/2011 - 13:47 | 1117923 cat2
cat2's picture

Because there is only paper price.  There is no premium to the spot price for physical, that just shows up as shortages.  In theory they will decouple some day.

Wed, 03/30/2011 - 13:58 | 1117984 DNB-sore
DNB-sore's picture

when the shotage hits the high-tech industrie we will know. Unless there is off-balance trading, read off-market trading

Wed, 03/30/2011 - 14:37 | 1118170 benburnyanki
benburnyanki's picture

oh and my dicks paralized. no these bastards are pullin the oldest day trader big wig pit tradin trick in the book. the guys who 'own seats' on the exchange religiously fuk over most other traders by 'runnin stops'. they dump enough or buy enough dependin on direction of market to knock out all the poor putzes stop losses. they are stoppin us all out and then goin home to fuk their bought and paid for 12 year old sex slaves from romania in the assholes. maybe even video it too.

Wed, 03/30/2011 - 14:59 | 1118291 suckerfishzilla
suckerfishzilla's picture

That would be great if those poor workers in the mines successfully negotiated a contract for compensenation that would be more commensurate with the risk and hard work associated with their profession. Other unions should stand in solidarity with them.  Unions have have helped to usher in the 40 hour work week and other forms of compensation.  United we stand!

Wed, 03/30/2011 - 17:18 | 1118948 Jasper M
Jasper M's picture

And yet . . . 

Here is why I am suspicious of these levels – when you try selling your silver, the even my local bullion dealers (and, in fairness, the jewelers are giving the same offer) will only give about 60% of spot! They are clearly skeptical, and they are the old hands here.

I may sell some more anyway.  

Wed, 03/30/2011 - 17:55 | 1119078 Robslob
Robslob's picture

Be suspicious...of you dealers...

Wed, 03/30/2011 - 23:08 | 1120118 lawrence1
lawrence1's picture

Strange. Where I live one dealers pays spot for silver rounds, another pays spot minus .50, two others pay about 4 percent below spot. In Phoenix I know at least one dealer who pay about l percent below spot and then the huge and highly reputable dealer CMI Gold and Silver pay about a percent below spot. Where do you live?

Mon, 04/04/2011 - 15:56 | 1133990 suckerfishzilla
suckerfishzilla's picture

In the unlikely event that you are not an anti-PM troll I would advise you to shop your Silver around.  If you are trying to sell what you would consider a large inventory start by only showing the dealer a few rounds instead of a few hundred and ask what he's paying.  In fact only show the dealer one round to start with and ask what he is paying.  I know dealers who all make a living and what they pay from shop to shop varies.  One guy buys at a dollar below spot and another will give you spot price.  Don't let somebody gouge you like that.  Move on to more friendly ports of call.  One dealer in town charges $2.50 over spot for Silver Eagles but will pay 25 cents over spot for the same MS ingots.  If you screw up your ingots with scratches and fingerprints you deserve the penalty for not keeping them uncirculated.

Wed, 03/30/2011 - 20:24 | 1119640 SuperRay
SuperRay's picture

they may be old hands, jasper, but i don't think they've ever been in a situation where trillions of FRN's are owed, we broke through the debt ceiling and no one said a thing, banksters have totally rigged the market, and we're soon going to crash like a coked up whore slipping on a banana peel.  No, those master of some alternate reality are gonna go down fighting, and they're gonna get more and more obnoxious, arrogant, in-your-face-fuck-you-you-can't-do-a-fucking-thing-to-me-because-I'm-making-the-fucking-rules.  They'll declare martial law, confiscate your gold and silver and tell you to say thank you or they'll throw your ass in a cell right next to Bradley Manning. All the while, our earnest, toothy, asshole-in-chief will steadfastly declare that what we're doing is for the good of the country.  You bet they'll be subsidizing cable rates - shit, they'll probably give it free to everybody before the end, whatever the hell that looks like.  Have a nice day  ;  )

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