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Eric Sprott: Why Are Investors Buying 50 Times More Physical Silver Than Gold?

Tyler Durden's picture





 

By Eric Sprott

Why are (Smart) Investors Buying 50 Times More Physical Silver than Gold?

As long-time students of precious metals investing, there are certain things we understand. One is that, historically, the availability ratio of silver to gold has had a direct influence on the price of the metals. The current availability ratio of physical silver to gold for investment purposes is approximately 3:1. So, why is it that investors are allocating their dollars to silver at a much higher ratio? What is it that these “smart” investors understand? Let’s have a look at the numbers and see if it’s time for investors to do as a wise man once said and “follow the money.”

Average annual gold mine production is approximately 80 million ounces, which together with an estimated average 50 million ounces of annual recycled gold, totals around 130 million ounces available per year. In comparison, annual mined silver production has averaged around 750 million ounces, while recycled silver is estimated at 250 million ounces per year, which adds up to approximately 1 billion ounces. Using this data, there is roughly 8 times more silver available to buy than there is gold. However, not all gold and silver is available for investment purposes, due to their use in industrial applications. It is estimated that for investment purposes (jewelry, bars and coins), the annual availability of gold is roughly 120 million ounces, and of silver it is 350 million ounces. Therefore, the ratio of physical silver availability to gold availability is 350/120, or ~3:1.1

Now, let’s examine how investors are allocating their investments between gold and silver. The data below is from the US Mint showing gold and silver sales in ounces:

Table1.gif
Source: US Mint (www.usmint.gov)

As you can see, investors are choosing to buy silver at a ratio to gold that is well above what is available. This uptrend doesn’t show any signs of slowing either. The ratio of the physical silver to gold is both rising and extraordinarily above the availability ratio of 3:1.

We can also use other data such as the most recent issues of the Sprott Physical Gold and Silver Trusts. The last Gold Trust issue in September 2012 raised US$393 million and the last Silver Trust issue raised US$310 million. On the basis of prices for each metal at the time of issue, we could purchase ~213 thousand ounces of gold and ~9.1 million ounces of silver. This represents a purchase ratio of 43:1.

If we examine ETF holdings in both gold and silver, we note that in the period from 2007 to 2012, the increase in silver holdings amounted to 12,000 tonnes, compared to 1,200 tonnes of gold – meaning, investors purchased ten times more silver than gold.

These are only three factual data points to consider, but there are other indications that silver investment demand is way out of line with availability. Our favourite question to the bullion dealers we meet, is to ask the ratio of their dollar sales in gold versus silver. The answer is that dollar sales are equal, which means that physical silver sales relative to gold are greater than 50:1.

A recent news headline on Mineweb read, “Silver Sales to Outshine Gold in India.2” It went on to quote a bullion dealer that “investors and jewelry lovers prefer silver jewelry these days.” As the largest importer of gold in the world, it would be impossible for India to purchase an equivalent amount of silver, as it would require more than one billion ounces, essentially more than the current annual mine production.

While these last two confirmations of silver demand are anecdotal, the statistics from the US Mint, the ETFs, and our Physical Trust issues, are factual.

For the time being, the silver price is essentially set in the paper market where the daily average trade on the Comex is approximately 300 million ounces. An outrageous number when you compare it to the daily mine production of about 2 million ounces. As Bart Chilton, Commissioner of the Commodity Futures Trading Commission stated on October 26, 2010, “I believe there have been repeated attempts to influence prices in silver markets. There have been fraudulent efforts to persuade and deviously control that price. Based on what I have been told and reviewed in publicly available documents, I believe violations to the Commodity Exchange Act have taken place in the silver market and any such violation of the law in this regard should be prosecuted.”3

Which brings us back to the phrase “Follow the money.” In our view, it is almost inconceivable that investors would allocate as many dollars to silver as they would to gold, but that is what the data shows.

The silver investment market is very small. While the dollar value of gold in the world approaches $9 trillion, the value of silver in the forms of jewelry, coins, bars and silverware is estimated at around $150 billion (5 billion ounces at $30 per ounce). This is a ratio of 60:1 in dollar terms.4

How long can investors continue to buy silver at the current ratios when the availability for investment is only 3:1? We are surprised that the price of silver has remained at such a depressed level compared to gold. Historically, the price ratio between gold and silver has been 16:1, when both were currencies. Today the ratio is 55:1, so what are the numbers telling us? We believe this is one of those times when smart investors will be well rewarded to “Follow the money.”

On behalf of all of us at Sprott, I wish you safe and happy Holidays and a prosperous New Year.

P.S. – US Mint Sold Out of Silver Eagle Bullion Coins Until January 7, 2013
The Mint recently informed authorized purchasers that all remaining inventories of 2012-dated Silver Eagle bullion coins had sold out and no additional coins would be struck. Since the 2013-dated coins will not be available to order until January 7, 2013, this leaves a three week void for the Mint’s most popular bullion offering.

1 Sources: Gold data is from World Gold Council www.gold.org, and silver data is from Silver Institute, http://www.silverinstitute.org/site/supply-demand/
2 Source: Mineweb.com
3 Source: Bloomberg: http://mobile.bloomberg.com/news/2010-10-26/silver-market-faced-fraudulent-efforts-to-control-price-chilton-says.html
4 Sources: Gold data is from World Gold Council, silver data is from United States Geological Survey (USGS) and Silver Institute.
 


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Mon, 12/24/2012 - 19:24 | Link to Comment Freddie
Freddie's picture

The poor man is also buying every gun and bullet he can lay his hands on.

Mon, 12/24/2012 - 20:59 | Link to Comment DoChenRollingBearing
DoChenRollingBearing's picture

Yep.  Bullets and bullion.  A great combination!

Mon, 12/24/2012 - 22:23 | Link to Comment rayduh4life
rayduh4life's picture

Precious metals?  Canned food and ammo?

Tue, 12/25/2012 - 20:24 | Link to Comment Freegold
Freegold's picture

Exactly, poor mans gold. Surely silver can have another run or two but i wouldn´t bet all my chips on that. And that´s if the system still is somewhat intact. If not, your best oprtion is/was to be in gold. Before that happens Eric Sprott and JPM will make a lot of money from you investers/speculators. Gold is held by centralbanks and the REALLY wealthy in the world. Gold is for savers. And savers don´t need an incomestream from speculating. When SHTF silverholders will find out what a referencepoint is. It might take a cpl of years more but who cares. +20x will be a nice added bonus to my savings.

Get your gold while it´s still dirtcheap :-) Some of you silverados might be lucky enough to make the switch to gold but most of you won´t.

 

Mon, 12/24/2012 - 18:36 | Link to Comment mwarden
mwarden's picture

how many americans have an extra $1730 of discretionary income lying around that they can stick into a gold eagle? in 2008 when the ratio was 2.6x, a gold eagle was $850ish. i think an "affordability" argument could be made where silver is "stealing" demand from the pool of people who are interested in having physical metals in their posession.

Mon, 12/24/2012 - 21:47 | Link to Comment Non Passaran
Non Passaran's picture

I wish it was $1,730 but I will try to use the opportunity that is presenting itself.
I think your argument is right.

Tue, 12/25/2012 - 17:18 | Link to Comment RockyRacoon
RockyRacoon's picture

Your answer is the correct one.  The simplest answer turns out to be the right one on many occasions. 

They just ain't got the dough to spring for gold coins, nor do they want to pay the premiums for fractional gold coinage.  It's okay, really it is.  That premium doesn't disappear when the coin is bought.  It stays with the coin (and increases along with the spot price), and it is redeemable when sold.  I have 2 rolls of 1/10th ounce AGEs.  A roll is 5 ounces of gold (50 coins).  Paid just over $2K per roll a long time ago.  The premium I paid is still there -- many times over. Don't sweat the premium, it's still money and a stored value.  Just a reminder.

Mon, 12/24/2012 - 18:41 | Link to Comment buzzsaw99
buzzsaw99's picture

While the dollar value of gold in the world approaches $9 trillion, the value of silver in the forms of jewelry, coins, bars and silverware is estimated at around $150 billion (5 billion ounces at $30 per ounce)...

 

Five billion oz my ass. It's closer to 25 billion. Silver is a byproduct, the dross of gold and copper mining. I wouldn't pay half the current price.

Mon, 12/24/2012 - 18:56 | Link to Comment Jreb
Jreb's picture

LOL. Sorry shouldn't have junked you. Maybe you can provide some data for your thesis. Not syaing you aren't correct about tonage - just wondering how you arrive at it??

I Love this quote - one of my favorites of late:

"Silver is a byproduct, the dross of gold and copper mining."

I love how you phrase this and what it is meant to say - that silver is more or less useless - like methane is a byproduct of taking a shit. The shit is the real value - the methane is "just" a byproduct". Of course if you didn't take a shit well... I suppose the consequences would be bad. Constipation anyone?

I wonder if companies such as First Majestic and others are aware that they are engaged in the mining of a "byproduct"? Indeed - I wonder if they are aware of the time they are wasting when they could be bypassing silver altogether and going straight for the copper??? Fools.


Mon, 12/24/2012 - 19:19 | Link to Comment Yen Cross
Yen Cross's picture

 Hey dumb ass. When you learn to spell?  Copper is priced like other P/M's, (tradeable on futures, option, spot charts, by exchanges)...

 

    http://finviz.com/futures_charts.ashx?t=HG&p=d1   Iron ore is a bit more tricky, as it is sold by "gross tonneage".

 Think before your speak dumb ass/  First Majestic? Are you fucking kidding me? Evergreen Clown!

  I meant to junk your smart ass! No, I won't divulge my Iron Ore pricing sources BITCH!

Mon, 12/24/2012 - 19:54 | Link to Comment Jreb
Jreb's picture

Actually, that should be: "Hey dumb ass! When _did_ you learn to spell?" or more appropriately: "WHERE did you learn to spell?"

Probably the same place you did - in grammar school. Moreover, I never realized there was some unwritten standard for grammar and spelling here on ZH? Tyler - did I miss something in the disclaimer???

But hey - if you can't refute the message - trash the messanger by all means. This is why I apologized for junking the guy I questioned with a down arrow and just asked for data.

As for the rest of your meaningless rant - well - it is what it is. Obnoxious.

This is why people who think - even if we aren't necessarily investors by trade (thankfully I am not) - are buying PM's. We know bullshit when we smell it. And our current politcal/ecoonomic situation is loaded to the tits with it.

Have a merry Christmas.

 

Mon, 12/24/2012 - 20:48 | Link to Comment Yen Cross
Yen Cross's picture

 I'll work on my underscores_ .   I just stated the obvious. You are full of shit, and tried to jump on a well respected Z/H contributor, in a demeaning way.

  I hope you take the next few days to reflect on your demeanor, and investment strategies. When it comes time to lecture, ask your wife? She is your better half (ass/face)

  Hey ( Meat Ball), I'm not your origional target>/ 

Mon, 12/24/2012 - 20:51 | Link to Comment Jreb
Jreb's picture

No I didn't. I asked in a very polite way for data - and that was after apologizing to the guy for hitting the down arrow. I didn't have to say a word to him - he would have been non the wiser for it. The rest of my post was merely pointing out a flaw in the logic he was using. "Respected" or not an error in logic is still an error. Maybe my analogy of shit to methane was too extreme for you? Frankly I thought it was appropriate.

Why are you so aggressive and rude?  Are you trying to hurt my feelings??? Do we have to act like poorly behaved children to try and get our message across?

If you were a thinking/moral human being you'd refute what I have to say with some sort of logical argument but instead you reduce yourself to infantile name calling. "Ass face"??? Really?

Beat me with logic. I am always happy to admit if I am wrong.

Merry Christmas friend.

 

Tue, 12/25/2012 - 02:12 | Link to Comment Yen Cross
Yen Cross's picture

 You and your clown buddies are going to get eaten for lunch/ 

  I'm not done with you, and you know it. We will explore charts, and Sovereign offers/

  Your Clown window group got their bonuses/ I'll see you soon. --- Status Quo--=-

Tue, 12/25/2012 - 09:17 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

You and your clown buddies are going to get eaten for lunch

 

I'll bring my girlfriend Sasha......pretty sure she'll dig that. If you do a good job...she might let you stay for dinner.

Mon, 12/24/2012 - 21:35 | Link to Comment TheSilverJournal
TheSilverJournal's picture

My guesstimate is there's around $20B of above ground silver. After the 1960's, the US gov sold about 40B oz of silver onto the market over the next four decades, smothering the market. Today, there's about $1B of "investable" silver and another $1B in coins, but on top of that, there a good amount of silver in other forms such as silverware, candle sticks.

Sorry, no stats, but the "investable" amount is easy to find, the amount in coins is doable too. The other 18B in silverware/candlesticks/serving trays is probably impossible to find a stat for. I'm sure the 40B oz that the US once held is findable as well. I hope that helps.

To be sure, 20B is not a lot of silver, that's only about 3 oz per person. The US is now set to print almost $200 per person on the planet in just this next year, and that's not including how many additional unfunded liabilities or contingent liabilities it's racking up, or 0% rates. Just counting the rate of annualized fiat creation, enough money over the next year (and likely more when QE5 comes along in a month or two) will be printed to purchase the current stock of silver, assuming 20B oz at $30/oz almost 2 times over.

Mon, 12/24/2012 - 22:12 | Link to Comment Yen Cross
Yen Cross's picture

 My best estimates, excluding your estimates, are that (XAg) is , and will always be desireable for conduction and building high quality machines.

 Stick to the paper. I just spent 2 months in Queensland /Northern Territory. Discussing mining costs and rights!

Mon, 12/24/2012 - 22:13 | Link to Comment TheSilverJournal
TheSilverJournal's picture

That's all fine and good, but the price rise in PM's will be mostly a monetary cause. Worldwide hordes will be rushing out of fiat and when you go through the lists of what makes good monies, there just aren't that many good suspects...gold, silver, platinum, paladium (rhodium cracks). There is nothing else. Maybe bitcoins, but that's weird and you need the internet to take it with you. Diamonds aren't homogeneous, copper isn't scarce enough, maybe nickel is scarce enough, food isn't durable, paintings aren't homogeneous or divisible.

Mon, 12/24/2012 - 22:26 | Link to Comment Yen Cross
Yen Cross's picture

 Two Hundred Thousand years ago, (grain was traded for shells and beads). Fiat will never die. (you know that's truth), Just like you feel the whisper of your mistress...

Mon, 12/24/2012 - 22:48 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Actually, I expect fiat to die, or to come very close to it. Likely it will come back after this period because the state loves to pay their bills through fiat ponzies...and then who knows, after a time of buying assets at firesale prices it may be time to invest in bonds again.

You invest in beads, shells and fiat. I'll stick to silver until it hits $1,000.

Mon, 12/24/2012 - 23:02 | Link to Comment Yen Cross
Yen Cross's picture

 You're missing the pointe'. Fiat was created as a form of exchange. \(generalization of commodities/ Exchange.

  Ever heard of the term/ Apples for Grapes?

Mon, 12/24/2012 - 23:16 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Ever heard of the term money? Money is used so you don't have to barter.

Fiat was created first so bankers could rake in more profits, and then so government could enjoy the power of money creation.

I hope your real point isn't that we need fiat in order to /aageneralization/exchange or whatever you wrote. If that's really your point, go join Krugman on his quest for a mock alien invasion, breaking windows, the more inflation the better, and 91% federal tax rate.

Mon, 12/24/2012 - 23:36 | Link to Comment Yen Cross
Yen Cross's picture

 Thank You/ you just solidified my previous comment!   The [Silver Journal], just won the Treasure!

Mon, 12/24/2012 - 23:44 | Link to Comment TheSilverJournal
TheSilverJournal's picture

Umm...I'm pretty sure I didn't, but I do like booty.

Tue, 12/25/2012 - 02:18 | Link to Comment Yen Cross
Yen Cross's picture

  Ok you didn't?  BTFD ( you just contradicted your self) How can you justify purchasing(Treasury Notes), yet still purchase (VIX,VXX)

   You are a Fucking Hypocrite!

Tue, 12/25/2012 - 07:09 | Link to Comment thecoloredsky
thecoloredsky's picture

YC, are you just worried that stackers are a threat to your livelyhood? Figuring that since you make "money" through paper markets and when those markets go poof, well...

Tue, 12/25/2012 - 08:39 | Link to Comment negative rates
negative rates's picture

You have an amusing ratio of posi's to negis. Looks like you are playing yourself for and as the FOOL! All kinds o tools for all kinds o FOOLS!

Tue, 12/25/2012 - 16:36 | Link to Comment TWSceptic
TWSceptic's picture

Fiat will never die.

 

Are you a troll or just very stupid?

Tue, 12/25/2012 - 20:35 | Link to Comment Freegold
Freegold's picture

Fiat will not die but it will surely by less in the future. FIAT is perfect for short tearm transactions and will have that role even after the dollar hyperinflates. For savings though, gold will be preferred.

Mon, 12/24/2012 - 23:18 | Link to Comment Harry Dong
Harry Dong's picture

You just can't really go wrong with nickels, right kyle?

 

Tue, 12/25/2012 - 14:31 | Link to Comment DosZap
DosZap's picture

You just can't really go wrong with nickels, right kyle?

Last year for 75/25 nickels 2012 was it.

95/5 pennies are a better investment.

Tue, 12/25/2012 - 14:12 | Link to Comment jumbo maverick
jumbo maverick's picture

The other 18B in silverware/candlesticks/serving trays is probably impossible to find a stat for.

Wait until the next census comes around. Wonder what kind of questions they will be asking everyone.

Mon, 12/24/2012 - 22:19 | Link to Comment Yen Cross
Yen Cross's picture

 Jreb , when you get over the "every one" hates me "reverse psychology"., give us a call! 

    You are a giant "flagellating pussy'...  Your mental games might work at home. Not here little boy!

  I'll bet you are living at home , just looking for a way out!  PUSSY!

Tue, 12/25/2012 - 17:29 | Link to Comment RockyRacoon
RockyRacoon's picture

Alright, already.  Give it a rest.

Mon, 12/24/2012 - 23:12 | Link to Comment Yen Cross
Yen Cross's picture

 7-8 people in a department (compartm,ent) Junk away/  Have fun>feel free.  You're still clowns/

Mon, 12/24/2012 - 23:22 | Link to Comment Jreb
Jreb's picture

Dude - you have some serious anger issues. I'd give you a hug if i could. After all it's Christmas Eve... and you sound like you are ready to blow a gasket. Truth be told I kinda feel bad for you. Maybe you should turn the computer off and get some rest. I know I'm going to. Good night all!

Mon, 12/24/2012 - 23:31 | Link to Comment Yen Cross
Yen Cross's picture

 Are you 3 years old? MR. Sir.  You are a child! You have never been taught to respect you elders. You are a babbling idiot!

Mon, 12/24/2012 - 23:32 | Link to Comment TheSilverJournal
TheSilverJournal's picture

If somebody can't hang now, then how are they gonig to do after fiat collapse?

Tue, 12/25/2012 - 00:11 | Link to Comment Yen Cross
Yen Cross's picture

 This comment willl be delayed/  The Silver Journal.  We have discussed smaller denominations and farming?

    Just joking, We have a GDP to trade .

Tue, 12/25/2012 - 02:38 | Link to Comment Yen Cross
Yen Cross's picture

 Fuck Off/ You are a wana be! 

Tue, 12/25/2012 - 08:53 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

I sense the playa's are getting a liitle ticked off.

Tue, 12/25/2012 - 17:32 | Link to Comment RockyRacoon
RockyRacoon's picture

Not really.  Just bored and annoyed that it has become necessary to scroll down for real comment material.

He's acting like the mean drunk in a bar just looking to pick a fight.  Sad really.  He's better than this usually.

Tue, 12/25/2012 - 22:27 | Link to Comment Jendrzejczyk
Wed, 12/26/2012 - 01:00 | Link to Comment RockyRacoon
RockyRacoon's picture

Damn fine that.  Andy was kinda like Ernie Kovacs.  A genius that transcended his era.

http://www.youtube.com/watch?v=416o9b_pjQk

Tue, 12/25/2012 - 08:53 | Link to Comment JoBob
JoBob's picture

Hey Yen

Before you call someone a dumbass for spelling you should learn that "P/M's" is just flat wrong...it is PMs. Since it is plural, it does not have an apostrophe; only possessives get one. It is also an acronym and doesn't have a slash, either.

Notice I did not call you a name in the process.

Merry Christmas, Bro!

Tue, 12/25/2012 - 17:35 | Link to Comment RockyRacoon
RockyRacoon's picture

And a merry christmas to you JoBob.  BTW, it would be an "initialism" since PM isn't a word but has to be said per each letter.

Mon, 12/24/2012 - 19:22 | Link to Comment buzzsaw99
buzzsaw99's picture

according to wiki there is 5X the amount of silver above ground than gold. ironically the following is from a bullish silver piece but i read it as bearish for gold:

...we'll use a very conservative estimate of 37.5% total industrial consumption. This would leave us with 25 billion total ounces of silver (857,000 tons).

http://seekingalpha.com/article/393651-silver-and-gold-trading-the-ratio

I am a PM bear and I have a right to exist (just like Israel). LULZ

Mon, 12/24/2012 - 19:26 | Link to Comment Freddie
Freddie's picture

Doesn't The Ben Bernank, Warner Buffert and Charlie Muger have golden slippers?

Mon, 12/24/2012 - 19:31 | Link to Comment Yen Cross
Yen Cross's picture

 I just call bullshit when I see it buzz/ 

Mon, 12/24/2012 - 19:56 | Link to Comment Jreb
Jreb's picture

Ya. That's what it was....

Mon, 12/24/2012 - 20:50 | Link to Comment Yen Cross
Yen Cross's picture

 That's exactly what it was. Until you prove otherwise? 

 Get yourself/family together. It's going to be a learning session for you.  (liquidity)

Tue, 12/25/2012 - 02:41 | Link to Comment Yen Cross
Yen Cross's picture

 You couldn't find (XAU/XAG) if it was put in your Cereal! Jreb, you are even more unintelligent than I thought!

   You are a fool living on the Tax Payers dime! You disgust me!

Tue, 12/25/2012 - 09:20 | Link to Comment awakening
awakening's picture

"You are a fool living on the Tax Payers dime! You disgust me!"

Such ignorance of the root causes that create the very need for ZH to exist should not be ignored.

It ain't those collecting healthcare (them damned unemployed we should really thank given a less than 5% rate in some economic models leads to an unstable currency [Bernanke will need all the help he can get, though it will only delay the inevitable] ) that live off the sweat from the brow of others (Tax paying or not, spare a thought for the black market/cash economy of which a share may not actually pay those taxes your so fond of), but those only that print those 'dimes' that we all waste so much time and effort to obtain (those promisary notes, created with a (steadily basterdised) rule of law and upheld by a force that is as equally blinded with the very same ignorance of said issue (thanks for working your arse off for me today, here's some printed currency notes I made while you were off working, chao).

Now if the above "heavily summarised" post on the makeup (it ain't natural, squirrels don't exchange nuts for goods and services) of fiat currency/money (or whatever else it gets called depending on the point of view of others, I think of it as an ingredient of alchemy turning paper into gold =) ) isn't enlightening enough as to why I find such commentary (usually ignored but I'll make exception for ZH) incredibly naive and foolish than I suggest a much slower re-read of most of Zerohedges articles may be much needed in your instance (most that is, some of the humorous pages like Simon Black's jet setting adventures while comical will be of little assistance for your education).

All the above assumed that your not trolling of course, whereupon that case 4Chan/reddit may be more your style of website.

Mon, 12/24/2012 - 19:56 | Link to Comment oddjob
oddjob's picture

There is an entire paper world for you to exist within, no need to crowd into an investment than comprises less than 2% of all global assets. israel feels threatened by children throwing stones and you feel threatened when people choose to save in PM's, nice.

Mon, 12/24/2012 - 20:14 | Link to Comment buzzsaw99
buzzsaw99's picture

...you feel threatened when people choose to save in PM's, nice.

 

Not true in the least. Some of my best friends are gold and silver bugs. At least they don't try to make their case by blowing smoke up my ass. I wish you all the best and hope PM investing works out well and have owned PMs in the past but I just don't happen to agree with the PM thesis as it currently stands.

Mon, 12/24/2012 - 21:11 | Link to Comment oddjob
oddjob's picture

I am a PM bear and I have a right to exist (just like Israel).

I'm just wondering why you would attach such a political subject to PM's.

Mon, 12/24/2012 - 21:17 | Link to Comment Yen Cross
Yen Cross's picture

 Isreal has "XAU, ART" vault...

Mon, 12/24/2012 - 21:59 | Link to Comment A Lunatic
A Lunatic's picture

I would hear your rationale..........

Mon, 12/24/2012 - 22:45 | Link to Comment knowless
knowless's picture

Probably taking the ratio to mean a gold reversion as people cover losses from fiscal cliff non resolution? Market plunge, ride and reenter as commodities in general 4ever with the rest. Hoping for an 08/09 Redux, just a guess.

Tue, 12/25/2012 - 03:32 | Link to Comment Yen Cross
Yen Cross's picture

Tyler is obviously on the "time lapse" plan. We checked it out. I'm losing interest in Zero Hedge/ Tyler is playinmg games with timing .

  That's ok, Ignorance is bliss. + 1 to the guy above you.

Tue, 12/25/2012 - 18:47 | Link to Comment knowless
knowless's picture

You'll be back.

Tue, 12/25/2012 - 21:17 | Link to Comment infinity8
infinity8's picture

Tyler(s) are playing games and are ignorant at the same time? pick a point.

Tue, 12/25/2012 - 15:18 | Link to Comment buzzsaw99
buzzsaw99's picture

that's actually not bad knowless. i'm going to have to put you on my xmas card list. zh claims again and again that a stock market crash is coming and yet insists that gold will not be negatively affected. zh also insists that interest rates will rise but again gold will be unaffected on its way to infinity. the zh position of being pm zealous in the face of pervasively illogical forward-looking positions makes my nose wrinkle.

Tue, 12/25/2012 - 18:39 | Link to Comment knowless
knowless's picture

As far as I'm concerned the only real thing to watch is the dislocation between physical availability. That will happen as the spot price consistently misaligns capital flows into the metals. Which i think is the point of the article..

Gold would be effected. The long game doesn't change though, what does it matter if rates rise, the fed will just print the difference.

If the government had any reliable source of funds besides printing i might be worried..

Just to be clear though, i hold no "investments".. Hand i was dealt. A reliable return on my "surplus income" would be completely negligible, and totally meaningless.

Tue, 12/25/2012 - 19:50 | Link to Comment buzzsaw99
buzzsaw99's picture

Your last paragraph places you in a large group that supports my theory. The playas in Chicago and NY can run prices up on leverage but the average joe (aside from goldbugs) is no longer buying so they have no-one to dump to except the central banks. Check out mining stocks or jewelry stocks. I haven't bought diamonds or gold for years now. That is actual end demand, not etfs and hedge funds who will sell what they hold back and forth an hundred times a day. Time will tell but if I am right everyone here will never admit it.

Mon, 12/24/2012 - 19:55 | Link to Comment Jreb
Jreb's picture

LOL. Yes you do. And thanks for the link.

Tue, 12/25/2012 - 10:35 | Link to Comment auric1234
auric1234's picture

If you think PMs will go down, go short on the COMEX futures. It so happens that everyone here (including you) will agree that PM futures are worthless (for different reasons). So it's the safest bet you can get.

But keep in mind this creates a long position in worthless FIAT. Find something to compensate that. Anything.

 

Mon, 12/24/2012 - 19:43 | Link to Comment Element
Element's picture

Host rock, mineralogies, grade and resulting economic extractability, is what determines if any silver that may be present is worth extracting. Sometimes the copper is dirt cheap to extract profitably, but the silver can only be recovered by reducing profitability ... well, unless the price rises ... so it may become economically viable to extract it, at that time ... until the price falls. So you set it aside for possible future extraction when the economics improve, or else the technology gets more efficient and cheaper.

 

Mon, 12/24/2012 - 19:55 | Link to Comment Doña K
Doña K's picture

Are we then saying that by overproducing copper when the byproduct (silver) sells for higher?

Is there a buy silver sell copper play here?

Mon, 12/24/2012 - 20:05 | Link to Comment Yen Cross
Yen Cross's picture

It's all about [content] and technology. I think you should be assaying over production of silver first. /hint hint/

Mon, 12/24/2012 - 20:02 | Link to Comment Yen Cross
Yen Cross's picture

   Good comment Element. One mans trash, is another mans treasure/

Mon, 12/24/2012 - 19:49 | Link to Comment Quinvarius
Quinvarius's picture

So much hyperbole and denial from the long abused hard money shorts.  Like moths attracted to the soft glow of Fukushima.

Tue, 12/25/2012 - 13:25 | Link to Comment Bay of Pigs
Bay of Pigs's picture

After 12 years you would think they might come around a bit or at least soften their stance.

Fucking Bozo's.

Mon, 12/24/2012 - 18:44 | Link to Comment q99x2
q99x2's picture

I have more gold. That eagle looks like one of my eagles.

Mon, 12/24/2012 - 18:46 | Link to Comment debtor of last ...
debtor of last resort's picture

I really don't know what to say to a 234 pound balled guy with nazi tattoos and a good after shave asking me: wanna go phyzz bitch?

Mon, 12/24/2012 - 19:58 | Link to Comment Doña K
Doña K's picture

It depends on whether he has a mustache or not!

Tue, 12/25/2012 - 12:03 | Link to Comment blunderdog
blunderdog's picture

Tell that 234 pound balled guy that there are treatments for elephantiasis, and he'll be a lot more comfortable after getting some help.

Mon, 12/24/2012 - 18:49 | Link to Comment Bokkenrijder
Bokkenrijder's picture

"How long can investors continue to buy silver at the current ratios when the availability for investment is only 3:1? We are surprised that the price of silver has remained at such a depressed level compared to gold. Historically, the price ratio between gold and silver has been 16:1, when both were currencies. Today the ratio is 55:1, so what are the numbers telling us?"

 

Well...maybe Gold is OVERvalued compared to Silver and a DROP in the price of Gold will return the ratio to 16:1?

Mon, 12/24/2012 - 20:13 | Link to Comment Jreb
Jreb's picture

If PM markets are as heavily manipulated as some claim I am not sure that anyone really "knows" what the value of them are. If paper assets are worthless at some time in the future then hard assets could become priceless in relative terms - or rather they could be the replacement for paper assets which renders the current arguement about value somewhat moot. Of course, it is all a matter of degree. Regardless - without truly free markets (it occurs to me to say there is no PM manipulation is to say that markets in general are not manipulated - Libor anyone?) everything is a fog and the truth is difficult to know.

Free markets could tell us that gold and silver are worth relatively little compared to say - a home, a car or even a productive business. Or free markets may tell us that they are in fact money - a medium of exchange and store of value somehwat superior to current styles of money. 

Until we have law and order restored to our financiial systems (and until we have the freedom to choose these things for ourselves) we will continue to look at PM's as an investment priced in currency units which are manipulated themselves. Thus the true value of these things are truly - at this stage - unknowable. The more I type the deeper down the rabbit hole I go and I realize how truly fucked up this system is....

 

Mon, 12/24/2012 - 18:55 | Link to Comment Silver Garbage Man
Silver Garbage Man's picture

Too bad this article came out 4:37 Christmas Eve.
Perhaps a less festive time of year would have caught more eyeballs.
I am committed to silver and I sleep like a baby.
It is only a matter of time.
Merry Christmas and Thank You to Zero Hedge for a top notch site....GREAT JOB

Tue, 12/25/2012 - 04:17 | Link to Comment The Navigator
The Navigator's picture

Double Ditto your sentiments.

Thanks Tyler and Merry Christmas to all ZHer's - it's been a fun/intertaining/informative year thanks to you all - look forward to more in 2013.

Unless, that is, the Mayan Calendar was off by 2 months - in which case, thanks for all the fish.

And lynnybee, if you're still out there, hope you're still hanging tough and best wishes for 2013.

Mon, 12/24/2012 - 18:56 | Link to Comment Right Wing Nut Job
Right Wing Nut Job's picture

I recommend simply buying physical and shorting the equivalent dollar amount in paper assets like gld/slv etfs. It's a net neutral trade in theory, but any event that creates significant price increases always expands that spread and anything truly catastrophic to fiat currency will also create widespread concern for paper assets. 

Mon, 12/24/2012 - 20:11 | Link to Comment Doña K
Doña K's picture

If many people did that, the price of physical will be supressed enough to limit the upside, which is what is happening now.

Most of the freedom loving, banker hater groups and the non-bigots who hate everyone equally but want to preserve wealth buy physical and the bankers are shorting the paper market resulting on limiting the upside. Only if many of us buy enough to make it too expensive for bankers to short paper PM's whould allow PM explosion to the moon.

Quote from non other than Kyle Bass that counting to a quadrillion would take 31 million years or so. That puts in perspective what would happened during the great unwind.

Yes Virginia head for the Andes!

Mon, 12/24/2012 - 18:56 | Link to Comment The Duke of New...
The Duke of New York A No.1's picture

Becuase it's cheap like Borsch.

Long NY Fed Tungsten.

Mon, 12/24/2012 - 19:01 | Link to Comment Edward Teller
Edward Teller's picture

The Ag:Au ratio (silver:gold) has been increasing for centuries originally running about 10:1 2000 years ago. There was a huge increase in silver production in the late 1800s which depressed the purchasing power of Ag relative to Au. The actual PURCHASING POWER of silver today in lower than it was 200 years ago, and greater than it was 50 years ago. Example, 1 US silver dollar will buy you 6-7 gallons of gas today vs. 5 or so in the late 1950s. The exange value between Au and real things is also a bit higher than historical norms stretching back several thousand years - but not too badly out of whack.

My suspician is that the precious metals will not increase much, at least if you measure in REAL purchasing power unless driven there through some "bubble" hype. Of course, where they may go in make believe money I have no idea.

Think reality.

 

Mon, 12/24/2012 - 19:01 | Link to Comment e_goldstein
e_goldstein's picture

Not sure we can call anyone buying eagles from the mint the smart money.

 

Mon, 12/24/2012 - 19:12 | Link to Comment Clint Liquor
Clint Liquor's picture

Please explain, oh wise one.

Mon, 12/24/2012 - 19:50 | Link to Comment rehypothecator
rehypothecator's picture

You do know that government websites have URLs that end in .gov, right?  Like, http://www.usmint.gov/ ?

Mon, 12/24/2012 - 19:59 | Link to Comment e_goldstein
e_goldstein's picture

My mistake, thanks for pointing that out for me. Btw, usmint.gov has an even higher premium.
http://catalog.usmint.gov/webapp/wcs/stores/servlet/ProductDisplay?catal...

Mon, 12/24/2012 - 21:56 | Link to Comment rehypothecator
rehypothecator's picture

Those are "specially burnished" and have the W mint mark, so they're not regular Eagles.  But they do indeed have quite a premium.  

Tue, 12/25/2012 - 01:03 | Link to Comment Room 101
Room 101's picture

The premiums at govmint are sky high. Not a good example. APMEX though.....

Attention thoughtcriminals! The guards, interrogators, and pain delivery specialists at the Ministry of Love wish you and yours a very Merry Christmas!

Mon, 12/24/2012 - 19:08 | Link to Comment ultraticum
ultraticum's picture

I like that Sprott always looks at physical fundamentals and carefully quotes his sources.

 . . . . . . . . . . . . . . . .

Retire FRNs forever in favor of something tangible that is nobody's liability, and something that didn't bear interest to an evil, global cabal from the instant it was printed.

Mon, 12/24/2012 - 19:23 | Link to Comment Yen Cross
Yen Cross's picture

 I trade Currencies for a living, and I like Sprott! The correlations of certain currencies and {Peripherial Bond yields}, are tied in with commodities as a whole/

Mon, 12/24/2012 - 19:20 | Link to Comment LiquidityandLunacy
LiquidityandLunacy's picture

So many of you people are sitting here PRAYING for the collapse of the silver and gold markets or rather hoping for parabolic paper appreciation. The people who want this are FOOLS. WHY would I want to trade more fiat for less gold and silver? Keep stacking and stop bitching. Its all a discount at any price.

Mon, 12/24/2012 - 19:41 | Link to Comment Dr. Sandi
Dr. Sandi's picture

If it's going to blow up anyway, I'd like to enjoy watching it with a full deck. If it takes too long, I'll be too Altzheimered up to really appreciate the ironic justice of it all.

Tue, 12/25/2012 - 04:22 | Link to Comment The Navigator
The Navigator's picture

Yeah, but your heirs will think you were a genius and thank your foresight.

Either way you win.

Mon, 12/24/2012 - 22:29 | Link to Comment Raymond Reason
Raymond Reason's picture

Some of us don't have a job. 

Mon, 12/24/2012 - 22:43 | Link to Comment Pejorative Requiem
Pejorative Requiem's picture

They're not praying for colapse in PM's, they're praying for higher interest rates. But they see thmeselves as the true optimists...... only pessimists put more that 15% in gold.

Mon, 12/24/2012 - 22:43 | Link to Comment Pejorative Requiem
Pejorative Requiem's picture

They're not praying for colapse in PM's, they're praying for higher interest rates. But they see thmeselves as the true optimists...... only pessimists put more that 15% in gold.

Tue, 12/25/2012 - 14:39 | Link to Comment DosZap
DosZap's picture

only pessimists put more that 15% in gold.

Or people who have a REAL inside track on  what is coming down.................

Suggest you read what some of the largest Hedge Fund mgrs in the world's take on this.

kingworldnews.com

Mon, 12/24/2012 - 19:23 | Link to Comment StockProdigy
StockProdigy's picture

My sentiments exactly!

Mon, 12/24/2012 - 19:36 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

Nice rack StockProdigy

Mon, 12/24/2012 - 20:12 | Link to Comment AGAU
AGAU's picture

Nice rack Angus

Mon, 12/24/2012 - 23:22 | Link to Comment Jam Akin
Jam Akin's picture

Nice sack AGAU.

Tue, 12/25/2012 - 00:16 | Link to Comment sablya
sablya's picture

Nice "hat" Jam

Mon, 12/24/2012 - 19:25 | Link to Comment UNCOMPROMISED
UNCOMPROMISED's picture

Interestedly, the 'ALL IN' pivot for UNCOMPROMISED is $3475 for gold and $77 for silver.

Mon, 12/24/2012 - 19:32 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

Speaking of silver, do any of you Bitchez have a problem with white spots on your silver coins? I've tried several methods to get rid of them but the simplest, most effective way I have found so far is to use a soft white rubber pencil eraser to remove them.

Anybody else got a preferred method you use?

Mon, 12/24/2012 - 19:44 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Either handle them a lot so they get a good coat of protective skin oil, or keep them in a safe, dry place with no handling.

Besides, if they're bullion, spots don't matter. And if they're numismatic, keep them in a coin condom.

Mon, 12/24/2012 - 20:09 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

Dr. Sandi: I wouldn't worry about it much if I was buying simple Maples but I only buy the more numismatic wildlife series coins (wolf, cougar, grizzly, moose, antelope).

The many coins I have that are sealed in thermo strips don't have a problem. It's when I buy the raw coins out of a tube that seem to be affected most, even though I immediately transfer them into solid plastic capsules. They also seem to be affected when stored in temperatures between 40-50 F. It's almost like they have a layer of frost on them but it doesn't go away when they are left at room temp for several hours. That's when I get out the white eraser, and it does a pretty good job. I just wish it wouldn't happen to begin with but at least I can clean them without too much fuss.

Maybe I should just dip them in WD-40 before encapsulating them (lol).

Tue, 12/25/2012 - 01:28 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Wow. Sneaky spots when you're not looking. I wonder if it's condensation, considering the cool storage place. You might try sealing some uncooked rice in with the coins to soak up any moisture.

Just a wild guess. But even if it doesn't work, you've put away something edible with your metal for a rainy day.

Wed, 12/26/2012 - 02:26 | Link to Comment CCanuck
CCanuck's picture

Angus, They have been named Milk Spots, The story is; the residue is a releasing agent used in bullion minting, due to chemical composition and concentration, they have affected some issues more than others. I have also used an eraser, leaves micro scratches, follow the grain, or direction of backround fields. I work P/t at LCS, our buy price is same on regular maples, milk spots or not, however wildlife or any other limited series do not get premium with milk spots, or have been cleaned up. They do look alot better cleaned, rather than milky, I have seen some with half the coin covered. No official reason or resolution has been issue by The Royal Canadian Mint, that I am aware of, the above information is from talk at the store.

Ccanuck

Wed, 12/26/2012 - 16:39 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

Thanks CCanuck. The guy I buy all my silver from is a certified Canadian Mint dealer. All his enquiries to the Canadian Mint as to what can be done about the "milk spots" have so far gone unanswered, and I see him regularly.

There are a couple methods to clean silver that I have personally tried:

1 - Fill an aluminum pie plate with warm water and sprinkle in a generous amount of baking soda. Let silver coins sit for several hours and flip them over every so often. Rinse in warm water after removing the coins and dry them with a clean microfiber cloth. This helps remove severe tarnish and other stains but does not usually work for removing milk spots in my experience.

2 - The only good method for removing milk spots that I have tried is the white eraser method.

WARNING: NEVER, EVER use hydrogen peroxide to clean silver. Try it once and you'll see why.

Don't ever believe a coin dealer or anyone else that tells you milk spots or other blemishes don't affect the value of coins. If you ever hear some retard tell you that sales pitch just walk away.

Mon, 12/24/2012 - 20:13 | Link to Comment Tango in the Blight
Tango in the Blight's picture

Do scratches matter? I have two coins which have scratches.

Mon, 12/24/2012 - 20:32 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

Scratches don't matter if they are only visible under a magnifying glass. If the coins have visible gouge marks that's a different story. Only non-circulated (literally mint issued collector coins) should be pretty much flawless.

Any coin that is dirty to begin with will have scratches and other imperfections already. I just try to clean up the coins as gently as possible using the least damaging cleaners and microfiber cloths. Needless to say it is a long process, which is why I wouldn't bother doing it on plain Maples or other standard Mint issued rounds from around the world.

Tue, 12/25/2012 - 01:09 | Link to Comment natty light
natty light's picture

There is a guy on YouTube named Drutter that shows how to clean silver using hot water and baking soda; it gets the black off.

Tue, 12/25/2012 - 02:24 | Link to Comment infinity8
infinity8's picture

This is true (i've done conservation work) - you want to mix the baking soda into hot water but, it doesn't need to be applied hot, Great for your teeth as well as a toothpaste (add hydrogen peroxide)..Also, try an "Artgum" eraser by Sanford. It's a tan colored, brick shaped "dry eraser". It crumbs, is absorbent, and totally non-abrasive. Good for lots of things- works on paper, stains on fabric - art supply store.

Mon, 12/24/2012 - 22:33 | Link to Comment Raymond Reason
Raymond Reason's picture

The coin dealers never used to pay attention to the white spots.  Now most of them around here won't pay their normal rate for such. 

Mon, 12/24/2012 - 20:45 | Link to Comment HellFish
HellFish's picture

I have a tube or two of silver Maple Leafs with spots - nothing has worked - but lately I hear a pencil eraser.  I have not tried it as I suspect it it will be destructive.

Mon, 12/24/2012 - 20:52 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

White erasers have worked pretty good for me and they don't cause any noticeable damage, and the end result looks much better than white "frost" all over the coin. I've even experimented with regular orange erasers and they work too but I think they have more grit in them than a white eraser, so stick with the white ones and if you see any dark flecks in the eraser don't use it.

Mon, 12/24/2012 - 23:15 | Link to Comment Absinthe Minded
Absinthe Minded's picture

Don't take them out of their plastic packages. Keep a handful for clinking, leave the rest in plastic. I've had mine since 2007 with no tarnish.

Mon, 12/24/2012 - 19:34 | Link to Comment Yen Cross
Yen Cross's picture

 XAU pivot is $1594. 100 week moving average, and assending(multi year) trend/line... Bitchez

Mon, 12/24/2012 - 20:06 | Link to Comment Rogue Economist
Rogue Economist's picture

T'was the Nightmare Before Christmas

http://www.doomsteaddiner.org/blog/2012/12/24/twas-the-nightmare-before-christmas-2012/

T’was the night before Christmas, when across all the seas
Not a Doomer was stirring, not even RE.
The False Flags were in the MSM all over the place,
While Politicians mumbled their words of disgrace.

The Diners were nestled all snug in their beds
While visions of Mad Max danced in their heads
WHD in his Red Afro Wig, and I in my hat
Had just settled in to watch Civilization go splat.

When out on the internet there arose such a clatter,
I sprang to the Laptop to see what was the matter.
Over to Google I flew like some birds,
To type in Apocalypse and other Keywords.

The news on the net was like new fallen snow,
Flakes of disaster everywhere I would go.
Off with my wandering keyboard fingers I went to visit
Zero Hedge, Survival.com and 8 blowhard Collapse Pundits

The news was so bad I surfed ever faster,
searching wide to find the cause of disaster.
More rapid than Assault Rifle gunfire the news came on in,
Of Earthquakes, Volcanoes and all Human Sins.

Now Kunstler! Now Orlov! Now, McPherson and even Jim Quinn!
On Ruppert! On Gail! On, on Denninger and Steve from Virgin!
To TEOTWAWKI as we head for a mighty big fall!
Now Dash away, Dash Away! Dash away from it all!

As Mall Signs and Rooftops before the wild hurricane fly
When they meet with an obstacle, mount to the sky.
Every keyboard was flying, calls of the end came everywhere
The Doomosphere was just chock full of despair.

And then in a twinkling, I read on the net
Illuminati across the Globe were begining to Sweat.
Bond spreads were wide, Futures were down,
Derivatives and CDOs were beginning to drown.

Gold bugs were Frantic, piles of Maple Leafs high to the sky,
While at Safeway and Walmart not a Twinkie to buy!
Preppers were loading their Glocks full of Lead,
Hoping to be the last of the Doomers left dead.

Permaculture raised beds and hydroponics were secured,
as Industrialization’s Ills could not be cured.
Heirloom Seeds in Nitrogen vaccuum packs were stored,
Ground floor windows were covered with 2×4 boards.

In Central Park all the OWSers set tents on the Grass,
the showdown with the NYPD would now come to pass.
The truckers rolled in and the Hell’s Angels too,
then the Longshoremen came in from out of the blue.

In CONgress the budget went over the Cliff,
while Obama said, “Hey, what’s the diff?
My Man Benny has the Inkjets all ready!”
No worries folks, the economy will stay steady.

In Brussels at the IMF the Eurocrats fumbled,
playing violins as the Euro crumbled.
In Japan the Sushi was glowing,
While Abe made sure those Yen kept on flowing.

In MENA the Drone Aircraft were flying,
with Women and Children doing most of the dying.
In the Straights of Hormuz Mines were placed to counter the Drones,
So all the tankers and carriers would be sent to Davey Jones.

In China the economy was rocking,
Ghost Cities and Bridges to Nowhere filled up their stockings.
Foxconn workers off factory rooftops went jumping,
While the Iphones out of the factory kept pumping.

The situation was dire, the whole world was on fire.
Everyone everywhere all caught in the mire.
The whole human race so utterly lost,
Happy Motoring and Industrialization exacting a terrible cost.

RE sprang to his keyboard to give the Diners some HOPE,
even though the world seems at the end of its rope.
They heard him exclaim, ‘ere the Internet went out of sight,
“Happy christmas to all, and to all a Good Night!”

RE

Tue, 12/25/2012 - 16:37 | Link to Comment Shell Game
Shell Game's picture

'Abandon hope all ye who enter here...'  -Doomstead Diner (i.e. Collectivist Cafe)

Mon, 12/24/2012 - 20:16 | Link to Comment Translator
Translator's picture

50 times cheaper than gold......duh

Mon, 12/24/2012 - 20:54 | Link to Comment Yen Cross
Mon, 12/24/2012 - 21:05 | Link to Comment q99x2
Tue, 12/25/2012 - 00:36 | Link to Comment Yen Cross
Yen Cross's picture

 Keep kicking ass q99x2     I'm trading Asia. How many JGB's can "Toyoda" sell in 4 days? Go Godzilla

Mon, 12/24/2012 - 21:20 | Link to Comment XtraBullish
XtraBullish's picture

Eric must be getting annihilated with redemptions - the same story since 2011 at $50 an ounce. How many ounces are getting spewed out by lead-zinc mines in Russia and China that are not in the official count. Carlos Slim hedged 10 years silver production in the $40's so I will bet Eric's assumptions are flawed and the black swan is the supply number. It is still going to $500/ounce in U.S. dollars because the USD is going to zero.

Mon, 12/24/2012 - 22:35 | Link to Comment They Tried to S...
They Tried to Steal My Gold's picture

Your point is a valid point.....We really cannot get accurate numbers out of China or Mexico in regards to production. Mexico is the largerst producer of Silver I beleive. It doesnt surprise me that the world's wealthiest man lives in one of the largest corrupt countries in the world....and thus controls Silver....

 

Until Silver finds a less corrupt home base ......it will be a while before they unleash the triple digits on Silver...

 

 

Tue, 12/25/2012 - 01:30 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Iceland comes to mind. But I don't know that they have viable silver reserves there. But they seem to have rooted out the corruption for awhile.

Mon, 12/24/2012 - 21:37 | Link to Comment Peter Pan
Peter Pan's picture

Prophecies of $500 per oz of silver fell flat last time and will fall flat again. Don't get me wrong because I do think silver is good to buy, but the fact remains that those who want silver can still buy it. Nobody has been refused delivery which means silver has an equilibrium level of buyers and sellers.

The only way silver will spike for a time is when paper buyers ask for physical and even then the spike will only last for a while before silver settles down to a higher but not $500 level.

Mon, 12/24/2012 - 22:12 | Link to Comment mwarden
mwarden's picture

i am not smart enough to know what to do with silver. people like the fact that it has industrial uses, but to me that is confusing, because that means industrial demand for the metal is less when the GDP growth slows. so how the hell am i supposed to project what happens to silver under various economic conditions that i want to hedge against? like i said, i'm not smart enough to do that, so i stay with simpler metals. and i tend to include platinum in there, even though it does have some industrial uses as well.

Tue, 12/25/2012 - 12:09 | Link to Comment blunderdog
blunderdog's picture

If foretelling the future was EASY, everyone would do it!

Mon, 12/24/2012 - 21:50 | Link to Comment Yen Cross
Yen Cross's picture

 Toyko fix #'s (  yuan Central parity)  ^6.2931 vs 6.2913

Mon, 12/24/2012 - 22:38 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

Hold a Silver Eagle up to functioning currency to see which one is more impressive to behold. Then hold it up to a dead currency and see how much more impressive it becomes. You won't really care if there is a slight silver surplus in mining at the moment. Last I checked there is a surplus of dollars, Yen, and Euro being stuffed into the banking sector. Besides, any silver surplus could vanish in the twinkling of an eye at $30 an ounce. 

Tue, 12/25/2012 - 01:32 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Since $1.2 quadrillion in derivitives are backed by $600 billion in collateral, I'd say there's about 2000x times as much money floating around as wealth to back it up.

This makes me a happy PM hugger.

Mon, 12/24/2012 - 22:46 | Link to Comment Dr. Gonzo
Dr. Gonzo's picture

The thing that would scare me to death if I was shorting silver is that it is still so cheap that any homeless bum could easily afford to buy a U.S. Silver Eagle. 

Mon, 12/24/2012 - 22:48 | Link to Comment Yen Cross
Yen Cross's picture

GOD/JESUS. Gets get'er' Done!

Mon, 12/24/2012 - 23:25 | Link to Comment Yen Cross
Yen Cross's picture

 I'm rapidly losing interest in the "validity" of Zero Hedge. J.R. and myself discussed starting a financial website 3 years ago.

   People are leaving Tyler. People are losing trust/ People are tired of advertising that is the " antithisus of Zero Hedge"

Tue, 12/25/2012 - 03:07 | Link to Comment AE911Truth
AE911Truth's picture

People are leaving to where exactly?
I do not know of a more educational site. Please tell. A lot of people have learned an extraordinary amount from ZH, myself included.

Thank you Tyler!

Mon, 12/24/2012 - 23:27 | Link to Comment Yen Cross
Yen Cross's picture

 When is someone going to start growing some balls? I send charts over/  Leeeches, and wanabees!

Mon, 12/24/2012 - 23:32 | Link to Comment Conax
Conax's picture

To even hold silver takes nerves and balls of steel.  Lose it in a boat accident and move on.

Mon, 12/24/2012 - 23:37 | Link to Comment Future Jim
Future Jim's picture

If people have a proportionlly higher than usual interest in buying silver right now, then doesn't that mean the price might be high relative to gold?

Mon, 12/24/2012 - 23:43 | Link to Comment Yen Cross
Yen Cross's picture

  I'M RAPIDLY loosing my patience Tyler.  This moving comments to suit the thread?  I have made comments to people that you have manupulated to upset posters.

 You( Tyler), of all people are intoxicated with clix/

Tue, 12/25/2012 - 01:41 | Link to Comment Dr. Sandi
Dr. Sandi's picture

Comments move down with traffic on the thread. A lot of thread hijacking means comments move way on down really fast.

Somebody has to pay for all this free stuff. Traffic drives traffic, which increases bandwidth and CPU costs.

Unless you're AOL or some other crazy ubernational, most people can't afford to have a hugely successful website.

I speak from experience. We almost went broke paying for hosting for our visitors. Then our sugar daddy came along and blew millions of unwary pension dollars on us. They went bust too, because visitors do not bring money with them.

More than any other site I can think of, Zero Hedge is NOT AN ENTITLEMENT.

Tue, 12/25/2012 - 01:50 | Link to Comment Yen Cross
Yen Cross's picture

  I'm the Sugar Daddy.

Tue, 12/25/2012 - 16:42 | Link to Comment TWSceptic
TWSceptic's picture

You're a fucktard / douche who deserves to get banned.

Mon, 12/24/2012 - 23:53 | Link to Comment HowardBeale
HowardBeale's picture

Uhh, because it is 1/50 the price of gold? Duh.

Mon, 12/24/2012 - 23:59 | Link to Comment TradingChief
TradingChief's picture

Sprott is just pumping his own PF and book. He is absolutely overloaded in Silver.

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