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Physical Silver Investment Demand Great Deal Higher Than Official Estimates
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Physical Silver Investment Demand Great Deal Higher Than Official Estimates
Posted with permission and written by: Steve St. Angelo of SRSrocco Report (CLICK FOR ORIGINAL)
Even though 2015 is estimated to be a record year for Official Silver Coin sales, total sales in this market is likely to be much higher. Why? It has to do with a portion of physical silver investment demand that is not included in the official data.
According to the Silver Institute 2015 Interim Report, total Official Silver Coin sales will reach an estimated 130 million oz (Moz), due to massive demand (June-Oct) stemming a Greek Exit contagion and the forecasted market crash in the fall. As we can see from the chart below, not only are Official Silver Coin sales for 2015 the highest ever, they are more than three times greater than they were in 2007… the year before the collapse of the U.S. Investment and Housing Market:
However, there is one important segment of this market that is not included in the figures above. Private silver round sales are not included in the physical silver investment figures due to the lack of available data. For new investors into the precious metal market, let me clarify the difference between Official Coins and Private Rounds.
Official Silver Coins = silver coins (mostly 1 oz) that are produced by Official Mints such as the U.S. & Royal Canadian Mints. These are labeled “coins” as they are legal tender.
Silver Rounds = silver rounds (mostly 1 oz) that are produced by several private mints such as the Sunshine and Highland Mint. These silver rounds have the same quality of silver as most Official Silver Coins, but cannot be called “coins” because they are not legal tender.
While silver rounds are not Official Coins, they still are highly sought after by investors and are easily purchased and sold back to most local and online dealers.
Sales of private rounds have increased significantly over the past several years, but their figures has not been included in the official statistics… again, due to the lack of reliable and accurate data. I have called many dealers and asked them for a general guideline of their private round sales. The private silver round figure I received from several dealers was approximately 10-15% of their Official Silver Coin sales.
After the release of the Silver Institute 2105 Silver Interim Report, I contacted the GFMS team at Thomson Reuters and asked several questions. One of the questions was in regard to the exclusion of silver round sales from their data. This was the GFMS team response:
You are correct in your observation that privately minted coins are not currently included in our silver coin demand statistics. This is something we have been working on, but it is taking time to develop back data. We have begun this work and it will be integrated into our statistics as soon as we feel they meet our reliability and accuracy standards.
I asked the GFMS team if they found that a 10-15% figure versus Official Coin sales was a good approximation. Thus, my estimate for private silver rounds was about 10+ Moz in 2015. The GFMS team responded by stating:
To give you a sense of the numbers we are currently working with, we would suggest your 10 mln estimate is conservative for 2015. 10% to 15% seems reasonable in normal years, but given the remarkable shortage of coins in North American in the third quarter and anecdotal information and data obtained from market players, we have estimated upwards of 20-40 mln ounces of privately minted coins sold in the region this year.As mentioned though, we are still working on these figures and they are by no means final.
So, according the GFMS team, they estimate that private silver round demand was 20-40 Moz in 2015.Thus, total Official Silver Coin and private round sales may actually be upwards of 30% higher than the official data. Folks, this is a big figure… much higher than I anticipated.
If we assume that private silver rounds were somewhere in the middle of their 20-40 Moz estimate, that would be an additional 30 Moz of physical silver investment demand for 2015.Thus, total Official Silver Coin and private rounds would equal 160 Moz in 2015, much higher than the 130 Moz figure. Thus, the forecasted net balance deficit of 21.3 Moz for 2015 will be more like 51.3 Moz… once we add in the additional 30 Moz private silver round demand.
Furthermore, once the GFMS team adds private silver round data to their World Silver Surveys, they will have to go back and update all previous figures for the past decade. This will certainly show that the cumulative net balance deficit shown below is actually much higher:
Please note, the GFMS Team was nice enough to share their approximate private silver round data with me, but it is still an estimate as they have not yet acquired enough reliable and accurate data to produce these figures officially. I would imagine we will likely see private silver round sales data included in their World Silver Surveys within the next year or so.
For those precious metal investors who think “All Official Data” is manipulated…. it isn’t. I have looked at a lot of data and can tell you, the folks at GFMS use information from many Government sources. For example, the GFMS team utilizes silver production figures from the U.S. Geological Survey (USGS) and Official Coin sales from the U.S. Mint. I have checked mining company silver production data for the United States and it does correspond with the figures put out by the USGS. This is also true for the U.S. Mint.
Now, I am not saying that all the official data is 100% accurate or that some may be over or under reported, but it is a good approximation of what is taking place as it pertains to supply and demand in the silver market.
That being said, physical silver investment demand has only one way to go in the future… AND THAT IS MUCH HIGHER. I will be putting out an article next week on Gold & Silver Prices To Surge Based On Fundamentals, Not Technical Analysis. Precious metals investors who have become disillusioned or frustrated by the low paper prices and negative articles by the so-called “Anti Gold-Silver Bugs”, have no idea just how bad the current economic and financial system have become.
One of the best ways to survive the coming collapse of the Greatest Financial Ponzi Scheme in history, is to own physical precious metals.
Please email with any questions about this article or precious metals HERE
Physical Silver Investment Demand Great Deal Higher Than Official Estimates
Posted with permission and written by: Steve St. Angelo of SRSrocco Report (CLICK FOR ORIGINAL)
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So when do we get part 4?
"Mr Bath House, the People no longer trust the FRN."
"What?! What are they doing?"
"Getting silver coins and rounds."
"Find these Traitors and kill them!"
"Yessir!"
Silver will always be needed in the medical field for its antimicrobial properties. It's used in various wound dressings and salves to prevent infection. Not to mention colloidal silver becoming more popular for immune system support. When suberbugs start resisting all strains of antibiotics, hospitals will need even more silver unless they want to become graveyards.
The military-industrial complex requires much silver. Most missiles take more silver than the average stacker has in their stash. Silver-jacketed bullets pierce right through light armor like kevlar and helmets. And again, medics have much use for it.
Electronics - sure, photography doeesn't use it anymore. Yet, a whole bunch of other things DO use it now. All the proles need their newest smartphone every year or two. The old ones get thrown out. Bye-bye. Same thing applies to TV sets. New cars have all sorts of electronics in them - so manufacturing all those cars to loan out at 0% interest for a 7-year loan requires silver, too. Computers, tablets, phones, TVs, most anything with a screen that can be plugged in needs silver. The screen you're reading this on, can't work without silver. Polarized sunglasses? Oh yeah, even those use some silver.
All of this doesn't even mention the race to the bottom of all fiat, courtesy of our demonic central bankers. No need to elaborate on that one here.
Bottom line - arguments for silver's demise don't hold up. Get it while you can, folks. All indications are that times of papering over economic despair can't last much longer.
"Now that anyone holding silver is dead, I control all Silver. I will make bandages available to those who swear allegiance to Satan."
where is lake city?
"After a bad opening, there is hope for the middle game. After a bad middle game, there is hope for the endgame. But once you are in the endgame, the moment of truth has arrived." ~ chess quote by Edmar Mednis
BUY NOW !
While you still have opportunity to lose even more of your money as the price continues to fall, fall, fall ... BUT we peddlers get to profit !!!!
The silver price follows the gold price (except for today,lol) . once gold moves silver will tag along. the silver market is tiny compared to gold,so when the buyng frenzy sets in (investors allways jump into rising assets) SILVER will sell out within days,just like last time,end of story. buy the physical and the debt free miners now,thank me later.....
The FED manipulates the silver market with the end game being driving gold lower, but today it didn't work. Gold almost always follws silver lower when silver is being manipulated down. The manipulators get a bigger bang for the buck in the much smaller silver market which ripples over to gold. It's just not working like it used to.
Silver is an industrial metal with no alternative element that can replace it. Currently it's so cheap it's not worth recycling from electrical and electronic devices, so it's ending up in land fills. Silver mines shut down many years ago so the only place it's coming from are mines where it appears with the primary element being mined. These mining company’s in the past would go ahead and process the ore to add to the bottom line. Silver has become so cheap in the past couple of years even this source as dried up as it's value is so low it costs more to process the ore than it's worth. Soon there will be a default of silver delivery to the industry’s that must have it to produce the products they manufacture. At that point the value of silver will increase exponentially in value so people that are holding their silver will let go of it. Where is silver used in electronics? It's used as conductors in electronic chips and the contacts under the buttons of your keyboard are just a couple of places where it's used. When electronic chip production stops due to the lack is silver what will the value of silver become? Industrial experts have said that even it was $1,000 an ounce they could still turn a profit without a substantial increase of the cost of chip production. At that point the true value of silver will be found, and it may very well be $1,000 an ounce.
I give you an A for effort, but NOT for results.
I am a computer engineer, own and manage many businesses, including design and manufacture of high-performance digital electronic equipment. I use silver in my solder, I know the usage of silver in the electronics industry, and I am ABSOLUTELY sure that what you theorized as the basis for an explosion in the price of silver is pure fantasy.
You are biased by what you WANT to happen, rather than just being objective about what can happen.
How many pounds of silver solder do you use in a year? And how many ounces of silver is in a pound of solder?
Ask how many pounds are used in each cruise missile's extremely hot batteries.
Throw a war without silver and you'll have to shoot them face to face.
None of this hiding in Ohio pushing buttons.
Don't fail to consider the Chinese and their dream of a modern, all encompassing electrical grid and several gigawatts of solar on the drawing board.
All as the mines throw in the towel.
It's a war of attrition we cannot lose.
What ifs, we then must ask what if an asteroid ripe for mining will fly by Earth soon?
Oh come on. The entire financial system and every economy on Earth is based on 'what-ifs,' projections, and speculation.
Ok, fair enough. There has been shrinkage:
"Photography used to be the No.1 end-use of the silver, using silver nitrate to create light-sensitive halide crystals. This sector includes consumer photography, the graphic arts and radiography (x-rays), both in medicine and industrial inspection of heavy machinery.
Photographic silver demand hit its peak in 1999, representing 25% of total fabrication. The film market in the United States alone used over 93 million ounces of silver that year, more than one ounce in every ten sold worldwide. Within five years, however, photographic demand slipped below 20% of total demand, and it fell to 9% by 2013.
The growth of digital photography has played the greatest part in this decline. Still-photography used in x-rays remains a big consumer of silver, but total photographic demand has contracted 70% by weight from its peak."
and there has been growth:
"Photovoltaic demand for silver exploded on these taxpayer subsidies, growing at a 50% annual rate and starting to fill the gap left by the declining photographic industry. But with subsidies then cut as the financial crisis wore on, and with silver prices doubling in 2011 to hit almost $50 per ounce – the all-time peak set in January 1980 – silver industrial demand declined for three years running.
Higher prices meant technology developed to use less silver in producing the same amount of solar power. This "thrifting" has now cut the quantity of silver by up to 80% per solar cell from a decade ago. So despite a rise in total solar panel production, US photovoltaic demand for silver has actually fallen in recent years. In Europe, those earlier government subsidies led to huge over-production, and excess capacity in the industry saw many solar-cell manufacturers go bankrupt, also hurt by competition from China.
Even so, global photovoltaic demand for silver has grown at a compound annual rate of 20% over the last decade, according to the Silver Institute's World Silver Survey 2014. China is now the leader in solar-panel manufacturing, producing 60% of 2013's global output. Solar capacity in China leapt from 0.8 to 18.6 gigawatts between 2010 and 2013, with Beijing setting a target of 70GW by 2017."
"During the 1920s, over 3 million prescriptions per year were written in the US for medications containing silver. Due to the introduction of penicillin in the 1940s, antibiotics became the standard treatment for bacterial infections, and this use of silver diminished. But new scientific research has since allowed fresh expansion of the medical industry's use of silver."
All things considered, the jury might still be out.
I would add that sites which promote the "coming silver squeeze" tend to be the same sites that sell the physical stuff.
https://www.bullionvault.com/guide/gold/Silver-industrial-demand
https://www.silverinstitute.org/site/wp-content/uploads/2011/07/futuresi...
Silver WAS used to a great extent in photography, but since digital, that ship sailed with nothing to replace it. Industrial silver demand is low, historically speaking, even if electronics goes up a bit, but with manufacturing and sales collapsing, will silver really have any impetus? I think so, but not as much as some presume.
One question, in 2011 the silver price was 3 times higher than today, why isn't silver demand 3 times higher today? Answer, lack of demand.
Did you read this article? There is no real pricing going on right now, anywhere! I am sure the demand is higher than in 2011. Check out the Hunt brothers and see if you think demand is the answer.
Rounds probably sell at LEAST twice the rate of coins....I have thousands of rounds, but ZERO coins, except for junk I have collected. I feel it is stupid to pay 35% premium for a legal tender coin when, you can buy rounds for a premium of 6%. Sunshines are my favorite, due to their top of the line security feature.
I guess it's easier to be a coward and junk me, than it is to explain why I am wrong.
I do not know a single person who buys Eagles, but know at least a dozen who buy rounds. WHY is it prudent to spend 29% more in premiums to get an ASE rather than a Sunshine Eagle? They are both struck from the same blanks.
I'm not your junker, but I only buy ASE's as rounds aren't monetary instruments and thus are subject to 28% "collectible" tax, according to the IRS.
I missed something? Explain please. I have bought both on a regular basis over the past few years and not once have I paid tax. Where does this tax kick in?
And since ASEs are legal tender "cash", what happens when/if cash is banned? And are You not just paying the 28% "collectible tax" up front in the form of a higher premium. I'll take my chances with the IRS when I sell mine, and if Do I'll be paying 28% on PROFIT, not spot price at purchase.
I send the IRS a letter each month itemizing just how much collectibles i have Collected /s
I am in your camp.
I do the sliver eagles in MS70 though, from time to time.
Thanks for the truth, We dont hear it much anymore! Its too bad we dont have a "Free" Market to participate in? We are allowed to participate in their new "fake" market where demand doesnt matter. I would love to participate in a market where there are no prices that are being "controlled". A natural, FREE market would be a little too much to expect in AMERICA? I would love to get our FREEDOM back.
If silver were an iphone, Apple would be through the roof. There is no good explanation, other than our FED is a bunch of cheating crooks! CHEATERS! They wont get far using cheating as a method.
CORRECTION: CHEATERS & LIARS! Thats exactly who represents us. FUCK YOU GOVERNMENT CUNTS!
ISN'T IT GREAT THE CROOKS HAVE TAKEN CONTROL! CROOKED AMERICA!
JUST IMAGINE A WORLD WHERE THE SILVER PRICE WAS "FREE" TO FIND ITSELF? IT DOESNT EXIST. The American people have no idea just how BAD this really is. Silver is unreal, good stuff and its showing us just how toxic our government is. Gold and Silver prices tell us just how corrupt our government has become. ITS BEYOND SALVAGING! The CROOKS NEED TO GO! Any one who participates in a fake market is crazy.
HEIL HITLER! The "NEW" AMERICA!
Silver needs to change hands, a little more than it does, even if it is used, occasionally, people will realize it's value..
that said.. Reloaded Ammo for sale.. Discount if paid in Silver, rings a bell around here at my place :)
Now that's a rant.
Good job, +1.