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Peak Silver Revisited: Impacts Of A Global Depression, Declining Ore Grades & A Falling EROI

Tyler Durden's picture




 

Submitted by SRSrocco

The world is about to peak in global silver production. This will not occur due to a lack of silver to mine, but rather as a result of the peaking of world energy resources, declining ore grades, and a falling Energy Returned On Invested – EROI. The information below will describe a future world that very few have forecasted and even less are prepared. This is an update to my previous article Peak Silver and Mining by a Falling EROI. In my first article I stated that global silver production may peak in 2009 if we were to enter a worldwide depression. We did not have the global depression as massive central bank printing and bailouts have thus far postponed the inevitable.

Full report (pdf)

 

 

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Mon, 10/10/2011 - 23:02 | 1759834 High Plains Drifter
High Plains Drifter's picture

buy   buy .. buy ...     silver .......bitchez..................

Mon, 10/10/2011 - 23:13 | 1759879 Troll Magnet
Troll Magnet's picture

you guys keep talking about this..gold? silver? who/what are they?

Mon, 10/10/2011 - 23:19 | 1759894 Schmuck Raker
Schmuck Raker's picture

They're like Jesus.

Very precious, yet inedible.

Mon, 10/10/2011 - 23:25 | 1759916 Prometheus418
Prometheus418's picture

I hear some Christians eat Jesus every Sunday, but he tastes like a crappy cracker.

 

Mon, 10/10/2011 - 23:32 | 1759939 Vic Vinegar
Vic Vinegar's picture

Was your comment witty?  No

Was your comment funny?  No

So no red for you but instead you get a Katy Perry video.  Deal with it.

http://www.youtube.com/watch?v=QGJuMBdaqIw&ob=av2e

Mon, 10/10/2011 - 23:52 | 1759991 LasVegasDave
LasVegasDave's picture

It takes guts to admit you like Katie Perry

http://www.youtube.com/watch?v=TZVJWh02I_M

Its all good!

Tue, 10/11/2011 - 00:29 | 1760056 flacon
flacon's picture

 

200,000 OUNCES, NOT TONS found on ship. (that is 6.66 tons, not 200 TONS, as some here are saying).

http://www.thesilverchronicle.com/Archive%20Folder/October%202011/oct112011d.html

 

USA Mint sold 750,000 ounces of silver in one day at the start of this month. Do you know how heavy two hundred tons is for a WWI ship?! This find of 200,000 ounces is pennies in a fountain. APMEX sold about 100,000 American Silver Eagles last week at the dip. CHUMP CHANGE!

 

"A BRITISH ship sunk in World War I with some 200,000 ounces of silver, worth $US19 million" $19M is not enough to buy a limp biscuit and a french fry at McD's let alone a stale beer from some dive bar in Philly. Pennies in a pond. 

Tue, 10/11/2011 - 00:30 | 1760106 CharlieSDT
Tue, 10/11/2011 - 02:05 | 1760212 Fukushima Sam
Fukushima Sam's picture

That was a great article, though one must wonder how the deaths of billions of people may affect the price of silver...

Tue, 10/11/2011 - 03:14 | 1760283 Johari Ichiban
Johari Ichiban's picture

Demand destruction.

Tue, 10/11/2011 - 07:52 | 1760466 Mitzibitzi
Mitzibitzi's picture

It'll affect the price a lot. Won't affect the value one bit. Reduced population equals reduced demand for goods equals lower prices. So your silver might be worth 1/10th as much, denominated in some arbitary paper currency, but so will the loaf of bread you want to buy with it.

Tue, 10/11/2011 - 02:42 | 1760241 zilverreiger
zilverreiger's picture

Note:

SS Mantola is the 2nd ship found, it only had a fraction of the first ship SS Gairsoppa (200 tonnes)

Tue, 10/11/2011 - 06:58 | 1760365 Colonel
Colonel's picture

Beats mining it.

Tue, 10/11/2011 - 09:16 | 1760634 johnnymustardseed
johnnymustardseed's picture

They actually found two ships, one with 200 tons and one with 200,000 ounces.....

http://thesilverchronicle.com/Archive%20Folder/October%202011/oct112011d.html

Lucky fuckers, most I ever found was one Washington Quarter

Tue, 10/11/2011 - 00:15 | 1760059 runlevel
runlevel's picture

katie perry is so fuckin hot. 

Tue, 10/11/2011 - 00:34 | 1760114 trav7777
trav7777's picture

if you like skanks that bang black guys, sure

Tue, 10/11/2011 - 01:08 | 1760160 runlevel
runlevel's picture

i got trav'd nice.

Tue, 10/11/2011 - 00:07 | 1760039 The Deleuzian
The Deleuzian's picture

240 million views are you kidding me...That's like MJ's billiejean, thriller, beat it plus every freakin' song from Nevermind combined!!!

Tue, 10/11/2011 - 05:53 | 1760345 Kina
Kina's picture

240 million views. No wonder the US is in trouble. That music is crap, though she might be sorta ok.

Tue, 10/11/2011 - 14:49 | 1761950 pupton
pupton's picture

I don't know what turns me on most about that video, the little girl with cancer/no hair, the two dudes kissing or the obese girl doing a "can-opener" into the pool half naked...

Mon, 10/10/2011 - 23:32 | 1759944 LetThemEatRand
LetThemEatRand's picture

I understand he is consumed in liquid form as well.  No one ever says that you can't drink silver.  

Tue, 10/11/2011 - 04:26 | 1760314 natty light
natty light's picture

If you want to look like a smurf.

Tue, 10/11/2011 - 14:58 | 1761990 pupton
pupton's picture

Holy crap!  That kind of looks fake.  Did you check out tree man???  He has HPV (Genital warts) all over his body to the point that he looks like a damn tree.  Yuk!

Mon, 10/10/2011 - 23:37 | 1759956 knukles
knukles's picture

Hearsay they serve booze with Him....

Tue, 10/11/2011 - 05:01 | 1760327 jomama
jomama's picture

i told the priest i couldn't eat the flesh of jesus because i was a vegetarian.

Mon, 10/10/2011 - 23:29 | 1759925 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

They are like Shaft:  Cool as bullets.

Mon, 10/10/2011 - 23:31 | 1759934 SGS
SGS's picture

Congrats SRSrocco!  This is my boy it was first posted here yesterday http://www.silvergoldsilver.com/index.php?option=com_content&task=view&i...

Tue, 10/11/2011 - 01:40 | 1760193 Hook Line and S...
Hook Line and Sphincter's picture

Good move on the posting and best on the new site SGS. Stay irreverent would you?

Mon, 10/10/2011 - 23:03 | 1759839 Vic Vinegar
Vic Vinegar's picture

SLV = fun loving e-digits holder.  No harm no foul.

Physical silver = enemy of the state.

Which side are you on?

Mon, 10/10/2011 - 23:26 | 1759889 DoChenRollingBearing
DoChenRollingBearing's picture

Physical gold and silver for me.  I am not an enemy of the state, but sure as Hell don't trust it.  SLV is for speculators only.

Want your wealth (whatever you have) to maintain its value through time?  Then everyone should own gold and silver.  Everyone.

Mon, 10/10/2011 - 23:27 | 1759919 Prometheus418
Prometheus418's picture

Depends on what you mean by state, though, doesn't it?

If we're talking US constitutional republic, I'm a friend of the state- but that isn't what we've got sitting on thrones in Washington right now, is it?

Physical silver is not a religion, but it can be a political protest.

Tue, 10/11/2011 - 00:07 | 1760036 DoChenRollingBearing
DoChenRollingBearing's picture

Support a constitutional republic?  Yes

Support thrones in DC?  No

I don't support ANY .gov looking to take away my capital and spend it stupidly, which is EXACTLY what is happening and has been for a long time.

Gold and silver.  A political protest!  I like that...

Tue, 10/11/2011 - 01:20 | 1760175 Acidtest Dummy
Acidtest Dummy's picture

DoChen,
Don't roll with the mobs. Occupations don't generally end well. Be rational, be consistent recommend physical Pt. At spot and/or cheaper than Au is a no brainer -- buy the Pt.

Tue, 10/11/2011 - 08:02 | 1760486 Mitzibitzi
Mitzibitzi's picture

.gov taking away your capital in order to spend it on anything is stupid. That isn't the job of government, beyond some meagre sales taxes (or whatever), agreed upon by all as fair, to support basic law enforcement, sound currency and a small but useful level of national defence. Anything else is simply someone telling you that they know better how to spend your money than you do.

In essence, they are calling you stoopid and indirectly pointing a gun at you to take your capital by force. Then they're treating you like you're stoopid because they sincerely think you should believe the crap they are spending your money on is worthwhile. And be glad that the experts are there to take care of you. And with the education, media, social, etc policies of the past 50 years, they're trying very hard to actually make you stoopid, so you won't notice. Sucks from all angles!

Tue, 10/11/2011 - 01:08 | 1760159 Gringo Viejo
Gringo Viejo's picture

Speaking only for myself, if government statistics are repeatedly shown to be fraudulent, why would I believe them or ANY stated by quasi-government related agencies. Not only do I not believe that there is no gold in fort knox, neither do i believe that comex and lme have the physical silver they purport to have.

Mon, 10/10/2011 - 23:03 | 1759841 buyingsterling
buyingsterling's picture

Gold is money, silver won't be, in time. It will be vanishingly rare at some point, while gold will still be abundant. Best investment ever.

Mon, 10/10/2011 - 23:11 | 1759875 Falcon15
Falcon15's picture

Yeah, except for the 200+ tons of silver they are getting ready to haul out of the North Sea on WWI & WWII shipwrecks. Vanishingly rare? Not so much, based on the amount of bullion they have supposedly found.

Mon, 10/10/2011 - 23:23 | 1759910 DoChenRollingBearing
DoChenRollingBearing's picture

I am not up to date on this news item, but 200 tons seems pretty small beer for silver.

Silver is just fine as an investment (physical), but I prefer the real thing: gold!  It cannot hurt to diversify PM holdings to include both.

Consider a little platinum, it is now prices more than $100 lower than gold.  That happens fairly rarely.  "Platinum is for optimists" someone here at ZH once said.  Platinum does well when lots of new cars are built.

Also, Bearing's Trail Guide FOFOA says that platinum and silver will NOT likely ride gold's coattails up the BIG price explosion he foresees.  FOFOA is my favorite gold analyst...  I do not know why he is not covered better.  Perhaps because his articles are long.

fofoa.blogspot.com

(I am not FOFOA, but I do contribute)

Mon, 10/10/2011 - 23:37 | 1759945 buyingsterling
buyingsterling's picture

Both, yes. But there's got to be something to the reports that some of the old banking families are worth trillions. They had billions when the dollar was worth 50 times what it is today, and have been pillaging ever since. I'd wager they have warehouses full of gold that aren't part of the official statistics. Probably not the case with silver. "vanishingly rare"may not be the case, but it's certainly vanishing, mostly in quantities too small to recover. By some reports there is less total silver on the planet now than gold (above & below ground combined). That may not be the case, but there's certainly not 16 times as much silver on the planet as gold. There's about 7 times as much gold above ground as silver.

Mon, 10/10/2011 - 23:49 | 1759982 Buckaroo Banzai
Buckaroo Banzai's picture

Rothschilds, Rockefellers, etc. are never seen on the lists of richest people. They are very careful to keep their wealth hidden. I saw one estimate that the Rothschild family is worth a quadrillion dollars.

QUADRILLION.

Tue, 10/11/2011 - 00:08 | 1760041 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

We should Occupy the Rotheschildes.

Tue, 10/11/2011 - 00:18 | 1760064 flacon
flacon's picture

@ Falcon15 - See my note about 200,000 OUNCES, not 200 tons. Get your facts straight. 

Tue, 10/11/2011 - 00:10 | 1760046 The Deleuzian
The Deleuzian's picture

Dude! They own everything...they just let us pretend so we don't flip out!!!

Tue, 10/11/2011 - 00:13 | 1760049 The Big Ching-aso
The Big Ching-aso's picture

In Zimbabwean equivalents at one time they would've be considered barely paupers.  Now imagine a trillion dollar bill.  Now a quadrillion dollars doesn't sound so much does it?      It's all relative isn't it?

They better own gold and lots of it.

 

Tue, 10/11/2011 - 02:35 | 1760235 Livingstrong
Livingstrong's picture

Rothschilds and all elite families REAL MONEY is physical gold and physical silver. The fiat paper bills are for the peasants and "useless eaters", in other words, the rest of the non-elite world class. 

Tue, 10/11/2011 - 00:22 | 1760053 DoChenRollingBearing
DoChenRollingBearing's picture

I saw an estimate for the same, probably the one you did Buckaroo.

A quadrillion dollars...  Staggering.  A million billions...

Wikipedia has a great article on the Rothschilds.  It has grown into a huge family.  Castles, vinyards, banks, "concessions", you name it.  Probably LOTS of gold.  

Yes, how curious that the Roths and Rocks never make into the Forbes billionaires list...

Hell, if I were RICH (say a net worth of a mere $100 million or more), I would have a LOT of gold stashed around.

Tue, 10/11/2011 - 03:24 | 1760288 thunderchief
thunderchief's picture

There is a chewy carmel filled chocolate treat called the Rothchild. 

I think, and I am almost certain that explains their Quadrillion dollars.

JMHO.

Keep buying silver anyway.

Tue, 10/11/2011 - 00:10 | 1760045 flacon
flacon's picture

200,000 OUNCES! NOT TONS! (6.66 tons)

http://www.thesilverchronicle.com/Archive%20Folder/October%202011/oct112011d.html

 

USA Mint sold 750,000 ounces of silver in one day at the start of this month. 

 

 

 

Tue, 10/11/2011 - 07:57 | 1760479 krispkritter
krispkritter's picture

According to Odyssey they've found TWO ships this year alone containing large silver stores. Let your fingers do the walking and stop trying to be Debbie Downer.... http://www.shipwreck.net/

Mon, 10/10/2011 - 23:34 | 1759949 Smartie37
Smartie37's picture

It's funny how the PsyOps guys always choose a militaristic or patriotic looking avatar, or just the paper bag head!

Your feeble attempt to discourage is so mathematically lame, since 200 tons, if actuLly dredged up, would represent about one hour's worth of Comex contract volume---just 1,300 contracts at 5,000 ozs. each.

Hahahahahaha PsyOp F-A-I-L !!!

Mon, 10/10/2011 - 23:53 | 1759993 GeorgeHayduke
GeorgeHayduke's picture

His argument is in the same category as all those prognosticators who claimed silver would lag in price or go down because they quit using it to develop film when everything went digital. Non-event.

Tue, 10/11/2011 - 00:28 | 1760097 Oracle of Kypseli
Oracle of Kypseli's picture

This silver is museum quality with collectible pricing. Not bullion. it will not move the needle.

Mon, 10/10/2011 - 23:43 | 1759970 Ponzi Unit
Ponzi Unit's picture

Arrh, Matey, 200 metric tons = 440,000 oz of silver, which is a shitpot of salvage, but current annual supply runs much higher. Mining plus recycling about 864,000,000 for 2010, I seem to recall, which means this undersea haul comes to 0.05% of annual production. 

 

Here's 2010 mining figures from the Silver Institute:

Silver Mine Production 2010

Silver mine production rose by 2.5 percent to 735.9 Moz in 2010 aided by new projects in Mexico and Argentina. Gains came from primary silver mines and as a by-product of lead/zinc mining activity, whereas silver volumes produced as a by-product of gold fell 4 percent last year. Mexico eclipsed Peru as the world’s largest silver producing country in 2010, and Peru is followed by China, Australia and Chile. Global primary silver supply recorded a 5 percent increase to account for 30 percent of total mine production in 2010.

And these from another source, 2007: Silver Statistics... (all figures rounded and approximate)


40 billion ounces - Total worldwide silver production since 3000 B.C

26 billion ounces - Total worldwide silver production since 1900 A.D.

670 million ounces - Total annual silver production from mining (2007)*
180 million ounces - Total annual silver production from recycled silver (2007)
40 million ounces - Total annual silver production from government sales (2007)
890 million ounces - Total annual silver production from all sources (2007)
890 million ounces - Total annual silver demand from all sources (2007)

Tue, 10/11/2011 - 00:20 | 1760072 flacon
flacon's picture

 


200,000 OUNCES, NOT TONS found on ship. (that is 6.66 tons, not 200 TONS, as some here are saying).

http://www.thesilverchronicle.com/Archive%20Folder/October%202011/oct112011d.html

 

USA Mint sold 750,000 ounces of silver in one day at the start of this month. Do you know how heavy two hundred tons is for a WWI ship?! This find is pennies in a fountain. 

 

Tue, 10/11/2011 - 00:23 | 1760080 CapitalistRock
CapitalistRock's picture

Your math is wrong. It's about 16 times more silver than that. But still such a small amount that it isnt going to move the price of silver.

Tue, 10/11/2011 - 00:01 | 1760016 The Deleuzian
The Deleuzian's picture

Like the last poster (a couple of weeks ago) who went on and on about shipwreck silver...200 tons is a drop in the bucket in the 700,000,000-800,000,000 oz./year production table...200 tons is like a week or a weekend of global demand atleast at present

Tue, 10/11/2011 - 00:25 | 1760091 Citxmech
Citxmech's picture

Does it cost only $5.00/oz. to dig. . . er, salvage it from the bottom of the ocean too?

Wed, 10/12/2011 - 15:11 | 1766777 akak
akak's picture

Yes.  Only $5.00!  In any and all circumstances.  Forever and ever.  Amen.

Mon, 10/10/2011 - 23:21 | 1759902 doomz78
doomz78's picture

200 tons is nothing on the grand scheme of things.  Do some research.

Tue, 10/11/2011 - 00:06 | 1760034 IAmNotMark
IAmNotMark's picture

But I bet it is damned pretty, sitting there in a pile!

Tue, 10/11/2011 - 00:24 | 1760082 flacon
flacon's picture

Doomz, if you did your research then you would find that it was 200,000 OUNCES, not two hundred TONS... See my notes scatered around above. 

Tue, 10/11/2011 - 00:43 | 1760128 The Deleuzian
The Deleuzian's picture

Yes flacon!!! (Nice Avatar by the way) The one I'm referring to is the other shipwreck which was reported about 2-3 weeks ago...In the end it doesn't matter!!  they're both nothing in the grand scheme of things, pennies in the fountain...that's cool!!!

Tue, 10/11/2011 - 01:52 | 1760198 Fukushima Sam
Fukushima Sam's picture

Damn, flacon, did you say 200,000 TONS of silver on that shipwreck?  That will kill the price of silver!  ;-)

Tue, 10/11/2011 - 00:24 | 1760085 The4thStooge
The4thStooge's picture

nah silver tarnishes. after 60-80 years under water it's all green and black now.

Mon, 10/10/2011 - 23:30 | 1759929 dr.charlemagne
dr.charlemagne's picture

silver production tapering off somewhat to "vanishing rare" seems like a huge leap to me. and i am a big time silver bull. care to elaborate?

Mon, 10/10/2011 - 23:40 | 1759962 buyingsterling
buyingsterling's picture

See above. At some point it will be more scarce than gold unless a substitute comes on line, that's pretty rare.

Tue, 10/11/2011 - 01:11 | 1760164 The Third Man
The Third Man's picture

Silver, oil, gold, copper, and how many other minerals are past peak in the more highly developed world. Is it any wonder why our armies will go anywhere to obtain new sources. Afghanistan and Iraq might as well be the 51st and 52nd states.

Mon, 10/10/2011 - 23:41 | 1759965 tmosley
tmosley's picture

Imagine a spoiled rich kid (the current silver market) who's father (all the soveriegn nations that ever stockpiled silver) left him a huge inheritance (ie a huge stockpile of silver).  He has gotten a job (ie mines silver), but not nearly enough to cover his expenses (industrial demand).  He has lived like this for years--decades even.  Now his inheretance is about to run out even as his spending (industrial uses) is increasing.  

Next, realize that the above ground silver reserve is less than the above ground gold reserve.  Conservative estimates put it around a billion ounces, but I don't see that.  I think it is more like a third that, or even less (if SLV really is a fraud), as it was a billion ounces several years ago, and we have run nothing but deficits since then.

Tue, 10/11/2011 - 00:01 | 1760013 Buckaroo Banzai
Buckaroo Banzai's picture

It is quite possible that China is sitting on a gigantic (multi-billion ounce) hoard of silver. Consider:

-- China was the last country on earth to demonetize silver. Everyone else had demonetized it by 1873. Because silver was still money in China all the way up until when the commies took over in 1949, silver flowed from the rest of the world into China for over 75 years. Google "US trade dollar".

-- It is well known that Japan looted China quite systematically and thoroughly in the 1930s and 1940s. However they left all the silver behind as they were overwhelmed by the logistical demands of moving all the Chinese gold.

-- Antalya Fekete makes a good case that JP Morgan's gigantic silver short is backed by China's hoard

Tue, 10/11/2011 - 00:06 | 1760033 Ponzi Unit
Ponzi Unit's picture

Hmmm. The Spanish shipped fleets of New World silver to China in the Manila Galleons...

Tue, 10/11/2011 - 00:25 | 1760087 CapitalistRock
CapitalistRock's picture

Silver was used as money in the US until 1964.

Tue, 10/11/2011 - 00:41 | 1760126 SilverDosed
SilverDosed's picture

1970 actually, everyone seems to forget those 40% halves. I buy rolls for rediculously cheap prices from a guy I know that "mines" them.

Tue, 10/11/2011 - 00:44 | 1760132 Buckaroo Banzai
Buckaroo Banzai's picture

The US went from a bimetallic (silver and gold) standard to a gold-only standard in 1873. As did virtually the entire world in that year. Google the "crime of '73". don't you remember the "cross of gold" speech from your US history class?

Silver coinage during the 20th century was like our current coinage today: the face value of the coin greatly exceeded the melt value. Silver was removed from circulation in 1964 when the melt value of silver finally exceeded the face value of the coins.

Consequently, even though silver circulated, it was not really money, just as today's cupro-nickel slugs we call dimes and quarters are not really money.

Tue, 10/11/2011 - 00:26 | 1760094 SilverDosed
SilverDosed's picture

After googling "US Trade Dollar" try checking out the prices for these guys on Ebay. They are SERIOUSLY collectible for numismatic value and I doubt this would be the case if someone (or some country) were sitting on billions of them. Now as for billions of Austrian silver thalers being hoarded in the middle east, thats a more believable story, although equally unlikely. I'm no numi expert though so it would be nice if someone that knows a little more would chime in.

Tue, 10/11/2011 - 00:48 | 1760137 Buckaroo Banzai
Buckaroo Banzai's picture

It's a communist regime in china... They are quite capable of keeping it a secret if they have a few million trade dollars. What, do you think they are calling up collectors to tell them that the prices for those things are too high? Of course not, they couldnt care less what some stupid people on eBay think those things are worth.

Tue, 10/11/2011 - 01:33 | 1760186 The Deleuzian
The Deleuzian's picture

I'm not an expert per se on us coins but common-date trade dollars are worth more than morgans for sure and trade dollars in proof condition are worth buttloads of money....Like 1000's and 1000's of dollars 

Tue, 10/11/2011 - 01:54 | 1760199 dust to dust
dust to dust's picture

 US Trade Dollar minted from 1873-1885. Highest mintage of this series was the 1877s at 9,519,000 next is the 1876s at 5,227,000. The rest of the series is about 20,000,000 total. We're talking millions not billions. Of course some melted and some taken out of circulation. Sorry no hoardes here.. Watch for Chinese fakes they do a great job at counterfeiting The Trade Dollar. 

Tue, 10/11/2011 - 02:30 | 1760233 Vlad Tepid
Vlad Tepid's picture

Can you give me a citation for the claim that Japan specificallyleft behind looted silver because of logistical difficulty?

Tue, 10/11/2011 - 00:38 | 1760120 trav7777
trav7777's picture

HAHAHA

What, Mosely-claven, IONIC LIQUIDS aren't going to save the silver market from peak silver?

There's TONS of silver out there, we'll just find more, technology will save us.

You are such a retard. 

Mon, 10/10/2011 - 23:05 | 1759847 RebelYell
RebelYell's picture

My day can be ruined by so many things:  our President's blabber, the news, the taxman, the traffic... on an on.  But nothing makes me more giddy than the little shine when I open my safe at night.  (except ofcourse the joy and love of my family, my good health, my great friends... etc.)  OK, Silver makes me giggle.  Silver don't give a shit!

Mon, 10/10/2011 - 23:07 | 1759853 RebelYell
RebelYell's picture

Oh, and Tyler gives me joy... and many of the regulars on ZH!

Mon, 10/10/2011 - 23:11 | 1759873 broke433
broke433's picture

Peak silver is ~$45 and peak gold is ~$1900

Mon, 10/10/2011 - 23:52 | 1759915 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

And you quote in dollars which is funny because there will be no peak of dollar production as long as there is a Federal Reserve Bank.

Mon, 10/10/2011 - 23:56 | 1760001 Money 4 Nothing
Money 4 Nothing's picture

..And ink, and a Georgia paper Mill convieniently located near Jekyll Island.

Tue, 10/11/2011 - 00:37 | 1760118 Freddie
Freddie's picture

It is not the price of gold or silver going up - it is the supply of paper fiat that is skyrocketing and making the fiat paper worthless.

Tue, 10/11/2011 - 00:32 | 1760032 SHRAGS
SHRAGS's picture

broke433        Member for 1 week 6 days

Red for you.

 

Tue, 10/11/2011 - 04:33 | 1760318 broke433
broke433's picture

US treasuries are also the ultimate safe haven as is indicated by the green light in the sea of red. Especially when shit hits the fan and mean old hedge funds have to "liquidate their winners" to cover margin calls. ;(

Tue, 10/11/2011 - 00:38 | 1760121 trav7777
trav7777's picture

gold peaked 10 years ago.

Tue, 10/11/2011 - 08:12 | 1760496 Crisismode
Crisismode's picture

It's been peaking every few months now.

Mon, 10/10/2011 - 23:19 | 1759880 DormRoom
DormRoom's picture

wtf..

 

told yall..

ETF soothsayers selling commodities under the false narrative of peak _____ to pull future demand to the present, spike prices, so they can cash out.

 

There is no peak silver.  Alot of silver is produced from copper mining.  And the industrial demand of silver will never reach its zenith when silver was used in photographic film.  You want more silver, find more low grade, large tonnage copper deposits..

 

 

 

Mon, 10/10/2011 - 23:19 | 1759893 nope-1004
nope-1004's picture

Your post just proved you never even read the report.  You sound so freakingly foolish, try reading before embarrassing yourself in front of the world.

 

Mon, 10/10/2011 - 23:36 | 1759953 RockyRacoon
RockyRacoon's picture

You beat me to it.   What a maroon.   Blathering about the very things debunked in the article -- which was an astoundingly great read.    ZH needs more of this caliber article.

Mon, 10/10/2011 - 23:50 | 1759983 The Deleuzian
The Deleuzian's picture

DormRoom, who knows what tomorrow will bring as far as industrial uses of Ag...Shit, we might be bathing in a colloidal silver pretty soon but that might only be for the 0.1% not the 99%

(yes the last part was sarcasm)

Mon, 10/10/2011 - 23:56 | 1759999 Ponzi Unit
Ponzi Unit's picture

Not so, DormRoom. Silver may have largely disappeared from photography, but the slack has been more than taken up by electronics, such as iPad, iPod, phones, etc.

Also, silver is extracted as a by-product in the mining of such industrial metals as copper and zinc which are in less demand during the global recession. Result: less silver produced.

Third, because of price suppression courtesy of your friendly neighborhood cartel, silver is artificially cheap, and so it is consumed more freely and there is less incentive to mine more of the stuff. 

Fourth, speculative demand for the phyzz has picked up smartly in recent years.

Fifth, owing to its lighter molecular weight, it is usually found closer to the surface, therefore more easily discovered and extracted. More above ground ounces of gold than silver, despite the 50+:1 price ratio.

Tue, 10/11/2011 - 00:05 | 1760029 Buckaroo Banzai
Buckaroo Banzai's picture

Even when silver was used in photography, the vast majority of it was recycled every year-- it is very easy to recover silver from used film, paper, and photo processing chemicals.

Now, the primary industrial use of silver is by the electronics industry. This silver is virtually impossible to recycle.

Tue, 10/11/2011 - 08:20 | 1760515 krispkritter
krispkritter's picture

Not so on the electronics recycling, it's one of the best businesses going(IMO) at the moment. There are several in this market and some of them extend not only into the US but overseas as well.  Anything not worth remarketing gets shredded, literally, onsite and separated.  Components with any metallic content are separated from 'chaff' and 'mined' for the gold, silver, etc. used in boards, chips, etc. When you're talking many thousands of tons of raw material, even the pounds of PM's extracted at today's prices add up.  The local company has one of the shredders similar to this(http://www.youtube.com/watch?v=ki1pICopIvc) but in a much larger form(it occupies an entire building). www.watchitshred.com is an interesting visit. Just wish they had a 'Bankster Shredder'...

Tue, 10/11/2011 - 09:58 | 1760756 qussl3
qussl3's picture

Oh its recycleable alright.

Above 300 an oz that is.

Tue, 10/11/2011 - 00:39 | 1760122 trav7777
trav7777's picture

production of everything peaks.  water peaks.

It's all about flow rates, moron

Mon, 10/10/2011 - 23:15 | 1759884 GreenPlease
GreenPlease's picture

I'm a Peak Oiler (you can find me over on The Oil Drum under the same user name) but I always point out, whenever I can, that EROEI is an incomplete measurement: what consumers really demand at the end of the day is utility. They demand lumens of light, not watts of power, and they demand miles driven, not gallons of gas. On an endosematic level, there's a lower limit to our energy demand (we all need X number of calories to keep living). However, society can drastically reduce its current energy use and still maintain its current standard of living.

 

This is the first post I've seen that takes a stab at looking at the cost of "energy services": http://www.theoildrum.com/node/8371

Mon, 10/10/2011 - 23:23 | 1759909 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I'm not sure how EROEI is incomplete, as it represents utility.

Tue, 10/11/2011 - 00:02 | 1760018 Ponzi Unit
Ponzi Unit's picture

Peak Oil? With all respect to Hubbert, have you ever heard of the Red Line Agreement of 1928?

http://www.alternet.org/world/37371/

Mon, 10/10/2011 - 23:20 | 1759899 Money Squid
Money Squid's picture

Are we there yet?

Mon, 10/10/2011 - 23:21 | 1759900 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Gold production has peaked, platinum production has peaked, oil production has peaked....the system is waiting on silver, and once it happens, hyperinflation will set in.

Silver trades 1:1 with oil.

Oil trades inversely to the dollar 1:1.

So the relation of silver to the dollar is a 1:1 inverse relationship.

There are only two things holding the dollar from becoming worthless in nominal terms (because intrinsically, and in real terms, it has no value, as it has an unlimited supply).  They are  i) The production of silver, for if its production peaks, its price will increase, thus crushing the value of the dollar and  ii) The shorts of silver that the Major Banking Houses have, and this acts as a demand hedge.

To take down the dollar, the fiat system, the Federal Reserve Bank, and all the Major Banking Houses, there is one simple way....

BUY SILVER

Mon, 10/10/2011 - 23:25 | 1759917 DoChenRollingBearing
DoChenRollingBearing's picture

Word.

Only thing I would add is diversify with gold as well.

Mon, 10/10/2011 - 23:31 | 1759935 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Buying physical gold and platinum will create a squeeze on shorts as well, but silver is so cheap that everyone can participate.

Tue, 10/11/2011 - 00:46 | 1760133 trav7777
trav7777's picture

When silver peaks, it will enter the same type of bull market as gold enjoyed since its peak 10 years ago.

In fact, I would submit that a lot of the upswing is a pricing in of that also in the face of relatively sudden increased industrial demand.  Production figures are all that matter.

In real terms, silver *could* be the trade of a lifetime...but this largely depends upon industrial use and how much scrap is out there to harvest.

Comparing utility to scarcity, *nothing* whatsoever compares to Pt and Pd.  Gold floats on its historical role right now.  Given the pricing of oil, Pt, and Pd, gold is presently significantly overpriced.  I submit that this is a liquidity or recognition premium and this is the very reason gold is gold and the other metals aren't.  Just an accident of nature expressed through relativistic effects in an electron shell.  Just as a thought experiment, imagine if gold were nonrelativistic and Platinum had the yellow

Mon, 10/10/2011 - 23:27 | 1759901 The Deleuzian
The Deleuzian's picture

That's OK!  We have countless sunkin' WWI+II boats filled with silver to make up the difference right....(yes...Sarcasm)

Mon, 10/10/2011 - 23:22 | 1759905 Paul Bogdanich
Paul Bogdanich's picture

Whomever wrote this is a dolt.  Most silver production for the last 30 years has been a byproduct of copper and gold mining.  Most naturally occurring silver is bound with lead and the separation of the two has envromental consequences and costs.  Were it not for remediation costs silver would be two bucks an ounce.  Stripping ratios are less than 1:1 and the ore goes >10%.  The whole Eastern side of the bitteroot mountains on the East side of Idaho is lousy with the stuff.  The lead leaching into the water supply also explains why the local inhabitants are so highly intelligent.  

Mon, 10/10/2011 - 23:38 | 1759957 SRSrocco
SRSrocco's picture

according to gfms and the silver institute zinc/lead account for 38 percent of the base metal pie and copper comes in at 22 percent  

Mon, 10/10/2011 - 23:38 | 1759959 RockyRacoon
RockyRacoon's picture

So... you're from E. Idaho.   Now go back and read the article.

Tue, 10/11/2011 - 02:44 | 1760242 Vlad Tepid
Vlad Tepid's picture

I think you missed the part where he debunked everything you just said.  Like the part about the environmental (fixed it for ya) consequences dues to ore ratios making it less and less practical to mine open pit style. And the dig on people from Idaho?  What do they put in the water to make people over-weening, know-it-all jackasses, 'cuz I think ya been tainted.

Mon, 10/10/2011 - 23:23 | 1759907 samsara
samsara's picture

but rather as a result of the peaking of world energy resources, declining ore grades, and a falling Energy Returned On Invested – EROI.

That's right PEAK OIL  ya'll

 

Mon, 10/10/2011 - 23:24 | 1759911 sockcutter moto...
sockcutter motorforker's picture

im trying to decide whether to buy pms now or when the market crashes and prices are really low

Mon, 10/10/2011 - 23:41 | 1759966 dr.charlemagne
dr.charlemagne's picture

what if the market crashes and gold and silver outperform or "unexpectedly" go up?

Tue, 10/11/2011 - 01:05 | 1760157 sockcutter moto...
sockcutter motorforker's picture

thatS definitely a possibility but it seems like a big enough crash like the one thats coming and EVERYTHING will go down

Tue, 10/11/2011 - 03:03 | 1760267 AustriAnnie
AustriAnnie's picture

Do you want to be a market-timer and make a fortune (yes, I'm saying you might be a little too greedy for your own good), or do you want to have silver as insurance in your hands, without-a-doubt physically there for you when/if TSHTF.

Beware of that voice in you that tells you that "if you just time the market right, you make even more"

Seems a lot of people have dug themselves graves thinking that way.

In a big crash when chaos reigns, do you want to be looking for a seller?  Or do you want to be sitting pretty, ready for hell?

Just a thought.

Fri, 10/28/2011 - 06:18 | 1820112 sockcutter moto...
sockcutter motorforker's picture

im thinking wait and see if it hits 50 again :)

Tue, 10/11/2011 - 00:10 | 1760047 SilverIsKing
SilverIsKing's picture

What do you mean by "low?"

Gold = X
Silver = Y

Solve for X and Y.

Tue, 10/11/2011 - 01:49 | 1760197 Threeggg
Threeggg's picture

Wait for the fourth week of this month. Options expiry week.....rumblings on the net about another "HUGE" paper takedown coming up. !

 

soon !

Mon, 10/10/2011 - 23:24 | 1759913 Caviar Emptor
Caviar Emptor's picture

US real median income declined 9.8% since December, 2007. 

The only way they can keep the deflationary depression death spiral from happening is to keep printing to keep prices levitating. But they're using the old playbook which says that 3% inflation is good. Well it ain't with radically declining incomes, net worth and retirement assets (the ole 1-2-3! punch to the gut of the consumer) and the flip side: vanishing small business margins as input costs can't be passed on to unemployed, retrenching consumers. 

Biflation, bitchez: It's here, it's queer, get used to it

Mon, 10/10/2011 - 23:48 | 1759979 walcott
walcott's picture

what about peak titties? or is that a renewable resource?

Tue, 10/11/2011 - 01:58 | 1760205 Isotope
Isotope's picture

Yes, it is.

Personally, I'm long nipples.

Tue, 10/11/2011 - 03:04 | 1760269 Precious
Precious's picture

I'm 25.  I think I just reached my peak erection.

Mon, 10/10/2011 - 23:50 | 1759989 buyingsterling
buyingsterling's picture

I'm buying sterling. Website coming soon (buyingsterling.com). If you have sterling you're looking to move or convert to .999, I pay up to 87% of spot, no melt loss or assay, we pay on gross weight; you can reach me at gmail. If you're in the business and using a refiner like NTR, have a look at your settlements and see how we'd compare.

Mon, 10/10/2011 - 23:59 | 1760011 rocker
rocker's picture

Like my Gold, I will keep my silver. But what the hell was the point of this. Was it about Oil or Silver.
And did we not just get a report from a contributor that all minerals were overpriced. Can't have it both ways.
So which way is Zero Hedge going. Too cheap on Silver or over valued?

Tue, 10/11/2011 - 00:20 | 1760071 zorba THE GREEK
zorba THE GREEK's picture

I've been accumulating gold and silver for over 10 years. I have sold some gold to raise cash but I

haven't sold any silver. I firmly believe gold is going up and silver is going below 20:1 ratio.

I also thought Beta Max was the future and that we'd have flying cars by the year 2000.

But this time is different, I really believe silver will be over $100 / oz before 2015.

Tue, 10/11/2011 - 00:25 | 1760088 Richard Head
Richard Head's picture

Has anyone asked Mathman what he thinks about this?

Tue, 10/11/2011 - 02:46 | 1760244 Vlad Tepid
Vlad Tepid's picture

Paul Bogdanich above says silver should be $2 an ounce...I felt wafts of MathMan when I read that.

Wed, 10/12/2011 - 15:23 | 1766839 akak
akak's picture

Mathman is still in rememdial math class, working on his multiplication tables.

For some odd reason, he has been consistently unable to progress past the numeral "5".

Tue, 10/11/2011 - 00:30 | 1760104 CapitalistRock
CapitalistRock's picture

Don't worry. Obama has a plan to build solar powered mines. He calls it green minerals. Engineers design, build, and then just flip the switch on these machines that take the sun's power and produce a never ending supply of copper wire and Silver America Eagles. It's the kind of genius that can only come from Obama.

Tue, 10/11/2011 - 03:06 | 1760273 AustriAnnie
AustriAnnie's picture

Too bad solar power requires silver.  

 

Tue, 10/11/2011 - 00:32 | 1760108 Sizzurp
Sizzurp's picture

Nice paper.  Silver aside, according to the net energy chart, we are all pretty much screwed and starving by around 2030 at the latest.  I am not sure how long things will look even close to normal based upon the steepness of the decline curve on that chart.  My guess is we could only endure 3-5 years on that net energy decline slope before a serious die off and complete social breakdown ensues.  That doesn't sound very good........ silver or no silver. If the net energy chart is correct, we are fast approaching a lifeboat situation, and there is most definetely not enough room for everyone.  So what is next? War? Famine? Zombieville? Hell, I'm going to retire now and live it up while I can.

Tue, 10/11/2011 - 04:44 | 1760324 jomama
jomama's picture

depressing, isn't it?

Tue, 10/11/2011 - 00:36 | 1760117 SilverDosed
SilverDosed's picture

My retirement fund is 90% silver, I just hit 30, I dont mind if they keep the shorts piled on silver for a looong time to come, more time for me to stack. Though if those shorts turn to longs and the true value of silver is reached I'll be retiring much sooner, probably into an armed bunker. Either way I'm good as I'll just keep stacking no matter what, until I cant anymore. I say bring on the 8 dollar silver, I'd love to double my stack.

Tue, 10/11/2011 - 00:41 | 1760125 Ponzi Unit
Ponzi Unit's picture

Wait a second.

The chart on the 1st page of the pdf shows world silver production from 1900-1950 averaging 7000 tons per year, best case. Over 50 years, that's 350,000 tons, or 770 million ounces in fifty years? Absurd.

A billion ounces is about 450,000 tons. Yet, in the body of the article he cites 10.5 BILLION ounces in world production 1900-1950

The chart makes no sense to me.

Tue, 10/11/2011 - 01:05 | 1760153 The Deleuzian
The Deleuzian's picture

1 metric ton = 2,200 lbs. (approx)...7000 metric tons/yr = 15,400,000 lbs. x 16oz/lb = 246,400,000 ozs./yr...  I think that's right...

 

Tue, 10/11/2011 - 02:14 | 1760220 dr.charlemagne
dr.charlemagne's picture

12 troy oz to the troy pound

Tue, 10/11/2011 - 00:51 | 1760140 SpeakerFTD
SpeakerFTD's picture

The author, at the end, mentioned a detail that makes the whole report look a little silly.

If EROEI crashes as badly as the graoh within the paper suggests, the tradeable price of silver is going to be the least of your worries.   The world population cannot be sustained through that kind of EROEI decline.   And rather than die off quietly and allow the author to enjoy his gains in silver, the starving masses are likely to get a bit restless.    

Just eyeballing it, but that chart suggests we will lose 4-5 billion barrels/year by 2020.   How does that energy loss translate to loss of world caloric consumption?   A pretty complex calculation, but I would hazard a guess that you lose the ability to feed 500MM-1B mouths, probably more, since the effects of energy loss along the supply chain and to industry almost certainly creates a multipler effect.   Not to mention that if history is a guide, hunger leads rather quickly to some level of chaos and violence, increasing again the multiplier effect.

My point is that, in the face of that kind of global catastrophe, focusing on the fundamentals of the silver industry seems dumb.   I am not going to be too concerned with silver ROI if hordes of hunger people are massing on my street corner.

Always seems wise to own some PMs, but if that EROEI chart is anywhere close to the future we are facing, you are better off with guns, defensible, arable land, a few smart, strong, trustworthy friends, and the ability to psychologically handle the decimation of the only civilization you have ever known.

Tue, 10/11/2011 - 01:46 | 1760195 IrritableBowels
IrritableBowels's picture

Great points.

Tue, 10/11/2011 - 02:51 | 1760254 Vlad Tepid
Vlad Tepid's picture

My take away was that if there is no more silver mining going on, those who have it in hand will be sitting on a rapidly appreciating resource...if there is a die-off, those holding enough wealth to ATTEMPT to parlay it into self and family preservation will do better than those who hold none.  The timelines were more useful than the silver investment strategies.  But, then I'm just about accumulation anyway.

Tue, 10/11/2011 - 04:42 | 1760323 jomama
jomama's picture

and again, if the world does devolve into that reality, just think how many of the existing 442 nuclear power plants would melt down. 

then we have extinction event for all sentient beings on this planet.

Sat, 10/15/2011 - 15:58 | 1777425 Socratic Dog
Socratic Dog's picture

I had the same thought when I saw his casually-mentioned stat of it taking 10 cals of energy now to produce 1 cal of food; previously the ratio was reversed.  We have a civilization (6 billion people?)  based on (essentially) free energy; when it goes away, where does the 10 cals  come from?  Yep, silver price might not be my first concern when that reality hits....

Tue, 10/11/2011 - 01:11 | 1760163 Jack Napier
Jack Napier's picture

Epithermal deposition bitchez.

Tue, 10/11/2011 - 02:12 | 1760217 Isotope
Isotope's picture

Argyria FTW.

Tue, 10/11/2011 - 01:37 | 1760189 J U D G E M E N T
J U D G E M E N T's picture

OMG.  I think THIS THREAD has reached PEAK INTELLIGENCE!

I read an article on the price of silver compared to gold during the second world war and the ensuing depression.

It stated that the best ratio was 1/16.  (Exactly the difference of their weights to price.)

That seemed way too practical to be true!

Currently it is 52.06.  so if it goes to that again....  we are looking at $105oz.

But, if gold goes to 3200 as predicted in early 2012, thats $200oz.

If the crazies are right and it goe to 45000 - 50000oz (WOW) then thats $2968oz LOL!

Got to wonder if at that time if its REAL value exceeded the previos purchasing power.

Other that saving yourself from infationary losses, it would be nice to actually accrue wealth in the process.

 

I think silver's best role in society will be a trusted monetary commodity to hedge inflation against a

destruction of the currency.  I think gold will have too much value to trade effectively, especially if

gold's price is way high, say 3000-50000 oz.  Not very divisible and usable at those levels.

 

I also think that the use of silver in solar panels lends well to the credibility of this article.  As the

need for renewable energy becomes more relevant due to peak everything, solar, is probably our best stategy.

Sucking up ever more supply.  Im thinking I want to buy my panels now and get off the grid...

 

 

 

 

 

 

 

 

 

 

Tue, 10/11/2011 - 02:21 | 1760224 dr.charlemagne
dr.charlemagne's picture

16 to 1 is roughly the ratio of occurrence of the two metals in the earth's crust. turns out natural free markets were able to figure that out long before the geologists did

Tue, 10/11/2011 - 01:54 | 1760201 viator
viator's picture

We have rached the peak of peak oil. Spend some money on Yergin's new book.

Tue, 10/11/2011 - 02:14 | 1760218 dust to dust
dust to dust's picture

 US Trade Dollar mostly minted in San Francisco for trade in the Orient. Convenience for shipping. Minting was a very slow process back in the day. Silver was mainly from the comstock lode in Nevada. Actually a great investment today. Check out LODE. 

Tue, 10/11/2011 - 02:26 | 1760228 The Deleuzian
The Deleuzian's picture

I wish all of the silver I have was in trade dollars...

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