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Is A Physical Silver Shortage Spike Imminent?

Tyler Durden's picture





 

That imbalances in the supply and demand of precious metals, particularly silver, could lead to a shortage of physical product in the future should not come as a surprise to many - it is a topic covered extensively here in the past. Nonetheless, as a useful reminder of the big picture in the silver market, Future Money Trends has released another update video, reminding viewers that if traded purely on fundamentals, there is a high likelihood of increases in the price of silver, and other precious metals. As the authors put it, " There simply isn't enough physical silver to deal with the demand of a fiat currency crisis. As the paper silver market pushes prices down, all hell will break loose in the physical market." While that conclusion may or may not be applicable just yet, when coupled with recent revelations of potential double counting of precious metals at the warehouse level (see HSBC-MF Global story), the situation will certainly get only more exacerbated. Furthermore, should silver miners take Eric Sprott's advice to heart and decide to convert some or all of their product into physical, the market will suddenly recall that in addition to liquidity, prices are also determined by something called fundamentals. And fundamentals, especially in combination with a market risk spike, confirm a price jump may be imminent.

 


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Sun, 12/11/2011 - 14:36 | Link to Comment williambanzai7
williambanzai7's picture

We are in the age of quadruple counting.

Sun, 12/11/2011 - 14:43 | Link to Comment Ancona
Ancona's picture

I thought I was the only one who counted his silver multiple times. I'm a closet silver counter.

Sun, 12/11/2011 - 14:58 | Link to Comment Ahmeexnal
Ahmeexnal's picture

Off to the coinshop early tomorrow.

 

Sun, 12/11/2011 - 15:11 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture
muahahahahahaha!!!!!!!!!!!!!!!!!!
Sun, 12/11/2011 - 15:43 | Link to Comment JW n FL
JW n FL's picture

 

 

I LOVE Monster Boxes!! they also can be used at foot stools... that is what I have in my office.. take 3 monster boxes.. stack them one on top of another and put them in from of the chairs in your office.. people come in.. who dont know you.. and ask what are those teal boxes.. and you then get to tell them how stupid they are for not knowing!

Got Silver?

Got Lead?

good! follow these instructions! http://www.youtube.com/watch?v=evr_tP9cJWY 

Sun, 12/11/2011 - 16:15 | Link to Comment gmrpeabody
gmrpeabody's picture

Got an idea where there's some silver to steal?

;- )

Sun, 12/11/2011 - 16:21 | Link to Comment JW n FL
JW n FL's picture

 

 

if ay of my fellow ZeroHedge Brothers are sooooo bad off in the days to come and would be in need I would be happy to share some.. no need to steal from someone who would happily give it to ya!

Sun, 12/11/2011 - 17:39 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

 

Do you think you could spare some silver to help me out? Over the last couple of months I’ve had some pretty devastating margin calls, and although I’m holding my head high I can’t help feeling a little sorry for myself. My equity portfolio is strictly long-only, which is a reflection of my belief the greatness of America. I know that I will be rewarded eventually for my faith in our leaders since history shows that politicians are accountable to the people. However, some extra margin would really help me through this difficult period. 

 

Sun, 12/11/2011 - 17:42 | Link to Comment XitSam
XitSam's picture

MDB, I don't know whether to take it on its face and downmod you, or upmod you for funny satire.

Sun, 12/11/2011 - 18:23 | Link to Comment traderjoe
traderjoe's picture

That's MDB_. See the last underscore.

Sun, 12/11/2011 - 18:31 | Link to Comment BrocilyBeef
BrocilyBeef's picture

That underscore means results!

Sun, 12/11/2011 - 18:53 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

did mdb just get rehyopthecated?

Sun, 12/11/2011 - 19:05 | Link to Comment akak
akak's picture

Good one!

But honestly, where the FUCK did this crazy word "rehypothecated" come from in the first place?  I NEVER heard nor read that word before maybe two weeks ago.  And if "rehypothecated" is a word, then what exactly does "hypothecated" mean?

Sun, 12/11/2011 - 19:28 | Link to Comment chumbawamba
chumbawamba's picture

Hypothecate - to pledge property as security or collateral for debt.  Generally, there is no physical transfer of the pledged property to the lender; nor is the lender given title to the property; though he has the right to sell the pledged property upon default.

Black's Law Dictionary, 5th Edition

-Chumblez.

Sun, 12/11/2011 - 19:34 | Link to Comment chumbawamba
chumbawamba's picture

So to rehypothecate would be to hypothecate it again :)  Picking this apart and examining the bits, it seems that the balance in trading accounts at MF Global were held as collateral for the margin in the account, or in other words they were hypothecated.  So it looks like MFG rehypothecated or re-pledged the accounts as collateral to whomever got the funds (JPM?) who then promptly stole them.  I'm not following the story that closely (to me it simply functions as a textbook example of "I told you so" since I've been telling "physical only in your possession" for years now) but that basically sounds like what's happened.

I am Chumbawamba.

Sun, 12/11/2011 - 20:14 | Link to Comment Miss Expectations
Miss Expectations's picture

The Bitchez Back!

Sun, 12/11/2011 - 21:49 | Link to Comment Sokhmate
Sokhmate's picture

rehypothecate (v.): short for recursively hypothecate. It's usage in a sentence does not indicate the recursive multiplier. it could mean once. It could mean Googolplex times. The limit of recursiveness will not be mathematically known until the Big Rip event.

Sun, 12/11/2011 - 19:56 | Link to Comment Abitdodgie
Abitdodgie's picture

They work it in progradually. 

Sun, 12/11/2011 - 19:55 | Link to Comment MillionDollarBonus_
MillionDollarBonus_'s picture

I have always had an underscore - search the site for yourself. You may be surprised by my modesty but I'm not afraid to proclaim my support for AMERICA, even if it means admitting losses on core US stocks.

Sun, 12/11/2011 - 20:07 | Link to Comment akak
akak's picture

.... but I'm not afraid to proclaim my support for AMERICA's sociopathic and criminal power elite and their collapsing house-of-cards financial and monetary systems, even if it means admitting the loss of core US values.

Corrected that for ya.  Asswipe.

Are you sure that you are not RobotRetard's long-lost twin brother?  Or maybe even his conjoined twin?  You do both seem to share the same nonfunctional eyes, microcephalic brain and vigorously flapping sphincter.

Sun, 12/11/2011 - 22:38 | Link to Comment JW n FL
JW n FL's picture

 

ave I told you lately that you are a sexy mofo?

+1 for telling the truth!

Sun, 12/11/2011 - 21:05 | Link to Comment Henry Hub
Henry Hub's picture

There is some people on ZH who should Google the word "irony" before commenting on MDB_

Sun, 12/11/2011 - 21:25 | Link to Comment akak
akak's picture

Actually, they should not.

The point is that once a consistent message is propagated often enough, with no corresponding message conveying the supposed "irony" of the other, then it can be presumed that the poster does indeed believe the consistent message which he is sending.

If you told your wife, day after day, month after month, that she was fat and ugly, intending it as a joke but never telling her otherwise, do you REALLY think that it would still be a joke a year later?

Sun, 12/11/2011 - 22:53 | Link to Comment nmewn
nmewn's picture

I understand and concur.

But it is an MDB clone...like hamy wanger whats his face. Fuckin boiler room sock puppets...like a call center.

Aylo, dis is Rahjer...lol.

We really need to go back to test questions before log on.

Sun, 12/11/2011 - 19:00 | Link to Comment Calmyourself
Calmyourself's picture

Darn it, stay in character everyone who has been here a while remembers wanger and knows your a td creation now go back to troll mode or we will unplug you..

Sun, 12/11/2011 - 19:20 | Link to Comment hunglow
hunglow's picture

No red monsters for chairs?

Sun, 12/11/2011 - 23:20 | Link to Comment Ag Tex
Ag Tex's picture

Stack it high and tight.

Sun, 12/11/2011 - 16:00 | Link to Comment gavroche76
gavroche76's picture

I've been looking to buy physical siver for the first time for a few months. But there's a thing i'm not sure about... The rise in the industrial demand always comes on top of the arguments to buy physical silver, so the shortage in physical availability also. I always been considering PM as a kind of insurance policy to protect my assets value in case the armagedon scenario happens. And in that case, i guess the industrial production would totally collapse. After all, who would need a PC or a cell phone when u r fighting to feed and protect your family ? Please tell me what i'm missing... And sorry for english mistakes. 

Sun, 12/11/2011 - 16:26 | Link to Comment El Gordo
El Gordo's picture

If you are not sure, just buy a little.  If you are sure, buy a lot.  If you have a little extra money, buy a little extra silver.  A good, regimented buying plan may pay off down the road, and if it doesn't, they make neat paving bricks, Christmas tree ornaments, and all sorts of neat stuff.

Sun, 12/11/2011 - 16:46 | Link to Comment Janice
Janice's picture

Silver is a win-win. If all this economic doom & gloom is BS, eventually there will be an increase in industrial demand and the sale of products created with silver should increase, thus demand for silver increases. If the economic doom & gloom is real and the economy collapses further, people will use silver to exchange for goods because gold would be too expensive. Potential silver shortages increase the value of silver in both senarios, whether used industrially or monetarily.

Sun, 12/11/2011 - 17:50 | Link to Comment XitSam
XitSam's picture

The Mint should start making quarter and tenth ounce silver eagles. Even a 20th ounce coin, alloy it with some nickel so it's not tiny like the silver 3 cent coin.

Sun, 12/11/2011 - 21:28 | Link to Comment RockyRacoon
RockyRacoon's picture

No need to do such a thing.  With all the 1964 and earlier junk silver around, and easily recognizable as a U. S. coin, there's not a use for minting new fractional silver coins.  It's already available.

Mon, 12/12/2011 - 08:28 | Link to Comment XitSam
XitSam's picture

I realize that. But after the Y2K non-event, a huge amount of the junk silver was melted down, there isn't that much of it around anymore and no more is being made. Besides, a silver quarter is only going to be accepted at a business for 0.25 FRN.  I want the government to produce a new currency that competes with FRNs. Wouldn't you like to walk into, say Best Buy and see the price of a DVD as "0.50 AgOz/$35.00"?  Don't put a value on the coin, read up on Hugo Salinas.

Update: fix a couple typos

Sun, 12/11/2011 - 19:36 | Link to Comment OliverTwist
OliverTwist's picture

"Silver is a win-win."

I heard this win-win stuff before. I think it was 5 years ago. I think it was somewhere in California. And I think it was a real estate agent saying it to me. "House prices can only go up."

Sun, 12/11/2011 - 19:54 | Link to Comment aphlaque_duck
aphlaque_duck's picture

Ya except the bull market in CA real estate started 50 years ago. Silver may have a ways to go then...

Sun, 12/11/2011 - 23:44 | Link to Comment Janice
Janice's picture

The difference between me and a real estate agent is that I'm not selling silver to you.....yet. I promise, I can hold my silver longer than most people can remain solvent. Plus, the value of my silver has tripled since I've owned it. I encourage you to put your money where your mouth is, trust your government, and sit on the sidelines.

Mon, 12/12/2011 - 05:26 | Link to Comment OliverTwist
OliverTwist's picture

But Mr Sprott is selling ETF's and with a healthy premium too! Do not misunderstand me! I like silver and I have some (physical) silver. I'm not trusting any government.

The only thing I wanted to put out is: be careful if you hear the words "win-win"! There is always risk in investments. Sometimes more sometimes less. But there is! If you have been buying silver in 1980 on the peak ..... you finish the sentence! It is too easy to pick two dates in history deliberately .... so be careful and do your own diligence!

Mon, 12/12/2011 - 05:52 | Link to Comment vamoose1
vamoose1's picture

Hey Checker,  i bought silver in size at 6.50  5 years ago, wats that,  a lose

 lose?

Mon, 12/12/2011 - 08:00 | Link to Comment OliverTwist
OliverTwist's picture

So you are the Checker. Not me! I congratulate you also because in 2006 silver was never at 6.50 .... at least the official price in US $.

Sun, 12/11/2011 - 17:33 | Link to Comment JustObserving
JustObserving's picture

There are only 700 million ounces of silver available according to the video.  The video also says that the physical silver market is $35 billion (about 1100 million ounces).  Sprott says about 1000 milllion ounces of silver bullion are available in the world.

So estimating the amount of silver bullion market of $35 billion is a very reasonable estimate.

Now compare that to US debt increasing at $5.9 billion a day(per usdebtclock.org) or US debt snd unfunded liabilities increasing by $23.8 billion a day.

There is no way that US, Europe, UK and Japan can ever pay their debts.  Silver which has represented money throughout human history will continue to increase in value in relation to fiat due to the amount of fiat money being printed.  Even if industrial demand stalls, the value of silver will rise due to the sheer size of fiat.

And there are other asset bubbles which make silver look cheap.  For example, the value of land in Beijing was worth nearly $20 trillion in January 2011, making it worth 570 times all the silver bullion in this world.

Silver is very inexpensive given the amount of fiat and the crazy bubbles in other assets.

 

Sun, 12/11/2011 - 19:22 | Link to Comment OliverTwist
OliverTwist's picture

So you are not sure. And you are asking other people. But how can you be sure that what they will tell you is true? You can not be sure. So how you will feel after having asked the people. Not sure. One day you will realise that at the end you have to trust. Trust other people or trust yourself or trust a mixture of both.

Just a tought from me.

Sun, 12/11/2011 - 19:45 | Link to Comment smore
smore's picture
U Snuze U Luze!

 

Silver Stock Report by Jason Hommel, November 16th, 2011

You will often read how various experts in the financial press will say that the gold price "should be" about $2000/oz., to $3000/oz., or slightly higher.  But what they almost never say is how they arrived at their figures, and what assumptions they are making.

The reality is that the gold price, today, given today's conditions, should be about what it is right now.

But conditions are likely to change, and change dramatically, and can change very quickly.  The conditions that are mostly like to change the most quickly are people's perceptions and understanding of the reality of the dangers of theft due to inflation.

The US Federal Government is spending about $1.6 trillion more than they take in from taxes, which is $1600 billion, which is $1,600,000 million, which is $1,600,000,000,000 dollars.  The news on TV this morning said that the US national debt increased by $400 billion in the last 3 months, which confirms the numbers.  They are not able to fix this problem anytime soon.  This problem could not be fixed even if they taxed incomes at rates of 100% per year.  And they are mostly just printing this money, which creates inflation, which means that prices will go up, for everything, including, and especially, for silver and gold.

Today, very few people in the USA understand that they need silver and gold, and that is likely to change, and historically, those kinds of attitude changes happen very quickly, which result in dramatic and very sudden increases in the prices of silver and gold.

Today, in the USA, only about $3.5 billion is being spent annually on silver, (estimated at 100 million oz. x about $35/oz.) and only about $3.4 billion is being spent annually on physical gold (estimated at 2 million oz. at about $1700/oz.), for a total of only about $7 billion spent on precious metals to protect itself from inflation.

But the USA has about $18 trillion of cash, savings, and short term bonds in the banking system, which can also be expressed as $18,000 billion, $18,000,000 million, or $18,000,000,000,000 dollars.

So, mathematically the reality is that new money creation is about $1600 billion, out of $18,000 billion, which is an annual increase of nearly 9%, and yet only $7 billion out of $1600 billion of new money creation is being spent on precious metals, which is only 0.4%, or expressed another way, is only $1 out of every $229 dollars of newly created money being spent on silver and gold, and only $1 out of $2,571 of money in the banks is being spent on silver and gold, which is only 4% of 1%.

So, currently, this is next to nothing compared to the avalanche of money that is going to be spent on silver and gold.

So, we could ask ourselves the following questions: 

1.  What is likely to happen to the gold price in the event that 1% of money in the USA were to be spent on gold and silver in a year.

2.  What if 10% of the money in the USA were spent on gold and silver in a year?

3.  "What if 10% of the money in the world were spent on gold and silver in a year?"

4. "What if 100% of all paper money had were to be spent on gold and silver in a year?" 

5.  "What if 100% of US paper money had to be backed by all the official US gold?"

6.  "What if 100% of US paper money had to be backed by all the US gold that the US government is likely to have left?"

See, the gold price will be dramatically different, given the different assumptions, as follows.

First question. What if 1% of money in the USA were to be spent on gold and silver in a year?  Money in US banks is about $18 trillion.  1% is $180 billion.  This is 26 times what the USA currently spends on silver and gold, which is only $7 billion.  The entire world annual gold market production is about 75 million oz..  The USA buys only about 2 million oz. of that.  The USA spends about half on silver, and half on gold.  What if that continues?  Well, if the US spent $90 billion on gold, at $1700/oz., that would be 53 million ounces.  Clearly that kind of new demand would push up the price, probably to triple the current price, taking the gold price to $5100/oz.  For silver, $90 billion at $35/oz. would buy 2.6 billion ounces.  But here we have a major problem.  World silver production is only 0.7 billion ounces, or 700 million ounces.  Furthermore, there is no large above ground stockpile of silver, as most has been consumed by industry, and furthermore, most of the silver market is already being consumed by industry, leaving very little left over for investors to bid over, which is only about 150 million oz. left over for investors.  But let's assume that industry gets squeezed out, leaving 300 million oz. available for investors who wish to spend $90 billion on silver.  This gives us an easy calculation for the price, which is $90 billion divided by 300 million, or .3 billion.  So, 90 / .3 = $300/oz. for silver.

But those numbers are extremely unrealistic.  Only 1% spending money on silver and gold?  Really?  Not likely, it's likely to be far more.  Conditions of inflation are only likely to change when interest rates are as high as the annual increase in the silver and gold prices, which are above 20% per year.  After all, why earn 1% in bonds if you can earn 20% in gold? 

Second question.  What if 10% of money in the USA were to be spent on gold and silver in a year?  This would be $1800 billion.  Half into gold would be $900 billion. With world annual production at 75 million oz.  If the USA bought half of world production, that would be only 37.5 million oz.  $900,000 million / 37.5 million oz. is $24,000/oz. for gold.  If $900 billion were to be spent on half of world annual silver production, that would be only 350 million oz., which would lead to a price of $2,571/oz. for silver. 

Third question.  What if 10% of money in the world were to be spent on gold and silver in a year?  World money is about $60 trillion.  10% would be $6 trillion.  If half were to be spent on total world gold production, that would be $3 trillion spent on 75 million oz., which leads to a price of $40,000/oz. for gold.  If $3 trillion were spent on 700 million oz. of world annual silver production, that leads to a price of $4,286/oz. for silver.

Now, the interesting thing about rising prices, is that they tend to attract more money, because everyone wants in on it.  People today who think silver is expensive at $35, will be scrambling to buy silver as it just keeps relentlessly climbing.  For two reasons.  First, they will recognize that dollars are just used paper, like newsprint, and they will be fearful to hold them as their values just keep going down, and fast.  Second, they will want to become wealthy, and they will see that they only way to do that is through owning real wealth of silver and gold.  So, this leads us to the inevitable question, the 4th question, what happens when the entire US money supply is spent on silver and gold, over a nice, slow pace, of over an entire year.  Now, think about that again.  This is still well before hyperinflation really kicks in, well before people are spending their entire paychecks on silver and gold the instant that they get paid, and well before the government starts printing new money with several more zeroes at the end of it.

So, 4th question, what if 100% of US money is spent on silver and gold in a year?  $18 trillion, or $18,000 billion.  Half for gold is $9,000 billion, spent on, say 2/3rds of world gold production of 75 million oz., would be 50 million oz.  $9,000,000 million spent on 50 million oz. leads to a price of $180,000/oz. for gold.  And if $9,000 billion is spent on 2/3 of world annual silver production of 700 million oz., which is 467 million oz., that would be $19,272/oz. for silver. 

But let's assume that the US government tried to prevent that from happening.  Let's assume that the government would be smart enough to back all US currency with the official US gold, at a rate that would give the dollar a 100% gold backing.  (I know, kind of a crazy assumption to assume that the government would be smart, but let's assume anyway.)  The point of considering these numbers is that, in theory, the US government could stop runaway inflation with a 100% gold backing and a balanced budget, but given today's political climate, that's currently impossible.  But let's say the Tea Party wins a full sweep of both houses of congress and we get Ron Paul as president, and let's assume that instead of trying to return to the gold standard, he tries to simply prevent runaway inflation with full 100% gold backing all dollars in all US bank accounts.  It's a very simple calculation  $18 trillion divided by 261 million oz. of official US gold = $68,966/oz.  Given the previous calculations, silver could hit a 10 to 1 ratio to gold, which would be about $7,000/oz.  This is what the gold and silver prices "should" be, given the givens of honesty, and living up to the basic pledge of FDIC "government" insurance on all bank accounts.

Ah, but finally, many people reasonably expect that the US has already sold off a lot of the official gold to protect and defend the dollar at current low gold prices, which is more consistent with government reality and stupidity and rising gold prices.  In that event, the dollar is like burnt toast, and there will be no stopping the coming runaway gold price increases.

The reality is that we live in an age of deception, because the dollar is a deception. 

http://silverstockreport.com/2011/gold-should-be.html

Sun, 12/11/2011 - 20:13 | Link to Comment smore
smore's picture

And if that doesn't make you happy, how about this, MONKEYS LEARN TO USE MONEY!

http://www.youtube.com/watch?v=J8449HgS3FM

Sun, 12/11/2011 - 21:24 | Link to Comment Yellow Tang
Yellow Tang's picture

Tl;dr for those of us with ADD?

Mon, 12/12/2011 - 01:42 | Link to Comment Dave Thomas
Dave Thomas's picture

Jason Hommel is blessed, he sleeps on a Simmons Beautyrest!

Mon, 12/12/2011 - 01:05 | Link to Comment natty light
natty light's picture

Investor demand is growing vs. industrial demand

http://www.pmbug.com/forum/f3/investment-demand-vs-industrial-demand-11/

Mon, 12/12/2011 - 05:18 | Link to Comment vamoose1
vamoose1's picture

Fair enough, there would be a collapse in industrial demand in armageddon.But armageddon in the west is not armageddon in the east, we are increasingly irrelevant.Silver is following the sun.Quietly migrating across the vast pacific. 

    And if you extend your own logic,  what is the value of a us dollar  or a Zeuro in armageddon,  they are for practical purposes worthless and abandoned as currencies, leaving the only two REAL currencies standing anywhere and would rise  from 50 to an infinite number  of current prices.  To  wit Weimar Repubublic 1921, Zambia in the present day, rendering industrial production declines irrelevant.

Sun, 12/11/2011 - 16:41 | Link to Comment johnu78
johnu78's picture

Please for the love of god, bring the price spike!!!

 

-John
http://www.youtube.com/CarMarketer

Sun, 12/11/2011 - 14:47 | Link to Comment JPM Hater001
JPM Hater001's picture

I'll take the over and bet my 4000 oz.

Sun, 12/11/2011 - 15:11 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

buy silver, bitchez!

Sun, 12/11/2011 - 15:47 | Link to Comment vast-dom
vast-dom's picture

Why not Tyler? Why not?

Just allow me first to rehypothecate the rehypothecation....

Sun, 12/11/2011 - 16:01 | Link to Comment SRSrocco
SRSrocco's picture

FUTURE MONEY TRENDS GETS AN AAA+ RATING ON THAT VIDEO

Funny how articles get around the internet. 

DID NEVADA PEAK SILVER PRODUCTION OCCUR IN 1997?

http://silvergoldsilver.blogspot.com/2011/07/did-nevada-peak-silver-production-occur.html

PEAK SILVER REVISITED: Zero Hedge

http://www.zerohedge.com/news/peak-silver-revisited-impacts-global-depression-declining-ore-grades-falling-eroi

I put those links for anyone who has not yet had the opportunity to take a look.  The situation in silver production/consumption is far worse than most are aware and I am glad Future Money Trends put out that video.

Once the spark gets ignited, silver will hit prices that will shock even the most diehard silver bugs.

Sun, 12/11/2011 - 16:05 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

'Once the spark gets ignited, the price of silver will hit prices that will shock even the most diehard silver bugs.'

You're not around here enough then because one guy, tmosley, I believe said he thinks ag/au ration will be one to one. As batshit as that seems, people +1ed him well into double digits. So ... yeah... just FYI.

Sun, 12/11/2011 - 16:08 | Link to Comment SRSrocco
SRSrocco's picture

Gene...true, I realize what your are saying.  But, when silver finally jumps up to shockingly high prices, seeing and experincing it first hand will be another thing than talking about it.

Mon, 12/12/2011 - 05:29 | Link to Comment vamoose1
vamoose1's picture

@srs

    Silver and gold are currencies. sprott is lobbying silver companies  to withhold some production and hold some prudent percentage  of their working capital  outside the banking system. This , properly apportioned,  makes pretty good sense to me.

    But,  if silver is money  as it has been for many thousaand years, and fiat becoming menacingly dangerous (witness the Zeuro) why confine the concept to silver producers,  since if its money as it manifestly is, then every corporation, every financial  intermediary in short every company in the world should adopt the same strategy.

   That might give the supply demand equation a bit of a tickle.Maybe a big tickle.  

Sun, 12/11/2011 - 17:55 | Link to Comment tekhneek
tekhneek's picture

Not to speak for him but we agree on a lot of things.

I think he also believes it will overshoot the mean... might not only trade 1:1, but it could also trade at a premium in the future. All of the gold that has been mined is still above the ground for the most part in coins, bullion, jewelry etc. The majority of the silver mined and used for industrial purposes is disgarded in such small amounts it makes it nearly useless to try and recover/recycle. (hence why I always joke around saying to buy up land fills...)

This leaves a small real, tangible chunk available for investment and other purposes. This is the chunk that's most likely rehypothetated to death and trades at a 100:1 paper divergence on the markets. 100 billion dollars traded per day and roughly 1 billion in physical available for delivery? Give me a break.

I'm probably preaching to the choir here for a lot of other members whom I know feel similarly. It will go 1:1 and it will probably go 2:1 or 5:1. It's more rare than gold and no one seems to acknowledge that it is because there is less available silver above ground than there is above ground gold... but what do I know I'm just a "crazy silver bug." don't take my word for it. Other people here have done thorough research to illustrate this and prove it.

The U.S. Geological society even said it could be the first element extinct from the period table no later than 2020. And we all know how good the government is at estimating and projecting.

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDYQ...

http://www.kitco.com/ind/morgan/aug072009.html

http://maxkeiser.com/2011/04/08/silver-will-be-the-first-element-in-the-...

http://minerals.usgs.gov/minerals/pubs/commodity/silver/

Say what you will but my strategy is $2:$1 silver/gold ratio buying on major dips and straight up dollar cost averaged accumulation. It's going to pay off. Besides what the fuck are your other options?

  1. 10 Year T bill?
  2. Some Chipotle/Groupon stock?
  3. Greek 1 year bonds?
  4. Maybe some FRN's?

Yeah, I'll stick with silver and you guys should too.

$2 of silver for every $1 of gold, bitchez.

Sun, 12/11/2011 - 18:05 | Link to Comment akak
akak's picture

Fundamentally I agree with you, but to be fair, and partly to play devil's advocate here, it must be noted that rarity alone is not the determining factor for any commodity's price; if that were so, then terbium and dysprosium, for example, would both be significantly higher in price than gold, instead of a mere fraction of its price.  But there is simply not enough demand for either metal to cause them to exceed gold's market value, despite their much greater rarity.

Sun, 12/11/2011 - 18:10 | Link to Comment tekhneek
tekhneek's picture

Agreed but when a global financial system and their respective currencies are falling in value/devaluing at a faster pace people will begin to trade them in for tangible assets like gold and silver. If gold's $2,500/oz... joe sixpack can't buy that, but if silver's at $40-$50-$60/oz... that's another story.

This is more where I'm coming with my theory.

 

Sun, 12/11/2011 - 19:00 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

that must be blithe's sexy face

Sun, 12/11/2011 - 21:20 | Link to Comment Henry Hub
Henry Hub's picture

The truth is silver has been, is now and will be in the future the bastard child of gold. the ratio will fluctuate but gold will the real value and silver a percentage.

Sun, 12/11/2011 - 22:35 | Link to Comment passwordis
passwordis's picture

 

 I've tried talking to Joe, Trust me, Joe is concerned with getting the highest resolution LCD to watch his football games. He's interested in getting a 1080p blu-ray player and setting it up to display 480p not knowing the difference. Joe sixpack won't be buying silver or gold. Joe sixpack does not know the definition of a hedge or an investment.  If you want to appreciate what Joe sixpack comprehends, Listen to any one of the OWS protesters.

 

Mon, 12/12/2011 - 01:26 | Link to Comment natty light
natty light's picture

Retail outlets like Staples and AT&T that recycle phones and other electronics for green or publicity reasons might make recycling a profit-generating part of their business if the elements contained (eg silver, tantalum) are valuable enough.

Mon, 12/12/2011 - 04:12 | Link to Comment BigInJapan
BigInJapan's picture

It already is a business over here in Japan:

http://www.youtube.com/watch?v=_bU-NwowzVE

Sun, 12/11/2011 - 19:07 | Link to Comment Temporalist
Temporalist's picture

Eric Sprott also said he believes in a possible 1:1 or even higher for silver.

Sun, 12/11/2011 - 17:33 | Link to Comment flacon
flacon's picture

Funny how articles get around the internet. 

 

Goes to show just how small the silver investment crowd is. There's probably not more than a thousand of us "regular people" in the whole world who have serious stocks of silver and not more than a handful of the super rich (Sprott types) who have gargantuan stocks of silver. The rest of the world will be selling their wife's silver bracelets and earrings, rings, spoons etc just to get a piece of the action. 

 

In the future look for half hour TV infomercials on how to tell if your teapot is "sterling" or "plated". Looking for a job? How about as a "precious metals analyst" for all the people who want their grandmother's "silver" ashtray to be tested to see how much they can get for it.

Sun, 12/11/2011 - 19:41 | Link to Comment bernorange
bernorange's picture

It was interesting to see that FMT video earlier this morning after having had that conversation with you just yesterday.  Funny how that works.

Sun, 12/11/2011 - 21:07 | Link to Comment SRSrocco
SRSrocco's picture

bernorange... how true.  The most overlooked aspect of silver is not the industrial demand, but the future stampede of investors out of paper assets and into physical ones to protect their wealth.  A billion ounces of silver doesn't go around as far as it used to.

Lastly, I didn't realize the following until recently:

1) a fella who works on the Diesel Powered Electric Generating Plants that provide power to remote mines unable to hook up to the grid, sent me an email stating that they actually consume more diesel than all the earth moving equipment on the site.

2) Silver processing is actually more complex and expensive than is gold... I did not know that.  The reason the production cost of gold is higher is mainly due to the huge amount of ore that must be moved to get that ounce compared to silver.

Sun, 12/11/2011 - 22:11 | Link to Comment I_am_always_right
I_am_always_right's picture

"The most overlooked aspect of silver is not the industrial demand, but the future stampede of investors out of paper assets and into physical ones to protect their wealth."

Dead right SRSrocco

It's wealth protection. That's why it's value will go insane as fiat currencies collapse.

Mon, 12/12/2011 - 00:23 | Link to Comment SRSrocco
SRSrocco's picture

always_right.... tonight we get to watch the paper price of gold and silver fall as the computers take over trading.  This is like watching the movie called "2001: A Space Odyssey".  H.A.L. took over the system and see where it got the crew members.

Today, we have manipulation, computer trading and naked shorting that makes TECHNICAL ANALYSIS dead in the water.  I don't know why professionals still make calls based on TA. 

So we have to be patient and wait for the WORLD TO WAKE up from 4 decades of FIAT AMNESIA.  I no longer watch the paper price of silver.  Now I just get my entertainment from watching the clowns on CNBC like Dennis Gartman.  Everytime Gartman says gold has topped, I pull another hair out of my ALAN GREENSPAN LUCKY RABBIT FOOT.

Sun, 12/11/2011 - 17:41 | Link to Comment Esso
Esso's picture

I see everybody's ignoring abiotic silver. Some dude in Russia proved that the Earth is full of silver and when a silver mine is depleted, it will fill itself back up with silver, just as the oil wells refill themselves with oil.

ABIOTIC SILVER! ABIOTIC SILVER! SILVER'S GOING TO ZERO, JUST LIKE ABIOTIC OIL! IT'S ALL JUST A CONSPIRACY TO STEAL YOUR PRECIOUS PAPER MONEY!

Sun, 12/11/2011 - 17:46 | Link to Comment tmosley
tmosley's picture

I like how you can't tell the difference between production of elements, which requires a star, and production of organic compounds, which requires only carbon, hydrogen, an energy source, and a catalyst.

Such intellectual weakness makes you easier to control.  Thank you for that.

Sun, 12/11/2011 - 18:34 | Link to Comment Jendrzejczyk
Jendrzejczyk's picture

Sarcasm T.

Sun, 12/11/2011 - 18:50 | Link to Comment tmosley
tmosley's picture

Actually, it's sardonism, but done in an idiotic way.

He is claiming that silver and oil are the same, in that they can not be produced abiotically.  This is clearly not the case with oil.  Hydrocarbons exist offworld, proving beyond a shadow of a doubt that there are abiotic pathways that yeild hydrocarbons.  Just because we don't have a good understanding of those pathways doesn't mean they don't exist.

Of course, that doesn't mean that they exist on this planet.

I just don't like non-scientific attitudes in general.

Sun, 12/11/2011 - 19:11 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

how come your magic oil has never been found?  abiotic oil is like bigfoot.  Where the fuck is it?

Sun, 12/11/2011 - 19:14 | Link to Comment akak
akak's picture

I hear that there are literally lakes of it on Saturn's moon Titan --- but building the pipeline is going to be a real bitch.

Sun, 12/11/2011 - 19:31 | Link to Comment Esso
Esso's picture

Actually, about 50 years ago, when I was a tyke in school, they used to say that the gas planets were actually giant balls of oil & methane clouds. Of course, that  didn't jive too well with the theory that here on earth, oil was dinosaurs & plants.

I dunno, I guess when you're a hammer, everything looks like a nail.

Sun, 12/11/2011 - 21:19 | Link to Comment StychoKiller
StychoKiller's picture

Hmm, dinosaurs must have developed interplanetary travel -- they're now living a second life on Titan! :>D

Sun, 12/11/2011 - 21:38 | Link to Comment akak
akak's picture

The verses describing Noah's installation of ion engines in his ark were unfortunately accidentally deleted from the Bible.

Sun, 12/11/2011 - 19:52 | Link to Comment tmosley
tmosley's picture

It has.  I spoke of it in great detail about a year ago, posting peer reviewed literature which described the detection of oil digesting microbes found a kilometer under the Atlantic plate, thousands of miles from any subduction zone.  Where did their food come from?

But that doesn't mean that all oil is produced abiotically, nor does it mean that there are recoverable amounts of abiotic oil.  It just means that it does, in fact, exist.  The trick is finding where it would gather.

But you are a bit too inflamed to take that in, just like all the other peak oil death worshippers.

Sun, 12/11/2011 - 19:43 | Link to Comment Esso
Esso's picture

"I just don't like non-scientific attitudes in general."

Which was the point of my post. It wasn't meant to be about oil or silver, but rather about attitudes, emotionalism and a general lack of understanding which seems to be overcoming the country.

I'm glad someone caught my reference about "precious paper money."

As far as abiotic oil, I've never seen conclusive evidence one way or the other. If it exists, it's all going to boil down to EROI.

Sun, 12/11/2011 - 18:30 | Link to Comment omniversling
omniversling's picture

CREDIBLE reference or link please..?

Sun, 12/11/2011 - 18:34 | Link to Comment omniversling
omniversling's picture

oh now I geddit...hahahahaah...precious paper money...sarc off

Sun, 12/11/2011 - 19:41 | Link to Comment JoBob
JoBob's picture

Thanks for the tip, ESSO. I'll empty a monster box and sit and watch as it spontaneously refills.  Abiotically speaking.....

Sun, 12/11/2011 - 19:55 | Link to Comment Esso
Esso's picture

You should be careful about watching it. I seem to recall an old saying: "A watched monster box never refills." Or something like that.

Sun, 12/11/2011 - 22:13 | Link to Comment I_am_always_right
I_am_always_right's picture

"it will fill itself back up with silver"

What are you talking about.

Do you know how silver is formed?

No, thought not.

Sun, 12/11/2011 - 18:58 | Link to Comment Armchair Bear
Sun, 12/11/2011 - 19:33 | Link to Comment LeonardoFibonacci
LeonardoFibonacci's picture

Let me see. Global financial system about to break down, China looking at a hard landing, EU Euro on the verge of fracturing, US economy scraping the bottom of the pool, US about to implode if Europe crashes, prospects of printing USD galore.....and some say....sell your gold and silver??
 
One thing is certain - nobody knows how this is going to end up, but it wont be good.
 
This is one gun fight I won't be taking a knife to.

Sun, 12/11/2011 - 21:38 | Link to Comment Yellow Tang
Yellow Tang's picture

Global financial system is always about to break down, Euro is always about to collapse, US economy is always scraping the bottom of the barrel - and Silver still drops in price.  I've been waiting for this silver explosion for 2 years and even though industrial and investor demand keeps going up the price does not.  I own gold and silver but I'm now resigned to owning some nice 1kg silver paperweights.  I'm sure the big noises in the silver space are responsible for the silver demand which means that demand will never go mainstream.  And most people have debts, let alone savings so in terms of investment demand, I think we're seeing "Peak Silver".

Sun, 12/11/2011 - 14:38 | Link to Comment jomama
jomama's picture

my local coin dealer went from liking me to not wanting me to come in anymore, because all i do is buy his silver :(  

Sun, 12/11/2011 - 14:44 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Why should he not like you? It was his idea to trade real silver for magic clownbux.

 

Mon, 12/12/2011 - 04:21 | Link to Comment BigInJapan
BigInJapan's picture

I hear ya!

I bought all the mixed silver coins in one shop here last winter/spring, exporting almost all of it and importing rolls of eagles and koalas with the profits. The guy caught on in the summer and started slapping $20 premiums on any new ounce of silver that came in the door. I then moved on to a new shop and started buying gold. Funny thing being, he still has that same stock in the window.

 

Metals are cheap in Japan.

Sun, 12/11/2011 - 14:39 | Link to Comment DougM
DougM's picture

I've been hearing about this 'immiment silver shortage' for the last 40 years.

Sun, 12/11/2011 - 14:52 | Link to Comment JPM Hater001
JPM Hater001's picture

I am sad for you doug.  Sad because if you have been hearing it for 40 years you are old enough to remember at least the the age of a gold backed currency and the stable prosperity it held.

Instead you whine about it and doubt the value.  And yes, you doubt the value if you think there isnt a shortage.

Tell you what.  I will pay you spot...right now...for any silver you own-cash.  I will save you the dealer charge so you will make more money selling to me than him.

Are we on?  I havent made my Q4 purchase yet so this would work out well.  I can handle anything from 1 to 400 oz. 

Anyone else want to help Doug?  Just +1 me if you want to buy and let's show Doug how many buyers there really are.

Sun, 12/11/2011 - 15:05 | Link to Comment duo
duo's picture

I remember my first year tuition at the University of Michigan was $600 and change (fall 1980).  How many oz of silver was that then?

Sun, 12/11/2011 - 16:23 | Link to Comment JPM Hater001
JPM Hater001's picture

Without working too hard to discover the price it was somewhere around 100 oz.

Today that is 1 semester at a decent UW college...excluding Madison.

Sun, 12/11/2011 - 19:26 | Link to Comment foofoojin
foofoojin's picture

funny 100 ounces covers jsut come up short of one semester at a california state school.  but hte real joke is that in the 1980's a student could bust his/her ass all summer taking 2 jobs and pay for tuition and books and living expenses the rest of the year on the earned income.  two jobs at 32 hours a week times 12 weeks at minimum wage is $6144 before taxes.  you can squeeze ONE semester out of that if you live on top ramen and bead.

Sun, 12/11/2011 - 19:36 | Link to Comment akak
akak's picture

you can squeeze ONE semester out of that if you live on top ramen and bead.

I tried living on bead, but I got all strung-out.

Mon, 12/12/2011 - 04:23 | Link to Comment BigInJapan
BigInJapan's picture

I remember my Commodore Vic20 with tapedeck was $700...

Sun, 12/11/2011 - 15:10 | Link to Comment lemonobrien
lemonobrien's picture

silver will always be gold's bitch; take an once of silver, and an ounce of gold; place them in your palms. ask you chick, "You get to pick the coin you want, but you have to suck my cock."

also, just to inform you, almost all precious metals in electronics is recycled; they have people in china, bangladesh, etc... where they ship container ship after container ship for those people to pull apart and dig out the gold/silver/platnium etc.

i knows your invest in silver; so am i. If there is a real shortage in silver the goernment would take/sieze all it could find. it would become a national defense issue and you would be considered a terrorist for hording it; and if you left the country... they'd kill you anyway.

 

Sun, 12/11/2011 - 15:20 | Link to Comment pasttense
pasttense's picture

"also, just to inform you, almost all precious metals in electronics is recycled;"

Nonsense. I'm sure most people here has thrown away at least one desktop PC--and I think you will find that most went eventually went into the local landfill--rather than being recycled.

Sun, 12/11/2011 - 16:16 | Link to Comment ForTheWorld
ForTheWorld's picture

Unfortunately, that isn't the case. Large swathes of electronic waste end up in Ghana:

http://www.gizmodo.com.au/2011/09/aussie-%E2%80%98e-waste-hell-in-ghana/

There's video footage on there showing people burning the plastic from the waste just to reclaim what little amount of scrap metal they can. It doesn't even seem like they're interested in silver or gold there.

Sun, 12/11/2011 - 16:29 | Link to Comment JPM Hater001
JPM Hater001's picture

Sadly the $5 in silver currently garners no respect.  But after the pop at $40 people will start digin back into the landfills.

Mon, 12/12/2011 - 01:48 | Link to Comment Dave Thomas
Dave Thomas's picture

We understand that there are virtual PC board junk cities in China and India, but what the guy above you said is that a lot of electronics still makes it's way to the landfill. So in effect there is a percentage of metals being thrown away.

Something tells me in thousands of years our landfills will be mining oppurtuinities for all the future earthlings with spandex suits and large alien like heads.

Sun, 12/11/2011 - 17:50 | Link to Comment tmosley
tmosley's picture

Between 2001 and 2010, the amount of silver that was recycled rose only about 10%, despite the massive price difference between 2001 and 2010.

The reason is likely that most uses of silver are in such low quantity that they are either overlooked, or just can't be gotten out economically, no matter how much slave labor you use, nor how much pollution you create.

Sun, 12/11/2011 - 15:46 | Link to Comment fonestar
fonestar's picture

I'm banking on the real terrorists in DC and London being exposed around that same time frame.

Sun, 12/11/2011 - 16:02 | Link to Comment flattrader
flattrader's picture

Chickz, girlz, ladiez, whatever...

Just bite down hard on his cock.  He'll drop both the gold and silver.

While he's rolling around on the floor crying like a little boy pick up both.

You'll have plenty of time to get outta Dodge.

So much for the psycho-sexual fantasies of moron PM holders.

We smart ones can think of much better things to do with our ounces.

 

Sun, 12/11/2011 - 21:04 | Link to Comment lemonobrien
lemonobrien's picture

that was funny.

Sun, 12/11/2011 - 22:55 | Link to Comment Uncle Remus
Uncle Remus's picture

We smart ones can think of much better things to do with our ounces.

In this case I am assuming you are referring to the precious metals...

Sun, 12/11/2011 - 16:51 | Link to Comment kinganuthin
kinganuthin's picture

I would love to know how in the hell you reclaim Artic Silver 5.  Ive redone a ton of heat sinks and if there is a way to save the toothpaste, please please shed some light.

Sun, 12/11/2011 - 17:41 | Link to Comment Ignorance is bliss
Ignorance is bliss's picture

Once I explain to my chick how much Silver was worth she would do it once for the gold and then come back for silvery seconds

Sun, 12/11/2011 - 21:20 | Link to Comment knukles
knukles's picture

OK, and so if she picks the gold do you have to suck her cock?

Sun, 12/11/2011 - 22:57 | Link to Comment Uncle Remus
Uncle Remus's picture

Wait, is that a re-bitchez?

Sun, 12/11/2011 - 15:41 | Link to Comment fonestar
fonestar's picture

Yes, if Doug would have been stacking for the last forty years he would be extremely wealthy now.  Sounds like he wanted to spend the last forty years complaining though.

Sun, 12/11/2011 - 15:51 | Link to Comment DougM
DougM's picture

Global silver production keeps rising: http://minerals.usgs.gov/minerals/pubs/commodity/silver/

 

 

  • 1999 Global Production: 15,900
  • 2009 Global Production: 21,400

Where is the shortage?

 

Sun, 12/11/2011 - 16:19 | Link to Comment fonestar
fonestar's picture

The shortages are in what is left above ground, what is available immediately for delivery.

Sun, 12/11/2011 - 19:47 | Link to Comment trav7777
trav7777's picture

moron...

there is no fucking shortage otherwise the price would go balistic and there would be no silver around.

they sure as shit wouldn't be selling it from coin shops to idiots like you

Sun, 12/11/2011 - 19:54 | Link to Comment tmosley
tmosley's picture

I like how you are unable to differentiate between the present and the future.

I think you describe yourself in the first word of each of your posts.

Sun, 12/11/2011 - 20:33 | Link to Comment trav7777
trav7777's picture

no, I am describing YOU, cliff

Sun, 12/11/2011 - 20:39 | Link to Comment akak
akak's picture

I have no doubt that tmosley is now utterly devastated by the rapier-sharp wit and intelligence of your retort.

I kept telling you, trav --- keep obsessing about spics and niggers, and you're gonna start catching it.

Sun, 12/11/2011 - 21:38 | Link to Comment RockyRacoon
RockyRacoon's picture

You crack-ak-ak me up!

Sun, 12/11/2011 - 23:01 | Link to Comment nmewn
nmewn's picture

I'm wearing a full body condom into this one.

An ounce of prevention...

Sun, 12/11/2011 - 21:39 | Link to Comment tmosley
tmosley's picture

You're pretty fucking stupid then, as you were replying to someone else.

Sun, 12/11/2011 - 16:25 | Link to Comment ForTheWorld
ForTheWorld's picture

In an effort to show information from the demand side, here's a link:

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

Overall, according to that site, silver demand overall has gone up 3,000,000 ounces in the last 10 years. That's quite an increase in demand.

Also, using your link, there was a PDF that I read:

http://minerals.usgs.gov/minerals/pubs/commodity/silver/mis-201109-silve...

It says that production from US mines is down slightly from August 2011 and down 13% YoY. With increasing demand for silver, that doesn't sound particularly good.

Sun, 12/11/2011 - 19:15 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

and the increase in production will mean the peak will happen sooner than later

Sun, 12/11/2011 - 17:48 | Link to Comment akak
akak's picture

Global silver production keeps rising: http://minerals.usgs.gov/minerals/pubs/commodity/silver/

  • 1999 Global Production: 15,900
  • 2009 Global Production: 21,400

Where is the shortage?

 

And consumption?

And investment demand (i.e., covert remonetization)?

 

Methinks we have a new anti-silver troll here, folks!

"Only $5 to dig from the ground ...."

Sun, 12/11/2011 - 17:52 | Link to Comment tmosley
tmosley's picture

Yup, idiot trolls like this guy and Trav LOVE to only look at once side of the equation.  Hell, sometimes they'll only look at half of one side of the equation, like not counting stockpiles as part of "supply".

Sun, 12/11/2011 - 18:08 | Link to Comment akak
akak's picture

Yeah, Trav really jumped the idiocy shark with that one.

I need to remind myself, once again, to ignore him in the future.  Although every time I see a stormfront move through the area, I will unavoidably be reminded of him.

Sun, 12/11/2011 - 19:48 | Link to Comment trav7777
trav7777's picture

stockpiles are supply when there is a systemic supply shortage.

You saw that in oil during the runup to $145.

Of course, cliff, you won't let ANYONE get in the way of your GET RICH NOWWWWWWWW silverbug pumper bullshit.

Scoreboard says $32 and that EVERY SINGLE PREDICTION you've made about silver has been WRONG.  You've cost a lot of people a lot of money.  You should be ashamed of yourself.

Sun, 12/11/2011 - 20:04 | Link to Comment tmosley
tmosley's picture

When did I EVER say that the road was a short one?  I said SPECIFICALLY that it would be very difficult psychologically to hold your silver.  

Scoreboard is $32?  I guess you forgot that I said IN FEBRUARY (when silver was *GASP* $32) that the price would go to ZERO as people lost faith in the system.  How has this lawsuit proven that prediction wrong?  How has MF Global increased people's faith in paper?

You forget that I have been "pumping" silver since 2008.  95% of the people who bought on my humble recommendation have made money.  EVERYONE who has held stocks and mutual funds has LOST money, ESPECIALLY in real terms.  The ONLY people who have lost money are those who bought during a VERY SHORT PERIOD during this year.  

But then, who cares about your dumb opinon.  All you do is yell and scream at people.  You aren't a doer.  You don't help anyone.  You are just a sad little shit who never does anything.  It's real easy to be a critic, isn't it?  Especially when you constantly LIE about the people you are criticizing.

You are a weak, sad little man.  Sorry you lost your family because of it :(

Sun, 12/11/2011 - 20:24 | Link to Comment akak
akak's picture

 

stockpiles are supply when there is a systemic supply shortage.

I love how, in the World According to Trav, reality can be altered on a whim by arbitrary definitions.

So, when there is NO systemic supply shortage, stockpiles do NOT constitute "supply"?  Fascinating!  Tell me more about the economics in your world, Trav --- they are apparently radically different from those in the world I inhabit.

Sun, 12/11/2011 - 21:37 | Link to Comment Matt
Matt's picture

What I think he means is that silver that is not for sale right now is not currently supply, but may become so in the future.

For example, I do not think any of the available supply lists count all the spoons, forks, candlestick holders, or the rings and necklaces in India, and rightly so, if they are not for sale now.

However, in the future, when the price is high enough, India could become a major seller of silver, as they were circa 1980. At that point, you would need to include that source in your total supply count.

Sun, 12/11/2011 - 22:14 | Link to Comment Max Fischer
Max Fischer's picture

 

 

Trav7777

You're full of shit.  Crude inventories were RISING in 1H 2008, while oil was catapulting to $150.  There was absolutely NO systemic supply shortage.  NONE.  

With demand falling (we were already months into a global recession), and supply rising, oil was doing the EXACT opposite of what the fundamentals would suggest.  Why?  $300B+ worth of speculative liquidity swashing around in the commodity complex before everyone simultaneously headed for the exits in 2H 2008.  And it wasn't just oil - virtually the entire commodity space was being flooded with liquidity from non end-users.   Inventories weren't the problem; GSCI and punks like Murti were. 

Max Fischer, Civis Mundi

Sun, 12/11/2011 - 19:18 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

but abiotic oil is real and three sky scrapers fell because they were swaying too much

Sun, 12/11/2011 - 23:06 | Link to Comment Uncle Remus
Uncle Remus's picture

1st soldier with a keen interest in birds: What? A swallow carrying a coconut?
King Arthur: It could grip it by the husk!
1st soldier with a keen interest in birds: It's not a question of where he grips it! It's a simple question of weight ratios! A five ounce bird could not carry a one pound coconut.
King Arthur: Well, it doesn't matter. Will you go and tell your master that Arthur from the Court of Camelot is here?
1st soldier with a keen interest in birds: Listen. In order to maintain air-speed velocity, a swallow needs to beat its wings forty-three times every second, right?
King Arthur: Please!
1st soldier with a keen interest in birds: Am I right?

Sun, 12/11/2011 - 18:46 | Link to Comment DougM
DougM's picture

Industrial demand is declining while global production continues to increase.  The only demand is coming from speculators and we all know how that will end.

 

http://minerals.usgs.gov/minerals/pubs/commodity/silver/mcs-2011-silve.pdf

"Events, Trends, and Issues: Through mid-year 2010, silver prices averaged $17.75 per troy ounce. The overall rise in silver prices corresponded to continued investment interest and holdings in new silver exchange traded funds (ETF) that have opened since the first silver ETF was established in April 2006. Silver ETF inventories totaled 15,240 tons through the end of November.
Industrial demand for silver continued to decline, and in the United States, demand for silver in photography fell to slightly more than 160 tons, compared with a high of 190 tons in 2000. Although silver is still used in x-ray films, many hospitals have begun to use digital imaging systems. Approximately 99% of the silver in photographic wastewater may be recycled. Silver demand for use in coins, electronics, industrial applications, and jewelry increased, while photographic and silverware applications declined."

 

http://minerals.usgs.gov/minerals/pubs/commodity/silver/myb1-2009-silve.pdf

"In 2009, the global use of silver for jewelry and photography continued to decline; however, use for silverware increased. The use of silver in industrial and electronics applications also declined in 2009, owing to the global recession. Silver is widely used in electronic applications, including fl at-screen televisions and radio-frequency identifi cation devices (RFIDs), which are used in barcodes, some high-denomination casino chips, passports, and speedpasses. Minting of bullion coins increased in 2009 owing to the surge in investment-related purchases of them, especially in the United States and Europe. The U.S. Mint led the way with a 35% increase to 1,050 t in 2009 from 780 t in 2008, and the global use of silver for coin and medal fabrication increased by 21% in 2009 (Silver Institute, The, 2010, p. 23)."

Sun, 12/11/2011 - 18:55 | Link to Comment akak
akak's picture

Tell the entire story, Doug, you disingenuous troll.

Industrial silver demand fell slightly in 2009, and picked up the following two years since.
Meanwhile, the ongoing stealth remonetization of silver --- that which you flippantly label as "speculation" --- is proceeding apace.

There is nobody as contemptible as a disingenuous asshole who spins the truth, and tells misleading half-truths, in order to deceive and propagate a lie.  And that nobody would be you, Doug.

Sun, 12/11/2011 - 19:33 | Link to Comment DougM
DougM's picture

The only meaningful increase in silver demand is from implied net investment and coins (speculators).

 

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

Sun, 12/11/2011 - 19:38 | Link to Comment akak
akak's picture

Yeah, a collapse of the financial and monetary status-quo paradigms can tend to do that.

Sun, 12/11/2011 - 19:51 | Link to Comment trav7777
trav7777's picture

you guys are idiots.

When this crash happens, industrial demand for silver goes off a fucking cliff.  And so does your net worth.

Look at what PLATINUM is saying to you right now, idiots.  It's RIDICULOUSLY rarer than gold and has industrial use, yet it's trading at a price discount.  So is Palladium.

Sun, 12/11/2011 - 20:14 | Link to Comment akak
akak's picture

Moral of that story: buy platinum.

But one thing I can guarantee you: if and when "the collapse" happens, sure as shit your ether-based governmental promises and stiff little pieces of paper are NOT going to preserve your wealth --- EVERY monetary and/or economic collapse in history has proven exactly that point.  But oh yeah, "this time it's different".

BTW, don't you have some nigger churches to firebomb?

Sun, 12/11/2011 - 20:32 | Link to Comment tmosley
tmosley's picture

I can't identify platinum at a glance, and don't have a way to test its purity.  If I can't do that, what the fuck are the chances of anyone else being able to?  What are the chances anyone will give you a can of beans much less more value than an ounce of gold for it when you are ready to sell?  Hell, what is the spread right now?

Yet another of Trav's "genius" plans down the drain due to his complete and utter inability to think beyond the surface of any given subject.

That is not to say that platinum isn't money, or that it isn't valuable, but it is no-where NEAR as versitile as gold or silver, and I haven't heard of any concentrated price supression efforts against it.

Sun, 12/11/2011 - 20:34 | Link to Comment trav7777
trav7777's picture

you cannot identify silver at a glance, EITHER, you fucking moron.  Nor gold.  Nor a cogent argument.

Sun, 12/11/2011 - 21:41 | Link to Comment tmosley
tmosley's picture

Yes, you can, you fucking idiot.  The ring of silver can not be replicated, and the density of gold is very difficutl to replicate.

You have zero idea what you are talking about.  Why don't you shut off your computer and masturbate to thoughts of castrating black guys?

Sun, 12/11/2011 - 21:49 | Link to Comment akak
akak's picture

Why don't you shut off your computer and masturbate to thoughts of castrating black guys?

What makes you think he had ever stopped?

Mon, 12/12/2011 - 03:06 | Link to Comment aphlaque_duck
aphlaque_duck's picture

Well there are platinum coins... eg platinum platypus is pretty, and the wholesale premium is reasonable.

Sun, 12/11/2011 - 18:41 | Link to Comment AgShaman
AgShaman's picture

Can I get in on that action?

If he has more than you can handle....tell Doug I'd take 500 oz's off his hands tomorrow

Sun, 12/11/2011 - 20:12 | Link to Comment dow2000
dow2000's picture

I Sell Doug to zero, no bid

Sun, 12/11/2011 - 15:14 | Link to Comment ISEEIT
ISEEIT's picture

True enough. Disaster porn has been around (and profitable) for a very long time. I question my asumptions all the time. And all the time they are affirmed.

Bullshit is in the air.

Not only do I see it, I smell it, and I taste it.

Confirmation bias confirmed.

That is my story and I stand by it. The bullshit factor is so f'ing huge. This is so phony/fake/fabricated/manipulated/constructed.

Rehypothecation? Seriously?

Turn off the distractions and consider 'rehypothecation'.

Try rehypothecating your personal life and you will soon be dead or in prison. This shit is M.A.D. and they knew it.

Thanks Keynes/krugman!

Real swell results.

Sun, 12/11/2011 - 15:49 | Link to Comment fonestar
fonestar's picture

+1000

 

"oh you didn't read the fine print?  Nothing is real."

Sun, 12/11/2011 - 15:33 | Link to Comment realitybiter
realitybiter's picture

1971:  DJIA average was 800, silver 1.50

2011 DJIA  12000, up 15x

2011 silver (ave) $36 up 24x...

just the facts.  Includes 20 years of hell for silver investors....and 10 years of stock hell in the 70's and 10 years of hell in the 00's....

 

Anybody can't see the opposite of this discussion, the fact that "money" has been duplicated over and over and over....and considering how much of the consumption is based on money that is as real as a HE loan on fantasy wealth in 2007 is in real denial.

MF Global is a siren.  It is a message of desperation to screw anyone for anything.  I think the financial markets are like musical chairs in a 90,000 stadium with 10 chairs that are being fought over by 30 banks.  All bank deposits are at risk, all brokerage capital is at risk.  Wake up.  The government has just proved how much they care about property rights.  There isn't enough FDIC to cover anything substantial.  

 

And consider that half the economy is based on govt spending fed, state, and local.....how much of a hit will gdp take when TSHF and they must shrink?  How much local business will shrink?  FIRE has grown since 2008..because govt said so.....

it is insane.

 

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