Going Nickel

cladking

I mightta coined a new term.

This guy seems to usually get it about right. I don't always understand him but he makes a lot of sense.

https://silverseek.com/article/silver-sharks-circle-comex-whale

"Going nickel" is what happens when the bankers have played too many shenanigans and stolen too much from their clients, widows, and orphans. It will be very different if silver blows up because there are millions of people who are long and have only paper rather than metal. There will be no self righting mechanism possible and this will cause gold to go nickel as well as bonds drop through the floor.

These are very dangerous times and silver may be the trigger of our suicide (or is that homicide be bankers).

streeter

Not sure I understand the point. The link didn't clarify anything for me except that they seem to be selling silver.

I used metals in my business for 25yrs. There is no shortage of metal. Just price spikes that are temporary because of supply issues.

Metal prices, ALL METALS, mostly, are tied to the cost of getting it out of the ground. As prices rise, reclamation also increases. As fuel prices soften, it's cheaper to extract or recycle.

Sometimes demand is so low that the price drops and that is the time to acquire physical. The problem with base metals is the inconvenience because of the volume. Obviously gold is more attractive size wise.

I have never bought anything when the prices are rising and someone is telling me ...it's a good deal'. I sell into a rising market to buyers that have a follow the herd mentality.
People who can predict the price are not on this forum. They are sipping mai tai's under a thatched hut in Bora Bora. Listen to your inner self and limit your allocation to a small percentage of your net worth.

cladking

You have to scroll down a bit to see the video.

@streeter said:
Not sure I understand the point. The link didn't clarify anything for me except that they seem to be selling silver.

I used metals in my business for 25yrs. There is no shortage of metal. Just price spikes that are temporary because of supply issues.

Metal prices, ALL METALS, mostly, are tied to the cost of getting it out of the ground. As prices rise, reclamation also increases. As fuel prices soften, it's cheaper to extract or recycle.

Sometimes demand is so low that the price drops and that is the time to acquire physical. The problem with base metals is the inconvenience because of the volume. Obviously gold is more attractive size wise.

I have never bought anything when the prices are rising and someone is telling me ...it's a good deal'. I sell into a rising market to buyers that have a follow the herd mentality.
People who can predict the price are not on this forum. They are sipping mai tai's under a thatched hut in Bora Bora. Listen to your inner self and limit your allocation to a small percentage of your net worth.

I'd be great at predicting silver prices since i can usually call tops and bottoms well in advance except that I've predicted twelve of the last three breakouts to the upside and three of the last twelves swoons. I certainly never follow the herd.

Silver is more than merely a commodity metal because much of the demand is for investment. Gold is similar except there is very little industrial demand.

The reason so many of us believe that a breakout is coming is that we expect a paradigm shift in the way people think of it. It is necessary in numerous and growing numbers of industrial applications and only about five times more common than gold. I believe when it 'Goes nickel" part of the reason will be that industrial buyers step up buying when they discover the bankers welched on their promises of delivery and the growing realization that every ounce of silver has been promised to five buyers and is owned by five different holders. Shenanigans are rampant in silver and is being treated like reserve banking. A lot of the metal simply doesn't exist except on paper. With Just In Time delivery many buyers are likely to panic when most of the supply just evaporates into thin air.

cohodk

@cladking said:
A lot of the metal simply doesn't exist except on paper.

They pull 900,000,000 ounces out of the ground every year...every year.

https://www.mining-technology.com/comment/global-silver-production/

ricko

Well I have not predicted anything of note - beyond what I will do today. Most of the time, I am reasonably accurate in that area. I will not try to predict geo-economics or even U.S. economics.... Not trained in that area. However, I do have a bad feeling about where we are heading with all the national debt/global debt. Eventually, there must be a settling of debts and reconstitution of economic stability. I think that will be a major event, and it will not be good. Cheers, RickO

derryb

@cohodk said:

@cladking said:
A lot of the metal simply doesn't exist except on paper.

They pull 900,000,000 ounces out of the ground every year...every year.

https://www.mining-technology.com/comment/global-silver-production/

Most of that is simply not available except at a high premium that grows with the correctly perceived increasing risk of paper metals and of fiat dollars.

Keep in mind they pull over 100 million barrels of oil out of the ground each year. Your logic calls for 46 cent a gallon gasoline. Good luck wid dat.

derryb

@cladking said:

"Going nickel" is what happens when the bankers have played too many shenanigans and stolen too much from their clients, widows, and orphans. It will be very different if silver blows up because there are millions of people who are long and have only paper rather than metal. There will be no self righting mechanism possible and this will cause gold to go nickel as well as bonds drop through the floor.

These are very dangerous times and silver may be the trigger of our suicide (or is that homicide be bankers).

A silver blowup at the COMEX will simply result in dollars paying off contracts that cannot be met with vault inventory. ETF holders will simply see a landslide reduction in the bid price; they will have time to exit their position, likely at great losses. And yes, the impact on physical prices will be outstanding.

blitzdude

@derryb said:

@cohodk said:

@cladking said:
A lot of the metal simply doesn't exist except on paper.

They pull 900,000,000 ounces out of the ground every year...every year.

https://www.mining-technology.com/comment/global-silver-production/

Most of that is simply not available except at a high premium that grows with the correctly perceived increasing risk of paper metals and of fiat dollars.

Keep in mind they pull over 100 million barrels of oil out of the ground each year. Your logic calls for 46 cent a gallon gasoline. Good luck wid dat.

That oil actually gets consumed. Most of that gutter just sits in someone's bunker. BIG difference. RGDS!

RobM

@derryb said:

Keep in mind they pull over 100 million barrels of oil out of the ground each year. Your logic calls for 46 cent a gallon gasoline. Good luck wid dat.

I think you meant per day!

cladking

@derryb said:

A silver blowup at the COMEX will simply result in dollars paying off contracts that cannot be met with vault inventory. ETF holders will simply see a landslide reduction in the bid price; they will have time to exit their position, likely at great losses. And yes, the impact on physical prices will be outstanding.

You probably know more about it than I do but one thing certain, as silver goes up there will be more shorting. I would hardly be surprised if computers step in and make it all worse. Between central planning, strips, and computer trading it makes just about any prediction impossible.

It seems the status quo has been enshrined by tying everything together with duct tape and baling wire. I don't know if any single part of it can fall off without affecting everything else and meanwhile they are still bulldozing coal power plants an making appliances that last only a couple years.

derryb

@RobM said:

@derryb said:

Keep in mind they pull over 100 million barrels of oil out of the ground each year. Your logic calls for 46 cent a gallon gasoline. Good luck wid dat.

I think you meant per day!

correct, per day

cohodk

@derryb said:

@cohodk said:

@cladking said:
A lot of the metal simply doesn't exist except on paper.

They pull 900,000,000 ounces out of the ground every year...every year.

https://www.mining-technology.com/comment/global-silver-production/

Most of that is simply not available except at a high premium that grows with the correctly perceived increasing risk of paper metals and of fiat dollars.

Keep in mind they pull over 100 million barrels of oil out of the ground each year. Your logic calls for 46 cent a gallon gasoline. Good luck wid dat.

Actually it's almost 100 million barrels per DAY.

The average tax on a gallon of gasoline is about 50c.

So no, MY logic does not call for anything like that. Does yours?

Added...the incorrect perception is that one must pay high premiums to acquire it.

jmski52

That oil actually gets consumed. Most of that gutter just sits in someone's bunker. BIG difference. RGDS!

Actually, silver does get consumed and much of that doesn't get reclaimed. The retail market for silver isn't that big compared to the commercial demand.

element159

@jmski52 said:
That oil actually gets consumed. Most of that gutter just sits in someone's bunker. BIG difference. RGDS!

Actually, silver does get consumed and much of that doesn't get reclaimed. The retail market for silver isn't that big compared to the commercial demand.

Yes, I think that most Ag (unlike Au) does actually get used. But for ASE's, those probably do stay in bunkers. But ASE's, and similar fabricated products for retail, are a very minor part of the overall silver market, as jmski52 says. Nobody with any sense will try and interpret the market for ASE's as representative of the whole silver market.

cladking

@element159 said:

Yes, I think that most Ag (unlike Au) does actually get used. But for ASE's, those probably do stay in bunkers. But ASE's, and similar fabricated products for retail, are a very minor part of the overall silver market, as jmski52 says. Nobody with any sense will try and interpret the market for ASE's as representative of the whole silver market.

Yes. My guess is that there is only some 5 billion ounces of silver readily available for industry. This includes not only 1000 oz bars but lots of silver coin and bars in weak hands that would sell with any significant increase. There's another three billion ounces that is tied up in fabricated artefacts and other silver in strong hands.

The issue here is "what is silver worth". Because of strong and growing industrial and investment demand coupled with macroeconomic forces such as political turmoil, "global warming" panic, and growing inflation a paradigm shift in peoples' estimation of the value of silver could occur at any time. If you believe it is only an industrial metal then imagine the change in your behavior the moment you come to believe that there are no safe havens for money other than gold and silver. If industrial demand survives whatever changed your mind then silver would explode. This explosion would manifest similarly to what happened to nickel but there is a huge difference; demand would explode after the price exploded rather than collapse and most of the silver in existence would be found to be composed largely or solely of paper.

The effects of the nickel explosion were largely self contained and self correcting. Any such event in silver would expand and snowball. It might look like 1980 on steroids and there's NOTHING the futures markets could do to contain it because the forces are fundamental rather than the effects of a few speculators. The only speculators are on the short side and it is they who are causing these pressures to build.

blitzdude

@cladking said:

@element159 said:

The issue here is "what is silver worth".

Bout $18-$19 bucks an Ozt. RGDS!

cladking

@blitzdude said:

@cladking said:

@element159 said:

The issue here is "what is silver worth".

Bout $18-$19 bucks an Ozt. RGDS!

Certainly. That's the apparent value today but what will it be if it goes nickel.

blitzdude

@cladking said:

@blitzdude said:

@cladking said:

@element159 said:

The issue here is "what is silver worth".

Bout $18-$19 bucks an Ozt. RGDS!

Certainly. That's the apparent value today but what will it be if it goes nickel.

$24655.00 USD/MetricTon THKS!

cohodk

@cladking said:

@element159 said:

Yes, I think that most Ag (unlike Au) does actually get used. But for ASE's, those probably do stay in bunkers. But ASE's, and similar fabricated products for retail, are a very minor part of the overall silver market, as jmski52 says. Nobody with any sense will try and interpret the market for ASE's as representative of the whole silver market.

Yes. My guess is that there is only some 5 billion ounces of silver readily available for industry.....

.....most of the silver in existence would be found to be composed largely or solely of paper.

I took out the irrational self-bantering and this is what was left.

So is there 5 billion ounces or is it just paper?

cladking

Silver exists.

Much of what people think is silver does not exist. Many people own depository receipts for silver and pay onerous annual dusting fees for it but the total amount of silver under lock and key is much less than the total of the receipts. This means that are many people who are long but don't actually own silver at all. Rather than these receipts representing supply they represent demand.

This is all fine. Just like in banking the banker actually has your money and loans out the same dollar to hundreds of others making large amounts on each transaction. So long as they have enough to satisfy depositors nothing can go wrong, just like any ponzi scheme. With FDIC insurance there's little likelihood of anything substantial going wrong.

Silver is different. If prices skyrocket many will want to acquire at least some physical and will probably sell some being "held" in banks to cover it. Silver would not go nickel in a vacuum because like gold it is still a monetary metal. It would drag gold higher and affect financial markets adversely. Redemptions would soar and soon exceed the amount actually stored resulting in defaults and more chaos.

There's no problem so long as industry doesn't need to compete with investors and this is where the problem lies. The total value of all the silver in the world is so low it can be snapped up by only a few entities. Every year the total amount of silver changes very little and its aggregate value relative everything else declines. This is a very very dangerous situation in a climate of inflation.

We live in a house of cards and all winds are ill winds.

cohodk

@cladking said:
The total value of all the silver in the world is so low it can be snapped up by only a few entities.

It needs a better campaign manager.

cladking

@cohodk said:

@cladking said:
The total value of all the silver in the world is so low it can be snapped up by only a few entities.

It needs a better campaign manager.

Yeah.

There's only enough silver for everyone in the world to own about one ounce and average world hourly income is the cost of an ounce of silver.

Every year total amount of silver stays relatively stable but the total amount in the infrastructure to support population continues to increase. This is a prescription for a fundamental change in the perception of the value of silver. The world can survive and populations can be maintained without more nickel but silver is necessary to maintain human life.

Nickel is a critical component of very few things and mining can be increased easily because there is vast amounts in the earth's crust. This simply is not true for silver. Most silver is a by product of other mining. Even in a depression silver production would collapse regardless of its price but consumption would be far less impacted. Much higher prices or much higher economic activity would have little effect on production as well but demand would soar.

blitzdude

@cladking said:
silver is necessary to maintain human life.

Say what? Man this place gets stranger by the day. lol

derryb

@blitzdude said:

@cladking said:
silver is necessary to maintain human life.

Say what? Man this place gets stranger by the day. lol

History of the medical use of silver

blitzdude

@derryb said:

@blitzdude said:

@cladking said:
silver is necessary to maintain human life.

Say what? Man this place gets stranger by the day. lol

History of the medical use of silver

cladking

Without silver none of our machines would work.

Sure most could be redesigned to no use silver at all but they would be greatly changed. There would be no 747's or anything similar but there would instead be somewhat heavier planes with less efficiency and much higher cost. Nothing would be unaffected but it is in electronics that the most dramatic differences lie.

Every year there are more uses for silver and more and more is used. Silver has some unique properties because of the way the atoms are put together. It is highly durable and stable except for a tendency for its surface to oxidize.

There is a tendency to think of it as industrial metal like copper or iron but its usage in the economy is nothing like any other metal. And it is thousands of times scarcer than most other industrial metals. Other than tin most industrial metals could easily ramp up production very rapidly if the prices were higher. New Caledonia is virtually made of nickel and Puerto Rico of aluminum. Iron is found everywhere.

Silver is largely a byproduct of other mining.

cohodk

@cladking said:
Without silver none of our machines would work.

Sure most could be redesigned to no use silver at all but they would be greatly changed. There would be no 747's or anything similar

How much silver is in a 747?

cladking

@cohodk said:

@cladking said:
Without silver none of our machines would work.

Sure most could be redesigned to no use silver at all but they would be greatly changed. There would be no 747's or anything similar

How much silver is in a 747?

I have no idea. I'd guess it's between .1 and 2 troy ounces but it could be substantially more if they use silver contacts in the breakers.

But don't forget the equipment that loads the plane, supplies the meals, guides them in flight, and schedules them are all dependent on silver as well. The passengers are carrying an average of about .03 OZ and they are each dependent not only on the plane but on infrastructure all around them that requires silver to operate. Some even take silver internally to live or apply it as salves.

The modern world would be very very different without silver.

derryb

@cohodk said:

@cladking said:
Without silver none of our machines would work.

Sure most could be redesigned to no use silver at all but they would be greatly changed. There would be no 747's or anything similar

How much silver is in a 747?

depends on how many monster boxes you ordered.

cohodk

@cladking said:
The modern world would be very very different without silver.

Imagine if we had no carbon.

TwoSides2aCoin

Got food ? We're all set. Let's have a picnic. We just keep breaking moldy bread here.

JWP

Somebody must be buying

Estil

@JWP said:

Somebody must be buying

Isn't just ONE of those bars like $200K or something?

PerryHall

@Estil said:

@JWP said:

Somebody must be buying

Isn't just ONE of those bars like $200K or something?

They're 400 Troy ounces so currently $660,000.

derryb

@JWP said:

proof that gold decreases gravity. Heavy boots required in its presence.

Estil

@PerryHall said:

@Estil said:

@JWP said:

Somebody must be buying

Isn't just ONE of those bars like $200K or something?

They're 400 Troy ounces so currently $660,000.

So even just one, heck half of just one of those bricks (aren't they called Good Humor bars or something?) could easily get me the early 70s/60s/50s Topps sets I've always dreamed of!

cladking

@derryb said:

proof that gold decreases gravity. Heavy boots required in its presence.

This is how "safety" works in industry. The boots are required to protect your toes from dropping gold bars on them and also to assure you trip and break a leg while climbing around on poorly stacked pallets.

Very few people would drop a bar on their toe but anyone can break a leg.

The picture is difficult to reconcile with what I know about gold and its storage. It looks like at least 5,000,000 OZ but I wouldn't have thought anyone other central banks has so much. The "worker" appears pretty casual.

ms71

I believe those slippers were sourced from the studio that made the old Michael Rennie movie The Day the Earth Stood Still. They were originally worn by the robot Gort.

blitzdude

What's up with all that gold dust on his toe caps? Looks like that dude musta dropped more than a few bars on his shoes.

taxmad

@cohodk said:

@cladking said:
The modern world would be very very different without silver.

Imagine if we had no carbon.

As life on our planet is carbon based - we would be an oblate-spheroid devoid of life...

cohodk

@taxmad said:

@cohodk said:

@cladking said:
The modern world would be very very different without silver.

Imagine if we had no carbon.

As life on our planet is carbon based - we would be an oblate-spheroid devoid of life...

Exactly my point. 👍

Spooly

"However, I do have a bad feeling about where we are heading with all the national debt/global debt. Eventually, there must be a settling of debts and reconstitution of economic stability. I think that will be a major event, and it will not be good. Cheers, RickO"

I agree, global debt levels cannot be roll over at higher rates. #DefaultsAreComing

derryb

sovereign debt is irrelevant, has been since dollars were no longer tied to gold. How many years has the US carried massive debt? It will always be paid with new debt.

Never forget the money tree. It should be printed on $100 bills.

jmski52

sovereign debt is irrelevant, has been since dollars were no longer tied to gold.

I wouldn't agree with that. The higher interest rates go as gov.com debt rolls over, the harder it is for the private sector to justify and finance new investment in plant & equipment as higher rates also compete with company IRR on any new projects. I think I have that right from what I remember about finance.

To make it even harder, the free money tree gov.com handouts to their cronies dilutes any company profits and incentivizes other malinvestments that compete with private company profits in various markets, using tax dollars (EV charging stations when the infrastructure won't even come close to supporting for the next 20 years or more),

And then, the inflation that arises from all this financial mismanagement begins to push everyone, both private equity firms and individuals - into higher tax brackets without a commensurate bump in purchasing power.

Sovereign debt is very relevant when the issuing entity has no plan to manage it properly, because the burden of rising interest rates will simply kill off the economy at some point. Like now, probably.

cladking

@jmski52 said:
sovereign debt is irrelevant, has been since dollars were no longer tied to gold.

I wouldn't agree with that. The higher interest rates go as gov.com debt rolls over, the harder it is for the private sector to justify and finance new investment in plant & equipment as higher rates also compete with company IRR on any new projects. I think I have that right from what I remember about finance.

To make it even harder, the free money tree gov.com handouts to their cronies dilutes any company profits and incentivizes other malinvestments that compete with private company profits in various markets, using tax dollars (EV charging stations when the infrastructure won't even come close to supporting for the next 20 years or more),

And then, the inflation that arises from all this financial mismanagement begins to push everyone, both private equity firms and individuals - into higher tax brackets without a commensurate bump in purchasing power.

Sovereign debt is very relevant when the issuing entity has no plan to manage it properly, because the burden of rising interest rates will simply kill off the economy at some point. Like now, probably.

A little thought experiment;

If government spent a quadrillion dollars for every dollar they taxed there would be "no" dollars but government dollars which obviously would have no value.

Just like the networks try to schedule a three hour big game in a two hour time slot you can't get enough milk for ever baby from a single cow. Government debt will bite us all in the end. It will result in inflation and eventual default; recession. Because of the bankers' grip on the economy it is likely to manifest as a bond collapse which will be a paradigm shift as well; the belief government debt doesn't matter or in manageable to the belief it can never be paid. Boom!

WCC

@derryb said:

@cohodk said:

@cladking said:
A lot of the metal simply doesn't exist except on paper.

They pull 900,000,000 ounces out of the ground every year...every year.

https://www.mining-technology.com/comment/global-silver-production/

Most of that is simply not available except at a high premium that grows with the correctly perceived increasing risk of paper metals and of fiat dollars.

Keep in mind they pull over 100 million barrels of oil out of the ground each year. Your logic calls for 46 cent a gallon gasoline. Good luck wid dat.

False equivalence. Oil cannot be recycled. Once it's used, it's not available.

bigjpst

@WCC said:

@derryb said:

@cohodk said:

@cladking said:
A lot of the metal simply doesn't exist except on paper.

They pull 900,000,000 ounces out of the ground every year...every year.

https://www.mining-technology.com/comment/global-silver-production/

Most of that is simply not available except at a high premium that grows with the correctly perceived increasing risk of paper metals and of fiat dollars.

Keep in mind they pull over 100 million barrels of oil out of the ground each year. Your logic calls for 46 cent a gallon gasoline. Good luck wid dat.

False equivalence. Oil cannot be recycled. Once it's used, it's not available.

Oil is absolutely recycled.

WCC

@bigjpst said:

@WCC said:

@derryb said:

@cohodk said:

@cladking said:
A lot of the metal simply doesn't exist except on paper.

They pull 900,000,000 ounces out of the ground every year...every year.

https://www.mining-technology.com/comment/global-silver-production/

Most of that is simply not available except at a high premium that grows with the correctly perceived increasing risk of paper metals and of fiat dollars.

Keep in mind they pull over 100 million barrels of oil out of the ground each year. Your logic calls for 46 cent a gallon gasoline. Good luck wid dat.

False equivalence. Oil cannot be recycled. Once it's used, it's not available.

Oil is absolutely recycled.

OK, how does it compare to other commodities as a percent of annual production? I have no idea.