How hot is silver? Keeping it in perspective.
Mesquite
Posts: 4,075 ✭✭✭
An intelligent analysis, IMO.
There are two ways to conquer and enslave a nation. One is by the sword. The other is by debt.
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–John Adams, 1826
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six or seven times bigger than all the ETF's.
Of course perspective is needed here since only 5 or 10% of silver is in ETF's.
Silver will be increasingly required to run industry and is scarcer than gold. As the price increases
there will be some decrease in demand and increase in supply but both of these factors are tiny
compared to the potential investment demand. At some point there will be industry, shorts, and
longs all competing to buy physical silver and right before this happens most of the silver in exist-
ence will evaporate because it will be shown to be nothing but paper promises.
There is a paradigm shift coming.
<< <i>There is a paradigm shift coming. >>
<< <i>
It might not be now, but in the long run reality must catch up with silver.
You keep saying that, and I keep not believing it.
Liberty: Parent of Science & Industry
I was going to say white hot (red hot doesn't seem to apply).
<< <i>Silver ... is scarcer than gold
You keep saying that, and I keep not believing it. >>
Finally something Baley and I can agree on! In my many years of B&M visits, and coin shows, I have seen literally hundreds of silver 100oz bars. I have not seen a single 100oz gold bar in all that time. Additionally, it is well accepted that there are both 4.5 billion oz of total gold above ground and that there are 600 million new oz of silver produced each year. By my math, just 7.5 years of silver production equals all the estimated gold ever to be mined by mankind.
Silver is NOT scarcer than gold.....im sorry.
<< <i>Silver ... is scarcer than gold
You keep saying that, and I keep not believing it. >>
It depends on your perspective. There's literal truth in the statement as made but as with
everything it needs a closer look to see the reality. Obviously silver is far more common in
the earth than is gold by a factor of about 10: 1. It is more common in the oceans by, I be-
lieve, a factor of about 2: 1. It is currently being mined at about 15: 1 with only some 40%
coming from primary silver mines.
But most of the gold ever mined or found lying on the ground still exists. The necklace worn
by king Khufu is 95% still in existence and spread through numerous large bars lying in one
warehouse or another. Gold produced as far back as 1900 is about 99% still around. Most
gold ever mined has only been manufactured since the 1860's and silver is similar.
The difference between gold and silver is that silver has always had a short half life. Since
it's common there are no big pains taken to recover it. Spent electrolyte was just washed
down the drains in the big silver plating industry of the 19th century and then virtually all
their product is now gone, spent, mouldering in middens and dumps with the silver unrecov-
erable at any price. While gold was the source of money it was silver that actually exper-
ienced the daily grind and loss from circulation and commerce. Each year about 1% of the
circulating silver would be irretrievably lost and over the course of circulation another three
to five percnt was simply ground off the survivors. If you dropped a gold coin you moved
heaven and earth to retrieve it. If you dropped a silver coin you might shed a tear and move
on.
In more recent times bankers have held the price artificially low in order to game the sys-
tem. They've made billions while silver has been used up by important and trivial needs.
It is a necessary component of untold products and tools but is used in such miniscule quan-
tities and has so little value because of the bankers that it's rarely recoverable. It is simply
trashed out where natural processes quickly strip the atoms from the matrix rendering them
unrecoverable forever. This might not be as true for most modern landfills but you aren't
goiing to find any silver plate or recoverable silver from before 1960 in dumps.
So how much silver is there?
This is a tough question but it's also a complicated one when dealing with the real world.
We know there are some 5 billion ounces of gold and that 45 billion ounces of silver have
been mined in history. Gold can be found all over the world in huge warehouses and in
large quantiies. Most gold is in bar form and under gaurd. Much is just under lock and
key in safety deposit boxes and homes. Some is jewelry and artefacts.
But there are no warehouses full of silver and even the largest is a mere couple hundred
million ounces which backs the ETF. Factories generally use just in time delivery and hedge
for critical items like silver. This means even large users might have only a few thousand
ounces in stock. Mines often sell future production so generally will have none in stock.
This lack of visible inventory suggests that much of the supply must be in manufactured
products and obsolete coin. I think people tend to exaggerate the amount of coin avail-
able to be used to feed the factories and investment demand. They look at the mintages
of coins but don't realize large percentages of world silver coins are already gone. Many
of the coins made in the US were lost or destroyed in circulation. Many of the coins left
will never be worth more as silver than as numismatic items. A nice AG '32-D quarter is
in no danger of hitting the scrap bucket. There's enough coin to keep the refineries run-
ing for six or eight years but then the shortfall has to come from the invisible and likely
non-existent stockpile or from some other source such as dishoarding.
I don't believe most silver buyers now are planning to get out as soon as they have a
"nice" profit but even if they do the increasing investment demand from China and the
other emerging economies can suck up all the excess with no difficulty at all. This is the
poor man's gold and $40 isn't that much money any longer even in India. We've taken
out all the old resistance and almost all the silver is in strong hands. There might be
a few casual owners who don't even know their tea set is now worth thousands in scrap
metal alone but most of these owners sold way back in 1980.
At current prices I'd guess there's some 2 billion ounces in meltable coins. At much
higher prices it would be 3 billion. There's probably not more than a billion ounces
in bar form and half a billion in public and private collections of artefacts. Of this lat-
ter very little would become available at any price.
The big question mark is how much "other" is there. This would include quite a bit in
investor hands. Not coin or large bars. Not modern rounds. But the oddball stuff like
3.5 Oz bars and various junk. This is harder to quantify. But even if you figure a bil-
lion ounces (which admittedly might be low) the total is still barely higher than gold
while the bulk of the silver, more than half, is simply unavailable because the price
can't get so high or it can't be converted to 999 any faster. The investment demand
is current. I like to say that information has always traveled at the speed of light
but demand is immediate. It doesn't matter how many eagles the mint can make in
five years, the question is can they keep up with current demand. It doesn't matter
if there's enough 90% coin to choke a horse if most buyers seek 999. By the time
the coin is melted the apparent supply will suddenly be dependent on mining alone
and, ironically, the overall health of the economy (because most silver comes from
other types of mining).
So for practical purposes there's only some 4 or 5 billion ounces of silver spread
thinnly over the face of the planet while there's 5 billion ounces of gold waiting in
storage for a need that might never come because it won't be great enough to
overcome the price.
In the lifetime of some people today the price of silver will exceed the price of gold.
In the meantime silver will be playing some catch up from time to time.
be the best type of evidence. In the real world data are very difficult to come by.
The Hunts accumulated a mere 180 million ounces and drove the silver market
into a tizzy. They caused the futures price of silver to hit about $400 in current
money. This was before two generations of bankers artificially suppressing the
price of silver and causing it to get used up.
So how much silver can there be if 180,000,000 ounces (.03 Ozt per human) can
disrupt the market so severely?
The futures price is a legitimate guage since people were made wealthy or went bust on its basis.
<< <i>Clad...care to address the mathematical fact that just 7.5 years of current (2004-2011) worldwide silver production covers all the estimated gold known to have ever been found? >>
It's consumed.
Up until about the middle of last year we've had to melt old scrap to make up the
deficiency in mining each year. Not only is this metal all gone but so too is another
100,000,000 Oz's or so that had to make up the difference during this period.
It's hard to see it right now but silver is probably at the bottom of a geometric
increase in demand. This increase will be twarted as it developes by the real world
constraint of a lack of metal. You can't destroy metal you don't have. The bankers
simply mortgaged the future for their own greed. Now we'll pay for it for decades
and maybe longer.
MANY positive BST Transactions
<< <i>Clad...care to address the mathematical fact that just 7.5 years of current (2004-2011) worldwide silver production covers all the estimated gold known to have ever been found? >>
Unlike gold, many uses of silver consume the silver and it's not feasible to try to recover it.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Hotter than a mother-in-law's kiss!
We'll take your word for it.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>Hotter than a mother-in-law's kiss!
You never met mine, obviously.
The central banks claim 31,000 tons but that figure is probably about half that following 15 yrs of central bank sales and leases.
Another interesting fact is that the dollar amount of gold derivatives is only 3X to 5X that of the silver derivatives. That also speaks to the current disparity in their prices
even with a 13 yr low in the GSR of 36-1. Warren Buffet was able to accumulate around 120 MILL ounces of silver from 1996-2006. More than likely that was used for the
SLV and to keep silver prices managed for a few years.
While the silver ETF's have a tiny market cap compared to the largest US corporations, it is also true that the Beanie Baby market has an even smaller market cap. But no one
is suggesting Beanie Babies are going to make a run because of it.
roadrunner
<< <i>
<< <i>Clad...care to address the mathematical fact that just 7.5 years of current (2004-2011) worldwide silver production covers all the estimated gold known to have ever been found? >>
It's consumed.
Up until about the middle of last year we've had to melt old scrap to make up the
deficiency in mining each year. Not only is this metal all gone but so too is another
100,000,000 Oz's or so that had to make up the difference during this period.
It's hard to see it right now but silver is probably at the bottom of a geometric
increase in demand. This increase will be twarted as it developes by the real world
constraint of a lack of metal. You can't destroy metal you don't have. The bankers
simply mortgaged the future for their own greed. Now we'll pay for it for decades
and maybe longer. >>
This guy....a silver bull.....says you are wrong.
<< <i>
<< <i>
<< <i>Clad...care to address the mathematical fact that just 7.5 years of current (2004-2011) worldwide silver production covers all the estimated gold known to have ever been found? >>
It's consumed.
Up until about the middle of last year we've had to melt old scrap to make up the
deficiency in mining each year. Not only is this metal all gone but so too is another
100,000,000 Oz's or so that had to make up the difference during this period.
It's hard to see it right now but silver is probably at the bottom of a geometric
increase in demand. This increase will be twarted as it developes by the real world
constraint of a lack of metal. You can't destroy metal you don't have. The bankers
simply mortgaged the future for their own greed. Now we'll pay for it for decades
and maybe longer. >>
This guy....a silver bull.....says you are wrong. >>
The only place I really agree with the author is that about 45 billion ounces have been mined.
As recently as nine years ago my estimate for the amount of surviving silver wasn't much diff-
erent than this author's (15 b Oz). But a poster here at CU (I regret I don't recall who) chal-
lenged me to find this silver. I spent a couple years looking for it and decided it is invisible or
it simply doesn't exist. In all probability the estimates of wastage are just too low.
I remember as a kid I could buy aluminum foil in the grocery for about a dollar. This was a big
heavy roll like foil should come in. Right next to it was silver foil (sterling) for about $4.50. Of
course it wasn't as heavy but it was silver.
Note the author is figuring 15% loss in coins. While this is way too high for 1955 and later coins
it's dramatically too low for almost all coins ever minted befor WW II. It's not just the 4 or 5%
loss of weight that each coin recieves during its lifetime but the 1% annual attrition of lost and
destroyed coins. This mounts of to most of the weight of a series over a very long run. Does
anyone really believe that if every single seated liberty half was melted today that it would ac-
tually generate some 45,000,000 ounces of silver. Of course not. Many of these coins were
lost and many were melted or otherwise destroyed. They were burned up in fires and flooded
in New Orleans. They've been bulldozed into piles and hauled off to the dump. They've been
redeemed by the mint for new coin and exported to other countries where they've met similar
fates. Many of th survivors are missing a few percent of their metal. A large percwentage of the
survivors are unc and proof or rare dates. A very highly disproportionate percentage would nev-
er hit the melting pots. Even at far higher prices it's unlikely more than a few million ounces could
be generated by melting seated half dollars. It's unlikely that more than six or seven million ounces
of silver even exists in this form.
It seems obvious there has been no increase in total above ground silver stocks since 1980. So
the real question is how much existed before this time.
I believe it simply hasn't existed due to the way things are lost and destroyed. Many of these
things are composed of silver and simply don't exist any longer.
Let me put the same challenge to those who believe there are 18 billion ounces; where is it?
Why isn't it flooding into the coin shops in response to higher prices? Why isn't it on inventories,
price lists, and manifests? Where's the paper trail to show it exists? Obviously there hasn't
been enough money pouring into silver to bouy the price of 18 b Oz or there must be millions
of sneaky owners lying in wait to crash the market.
<< <i>While there may be 5 billion ounces of gold world-wide, it is widely scattered, with probably the bulk of it in jewelry format being held by millions or billions of Asians.
The central banks claim 31,000 tons but that figure is probably about half that following 15 yrs of central bank sales and leases. >>
I stand corrected.
<< <i>
While the silver ETF's have a tiny market cap compared to the largest US corporations, it is also true that the Beanie Baby market has an even smaller market cap. But no one
is suggesting Beanie Babies are going to make a run because of it.
>>
Beanie Babies aren't required to keep the factories running and were not used for
thousands of years as money.
These sets dont get routinely shipped to refiners because of their heirloom status. Yet, a shockingly high amount has been getting turned in recently. I would have to guess that for every 1 set that gets melted because of financial troubles, there are at least another 15 sets that are in strong hands. So even with recent high levels of silverware being melted, just imagine how much more of that stuff is still out there!
It's the usage rate compared to manufacturing production that does matter, as I see it.
2010 stats.
Mining production =735.9m ozt
Industrial & fabrication consumption = 878.8m ozt.
Of course I assume some of this consumption is recoverable but still . . .
2010 Stats . . .
HH
1947-P & D; 1948-D; 1949-P & S; 1950-D & S; and 1952-S.
Any help locating any of these OBW rolls would be gratefully appreciated!
<< <i>Not here to argue something as silly as whether there is more silver than gold above ground . . . What difference does it make.
It's the usage rate compared to manufacturing production that does matter, as I see it.
2010 stats.
Mining production =735.9m ozt
Industrial & fabrication consumption = 878.8m ozt.
Of course I assume some of this consumption is recoverable but still . . .
2010 Stats . . .
HH >>
And what happens to a commodity when the price doubles? More mines? More exploration? Ramped up extraction? The higher silver's price rises, the higher the world's output will be. Until we hit peak silver that is....and thats TRULY anyone's guess as to when that will be hit.
<< <i>And what happens to a commodity when the price doubles? More mines? More exploration? Ramped up extraction? The higher silver's price rises, the higher the world's output will be. Until we hit peak silver that is....and thats TRULY anyone's guess as to when that will be hit. >>
Only 40% of silver comes from silver mines. Even if the number of silver mines doubled it
would mean only about 20% increase in silver production.
And, of course, you can't put a silver mine in unless you first find the silver. There are new
mines in the world and these will continue and in all probability a greater and greater share
of silver production will come from other mining.
Texas Mine
HH
1947-P & D; 1948-D; 1949-P & S; 1950-D & S; and 1952-S.
Any help locating any of these OBW rolls would be gratefully appreciated!
<< <i>In my many years of B&M visits, and coin shows, I have seen literally hundreds of silver 100oz bars. I have not seen a single 100oz gold bar in all that time. >>
So, if you had a B&M store, you would have a 100 oz bar of gold sitting behind a glass case????
Not me, it would be locked up away from prying eyes.
By the way, before digital cameras, look how much silver was used and lost to film development, including X-rays. It was only near the end of the film usage did they start to think about capturing it.
<< <i>I would wager that there is as much silver in JUST silverware items....worldwide.....than there are total ounces of above ground gold. Silverware sets are family heirlooms passed down from one generation to the next. Every single person on this forum either owns a set, OR knows someone that does. If the average, modest silverware set contains 75oz of Ag, then there only has to be 60 million sets worldwide to meet the same amount of metal as the estimated 4.5 bill oz of gold. If there are 6 billion people on the planet......and the average "family" is 4 people, then just 1 family in every 25 must own a set to satisfy my claim. And that doesnt even account for the multi hundred ounce sets that the wealthy often own!
These sets dont get routinely shipped to refiners because of their heirloom status. Yet, a shockingly high amount has been getting turned in recently. I would have to guess that for every 1 set that gets melted because of financial troubles, there are at least another 15 sets that are in strong hands. So even with recent high levels of silverware being melted, just imagine how much more of that stuff is still out there! >>
I have some doubt about your numbers. I don't think the typical silverware set contains
so much silver and there aren't nearly so many who have one as you suggest. People had
a chance to melt these down (75 OZ) for $22,000 is today's money back in 1979 and a large
number of people capitalized on it. Not a lot has been replaced over the years. Such things
have been destroyed in fires and the like as well since 1979.
You may well be right that I've been underestimating this source.
<< <i>If people think that mines can be turned on or off like a spigot, they are in dreamland. There is so much hostility to mining now even in the third world from environmental or sovereignty concerns, good luck. Years ago I made a ton of money on Meridian stock before they were bought out by Yamana Gold. However, one of their most promising projects in Argentina was shot down permanently before they could start. >>
Yes. Abandoned mines require a lot of capital to restart as well since new equipment
is needed and new technology. If they were very profitable they'd probably not have
shut down in the first place.
There's no question more mines will open as prices rise but the percentage of silver
coming from silver mines is unlike;ly to increase very much unless massive new sources
are found. Then it will require years of paperwork and bribes to get them into produc-
tion. On the bright side silver producers should have lots of money to pay the bribes.
I'd actually be surprised to see production increase more than 25% on a massive price
increase and much of this will go straight to industry. It's likely silver production is
actually going to decrease after this until we discover how to recover it from the oceans.
This might not be so very far away with the improvements in materials technology of
the last couple decades. All that's really required is energy and a sufficiently strong
material. (about 20x stronger than the best steels).
But prices are set by what exists. Silver might have the biggest collapse of any com-
modity in history someday but before then there's nothing to stop the biggest increase.
increase will cause more dramatic increases in recycling. But due to the way silver is
used all recycling will prove relatively costly and difficult to recover significant percen-
tages.
Silver production, demand, and recycling are all very price inelastic and this will prove
to be the rocket fuel for it. Nothing can come of demand except higher prices.
I just moved mine to safety deposit boxes.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
<< <i>I would wager that there is as much silver in JUST silverware items....worldwide.....than there are total ounces of above ground gold. Silverware sets are family heirlooms passed down from one generation to the next. Every single person on this forum either owns a set, OR knows someone that does. If the average, modest silverware set contains 75oz of Ag, then there only has to be 60 million sets worldwide to meet the same amount of metal as the estimated 4.5 bill oz of gold. If there are 6 billion people on the planet......and the average "family" is 4 people, then just 1 family in every 25 must own a set to satisfy my claim. And that doesnt even account for the multi hundred ounce sets that the wealthy often own!
These sets dont get routinely shipped to refiners because of their heirloom status. Yet, a shockingly high amount has been getting turned in recently. I would have to guess that for every 1 set that gets melted because of financial troubles, there are at least another 15 sets that are in strong hands. So even with recent high levels of silverware being melted, just imagine how much more of that stuff is still out there! >>
I have a difficult time justifying your logic/numbers regarding silverware items.
1 in 25 at first doesn't seem unreasonable, but when you figure the amount of poor people, low income people and even most middle class people who would not own such an item, then 1 in 25 seems way too high.
Also, most 'modern' families don't even own sterling silverware as it is viewed as 'old fashioned' and also if they do, it most likely is silver-plated silverware and therefore has very little silver content.
Lastly, as stated earlier, if these modern families have a sterling silver heirloom, pased on down through the generations, chances are very good that it was sold in 1980 or sometime in the last 5 years.
"“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)
"I only golf on days that end in 'Y'" (DE59)
No Link
650 years inflation adjusted.
Making links with Microsoft garbage has gotten too tough; Here's the address for cut and paste;
http://goldinfo.net/silver600.html
The link might work. Jeesh.
Phil, nice debate on your part as well...............Mj
Fellas, leave the tight pants to the ladies. If I can count the coins in your pockets you better use them to call a tailor. Stay thirsty my friends......
<< <i>ck, your work in this thread is TOP SHELF.............. absolutely stellar
Phil, nice debate on your part as well...............Mj >>
Thanks.
Here's some more perspective;
In 1979 three people caused silver to skyrocket in price and were only stopped by
a rule change.
Today there is significantly less silver in the world and there are millions of people
buying. The entire nation of China with 1,200,000,000 people are being encouraged
to buy silver by the government and are experiencing inflation driving even more to
buy silver. 1,100,000,000 people in India are giving silver a harder look than ever.
Almost all over the world the middle class is gaining in size. There are millions of
times more people chasing less silver and no rule change on the commodity market
can stop it.
Of course this still isn't the buying panic yet until you see the wild eyed shorts out
there trying to get silver at any price and there are things that at least in theory can
be done to head it off. How much pain are politicians willing to accept to help bank-
ers who made their own bed. It's a tough question when government is just get-
ting up for a quick smoke.
<< <i>It's consumed. >>
Yes, vast amounts of silver are consumed every day but I still feel gold is much scarcer than silver.
I'll see if I can find the source for this: "Gold is 4X scarcer than silver". Can't recall the source at the moment.
We aren't seeing that today. The silver just isn't there anymore 30 years later.
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<< <i>How hot is silver?
I just moved mine to safety deposit boxes. >>
You would trust a bankster?
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