How can Silver be rare?
tneig
Posts: 1,505 ✭✭✭
I don't think Silver is rare enough to even be on the PM category. They should just change the content of that category or just take silver out, and have simply; 'Gold.' Ok, its too expensive to make coins out of, and value to unstable to make a $30 coin. But that's been the case for decades. Silver or gold for that matter in spending coinage is long since a memory and no relationship on Silver now.
I mean all the hubbub about silvers worth in the industry and how much its used proved to make no difference at all. Even copper holds it own better than Silver. There is so so much silver available that they make bullion in every imaginably form to sell to individuals. Really, why aren't we buying bulk copper now? Silver gets recycled for this market with an exchange cost during each step. We just keep rebuying our own silver back and forth.
All that I read about its uses and growth industry didn't come true. If it was so valuable for industry, they'll likely buy all the could now and store it. If it really affected the price of electronics so much, we might see the cost of a cell phone go down.
I know paper sets the price. And the dollar value. But the rest I'm in the "prove it to me mindset". I'm holding my own better with the dang copper pennies.
Disclaimer: I stack and I am converting to good silver and will continue.
I mean all the hubbub about silvers worth in the industry and how much its used proved to make no difference at all. Even copper holds it own better than Silver. There is so so much silver available that they make bullion in every imaginably form to sell to individuals. Really, why aren't we buying bulk copper now? Silver gets recycled for this market with an exchange cost during each step. We just keep rebuying our own silver back and forth.
All that I read about its uses and growth industry didn't come true. If it was so valuable for industry, they'll likely buy all the could now and store it. If it really affected the price of electronics so much, we might see the cost of a cell phone go down.
I know paper sets the price. And the dollar value. But the rest I'm in the "prove it to me mindset". I'm holding my own better with the dang copper pennies.
Disclaimer: I stack and I am converting to good silver and will continue.
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Or it can be about uncirculated, depending on how worn it is.
I knew it would happen.
<< <i>The issue is that governments don't want to be tied down to anything that can be accounted for by ordinary folks. >>
The government hates capitalism in the hands of the people. That should say something scary about politicians.
Silver is about 9X more plentiful than gold based on mining statistics over the past 10-30 years. That would suggest around 50 BILL ounces of silver mined over human history....or about 8 oz for each person on the planet. That comes to a whopping $152 per person. The difference with silver is that a large portion of that 50 BILL ounces is long gone. Estimates I've researched put the upper end on the remaining supply at 25 BILL oz while the low end is anywhere from 500K oz to 5 BILL oz. I think the real number is between 5 BILL to 25 BILL oz (max 780K tonnes). We still mine silver at 9X the rate of gold. And approx 60-70% of that silver comes from the byproduct mining of other base metals. If you look at the amount of copper being mined and still available it is massive compared to silver. 18 MILL metric tonnes of copper is mined each year vs. about 22,000 tonnes of silver.... a factor of >800. One would think that copper is every bit as recyclable as industrial silver. I'll estimate that about 600 MILL tonnes of copper has been mined since 1900. Using the same 50% upper usage rate for silver gives 300 MILL tonnes of copper in existence or easily recoverable (95% of copper has been mined in the last 115 years). Copper is 385X more available than silver. I don't find silver and copper anywhere near comparable either from price or volume. With a 385X difference how can you justify $3 copper vs. $18 silver? Same comment for gold where the price spread is 66X while the availability spread is <5X. Copper and gold are both priced about the same for their total availability. Silver is not.
Gold's 67 foot cube is not all the big in relation to the entire world of resources. Silver's cube would be be 4.7x that volume or about a 112 ft cube. That's still not a large amount to spread around the globe. Copper's cube would be an approx 814 ft cube. From a price X volume perspective gold and copper are potentially in the same ball park at over $1,000/per person on earth. All the silver above ground is worth <15% of the gold. Most of that silver is scattered far and wide with most of the world's > 1 BILLION ounce stockpiles long since dispersed. There are a few billion Asians and Europeans who have seen their economies decimated by paper money over the years. They appreciate having both silver and gold ounces in hand....even if on average it's at most 0.8 oz of gold or 8 oz of silver.
Just a quick thought since we are comparing an oz of gold to human population.....are humans scarce?
Which could bring forth the question, which is more valuable, an ounce of gold or a human life?
How far a tangent can this thread take?
Knowledge is the enemy of fear
Silver is much more rare than copper and, I believe, much less rare than gold. A stop into any pawn or coin shop will prove this. I also see much more silver than gold at garage sales. And this board has much more silver offered for sale than gold.
Silver is $19/oz, gold is $1200/oz and copper is 20c/oz. I think the market has these priced relatively correctly.
Knowledge is the enemy of fear
<< <i>The comparison doesnt bother me at all, it was just a quick thought that popped into my head. We could compare gold to anything that we may place a value upon.
Silver is much more rare than copper and, I believe, much less rare than gold. A stop into any pawn or coin shop will prove this. I also see much more silver than gold at garage sales. And this board has much more silver offered for sale than gold.
Silver is $19/oz, gold is $1200/oz and copper is 20c/oz. I think the market has these priced relatively correctly. >>
Actually, the market prices gold and silver higher if we're talking real metal and not promises for metal. Question is, "are physical prices keeping paper prices up or are paper prices keeping physical prices down?" If you don't know the answer to this question, you best avoid PMs altogether.
"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
Another question that could be asked is whether paper prices are keeping physical prices up?
Knowledge is the enemy of fear
And right now, it's NOT rare at all. I am not a chartist or educated in much, but there's tons and tons and tons of silver above ground , even if it stacked below the frost line.
The utility of these objects is to look at, and to sell someday for spending money that they can use for food, energy, clothing, or some other need or want.
They must not realize that no other object except silver medallions and chunks can serve this function of being able to be looked at or sold later for money.
Liberty: Parent of Science & Industry
Didnt "they" end this "fix' a few weeks ago?
What happened to the price?
Knowledge is the enemy of fear
<< <i>The comparison doesnt bother me at all, it was just a quick thought that popped into my head. We could compare gold to anything that we may place a value upon.
Silver is much more rare than copper and, I believe, much less rare than gold. A stop into any pawn or coin shop will prove this. I also see much more silver than gold at garage sales. And this board has much more silver offered for sale than gold.
Silver is $19/oz, gold is $1200/oz and copper is 20c/oz. I think the market has these priced relatively correctly. >>
Silver is tremendously rarer than copper (385X rarer). Above ground gold is at best 4.7X rarer than silver. They are not that far apart. It almost makes you wonder why their price is 66X difference. The most important point is that the total value of above ground silver is worth only 1/7th that of gold. That makes it rare enough in my book. Tons and tons of something doesn't mean it's common. Gold miners dig up 2800 tonnes (tons and tons) of gold each year. That hardly makes it common. When Warren Buffet was buying up his 120 MILL oz of silver (3750 tonnes) in the 1990's he moved the price up considerably just on his own. If purchasing 120 MILL ounces of silver can make the price move as much as it did for WB, it suggested that maybe there really aren't tens of Billions of silver ounces above ground. It's supply might be more inelastic than we think. $450 BILL will buy up all the above ground silver on the planet. It would take over $6 TRILL to acquire all the gold.
- Now is there any major nation that uses silver for, or in its 'current currency' as ongoing exchangeable money or coinage?
- There are other rare metals that could interchange with silver's place in the PM slot.
- Gold is universally known as a rare, money exchangeable thing, even if most don't know the exchange rate.
- Silver on the other hand is likely more known as value in a bracelet or a change, then a coin or bullion block.
- Are we "hanging on to" Silver as a money valuable thing because of its previous use in currency? Hanging on too tightly to a legacy like confederate money may leave you hanging, regardless of how much you want it to be valuable again.
- Now I think we are 100 years away from the general public realizing the gold, being a former backer of currency/money, is now a 'virtual reality' because the store houses are so much over leveraged, that one day it could just fade away as a memory in modern economies..... (that rely on nothing but faith)
Countries have minted millions of
coins in both gold and silver, so
how could they be "rare" ?
<< <i>
- Now is there any major nation that uses silver for, or in its 'current currency' as ongoing exchangeable money or coinage?
- There are other rare metals that could interchange with silver's place in the PM slot.
- Gold is universally known as a rare, money exchangeable thing, even if most don't know the exchange rate.
- Silver on the other hand is likely more known as value in a bracelet or a change, then a coin or bullion block.
- Are we "hanging on to" Silver as a money valuable thing because of its previous use in currency? Hanging on too tightly to a legacy like confederate money may leave you hanging, regardless of how much you want it to be valuable again. >>
No major nations use metal for their daily currency. They don't use PGMs or rare earths either. But that doesn't make them any less valuable. It is irrelevant to this conversation. The US used silver coinage daily until 1964 even though we were officially off any sort of silver standard since 1900. That was 65 years of using something as money that to all but strict constitutionalists "wasn't even money."
What other metals could interchange with silver's current slot? (you're going to need it to cost no more that $20/oz and have an annual mine supply of 700 MILL oz mined per year to help match current demands). It certainly doesn't hurt that people have used silver as currency/savings/wealth for thousands of years and that silver has numerous key industrial uses that are hard to duplicate. It may be that most above ground silver in the world is in jewelry form. It really doesn't matter what form it's in. It's still silver and still worth about the same. As far as the confederate money comparison, I didn't realize that confederate money is worthless today. A lot of it is very valuable and nearly all of it is quite collectible. The term "rare" can be very misleading, especially if there is little to no demand for a "rare" item. There are numerous collectibles that are very rare, yet the number of collectors for them is just as rare. Someone's collection of Hummel Figurines or Beanie Babies might be rare for one reason or another..... but I'll take a few dirt common monster boxes of ASE's instead and take my chance. There's millions of common date BU Morgan dollars out there. Yup, they aren't rare. But the demand for them is enormous making them very liquid and a store of ready value.
Gold and silver coins minted in the millions may not be technically rare/scarce by the Sheldon Coin Rarity sale (R8 to R5) but they have something that Sheldon rarity can't compete with.....that is demand by hundreds of millions to billions of humans. That "rare" US coin with 75 pieces known is desired by at most hundreds, or maybe even thousands to tens of thousands of collectors/dealers. Those millions of ASE's, silver Maples, silver Libertads, Englehard rounds and bars, LBMA and Comex certified bars, etc. have a very large demand base around the entire world. The average human can own up to 4 oz of silver if evenly distributed. It's not a mind-boggling quantity nor cost ($75).
Your motor vehicle or house isn't rare either. But odds are if you bought them new they cost a lot....yet there are millions of them out there. A $600K home costs a "tonne" of silver today. Silver has been around $18.60/oz recently. There could be less and less coming to market as it's costing most silver/base metal miners around $22-$28/oz (all in costs) to mine it.
Copper "doing better" than silver is certainly highly dependent on the time frame being analyzed. If you look at the copper and silver bottoms from 1999-2001 you will find that both metals are approx 4.5-4.8X the price they were back then. Very comparable.
Where's CaptHenway ?
<< <i>Gold is present in very small quantities in the earth's crust such that over the course of human history all the gold ever mined can fit into a 67 ft. cube. Figure approx 155-165,000 tonnes, or approx 5 BILL ounces. About 0.8 ounces for every person on earth ($1030 per person at current prices). That's pretty scarce imo.
Silver is about 9X more plentiful than gold based on mining statistics over the past 10-30 years. That would suggest around 50 BILL ounces of silver mined over human history....or about 8 oz for each person on the planet. That comes to a whopping $152 per person. The difference with silver is that a large portion of that 50 BILL ounces is long gone. Estimates I've researched put the upper end on the remaining supply at 25 BILL oz while the low end is anywhere from 500K oz to 5 BILL oz. I think the real number is between 5 BILL to 25 BILL oz (max 780K tonnes). We still mine silver at 9X the rate of gold. And approx 60-70% of that silver comes from the byproduct mining of other base metals. If you look at the amount of copper being mined and still available it is massive compared to silver. 18 MILL metric tonnes of copper is mined each year vs. about 22,000 tonnes of silver.... a factor of >800. One would think that copper is every bit as recyclable as industrial silver. I'll estimate that about 600 MILL tonnes of copper has been mined since 1900. Using the same 50% upper usage rate for silver gives 300 MILL tonnes of copper in existence or easily recoverable (95% of copper has been mined in the last 115 years). Copper is 385X more available than silver. I don't find silver and copper anywhere near comparable either from price or volume. With a 385X difference how can you justify $3 copper vs. $18 silver? Same comment for gold where the price spread is 66X while the availability spread is <5X. Copper and gold are both priced about the same for their total availability. Silver is not.
Gold's 67 foot cube is not all the big in relation to the entire world of resources. Silver's cube would be be 4.7x that volume or about a 112 ft cube. That's still not a large amount to spread around the globe. Copper's cube would be an approx 814 ft cube. From a price X volume perspective gold and copper are potentially in the same ball park at over $1,000/per person on earth. All the silver above ground is worth <15% of the gold. Most of that silver is scattered far and wide with most of the world's > 1 BILLION ounce stockpiles long since dispersed. There are a few billion Asians and Europeans who have seen their economies decimated by paper money over the years. They appreciate having both silver and gold ounces in hand....even if on average it's at most 0.8 oz of gold or 8 oz of silver. >>
Well stated.
To put your 25 billion ounces into perspective that 780,000 tons is the production
of one big iron smelter for a couple years. I believe the real silver overhang is in the
range of 3 or 4 billion ounces making it possible for a single iron producer to match
it in only a few months. This amounts to perhaps a day or two of world iron produc-
tion.
Iron production is constrained by demand and could easily be ramped up five fold in
less than a decade. Silver production is constrained by availability and costs. Even
much higher silver prices would have little effect on production.
Silver price is controlled by paper but much more it is inertia. If prices increase percep-
tions can change but people are used to silver being chea. It will probably require a
physical shortage to increase prices.
Silver is a bet on the success of man because silver will have a high tech metal for the
foreseeable future.
I expected $18 to be tested again before a run. Even if $18 doesn't hold (it will), the
stars are beginning to align now.
<< <i>
To put your 25 billion ounces into perspective that 780,000 tons is the production
of one big iron smelter for a couple years. I believe the real silver overhang is in the
range of 3 or 4 billion ounces making it possible for a single iron producer to match
it in only a few months. This amounts to perhaps a day or two of world iron produc-
tion........ >>
I've seen that 3 to 4 BILL oz figure as well. If that's the case then rather than 4 oz of silver per person on the planet, they can each have 1/2 to 2/3 of an ounce ($10-$13)....which is actually less than the availability of gold at 5 BILL ounces. Wouldn't it be interesting if the above ground supply of silver was less than that of gold?
If stable industrial silver demand only supports $12-$14/oz, the miners have a lot of work yet to do to cut their "all-in" costs by half. There's also a base world-wide demand for jewelry and bullion silver that would be hard to eliminate. One could also wonder how silver got to $3.60/oz around 15 years ago if stable industrial demand was much higher. Silver tends to follow the economy much more closely than gold. Silver bottomed in 1993 and proceeded to follow the stock market higher until it peaked in 1998. I think all the gamesmanship with gold carry trades, LBMA, Brown's bottom, and other shenanigans that tanked gold from 1998-2001 did much the same to silver. As silver was trying to get off the mat with gold, the 2000-2003 recession forced it down yet again.....while gold advanced +53% on a weakening dollar.
<< <i>One could also wonder how silver got to $3.60/oz around 15 years ago if stable industrial demand was much higher. >>
Guessing that's because industrial demand is not limitless...
I think a big reason for the continued gold-silver skew is the fact that the 0.01% don't want to mess with silver because it's too cumbersome in serious quantities, and have deep pockets. With the ultra-rich out of the picture, it comes down to us fickle peeps, as shorecoll said.
<< <i>I don't think Silver is rare enough to even be on the PM category. They should just change the content of that category or just take silver out, and have simply; 'Gold.' Ok, its too expensive to make coins out of, and value to unstable to make a $30 coin. But that's been the case for decades. Silver or gold for that matter in spending coinage is long since a memory and no relationship on Silver now.
I mean all the hubbub about silvers worth in the industry and how much its used proved to make no difference at all. Even copper holds it own better than Silver. There is so so much silver available that they make bullion in every imaginably form to sell to individuals. Really, why aren't we buying bulk copper now? Silver gets recycled for this market with an exchange cost during each step. We just keep rebuying our own silver back and forth.
All that I read about its uses and growth industry didn't come true. If it was so valuable for industry, they'll likely buy all the could now and store it. If it really affected the price of electronics so much, we might see the cost of a cell phone go down.
I know paper sets the price. And the dollar value. But the rest I'm in the "prove it to me mindset". I'm holding my own better with the dang copper pennies.
Disclaimer: I stack and I am converting to good silver and will continue. >>
What would you suggest as a replacement/alternative metal that isn't already available to the public?
Apmex says its: Gold, Silver, Platinum, Palladium
Some say its more like this:
Br
Ba
I say the Precious Metal list we use is made up. And we really only concentrate on 2... So who's to say the so called second spot can end up being something else.
The only real list is a list via rarity and it goes past 4 or 5.