Silver MapleOver the weekend we gave SD readers a unique inside look at the developing shortage in silver from a wholesale perspective.
On Monday, we updated readers that the shortage appeared to be spreading to Canadian Maples, as wholesale premiums had been raised several times throughout the day.
The shortage of Canadian Maples has now been confirmed, as our primary suppliers at SDBullion have confirmed with us this morning that the Canadian Mint has begun allocating the supply/ purchases of 2013 Canadian Maples

As we now have a confirmed shortage in the 2 most popular official silver coins, look for premiums to continue rising in the silver maples, as well as to spill over into other retail products such as 1 oz rounds, 10 oz bars, and 90% coins. 

With silver demand skyrocketing while the metal continues its now 21 month consolidation, look for absolutely monstrous demand to surface as the next leg of the bull market kicks into gear over the next 6-12 months, particularly as silver clears $40 and again nears its all time nominal highs of $50.

It is very possible that extremely tight silver supply and ever increasing physical to paper premiums will continue to escalate throughout the duration of the coming bull leg.


SD Bullion

    • No worries. I read silver should be anywhere between 50 and 1000 dollars imminently.
      The cartel still has an (admittedly loosening) death grip on pricing. The fact that paper and metal prices are diverging ( making it more expensive for us to buy but not necessarily as advantageous to sell perversely enough) is a step in the right direction.
      I dearly hope it portends to the explosion many in the blogosphere have been cheerleading now since the may smash from 50.

    • @NetRanger808: I’ll give you my take on the spot price of silver.  We have to remember that the spot price is the PAPER price of silver.  The metal price (physical) is what you are paying for your silver eagles, rounds, bars, junk, etc.  I have written previously that the silver buffs are, for the most part, unclear about the PREMIUM price of silver.  I have had numerous buyers call sellers “greedy”, “ripoffs”, and worse, because the sellers were not willing to part with their product without a legitmate premium attached.  Be advised that the premiums are going higher, much higher.  The spot price may not act accordingly, but for you to go to your LCS and buy silver, you will experience what a premium is…the true VALUE of silver at that moment in time.
      Hope I’ve helped.  Keep stacking.  If you can find it, buy it, period….regardless of the price.  Soon, very soon, it won’t be available at any price.  T.I.O.L.I. time IS HERE (take it or leave it).

    • I have heard that some LCS’s are paying over spot on a buy back for Silver eagles etc.  That has to be taken into consideration as well when you are considering the high premiums.  I do not believe that there will ever be a shortage so severe that you will not be able to buy silver.  You will just pay more for it.  At least that is the theory.

    • The price doesnt rocket because the biggest shorts of all time in any commodity are held buy JPMorgan, with new naked shorts being added at will- and enabled by the corrupt CFTC.
      Be sure to email Bart Chilton, Jill Sommers, Mark Wetjen, Gary Gensler and Scott Omalia, and ask them why silver is being apportioned, if its their job to regulate the market.
      I eagerly await the day when the biggest commodity scandal of all time -silver- gets its own nice little expose ala “The Untouchables”, starring our CFTC Commisioners.

    • Retail silver coin bullion products are temporarily constrained by the availability of silver blanks called planchets.  Silver bars and the like are still readily available.  It’s that only a few companies like Sunshine Minting out of Coeur d’Alene, Idaho provide silver planchets to the U.S. Mint and the rest of the industry.  The availability of silver planchets is the choke point in the supply chain.

    • I tend to favor ASE when purchasing rounds,they are nice to look at. This morning tho I said the hell with it and got me some OPM bullion rounds off the Doc for 79 cent over spot. Not much to look at but, it will help keep the wolf away.

    • @netranger – options expiry end of month. The boys are dumping shorts to drop price to push longs into liquidation instead of delivery. Expect move back up after options expiry

    • @UglyDog …  “The availability of silver planchets is the choke point in the supply chain.
      Not trying to ‘dis’ you here … just saying … but … what do planchets have to do with the complete disappearance of 90% ‘coin silver’?
      Fess up now, UglyDog … you haven’t been sipping any cool-aide lately … have you?

    • @PatFields   Not drinking any Kool-Aid.  Just keeping it real.  Tom Horn in his interview (see Doc’s post from 1/23) revealed that one buyer cleaned out the wholesale market of junk bags.  Same thing happens periodically at the low end of the $20 gold market where one large buyer comes in and buys up all the Saints and Libs from the wholesale bullion dealers that supply retailers like APMEX, Patriot Trading Group, CMI Gold and Silver, and the like.  It doesn’t take that much money to do this.
      If there was a genuine lack of silver then silver bars would not be available.  But, silver bars are still readily available.  What’s not available are the retail products made from silver panchets.  
      The PM community loses credibility when it crys wolf when there is no wolf.  
      There will be a silver short squeeze.  Just not today.  TPTB have to blow through the entire SLV hoard first.  And indications are that is occurring.  We’re just not there yet. 

    • “You will just pay more for it.  At least that is the theory.”
      Indeed.  The question is, “What will we be willing to accept as payment for our silver?”.  If the US dollar were to crash, for example, who would accept dead fiat for live silver?  No one, so if that is what one is planning to use as payment, we can see that silver could not be bought at any dollar price.  Personally, I am thinking that the US dollar will not crash but it will just slowly melt away… like its buying power does via its built-in inflation.

    • “What’s not available are the retail products made from silver panchets.”
      So, what are these “panchets” made from?  Silver bars?  lol

  1. What are the premiums now on the silver maple?  Last time I checked silver eagle premiums were 5 bucks over spot or there abouts?  That should temper the demand pretty well?  If we don’t get the expected upsurge in silver prices these high premiums should lower demand quite abit.  21 months of consolidation plus 3 or 4 months more will probably make for a launch pad from hell. The Feds won’t be able to prevent the launch for much longer.  At least that is my thinking.

  2. Hi all, first post here at SD. have been long time reader and decided to join up. this smash on pm’s is typical during the time of unemployment reports and a little more drastic with the tight supply. I agree with crissy, buy before you can’t!

    • I noticed they “estimated” the claims of 3 stated including the most populous, california, hence the bullshit low number.
      I scooped up 40 silvee bullet coins today for my brother and I. I did so assuming we’ll see premiums going up on everything.
      The news that refiners are apparently working overtime, mints are working overtime (when they have material with which to mint) is great. But.. then we see price action – which has been decent but not great.
      As we’ve said a million times… the corrupt system will work, until it doesn’t. When everyone is panicing to get some I’ll have mine. It can’t come soon enough.

    • I believe they use domestic silver as much as possible and go elsewhere when they need to. At this point who knows.
      Frankly everything points to some sort of oh shit moment creeping closer – I’m not sure we are in a position to get the true state of the union from the canadian mint, the US mint, or anything in any way linked to the government.
      CHANGING GEARS, regarding the planchets being the source of the squeeze here. That in this case is undoubtedly true, but let’s not forget that junk silver supplies have absolutely evaporated recently.
      Every product which suddenly disappears will do nothing but put more pressure on the remaining products. Keep calm and SLAVE ON! lmao.

    • @Canadian Dirtlump said…”junk silver supplies have absolutely evaporated recently”
      My enthusiasm in buying up quantities of Junk Silver earlier this month apparently created some issues.  I apologize for any inconvenience this may have caused.

    • @silverrrrr    Yeah, it’s not actually the Perth Mint, but a silver refiner in Perth that supplies the Perth mint.  There are three refineries that supply planchets to the Mint: VennerBeck Stern Leach in Rhode Island, Sunshine Minting in Idaho, and Goldmark in Perth, Australia.

    • That used to be the law that only U.S. sourced silver could be used in ASE’s.  Congress changed the law a few years ago.  Entire U.S. silver production does not satisfy demand for silver eagles. 
      I suspect a few large buyers with some very deep pockets made a planned purchase of ASE’s at the beginning of the year.  When you have enough money and clout you can get direct delivery from the mint.  Saves on the retail markup.

    • “…but let’s not forget that junk silver supplies have absolutely evaporated recently.”
      That they have, Lump.  No US 90% silver coins available in the local shops I frequent and the on-line retailers have a lot of those “out of stock” notes on many of their junk silver products.  Makes me wonder what is happening to the 90% silver coins out there.  They being melted down and refined into .999?

    • With higher silver prices, I suppose the relative refining costs (junk to .999) will diminish.
      But at which point does that become a viable option for refiners? Yes, higher premiums will help.
      The really large silver buyers (mints) in North America may be running dry now, mostly due to increased demand, not reduced supply (but lack of comex stock I suppose). But they’re monopolists, they can wait for a large delivery and play catch-up. We’ve SEEN that happening real-time here on SD. Small buyers will be served until the bitter end I think, as when THEY run out, they get loud. They open silver booths at local markets, they will start offering well above spot for junk, let alone 999. If they feel demand for their .999 products, they’ll remelt the junk, or even sacrifice slow moving .999 that receives too little premium. Says, you have 10,000 stupid rounds in stock with your local dealer’s ugly face on it. Customers pay $6 over spot for Eagles/Maples, and just $3 for the rounds. If the reworking to a nicer round (like the hyped silver shield series) costs $3 and sells for more than the Eagles, you’re going to do that. To move the stock, and make some premium.
      If we are really reaching the point where junk coins are being reworked to window dress with ongoing .999 supply, that would be huge. We’ve read on here that some local dealers have already bumped their sales premiums on junk. Perhaps some shady traders were offering them well over spot for attractive quantities, and by lack of volume on hand they just decided to bump over the counter premiums even more?
      In June (right at the price bottom) I had a huge score at a stamp&coin shop downtown. I was sold 72% and 80% junk coins well under spot, some calc error by the shop lady. I didn’t buy as much as I might have, but the deal was still sweet. 
      Not long after I returned there to get more, and the shop owner basically told me he’d gone from SELL to HOLD, as the supply was drying up. I was right present when a lady who scavenges flee markets came to turn in many hundreds of coins. But apparently that has become a rare occurance. Normally the shop kept quite a few kgs of junk in stock, but may be playing the sell only at high prices game. If supply dries up, even if you pay even less for it than the refining industry, that’s the profitable way to go.
      The local bullion dealer though, still offers -5% for 72% junk, and sells at +3.5%, as per usual. They may be sitting on really old (cheap) stock, not feeling the market?
      An online bullion dealer that used to have a whole assortment of international junk coins, now only offers the most generic ones. All the fancy stuff is gone from their website. 
      Are we seeing what we want to see or is this really the start of a drought?

    • @XC Scater … “shady traders were offering them well over spot for attractive quantities”
      What’s up with THAT? ‘Spot’ is an induced financial hallucination. So, a Free Market dealer seeking TRUE price discovery is ‘shady’?
      As it was often put in the 1960s … Dude, check yourself out.

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  4. It should be remembered that these ‘official’ mints are part of the same organization that would rather people keep using fiat money rather than trade it for physical Silver or Gold, so they have an incentive to control how much metal is made available to the public.  Of course they have the means to acquire more supply, but that would mean more metal in the hands of the people, and an increase in the price of the metals–two things that they want to avoid if possible.
    It seems perfectly logical that the ‘official’ mints would ration or even stop selling precious metals to the public (if they could get away with it).  Of course, such a move would be seen as clear evidence of manipulation and price control, and actual demand for the precious metals Silver and Gold would increase even more.  It’s a Catch-22 situation for them.

  5. It would be good to know how much physical is still actually leaving the COMEX system in the form of physical. And where it’s going to now. I bet there are a lot of buyers going directly to the mines, and paying them more than the COMEX system can, or will. Who cares about “good delivery” if you can check quality yourself? It’s not rocket science. It’s been done for centuries.
    For the paper price to rise, more longs need to be bought than shorts. Longs require people actually interested to downpay part of their their hut on the Titanic.

    • Countries like China buy gold ore concentrate directly from the mines in Alaska for refining back in China.  All this stays below the radar.  What will happen is one day China will announce that their gold reserves have tripled. 

    • “What will happen is one day China will announce that their gold reserves have tripled.”
      Which will likely be the very same day that they announce a new Chinese or world trade currency that is at least partly backed by gold.  They are not collecting this stuff because it is pretty.

    • Actually if you look at it over the past year and a half or so, you’ll notice that for the same silver prices, the GSR is actually drifting higher. Before the 2011 peak, GSR was significantly lower (like 43 vs 52) for a given price level.
      This means a few things possibly.
      Silver is actually remaining to be a good deal vs gold. It’s more so a no-brainer even than Feb 2011 when the GSR was 43. 
      I used to plan to trade the GSR with physical (mini-)swaps, and even keeping a percentage in gold to hedge against GSR or even price dips. However, as the beach ball is kept under water longer and longer, deeper and deeper, I see less and less likelihood that between 2013 and the optimal exit point (into gold or real estate/land), there will be tradeable dips in the GSR. Sure, any bull market has corrections, but with silver being relatively suppressed more so than gold, for such an extended time…it just might remain hotter than gold, even on price dips. We are seeing serious dip buying now, shortages at what many regard dips. I for one bought what I could at the pre-xmas dip, all silver. 
      I am not a very experienced silver guy (lost a lot of cash on derivatives before biting the bullet and going for tiny amounts of physical), but I have a hunch that this extention/delay only reduces the target GSR exit point. Increased likelihood (or is it just hope) that the GSR will undershoot what’s sensible and sustainable, and hit lows between 5 and 10. If a buying frenzy were to coincide with a serious (can’t get your hands on any) shortage, there could be a crazy price spike, or just a GSR dip as greedy money shifts from gold to silver. It will take strong hands to hold on to silver as the GSR crossed the 10 line. But if real estate is holding up decently, it may be worth to wait a little longer, and not start selling too soon. At least set good sell price price target for the silver you have.
      Hey, there should be an international PM specific ebay/craigslist alternative. Less expensive for sellers, and aiding to keep sale prices healthy to getting sellers more than a shop would give. Right now, you can’t get decent money for silver bars here in Europe. People like me are basically forced to hold on to their bars awaiting preferable VAT climate changes (VAT/premiums on coins to level with bars). Lower spread in physical buy/selling should really make the market more healthy. We’re talking about a commodity for crying out loud, how hard should it be to get your money back if you didn’t overpay?

  6. 3 things caught my eye today
    Japan and China and eye to eye, toe to toe, with fingers on the trigger
    SEC tells Egan Jones their right to assign ratings is curtailed—EG was bragging a bit too much about their performance
    11 nations in the EU are about to impose a .01% financial transaction tax. Supposed to raise $75 billion a year.
    These events may not affect PMs but they are pretty important overall. 

  7. I really don’t thinks their is a silver shortage now. After reading and listening to numerous articles and videos, I think the dealers are the ones that are making the money and putting out false information and making a big deal out off rationing and suspension of the coins. There could be other reasons for it.
    All I’m seeing right now is the dealers making the money from us.
    Keep Stacking, It will eventually Be Our Turn when The Derivatives Collapse.

    • Regardless of the reasons being given (or lack of reasons), by definition rationing and/or suspension of sales of something is a shortage (ie, supply cannot keep up with demand).  Usually, this is resolved by higher prices (so that more sellers will be willing to sell).  But the ulterior motive is likely that they just don’t want people to be buying Silver right now.
      Unlike Apple’s Mac computers, minting Silver coins is not a high-tech process that is dependent upon a myriad of suppliers to make things come together.  All that it required is the basic raw material: ample supply of pure physical Silver.
      Have any of the mints even come out to try to explain to the public why rationing and/or suspension of sales of Silver coins have been necessary?

    • Mint enjoys being opaque.  Mint is short on planchets, but I think they may be angling to increase their seigniorage on ASE’s, because they lose money minting pennies and nickels now.

  8. Its important to truly see the limited amount of silver available each year for investors. If we take just over half of the people of world (4 billion) and see how much each person can get of available silver for investment (400 million ounces) each year the grand total is only 1/10 of an ounce of silver per person per year. So, today each person would only be able to buy $3 of silver a year, and it would take them 10 years to get a full ounce of silver. That 400 million ounces per year does not take into account the big silver buyers, institutions, etc.. and the fact that if one was to buy silver they generally would buy more than one ounce per year. Something to think about

    • @MaryB     Mint is run by the government.  They don’t think like a private business.  Mint places their planchet order off of previous years’ Jan demand.  I doubt they do any forecasting other than that.  Mint is out because they did not properly forecast demand.  But, then again, they have absolutely no incentive to do so.

    • Thanks for being reflective and thoughtful. Some folks would be emotionally defensive (thank God most of THEM have moved on to irk other lists, it seems). Also, thanks for being mindful to ‘keep it in the family’. If Plantation Scrip IS somehow kept in circulation and we HAVE to use the crap for ‘bills’, we’ll need to try our damnedest to find young Savers to pass our ‘heritage’ on to, rather than succumb to trading with elitist agents.

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