silverWhen I look at the $8 billion that’s gone into gold funds THIS month, you couldn’t begin to get that into silver in a year!  There’s only 25 million ounces of silver on the COMEX and that’s worth only $400 million; you’d clean out the COMEX!
I think only 20% of silver is available for investment, so that’s only 160 million ounces!

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Submitted by Rory Hall, The Daily Coin:

Mining silver and gold is a tough business. In order to mine either of these products (money) you need a steady stream of capital into your operation. As we have reported on a number of occasions throughout 2015, and into 2016, that capital is drying up or has left the market completely. This has been causing stress and strain within the mining industry, but not like you might think.

Some of the worlds largest primary silver producers are reporting record mining years. In other words, these mining companies have been digging more silver out of the ground than ever before. Most of these mining operations are located in Mexico, the worlds largest silver producing country, while a lot of the rest of world’s silver producing countries have shown slight declines or flat production for 2015. The mining operations in Mexico have been “high grading” their mines, meaning they are digging out the most productive part of the mine possible. This does two things for the company. It cuts cost, which is great when you are dealing with a market that has suppressed the price of both silver and gold. It also means these mines are grabbing all the easy-to-mine product. If you dig out all of the easy product this year that leaves the harder, more expensive stuff next year.

This is exactly where we find ourselves today. These mines have stripped all the “low hanging fruit” within their operations. This can not and will not last. There is only so much “easy pickings” to be had. What this also does is allows the mining operations to continue operating instead of shutting down. With the current rates for gold and silver being at multi-year lows a lot of these companies have cut their profit margin by significant percentage points. One company recently announced a 44% drop in their year-over-year profits while at the same time reporting a new record in production. This does not make for a sustainable situation.

When I look at the $8 billion that’s gone into gold funds this month, you couldn’t begin to get that into silver in a year! There’s only 25 million ounces of silver on the COMEX and that’s worth only $400 million; you’d clean out the COMEX! I think only 20% of silver is available for investment, so that’s only 160 million ounces [annually].- Eric Sprott

While this is happening, we see, globally, a massive surge in retail investment demand for both silver and gold. This demand became overwhelming to the market in July 2015 when both the U.S. Mint and the Royal Canadian Mint were sold out of the two most popular silver coins in the world. While both mints moved to rationing sales for the remainder of 2015 both mints set new record sales volume!! That’s real demand! Oh, by the way, both of these mints are still rationing sales for the American Silver Eagle and Silver Maple Leaf coins and both are on pace to set another sales volume record in spite of rationed sales!! What would the volume be if these mints opened up the sales and allowed the market to determine the sales volume? We will never know.

So far, we’ve had about 100 tons a month going into the world’s ETF’s. If we annualize that, that’s 1,200 tons of gold purchases this year just for ETF’s. Last year they sold 138 tons, so you have a total delta there of 1,338 tons in what’s a 4,000 ton market! Which was in balance last year. So where do you come up with 1,300 tons of gold to satisfy that one change in demand? – Eric Sprott

And let’s not forget that the Shanghai Gold Exchange moved the equivalent of 100% of global gold mining production in 2015. Got physical?

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Below is an in-depth discussion with Eric Sprott, Sprott Global ResourcesSprott Asset Management and Sprott Money regarding silver, gold and the unfolding cashless society.

MP3 Download/Listen

 

 

  1. Ok Eric, so buy all the Silver already and quit talking about it. I’ve been reading this crap for years now. These PM’s articles are all being recycled year after year. Guess what stackers, we’re not in charge. See you next year when, wait for it, Sprott will tell us yet again how the Comex has no metal….

    • Sprott has a better grasp and world view than is evident in you ignorant statement. You’d be better off with an open mind and a shut mouth.

  2. The ratio of silver to gold is approx 82 to 1. Dark horse for sure. Less silver inventory to purchase vs. gold inventory. Keep stacking at these low prices, the near future bode’s well for silver. Keep stacking the shiny.

    Keep stacking and packing the metals.

  3. Ranting Andy Hoffman is another “High Speed Cheerleader” who is nothing more than a PM’s dealer with a broken Crystal Ball… Cue-Up Bo Polny in 5…4…3…2… He’s due for another worthless prediction…

  4. Well, you can bad mouth Eric all you want but the data is the data.  The market has been manipulated which renders typical prediction methods null and void.  The only answer is either change the laws or continue to accumulate until the manipulators run out of the ability to manipulate.

    I chose the former option and while some yell about all this being just smoke and mirrors, my PM stocks are up over 50% in just over 45 days.  This ride will have a few bumps but overall I think its gonna be spectacular. Eric Sprott is one of the guys I trust.

     

    • Data is important. Case in point,

      “For each ounce of physical, deliverable gold that is registered with the Chicago Mercantile Exchange (the key market for gold contracts), investors have claims over another 542 ounces, a record level.

      Van Dyke said the spike is distorting the gold price because for each derivative contract — which is a bet on the price going up or down — investors will also hedge their position in case the opposite occurs.

      “Those hedges can push prices in different directions,” she said. “A comparison is mortgage-backed securities, when the proportion of derivative contracts was exponentially higher than the underlying actual mortgages they were built on. We ended up having a financial crisis and the majority of those contracts had to be painfully unwound.”

      She added: “I don’t want to forecast that kind of doomsday here, but in the past two years the ratio of contracts has multiplied, and the number of registered ounces has fallen hugely, leaving the ratio at unprecedented levels. It is cause for concern.”

      If that system were to break down, the “true” higher price of gold could be revealed, she argued.”

      http://www.thesundaytimes.co.uk/sto/business/Finance/article1672690.ece

  5. So why don’t some of us stackers work together to buy a futures contract for silver and then request physical delivery?  We could exchange our silver for coins  at a mint of our choice and then do it again next time we have more money.  A war of attrition is better than just talking and complaining.  Get organized and do something.  If enough people did it we could drain the COMEX.

    • Do you have an armored car and enough Fiat for 5,000 ozs? There are numerous other fees involved too.

       

      And why do you suppose the COMEX would honor your REQUEST for delivery and not just settle out the contract with cash?

    • Sonargodz take your profits out of the miners and buy physical!

      Been doing it for over a year and every 1% buys 1000 oz’s!

      They are going to get it every which way we can do it!

      There are 14 of us together total and we pooled our money together and are going to put a strain on this manipulation!

      On a roll this year so far over 9% a week for the first 8 weeks so the drain on their supplies should be historic by years end!Let us see how much of this they can take and please spread the word cause what you say is what we are doing times 100:)gl

    • Would love to do that if…..

      1.  Had the partners I trusted

      2.  I believed the rule of law would be followed and at some point we wouldn’t get shafted.

       

      Unfortunately, I suspect the collapse is close at hand and anything you haven’t got your hands on is going to be long gone.   Before order is restored, folks with lots more clout than us is going to have made a whole new set of rules which won’t view our “contract” (piece of paper) in exalted and enforceable status.  In short, they will own what they have their hands on (gold and silver) and we’ll own what we have our hands on (a paper contract).

    • @MrBaits

      This is what the Hunt’s brothers did.  If you legally own it they must legally deliver.  The issue arrises as they have more contracts for silver than silver itself.  If you call for delivery and they can’t meet your total call, then they will deliver what they have and settle in cash for the rest and commodity trading in gold and silver will end as we know it.  One day it will happen and the system will be revamped.  That’s when you’ll see the real market for gold and silver, but seriously the powers that be will not let that happen.  Look what they did to the Hunt’s brothers!!!!  They did nothing wrong and were called in to congress for trying to corner the silver market.  They were slapped on the hands,  the governement put a stop order on all long positions which crashed the price and almost bankrupted the hunt’s brothers.  Why did the government get involved.  well they are controlled by wall street.  So Good Luck cornering the market!!!!!1

  6. It seems that the FED naked shorters have left gold alone lately , and are concentrating solely on manipulation of the Silver market since it is so much smaller. They have succeeded in holding down silver temporarily, but the ‘ripple effect’ is not translating into the Gold market as it has in years past, another sign that the end is near.

     

    Death to the Moneychangers

    • OH SNAP “Bait’s is come off me hook!” !!!

      “Who loves ya Punkin’- that’d be the Commercials Thank you very much”

      Next stop….$14/$1150

       

    • To really seal the $14 deal- I need Blow Poclair to post by Thursday!

      Blow- my GDX Puts are in need of your “Bullish >$1400 this Month” call!!

       

    • I guess you guys are too stupid to know what “SEEMS” means……all of you.

       

      SEEMS AND IS, ARE NOT SYNONYMS, no matter how much you cowards try to pretend they are.

       

      Also, what kind of buffoon attempts to correct a statement MADE ABOUT THE PAST, with statistics from the present?

       

      How cowardly.

  7. they seem to have lost control over gold, and have regrouped to make a last stand over silver.

     

    when the stock market crashes further and when the East starts to set the PM prices, we will see whether the FED is able to keep any longer.

     

    true, the FED has put up a brillant fight in prolonging the fiction.

  8. sorry to go off topic… but an important tidbit of info.

    just received an email from paypal. it is starting a marketing campaign referring to itself as “new money”.

    to me this is an extraordinary and obviously deceptive strategy. and no accident that it is happening right now. it looks like they might be trying to get paypal to play a part in a future currency system after the SHTF.

    • agreed @ranger. i have used ebay/paypal only twice in the last year, and i have significantly reduced the number of credit card purchases – only when necessary. i use cash when possible. (according to government propaganda i am a potential terrorist.)

      choke their money supply.

    • @silver-nurse

      I use paypal all the time and have not received that.  it may be a scam or it may be their new service that is trying to compete with square which allows you to transfer money from your wallet to someone else like the lawn boy.  (have you seen the commercials), But I would be cautious as it may be a scam try reporting it.  The only thing that makes me upset with paypal is they charged me 8% for currency exchange without my knowledge.  I’m still fighting it but it’s like fighting the IRS.

  9. Sit back and enjoy my “Artisan Friend“, the Shifty Asians in Hong Kong coming shortly, then our Proper Londoners and then…yes and Then- THOSE NEW YORK $#%$!#%$#@….
    $14 coming….

    See ya in the am.

  10. Morgan Stanley is the largest institutional shareholder in PSLV.

    Owning THREE TIMES the silver in that trust that Sprott does.

    And is a large holder of shares in PHYS as well.

    And they can redeem their shares in those trusts for physical anytime they want.

  11. Morgan Stanley (MS.N) has sold the majority of its global physical oil trading operations to Russian state-run oil major Rosneft (ROSN.MM), becoming the latest Wall Street firm to dispose of a major part of its commodity business.

    The deal represents a bold move into the U.S. market by Russia’s top oil producer, which is headed by Igor Sechin, a powerful ally of Russian President Vladimir Putin. The Russian state owns almost 70 percent of Rosneft.

    The deal includes more than 100 traders and shipping schedulers in London, New York and Singapore, over $1 billion worth of oil, and the bank’s 49 percent stake in tanker company Heidmar.

    The terms of the deal were not disclosed. Morgan Stanley said it was not expected to have a significant impact on its financial results.

    The purchase will not include Morgan Stanley’s oil storage, pipeline and terminalling firm, TransMontaigne Inc., which may help avoid significant scrutiny of the deal in Washington.

    The United States has often been hostile to state-owned companies from countries such as Russia and China buying up U.S. energy and infrastructure assets.

    News of the deal raised alarms in Washington. Senator Edward Markey, a Democrat who is a member of the Senate Committee on Foreign Relations, called on the U.S. government to “closely review” the deal to ensure that a Russian state-owned oil company “cannot manipulate our markets and harm the United States and its citizens.”

    Morgan Stanley plans to submit the sale for review by the U.S. Committee on Foreign Investment (CFIUS), an inter-agency executive branch panel that examines foreign investment for potential threats to national security, a source familiar with the matter said.

    The sale is also subject to regulatory approvals in the United States, the European Union and certain other jurisdictions, the bank said in a statement.

    The deal comes as U.S. relations with Russia have been strained in recent months over Moscow’s decision to grant temporary asylum to U.S. spy agency contractor Edward Snowden and the conflict in Syria.

     

    A spokeswoman at the U.S. Treasury declined to comment on the sale.

    Morgan Stanley has been trying to sell or spin off its physical commodity business for over a year as it faces increased regulatory pressure and higher capital requirements. The bank said it would continue to look at “strategic options” for TransMontaigne.

    Restrictions on proprietary trading introduced to prevent a repeat of the 2008 financial crisis have made commodity markets less attractive for many banks, with total revenues in the sector down sharply on Wall Street in the last five years.

    Deutsche Bank announced two weeks ago that it was largely exiting commodities trading, while JPMorgan is selling its physical trading operations.

    Goldman Sachs, which pioneered Wall Street’s entry into commodity markets alongside Morgan Stanley almost three decades ago, has also looked at selling parts of its business, but has repeatedly said it remains committed to commodity trading.

     

    “I think it’s a confirmation of a trend that Wall Street is exiting the business,” said Craig Pirrong, a finance professor at the University of Houston and an expert on commodity markets.

    “Rosneft has indicated it was going to try to become more like an international player. This is a way for them to build out and become more like other oil companies.”

    GO EAST?

    In buying the operations, the Russian oil producer will get its first foothold in the United States and expand its modest trading business.

    About 100 front-office Morgan Stanley personnel will transfer to Rosneft under the deal, including oil traders and shipping schedulers comprising about a third of the bank’s total commodity team.

     

    The bank will remain in other commodity markets including gas and power trading, agriculture and metals, according to a person familiar with the matter. The bank will also retain a client oil trading business that will be able to execute both physical and financial deals.

    The majority of oil traders transferring to Rosneft are based in London, New York and Singapore but are expected to remain in their current cities.

    The bank said in the statement it is targeting the second half of next year to complete the deal. Shares of Morgan Stanley closed up 0.2 percent at $30.93 on the New York Stock Exchange.

    Rosneft became the world’s biggest listed oil producer in March after the $55 billion acquisition of Anglo-Russian oil firm TNK-BP. Its oil output accounts for over 40 percent of the total in Russia, the global leader in crude production.

    Rosneft has amassed assets abroad in the past few years, including refineries in Germany and Italy, but has bought no significant assets in the United States.

    Rosneft has an oil trading division in Geneva, which helps supply its refining assets in Europe.

    Antitrust experts don’t expect the deal to hit any regulatory hurdles, but allowing a state-owned Russian firm access to oil terminals and the U.S. home heating oil market is likely to get a deep look from the U.S. government.

    A Washington-based policy analyst said the government watchdog was sure to take a hard look, especially after it blocked a privately owned Chinese company, Ralls Corp, from building wind turbines in Oregon last year.

    “If CFIUS flags wind farms to China, it’s hard to imagine that commodity trading to Russia gets by without a blink,” said Kevin Book, at ClearView Energy Partners, LLC in Washington.

    (Reporting by Dmitry Zhdannikov and David Sheppard in London and Katya Golubkova in Moscow; Additional report by Jeanine Prezioso and Lauren Tara LaCapra in New York and Valerie Volcovici and Timothy Gardner in Washington; writing by David Sheppard in London and Josephine Mason in New York; editing by Keiron Henderson, Rosalind Russell and Leslie Adler)

     

  12. Eric Sprott: Silver is The Dark Horse!
    Only a true genius could make such a bold prediction.  The GTSR is over 80 and silver is below $15 an ounce. I’ll go way out on a limb, stick my neck out and agree with Eric… HI HO SILVERRRRRRR AWAY!

    Continue to practice patience and don’t panic, for rewards shall be waiting for those that have stacked.

  13. Looks like silver and gold are going to fall near term!!  Found some silver finally on the farm metaldetecting.  Found a 1909 barber dime and a 1943 merc dime.  I love finding silver on the dirt cheap!!!

    Killroy was here

  14. The largest LCS in our area (pop. 440K) is out of ASE other than numismatics, four peace dollars with chain holes in them; the lowest inventory I have seen in five years.  Has a few hundred dollars in halves, quarters and dimes.  Has not had AU in years.

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