Serpo
5th December 2010, 08:43 PM
The Silver Shortage Pre-Panic Line
Bill Downey
3 December 2010
For years we have heard of the coming silver shortage but somehow price was always contained and was a wild swinging commodity. But that changed last spring when allegations of silver manipulation made it to mainstream internet sites and became a focal point of testimony by Bill Murphy of GATA to the CFTC in early spring.
Since last August the silver market has been on a tear to the upside and the physical market is now again facing reported shortages. The demand for coin is at its highest levels in 25 years as reported by coin dealers.
Once silver broke above $20 dollars there was a triple demand factor that came into play.
The first is the industry that uses silver. It's made a mad dash to the buy line to secure supplies. No user in his right mind is going to stick around and wait for the shortage to become acute and hold up production. That is a show stopper and industrial use is the largest demand factor in the fabrication of silver. I was informed by a person who was building a database for a company in late October that the company she was doing business for was in panic mode buying up to a year's worth of silver so as to hedge for future price increases. She did not even work there and was providing a service for the business. She said that the talk was rampant among the executives.
Consider what Ted Butler, who was way ahead of the curve wrote in 2006
World silver inventories are at the lowest point in 200 years. Industry requires over 900 million ounces each year. Silver is the best conductor of electricity. Every computer, server, monitor, cell phone and switch must have silver. Lasers, satellites, high-tech weaponry and robotics, all require silver. Digital technology and telecommunications need silver. Around the house there's silver in every TV, washing machine, wall switch and refrigerator. Conductors, switches, contracts and fuses use silver because it does not corrode or cause overheating and fires. Silver is used heavily in photography and in prints. Meanwhile, new and exotic uses for silver are expanding.
A new double layer of silver on glass is sweeping the window market, as it reflects away almost 95% of the hot rays of the sun. A new electronic application for "smart tags" that are replacing bar codes could use significant quantities of silver.
Silver achieves the most brilliant polish of any metal and is the best reflector of light, allowing it to be used in mirrors and in coatings for glass, cellophane or metals. Chemical reactions can be significantly increased by adding silver. Approximately 700 tons of silver are in continuous use in the world's chemical industry for the production of plastics.
Batteries are now manufactured with silver alloys. Lead-free silver solder is used heavily for joining materials and producing leak-tight joints. Silver is also widely used in silk-screened circuit paths, membrane switches, electrically heated automobile windows, and adhesives. Silver has a variety of uses in pharmaceuticals. Silver sulfadiazine is the most powerful compound for burn treatment. Catheters impregnated with silver eliminate bacteria. Silver is increasingly being tapped for its bactericidal properties and water purification. In the face of all these industrial uses there is less silver available.
Here we have a vital material, known to all men for all time, literally disappearing before our eyes, both above and below ground. It is a material upon which modern life and rising standards of living are dependent. It is beyond indispensable, it is a miracle metal.
The second factor that is coming into play is the loss of confidence in paper money and the realization by many that silver is not only an industrial metal but was a monetary metal.
Silver has been around for just as long -- if not longer --- than gold. It was currency in the past --- and who is to say it will not be currency in the future? Indeed -- gold bugs who favor a return to the gold standard -- would stand a better chance if they were pushing a bimetallic system of both gold and silver. At least there would be more "currency" to go around. As nations that look to establish the former glory -- it might not be beyond the realm of China to go that route.
Silver Sycee in one form or another was a means of exchange in China for over 1000 years. In fact -- a quick history of money is simply -- barter -- livestock/Crops -- cowry shells (tools) -- silver -- leather banknotes (deer skin) -- paper currency (first introduced by China 9th to 15th Century) -- potlatch -& wampum (north American Indians)--- gold standard -- paper currency. So if we exit paper currency --- there are only two choices on the above list --- silver and gold. And silver has been used more times and more places than gold has.
Silver certificates we're re-issued by the Kennedy Administration in USA and were in fact redeemable in silver until June of 1968. So the thinking that silver can't come back as a monetary instrument is not impossible. In fact -- what will be the alternative to gold and silver? Nothing. Black market or not -- gold and silver will always have their place.
The second factor influencing silver is the loss of confidence in paper currency and the public awareness that is fast becoming a major factor in PHYSICAL DEMAND.
Finally the third factor that comes into play is the massive amount of short positions that have been sold forward by the manipulators of silver. According to the latest statistics there are 154 days of silver production that is currently sold short. As prices rise the shorts have only two choices. Sell more contracts short - or cover the positions. Each drop in silver since the summer has not been met with new short positions. It has been met with short covering. This triple whammy is turning the supply side equation and demand into a runaway freight train.
link has charts ect
http://www.gold-eagle.com/editorials_08/downeyb120310.html
Bill Downey
3 December 2010
For years we have heard of the coming silver shortage but somehow price was always contained and was a wild swinging commodity. But that changed last spring when allegations of silver manipulation made it to mainstream internet sites and became a focal point of testimony by Bill Murphy of GATA to the CFTC in early spring.
Since last August the silver market has been on a tear to the upside and the physical market is now again facing reported shortages. The demand for coin is at its highest levels in 25 years as reported by coin dealers.
Once silver broke above $20 dollars there was a triple demand factor that came into play.
The first is the industry that uses silver. It's made a mad dash to the buy line to secure supplies. No user in his right mind is going to stick around and wait for the shortage to become acute and hold up production. That is a show stopper and industrial use is the largest demand factor in the fabrication of silver. I was informed by a person who was building a database for a company in late October that the company she was doing business for was in panic mode buying up to a year's worth of silver so as to hedge for future price increases. She did not even work there and was providing a service for the business. She said that the talk was rampant among the executives.
Consider what Ted Butler, who was way ahead of the curve wrote in 2006
World silver inventories are at the lowest point in 200 years. Industry requires over 900 million ounces each year. Silver is the best conductor of electricity. Every computer, server, monitor, cell phone and switch must have silver. Lasers, satellites, high-tech weaponry and robotics, all require silver. Digital technology and telecommunications need silver. Around the house there's silver in every TV, washing machine, wall switch and refrigerator. Conductors, switches, contracts and fuses use silver because it does not corrode or cause overheating and fires. Silver is used heavily in photography and in prints. Meanwhile, new and exotic uses for silver are expanding.
A new double layer of silver on glass is sweeping the window market, as it reflects away almost 95% of the hot rays of the sun. A new electronic application for "smart tags" that are replacing bar codes could use significant quantities of silver.
Silver achieves the most brilliant polish of any metal and is the best reflector of light, allowing it to be used in mirrors and in coatings for glass, cellophane or metals. Chemical reactions can be significantly increased by adding silver. Approximately 700 tons of silver are in continuous use in the world's chemical industry for the production of plastics.
Batteries are now manufactured with silver alloys. Lead-free silver solder is used heavily for joining materials and producing leak-tight joints. Silver is also widely used in silk-screened circuit paths, membrane switches, electrically heated automobile windows, and adhesives. Silver has a variety of uses in pharmaceuticals. Silver sulfadiazine is the most powerful compound for burn treatment. Catheters impregnated with silver eliminate bacteria. Silver is increasingly being tapped for its bactericidal properties and water purification. In the face of all these industrial uses there is less silver available.
Here we have a vital material, known to all men for all time, literally disappearing before our eyes, both above and below ground. It is a material upon which modern life and rising standards of living are dependent. It is beyond indispensable, it is a miracle metal.
The second factor that is coming into play is the loss of confidence in paper money and the realization by many that silver is not only an industrial metal but was a monetary metal.
Silver has been around for just as long -- if not longer --- than gold. It was currency in the past --- and who is to say it will not be currency in the future? Indeed -- gold bugs who favor a return to the gold standard -- would stand a better chance if they were pushing a bimetallic system of both gold and silver. At least there would be more "currency" to go around. As nations that look to establish the former glory -- it might not be beyond the realm of China to go that route.
Silver Sycee in one form or another was a means of exchange in China for over 1000 years. In fact -- a quick history of money is simply -- barter -- livestock/Crops -- cowry shells (tools) -- silver -- leather banknotes (deer skin) -- paper currency (first introduced by China 9th to 15th Century) -- potlatch -& wampum (north American Indians)--- gold standard -- paper currency. So if we exit paper currency --- there are only two choices on the above list --- silver and gold. And silver has been used more times and more places than gold has.
Silver certificates we're re-issued by the Kennedy Administration in USA and were in fact redeemable in silver until June of 1968. So the thinking that silver can't come back as a monetary instrument is not impossible. In fact -- what will be the alternative to gold and silver? Nothing. Black market or not -- gold and silver will always have their place.
The second factor influencing silver is the loss of confidence in paper currency and the public awareness that is fast becoming a major factor in PHYSICAL DEMAND.
Finally the third factor that comes into play is the massive amount of short positions that have been sold forward by the manipulators of silver. According to the latest statistics there are 154 days of silver production that is currently sold short. As prices rise the shorts have only two choices. Sell more contracts short - or cover the positions. Each drop in silver since the summer has not been met with new short positions. It has been met with short covering. This triple whammy is turning the supply side equation and demand into a runaway freight train.
link has charts ect
http://www.gold-eagle.com/editorials_08/downeyb120310.html