There is no silver shortage folks

[Twisted Titan]

AS PER KITCO...........




Reports Of Physical Silver Shortages ‘Limited’

16 February 2011, 5:26 p.m.
By Kitco News
http://www.kitco.com/


There are some spot shortages in the physical silver market, but they are limited to higher purity metal in specific forms and locations at most, said commodities research and consulting firm CPM Group Wednesday.

There have been reports of shortages of physical silver circulating in the market, CPM Group said in a research note, but information about the market tightness has been “blown out of proportion by the silver conspiracy theorists who are trying to portray this as a much more cataclysmic event for the silver market.”

CPM Group explained that the tightness comes from the fact that refiners do not make 1,000 ounce bars, rather they make something called “silver shot” – also known as grain, powder, flake and/or sponge – because of demand from manufacturers.

“They do not waste time, money, and energy casting bars as their user clients do not want bars, and demand for sponge is very high due to increased demand in electronics and solar panels,” CPM Group said.


One-thousand ounce bars in silver purity of 0.999, the good delivery grade, are plentiful, but they said there is tightness in the higher purity 0.9999 and 0.99999 for two reasons. One, investors are buying more metal and two, refiners would rather sell higher purity silver in sponge, not bars.


Demand for photovoltaic cells used in the solar panels has surged, with growth accelerating in the second half of 2010, they said. The silver flake or powder used in this manufacturing must be of a high grade, which explains why there is tightness for silver of high purity. While producers of this specialized silver are increasing supply, there are only a few producers that source silver to the photovoltaic industry currently.


CPM Group said it has heard of only a specialized instance of actual supply tightness in the physical market. The firm added that there is talk in the market of shortages of 100-ounce investment-sized bars and coins, but its investigations dispute this. CPM Group said it surveyed Fidelitrade, Kitco, and Northwest Territorial Mint in the first week of February about the supply of these metals. “There were hundreds of thousands of ounces in 100-ounce bars available for immediate delivery, and NWTM said it was steadily producing more each day,” CPM Group said.


Regarding the rise in silver lease rates and the slight backwardation in March Comex futures prices, it said that lease rates are higher, at 0.8% versus 0.3% previously. Still, it said 0.8% lease rate is still very low, considering in the past 30 years lease rates have ranged between 3% to 6%. They also attributed the backwardation in futures to market congestion.


“In conclusion, there are short-term market developments along the lines of what CPM has repeatedly said to expect in February and March 2011, and there is spot tightness in high purity silver cast into bars as opposed to sponge. The rest is noise,” they said.

[StreetsOfGold]

Nothing quite like the "kitco spin"

[Ponce]

As we all know most American are having a hard time with today's economy so that many that are holding silver are now selling........they bought it at $16.00 or $18.00 or $22.00 and now they want to recieved their profit from today's price........While I am not having a "hard" time I now have an itch that is getting hard to reach.

[Twisted Titan]

Here's Jeff Clarks take on it.

Bottleneck or Supply Deficit?
by Jeff Clark - Casey Research
Published : February 18th, 2011




There have been numerous reports of bullion shortages in many parts around the world, along with rising premiums. And the two explanations - we're running out of gold! and, it's just a manufacturing bottleneck - are at odds with one another. So, who's right?



First, the data. The following has been reported since New Year's eve horn-blowers were put away:



1. Report from China: "...premiums for gold bars jumped to their highest level in two years."

2. A director at Cheong Gold Dealers in Hong Kong: "I don't have any gold. Premiums are very high. Some say they have no stocks on hand."

3. A dealer in Singapore: "There's a sudden surge in demand. Demand from China is very strong and they are paying very high premiums. Refiners can't meet the demand."

4. World Gold Council report: "...gold imports by India likely reached a record last year due to increased investment demand. Imports will probably be the highest for India in its history."

5. Nigel Moffatt, treasurer of the Perth Mint: "...demand for gold bullion has been unrelenting since gold dropped below $1,400 an ounce. At the moment demand is such that we cannot meet all the enquiries we are getting. Demand for our coins and medallions is strong, but the biggest demand is coming from banks and traders looking for kilo bars."

6. Eric Sprott, chief investment officer of Sprott Asset Management, after having difficulty locating enough bullion for their new silver fund: "Frankly, we are concerned about the illiquidity in the physical silver market. We believe the delays involved in the delivery of physical silver to the Trust highlight the disconnect that exists between the paper and physical markets for silver."

7. 2010 gold Buffalo coins are largely unavailable from dealers.

8. Sales of silver Eagles set a new record in January - by the 19th of the month. Already, 4.6 million coins have been sold, an all-time monthly high since the coin's release in 1986.



Based on this data alone, you might come to the conclusion that yes, we're running low on bullion supply. But most industry execs I spoke to insist this is a "bottleneck" issue: current demand is greater than current stock on hand, or is coming in faster than mints can produce. In other words, it's a fabrication issue, not a supply deficit. A Treasury rep said as much.



You'll recall from 2008 how supply was difficult to come by and premiums were roughly double what they are now. Some think it will be "lesson learned" this time around; mints now know how to prepare for another spike in demand. Many have added workers, shifts, and facilities. The U.S. Mint stopped producing the less popular coins and now focuses on those that are most in demand.



To a large extent, I believe the bottleneck argument is exactly what's happening. It's no different than the store that sells old-fashioned wooden rocking chairs suddenly getting swamped with customers when an antique dealer declares they'll be valuable collectibles in the future. Collectors rush to buy, and the store doesn't have enough rocking chairs in its warehouse. But they're not running out of wood. And they'll likely be better prepared when they hear the dealer is coming out with a book.



It's true there's only so much gold coming to market every year (total 2010 supply is estimated to have been about 115 million ounces), but in the big picture, there's been enough. It's also true that orders from the 2008 rush were eventually filled. However, I think the "bottleneck" and "we're running out" arguments miss the point, because they both focus on supply.



Demand is what I'm concerned about. Now try this data:



1. According to International Strategy and Investment Group, gold ownership currently represents 0.6% of total financial assets. If it rose to just 1.2% - still less than half its 1980 level - it would require an additional 917.1 million ounces, or 16% of aggregate gold worldwide. This amount is equal to about 10 years of current global production.

2. Investment demand represented 53% of all gold demand in 1979; today, it represents just 32%. Coin demand represented 37% of all demand in 1979; today it's less than 14%.

3. Gold and gold mining stocks represented 26% of all global assets in 1981 (high inflation), and 20% in 1932 (high deflation). Today, gold and gold mining shares represent about 1% of global assets.

4. The market cap of the entire gold industry is about the size of Microsoft, is less than Exxon Mobil, and is 10 times smaller than the banking industry. The whole of the silver industry is smaller than Starbucks.

5. Silver mine production is insufficient to meet current demand. The only way silver needs are fulfilled is from scrap coming to market. Miners don't produce enough on their own.

6. There are approximately 40% more earthlings right now than there are ounces of gold that have ever been mined. That includes every ounce used in jewelry, electronics, and dental. Further, if every ounce of supply last year were made into coins and bars for investment purchase, it would amount to less than two one-hundredths of an ounce, or about half a gram, for every man, woman, and child on earth. This means 0.018% of the global population - about one in every 55 people - could buy a one-ounce gold coin this year.



Yes, there is a bottleneck. But with this recent spike in demand, it appears some mints still aren't equipped to keep up. Are we nearing a tipping point where in spite of the increased efficiency and preparedness, requests from buyers will outweigh available supply? Imagine demand continuing to accelerate, and you can see where this might be headed. I think this is the side of the equation to watch.



Andy Schectman of bullion dealer Miles Franklin told me last summer that, "Based on what I know, it's my opinion that if 5% of this country put 5% of their money into gold, there would be nothing left tomorrow morning." In other words, even if supply is sufficient at present, what happens if demand, say, doubles, as the above data show is possible?



Right now in North America you can still get bullion, but we're clearly on a path where demand could overwhelm the system, making purchases very difficult. When that point arrives, many investors will wish they hadn't worried so much about price.



Imagine Doug Casey is right about the future value of the dollar: zero. Imagine how high inflation would rocket in such a scenario.



Bottleneck, meet desperation.



Jeff Clark

http://www.24hgold.com/english/news-...tor=Jeff+Clark

[Antonio]

The Ag market is getting fancy. What is a dumb hick like me gonna do when he tries to buy a loaf of bread with a 90% dime and the smart hick who holds the bread spits out chewing tobacco juice and says:" no 90% shit for me, gimme some silver sponge"?

[Ponce]

Antonio.........I have been in countries where many didn't know how to read or add.....but.......they always knew how much change to make for the american dollar..................in other places where there was no radio or tv they knew the price of gold to the current penny, in what is to come the general public will learn that the value of the silver dime, or oz of silver, is more valuable than the paper fiat.

[Antonio]

The way the paradigm shift is going, we may see in not too distant future homeless people trading osmium sponge on the street.

[keehah]

My review of the article:

High quality silver is in demand.

Industry is consuming most of it, so there are shortages for investors.

NWTM, unlike the rest, does not offer silver for immediate delivery. 8)

[Serpo]

There is no silver shortage thats why you cant buy it ........kitco logic....haha

Watch Nadler yesterday and everything they asked him on gold or silver was glum.....he said silver wouldnt pass 31.5 and bounce around between that and 27, next day its blowin that away.

Still they do have a good video service of updates that seems to keep going, its just how you read it thats important.

[skid]

There is no silver shortage thats why you cant buy it ........kitco logic....haha

Watch Nadler yesterday and everything they asked him on gold or silver was glum.....he said silver wouldnt pass 31.5 and bounce around between that and 27, next day its blowin that away.

Still they do have a good video service of updates that seems to keep going, its just how you read it thats important.


Nadler's a freaking idiot. I can't imagine why he is on the payroll of Kitco. Total disinformation agent.

[Serpo]

There is no silver shortage thats why you cant buy it ........kitco logic....haha

Watch Nadler yesterday and everything they asked him on gold or silver was glum.....he said silver wouldnt pass 31.5 and bounce around between that and 27, next day its blowin that away.

Still they do have a good video service of updates that seems to keep going, its just how you read it thats important.




Nadler's a freaking idiot. I can't imagine why he is on the payroll of Kitco. Total disinformation agent.


I know.....

[mick silver]

there is a silver shortage ... 1 i can no longer buy as much as i did at this price

[Bullion_Bob]

There is a surplus of $40 silver, a massive surplus of $100 silver, and extreme shortage of $20 silver. There is no $10 silver left anymore.

There is no stopping or parking in the red zone, please have your cards ready to be checked at the gate.

Thanks for flying silver coach airlines.

;D

[FunnyMoney]

The whole article was a great laugh. I think the "Lack of Silver Shortage" theme becomes a mainstream topic. They are going to start counting the months, "nope not much a a shortage last month, waiting on next month's figures, stay tuned, will let you know."

That probably goes on until they're forced to change the story. Should be a simple change when it comes, they can keep the rest of the article, all they'll have to do is remove a single word... "Lack of Silver Shortage"

[Mouse]

Increases in Silver Price and what does it mean for you, America?

Due to the extreme weather this year, with massive flooding in Australia, and heat waves in Russia, and frozen popsicle mexicans in North America, it's just been too cold and rainy to go out and mine any silver. Shill analysts pontificate that this is why there is inflation, but it's not Inflation. Revolts in many countries of the world are merely tied to the poor weather this year, which is clearly caused by man-made climate change warming cooling.

Next up, what impact will increasing silver prices have on American security? Will there be more financial terrorism as a result?

And finally, we will wrap it up with Friday's special person of the week. This week we interview Blythe Masters, whose heroic fight against silver inflation has brought tears to our eyes and endears us all to how one woman and her employer could be so charitable to the world in their virtuous efforts to ensure adequate supply of cheap paper silver. Just courageous!

Buy Viagra. Buy Drugs. Buy Drugs that may kill you. Buy lunesta, it might kill you. Try Boniva, it might kill you. If you haven't been seeing Alice, you should go see her....

Okay we're back....

[Neuro]

I read somewhere that the entire planets silver mining industry had a market cap that was less than starbucks... That says something, but I am not quite sure what...

[hoarder]

Nadler's a freaking idiot. I can't imagine why he is on the payroll of Kitco. Total disinformation agent.
If he's a disinformation agent (which he is), how can he be an idiot? These bastards have a system where they issue trillions of dollars out of thin air and never even get audited. Seems pretty damn clever to me. Who are the real idiots?

[bellevuebully]

I used to wonder a lot about why Kitco had Nadler on the payroll and then it dawned on me....he is not a disinfo agent...he is a DJ. He is there to keep the dancefloor moving.

When it became apparent that silver was in a huge bull market, Kitco knew that the bias was going to be on the buy side. They don't want that....it excludes the other half of their business mode...the sell premium. They use Nadler to try to balance up the bias by encouraging selling, as they know eventually anything sold will quickly be rebought. So in a way, Nadler is a very useful idiot for Kitco. He knows better, but he's likely getting paid handsomely to be a buysman instead of a salesman.

As Andy Rooney used to say.....'and now you know.......the rest of the story'. ;)

[MNeagle]

That was Paul Harvey, not Andy Rooney's tagline.

[Twisted Titan]

I used to wonder a lot about why Kitco had Nadler on the payroll and then it dawned on me....he is not a disinfo agent...he is a DJ. He is there to keep the dancefloor moving.

When it became apparent that silver was in a huge bull market, Kitco knew that the bias was going to be on the buy side. They don't want that....it excludes the other half of their business mode...the sell premium. They use Nadler to try to balance up the bias by encouraging selling, as they know eventually anything sold will quickly be rebought. So in a way, Nadler is a very useful idiot for Kitco. He knows better, but he's likely getting paid handsomely to be a buysman instead of a salesman.




I agree with your assement but I really wouldnt want to be in his shoes when Cracpco starts to default on their warehouse recepits He will be the visible target of people that lost a shit load of money.

Think Bernie Maddof silver

Thats a risk premium I will pass on as some of those people will have the means to get even


T

[skid]

So in a way, Nadler is a very useful idiot for Kitco. He knows better, but he's likely getting paid handsomely to be a buysman instead of a salesman.



It's a good theory Bellevue, but I have exchanged personal emails with him and he actually gets really mad when you call him on his articles. He's actually called me names in his correspondance with me. He really believes what he writes and quotes the CPM group and the rest of the gold/silver negative crowd. Perhaps the owner of Kitco hires him for that purpose as you suggest??

[Neuro]

So in a way, Nadler is a very useful idiot for Kitco. He knows better, but he's likely getting paid handsomely to be a buysman instead of a salesman.



It's a good theory Bellevue, but I have exchanged personal emails with him and he actually gets really mad when you call him on his articles. He's actually called me names in his correspondance with me. He really believes what he writes and quotes the CPM group and the rest of the gold/silver negative crowd. Perhaps the owner of Kitco hires him for that purpose as you suggest??
You don't think he might feign his indignance? This man is consistently wrong in his prognosis apart from the times when the market goes down. He always predict a down market.

[skid]

If he was faking it I don't think he would react the way he does in personal email exchanges.

[hoarder]

Jews are the world's best fakers. Most actors are Jews. They take pride in fooling goys.

[bellevuebully]

If he was faking it I don't think he would react the way he does in personal email exchanges.


How does Bernanke keep a straight face when he says QA isn't printing money, or Geithner when he says the US has a strong dollar policy?

Nadlers probably buying gold with both hands. lol.

[Neuro]

If he was faking it I don't think he would react the way he does in personal email exchanges.
How would you expect someone faking it to react in a personal e-mail exchange?

[bellevuebully]

I agree with your assement but I really wouldnt want to be in his shoes when Cracpco starts to default on their warehouse recepits He will be the visible target of people that lost a shit load of money.

Think Bernie Maddof silver

Thats a risk premium I will pass on as some of those people will have the means to get even


T


Which warehouse reciepts are you refering to?

[Twisted Titan]

Shitco has unallocated pool accounts for sale to fresh and willing sheep .........

[bellevuebully]

shitco has unallocated pool accounts for sale to fresh and willing sheep .........


I can agree that they might not be able to at some point provide the option of metal, but I didn't quite get the way you related it to warehouse reciepts. They would cover the activity in their pool accounts by running futures in the background, but the warehouse reciepts don't come into the picture until the futures are stood for delivery, and moreso, they are not the originators of these reciepts, they are the recipient. It is the parties at the front end that would be defaulting....the originator and the custodians (the owner, the clearing house and the storage facility). That's the way I would see it anyway. fwiw.

[bellevuebully]

I used to wonder a lot about why Kitco had Nadler on the payroll and then it dawned on me....he is not a disinfo agent...he is a DJ. He is there to keep the dancefloor moving.








Everybody say Yo! DJ Jazzy J Nadler in the house.........spin'n sum beatz.

Parisian Blinds?

By Jon Nadler

Feb 21 2011 9:26AM
www.kitco.com



As Friday’s trading sessions got underway, gold appeared set to complete its best weekly gain of the current year and silver orbited around the $32 level – a fresh 30-year peak-following yesterday’s fund feeding frenzy that added a dollar and a dime to its value, and, much, beyond-bullish sentiment, to the camp that refuses to see it for being a bubble in the making.

Why, one bullion dealer (unsurprisingly) declared that not to possess silver at this time should land one in an asylum, after first being checked for deficiencies on the mental front. Yes, and in October of 2005, David Lereah, chief economist of the US National Association of Realtors declared that [US] “housing activity will remain healthy for some time to come” as well…

Silver’s recent gains have certainly made for some interesting headlines, but here is a friendly reminder that such occasional performance comes with a commensurate (some would say: out-sized) degree of…risk. The table speaks for itself:



Thus, while a core 10% gold holding is very much advisable for most investors with assets worth protecting, perhaps, silver (the single riskiest asset in this group) should be approached with the discipline once manifested by one, Mr. Buffett. Investors who did not exercise such ‘discipline’ and piled into $52.00 per ounce silver, hot on the heels of the Hunt Bros., in early 1980, are still waiting for $138.00 (inflation-adjusted) silver in order to…break even on that ill-timed bet.

That noted investor doubled his money (having bought 130 million ounces near $5 and having sold it all at under $12) and was ‘out’ of that trade without remorse. And, no one should label you as a “lunatic” for exercising your right to be without it for a period of time, as you might see fit. Meanwhile, get ready for $35 silver, we are told. Or, equally, get ready for $25 silver, we are also told. How do you think tables such as the one above are eventually constructed?

Separately, palladium prices spiked to a ten-year high overnight, reaching $855.00 the ounce, while platinum touched $1,849.00 as funds continued to press hard in that niche as well. Rhodium actually slipped by $20 to touch $2,410.00 per troy ounce. It was learned yesterday that certain primary users of noble metals – Corning among them- are now stockpiling essential supplies of same in an attempt to secure price insurance at a time when spec funds (via ETFs) are de facto also hoarding the PGM group metals in warehouses.

While gold prices got a further overnight lift from continuing social commotion in the Middle East, its advances beyond $1,385-$1,390 were somewhat hampered this morning by yet another (50 basis point) hike in bank reserve requirements executed by China’s policymakers overnight. That further tightening maneuver was apparently not enough, and the country’s Ministry of Commerce also released a draft measure to control food prices starting in the very near future (perhaps as early as the second quarter).

Inflation combat was apparently also on the mind of the ECB’s Executive Board member Lorenzo Bini Smaghi. The gentleman stated this morning that “it is a key challenge for monetary policy to avoid spillovers and maintain inflation expectations in check. This requires the ability to take pre-emptive actions, if needed.” Presto: bets that the ECB will indeed hike rates are suddenly clustering around the month of September.

While not exactly using such ‘harsh’ words as ‘pre-emptive action’ or similar, Dallas Fed President Mr. Fisher also concluded yesterday morning that “central bankers have done enough to provide liquidity to the US economy and that “I cannot foresee any circumstances at present that would lead me to support any further initiatives on that front.” The keywords in that sentence: “any circumstances.” Separately, the head of the Chicago Fed, Mr. Evans, one of the most ‘dovish’ of the US central bank’s policymaking members, cited June as the time when the Fed’s QE2 program “most likely” comes to an end, and will not be extended into any form of QE3, or similar.

In Paris for a Bank of France conference and the upcoming G-20 summit, Mr. Fisher’s team leader, Mr. Bernanke, defended the Fed’s extant bond purchase program and exonerated it from culpability when it comes to being the cause of current global imbalances and rising inflationary trends.

Bloomberg reports that “rising consumer prices, a byproduct of the recovery from the worst recession since World War II as commodity costs surge, have put higher interest rates back on the agenda as the rich world grapples with a debt overhang and developing countries try to escape the boom-bust syndrome. With China, the emerging world’s dynamo, four months into a rate-rise cycle to put a lid on surging inflation, the specter of higher prices casts a political as well as an economic shadow over the two-year-old global upturn.”

“A burst in food prices was behind the democratic uprising in Tunisia, spilling over to Egypt and neighboring Arab countries with the potential to remake the balance of power in the Middle East. Dairy, sugar and grain costs spurred food prices to another record last month, and the World Bank this week said that climb has pushed 44 million more people into “extreme” poverty. Oil prices last month reached the highest level since 2008.”

Such pivotal topics (as well as the turmoil in the Middle East, which is closely linked to all of this, as seen above) will be very much at the front-and-centre of the discussion tables when the G-20 will gather in the City of Lights for a two-day huddle. A new name was added to the list of places in the world where anti-government protests are now flaring up: Djibouti. Hard to see where speculators would want to go home ahead of the upcoming long weekend without some “protection” lining their positions. Then again, weekends such as these are the times when policy shifts and systemic changes sometimes take place.

Until Tuesday,

Jon Nadler
Senior Analyst
Kitco Metals Inc.North America