SILVER : The New Law of Supply and Demand

Theodore Butler
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July 5, 2013 - 9:10am
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This was excerpted from the Weekly Review of June 29, 2013 -
The cornerstone of the free market system is the law of supply and demand. This is the premise that governs how the prices of resources are determined in any free market economy as opposed to prices being set by government edict or monopoly control. It is the mechanism by which resources are produced and consumed in the freest and most efficient manner. Here’s a great definition of this law from the Free Dictionary – “the theory that prices are determined by the interaction of supply and demand: an increase in supply will lower prices if not accompanied by increased demand, and an increase in demand will raise prices unless accompanied by increased supply.”
http://www.thefreedictionary.com/law+of+supply+and+demand

There are three components to the law – supply, demand and price. Price serves as the fulcrum between supply and demand, balancing the two. But the important point is that the interplay between supply and demand is what determines the price. That’s elementary and spelled out in the above definition; a free market price means the price is determined by supply and demand. This is the definition we expect our children learn in school. Unfortunately, this definition is old-fashioned and no longer operative in gold and silver and other commodities. Instead a new definition of the law of supply and demand has supplanted the version still in the dictionary.
Simply put, the new law of supply and demand has the price determining supply and demand and not vice-versa as it should be. This may sound like a game of words at first blush, but it goes to the heart of the matter. When price determines how much is produced and consumed, instead of supply and demand being the determinant of price, that’s just another way of describing price manipulation. All our laws against manipulation and the restraint of free trade are aimed at preventing an artificial price from coming into existence. That’s because it is well-known that an artificial price will adversely impact production and consumption and cause overall harm to society. An artificial high price must lead to over-production and under-consumption and an eventual price crash, while an artificial low price must result in an eventual shortage and price explosion.
There is undeniable proof that the recent price action on the COMEX in gold and silver is the new and manipulative version of the law and supply and demand. There was no big increase in production or weakening of demand for gold or silver leading to sharply lower prices; instead the price decline, due to speculative selling of futures contracts, is determining what will be produced and consumed in the future. Speculative selling on the COMEX has resulted in prices low enough to threaten mine production and encourage increased demand (especially investment demand).



MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Is It Time To Buy Silver?

The first part of this article introduced the demand for silver; this 2nd part will discuss the tendency of silver supply and reserves.
Mine Production

The total world silver mine production rose from 13,290 metric tons (427.3 million ounces) in 1986 to 24,000 metric tons (771.7 million ounces) in 2012, while the Compound Annual Growth Rate (CAGR) was 2.30%. At this point, the growth rate was greater than the world silver industrial demand growth rate, which was 1.56% in the same period.
 read more >


MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Why Are Premiums On Physical Gold And Silver Rising Even As Futures Crash?

 Premiums on physical Gold and Silver are on the rise again after both metals were smashed again Wednesday. Why are investors paying premiums for Gold and Silver when so many forecasts on further crashes are doing rounds? What do they know that these biggies are missing or is it simply deeper

manipulation of the Paper Gold and Silver prices? Is it again due to the naked shorting by the usual suspects, trading desks, big banks and hedge funds? Has the physical market completely disconnected from the paper market? Right - Gold and Silver physical markets are facing a complete disconnect with the paper or the futures market only based upon the fact that these paper markets can be easily manipulated. These markets were initiated for achieving a better price discovery based on current fundamentals and prospective future demand and supply factors. But now have become a playground for the Big and Influential or more popularly known as TBTF. Much has already been spoken, written and debated upon the same and I would prefer not to get into those details again here. Whatever is the reason for the gold and silver price smash, what I wonder is, who in his right mind would prefer to pay a large premium for something that he would get at a much cheaper price in just some more time? - No, these investors just won't wait, but rather stand in long queues, pay premiums and confirm holding some Gold and Silver rather than await a more attractive price. Why? It's the shortage of supply in gold and silver and more bottlenecks in supply expected as the mining industry halts productions. Going ahead I'll explain the same.
 http://seekingalpha.com/article/1524592-why-are-premiums-on-physical-gold-and-silver-rising-even-as-futures-crash?source=google_news


MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Silver Demand: The Photovoltaic Industry

Thursday, 6/27/2013 09:55 
THE PHOTOVOLTAIC industry didn't start to show on charts, according to the CPM Group of New York, until the year 2000 when they consumed approximately 1,000,000 ounces, writes Miguel Perez-Santalla at BullionVault.

Essentially that is barely a blip on the silver consumption chart. In fact in comparison to the smallest of the large consumers at the time, which was electronics, it was not even a tenth of their consumption.

It was not expected that this industry would become an important player in the silver market for years to come. The facts at hand of the silver data prove this out. It was not until the year 2008 that the industry reached any volumes of importance having consumed nearly 19,000,000 ounces.
 What happened in the global economy was that major subsidies were being given for the development and promulgation of solar energy by sovereign nations. Germany, at first the largest consumer, was then followed by many other European nations in this objective. But it was not until the USA began to offer subsidies that the silver consumption for these products became of major importance.

The photovoltaic industry in certain countries became very important sectors and so with the global economic crisis many were to suffer. Spain specifically suffered tremendous economic losses in this industry when the state pulled its subsidies. This has been a major concern for developers and businesses involved in solar power.

http://goldnews.bullionvault.com/silver-demand-photovoltaic-062720131

MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Ugly Day for Silver

Jeff Nielson- Silver Market Getting Ridiculous
Jeff Nielson of Bullion Bulls Canada discusses:

(1) How he's shocked that silver has gone this low

(2) How he agrees with me that there could be a deflationary headfake and metals could even drop further (which doesn't make sense to the both of us)

(3) How he's no longer allowed to post on the Street.Com's website


MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Is the Silver Price Finally Bottoming Out?

By The Daily Reckoning • June 27th, 2012 •

Over a year ago, I penned an article entitled "4 Silver Investments to Avoid." About two weeks later, on April 26th, I wrote another article: "Should I Sell My Silver?" saying that I expected an imminent correction in the silver price, after it had gone "parabolic."

It caused quite a stir at the time. There was no shortage of people calling me delusional for suggesting the bull market in silver was overdue for a pause. Some even labeled me a "traitor," presumably to the "hard money" movement.
One of the silver companies I recommended to NOT buy immediately contacted me after the article was published, insisting there was nothing to worry about, and that their stock was a great investment.
For the record, since then, the price of silver is down 35.2% (based on the London PM fix). And of the four silver investments I said to avoid:
1. The iShares Silver Trust (SLV) is down 33.3%.
2. Large silver bars have obviously gone down commensurately with spot silver.
3. Shares in Silvercorp Metals (SVM) are down a WHOPPING 61.5%.
4. And shares in Coeur d'Alene (CDE) are off by 50.8%.
Not pretty.
 read more : http://www.dailyreckoning.com.au/is-the-silver-price-finally-bottoming-out/2012/06/27/

MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

How to Invest in Silver and Gold in 2013

Anyone thinking about how to invest in precious metals right now has been watching the plunging prices of gold and silver.

Both metals are firmly in bear market territory. By the end of last week, gold was down about 27% from its 52-week high of $1,803 and silver had cratered by a whopping 43%.

But the recent downward slide in the price of silver and gold has once again revealed to investors the most important fundamental fact about precious metals - they're incredibly volatile. Swings of 50% in value in a single year are not unheard of.

But the fact remains, there are a host of good reasons why you should know how to invest in precious metals and why they are important to a diversified portfolio.

Precious metals offer unique protection against inflation and insurance against financial or political disasters.
http://moneymorning.com/2013/06/25/how-to-invest-in-precious-metals-in-2013/


MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Silver Manipulation Debunked

 Silver futurist is one of the most honest and intelligent commentors in the YouTube precious metals community. What he says bears a lot of weight with me. And one of the coolest things is, when he doesn't know something, he's able to admit it! Most people come out with an attitude of certainty about things that no one can possibly be certain about! Joe, on the other hand is honest, and smart. This is rare and invaluable!




MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

THE BANKSTERS ARE BUYING PHYSICAL SILVER BEHIND THE SCENE TOO!

HSBC has quietly moved into acquiring large amounts of silver bullion.. The bank has secured another deal to buy silver bars from KGHM which brings their total purchases of silver from KGHM alone in the last 12 months to $876 million or PLN 3.65 billion.. KGHM is one of the largest producers of silver in the world and is the second-largest producer of refined silver in the world.. They produce silver bars registered under the brand KGHM HG that are attested to by "Good Delivery" certificates issued by the London Bullion Market Association and the Dubai Multi Commodities Centre.. Listed metals producer KGHM signed an estimated PLN 1.67 billion deal on 2013 sales of silver to HSBC, KGHM said in a market filing yesterday.. The deal puts the total value of deals between KGHM and HSBC in the last 12 months to PLN 3.65 billion or $876 million, the filing read.. The Management Board of KGHM announced that on 21 January 2013 a contract was entered into between KGHM and HSBC Bank USA N.A., London Branch for silver sales in 2013.. The estimated value of the contract is PLN 1,672,260,469.66. As a result of entering into this contract, the total estimated value of contracts entered into between KGHM and HSBC Bank USA N.A., London Branch over the last 12 months exceeded 10% of the equity of the Company and amounts to PLN 3,654,120,061.59.. The highest-value contract signed during this period is the above-mentioned contract. The criteria used for describing the contract as significant is that the total estimated value of the contracts exceeds 10% of the equity of KGHM.. KGHM is one of the largest companies in Poland and one of the largest mining & metallurgy companies in the world.. The main customers of Polish silver in recent years have been the United Kingdom, Germany and Belgium. HSBC appears to be one of their main customers now.. Respected and erudite, James Steel, the chief commodity analyst at HSBC Securities (USA) Inc. continues to be bullish on silver and recently said how "silver tends to track gold, except it over performs in a bull market" and how he was "moderately bullish on silver" in 2013.. HSBC did not comment on the deal and it only came to light as KGHM is a listed company and had to report the deal which was then picked up in Polish media.. The massive deal could simply be HSBC securing supply for the NYSE listed ETFS Physical Silver as they are the custodian.. Or it could be that HSBC's senior banksters are concerned about securing supply as they expect robust investment demand to continue and possibly increase resulting in higher prices too...

MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Silver Price Drop DON'T PANIC

Society has collapsed many times and precious metals have stayed valuable throughout the ages. Zinc is good for nothing, but cheap products and skin irritation. You can't built satellites, solar panels or screens with zinc; You need silver. I'm just saying that you shouldn't use banks or gold vaults that leave you with a promise should society collapse. You can do what you want with your money and life and suffer the consequences of your poor choices. Stack your zinc bars and wish for the best.
MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Eric Sprott: Physical Demand for Gold and Silver is Draining Supplies, New Highs and More

 Eric Sprott: Physical Demand for Gold and Silver is Draining Supplies, New Highs and More


Eric Sprott, President and CEO of Sprott Asset Management, says extreme physical demand for gold and silver is draining supplies. Sprott predicts, "Somebody's going to fail here. All the data I look at says the Western central banks . . . that have been selling gold are running on fumes now . . . so, it's very close at hand." Join Greg Hunter as he goes One-on-One with money manager Eric Sprott.




MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Silver, Central Banks Are Losing Control per MM

Bernanke will have to undergo plastic surgery to change his looks and enter a witness protection plan to save his ass when all of these financial shenanigans start to unwind. We'd be on the road to recovery today if the Fed has simply stepped aside and let the inevitable occur.

MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet

Barclays : SILVER exhibited its weakest month in two years

Barclays Capital’s commodity strategists this morning predict more tough sailing for the price of gold. They’re just as bearish on silver.
From the note:

On silver:

On the industrial demand side, silver imports into China were the weak spot in April’s trade data and reaffirm our negative view on the metal. Imports were down 28% y/y at 172 tonnes, while exports were up 21.5% y/y at 85.7 tonnes, keeping China a net importer of the metal. Once again, the weakness in silver was across the board, from powder to jewellery; unwrought silver suffered the sharpest decline at 29% y/y, while powder imports were down 28% y/y. Given that investor appetite also remains soft, silver is set to remain significantly oversupplied.
A considerable amount of weakness stemmed from the ETP outflows, which had been relatively resilient compared with gold until May. While outflows were still weak for gold in May, silver exhibited its weakest month in two years with outflows tallying over 500 tonnes. May’s activity almost eliminates inflows for the year to date, but outflows over the past two months only make up 3% of total holdings. Silver coin sales, on the other hand, have been quite strong. The US Mint has reported sales exceeding 100 tonnes every month so far this year with June on track to surpass 100 tonnes


MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet