Loading ...by Andy Hoffman
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As I watch yesterday’s global equity and crude oil carnage expand this morning, I figured I’d show you a few pictures of just how tight silver supply is becoming. Which, I might add, mirrors 100% the experience of physical gold; except for the teensy, weensy fact that there is essentially no above ground, available-for-sale silver inventory – anywhere. To wit, in the silver world, it is becoming “common knowledge” that no more than two billion ounces of physical metal exists at all – given how nearly all the metal ever produced has been consumed by industry. And given that said two billion ounces includes decidedly NOT “available for sale” inventories – like mine – it’s entirely possible the actual amount one can actually buy is no more than a tenth of that amount. And doing some simple math, the entire two billion ounces is worth just a measly $30 billion or so – i.e., about half of what the ECB’s current QE program prints each month. As for a “tenth” of that amount, let’s just say there are more than 1,000 individual billionaires on the planet – and perhaps 10,000 institutions, Central banks, and sovereignties with that kind of “chump change.”
With that ominous introduction, here are a few of the statistics publicly available from the, generally speaking, highly opaque silver industry. Which, I might add, is not just due to Cartel efforts to suppress information, but the fact that roughly two-thirds of all silver production is the byproduct of other types of mines; including roughly half from copper, lead, and zinc mines – which, based on today’s horrifying, and likely indefinite trends, are on the verge of massive, long-term shutdowns.
Thus, without further ado, let’s start with a chart updated yesterday by metals expert extraordinaire Steve St. Angelo of the SRS Rocco Report; of how inventories at the world’s largest physical silver delivery mechanism, the Shanghai Futures Exchange, have plummeted by 80% since April 2013, to a piddling $115 million worth at current prices (yes, that’s million, not billion). As you can see, August has seen one of the biggest inventory drains on record. And by the way, isn’t it funny how the inventory peak “coincided” with the April 2013 “alternative currencies destruction” raids; in which, in the 36 hours following a now infamous “closed-door” meeting between Obama and the top “TBTF” bank CEOs, physical gold and silver prices plunged by 16% and 20%, respectively? Which, I might add, is the very same month COMEX registered (available for purchase) gold inventories peaked; which, like Shanghai silver inventory, has since plunged by 83%. And speaking of COMEX registered inventories, they have plunged for silver as well; down a whopping 21% since March to a measly 56 million ounces, worth a piddling $875 million at current prices (again, million not billion).