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demand: A) industrial usage continues to grow. in most applications there is no suitable substitute. B) safe haven appeal increases as we progress into “interesting times”
and seemingly incurable inflationary trends. (inflation rises and falls, but DOES NOT stop.)
supply: A) mining is slowly responding to rising prices, but long start-up times and the fact that most silver supply is a byproduct of other mining activities put the emphasis
on “slowly.” (years and decades rather than weeks and months.) B) recycling remains difficult due to the wide dispersion of small quantities of silver per unit of product.
above ground inventory: A) comex warehouses, the london and shanghai exchanges have levels of deliverable metal on hand at historic lows, and shrinking. B) private retail
hoards (stackers, large and small) – no reliable information, but it seems likely most of this is in “strong hands.” C) junk and scrap (90% coins, sterling tableware, etc) again, no
reliable information, but this is finite, and considerably depleted during past price spikes.
paper silver: A) futures markets – last i heard comex had sold forward (shorted) four ounces for each deliverable ounce on hand. other futures exchanges? probably similar.
B) banks, etf’s – whatever – holding “silver” accounts for clients? anybody’s guess, there are all kinds of fractional reserve ponzis out there.
outlook: stormy weather!
lots of volatility (up AND down), becoming ever more frantic as march deliveries get closer and closer. (tick… tock… ). first notice day, when we find out how many are standing
for delivery in march, will be worth watching.
continuing: if, somehow, the comex operators patch something together and avoid an outright default in march, we get to watch this movie again, except with even less inventory the
next delivery month…
…lather, …rinse, …repeat – until something breaks. are your seatbelts fastened and your tray tables in the upright position?
76 degrees and cloudy at beautiful treefrog manor.