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Alert: There is a silver shortage


Balco
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corn yea, land no

 

Arable land yes, other land no

 

Hoard now. Will explain more later.

 

There's no shortage of silver. In fact the market is entering peak silver production for the next 10-30 years if you go by a hubbert linearization model.  There are physical delays for American eagles and some other government bullion. That demand is from the retail sector. Still lots of 100oz and good delivery bars floating around too.

 

That's not to say there won't ever be a shortage of silver though. If the world economy continues to tank and it takes down base metal producers it will be a problem for the supply side since most silver production is a byproduct of processing nickel.

 

The market is capped at either end IMO. If supply shock forces the silver price higher industrial use will decrease and other metals or alloys will be found as a substitute. If the price goes too low in silver or other base metals it will simply stop being produced.  If supply continues as is there will be lots of silver on the market beyond what gets used industrially and not recaptured every year. In a situation like that you would think that the price will continue to fall but it's counter intuitive because an over supply of silver actually increases the stock to flow ratio of the metal. Gold/Silver have the highest stock to flow ratios of any commodity which makes them ideal for stores of value.

 

Right now they are getting pounded because everything is deflationary as financial assets are repriced. The Fed couldn't hike a measily 0.25 bps after 7 years of QE/zero interest rate policy and they want inflation to stimulate the economy. So what comes next is NIRP or negative interest rates,  QE4 and direct financial incentives given to market participants or "helicopter" money in the form of a tax credit or cheque. The problem is that all those actions debase a currency. A hyperinflation is a crisis of confidence and that's what the world is walking into if they keep intervening in markets to keep asset prices artificially inflated. You have to allow proper price discover or the trust is lost.

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But here is vindication to us "conspiracy" theorists who think that the price of metals is artificially suppressed:

 

Swiss watchdog opens bank probe into precious metal collusion

 

The Swiss competition watchdog has launched an investigation into possible collusion in the precious metals market by several major banks, it said on Monday, the latest in a string of probes into gold, silver, platinum and palladium pricing.

 

Global precious metals trading has been under regulatory scrutiny since December 2013, when German banking regulator Bafin demanded documents from Deutsche Bank under an inquiry into suspected manipulation of gold and silver benchmarks by banks.

 

Even though the market has moved to reform the process of deciding on its price benchmarks, accusations of manipulation have refused to go away.

Gold prices have also shed some 9 percent in the last two years as investors lose faith in its status as a store of value.

 

"It (WEKO) has indications that possible prohibited competitive agreements in the trading of precious metals were agreed among the banks mentioned," WEKO said in a statement.

 

A WEKO spokesman said the investigation would likely conclude in either 2016 or 2017, adding that the banks were suspected of violating Swiss corporate rules.

 

The banks face financial penalties if WEKO finds them guilty of wrongdoing, the spokesman said, though he declined to comment on the size of any possible fine.

 

WEKO could add more banks to its investigation if it finds cause for suspicion, the spokesman said.

The move comes a month after press reports that the European Union's competition regulator was investigating anticompetitive behaviour in precious metals spot trading, and follows news of a U.S. probe by the Department of Justice (DoJ) and the Commodity Futures Trading Commission earlier this year.

 

Switzerland's WEKO said its investigation, the result of a preliminary probe, was looking at whether UBS, Julius Baer, Deutsche Bank, HSBC, Barclays, Morgan Stanley and Mitsui conspired to set bid/ask spreads.

 

U.S. authorities are investigating at least 10 major banks for possible rigging of precious metals markets, according to reports. HSBC and Barclays said earlier this year that they were cooperating with the investigation.

 

Aside from regulatory probes, a number of lawsuits have also been filed in U.S. courts alleging a conspiracy to manipulate precious metals prices.

Commenting on the WEKO probe, a Julius Baer spokesman said the bank was cooperating with authorities.

 

In a statement, Deutsche Bank said it was cooperating with requests for information from "certain regulatory authorities" over precious metal benchmarks but declined to comment further.

Representatives for UBS, Barclays, Morgan Stanley and HSBC declined to comment. Mitsui was not immediately available for comment.

 

PRESSURE RISES AFTER LIBOR

Scrutiny of precious metals pricing ramped up with the LIBOR scandal in foreign exchange markets. In May, four major banks pleaded guilty to trying to manipulate forex rates and, with two others, were fined nearly $6 billion in another settlement in a global investigation into the $5 trillion-a-day market.

 

A push for more transparency in precious metals saw banks last year abandon existing benchmark prices, including the century-old "gold fix", which had been set twice a day via a telephone auction, in favour of a physically settled electronic system.

The benchmarks were used by miners, refiners, traders and end-users to price gold and silver, as well as platinum and palladium, which are chiefly used in autocatalysts.

 

Last year Swiss financial regulator FINMA said it had found a "clear attempt" to manipulate precious metals price benchmarks during a cross-market investigation into trading at UBS.

As part of ongoing obligations imposed by FINMA, UBS is seeking to automate at least 95 percent of its global foreign exchange and precious metals trading by the end of 2016.

 

The UK Financial Conduct Authority (FCA) last year fined Barclays 26 million pounds ($43.8 million) for failures in internal controls that allowed a trader to manipulate how gold prices were set.

Germany's Bafin has also investigated the gold market, but said earlier this year that it had found no signs of benchmark price manipulation.

 

The impact of the probes on wider precious metals trading was likely to be muted, according to Brian Lucey, professor of finance at the School of Business, Trinity College Dublin.

 

"The question is not if individuals, or groups of individuals are collaborating to rig the game for themselves, the question is if this has any material effect," he said.

"I'm not convinced collusive behaviour will have a meaningful effect micro-economically to the structure of gold trading around the world."

 

http://uk.reuters.com/article/2015/09/28/uk-precious-manipulation-swiss-idUKKCN0RS0IZ20150928

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Balco-- not that you care for such things-- but Goldman put out a position paper on Silver for 2015 and 2016 just a few months ago.

 

It isn't good for your position.

 

Goldman pointed out that the large.. really large silver backed exchange funds are very very very close to liquidating.  

 

And if those EFTs sell off-- you-- our resident crazy person-- are fucked.

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Retail Silver Products are in Short Supply.

 

Canadian Silver Maple coins, Sunshine Mint silver rounds and other popular silver products are on back order.

 

American Silver Eagles selling at substantial premiums over the spot price of silver.

 

Despite retail shortages of silver, the price of silver continues to decline.

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Government sales that once provided as much as 78 million ounces of silver in 2006, have tricked down to essentially none. Central banks do not hold silver as a reserve asset and most governments no longer holder silver as a strategic asset. The U.S. government abandoned their strategic silver stock pile over a decade ago.

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Government sales that once provided as much as 78 million ounces of silver in 2006, have tricked down to essentially none. Central banks do not hold silver as a reserve asset and most governments no longer holder silver as a strategic asset. The U.S. government abandoned their strategic silver stock pile over a decade ago.

I heard from an inside source that there was a HUGE stock of silver found on Mars recently. NASA doesn't want to make it known for fear of devaluing silver.

 

I'll make you an offer of .25 on the dollar for the $14k worth you have. Make sure to let me know soon an emp attacking is on the way and will render the internet useless.

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