I’ll try my best to get to the point fast and start with the biggest misunderstood things about the silver market.
- Silver is money. This means all money, in all forms, is a potential claim on silver, as all money, in all forms in all different national currencies, whether paper or electronic, can be spent on silver. All of it can potentially drive the price up.
- There are two huge forces in the silver market, and they have driven the price to historic lows today. The rise of paper money has reduced demand for silver as a circulating currency. This has created a 150 year price trend of lowered values for silver, which then also reduces demand for silver as a form of savings. Saving in silver has been a disaster.
- The second big trend in the silver market is it’s use in the electronics industry, which has consumed silver mostly for use in switches. After World War II, the per capita consumption of silver increased from 1/10th of an ounce of silver to 6-7/10ths of an ounce of silver, per person, in the industrialized world, annually. This has consumed most of the silver ever mined in this history of humanity, and has made real silver very scarce.
- All of the market commentators on silver always miss point number 1. Silver is money. Money can be used to buy silver. Money itself, is a manipulation, and is in essence, a short position on silver. The issuers of money ran short on silver, but continued to issue paper money. All of this paper money can come crashing into the silver market.
- The COMEX or the futures contracts in silver are supposedly very large, and are nearly always the source of market commentary. The amount short sometimes ranges up to 100 million ounces. This is nothing.
- There is an “over the counter” hidden short position against silver that dwarfs the COMEX paper market. In 2009, they sold 20 years of mine supply of silver into this over the counter market, over the span of 6 months. This was about 900 million oz. x 20. It is about 200 times of a bigger short position compared to the COMEX nonsense, and still tiny compared to point number 1. This is the market where a brokerage account holder asks the broker to buy physical silver for their account. They will “do that” for their clients. But they never get physical. These are the “total silver derivatives” as reported by the Bank of International Settlements. Morgan Stanley was busted over this, and their excuse was “It’s standard business practice by the industry”. JP Morgan was exposed over this and their excuse was “We are hedging client long positions”. Right, the clients are long, so the bank that did not buy it for them is short. If the bank is short, they must continue to short to protect their short position from exploding against them.
- There are no experts alive who have witnessed the entire world running out of silver, and an entire world who adopted to paper money, and then saw that kind of world begin to scramble for silver, so despite what I know, I cannot predict this silver market.
It will be Biblical. Revelation 3:18
Good luck. Have fun.