The Silver Market will experience a significant trend change in the future due the unraveling of the paper markets.  Already we are witnessing a lot of political turmoil and havoc as President-elect Donald Trump gets ready to take over the White House in the next few days.

It’s also logical to assume the policy changes President-elect Trump wants to make will cause serious ramifications to the highly leveraged debt-based fiat monetary system… whether he realizes it or not.

Craig over at recently interviewed Paul Myclhresst about the huge problem the Chinese government is dealing with as they liquidate Dollars to prop up their banking and economic system.  I highly recommend listening to that interview if you haven’t.

Thus, the continued liquidation of U.S. Dollar Reserves by China and other countries is probably the reason for the ongoing decline in International Reserves covered in Hugo Salinas Price’s newest article, The Further Decline In International Reserves:

Over the past 29 months, the decline in Reserves took place at a rate of about $42 billion dollars a month. At this rate, by the end of 2017 International Reserves will likely decline by another $504 billion dollars, to $10.31 Trillion, which will increase the decline from the peak in 2014 to 14.31%.

As we can see from Hugo’s chart above, countries continue to liquidate their official reserves (mostly U.S. Dollar reserves) to prop up their financial and economic systems.  This is a very BAD SIGN… likely to get much worse in the future.

The Silver Market Will Experience A Huge Trend Change In The Future

The Global Silver Market will experience a huge trend change in the future, thus impacting the price in a BIG WAY.  The are two critical reasons why this will occur:

  1. Cracks In the Highly Leveraged Debt Based Fiat Monetary System will force investors into purchasing silver to protect wealth
  2. The 17 consecutive years of annual silver deficits totaling 1.8 billion oz, suggests the easy to acquire silver is now in tight hands.  Which means, when investors finally start to rush into silver, there will be very little available to be purchased, only at much higher prices

Let’s take a look at the Global Silver Market annual net balances from 1975 to 2016:

Let me explain this chart as it contains some interesting trend changes.  First, the majority of annual net surpluses occurred from 1975-1987.  This was after the U.S. and British Govt’s colluded to start the Gold & Silver Futures trading markets, which funneled investors funds into paper precious metals rather than physical.

You can read more details on this in my article, PRECIOUS METALS INVESTORS: Are You Ready For The Great Financial Enema.

This was also the same time when governments and big investors were dumping old silver coins onto the market that were no longer being used as currency.  You will notice that in 1978 the net silver surplus was very low.  This was due to the huge demand by investors as the price of silver skyrocketed.  However, as the silver price was capped by the “Financial Doctors” at the Fed and CME Group in 1980, many investors dumped silver back into the market.

According to GFMS’s data, there was a 306 million oz (Moz) surplus of silver that year.  And, as the silver price continued to decline in the 1980’s, more silver was dumped into the market, especially in 1983 (140 Moz) and 1984 (149 Moz).

I don’t want to get into too much detail from years 1987-1999, but annual net surpluses continued as governments such as China, Russia and India sold official silver stocks into the market.  But, this all changed in 2000 when the Global Silver Market started to experience net deficits.

And… since 2000, the Global Silver Market has experienced 17 consecutive years of net silver deficits.  According to GFMS and the Silver Institute, the world will suffer another 185.5 Moz net deficit in 2016.

So, how can the Global Silver Market suffer 17 years worth of consecutive silver deficits?  Well, because there was over 2 billion oz of silver surpluses (1975-1999)  put away for a rainy day:

Of course these figures are best estimates and do come from an official source that may have the motivation to under-report the real situation, but we can clearly see that a lot of silver has moved out of the market and is now likely be held by extremely tight hands.

While the market is nothing more than one huge “Intervention”, these official figures reporting 17 years of consecutive net silver deficits means the silver market is poised for something extremely big.  And, I am not saying that just because I am a silver investor.  The PROOF is right in front of us.   No need to hype something that is totally making the CASE for us.

The Gold & Silver Paper Markets Are In Serious Trouble

While many precious metals investors believe that market intervention and manipulation can continue indefinitely, we are already witnessing the collapse of International Reserves.  Furthermore, if President-elect Trump is allowed to run the White House for a while, we are going to see serious financial dislocations due to trade wars and increased U.S. inflationary pressures.

In addition, GFMS and the Silver Institute forecast continued net annual silver deficits for the next several years (at least) as global silver production declines while demand continues to be strong.  This will be just more FUEL for the SILVER MARKET FIRE ahead.

Again, this is not hype.  What I am explaining here is the same setup as those characters portrayed in the movie the BIG SHORT, who were betting against the disaster called the Mortgage-Backed Securities industry.  They knew it was a huge house of cards ready to implode… it was just a matter of time.

While the gold market will likely experience a huge run, I believe silver will outperform gold many times over.  This is due to the fact that there is about the same amount of invest-able silver in the world as there is gold:

According to the best sources I could come across, there is about 2.2 billion oz of investment gold and 2.5 billion oz of investment silver in the world today.  Of course, there is likely more physical gold and silver we don’t know about, but it will not change the ratio all that much.

That being said, just a doubling of physical gold and silver demand will put a lot more pressure on the silver price than gold as big traders and hedge funds jump aboard for larger percentage gains.

As we begin to see fireworks going off in the United States as President-elect Trump stirs up the pot, 2017 will likely be the year things really start to fall apart.

If you haven’t read my article, PRECIOUS METALS INVESTORS: Are You Prepared For The Great Financial Enema, I provide more clues of the situation ahead.

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53 Comments on "BIG MOVEMENT AHEAD IN THE SILVER MARKET… Serious Trouble In The Paper Markets"

  1. Steve,

    If I understand your chart correctly, there was a surplus of 2,101.6 million ounces from 1975 thru 1999 and a deficit of 1,801.1 million ounces from 2000 thru 2016 and a deficit total of 185.5 million ounces in 2016. Is the 2016 included in the total of 1,801.1 moz and does that mean that there is still a surplus of 300 moz out there somewhere?

    If so, will this cover the 2017 deficit and, maybe, part of the 2018 deficit?



    • SteveW,

      I don’t know if there is a 300 Moz surplus. GFMS data on retail bar demand was not available before 1990, so we have no idea how much was purchased, thus lowering the overall 2 billion oz surplus.

      Again, I believe the situation is much worse in the silver market. I can’t give actual evidence, but a market that has suffered 17 consecutive years of deficits with more on the horizon is not a market that will continue operating for long.


      • Dosen’t JPM have somewhere around 300million ounces?

      • 300M ounces is “only” 60k contracts on the CONeX – they satisfy that sort of demand by a click of the mouse!

        /sarc off

        In other news, as per the last COT report, the commercials ARE short 79k silver contracts right here and right now. Hmm…

      • 2017 American Eagle Sales Total = 4,572,500

        • 4 oz,

          Was that in fact 2016 or a projection for 2017?

        • 4 oz,

          Thanks… yes, I saw that. Last year, the U.S. Mint sold 5,945,500 Silver Eagles in January. So, they need to see about 1.5 million more in the next two weeks to meet that same figure.

          If the political situation continues to RUN AMUCK when Trump takes over the White House, we may see some serious fireworks in the world markets. This could be the motivation for investors to acquire even more than the 1.5 million. But we will have to see.

          I am actually less concerned with the ongoing demand figures for Silver Eagles. However, the situation in the silver market is becoming quite interesting as it continues to run annual deficits. This is much different than the gold market, even though a lot of gold has gone from WEST to EAST forever… LOL.


  2. I’m the guy driving the big silver bus, you flag me down, I’ll let you ride. (For a fee of coarse)

  3. Silver has not even come close to it’s all time high in 5 years. If there was any validity to your theory silver would have to blow passed it’s trading range with tremendous strength. It isn’t even close to doing that. Many have been sitting on a dead investment for years. In 2011 many were predicting $6O silver. Caveat Emptor .

  4. Haven’t we been here before?
    The sky is still there…

    • No use shutting the stable door after the horse has bolted. Spilt milk…..etc. Or just insert your own choice of folk-phrase. If you’re caught without it, you’ll have a long time to weep and wail “Coulda, woulda, shoulda….”

  5. JPM is the worlds largest single owner of physical silver and owns more than 550 million ounces of silver.

    • Don’t underestimate JPM, ever. Watch what they do. They WILL make money, and you can make money too by doing what they do. Don’t worry about why. Accumulate silver and preserve/increase wealth, just like JPM.

  6. We will see how long this zombie system remains in place. In the meantime, it is a good idea to buy gold and silver — though the price of silver at well under 20/ozt is especially enticing right now. Bare minimum, buying gold and silver should be regarded as a form of basic insurance.

  7. W Bishop Jordan | January 18, 2017 at 7:53 am | Reply

    Steve It is my opinion Trump thinks the dollar is too high. Wouldn’t a higher gold and silver price put downward pressure on the dollar

    Trump my end the manipulation gig to you guessed it manipulate our currency > Oh My


  8. India will become a much different country when all the presently poor residents become something like millionaires.

  9. Silver is in a trading range , if you can play it fine but if you are waiting for “a zombie apocalypse “and investing in silver because of it, it is a mistake . First of all a complete collapse of the banking system would not only bring America down it would destroy the worldwide economy and bring about anarchy . A few silver coins in your hand wouldn’t mean much. You’d be better off with beans bullets and toilet paper. One must remember that the elitists would lose all power in a “Mad Max” world. You have to ask yourself if you are rich and can have anything you desire why would you opt to live in a bunker for 20 years, or more, eating freeze dried food. Every economy is shaky but that’s the norm. If one reads articles from the 1960s on you find that no one believed the economy was going to improve or the markets would grow except todays Billionaires . Think about it.

  10. Compatitive devaluation of currencies is in full swing in our collective race to the bottom. Now the $ value is too high according to Trump.

    Currency wars, trade wars, real wars. “Build that factory in my country or suffer import taxes”, with the currency war in full swing, they’re heating up the trade war machines.

    Watch until diminishing returns force governments to take unprecedented steps to avoid a total collapse of their economy and watch your buying power in FRN’s evaporate like a snowball between your buttocks. Then look in the mirror and tell yourself: “you can’t eat gold & silver”.

  11. I trade silver and the SandP 500 on the futures market. Interesting the S and P is worth 10.7 trillion dollars and trades at 17.50 a pip. Silver is a market that worth about 20 billion and trades at 25 dollars a pip.
    Now that is leverage.

  12. The main factor that will determine silver prices is the velocity of money. Not surprisingly, there is no mention of it.

  13. I have been a silver stacker since 2013 and I have stuck with it but am buying much more at a time these days. You really have to understand silver and gold and what role it plays. You also have to disconnect from thinking about precious metals in fiat currency terms.

    Once these hurdles are past its a clear path to financial royality. I have not one regret except I probably could have pushed my limits by working a second job and buying even more!! A pound of silver a month is still pretty good for a retail worker.

  14. Gold bugs have been singing the same old song for years. One must remember that after the run up and crash of the 80’s gold didn’t really do anything for more then a decade. Even in a market crash gold would get hammered just like it did in 2006&7 . It been five years now in a trading range and every gold bug out there gave dozens of reasons why metals would hit the moon from the Chinese exchange opening to US 20 trillion dollar debt exploding but it stayed range bound. When it does go up its a given nobody is going to telegraph it.

  15. To many physical buyers sucking up about a 5th of yearly production, not sure I would call that a deficit, or strong hands, wait until recession or hard times and we will see more silver hitting the street than ever before in history, I see a surplus coming. Also, we have record production, it’s a profitable game for producers, wasn’t the case back before 2000 when silver was only $5 oz it wasn’t worth anything, nobody wanted it, now people think it’s worth something, it’s not, it’s an over speculated base metal.

    • C,

      Thanks for the COMEDIC RELIEF.


    • C.
      You can hand your silver out to me fo 10$ before it goes to zero. Or are you paid for writing in blogs like that, looks more real.

    • “wait until recession or hard times and we will see more silver hitting the street than ever before in history, I see a surplus coming.”

      well, we’re in a recession, and on top of that silver went from $45 to $12, but the physical didn’t all get dumped.

      yeah, we’ll see a surplus, but not like you think. it’ll be more along the lines of, “what do you mean you won’t sell me a loaf of bread for a silver eagle?”

      • You come back tomorrow after I grind this wheat into flour and bake bread. 1 ASE per 48oz loaf. Organic & hand made! You want some canned butter or raspberry jam with that bread?

  16. The turn around in net balance chart seems to correspond with the fed’s Gold and Silver ore mining chart.

  17. If their is anything I said that does not seem right, call me on it, I’m just getting my information from the world silver survey. In 2015 physical coin/bar demand topped out at 292 million oz. moving up from around 50 million oz. back in 2006, while production has gone up about 200 million oz. since then currently almost 900 million oz./year. During times of easy money like this, it’s easy to see where the silver is going, people are buying it and stock piling it, I have over 1000 oz. of physical myself, and that’s a peanut investment for the average joe in an economy where the stock market has doubled in 10 easy years, “paper” millionaires are everywhere now and they need hard assets too, more folks this time haven’t forgotten the last equities crash and what the government had to do in order to prop it all back up.

  18. Steve,
    Off-topic but your work has made it into a significant article at The Automatic Earth:

  19. The same headline over and over again . .
    It may be right that the silverprice will explode in some time in the future . . but this constant populistic ALL CAPS – “NEAR FUTURE!!!!”- stuff is just unprofessional and annoying like nothing else.
    I invest a good amount in Silver but I am no Idiot who needs HUGE Marketing Headlines that sound like something for penisenlargements . . .

    And . .
    We will not only see a rise in the silverprice . . we will see thousands of counter measures that will be put in place so you wont be able to use the value of your stacked silver then. Your silver is just worth anything if it is legal to pay with it. Thats the line. And it is only worth anything if you can store it secretly so no one is skinning your feed until you give him the the location and the keys.

    Silver will be branded as the currency of “terrorists” and “paranoid idiots”. Since most people are just concerned about what most people think of them . . noone will accept silver as payment for anything. It will be treated like helium or any other industrial commodity. The only alternative scenario is war . . big war.
    And there noone cares about silver . . people will just kill you for some coins to get into safer regions.

    The worth of silver can only be harvested if you put the same efford into changing the world into a silver friendly, intelligent world. A lot of amazing graphs . . a lot of numbers . . but nothing really changes. Because they always react. And where they cant react anymore they will forbid. Socially or by law.

  20. Silver has been moving a lot lately. Well within the defined range of the manipulators. Banksters are in charge. They will be under Trump too. Trump will be powerless to change our FIAT system.

    • Trump is the chosen pupet to blame when everything collapses. Like they chose Hitler for the same reason when people understood, that the world is in the hands of powerful people.
      It’s distraction and killing a whole generation of people who know that they are slaves . . to generate the next “work hard”- generation.

  21. To all the trolls. Use some common sense. If you ban a useful commodity such as silver then the silver never makes it into the market place. It will migrate to friendlier shores or stay hidden. There is only one answer. Pay enough for it to find its way back into the market place. Even taxing silver sales makes no sense. It has the same effect as making it illegal. Steve is pointing out real world imbalances. Its up to us to make the most of the illegal manipulation that the bullion banks have used to enrich themselves. I’m going to stack so that in my retirement I’ll sell a little silver to keep the lights on and the missus happy. That is true wealth. The rest can be disposed of by future generations.

    • “common sense” . . . there are a lot of chemicals that are banned today for the public but used in normal civil productions. It’s not hard to do. You just say something is too dangerous for the idiot on the street.

      Step one: You say you need to monitor the precious metall movements for anti-terror “reasons” starting on a specific date. Every bought has to be reported then. So small investors and preppers sell it like crazy because they are scared and feel watched.
      (Of course you accuse all other countrys of supporting the terror by allowing such a anonymous way to keep money. But they still dont forbid it.)
      You also point out constantly that saving wealth by silver is something that harms the economy and evades important taxes to socially shame every investor.
      Price drops.

      Step two: Create a second 9/11 and “find out” that “terrorists” use Gold and Silver to pay their heavy equipment on the black market. (Now the pressure to forbid this outdated, Tax-evading, evil terroist money in the world gets bigger. No one wants to support this “terror”, like no one stood up to save the people of Iraq from bombing into shreds on made up evidences of “weapons of mass destruction”
      So they “Temporarily forbid (excuse me: HOLD) the precious metall sells” during the “investigations”.

      Years later after forbidding papermoney for the same reasons. . .
      Because of “SOO MUUUCH” Tax related crimes, drug crimes on the street and terrorism they “feel the need” to forbid the trading of gold and silver indefinitely for a better and safer world.

      Behind the back: The real leaders of this world buy up every single ounce through industrial branches, because they will reinstate the tradeability later. So they rule the world much better than ever.

      A view years ago people couldn’t believe that they are monitored by their mobile devices. Now they act like it’s completly normal . . Just because you cant imagine a world where silver and gold are branded as the traceless terrorist money doesn’t mean that this ciould change in 3 Years drasticly.
      AS WE KNOW!

      For the record: I am not saying silver is a bad investment! And I KNOW ABOUT THE TRUE WEALTH!. But we are not living in a TRUE WOLRD! There come a lot of things with buying silver.
      It is how you use it when SHTF. When to sell. How to sell. How to hide and protect. How to transport.
      The key is trading the silver into something real at the right point on the right place in your lifetime. A house . . a farm .. tons of food . . or freedome. . . that is the ONLY goal. Not to sit on it and just HAVE IT like a sick billionare that cuts out coupons to save some cents.

  22. I think its plausible to assume the Obama administration was secretly providing gold to shore up COMEX bullion bank deliveries. I don’t think Trump is going to keep giving away America’s gold to the bullion manipulators. I suspect we’ll see gold start going much much higher in the months to come.

    • DisappearingCulture | January 24, 2017 at 9:58 am | Reply

      Trump will shake up some things but he won’t run the bankers + Federal Reserve + Treasury working together. They will give him his marching orders, or he or his family will be in jeopardy. Or they will “enable” impeachment. What has been done to prevent economic chaos and enable the profits of the elites will continue to be done.

      Until the COMEX breaks down the prices will continue to be controlled by the commitmant of traders [shorts versus longs] on the COMEX. When the COMEX structure breaks down it won’t be long before TSHTF


    Don’t walk on the grass, smoke it.Maybe the real energy storage?German quality work.LOl!

  24. Silver and gold is obviously very weak.It’s very simple.Look to the juniorminer.No money flows in.
    I’am relative shure that they smash the price again.

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