Collapse Of U.S. Gold Scrap Exports As Suppy Dries Up

In just the past two years, U.S. gold scrap exports declined an amazing 80%.  What’s going on here?  Is the U.S. starting to run out of gold scrap?  Either the U.S. is running low on gold scrap to export or the market is refining more to fill the huge amount of domestic and foreign bullion demand.

Regardless, U.S. gold scrap exports in 2013 fell to their lowest level in years.  According to the USGS Gold Mineral Industry Surveys and Yearbooks, U.S. gold scrap exports fell from 886 metric tons of gold (gross weight) in 2008, to 128 metric tons (mt) in 2013.

U.S. Gold Scrap Exports 2007  to 2013

Some believe the decline in gold scrap exports in 2012 and 2013 were due to the fall in the price of gold.  While this may be true in 2013, it was not the case in 2012.  The average price of gold in 2012 ($1,669) was higher than in 2011 ($1,571).

We can see that U.S. gold scrap exports fell 60% from 663 mt in 2011 to 266 mt in 2012, even though the price of gold was nearly $100 higher in 2012.

The collapse in U.S. gold scrap exports are more apparent when we compare the total amount in 2013 to the individual countries in to 2011:

U.S. Gold Scrap Exports 2011 NEW

In 2011, the U.K. imported more than double the gold scrap from the U.S. (260 mt) compared to total exports in 2013 (128 mt) and nearly the same amount as in 2012 (266 mt).

Interestingly, two of the top four importers of U.S. gold scrap in 2011, Switzerland and the United Kingdom, are the leading exporters of gold bullion to Hong Kong.

When I first wrote about this subject in my article, Is The U.S. Running Out Of Gold Scrap, the U.S. exported 121 mt of gold scrap by the end of October of 2013.  After the USGS released their final data for 2013, total gold scrap exports were only 7 metric tons for Nov & Dec.

Which means… the present decline trend of U.S. gold scrap export supply, continues to fall even faster.  In the first ten months of 2013 gold scrap exports averaged 12.1 mt, however, in the last two months it fell two-thirds to 3.5 mt.

We can only speculate why this is taking place, but the data sure does paint a very interesting picture.

Very Strange U.S. Gold Scrap Import Data in 2013

Something very odd took place in 2013 as it pertains to U.S. gold scrap imports.  I spent the better part of the day trying to locate sources who could explain this large anomalous gold scrap import figure in 2013.

If we look at the chart below, U.S. gold scrap imports remained quite low since 2007… a fraction compared to exports.  From 2007 to 2011, gold scrap imports ranged from 36-50 mt, and then picked up substantially in 2012 to  116 mt.

U.S. Gold Scrap Imports 2007-2013

Then in 2013, total gold scrap imports ballooned to 286 mt.  When I first checked the data, I thought this large increase came from many countries, but when I looked closer,  I realized 221 mt of this amount came from one small country in South America… Suriname.

This is the very same country in which GATA secretary, Chris Powell went to visit back in February to help educate the government officials in Suriname on the subject of “Gold Price Supression.”  Powell spoke about this during an Interview on King World News.

Something seems highly suspect here.  While there is one large gold mine (Newmont) operating in Suriname, where on earth did the country come up with 221 mt of gold scrap?

As I mentioned, I spent a great deal of effort trying to get to the bottom of this large Suriname gold scrap export, but no one could offer a good explanation — the tragedy of a highly specialized system where the left hand knows not what the right hand is doing.

One thing is for sure, U.S. gold scrap exports fell off a cliff in the past two years.  I believe the majority of Americans sold whatever gold scrap they had and are now for the most part… tapped out.

I spoke with USGS Gold Specialist, Micheal George on the subject of gold scrap last year and he told me (according to his sources), that the gold scrap market was now refining lower quality scrap because the low-hanging fruit was gone (paraphrasing).

It looks like 2014 will be an interesting year for the gold market.  Please check back at the SRSrocco Report for updates and you can follow us at Twitter below:

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52 Comments on "Collapse Of U.S. Gold Scrap Exports As Suppy Dries Up"

  1. Yep, let’s go through every last ounce of the gold that has been saved up generations, and ship it off to China and India for cents on the dollar. Makes sense!

  2. Nitro Charged | March 21, 2014 at 3:12 pm | Reply

    A great read as always! Well done on the research of this too.

  3. Be a man and stop screening comments

  4. Wrong for 3 years & counting. You’re the best contrarian indicator out there.

  5. Do you ever apologize to readers for telling them to buy silver at $40+

    • 2014,

      A little frustration here? Screening comments? I don’t mind someone asking questions or providing the other side of the debate, but you are making assumptions… dear sir. The only time I screen comments is when it is from a new commenter or if there are several links in the comment.

      After someone makes their first comment, the rest are published automatically. If a regular commenter puts several links in a comment, my spam filter puts it into “Moderation”. I publish all of these… BAR NONE.

      Apologize for readers for buying silver at $40? I bought silver at $8 to watch it fall to $6. I bought silver at $14 to watch it fall to $9. I bought silver at $18 to watch it fall to $9. Do you hear me complaining?

      Buying physical gold and silver is just like Americans investing in their 401K’s for decades. However, the precious metals will turn out to be the better choice in the future. It’s a long-term buy and hold strategy. Not the silly trade mentality infected by the majority of investors.

      If you got burned at buying silver at $40… well, I never told anyone to buy at that price. And lastly, that price will seem quite silly when the fiat monetary system collapses.

      The biggest problem with the pubic today is that they have the attention span of a GNAT when they should be looking at the longer term.

      steve

      • Gosh, I’m so sick of short-sighted opinions and ideas. Vaccines against pathogens, QE to stimulate our economy, intense natural resource extraction all have terrific short-term value but the long-term value is non-existent or destructive.

        I understand it and why it exists in nature, but it leads towards no sustainable course. Us long-term thinkers are a VERY rare breed.

      • Maybe with the ongoing investigations into the banks suppressing the gold prices and the fact the other countries will follow Germany in asking for their gold back, that scrap gold is being refined back to give Germany their gold back. This may be why they said it will take seven years.

    • Stop acting like a sheep and take responsibility for your actions!

    • Link to the article recommending buy @ $40?

  6. I suggest you go back and read the first 10 articles you published under the SRS name

  7. Or visit the kitco forums where your articles provide endless entertainment

    • Welcome to complex systems where the short-term predictions are useless.Steve is spot-on with his general analysis and if you can’t understand that than you should go somewhere else. Nobody is forcing you to read Steve’s stuff. The rest of us are here because we understand the data which you seem to not get.

      No biggie. There is always Yahoo finance.

    • Why don’t you go back to the KItco forum? When you want some real analysis you can always come back here. When you do come back to troll this forum why don’t you ask some real questions. If you think his analysis is so wrong why don’t you offer some counter arguments rather than taking cheap shots? Do you honestly think that the correction in gold and silver prices in the last couple years render Steve’s analyses during that time useless? If so, you are as ignorant as you sound.

  8. Hi Steve, i’m from an italian blog on metals, argentofisico.blogspot.com … here just to say keep strong and nevermind this trolls!!! ;D

    • Er,

      Yeah, I have seen your website linked to mine.. great to have you putting out the precious metal word in Italy. By the way, my Grandfather was from Sicily and my Grandmother’s parents were from Italy.

      Not many people realize the ROCCO in SRSrocco is my middle name which was the first name of me Gramps.

      Always wanted to go visit the place where my ancestors were from. Anyhow, I think 2014 will be quite an interesting year in the Precious Metals and Energy industry.

      steve

  9. Suriname

    Steve, the company Valaurum which produces the aurum seems to do most of its work with Suriname. They love their gold.

    http://valaurum.com/news.html

  10. thank you steve, I was just wondering with all the scrap gold in India will the govt try to take it from the general masses

    • Raj,

      Hard to know what Govts will do. However, I do believe the Indian people would not stand for a Govt confiscation of their gold and silver. This would be akin to the U.S. Govt trying to take away guns from American citizens.

      Indians are a very smart and intelligent people. Which is why they have been buying gold and silver for hundreds of years. Again, I really doubt the Indian Govt would be stupid enough to try and take away their citizens precious metals.

      steve

  11. Thanks for sharing this information…it takes time and energy to publish and share … it is appreciated ….. as to buying higher … I too bought higher but I realize all markets are corrupted …. but in commodities at least …. fundamentals will over time …. win out.
    I am in the electric generation business …. for years the price per kw-hr has been depressed …. so hard to see a return on equity … but this winter what a surprise wholesale rates topped retail rates on the spot market. When the demand exceeds supply over time the price will move….. When paper gold and silver is no longer bought … the supply of physical will no longer be adequate … price will rocket. When will this happen …. no one knows …. be cool … wait …. and hopefully … within your lifetime… the reset will come. I know I’d rather have a warehouse full of real tires than a slip of paper from the manufacturer saying I own 50,000 tires…. When the shit hits the fan a warehouse tire can be sold with a big mark up… that slip of paper saying you own the tires will be worth little.
    This example carried over to our savings … silver, gold, gallium, tires, etc can be savings that are real and can’t disappear due to lies…. our bank accounts … stocks…. pensions can vaporize due to lies. It is already happening to varying degrees with inflation all over the world …. it is already happening to larger degree with bail ins , and taxes on savings (Theft) all over the world ….

    Wake up …. haven’t the governments and the bankers stolen enough of your labor…. One hour’s labor stored in ones youth for old age (money/savings is stored labor) will only buy about 20 minutes of labor today….

    One last indication of how we are economic slaves …. take 4 quarters of today … take four quarters, 1964 (90% silver) lay them side by side …. today’s quarters will get you one dollar … silver quarters will get you 17 dollars…. This example is why the founding fathers, tried to keep the people free by providing real money instead of paper script. The difference between something that is easily manipulated and something that is hard to manipulate….. The difference between economic freedom and economic slavery….. Wake up …. we all are economic slaves …. rise up slaves and do something for yourself… take the steps necessary to become free or at least freer.

    • Chris,

      You are spot on… except for one small thing. Americans sit on $trillions of dollars of supposed assets that are digits in an account. Peak Energy will destroy the value of these digits and most other physical assets. Gold and silver will increase in value above and beyond their present purchasing powers when Americans try to switch from increasingly worthless paper assets to the precious metals.

      This is precisely why Gold and Silver will become excellent INVESTMENT GAINERS rather than just STORES OF VALUE.

      steve

  12. Ironically,2014 will be the year that precious metals turn around.Thank You 2014…as long as there are short sighted mainstream market morons like you, we will still be able to buy into the coming PM frenzy ….you will be buying while we are selling!

  13. Ahh, Suriname…
    as in, Dutch Guyana….Dutch as in Anglo-Dutch Oil, Shell, Libyan light crude, and the “responsibility to protect”.

    Remember that convoy reported as having set out from NATO-interdicted Libya,
    G-Daffs’ gold aboard? Last heard of somewhere in Niger heading through the desert for an unknown destination on the coast?

    As in the former “Gold Coast”/// where Dutch trading forts policed the flow of slaves and gold from the Ashanti interior?

    One hundred and thirty three tons of Libyan gold -gone missing- who ya gonna call? Muammar was further ahead on the African gold dinar project than is commonly realized… indeed, it is quite possible to imagine that the new stock of gold dinars, with which the man had threatened to assault the petro-dollar hegemony was already minted and waiting…

    America’s moral imperative to invade and restore stability followed.

    Gold convoy intercepted after a call to the Resident in US Embassy Ghana, payoff to local narcos for the wet work, President bribed to look the other way, ship ready and loaded in the night for a voyage to South America…

    where the terror of a reborn Islamic gold currency quietly melts away into another load of ‘scrap’ for the markets of New Holland… er, Manhattan. And the world is kept safely in thrall to western “democracy” another day.

    Personally, I’d call Patrick McGoohan, for a discreet insertion into the local scene… but sadly, he, like all the rest of the best… is no longer with us. We must muddle on!

  14. I enjoyed the article on the subject of decreasing gold scrap exports very much. Steve made his point very clear, the charts back up the simple facts stated. Thank you for doing the research and sharing it. I had no idea this was taking place, it seems odds and as you say, begs the question What’s Up wit Dat ?

  15. “In just the past two years, U.S. gold scrap exports declined an amazing 80%. What’s going on here? Is the U.S. starting to run out of gold scrap? Either the U.S. is running low on gold scrap to export or the market is refining more to fill the huge amount of domestic and foreign bullion demand”

    Recyclers like OPM and NTR are selling one ounce & fractional gold to the public through PM retailers, and perhaps to wholesalers. How much of that stays in the U.S. versus going abroad…who knows.

    • David,

      Good question. As I mentioned in the article, USGS Gold Specialist Micheal George told me during a conversation last year, that the high-quality scrap metal had already been refined and now they were down to refining much lower-grade stuff.

      Also, looks like the U.S. Govt wants more gold scrap to stay in the U.S.

      steve

  16. The OP likes to use scare terms like “collapse” to feed your paranoia

    • Kewl!

      I looked that wird up – paranoia… says here – “Paranoia is a state of heightened awareness. Most people are persecuted beyond their wildest delusions. Those who are at ease are insensitive.”

      So… I guess you is sayin the OP is scarin us into our senses??!? U gots me confused now! First I thoughts you were throwin insults his way, noows you tryin to suck up to him?

    • 2014, We will have a collapse that’s for sure. There is no question about it. Steve makes a very good job here educating us on the physical and energy side of what will happen in the not to distant future and how to protect from it. The information I find here is helping me to stand al the manipulation and propaganda around us wanting us to believe in business as usual.
      So come up with some real arguments or just be quite.

  17. Steve, I appreciate your work. I am looking forward to your first paid report. The comments section for most articles have been very educational. Your responses to individual questions have helped me learn more about EROI and other topics. Its sad to have people like ” 2014″ who are only here to start trouble

  18. It’s dishonest reporting when you write articles about primary miners and fail to mention that 70-75% of the world supply doesn’t even come from them.

    Same as this “scrap” article

    • 2014,

      I see you have some sort of axe to grind here. However, if you read all of my articles and the comments, you would understand already what I am about to write. Unfortunately, those who comment in this way normally jump to conclusions before knowing ALL THE FACTS.

      First of all… this was the breakdown in global silver production in 2012:

      Primary = 222 million oz (28%)
      By-Product= 565 million oz (72%)
      Total silver production = 787 million oz

      Secondly… there is no way to do a cost analysis on Base Metal by-product silver. There are way too many variables, mining companies, base metals and etc to figure. It is just impossible to calculate.

      That being said, the largest Copper By-Product silver miner in the world, KGHM Polska Miedz, had an extensive SILVER HEDGE BOOK up until the beginning of 2013. They produce about 40 million oz of by-product silver a year.

      After the price of silver was crushed along with gold in April of 2013, KGHM dropped their entire silver hedge book. Which means they don’t believe the price of silver will fall much lower than where it is presently. Also, their profits have been falling like a rock… especially now with the price of copper down after the Chinese leveraged disaster.

      Which means… THEY NEED EVERY DOLLAR THEY CAN GET FROM SILVER TO REMAIN PROFITABLE. The idea that by-product silver miners produce silver for free is just as insane as silver cash cost analysis.

      Third… the 222 million oz or 28% of global primary silver mine supply is a big number. We would see massively higher prices if primary silver production was taken off line. But let’s go the other way.

      The 565 million oz of By-Product silver mined in 2012 at the average 2013 price ($24) would be a MEASLY $13.5 billion dollars. That’s right…. someone with the FED’s checkbook could purchase TOTAL GLOBAL BY-PRODUCT SILVER PRODUCTION for a little more than one lousy week of QE monetization.

      Fourth… this does not take into account PEAK ENERGY-OIL. The impact of peak oil on the markets will be like a sledge hammer on most paper & physical assets. Those wise enough to protect their wealth in gold and silver before things get real ugly in energy industry, will be glad they did.

      Lastly… 2014, you are more than welcome to come in here and write whatever you desire, but if you think you are taking the OTHER SIDE OF THE DEBATE in an intelligent fashion… you are sadly mistaken.

      By the way… you’re not dead yet. So, in say 2-5 years come back here and let me know how silly it was to invest in silver.

      steve

      • Steve, do you have a figure for the global silver hedgebook? I mean the total. For gold, the GFMS has a figure that is somewhere around 180t if I remember correctly.

        • Adolf,

          Looks like estimated Silver Hedge Book declined substantially in 2013. It fell from a little less than 100 million oz in 2011 to 55 mil oz in 2012, and then down to a little more than 20 million in 2013.

          Data according to Thomson Reuters GFMS Silver Nov 2013 update:

          steve

          • Adolf Hitler | March 22, 2014 at 10:49 pm |

            I have read this presentation already. But I want to confirm whether the GFMS silver hedge book is primary miners only or by-product producers are also included in the calculation.

          • Adolf,

            If you already read this presentation, then you would realize the data was for the entire market. The majority of the data in that presentation is based to total supply and demand.

            According to the 2013 World Silver Survey, total silver hedging in 2012 was 54.8 million oz. Looks like 25 million were in FORWARDS and the remaining in DELTA-ADJUSTED OPTIONS

            That was total producer hedging outstanding positions for 2012. Which means 2013 is forecasted to be much less.

            steve

    • “2014”, it is good to be sceptical, but it is also good to do your homework.

      So what, if only 25-30% or the world’s silver supply comes from primary mines? I’d argue that the silver market couldn’t even take a 10% reduction in supply.

      Above ground stockpiles barely cover a year’s supply, and most of that stock already has multiple claims on it. So when solar panel or smartphone producers can’t get their silver to manufacture their products, you can’t just raid the ETFs and supply it to them.

      I mean, one thing worries me, that the miners really are extraordinarly stupid. They keep themselves at max output despite the fact they are losing money on what they are selling. They have to enter financing deals to keep alive. Most miners are actually zombie miners. And such irresponsible behavior is hard to predict. Who knows how long it can go on? I mean, zombie banks have been in business almost a decade now, acting live they are still alive and well.

      Anyway, it’s a given that at some point we’ll go into full reverse, and noone who bought silver at 40$ and held on to it will feel sorry. Just a matter of when this will play out. Nothing about our economy is sustainable. It’s just a matter of when it will become clear to the public.

      • Markus,

        “I’d argue that the silver market couldn’t even take a 10% reduction in supply.”

        I’d welcome you to expand upon that claim, as I have seen little evidence to support it.

        Many in the precious metals community believe that supply&demand ratio is the fundamental driver of the price of silver. As long as this fallacy is allowed to stand, operators like “2014” will have a field day in getting away with unfocused critique of anyone who questions the MSM narrative… because the core argument is flawed, they can pick on the weakness of it’s application to real life events till the cows come home.

        Since even in an article about “gold scrap” the focus gets turned back to questions about silver production, there’s clearly an angst about the subject… no, it’s not “sad” that Mr NewYear is “causing trouble”: he’s just picking at a scab that sooner or later will need to be drained and cleaned in order to heal.

        Once again it is necessary to call upon the keen analytic skills of A Fekete to cut through the smoke and mirrors which cloud an understanding of what really drives the silver market… and why Steve’s EROI analysis must inevitably drive a stake in the heart of certain ‘precious’ assumptions on the part of too many silver holders.

        “The notion that we have a silver shortage is preposterous. Most of the silver
        produced by the mines and sold by the U.S. Treasury during the past 60 or so years still exists in monetary form. Monetary silver is owned by private individuals, who entrust it to commercials skilled in making monetary silver yield a return. This is the reason why silver and gold are monetary metals:they can yield a (more or less consistent) return to their holder if traded adroitly and professionally. To sit on a long position of silver
        will not hatch the silver egg and is not a very intelligent way to make silver yield a return. A better way is covered short selling which to the uninitiated appears to be naked short selling. It is not.”

        If you combine this (more domestic) observation with his (more big picture) claim that the Chinese are shorting the huge stockpiles of silver they are sitting on(no successful refutation of this claim was delivered here when previously submitted!)… in order to earn an income for it as well as hedge against their Treasuries exposure…

        suddenly the landscape totally changes. If and when conditions(as in – geopolitical and macro-economic) change as to cause the private shorts in the west and the state shorts in the east to abandon their short positions and go long…. you will see the brakes released from silver at last. No mining production changes needed. And no ‘2014’ will be needed either! Till then, let him have his fun… and us, our useful idiot!

        To sum up then; it is commonly assumed that “investment demand” and “industrial use” are the ONLY two factors determining the mechanics of silver pricing. This ignores the huge impact of “players” using silver as a financial tool to be exploited for speculative gain. And creates the very conditions which allow skeptics to scoff at the naivete and wishful thinking of those who allow themselves to be inveigled by blogistas and pundits…

        who constantly make the case for interpreting the activity of a market of which they are fundamentally ignorant as evidence for a conspiracy behind which the real movers and shakers can go about their business free of scrutiny or challenge! Final words must again go to the Professor…

        “Rumor-mongering about present or future silver shortages do not bring credit to the analyst. He should go back his textbooks and study market in greater depth. Above all, he should learn elementary differences between monetary metals non-commodities.”

        • Actually Rogue is correct about the following:

          “The notion that we have a silver shortage is preposterous. Most of the silver
          produced by the mines and sold by the U.S. Treasury during the past 60 or so years still exists in monetary form. Monetary silver is owned by private individuals, who entrust it to commercials skilled in making monetary silver yield a return. This is the reason why silver and gold are monetary metals:they can yield a (more or less consistent) return to their holder if traded adroitly and professionally. To sit on a long position of silver
          will not hatch the silver egg and is not a very intelligent way to make silver yield a return. A better way is covered short selling which to the uninitiated appears to be naked short selling. It is not.”

          If you combine this (more domestic) observation with his (more big picture) claim that the Chinese are shorting the huge stockpiles of silver they are sitting on(no successful refutation of this claim was delivered here when previously submitted!)… in order to earn an income for it as well as hedge against their Treasuries exposure…
          ——————–

          I have always assumed that the Chinese were in part of the Shorting of Silver and more recently gold. And if you read Zerohedges newest article: how-china-imported-record-70-billion-physical-gold-without-sending-price-gold-soarin

          it explains some of the logistics behind it.

          The only area I would SPLIT HAIRS with ROGUE is on the notion that most of the silver mined in the past 60 years is in a monetary form. I actually believe a good percentage of that mined silver in the last 20-30 years has been lost to industrial demand or sitting somewhere nicely in a land-fill.

          We have no idea how much monetary metal is tucked away in China and India. However, the peaking of oil and the falling EROI is making the U.S. Treasury-Dollar scheme increasingly impossible to continue for much longer — a few years maybe at the most.

          steve

          • roguefaction | March 23, 2014 at 11:31 am |

            Steve,

            First, I have to apologize for the last line of my previous comment, which dropped an {and} between metals and non commodities… I’m still trying to work around the inability to post via my proxy, which is where I create a comment to your blog… and then have to transfer to firefox in order to see it go through… weird things seem to happen in the process… like that random example of simple cut n paste of a quote gone awry. Proofreading is my weakest link… memo to self… improvement needed!

            You are actually splitting hairs with the man hisself… and I shared your doubt when I read that bit about ‘monetary metals’ – but the idea of contradicting an authority so erudite as Antal gives even me cause for pause – so I let it go –

            he either knows more about that issue than he has publicly let on, or may have been victim of a momentary impulse to overkill… I’d love to know which is is, but unfortunately Prof Fekete is not someone with whom I correspond directly!

            I am most happy that you mentioned the piece from the legacy site which you linked in your response … when I read it this morning, I sensed something was up! That is by far the most insightful, informed, and interesting post that the tiny tryant[s] has managed to publish in months…

            and therefore, can be guaranteed to have been written by someone OTHER THAN the(increasingly diminished)braintrust there. That they have tried to pass it off as just another op-ed from within(they gave no author attribute) is extremely revealing.

            I an interpreting it as an indication that they are feeling the heat already… and that they are lurking here religiously, looking for clues about their pending downfall like Danton sought to preempt his own appointment with the guillotine – trying ever so hard to upgrade their devalued brand before the mass exodus I have predicted on a previous thread occurs in live time … towards, guess where>>> ?

            Well, I know you’ve been throwing out a few lifelines of your own over there, so I won’t go any further and jeopardize your operation… they seem to be hyper-sensitive to challenges in the way that only former operatives of Darzhavna Sigurnost can be! And when you compare you sleuthing work here with their regurgitated “Bloomberg” feeds there…

            it’s easy to see why they be pulling at their Austin Powers’ cravats right bout now/ Your best piece yet! Keep up the great work SRS!

            Hey… it’s a ‘free market’ right? Err, right?

        • I have rarely read a more elaborately stupid comment anywhere. You are really good at this. Maybe you should receive a Nobel prize for stupid.

          First off, noone has claimed that there are actual shortages at this point, while of course tightness in the physical market has been reported numerous times during the last couple of years. If that is because of actual mine supply shortage, or lack of refining capacity, noone knows. But it sure is no sign that there is silver in abundance.

          Second, most of the last couple of decades silver still around in coin or bar form according to you? Jesus, how have you even learned to aquire and use a computer with that lack of common sense?
          How many people do you know that have silver coins or bars? I’m guessing none. Guess why – because there are hardly any. Noone has silver coins anymore. They have been converted to paper dollars or other fiat currency. That’s what people tend to do – when something easily converted to fiat money is lying around their house, they tend to sell it and spend the money.

          As for government reserves, they have been sold off as well. There are no recorded large stockpiles except the ETFs. If you found documentation on some mystery stockpile that all of us haven’t figured out yet, please enlighten us. But you won’t because you haven’t got any data, all you got is BS.

          On the importance of stockpiles, well, according to your argument the real estate and the bond market will soon go to about zero, because look at all that inventory just lying around to be sold off into the market!

          Getting back to silver, you’re wrong – physical supply/demand is and has always determined the price of an investment. There is a psychological side to investing that can lead to gross distortions, meaning people can perceive something to be worth a lot more or a lot less than a neutral observer would deem it. This volatility in supply and demand will lead to misvaluations. But in the long average, people tend to get it right, misvaluations tend to be corrected, and in the short term overcompensated.

          A good example would be the distorted price of gold beginning in the 50ies, continuing with the gold manipulation via the London Gold Pool and others in the 60ies, and then the free market compensating, and in the end violently overcompensating for the decade long misvaluation in the 70ies to early 80ies.

          As for silver supply and demand, as we all know 80% of demand comes from the industrial side, with applications increasing year by year. Your fridge is probably lined with silver particles for their antibacterial properties. You keyboard contains silver. Your car (provided you own one, which after your comment, I doubt) contains about an ounce of silver. And btw, have you ever heard of photovoltaic cells? Little hint, they got silver in them. How do you think demand for these products will develop? According to you I guess there will soon be a general neglect for portable computers, cars, and alternative energy?

          Recycling these products for silver is not, or hardly economically viable right now, so the silver used for these products is gone and is not coming back.

          The silver institute, at https://www.silverinstitute.org/site/supply-demand/ , states demand equal to supply, with implied net investment of 160 mio oz in 2012. Do you realize that a good part of those 160 mio oz is already spoken for in the form of Silver Eagles alone? And when have people begun to buy Eagles in significant quantities? Only a couple of years ago. Those people are not buying to sell again in 1, 2 years. They are buying to sell in a decade, or a couple of decades. That demand is not satiated. It will not just stop.
          And btw, how much do you think the Chinese are buying, who a couple of years ago were not even allowed to own gold and silver? They started at zero. Do you think that market is satiated right now?

          I could go on, and on, but I have no further desire to teach you and try to make up for your lack of common sense AND data. Please refrain from further poisoning this blog. Nobody is forcing you to buy anything anyway, so if you don’t get the gold and silver story, please, by all means, stay away.

          • roguefaction | March 23, 2014 at 9:49 pm |

            Thank you for your feedback. Yes Markus, you COULD go on… I’m sure of that! But once you have placed your foot into your mouth, continued downward pressure can only increase your discomfort… you have made a wise decision to stop, therefore.

            The great majority of what you have attempted to critique me for, and use as evidence for my er, stupidity…

            was actually -had you stopped for long enough to control your attack of apoplexy, and read the quotation marks – written by a person whose grasp of the precious metals market, indeed of economics in general… far exceeds anything you or I might ever hope to attain.

            And if he, Professor Fekete, is as ‘stupid’ as you claim, I am greatly flattered to be included in his company!

            There is little point in disposing of the rest of your claims point by point, as the whole purpose of calm and civilized debate seems beyond your grasp.

            Just the one. I think… perhaps worthy of comment- my car? Hmm, surprise!… I do have a few petroleum burning vehicles in my possession, yes. I find them a necessary part of my existence at the moment. But I much prefer the ride on the back of one of my four-legged friends, or at the reins of my phaeton, the clip-clop of Simsek’s steady pace forging ahead.

            At least when I am looking at that horses’ ass, I am seeing an example of intelligent life harnessed to a noble purpose… with your own example, not so much!

            I remain, your most… etc etc.

  19. Steve

    I hope you never feel the need to apologize for your thoughts and opinions. Isn’t that the hallmark of the USA, free speech, free opinions and the freedom to express yourself in your terms?

    That said, I truly appreciate your writing and your research. I love your presentation of facts, figures and other fundamentals.

    Thank you for sharing Steve!

    Tas

  20. All I can say is:
    Price is temporary….
    Possession is permanent…

  21. He’s already educated the readers far more in the comments here than in any article he’s ever written. Of course what he wrote here isn’t bullish & relies entirely on waiting 2-5 more years & discounting the 3 and counting that he’s been wrong.

    Plus missing the best stock market run in our lifetime on top of losing 60% on silver.

    • Kaboom! Out of the mouths of babes cometh……

      Do you have any idea what you just admitted to, or do you just drool and gurgle when your attendant attempts to insert the spoon into your chosen orifice???

      Your nemesis…. MR “OP” or whatever you want to call him, has established a manner of interaction with his audience which has allowed for a kind of win-win scenario which is putting paid to a whole generation of wanna-be blogistas and financial pundits whose efforts to cloak their INTENT to MONETIZE the attentions of their readers are so poorly disguised as to invoke increasing ridicule and disengagement of the kind that you are most certainly seeking to emulate here… with a probably similar half-life.

      ” best stock market run in our lifetime” /// how very Million$DollarBonus of you! I always suspected he was a house sock puppet inserted to drive the numbers… and here you are – recycled in the best tradition of those who can no longer afford a made to measure suit. Carry ON…

    • 2014,

      “Of course what he wrote here isn’t bullish…”

      Refer back to the article itself; the heading and the text… this was an informational article about scrap gold and had little to do with bear or bulls predictions.

      Explain in a cogent manner “the three and counting” years he has been wrong. In what way[s]?

      Had you followed his writing more you would know he stated he bought most of his silver holdings silver between 2002 and 2008. If I am recalling that incorrectly he can tell us. That period blew away the stock/equities markets, as does the current spot on his silver compared to cost-averaged purchased prices on equities from then.

      Anyone with substantial $ invested in stock/equities markets and no PM’s would be wise to trim their holdings and covert the fiat into real money; the historical “gold standard” or “silver standard” of what has defined money for over two thousand years.

      In a dollar/fiat currency collapse equities [a small % of ownership in a company] may continue to have value. But only if several conditions are met by that company.

      A few would be:

      The company doesn’t go bankrupt.

      The products they produce are more in the realm of necessities than luxuries.

      They can get the materials they need to produce their products.

      They have a form of pay acceptable to their employees; something other than or in addition to a currency undergoing a rapid decline in purchasing power.

      And corporations operating profitably during fiat currency debacle would have to be ones that use less energy that they have to obtain and pay for that most industries.

      There will be a significant “correction” in the equities markets; it could easily be this year. Some equities will lose a lot more than others just like in 2008. But a “2008 style” correction would be a warmup to what would happen to equities in a full-blown dollar collapse.

  22. You don’t think he’s pandering to paranoia?

    The last 4 article titles have these in the title

    Collapse
    Run
    Scam
    Disintegrate

    He’s been more honest in these comments than he has on any article he’s ever written. People like him,Jason Hommel,Schiff & other hucksters come and go every few years only to be replaced by a new crop.
    It is refreshing that at least this one seems to be religion free

    • 3 minutes for High Schticking! Into the box with you, Mr 2014… and no back talk or you’ll get a double for Charging! …a veritable HOWIE YOUNG of the SRS league, you are becoming… the point of the game is to keep your eye on the puck … not on who you can spear from behind chum.

      However, you are providing some entertainment value, so ‘stick’ around n show us some of those famous back-skating skills… some folks here gonna need to learn them quick!

      Now back to the live action…

      Seems that the fore-mentioned legacy site simply ripped off a Goldman report without attribution, like they used to do with Rosenbergs’ private reports before they got hit with some chilling legal notices… and got nearly 100k hits on it over the weekend…

      people clearly wanna know who-dunnit with the market manipulations, and are not content with the previously offered explanations. That China is in control of pricing in the metals markets is beyond contention now- whether Goldmans’ interpretation of how that is happening is correct or not is another issue. Even Koos Jansen is slightly confused at this point about the mechanics of it all, and he has the best insight of any commentator in the western world it seems… other than perhaps W Kaye.

      Certain perma-China bears who never get tired of predicting a crash there are likely to discover that their brand has a best-before date which is soon to expire…

      Here’s hoping that certain parties who recently developed ‘foot in mouth’ disease will return to harp on the same issue like Howie here, and “teach” us how we all wrong – then we will have our own “itchy n scratchy duo to keep things aboil here 24/7 …and just the right tween sublime and ridiculous!

  23. lolz.. what about the diamond export is heading…..
    Import Export Business

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