With the Federal Reserve announcing this morning that it will start buying Junk Bonds and Junk ETFs, along with its monthly asset purchases of U.S. Treasuries and Mortgage-Backed Securities, the demand for gold and silver bullion will only increase. Thus, get ready for shortages of available precious metals products to get worse as wait times will likely increase from weeks to months.
In my newest video, Gold & Silver Shortages: Massive Debt & Money Printing Just Beginning, I discuss how much the U.S. Public debt, M2 Money supply, and Currency in Circulation have increased in just the past two months.
For example, the U.S. Government’s public debt surged by a staggering $219 billion in the first three days of April. How does this compare with the value of global gold and silver mine supply for a month?
The total value of global gold and silver mine supply for a month is approximately $16 billion compared to the $219 billion increase in U.S. Government debt over three days. And, this is just the beginning. As I mentioned at the top of the article, the Federal Reserve will now start buying Junk Bonds and Junk ETFs to prop up the market. This is how bad the situation is becoming.
In the video, I provide an update on the list of mines that are now shut down in Mexico. These mines will be shut down until the end of April. Mexico produces about 28 million oz of silver per month. Furthermore, Peru hasn’t announced a reopening of mines that were shut down on March 15th. I’ve checked Pan American Silver’s website, and they have not provided an update on their four mines in Peru that were closed in mid-March.
Moreover, as global silver mine supply is contracting, demand for physical silver bullion has skyrocketed. While the retail silver bullion products have been delayed for 2-4 weeks or more, it is very difficult to obtain the 1,000 wholesale bars. Back in 2008, when the same retail silver bullion shortages were taking place, investors could still acquire 1,000 oz silver bars and turn them into smaller products.
However, if we look at APMEX’s website, there aren’t any 1,000 oz silver bars available. In 2008, APMEX had at times a dozen of these 1,000 oz bars for sale (including serial numbers):
Dan at Cloud Hard Assets told me that they could get some 1,000 oz silver bars, but it would take 4-6 weeks. So, we already see tightness in the 1,000 oz wholesale silver market.
I believe investors still don’t realize just how bad the Global Economy and Financial System has deteriorated. Over the next 2-4 weeks, watch as more fireworks take place in the market, forcing a more significant number of investors to move into physical precious metals. Unfortunately, that will only make the shortages and availability more extreme.
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Steve, let me give another horrible example of comparison:
2+ quadrillion (= 2.000.000 billion) $ of global paper derivatives
Versus
25 billion $ of total investable silver bullion (may be even less than that).
Naturally, this will end very, very badly.
Mehment,
Agreed 100%. I don’t see the shortage of gold and silver retail bullion products subsiding anytime soon.
steve
Tied for quote of the week:
…I don’t see the shortage of gold and silver retail bullion products subsiding anytime soon. –SRSRocco
AND
” The Fed has made it clear that it will not tolerate prudent and responsible investing. ” — Scott Minerd
Steve,
These guys seem to have 1000 oz. bars in stock. I’m not disputing the points you make above, only offering this link as a price reference.
https://www.silverbullion.com.sg/Shop/Buy/Silver_Bars
Adam,
They are located in Singapore. Try finding one in the United States.
steve
I know. I was offering the link in support of your post in the sense that even those bars would cost a buyer approximately 30% over spot plus the cost of shipping, insurance, etc.
Adam,
Thanks for the link, though.
However, Dan at CLOUD HARD ASSETS was quoting $1.75 over spot for 1,000 Silver Bars that would be available in 4-6 weeks. That’s a 12% premium over spot (based on $15 when he gave the quote), versus 33% for SILVER-BULLION in Singapore.
steve
What would you do if gold/silver ratio drops to 60? Convert your 1000 oz. silver bar to gold or platinum?
JLS,
I don’t own any 1,000 oz silver bars. However, I would exchange some silver for gold when the GOLD-SILVER Ratio fells below 40-50/1.
steve
I would wait until the ratio reached closer to 30 to 1. However, the availability of gold at that ratio may be difficult or impossible to get for an exchange. Isn’t it perplexing that as we approach 1900 gold that silver will be under 20-25 spot. The last time gold got to 1900 silver spot was at 50. In 1980 when silver hit 50…gold was at 800. Silver for some reason is a much bigger whipping boy than gold.
What is your guess of where gold will be this time around when silver reaches 50?
Crayfish
I would like to see an immediate panic in silver.
$100.00 for starters.
We are going to see the real performance of silver when the global bond market explodes like an H-bomb.
I think the Fed will have something to say about that.
Short answer. Absolutely.
Longer answer. It’s only a matter of time before interest rates start going up (i.e. when the markets are allowed to once again price RISK into their calculations). As that happens, the nominal value of the bonds decreases. As the bonds decrease. ALL the Pension Funds and Co. will need to sell shares to rebalance their portfolios. But wait, just as they need to sell shares to buy more bonds, the value of the shares will also be dropping due to Investors demanding a higher dividend to match the now higher interest rate.
Totally agree with the above comment.
BOOM.
@Anon, you guys who gave a thumbs up to this post just don’t get it ! The Fed will never allow interest rates to rise. They will be the last buyer of bonds and keep the interest rates at a minimum. Did you not hear that they will now be buying municipalities and company bonds? The next thing will be stocks and who knows after that ! The US dollar is toast. Go get you some gold and silver.
Afraid that DC will make it illegal to own pm privately.
I think any selloffs of gold and silver will be met with buying only 1% of the people hold gold and or silver. how hard will it get to buy when 2% or 3% want in and hold it it hand. When the next phase of the stock market drop happens a whole new set of people that never held any in hand will what it . alot of you tube sites telling people that etf and gold paper product are not worth the paper in is printed on. Going to fun watching for all those years of just stacking in the up and downs of this market and the reason you did it is now happening.