Government Silver Sales Have Totally Dried Up… WHY?

Before the turn of the century, Central Banks sold a record 97 million oz of silver into the market in 1999.  This was great deal of silver as it accounted for 17% of total global mine supply that year.  Over the next 14 years, Central Banks continued to sell a substantial amount of silver to supplement the market.

However, silver supply from Central Banks has totally dried up over the past three years….. Why?  Well, the answer is quite simple when we understand the data.  Central Banks silver stock piles have dwindled considerably over the past decade and a half.

According to the data in the recently released 2017 World Silver Survey, Central Bank silver sales were estimated to be a big fat zero for 2014, 2015 and 2016:

As we can see in the chart above, Central Bank silver sales have declined from a peak of 97.2 million oz (Moz) in 1999 to a low of 7 Moz in 2013…. the last year of official government sales.  From 1999 to 2013, net government silver sales totaled a staggering 774 Moz.  This was more than three-quarters of a billion oz of silver sold into the market during the 15 year period.

Now the majority of that silver, 617 Moz, was sold from 1999-2006, while the remainder of 157 Moz was sold from 2007-2013.  Thus, a lot of Central Bank silver sales were used during the first decade of the 21st Century to supplement the market.  However, this official supply has totally dried up.

Again… according to the data from the 2017 World Silver Survey, total Government Silver stocks have declined from 207 Moz in 2007 to 89.1 Moz in 2016.  Thus, total Government Silver stocks were much higher in 1999.  The majority of the Central Bank silver sales over the past 15 years came from three sources, China, Russia and India.

GFMS -Gold Fields Mineral Services (organization owned by Thomson Reuters,  collects the data and publishes the World Silver Survey) states that there is little public data on Central Bank silver stocks and sales, however they arrive at their figures from private information sources.  While it is impossible to know everything that is going on as it pertains to “official silver sales”, I believe the data put out by GFMS is likely a good gauge of what is taking place in Central Bank sales.

That being said, I would imagine some readers believe there is a Grand Conspiracy by Central Banks who are secretly holding a massive amount of silver.  While anything is possible, I highly doubt Central Banks hold that much silver.  And why should they?  There is no reason for Central Banks to hold onto a lot of silver when most of their assets are in Bond and now Stock portfolios.

We must remember, China and India held onto a great deal of silver inventories after they dropped the silver standard early last century.  The U.S. Treasury also had a lot of silver stockpiled, but dumped most of that inventory onto the open market between 1960 (1.9 billion oz) to 1970 (165 million oz).  Thus, the U.S. Treasury sold 1.7 billion oz of silver during the 1960’s decade.

Regardless, Central Banks will likely hold onto the remainder of the 89.1 Moz of silver inventory as the policy to reduce their elevated silver inventories has already taken place.

It is not too surprising that the Central Banks have discontinued silver sales since the price of silver continued lower in 2014, 2015 and 2016.  Even if the price of silver did surge over the next few years, I don’t believe the Central Banks will sell much of their silver into the market.

Actually, silver can turn out to be a very critical asset for Central Banks to hold onto, EVEN MORE THAN GOLD, as a great deal of silver is consumed by industrial applications.

I will be writing an article on Global Above-Ground Silver Stocks shortly.

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16 Comments on "Government Silver Sales Have Totally Dried Up… WHY?"

  1. DisappearingCulture | May 26, 2017 at 1:09 pm |

    “It is not too surprising that the Central Banks have discontinued silver sales since the price of silver continued lower in 2014, 2015 and 2016.”
    Well, who ever said logic would prevail in a government policy or decision? lol

  2. Central banks function only in a fiat currency regime. In a ‘hard money’ environment central banks are irrelevant. A gold backed currency doesn’t work in a 7 billion plebes economy, so they have to diversify; gold, silver, crypto currencies, to establish monetary permaculture. That’s why crypto’s are on the rise, and that’s why the states of Utah, Texas and Arizona are promoting gold and silver.

    Central banks work on trust, not on truth. There’s no need for central banks to stockpile gold or silver. They have gold, but that has the same purpose as governments having nukes. It works until it doesn’t.

    As soon as most people left the fiat currency regime, they can skip the debt overload. Fiat for daily transactions, gold, silver, crypto’s for savings. With physical gold and silver as the ultimate store of wealth, and crypto’s as a more speculative bet.

    Just some thoughts. Fiat currencies into the ‘bad bank’, dying.

  3. JPMorgan has been amassing (stopping) silver into customer accounts for over a year. Harvey Organ has been tracking it. Someone, maybe Harvey, speculated that the account(s) belonged to a sovereign wealth fund(s). It’s become sort of a black hole of silver.

  4. Governments don’t need real silver anymore to control the silver market. Paper silver and gold work just fine. Why bother with real metal. It’s heavy and messy. Electronic entree are easier. Rehypothicate the real metal by a factor of 500. You create more silver than actually exists in the world.

    Steve is right. They probably don’t have much left. They will dole it out for maximum impact.

  5. walter lyons | May 26, 2017 at 6:15 pm |

    Looks like the paper derivative might be the only thing keeping a lid on the price of silver.

  6. William Heard | May 26, 2017 at 8:06 pm |

    2016 supply 1.007 bill. oz.,demand 1.027 bill. oz. 561.9 Mill. oz industrial demand— and you’re saying 89.1 Mill. oz at central banks is important? Even for manipulation that seems a bit thin. Supply was down in 2016 some 3% vs. 2015—net demand was 14% more than supply when inventory builds are included even as total demand declined 11%. We’re all watching to see how long paper price ‘discovery’ will continue. Will Cent. Bks. buy silver again,ever? Willy

  7. Beware of Bitcoin, Australia makes it legal to deal with the crypto Bitcoin on July 7th! At present there is a “double tax” on ANY transaction (if declared I suppose), but after 7th July the tax will be removed. Why are they doing this? I think anyone with half a brain would realize it is to keep PM’s supressed, fully aware those moving away from fiat will more than likely move into the new crypto currencies. This gives the powers that be a little more time to suck up ALL the money, from those that are ignorant or mislead, and to continue propping up the stock market! After the crash, what their intention are with Bitcoin, is anyones guess, but my guess is they will steal the LOT. At least with physical gold or silver, it is in your possession or a safe holding position.
    Many thanks to SRSRocco for your tireless support and dedication to the “truth” and the precious metals industry!

    • What are crypto’s, an expansion valve for currency overload? To prevent too much currency go into stocks? Or to keep people away from real money? Real money undermines exponential growth, can’t have that can we, with 7 billion + plebes looking for a better living, voting mainstream.

      “And suddenly, out of nowhere, Satoshi’s son in law turns up with BTC’s source code, adding a few million coins into the mix, because his Goldman advisor told him so while he was dreaming”

      Who knows. Imo, btc is a very smart early adopter scam. But maybe btc will go Asia, while eth goes US, for Europe another crypto, and let the current fiat majors die. Then again, sirplus energy declines, and i don’t see a way for large it companies to maintain the complex it structures with half their income. Or less.

  8. Silvrwllwn | May 27, 2017 at 8:35 am |

    Physical silver awaits it’s day / month / year and beyond , in the sun ! It is coming and soon. Here is why. Like that of a triangle , there are three powerful reasons all coming together that will not let anything get in the way of this metal from rising like a zenith for all to witness and never again deny or manipulate it’s true name and meaning ! The high point of the triangle is EROI. Thank you Steve for enlightening all of us. The next point to the triangle is Supply and Demand which is in this report. The third point is Usage . If civilization loses physical silver it will have a devastating effect with our planet existing due to the incredible areas of it’s usage and capabilities. The only thing standing between the Truth being made clear to the world about physical silver and the air of deceitfulness that is going on today is time. That is what central bankers , government officials and the like have left to keep the false narrative alive since the Big Lie was created as far back as when the Chinese were ripped off by the Rothschild clan (in the 1800’s), right on up to when Bear Sterns was ready to go belly up ( due to the lack of physical silver) and the US government stepped in to give JP Morgan Chase the controls to manipulate through derivatives. If all of these institutions were smart they would start to find ways to make this dynamic work for them rather than against them ! Truth is like oil in water – it will always rise to the surface.

  9. Charles Covington | May 27, 2017 at 8:49 am |

    There was no sales report from the U.S. Mint on Friday.

    Month-to-date the mint has sold 14,000 troy ounces of gold eagles — 4,500 one-ounce 24K gold buffaloes — and 2,155,000 silver eagles. That’s a big improvement from last month, but that’s not saying a lot now that JP Morgan is no longer at the trough.

  10. OutLookingIn | May 28, 2017 at 8:29 am |

    Crypto-currencies are nothing more than a digital currency ponzi game. Stay too long in the game when the music stops and find no chairs awaiting. Such is speculative gamboling.
    Bitcoin was the original crypto, however as of now there are over 800 cryto-currencies! ALL holding the very same counter party risk – a computer system.
    Will you lend me a cryto coin today? For which I will repay you Tuesday.

    Too bad Barnum & Bailey have folded up their tents for good. An old adage purported to P.T. Barnum; “There’s a sucker born every minute”. Want to make a quick buck? Start selling anything with the word “coin” in its name.

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