Institutions Mislead The Public About Silver Investment Demand

There’s a lot of shortsighted and incorrect silver analysis out there, so its imperative that you consider the information in this article. CPM Group just announced the release of their 2014 Silver Yearbook.  In their statement they implied that “Net Global Silver Investment” declined in 2013, while fabrication demand increased.

This sounds like a bearish statement for silver investors, but the reality is… silver investment demand actually INCREASED IN 2013, it did not decline.  I will prove why this is true in a minute, but I want to first bring up another piece of silver analysis titled, “Silver $50:  Three Years After The Shortage.”

This article was written by Bullion Vault’s Miguel Perez-Santalla.  In the article he states the following:

The silver market environment of 2011’s run to $50 per ounce was, however, very different to that of 1980. The principal driver back then was the continued inflation in consumer prices, plus the attempt by Nelson Bunker Hunt and his partners to corner the silver market – an attempt eventually brought to an end by efforts of the Federal Reserve Bank and certain members of the Commodities Exchange.

Mr. Perez-Santalla believes the price move up in the 1970’s decade was different than what took place in 2011.  Oh really?  I gather he doesn’t believe consumer price inflation took place from 2002-2011.  Is this true?

Well, lets bring back two of my previous charts and lets compare them.. shall we?  The first chart shows the price movement in silver and oil from 1971-1980:

Silver vs Oil Price & Ratio 1971-1980 NEW

The price of a barrel of oil shot up from $2.24 in 1971 to $36.83 in 1980.  The price of silver increased from $1.39 in 1971 to $21.79 in 1979.  If Mr. Perez-Santalla believes the Hunts were partly responsible in pushing the price of silver to $21.79 in 1979… then who in the living hell was cornering the OIL MARKET?  And how about the GOLD MARKET?

The cost to mine gold and silver increased substantially in 1979 and 1980.  If the price of oil increased 15 times more than what it was in 1971… wouldn’t that impact the cost to mine the precious metals?  Of course it would.

As I stated before, Homestake Mining made better profits in the 1973-74 period than they did in 1979-80.  You can take that to the bank because I am looking at Homestake Mining’s Annual Reports right now.

I can say this… if the HUNT BROTHERS did help impact the price of silver in a positive way, the silver miners where GLAD AS HELL, because their costs where rising sky-high.

Then Mr. Perez-Santalla makes the following comment in his second part of that article HERE, about the CME putting on 5 subsequent Margin Hikes on silver in April-May 2011:

The first signs that money was departing the market however came on 25 April 2011 when the CME first raised margin requirements on contract holders. This meant you needed to have more cash on hand to hold the same position you had the day before. The next big decline registered in market participants then coincided with another increase in margin requirements on 5 May. 
 
There is nothing abnormal or suspicious here. The exchange needs to make certain that holders of leveraged positions are viable counterparties in a volatile market. So they ask for greater protection. Holders who don’t have the financial means to meet the new requirements then liquidate some or all of their contracts.

Mr. Perez-Santalla sees nothing suspicious here.  I gather he wouldn’t see anything suspicious either if one of the 2 dozen DEAD BANKERS fell in front of him while he was writing that article.  I am only kidding here… nothing wrong with a little sarcasm when it seems appropriate.

Increased Margin Hikes were basically the same STUNT the exchange pulled against the Hunt Brothers and other Silver Longs back in 1979-80.  In 2011, they raised the margins 5 times and back then.. they only took SELL ORDERS.  Either way, it ended the rise in the price of silver.

I wonder if Mr. Perez-Santalla realizes that the “PARTIES” in need of  protection were the SHORTS rather than the LONGS.  Again.. same nonsense as it was in the 1979-80 period.  The shorts were about to get the ENEMA of their Life if the price of silver continued to increase in 2011.

Of course, the Banks-Bullion houses of the FIAT MONETARY MASTERS run the card game and make the rules.  I find it simply amazing that anyone with a decent amount of analytical ability can’t see the forest for the trees on this issue.

The reason Mr. Perez-Santalla’s analysis is incorrect has to do with a little factor called OIL.  It was the price of oil that impacted the price of silver in the 1970’s and in the 2002-2011 time period.  Here is my second chart:

Silver vs Oil Price & Ratio 2000-2013.New

Well, look at that… a real knee-slapper.  The price of oil and silver raised in tandem, until the wonderful folks at the CME Group pulled out their WILDCARD that had 5-margin hikes on it.

How can the rise in the price of silver from 2002-2011 be any different from the 1970’s as Mr. Perez-Santalla states in his article… WHEN THE FRICKEN DATA RIGHT IN FRONT OF US, SAYS OTHERWISE???  Again, we can chalk that up to what I call… the failure of precious metal analysts to understand the energy markets.

The only reason the price of gold and silver fell after 1980 had to do with the world increasing oil production for another 3+ decades.  If we hit peak oil back in 1980… I doubt the (unbacked) U.S. Dollar would have survived for many years.

This is exactly why the value of GOLD & SILVER will increase tremendously in the future.  Peak Oil, the falling EROI and declining net oil exports will destroy the Global Fiat Monetary System — the paper monetary system that Mr. Perez-Santalla uses to currently gauge the value of gold and silver.

Silly analysts….

CPM Group: Silver Investment Falls But Fabrication Demand Rises In 2013

That was the title of Kitco’s article on the release of CPM Group’s 2014 Silver Yearbook.  If anyone deserves a PHAT “F” for writing a title that reflects the reality… that author certainly does.

Let me start off by saying, OFFICIAL COIN SALES are apart of what they term, “Fabrication Demand.”  Here is a chart showing Global Official Coin Sales from 2003 to 2013 (2013 is my estimation):

Global Silver Official Coin Sales

These figures come from GFMS, 2013 World Silver Survey, CPM Group’s competition.  CPM Group states that “Official Coin” sales were a record 136 million ounces in 2013.   My estimation was a bit low (125 mil oz)… but how in the HELL, did investment demand FALL in 2013, if official coin sales increased 30-40 million oz??

It’s easy… you label the supposed surplus as NET SILVER INVESTMENT DEMAND… and poof.. you can show a decline.  Let me explain, I am gonna let you all in on a dirty little secret.

Official Coin Sales are counted as FABRICATION DEMAND… not investment…LOL.  That’s right.  When GFMS and CPM Group calculate their “Implied Investment Demand” they do not count official coins such as Silver Eagles, Maples, Philharmonics, Pandas and etc as investment demand.

So all you SLOBS out there who believe you are INVESTING in Silver Eagles, you’re not… you’re just a “Fabrication Investor.”  Again, I am only making a funny here.  Truth be told, I must be a SLOB too as I am a fabrication investor as well.

Okay… here is the kicker.  The more official coin sales, the higher the fabrication demand.  Thus, the higher the fabrication demand, the lower the supposed “Net Investment Demand.”  You all didn’t realize by purchasing more Silver Eagles & Maples in 2013, that you were actually guilty of making a decline in net investment demand.

To get this “Net Investment Demand”, they add up all supply (mine & recycle) and minus all Fabrication demand (including official coins).  CPM Group stated that net silver investment fell 42% from 180 million oz in 2012 to 105.3 million oz in 2013.

Furthermore, GFMS states (from their 2013 Nov. Silver Update) that total Silver ETF’s increased 25 million ounce to 655 million oz as of Q3 2013.  So what I want to know.. how did net silver investment demand decline in 2013 if the world purchased 35-40 million oz more of official coins than in 2012, while total global Silver ETF’s increased?

It didn’t… it’s accounting SMOKE & MIRRORS. 

Which means, Kitco’s title is actually an outright lie.  If we add wholesale silver bar investment including smaller coins and bars, I would guarantee you all that “REAL SILVER INVESTMENT DEMAND” increased substantially in 2013 compared to 2012.

Mr. Perez-Santalla did state in his article that GFMS will change their term, “Implied Net Investment” to surplus.  Even though they are going to use the term “Surplus”, they will still count official coin sales as “Fabrication demand” when they calculate this figure.

Also, the surplus does not figure in any silver investment that flows into ETF’s, wholesale bars or standard bullion.

Furthermore, when the world was on a Gold & Silver monetary system, there wasn’t any silly SURPLUS or IMPLIED NET INVESTMENT.  For some strange reason, 40+ years of fiat monetary amnesia destroyed the ability for the public and analysts to understand the value of REAL MONEY.

Lastly.. CPM Group also stated this on Cash Costs for silver:

Meanwhile, CPM Group calculated that the cash cost of primary silver production fell for the first time since 2002. The production-weighted average silver cash cost was listed at 9.68 an ounce in 2013, down 3.3% from $10.01 in 2012.

I can write a long article just on the worthless metric called CASH COST ACCOUNTING.  In a nutshell, cash costs do not determine the PROFITABILITY of a company.  All it does is show how much a silver producer can lower its cash costs while stating REAL LOSES (at current prices).

Every mining company’s financial report always has a footnote below where the company calculates cash cost stating:

… Cash Costs are not GAAP – Generally Accepted Accounting Principle.

Subtracting by-product metals’ revenue might show a low cash cost, but I guarantee you, it has nothing to do with the profitability of the company.  Cash Costs are used to mislead the investing public as to the REAL COSTS of mining silver.

Hecla stated a cash cost of around $7 for 2013, while recording a net loss for the year.  And this was at a realized price in the $23-24 area.  What would their losses be at $7??

Folks, Peak Oil, the falling EROI and declining Net Oil Exports will wreak havoc on the highly leveraged Fiat Monetary System.  Analysts who gauge the value of gold and silver by a Fiat Monetary System have no idea of their true value of the precious metals when the systems comes down.

When the world realizes it has invested most of its hard-earned fiat currency into Paper Assets that will have no future, Silver Surpluses and Implied Net Investment will be a good joke to tell your grand kids.

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43 Comments on "Institutions Mislead The Public About Silver Investment Demand"

  1. I wonder why the sliver price didn’t spike up with the oil price spike in 2008?

    • the price move in crude oil from Feb 1 ’07 @ $60, to $140 by June 1st, ’08, back down to $40 by Dec 31, ’08 honestly happened so fast up and down I don’t think the supply chain even fully had a chance to price it in on the way up or down…

      Now the price of crude has basically remained $90-$110 since November of 2010…over 3yrs of sustained high prices…nonsensical.

      I don’t know how Steve keeps on writing these articles? He has every fact and every rational, logical reason to believe what is should not be…but this is true in every “market” that exists now. They are all facing some to total rigging. To show the rigging, the mechanisms, the fraud, the lies isn’t even hard any more. It’s blatant and ever more institutionalized.

      Hang in there Steve, you are a stronger man than I.

  2. Steve,

    As a silver bull your article made for sober reading. In your second graph you have the oil/silver ratio at 5.2 for the period since 2001. With oil at around a hundred dollars that gives an implies silver cost of $19.20 oz. that implies by that metric silver is not undervalued, gulp!

    Since 2009 the oil / silver ratio has under performed the historic average and in 2014 we are returning to it. What’s the ratio over a longer period of time?

    • CFO point of view | May 1, 2014 at 11:21 am | Reply

      You have to take into consideration falling ore grades. They sistematically fall, what makes costs of mining higher even with stable oil price.

  3. roguefaction | May 1, 2014 at 1:02 am | Reply

    “accounting SMOKE & MIRRORS….Kitco’s title …an outright lie”

    Steve, what a stunning lack of empathy shown for the hard working people who labor to bring us the facts and figures needed to be able to gauge the state of the precious metals market. How can you impute such deleterious motives and machinations to your analytical colleagues?

    When the truth is that they are simply poorly trained hacks trying to eke out a living while FORCED to use faulty methods of measurement, as well as draw spurious conclusions via erroneous assumptions as to what constitutes the basis of price discovery – in this modern era of ‘marketless’ markets! [hey- just goin wit da flow, bro!-“nothing wrong with a little sarcasm when it seems appropriate.”]

    “So what I want to know.. how did net silver investment demand decline in 2013 if the world purchased 35-40 million oz more of official coins than in 2012”

    Alright… let’s take a peek under the hood…

    yes, lumping ‘investment demand’ under “Fabrication” would seem to be an odd choice – but it gets better! You see, the CPM is not even consistent in it’s use of the categorization. While I don’t have access to the new Yearbook you are discussing, their 2012 GOLD Yearbook defines “investment demand” variously as the “net flow of the investor sector,”AND as the “net flow of the investor and official sectors combined.” Depending pon the circumstance, they are happy to mold their definitions to the outcome required…

    tho some may DARE TO CALL IT CONSPIRACY….these people are simply confused, and way out of their depth. Unlike the handlers to whom they report! I would rather feel sorry for the likes of Jeffery Christian, and save the best of my invective for the Jon Corzines of this world. The guy[Jeff] is a mere foot soldier, rather than a ‘made man’!(Sure – his salary is greater than the likes of you or I could ever dream off – but I doubt he sleeps as well at night! … too many flashbacks of 12-2 am drive by shootings of innocent metals investors, whose blood now indelibly stains the foyers of all the players in this charade of ‘exchanges’!) Likewise for the rest of the sad sacks in your report -nameless or otherwise.

    Given that personally, I don’t pay much attention to precious market reportage as it applies to the USA and it’s various farm teams, since AS YOU KNOW… I don’t consider ‘investment demand'(as in coins etc.)in the west to be a SIGNIFICANT factor driving prices of either gold or silver… on which topic you and I shall continue to agree to disagree…

    perhaps we can, on the other hand, look forward to finding some degree of consensus as to what DOES constitute a valid method of measuring supply and demand categories, as well as the OTHER CONSIDERATIONS which need be added in to secure a worthwhile result in any pretense to determining what actually drives prices!

    To which end, I offer this for your consideration… for which I can take no credit, as it is the work of Robert Blumen which I draw upon in suggesting that…

    “The paradox of gold is that which drives the price cannot be measured, that which can be measured does not drive the price.” A statement which… at face value… would seem to drive an analyst such as yourself to run for cover! Yet, pon suitable reflection… will be found to actually ENFORCE rather than deny the implicit assumptions of your core EROI thesis. Takes yur pick… good news/bad news>!>>>|:<<<?

    This revelation is a function of gold being an ASSET… rather than a COMMODITY… the functional definition of the later being – a good the stock of which is sold into a market to be 'destroyed' by 'consumption'. As almost all gold produced throughout time remains available for sale or hoarding … stock flow of the precious metals is determined by an "opportunity cost" via which their owners decide to either disgorge or hold onto their shiny.

    Since this article is about "the other metal" … we must delineate the unique properties of silver as opposed to gold… wherein… because it is BOTH an industrial COMMODITY as well as an investment ASSET, it occupies a middle position between the two. But for purposes of argument here, let us give it full weight in the later format… and suppose that the stock flow of silver, like gold, will be determined by the choices of those who hold it in the 'frozen' form of an investment which they expect to profit from SOMETIME IN THE FUTURE.

    Again… with credit to Blumen as originator…

    The core belief of the clown brigade headed by Christian, J. – "Gold investment demand is one of the strongest influences on gold prices"… "Herein lies the key to accurate gold price forecasts: Investment demand is the most important influence on gold prices. Markets are made at the margin, and in the gold market investors are the marginal market participants" …"Central bank activity and investment demand trends … exert much more powerful influences in determining the gold price" and so on…(2012 CPM Gold Yearbook) is a fairy tale, along the lines of Tony Blair's WMDs or Dick Cheneys towelheads with boxcutters story lines…. not suitable for grown ups… or Non-Bagholders of any age or description! .

    Blumen accurately sums up the basic mistake of the INSANE CLOWN POSSE running the asylum as:

    "Christian believes that only transactions participate in price formation. After a particular gold ounce has not been traded for a long enough time, he no longer considers that ounce to be part of the market. At that point, in Mr. Christian’s view, that ounce has no impact on the market price."

    Succinct n to the point. AMEN!

    I could, of course, go on… but already 9/10s of the audience will have suffered yet another recurrent bout of narcolepsy… while most of the remaining few will be sharpening their axes in order to indulge in yet another fruitless attempt to assuage their signal lack of polemical skills by attacking the humble messenger.

    For all the rest…. see ya @MOES!

    " how did net silver investment demand decline in 2013 if the world purchased 35-40 million oz more of official coins than in 2012?" …"You never had a rope around your neck. Well, I'm going to tell you something crazy. When that rope starts to pull tight, you can feel the Devil bite your ass"

    • Rouge me auld cheese.

      If I read your post diagonally (as I did with Shantaram), It would read:

      “Steve, As you know, Devil bite your ass”

      Does that sum up your post correctly?

      • rogue faction | May 1, 2014 at 1:30 pm | Reply

        actually, if read backwards, its a complete chapter of Rushdies Satanic Verses… except for the ICPosse bit – which I put in just to throw you off track!

  4. VoyageKiter | May 1, 2014 at 1:51 am | Reply

    To answer my own question and to put my post in context. Its not all doom and gloom having the current price ratio returning to the mean. The historic trend of oil / silver price (over a longer time frame) should show your EROI in play with the oil/silver price ratio coming down as silver gets harder to recover. At some point if demand / utility for silver persists then the ratio will come down to 1:1 and then beyond. Peak oil and silver scarcity will get us there at some point in the future (perhaps decades out). The conversion of paper currency to silver may or may not hasten that. We in the silver bull camp believe it will. Show us the 100 year price ratio Steve 😉

  5. Excellent analysis. I consider you and Charles Savoie as the greatest analysts and historians of silver.

    re; Guillermo – According to Charles Savoie, this creature is linked to duplicit people behind the Silver Users ASSociation.

    Here is another gem from Guillermo:

    ” In the minds of the public they do not realize that it is not in the bank’s interest to lower the price of silver as their profit margin on trading activity would be decreased. This logical thought was pushed aside for the aforementioned more sensational accusations ”.

    Source: http://preciousmetalslife.com/author/gmiguelps/

    Do you believe that? I do not. It is definitely in the interest of the evil centrl bankers and printers of (toilet) paper to crush the metals giving the public the continuous impression that there is an abondant supply of vast reserves of gold and silver and therefore one is better to place one`s after tax cash in equities and government bonds.

    Another Perez-Santalla, this one is named Carlos ie Carlos Danger the aka of Anthony Wiener. ” Gold losing its luster after FOMC Statement”.

    Many of us know that the past 100 years at least have been a psychotic bloody freak show financed and orchestrated by mainly Anglo/American and European bankers ie peddlers of printed paper with beautiful colours, wavy lines and pictures of bad guys and good guys ( and if you are in Canada, Elizabeth the Queen), backed by nothing at all except armies of patriotic induced young men and corrupt politicians and their well paid staff.

    This nonsense must end. It has to end. I pray for us all. We are in North America, arrived in different ships but ALL in the same boat.

    • roguefaction | May 1, 2014 at 9:06 am | Reply

      Good stuff.

      I went to the link provided, and read some of Miguelitos’ stuff… very informative… and certainly cut from a different cloth than a Jon Nadler or such. Can you explain why he is a “creature?” Linked to SUA?… link?

      ” We are in North America, arrived in different ships but ALL in the same boat” … very good!

      Altho…

      I suspect that in the end, what will matter more, to the continuance of one’s bloodline at least, will be not which ship one’s antecedents arrived in, but which ship one got out on!

      • Outlookingin | May 1, 2014 at 8:28 pm | Reply

        rogue, might I add (with true humility) not only which “one got out on” but on which deck! Or, was that crew? In which case one would be classed a deserter, by jumping ship. Those weighed down with much gold and or silver, followed the luggage porter from their sumptuous cabins, while those forced to “jump ship” or exit from steerage had only their labor.

        p.s. GFMS, CPM Group, Kitco, are all slaves serving the same master.

        • roguefaction | May 1, 2014 at 10:34 pm | Reply

          “those weighed down with much gold and or silver, followed the luggage porter from their sumptuous cabins”…

          thanks, that’s an opportunity to actually discuss a practical matter – for the benefit of those very few who will ever get mobilized to do something about checking outta Hotel California. While checkin out is still an option.

          At this point, even pre-FATCA… leaving with your stash is probably not a very smart move. Too many potential chokepoints at departures and arrivals… and hoops to jump through. All with potential unseen peril via state-employed bullies who can interpret rules according to their whim. Everywhere.

          Better, methinks, to use the services of one of the vaulters like Gold Money, to convert your stash to gold grams/silver oz… then, after establishing a bank account you can convert to cash, send proceeds to your new shelter… then buy physical on site. Expensive, in terms of conversion costs, yes. But proven method of getting the job done – of leaving Dodge with your loot intact!

          OOPS… I forgot… foreign banks NO LONGER WISH TO serve American passport holders… INTERNATIONAL PARIAH STATUS NOW IN EFFECT!

          Do you remember that Poe story where the walls slowly close in?

  6. I think they categorize government bullion under fabrication because a lot of people get them as collectibles. ALL of my government bullion is held as collectibles not necessarily as investment.

    My investment in silver is in private bullion. Private bullion can not be measured at a global scale, thus the implied net investment category. All the private bullion recycled from one year to the next at coin stores are not accounted for. Silver investment demand could be leagues beyond these numbers. Oh well!

    At least the trends can be determined and that is where the value can be had in these numbers.

  7. Someone is in great need of physical metal. Story goes that people BUY metals into a rising market and sell into a declining market. The old buy high, sell low crowd.

    The way to secure metal then is to DROP price, not bid it up. The lower the price the more metal hits the market. From this I conclude some powerful players are desperate for physical gold and silver.

    Tas

    • Max Meister | May 1, 2014 at 2:39 pm | Reply

      At least with Gold that’s only true for the west. The chinese make a use of those artificial price drops and they buy as much as they can at these bargain prices. I think that the manipulators will have increasingly problems to generate plenty of physical silver on the market by suppressing it’s price. What is really hard to understand is the fact that mine supply increases with lower prices. That is against any principle on how an economy works. It seems to be illogic to me. I know that they need cashflow to stay in the business but if they produce actually for free, the would have to run huge losses over time and i don’t think that any enterprise can stand that for a long time. So by logic supply will fall after some mines were going bankrupt.

  8. The reason Mr. Perez-Santalla’s analysis is incorrect probably has to do with him being a shill for Bullion Vault’s services. All of their writers seem to do so.

    They want to hold it “for you.”

  9. Counting on Peak oil is just stupid. You will wait your entire lifetime for it….and guess what? You’ll still be waititng when you are dead.

    I’ve been hearing about the death of the dollar and peak oil for decades. Guess what? We have more oil than we know what to do with and the dollar is the strongest currency in the world.

    Invest in productive assets. Betting on the end of the world as we know it is just stupid

  10. Silver died. 3 three years ago. The Shale Boom killed it. Oh…..and how long do we have to hear the same freakin’ nonsense about low inventories?

    10 more years? 20? 50 years?

    • Check out Dan Norcini’s post about the gold cult.

      • Matt,

        I am familiar with Dan’s opinion of the GOLD CULT. Dan does great work in an ENERGY VACUUM. If this was 1980 all over again, I wouldn’t advise purchasing the precious metals. However, we are experiencing the Peak of Global Oil Production. The $100 Trillion in Global Conventional Assets, are not assets, but rather ENERGY LIABILITIES.

        This is something that Dan doesn’t factor in his forecasts. I have never looked at gold and silver in a trading function. Things are already getting quite interesting in the Oil Market.

        Peak is here… and the Oil Majors realize it.

        steve

        • Outlookingin | May 2, 2014 at 12:53 am | Reply

          “the Oil Majors realize it.”
          Too many who also realize this, labor under the misconception that the oil will run out almost overnight. Not so. It will be the ever rising cost that will make it out of reach to all but the very wealthy. This will happen slowly, just as a Boa Constrictor slowly squeezes the life out of it’s victims.

          If there is no other energy source as efficient as oil to take its place, then the world will become a place of localized survival. This will entail a step backward in time, to a place that not many even contemplate. Time to wake up.

        • Thanks, Steve. I asked Trader Dan what he thought of peak oil and this was his reply.

          “I do not adhere to the peak oil theory. I think the shale oil finds are pretty much disposing of that as having any value. Heck, California is sitting on a massive shale oil field. Sadly the political leaders there will never let them get it. Same goes for New York.”

  11. Hi Steve

    Hows the paid reports coming along? Do you have a firm ETA yet?

  12. Jack

    You make a great point. The timing is such that the shale boom certainly led to the massive drop in silver. And, I must admit, the inventory of OIL in the USA I believe is at an all time high. No need for solar panels when OIL is this cheap.

    Good call Jack.

    As I stated earlier, silver will come back but, in your words, it could very well be 5-10 years before we see a new high. The miners will produce MORE at these prices, not less. People will sell MORE at these prices, not less. This glut of supply may put a lid on prices for a long time. The lower the price the MORE silver will come on the market. Not sure how anyone could argue that logic.

    Tas

    • Indeed Tas.

      The problem with the silver bulls is that they don’t see any other argument other than their rose colored views for the precious element. Look at what human ingenuity has accomplished in the Shale. Counting out the ascent of mankind has been a rather bad bet over time. And will be again….the peak oil fanatics won’t change. What will is the adoption of mankind as we’ve seen. Those holding silver a wishing and betting the world goes down will be sorely disppointed.

      Meanwhile, silver keeps heading down with people, like Steve, that refuse to pull their head out of the ground and look around. Oil has stagnated around these prices for good reason—and it will begin to head down in price once Ukraine noise settles down (heck, oil is already heading lower).

      Silver is a dead……dead……dead waste of capital. So many better opportunities without the non-sense.

      Sprott, Maloney, etc. How long and wrong can you be before people start to truly call you out for what you are: a bad capital allocator. In the case of Maloney, he should have stayed with his finanical advior. With Sprott, he should have stuck to small caps.

      Everyone following their advice have turned out to be on the losing end. And will continue to do so. I mean how many times can Sprott say dumb thinks like the manipulation is ending has the price goes down everyday anyway? What a fool.

      • Jack – broadcasting your ignorance rather than attempting to learn something…sorry but you haven’t a clue. Which isn’t to say there isn’t a bear case for silver…but there is also a clear bull case.

        But your case that shale oil in the US changed the world oil picture is just silly…run the numbers before you run this BS.

  13. The first four words of your headline said it all:
    “Institutions Mislead The Public”
    The only way one can steal from the public is to lie to the public.
    It’s so sad that it has come to this once again.
    There’s an old 1938 book “Promises Men Live By.”
    In short, when promises are being kept, times are good.
    When promises are not being kept, times are not so good.
    All paper financial transactions are promises.
    Holding gold and silver means not totally depending on others keeping their promises.
    Good defense for these particular times.

  14. GermanReader | May 1, 2014 at 10:36 am | Reply

    The US Mint sold 4590500 Silver Eagles in April the highest selling in an April ever, The price if silver dipped below 19 USD today. What an insane world we live in.

  15. GermanReader

    As long as miners keep selling silver at these prices the ASEs will fly off the shelf. The following sums it up:

    Miners selling every ounce they can to generate cash
    Market makers continue to short with abandon knowing mine supply will go up with lower prices
    Individuals throwing in the towel, buy high, sell low

    All this suggests lower prices as THAT is what creates supply. Higher prices reward hoarding of silver.

    • Max Meister | May 1, 2014 at 2:24 pm | Reply

      Well declared deaths usually live longer. I wouldn’t call it death, it is just blantantly supressed. There is no silver shortage around for the time being but silver is also a monetary metal so fear will most likely play a mayor role in the coming years. You never know what some stupid politicans and some criminal banksters are going to do next. Silver is a hedge against worst case outcomes, not more and not less. Should such a wostcase emerge you might see silver being more alive than anything else, if not you might be right that we are decades away from even 100$ Silver.

  16. CFO point of view | May 1, 2014 at 11:56 am | Reply

    Tas,

    You seem to underestimate Indian demand, as well as one very serious issue. The easiest way Putin may destroy financial system and not being blamed is to purchase indirectly silver for a few bilion of $.
    Nothing simplier to do by GRU or KGB agents around the world.
    I know he would already done it, if only Chinese would allow him, as he has to cooperate with them. But once he will be allowed to, it will be few days and you even will not notice the moment. As soon as gold will stop flowing to the east all short bets on silver will be toasted. Good luck with your predictions.
    And as for peak oil – it’s additional factor, that oil below 90$ will be undersuplied, and it makes ground flor for silver price at ca. 20$. Of course it can fall even to 10$ for very short period of time – especially if there will be similar need in silver as occured with GLD (to drain SLV), but it will just allow us to back up the truck with white metal before it disapears. Then all hell break loose and you will have mad scramble for any metal by industry and very low supply as mines will go out of the business.

    • LOL CFO! Good one. Russia is going to take us down by having the KGB buy silver. You should be writing books. But you should definitely not be allocating your own capital.

      • roguefaction | May 2, 2014 at 2:55 am | Reply

        Sorry Jack….

        gotta go with CFO on this one.

        Some time whilst you were doing your Rip Van WInkle thing, the world got stood on it’s head… now black is white and upside is downside! When the grogginess fully wears off, you will begin to notice that the former USSR is no more… but has been replaced by a newer version…the USSA. Where “FEARLESS LEADER” treads on the liberties of the little guy via his dual-citizen henchman “Boris Badenov” & Co.

        I know it’s hard to imagine…. but there’s help… CFO don’t need to write no books – cause it’s all out there in the public domain already -https://en.wikipedia.org/wiki/The_Treasure_of_Monte_Zoom – for you to get your head around!

        Plot excerpt: “When Boris and Natasha get back they find out that they were beaten to getting the treasure. However, they see the license plate which reads “14K”, giving them the idea that the car is made of solid gold. They open up a fake used car business and scam Rocky and Bullwinkle into trading it for a cardboard cut-out of a car. Rocky and Bullwinkle then chase after Boris and Natasha…

        Boris and Natasha take the car to a thrift shop to cash it in, but when Boris shows the owner a bumper, he learns that the car is not made of gold after all. When leaving, they see Rocky flying after them, and they get in the car to drive off. Boris tells Natasha to throw out everything heavy so the car can go faster, and she discovers that the trunk is full of gold coins. She has to toss them out in order to make the car go faster, which works, but Boris is so heartbroken about losing all that gold that he covers his eyes, causing the car to turn around and fall off a cliff.”

        Everything you needed to know bout modern eCONomics and geopolitical stuff… in just one episode! Just think of Putin as Rocky J Squirrel… and Boris as the Golfer n Chief…Natasha? Well you know there’s only one vamp evil nuff to play that role! It will all become clear! …

        “Fake Used Car Business”!!! Allocatin Capital!!! ONLY IN AMERIKA JACK!

  17. Price tells me everything I need to know. Most of the big miners, Gold Corp and Barrick, have lost almost half their stock price, and more. That tells me at these prices, profits are taking a beating. Most of the stocks are below 2006 levels.

    If we were in a bubble, and prices were far beyond market, their profits would be off the charts. They are not, quite the opposite, which likely means prices reflect undervalue. Manipulation, maybe, probably.

    Price is everything, price of the miners is telling me these historical ratio’s have some correlation to price vs cost.

  18. I like silver…I hope silver drops to a dollar…I love silver

  19. I cannot wrap my head around the American Silver Eagle making up for more than 1/3rd of silver coin demand. The rest of the world has great alternatives, and the USA itself is a hugely versatile bullion coin market in itself. Makes no friggin’ sense.

    • lastmanstanding | May 2, 2014 at 6:59 am | Reply

      XC…as an American, I am preparing for a localized economy to return. I am NOT a globalist.

      Buying coins that will be recognized/accepted in your locale may be the best purchase.

      Perhaps 1/3 of Americans are waking up.

      If one lives in a foreign land, I suspect they might be buying a coin that would be most recognizable there.

  20. IF true, WHY SHOULD CME BE ALLOWED THEIR NEW PHYZZZ EXCHANGE IN ASIA… plaintiffs should enjoin against their license and the grounds of what sounds like… [lawyers fill in the legal blank.]

    Just saying…

  21. Dear Mr Perez-Santalla.

    “You have been Weighed!”
    “You have been Measured!”
    “And you have been found Wanting!”

    “NEXT !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!” 🙂

  22. Bullion Vault is a company for people saving in allocated gold/silver. Do you think they are serious in gold/silver with a sub-standard analysis article?

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