To truly understand the troubling “Dislocation” between higher gold and silver prices and the hemorrhaging of the Wholesale-Dealer Industry, you must watch this roundtable discussion with Bob Coleman and I, hosted by Tom from Palisades Radio.
Unfortunately, many of the precious metals supposed analysts or “Influencers” who suggest that with higher gold and silver prices, there will be tightness in retail bullion supply and higher premiums HAVE NO IDEA of the current state of the Wholesale-Dealer Market, which is literally CHOKING on inventory.
Bob Coleman provides excellent insights into what is happening in the Wholesale-Dealer Market because he knows his business inside and out and has many contacts in the industry. Regrettably, we believe that as gold and silver prices move even higher, this could continue negatively impacting the wholesale dealer market as some companies haven’t prepared for a market with large SELL-BACKS in the system. This is a big change, mainly in the net sales for the past 15+ years.
You can check out more of Tom’s Interviews here: Palisades Radio Youtube.
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So, this is where decades of criminal price suppression exerted mercilessly on silver has finally brought us: frustrated, disappointed silver investors who have lost all hope for a fair price discovery for the most beautiful and most useful element ever created. All troubles and severe reluctance to wait just a little more culminate in firesale of silver; if not by the hopeless investors, then certainly by their inheritors, many of whom are cash-strapped due to continual purchase of toys and all forms of crapware offered to them. They are quick to sell the only real value they’ve ever owned in their entire life.
Not everyone is unhappy, of course. In fact, the situation could not be better for the Criminals. For;
1. They have managed to make the “best” seem like the “worst”, the ugliest. Something that should be gotten rid of ASAP. 99.9 % of people now think exactly the way the Criminals wish they do.
2. They are now busy collecting the most important element newly disposed of by the brokenhearted or their clueless heirs. At laughable prices, of course.
Concurrent damage is being inflicted in the mining sector: It is absolutely tragi-comic that, while companies regurgitating crap are setting stock market records, those that produce REAL VALUE, ie, silver, are struggling because of the ridiculous prices imposed on them by the “free market”. Now, that certainly makes the Criminals even more happy.
For me, this is the best time to buy more physical silver. As much as I could afford.
I have a very strong belief that the tide will turn dramatically. Very probably towards the end of this summer.
Most people lack wealth. They think they have wealth because they measure their worth in depreciating assets, fiat currencies, and electronic coins that exist only on the internet. Electronic coins (Bitcoin) are not a store of value but an energy user (as Steve St. Angelo pointed out in this video). Wealth should be measured in ounces of gold and silver. This means I care but do not care greatly about the price of gold or silver. The problem is people who live month-to-month do not have discretionary income to buy precious metals. When they buy PMs, they sell them at a loss when they are forced to sell because they need cash.
I question whether the cost of producing gold and silver is as disparate as reported. If silver’s rarity is 16 to 1 compared to gold, then shouldn’t its cost of production be closer to 16 to 1 as well? Is silver’s cost of production (about $22) really accurate?
Yes, the approximately $22 figure for silver is accurate, as is the approximately $1,700 figure for gold.
As has been pointed out by Steve, it costs about 80 times more to extract and refine an ounce of gold than an ounce of silver, so the 16 to 1 ratio doesn’t apply.
Thank you for your reply. I have read different views on what the gold-to-silver ratio “should” be. I assume that the ratio is tied to relative scarcity. So, if, market-wide, it costs 80 times more to mine an ounce of gold than silver, then one could say that silver is not as scarce as previously thought, which means that the 16-to-1 ratio must be inaccurate or obsolete. What do you think?
The average ore content processed by the mining companies is decisive for production costs.
We are at around 150 g of silver per ton and around 2 g of gold per ton of ore content,
i.e. 75 to 1.
Silver Cannon,
Keith Neumeyer from 1st majestic has often quoted that silver comes out of the ground right now versus gold at 8:1. Somebody correct me if this number isn’t right but I think it’s close. The price ratio is almost 90:1. The cost of production ratio is approximate 77:1 Unlike gold, quite a bit of the silver that gets mined winds up in solar panels, electronics etc… and eventually the landfill. The thing with silver is there appears to be no monetary demand for it. If there were, I’d think we’d the price ratio would be closer to the way it comes out of the ground.