The Coming Market Crash Will Wipe Out Global Silver Supply

The market doesn’t realize it yet, but the coming collapse of the global stock and bond markets will totally wipe out world silver supplies.  Unfortunately, this will occur at the time when main stream investors finally understand the value of owning physical silver. 

Global Financial turmoil and low silver prices motivated experienced precious metals investors to purchase record amounts of silver.  However, the market is starting to see a huge inflow of new and first-time gold and silver buyers.  According to Money Metal Exchange, they experienced a 365% increase in first-time buyers over the past 45 day period (June 16th-July 31st).

This recent surge in buying has put a huge dent in the retail physical silver market and is now impacting the wholesale market.  The COMEX suffered another large 1 million oz (Moz) withdrawal from its warehouse inventories today:

COMEX Silver Inventories 081115

The CNT Depository had 1.28 Moz of silver taken out of its Eligible category.  When we add up the other small withdrawals and the 443,807 oz deposit, the net amount of silver removed from the COMEX was 958,531 oz.  Almost another cool million ounces of silver removed in just one day.

Then we had a new update on U.S. silver imports from the folks at the USGS.   According to the data for May, the U.S. imported another 475 metric tons (mt) of silver.  If we add up all U.S. silver imports JAN-MAY, it turns out to be a whopping 2,510 mt (81 million oz).

Total U.S. Silver Imports May 2015

As we can see, total U.S. silver imports year to date (2,510 mt) are 523 mt greater than the same period last year (1,987 mt).  Thus, silver imports are 26% higher than they were during the first five months of 2014 and are on track to reach 6,000 mt in 2015.  This continues to be a surprise because the U.S. market demand for silver is probably less than it was last year. 

However, the Silver Institute recently published a news release stating that U.S. silver jewelry imports increased 11% in the first five months of 2015.  Now, silver jewelry imports are not stated as either “silver bullion” or “silver Dore Bars” in the USGS import data.  For example, the chart below shows which countries exported silver bullion and Dore’ bars to the United States:

Total U.S. silver imports JAN-MAY 2015

Mexico, Canada and Poland accounted for 2,133 mt (85%) of the total 2,510 mt of silver imported by the U.S. Jan-May 2015.  Also, these three countries are not major fabricators of silver jewelry as are Asia and India.

Furthermore, the U.S. only fabricated 397 mt of jewelry in 2014 (2015 World Silver Survey).  Basically, the United States only manufactured 397 mt (12.7 Moz) of silver jewelry in 2014.  Even though the U.S. may be importing more silver jewelry this year, it’s not apart of the silver bullion and Dore’ bar data.

So, where is all this silver going that the U.S. is importing at a near record pace this year??  I would imagine the majority of the silver is being acquired by large entities and wealthy individuals.  I chat with some folks in the industry and they continue to tell me that 80+% of their precious metal sales are silver.  And these aren’t just small Mom & Pop purchases… these are large 6 & 7 figure sales in silver.

Which is why we also see huge demand for Silver Eagles over Gold Eagles.  Gold Eagles were very strong in July due to the possible Greek Exit of the European Union and its impact on the global financial markets.  Gold Eagle sales jumped from 76,000 oz in June to 176,000 oz in July.   However, sales of Gold Eagles are only 7,500 oz for the first 11 days of August.

Now compare that to Silver Eagle sales:

Silver Eagle Sales May-Aug 2015 NEW

Silver Eagle sales in the first eleven days in August have already reached 2.1 Moz, surpassing the total for May of 2 Moz.  Amazingly, investors have purchased 281 Silver Eagles for every Gold Eagle oz in August.  Compare that to the 31/1 ratio in July:

July Silver Eagle sales = 5,529,000

July Gold Eagle sales = 176,000 oz

July Silver/Gold Eagle ratio = 31/1

August Silver/Gold Eagle ratio = 281/1

While many investors cut back on buying gold this month because they believe the global financial situation is now back under control by the wizards at the Fed and Central Bank, other savvy investors continue to purchase silver hand-over-fist.  We must remember, this record silver buying is only by 1% of the market.  The real question is…. What happens to global silver supply when the majority of the market wakes up?

Investors need to realize just how much silver the U.S. and India are importing.  If you read my THE SILVER CHART REPORT, you would have seen this chart below.  This is Chart #44 of a total of 48 charts explained in detail in the report:

U.S. & India Silver Imports 2007-2014 Moz

This chart shows the annual silver imports for the U.S. and India.  As you can see, U.S. silver imports (Blue) are more consistent compared to India (Tan), which are more volatile.  This is due to India’s erratic annual silver bar purchases.  Some years, India imports a great deal of silver bar, while other years demand falls considerably.  However, 2013 and 2014 were banner years… and the best is yet to come in 2015.

According to ETF Securities July Metal Update, India has imported 61% more silver in the first six months of 2015 compared to the same period last year.  India is on track to import 9,000 mt or 300 Moz of silver in 2015.  If the U.S. imports 6,000 mt (193 Moz), these two countries will import a total of 493 Moz of silver in 2015.  Not only will the U.S. and India import 105 Moz more silver this year than they did in 2014, these two countries are on pace to consume nearly 60% of global mine supply.

CONDITION RED:  Investors Better Wake Up Before It’s Too Late

Even though we are seeing elevated buying of physical silver investment, I would imagine many individuals are just waiting to pull the trigger to make their purchases.  They are either waiting for the perfect moment to purchase their silver at a lower cost, or they are trying to time the coming Market Crash. 

I have to say… THIS IS A LOUSY STRATEGY.  Of course, we can never know how the future unfolds, but evidence is mounting that the FAN is going to hit the SH*T sooner than later.  If the retail silver market is already experiencing rationing of Silver Eagles and Maples as well as 2-4 week wait times on other silver bullion products, this will likely get worse in the future.

Many investors are holding off buying silver because they believe we could see lower silver prices for decades as we experienced from 1983-2003.  While that notion is held by many investors, this time around will certainly be different.  Why?  Because the world will no longer enjoy a growing global oil supply as it did over the past three decades.  Growing global oil production allowed the U.S. Fiat Dollar to remain the world’s reserve currency as it controlled the flow the world’s energy supply. 

I still read where many websites repeat the infamous saying by Mayer Amschel Bauer Rothschild — “”Give me control of a nation’s money and I care not who makes it’s laws.”  This may have be true when Mayer Rothschild (1744-1812) said it over two hundred years ago, but today it should read, “Who CONTROLS the ENERGY SUPPLY, controls the money.”

The United States Shale Oil Industry is in deep trouble.  Now that the price of oil has fallen below $44, watch for spectacular fireworks in the next two quarters.  Thus, the collapse of the U.S. Shale Oil Industry may be straw that breaks the back of the market as did the Subprime Housing Market Fiasco in 2008.

The coming Global Market Crash will totally wipe out world silver supplies.  The clues are all around us to see, but the majority of investors just don’t want to believe the END IS NEAR. 

If you haven’t checked out THE SILVER CHART REPORT, there’s a great deal of information on the Silver Industry & Market not found in any single publication on the internet.  There is one chart in this report (Chart #19) that I can guarantee that 99.9% of precious metal investors haven’t seen before.  

SIlver Chart Cover Graphic 3D shadowMost analysts focus on a certain area or sector of the silver market. However, the information in this report illuminates a holistic view of many sectors of the silver industry, capturing the relationships that connect many parts of the market.

One of the important aspects of my work is to look at many industries and markets from a bird’s-eye view.  From this perspective, we can see how industries and markets impact each other to a much larger degree than by just focusing on individual sectors.

 

I use this bird’s-eye approach when I create my easy to understand charts.  The Silver Chart Report is a collection of my top silver charts from articles published over the past six years, and includes in-depth, never-before-seen charts and content that indicate that silver is on the rise. There are 48 charts in the report, broken down in five sections.

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26 Comments on "The Coming Market Crash Will Wipe Out Global Silver Supply"

  1. I think Steve is on track in his analysis of gold n silver…the movements behind the veil are very significant and as fiats falter gold and silver will shine…it will be a whole new game and very possibly done over a single night.

    China’s problems and their fundamental reasons for devaluing the Yuan are based in the same mistaken models of infinite growth as the West…slamming into reality of negative “growth” (aka, decline)…China danced while the music played like the rest in the West but now the music has stopped….what comes next is really scary for East, West, North, and South alike. There are no sure things but I wouldn’t be without PM’s for what likely comes next.

    As for the why…infinite growth models meet very finite limits

    http://econimica.blogspot.com/2015/08/the-chinese-mirage-no-different-than.html

  2. Hopefully India farmers will have a profitable harvest this year resulting in increased silver imports. So far so good as early rains have come on schedule.

    Peru’s exports of silver could be slowed if there is a repeat of the flooding that occurred during 1998 el-nino. More on that around Christmas.

  3. Steve,

    I just heard an interview with Andy Hoffman of Miles Franklin Mint and he stated they are almost out of silver. He also stated the hardest silver to get is the junk silver coins. MSM and normalcy bias are the two primary things I believe are holding investors back from waking up. After China’s currency debasement and the DOW dropping during the last week (down 6% YTD) people have to start wondering about the future in paper assets. The bond bubble is the worst scenario of all.

    The currency wars are now at full tilt and it’s only a matter of time until some developed nation experiences hyperinflation! I have to believe that the riggers on the Comex will attempt naked shorts soon if the metals keep rising – it’s the only hand they can play to protect paper assets. Maybe that’s what wannabe metals investors are waiting for. I agree that trying to time this is impossible and better to get what you can now.

    As far as depleting oil supplies that’s a harder case to make since the world is currently awash in oil and the prices keep falling. Despite all the facts you present (which I’m understanding more each day) that will be a time I don’t want to imagine!

  4. Short term dolar trend will decide the price of PMs. The dolar index is forming a triangle pattern. Probably in 3-4 weeks the index will go substantially up or down and the prices of PMs are currently correleted to the dolar.

    • see below.

    • PM prices correlated to COMEX action [manipulation far more than the dollar; so much so they really are not correlated to the dollar.

      • Are you kidding me !? That’s like saying that tires have nothing to do with cars !
        The COMEX has everything to do with the d o l l a r !
        You we’re just trying to blow smoke , weren’t you .

        • Go back to Eva’s comment:

          “Probably in 3-4 weeks the index will go substantially up or down and the prices of PMs are currently correleted to the dolar.”

          PM prices are set on the COMEX. the prices of PM’s are currently related to COMEX action.

  5. Eva , You’re right ! That’s what the U.S. dollar is really worth , namely a dolar . And that is precisely why “they” keep the PM prices behaving the way that they do. For if the truth gets out and the people find out that “their” dollar is only worth a dolar because it is after all only paper and has an incredible amount of debt attached to it’s every meaning ! THEN , that’s when the true meaning of what PHYSICAL gold and silver represent , namely individual worth not attached to DEBT.

  6. you are delusional, there is no dearth of silver, this is a bounce where you are trying to beggar your readers, silver will test $17 levels and drift to 10-11$ LEVEL , WHEREIN THE MONEY WILL MOVE IN, AND ONLY AFTER THAT YOU WILL EXPERIENCE THE NEXT BULL MOVE , WHICH WILL TAKE IT TO 160-170/OZ, BUT BUY THEN $ WOULD HAVE LOST MOST OF IT’S PURCHASING VALUE.

    • You are probably right. It is a typical bear market rally. The long term suport line for silver is between 12-13 $. The biggest players will try to scare the other investors with one more profound dip.

  7. “Who CONTROLS the ENERGY SUPPLY, controls the money.”

    it’s the other way around. energy means nothing if people can’t pay for it, and they pay for it with money.

    “I would imagine the majority of the silver is being acquired by large entities and wealthy individuals.”

    the first principle of the manor. the king has the gold, you don’t.

  8. When the dollar is worthless then will the same happen to all other currencies.

  9. Argentum Maximus | August 13, 2015 at 7:44 pm | Reply

    blah blah blah; another typical coinflation article.
    We can analyze charts all day long and read one conjecture after the next.
    I do like vishwaraj’s viewpoint; it’s spot on.

    I just buy and stack and ignore the constant back round noise.
    Think 15 to 20 years from now or even longer.
    In the meantime it is fun to watch each country’s race to the bottom via currency devaluation.

    Janet Yellen is piloting a ship with no rudder, no sails, and no steering wheel.
    Interest rate increase? Too little to late. LOL

    • “Janet Yellen is piloting a ship with no rudder, no sails, and no steering wheel.”

      heh. and just who took away the rudder, sails, and helm? answer that, and you’ll know what’s going on.

      • Argentum Maximus | August 13, 2015 at 9:48 pm | Reply

        Do you possess any original thoughts?
        “answer that, and you’ll know what’s going on.” (heh)

      • Numerous contrarians claim that it will end with a total crash. Basically I agre, but still the richest people first have to secure their money in order not to lose their capital. Therefore, first we should look for signs of powerful asset allocation and then one should expect a crash.

        • You can bet your bottom dollar (even if it’s worth is toilet paper) that the oligarch is covering their wealthy arses before the ship goes down. They were always at the helm and knew /know well good when to jump ship ! After all they’re the ones seeing to it that it does go down !!!!

  10. I am buying up all the physical silver I can. 90% , Eagles, libertads, it does not matter. I am preparing for the worst. This is not going to be good for paper assets.

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