THE DISINFORMATION WAR: The Attempt To Disregard Silver Investor Demand In The Market

There is a Disinformation War taking place in the silver market as certain industry analysis is confusing individuals by purposely disregarding the tremendous impact of rising investment demand.  Not only do I find this troubling, but I am also quite surprised how much the silver industry pays attention to this faulty analysis.  So, it’s time once again to set the record straight.

Setting the record straight has now become a new mission for me at the SRSrocco Report because the amount of disinformation and faulty analysis being published in the mainstream and alternative media is quite disturbing.  I decided it was time to say enough was enough, so I started by destroying the myth about the 1 million tons of gold hidden in the Grand Canyon in my recent article, THE BLIND CONSPIRACY: The Gold Market Is Heading Towards A Big Fundamental Change.

If you haven’t read that article and are still confused on whether or not there are billions of ounces of gold hidden in the Grand Canyon, I highly recommend that you do.  Now, if you read the article and still believe the U.S. Government decided to make the Grand Canyon a national park to protect all that gold, then you have my sympathies.  However, the reason certain individuals in the U.S. Government decided to make the Grand Canyon a national park because it was probably a GOOD IDEA to keep a beautiful part of the country off-limits from those who had no problem with destroying the banks of the Colorado by trying to extract gold at a pathetically low uneconomical yield.

If you have seen some of the episodes of the Discovery Channel’s Gold Rush show, the result of gold dredging operations isn’t pretty.  Here is a picture of the beautiful landscape outside of Dawson City in the Yukon that shows the effects of placer mining and gold dredging.  Now, how many families in the U.S. and abroad would have taken their kids on vacation to the Grand Canyon if it looked like this?  I am quite amazed at the lack of dignity and respect by individuals who only seek at the almighty Dollar.

(aerial photo of Dawson City, Yukon – picture courtesy of Peter Mather)

To tell you the truth, I am glad that Teddy Roosevelt had the foresight to dedicate the Grand Canyon as a national monument back in 1908.  At least some politicians had the wisdom to keep OFF LIMITS parts of the country, so we weren’t able to destroy it by mining it for ultra low-grade gold or bulldoze it, pour concrete and build another million suburban homes.

Okay, let’s get back to subject at hand… Silver Market Disinformation.

Precious Metals Analyst Totally Omits Silver Investment Demand From Market Fundamentals

The motivation to write this article came from several of my readers who sent me an interview by CPM Group’s Jeff Christian, at the San Franciso Gold and Silver Summit.  In the video, Jeff claims that there has been a silver market surplus for ten years and those industry analysts, who have reported deficits, “Are simply wrong.”  Jeff goes onto to say, “they have been wrong the entire time they have been on the silver market.”

Jeff continues by explaining that to analyze the silver market correctly, you must look at surplus and deficits based on total supply versus total fabrication demand.   Furthermore, he criticizes industry analysts who may be promoting metal by throwing in investment demand to arrive at a deficit.  He says this is not the proper way to do “commodities research analysis.”

Jeff concludes by making the point, “that if you keep silver investment demand as an “off-budget item,” then the price matches your supply-demand analysis almost perfectly.”  Does it?  Oh… really?

If we look at the CPM Group’s Supply & Demand Balance chart, I wonder how Jeff is calculating his silver price analysis:

This graph is a few years old, but it still provides us with enough information to show that the silver price has nearly quadrupled during the period it experienced supposed surpluses.  According to the CPM Group’s methodology of analyzing total fabrication demand versus supply, how on earth did the silver price rise from an average of $5.05 during the deficit period to an average of $19.52 during the surplus period?  I arrived at the silver prices by averaging the total for each time-period.

Again, Jeff states during the interview that their supply-demand analysis, minus investment demand, provides an almost perfect price analysis.  According to the CPM Group’s 2016 Silver Yearbook, the total surplus for the period 2008-2016 was approximately 900 million oz.  With the market enjoying a near one billion oz surplus, why would that be bullish for a $20 silver price??  It isn’t… and I will explain why.

As I have mentioned in many articles and interviews, the price of silver has been based upon the price of oil which impacts its cost of production.  If we look at the following chart, we can plainly see how the price of silver has corresponded with the oil price going back until 1900:

You will notice the huge price spike in the 1970’s after Nixon dropped the Gold-Dollar peg causing inflation to run amuck in the United States.  Now, the oil price didn’t impact just silver; it also influenced the value of gold:

As with the oil-silver trend lines, the gold and oil price lines remained flat until the U.S. went to a 100% Fiat Currency system in 1971.  So, if we decided to throw out all gold and silver supply-demand forces, we can see that these precious metals prices paralleled the oil price.  Now, the reason the price of silver shut up to an average of $19.52 from 2006-2017 was due to its average cost of production.  Today, the market price of silver is $16.42, and the average cost of primary silver production is between $15-$17 an ounce.  According to my analysis of the top two gold mining companies, their cost of production is about $1,150.  Hence, the 71-1 Gold-Silver price ratio.

Did Jeff Christian include the cost of production in his analysis of the silver price?  How many silver mining companies are producing silver for $5 an ounce and making an $11 profit?  Or how many silver mining companies are producing silver at $35 and losing nearly $20 an ounce?  I will tell you… ZERO.

The only way an individual would believe that the primary silver mining companies are producing silver at $5 an ounce is if they believe in the investor presentations that report CASH COSTS.  Anyone who continues to use CASH COST accounting needs to get their head examined.  It is by far the most bogus metric in the industry that has caused more confusion for investors than anything else… well, if we don’t include faulty analysis by certain individuals.

I find it utterly amazing that the CPM Group entirely omits silver investment from their fundamental analysis.  Here is a chart of their total world silver fabrication demand from their 2016 Silver Outlook Report:

If you are a silver investor, your demand doesn’t count.  It doesn’t matter if you purchased 100 of the half a billion oz of Silver Eagles sold by the U.S. Mint since 1986.  How many Silver Eagles have been sold back, melted down and returned to the market to be used for industrial applications??  According to the 2017 World Silver Survey (GMFS), total Official Silver Coin sales were 965 million oz (Moz) since 2007.  If we add Official Silver Coin sales for 2017, it will be well over one billion.  I highly doubt any more than a fraction of that one billion oz of Offical Silver Coins were remelted and sold back into the market.

Moreover, what term do we give to companies who produce Silver Eagles or private silver rounds??  Aren’t companies fabricating silver bars and coins?  While it is true that physical silver bar and coins can be sold back into the market, a lot of new demand is coming from fabricating new silver bullion products.

CPM Group only values silver as a mere commodity for the sole purpose of supplying the market for industrial, jewelry, silverware, photography and photovoltaic uses.  I gather 2,000+ years of silver as money no longer matters.  Yes, I would imagine some precious metals investors are feeling a bit frustrated as they watch Bitcoin go vertical towards $12,000.  But a word of caution to Bitcoin investors who are dreaming about sugar plums dancing in their heads and dollar signs in the eyes.

Now, when you see an article titled, Signs Of A Market Top? This Pole Dancing Instructor Is Now A Bitcoin Guru; it might be prudent for you to recall a memorable part of the move in The Big Short:

There is a wonderful scene where a pole dancer is explaining to a fund manager how she’s buying five houses.

A lowly paid pole dancer who survives on unpredictable tips should not be able to afford multiple houses, but this was the sub-prime USA where the ability to repay a loan was apparently not a prerequisite.

What a coincidence… ah??  Pole dancers buying five homes and becoming a Bitcoin Guru.  What’s next?  LOL.

Regardless, the notion by CPM Group that investment demand shouldn’t be included in supply and demand forecasts suggests that the gold market has experienced a total 418 million oz (Moz) surplus since 2006.  Yes, that’s correct.  I calculated total global gold physical and ETF investment demand by using the World Gold Council figures:

The reason for the drop-off in net gold investment in 2013-2015 was due to Gold ETF liquidations.  For example, 915 metric tons (29 Moz) of Gold ETF inventories were supposedly liquidated into the market.  Even though the gold market experienced a record 1,707 metric tons of physical bar and coin demand in 2013, the liquidation of 915 metric tons of Gold ETF’s provided a net 792 metric tons of total gold investment.  Please understand, I am just using these figures to prove a point.  I really don’t care if the Gold ETFs have all their gold.  I look at Global Gold ETF demand (spikes) as an indicator for gauging the amount of fear in the market.

The CPM Group does the same sort of supply and demand analysis for gold.  They omit investment demand from the equation:

(CPM Group Chart Courtesy of Kitco.com)

Again, according to the CPM Group, gold bar and coins aren’t fabricated.  They must be produced by Gold Elves in some hidden valley in the Grand Canyon.  No doubt, under the strict control by the NSA department of the U.S. Government.

For anyone new to reading my work… I am being sarcastic.

Moreover, the significant change in gold investment demand is a clear sign that investors are still quite concerned about the highly inflated bubble markets.  If we go back to 2002, total gold investment was a paltry 352 metric tons compared to 358 metric tons of technology consumption and 2,662 metric tons of gold jewelry demand.  However, in 2011, the gold market experienced a massive 1,734 metric tons of total gold investment versus 2,513 metric tons of jewelry and technology fabrication.

What is significant about this trend change?  In 2002, global gold investment was a mere 10% of total gold demand.  However, by 2011, gold investment demand surged to 41% of the total, not including Central Bank demand.  Even in 2016, global gold investment demand was still 40% of the total.  As we can see, investors still represent 40% of the market, whereas they were only 10% in 2002.

Precious metals investors need to understand there is a huge difference between Gold and Silver versus all other metals and commodities.  The overwhelming majority of commodities are consumed while gold and to a lesser extent, silver, are saved.  And, they are being purchased as investments and saved for an excellent reason.

The world continues to add debt at unprecedented levels.  In just the month of November, the U.S. Government added another $137 billion to its total debt.  This doesn’t include the $610 billion of additional debt added since the debt ceiling was lifted on September 8th.  So, the American public is indebted by another $747 billion in less than three months.

Getting back to silver, according to the GFMS team at Thomson Reuters, who provide the World Silver Survey for the Silver Institute, the market will experience a small annual silver surplus this year for the first time in several decades:

The reason for the surplus has to do with a marketed decline of silver investment demand this year.  With the election of President Trump to the Whitehouse and the “Pole Dancing Guru” Bitcoin market moving up towards $12,000, demand for the silver investment fell by 50% this year.  However, I don’t look at it as a negative.  Oh no… it’s an indicator that the market has gone completely insane.

This reminds me once again of the movie, The Big Short.  In the movie, the main actor bets big against the Mortgaged-Backed Securities.  Unfortunately, just as the housing markets start to crash and the mortgage-back security market begins to get in trouble, the bets that the main actor in the movie made, began to go against him.  That’s correct.  His short bets against the market should have started to gain in value, but the banks wanted to dump as much of that crap on other POOR UNWORTHY SLOB INVESTORS before they would let it rise.

We are in the very same situation today.  However, the entire market is being propped up, not just the housing market.

It is impossible to forecast a more realistic gold and silver price when 99% of the market is invested in the wrong assets.  So, for the CPM Group to value gold and silver based on their fabrication demand totally disregards 2,000+ years of their use as monetary metals.

Thus, it comes down to an IDEOLOGY on why Gold and Silver should be valued differently than mere commodities, or even most STOCKS, BONDS, and REAL ESTATE.  Valuing gold and silver can’t be done with typical supply and demand fundaments.  The only reason I analyze supply and demand fundamentals is to understand what is happening to the market over a period of time.

For example, if we look at total global silver investment demand and price, there isn’t a correlation:

But, if we look at what happened to silver investment demand since the 2008 Housing and Banking collapse, we can spot a significant trend change:

As we can see, world physical silver bar and coin demand nearly quadrupled after the 2008 Housing and Banking collapse.  This is the indicator that is important to understand.  While silver investment demand after 2008 has increased partly due to the higher price, the more important motivation by investors is likely a strategic hedge against the highly-leveraged fiat monetary system and stock market.

Investors who follow the CPM Group’s analysis on gold and silver based upon fabrication demand only, are being misinformed.  Jeff Christian who runs the CPM Group has no idea about the Falling EROI – Energy Returned On Investment or does he understand the dire energy predicament we are facing.  Thus, Mr. Christian and the CPM Group still look at the markets as if they will continue business as usual for the next 50 years.

We are heading into a future that we are not prepared.  The economy and markets will likely disintegrate much quicker than anything we have experienced before.  I believe the Bitcoin-Cryptocurrency market is going to collapse shortly due to what I see as extreme leverage in the system with very little in the way of cash reserves.  I hear stories that trading in and out of cryptos isn’t a problem until you want to receive a substantial amount of funds in your bank.  That is a huge RED FLAG.

So, take this warning… as well as the knowledge that pole dancers are becoming Bitcoin gurus.  If it’s too good to be true, it’s likely too good to be true.

Lastly, I want to thank everyone who continues to support the SRSrocco Report site.  Those who have become members of my site or Patreon might wonder why the membership count does not rise that much.  This is because while I receive new members, some fall off each month for various reasons.  However, I sincerely appreciate the support and believe the SRSrocco Report site is providing analysis, information, and data not found anywhere else on the internet.

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109 Comments on "THE DISINFORMATION WAR: The Attempt To Disregard Silver Investor Demand In The Market"

  1. Supply/demand sure has no impact on price, it seems. Silver cratering, lately.
    Bought a lot around $4 in 2001. Sold some above $40 in 2011. Thought it would go higher. Timing is everything if you are buying for investment. Lots of dealers are telling people the metals are for “insurance” not investment. To justify dead money, I guess. “Speculation” is a dirty word, i.e. bit coin, but it’s all we little people got left.

    • DisappearingCulture | December 4, 2017 at 1:24 pm | Reply

      “Supply/demand sure has no impact on price, it seems.”

      Demand hasn’t exceeded supply, or if so only briefly. When it does it will have an impact. Until demand can’t be met, particularly when there is no default on physical delivery on these bogus paper/contract exchanges like COMEX, price will be range bound.

      • Silver demand has exceeded supply for more than the last 10 years.
        http://www.silverinstitute.org/silver-supply-demand/
        The reason that demand hasn’t raised the price of silver during this time frame is because “the powers that be”, who manipulate the market, have been able to use stockpiles of silver to to supplement the shortfall. Once the stockpiles have been depleted, silver shortages will have major impact on price. When solar panel manufacturers or electronic firms can’t get the silver they need…supply and demand economics will take hold again.

        I don’t know how much of the silver stockpiles are left but indications are that they are severely depleted. The US no longer has any stockpiles left and at one time it had over 4 billion ounces. Im counting on either Steve’s EROI theory and/or silver stockpiles to be depleted to have a profound effect on price. But the same people manipulate both markets, so I wouldn’t hold your breadth. It won’t be next year.

        Even though silver demand is way down this year (read Steve’s article about 3 weeks ago), he also has stated that silver supply is way down at the primary mines. As the world economy shrinks during the next great recession, the amount of silver harvested from non-primay mines will fall rapidly as well.

        Keep Stacking!

        • I will always think the main reason JFK was assassinated was his attempt to back our money with silver, even with all the other stuff.

          • 100% behind you on that Sammy. There were a (whole) host of other reasons too, but that was a big one.

    • E-sports is a 50 bil $ industry. Silver is 30 bil $. Guess where I am “playing” with my $?

    • Total nonsense. Most silver mined is a byproduct of mines looking for other base metals and they simply cannot back production without cutting back on overall production so they have been flooding the market and cannot get rid of the crap. There are no deficits. Many mines do not even state production numbers promoting the concept of scarcity. If these numbers were released price would fall off a cliff.
      70 to 89% of demand is industrial, manufacturing and retail jewelry all depending on low prices. Since silver is rarely used anymore in most monetary systems except mints marketing collectables this has effected worldwide demand. The monetary demand has become too small to effect price and this demand can never offset the drop in demand of the above 3 sectors. It is simply moved from a monetary based metal to an industrial based commodity. Another factor is that when price moves to a certain point industry uses more copper than silver also effecting worldwide demand with prices then falling back. Still another factor is that because of the constant flow of new technology the amount used in products has gone down every year. For solar panels 10 years straight. It gets worse. World trade has been slowing also effecting worldwide demand. And it still gets worse. People in the west generally have less disposable income because of higher taxes and this also effects demand.
      Sorry stackers, you have been scammed by those promoting silver. All of the above is why prices will never rise significantly as they claim. Many now have woken up to the scam and are selling. Silver has been one of the largest scams on the net!

  2. Great article, Steve. I believe Snowden’s gf is a pole dancer. I really hope he got some solid bitcoin advice…

  3. Of course they don’t want people to board the physical plane. It would destroy the monetary plane. That’s why we have crypto currencies. More ‘wealth’ out of thin air. They hope people run into crypto’s after the next crash, preparations are being made as we can see. False info on blogs, crypto pumping, trolling on blogs. That’s my take anyway.

  4. With regard to bitcoins:
    All my family and friends want to get in.
    My question to them is; Have you ever used a Bitcoin to buy or pay anything? The answer is a resounding Nooo… But Bitcoin is the future!
    Yessssss… But the future calamity

  5. If oil/PMs relation oes not chnage in the future and if your predictions on oil crash also happen, PMs will crash into the 2020/2025 era. Am I missing something ?

  6. pennies onthedollar | December 4, 2017 at 5:40 pm | Reply

    If you’re right about Bitcoin we’ll get to see John McAfee eat his own dick.

  7. Michael Kohlhaas | December 4, 2017 at 6:03 pm | Reply

    First Bix Weird – no typo – now Jeff Christianson. Who’s next? Steve is a serial killer!

    • One thing for sure: Bo Polny will not be on the list. Bo always supplements his technical analysis with some quotes from the bible and bhagavad gita.

  8. I would like to know what the bitcoin owners are going to do if the govt shuts down the internet when the Bible’s pop. Banks will probably have a holiday also to stop runs.
    They have already been given a 10 day “Gate” by law to hold your money.
    If you can’t hold it you don’t own it!!!

  9. It appears to me, folks around the world are realizing their fiat money isn’t backed by anything, except perhaps a shakey government and debt. Last weekend the crash up in bitcoin was from desperate South Korean buyers. Can you blame them? Gold is hard to transport across borders, silver more so. Even if we, heaven forbid get a local EMP, the internet will be up somewhere, if you survive. People are not just speculating but panicking out of fiat to crypto,as an alternative. Take all the fiat in the world, how many percent has it decreased in purchasing power? Now compare that to bitcoin increase. I think we are just getting started. All my own opinion.

    • Sammy,

      While the notion of $100,000 Bitcoin sounds nice, I believe a BIG CRASH is coming. This isn’t based upon mere speculation, but some direct proof of what is taking place in the Crypto Market. I have heard through the Grapevine that GOOD LUCK selling any decent amount of Bitcoin and receiving the cash in one’s bank. Sure, individuals can get $10-$20,000, but forget about higher numbers. This means there isn’t the CASH to back up the leverage in the system.

      Furthermore, there is a lot of FRAUD and CORRUPT market activity going on via TRADING. I could tell you stories, but I have to keep it private.

      steve

      • Steve, thank you for your hard work and your reply. I love the articles and the comments, good stuff.
        Folks in the know never plan on reconverting to fiat, price goods in the future in terms of Cryptos. Or buy gold/silver. Why use a bank if you don’t like them?

        • Sammy,

          Holding onto Bitcoin might be partly true for the sake of future use. But, on Dec 18th, the CME will allow SHORTING of BITCOIN. With the Chart of Bitcoin going STRAIGHT UP, I would imagine there are savvy traders who would love to short BITCOIN. Right now, there isn’t anyone shorting Bitcoin, like we have with Gold and Silver.

          Let’s just wait around for a few months and see what happens.

          steve

          • I will be amused to see how these 9-5, M-F boyz can short a 24-7 world market. I guess they’ll let robots handle it.
            Yes, could be a crash or the get their foots shot off.

          • Whipworms are about to parasitize the tapeworms.

          • Steve the argument you made about bitcoin is inherently flawed. Comparing a stripper who put no money down to lever up and buy 5 houses to speculate on real estate (using DEBT), against a stripper who had to put up CASH to buy bitcoin isn’t even on the same level. In fact, the opposite is true. Bitcoin enthusiasts want mass market adoption. So the more strippers, dentists, artists, car dealers, and any other industry who wants to accept or buy bitcoin (or become a guru – whatever that means), the stronger the overall market and crypto economy becomes. So your example that you think makes your case, actually undermines your case. More people educating others about crypto being a better alternative to fiat in nearly every way is good for the crypto economy.
            As to cash withdraws, some people want to do this yes. Those people can do $10k a day immediately, and some exchanges don’t have such cash limits if you do a wire transfer. But most bitcoiners don’t want to cash out for dirty fiat anyway, and most aren’t buying on margin with debt. We want to buy actual goods and services one day with the bitcoin or other cryptos. And we will frequent merchants that offer it, which helps those merchants and incentivizes others to accept crypto. I can buy $100k worth of gold at JM bullion or up to $25k of gold per order at APMEX. Do you think I will buy my gold at a dealer not accepting bitcoin – no! Coinbase has plenty of cash, and your “secret proof and grapevine talk” is as weak an argument as it gets. And corrupt trading? What does that even mean? Are you referring to tether?
            What will happen when we have a bitcoin futures market? Nobody knows yet. Some traders will get wrecked. Bitcoiners do not care about the portfolio of day traders. The market will flush out the weak hands only in the game for USD profits, and the bitcoiners will buy the dips. You seem emotionally attached to the idea that bitcoin must crash. I sleep quite well at night holding gold, silver and crypto – with none of it purchased with debt or on margin. Don’t you think that is the smartest play?
            What gives bitcoin value? See here: http://www.bullionstacker.com/viewtopic.php?f=108&t=15864&start=2500#p559619

          • Do you think the bitcoin potential shorting will be analog to precious metals ones ? I guess that’s a major issue.

          • Currently “being short BTC” is being in cash, PMs, or some other fiat investment (real estate, bonds, stockx). My hunch about bitcoin shorting is as follows: The big banks, PPT etc. (a.k.a. “THEY”) have amassed a reasonable amount of bitcoins and cryptos of all kinds by now and they have a clear knowledge of how much selling is required for BTC to go up or down 20 or 30%. The futures on BTC are settled in CASH (not BTC), so at some point they will go short on the futures and dump as much BTC/crypto as needed to let the market fall X %… as panic selling starts they cover / cash in on their shorts and gobble up BTCs again until some rebound occurs, having again amassed BTCs and fresh fiat $ as the go long futures and “enough” BTC until they revert again – and are in full control (if they not already are)… So my guess is that once the futures start trading we will see even wilder price gyrations, up and down. Either way it will continue to be a spectacular show.

            As for myself, I continue to hide in (mainly) PMs as I see BTC and cryptos as a derivative of fiat (excessive/speculative cash/debt in the system). BTC so far is going up bcs it’s going up – that is fiat is pouring in on the hope that someone will buy your BTC crumbs at a higher price. While it is possible that BTC will go even much higher, I still think PMs will eventually do a (BTC)^n “reset” move at some point, when physical delivery is no longer possible “in size” = a de facto default of the paper PM CONeX/LBMA “contr+P”-PM machinery occurs and the Eastern exchanges will start setting the global price (transition to a cash for bullion market ONLY). At that point I want to hold as much PM as possible, NOT crypto. I see/understand the potential benefit of cryptos/blockchain, but it just ain’t my cup of tea for now. Too many risks. And with the dire energy situation we face I don’t see a sustainable “high tech world” lasting forever.

            My hope is, that some sort of more sustainable “reboot” of a new system will occur after the coming crisis, but my mind tells me that TWAWKI now will not, cannot come back (actually, it already died during the last crisis – we were given 10+ years on nothing more than money printing and excessive debt). A lot of people will be left behind and wiped our in the coming storm, so I wish GLTA, as we will ALL need it before long.

            A great thanks goes to you Steve, for all your great efforts and sharing your insightful analyses.

      • That sounds inevitable. End-run by the banks. Plus the stories about banks contacting police when large cash withdrawals take place easily make this picture of computer coin “money” become very creaky. Termites, anyone? No? Wood ants then. But they can’t eat my silver. Bank staff ambitious for promotion will monitor for these crypto conversions and bank wires and engage in appropriate rat fink tattling. Next comes the IRS summons by certified mail. Fun time for whom?

      • If bitcoin reaches $ 100.000 and the full 21 Million BTCs are in supply, we speak about a “market value” of $ 2.1 Trillion. This will never happen. Money creation on this scale is a danger for the national security, the current banking system. But if it happens and the money can be transferred into bank accounts or it can be used as an instrument to barter goods and services the people will then value real money which cannot be inflated so easily – gold and silver.

        • Not only is money creation on the full 21 mio BTCs a danger to the concept of public money and therefore national security… the energy equation is insane:
          The bitcoin computer network currently uses as much electricity as the country of Denmark.
          According to environment news site Grist, if the currency’s growth continues on its current trajectory, it will use as much as the entire USA in just 18 months’ time.
          And by February 2020 the environmental news site claims Bitcoin would use as much electricity as the entire world does today.

          So there is NO WAY bitcoin will be allowed to function as public money.

          • False. Bitcoin consumes less than 1% of the electricity wasted annually on stand-by devices doing no work whatsoever in America.
            http://www.zerohedge.com/news/2017-11-29/about-sensationalist-bitcoin-electrical-consumption-story

            Proof of Work (bitcoin) is one system of blockchain. Proof of Stake is second generation which doesn’t use anywhere near the energy. You’ll need another excuse why bitcoin will fail.

          • Let’s do some math. The Antminer S9 (probably the best commercially available ASIC miner at the moment) for example, uses 0.098 W/(GHash/s), which at current BTC hashrate of 10 Million THash/s equates to roughly an ongoing 1 gigawatt for bitcoin mining if the S9 is representative of the average hardware being used. That’s 24 million kWh/day over, what, 400-600k tx’s/d. So 40-60 kWh/tx is about right. If that’s how you wish to assign “cost”.

            Backing it up that also means, currently, each BTC “costs” about 524 kWh/year to keep alive, as another way of assigning cost.

            Either way I see a scalability problem with bitcoin not only with its current transaction bandwidth (as currently designed mass adoption just doesn’t work, Lightning network or not, at only 150M-220M tx/year.), but also this ridiculous, and unnecessary, and costly, carbon footprint.

      • I’m pressed to understand why one would wish to receive cash in a bank, perhaps so one can pay big chunk of taxes?
        I prefer to just buy PM’s on one of the online sites who accept cryptos in payment.

    • One of my favorite stories from WWII was about a Jewish goldsmith who got hauled off to a prison camp. Knowing what was coming, in his basement he mixed up a big bottle of aqua regia. Then he dissolved up all the gold he had in the solution. He left the bottle on a shelf in the basement. He survived the war and was able to return to his home where the basement, shelf and bottle were all intact. He recovered his gold from the solution.

  10. Steve: You have used the oil-silver and the oil-gold charts again, but referenced the rampant inflation induced by Nixon’s drop of the gold-dollar peg. One can assume then you have given inflation a roll in the oil price.

    Oil consumption has risen rather steadily since the ’50’s, but the oil price spiked in the mid 80’s, 2007 and again in 2011-12 range. Those spikes do not necessary match consumption, hence would seem to be anomalous. WHAT CAUSED THOSE PRICE SPIKES?

    You also infer that the oil price dictates the gold and silver prices by governing the production cost. Which is partially true, but ignores the role of the producer modulating the cost of production primarily to meet the mine’s cash flow needs, and secondarily to elongate mine-life by mining lower grade, using more marginal reserves (now profitable with a high PM price). A process which directly leads to a higher cost per oz., hence MIMICING the oil price curve.

    Rather than saying that oil price governs PM production costs, hence controls the price …….. could it be that the same economic forces that drive up oil price will also drive up metal prices. Such as: world turmoil, confidence in fiat money, inflation, and lest I say it, Supply and Demand. These criterion work for both oil and PM’s. Oil and gold are both driven by the same fears, or lack of confidence in the system.

    • Antler333,

      You bring up some excellent points. Some readers have told me that I am incorrect that the oil price is the driver of silver and gold. Rather, they believe it’s the precious metals that are driving up the oil price. Well, that’s kind of ARSE BACKWARD, ain’t it? Without energy, there is no economic activity or value.

      A basic example, if you don’t have the energy to harvest your corn and walk it into the market for trade, IT’S WORTHLESS. Thus, the ENERGY ALWAYS COMES FIRST.

      The rising oil price during the 1970’s and 2000’s was due to massively changing market conditions. First, was the peaking of conventional U.S. oil production and the end of the U.S. Dollar-Gold Peg and the second was the peak of conventional global oil production in 2005. There isn’t a coincidence that the U.S. peaked in oil production in 1970 and the Nixon dropped the Gold-Dollar Peg the next year.

      The rising Cost to produce Oil as well as the massive inflation and debt impacted the cost to produce oil. Thus, it impacted the gold and silver price.

      steve

      • Steve:
        “Without energy, there is no economic activity or value” While that is true, the two commodities, oil and gold obviously respond to the worries of the marketplace. If peak oil production was responsible around those oil price spikes, then the rise in oil price reflects the market worry of an oil shortage. A fear of shortage causes oil prices to spike internationally. That is potentially a “future” supply and demand issue with no relationship to the EROI. That spike, in turn, is effectively devaluing the dollar in its relationship to gold AT THE SAME TIME….so the price of gold goes up as well, again without regard for the EROI. Its does however suggest that oil perceptions CAN DRIVE the value of gold because the dollar is the international currency of choice. The Arabs threatened to tie the oil price to gold. Hence, I conclude that any perceived commodity shortage as important as oil should also drive the gold price.

        AS an additional factor, please recognize that oil (and its stepchild, electricity, is only a large factional part of the cost of an oz of gold….Labor is highly important and with no direct relation to EROI, and of course there is, capital cost and replacement, chemicals etc WHICH would eventually rise in response to the oil spike but would be time-delayed significantly compared to the spiking prices due to inventory etc.

  11. My wife’s manicurist’s boy friend’s uncle has laid down the definitive word on Bit Coin. He’s going all in at $11,000 per coin His pole dancing GF needs new boobs and BTC has to double.
    As for silver, Morgan is also saying silver is not in shortage. He should know better. His pole dancing GF already has some nice new boobs so there is no excuse for his running this ‘silver is not in shortage’ palaver.

  12. About that bitcoin thing…

    “It’s not really about bitcoin price surging, it’s fiat currencies in free fall, but only bitcoin is noticing”. – Joseph Young

    Yes, some of the price movement is pure speculation. There always is. However, there is also desperation. Safe haven status for wealth and its preservation are reaching desperate heights. So, is the stratospheric growth of bitcoin and its price a reflection of its value? Or is it a “tell” of how the fiat currencies are being viewed?

  13. Easy to understand | December 4, 2017 at 9:19 pm | Reply

    I think there is a very simple but unspoken explanation as to why CPM has omitted investment demand for both gold and silver.

    Basically he needs to “toe the line”, or else. He can say a few things about a few things, but there are limits. Letting the “investors” who read their market analysis know the truth about investment demand into gold & silver and the magnitude of it is off limits. He would have been spoken to by various financial and government people, and been told flat out “do not mention this”. National/financial security and protecting the USA and the dollar may have been among the reasons cited. Any failure to do as they are told would be met with loss of job, jail, treason charges, or an arranged accident of some kind. (For those that think this is far fetched, you have not done sufficient research yet to fully understand how the world works.)

    This is the ONLY reason why that data would be omitted, and they pretend it doesn’t even exist.

  14. To the chart “world physical silver demand” 2000-07 and 2008-15
    “….the more important motivation by investors is likely a strategic hedge against the highly-leveraged fiat monetary system and stock market.”

    Is this enough reason?
    I remember selling all stocks in 2007, I even shorted a little in 2008. But I NEVER had thought about PM. I sat in Euros.
    In Germany gold coins were(and are) without VAT, but silver/platinum were taxed.
    Then James Turk came along and as a first allowed to save in phys without the taxes.
    Singapore changed from taxing PM to free them and the airport became a huge storage place for PM.
    So there is a bigger reason, why these two timeframes have so diff volume in buying – the non US rest of world:
    1. Germans (and others) had no cheap (taxfree) buy possibility for silver before 2007.
    2. There were (to my knowledge) no goldmoney like institutions for phys buy/store before 2007. Only bank-funds (where you never knew).
    3. There was no reason (for me) to own PM as the stocks boomed and peaked a 2nd time in 2007. (from 2009 I view the whole stock ralley as artificially made – which made me buy PM).
    4. My biggest influencer was Mike M. with “the case for $20000 oz gold” – a masterpiece, which made me understand first time what was going on – and I became a PM saver. This video is dated 16th Aug 2011.

    => So until 2009 I had no idea nor real possibility. From 2011 on I could save in PM – not earlier. Today I have many places to save also in other jurisdictions, out of banks, lots of competition (costs came down), but before 2007 we talk only rounds in USA I guess or VERY expensive ways in Europe and Asia.
    Best wishes from Europe and thank you Steve!

    PS: Any idea when China motivated their cits to save in PM? I feel after 2008. 😉

  15. “Jeff claims that there has been a silver market surplus for ten years”, “Morgan is also saying silver is not in shortage”. OK! Suppose this is true. Why don’t we hear this kind of message within this ten years. If some one from JPM jump out and say this. All of us will not be surprised! Readers follow Steve to here. We all know that the financial system is very unstable now. We should admit that we don’t know the real picture of silver supply and silver inventory. But the CB do know! Prepare to hear more message of “silver market surplus”, “silver is not in shortage”, “one million tons of gold”. Finally, hope that the miners belief this kind of information and stop digging gold and silver. Thanks to Steve great work!

  16. How can you determine value or price with only supply and demand minus investment when investment is demand?

  17. When banks collapse or the IRS comes after bitcoin traders, cash for bitcoin will be on the black market. In turn ruining government spending for taxes they are unable to collect. But yet freeing the people.

  18. “Jeff Christian who runs the CPM Group has no idea about the Falling EROI – Energy Returned On Investment or does he understand the dire energy predicament we are facing. ”

    This is a huuuuuge club.

    KK

  19. A big paper Gold dump this morning… someone dumping $1.5 billion in paper Gold in seconds;
    http://www.zerohedge.com/news/2017-12-05/gold-breaks-below-key-support-drops-4-month-lows

    Paper Gold is the elephant in the room that the mining CEO’s dont want to talk about.

  20. Steve … it doesn’t matter what the fundamentals of physical market are … when you can create millions of ounces of Paper Gold or Paper Silver with the push of a button and dump it onto the market in seconds without any repercussions – fundamentals meaning nothing.

    Paper Gold & Paper Silver are the elephants in the room that the mining CEO’s dont want to talk about.

  21. That is correct, it doesn’t even matter what the underlying fundamentals are for gold and silver. As long as they can create unlimited paper claims, they can always suppress the price down to the cost of production and even further, causing the mines to shut down eventually.

    How long can they do this? Forever. We are dealing with the legal and political end of a system, nobody is even going to care in 50, 100 years.

    • I think about it this way, decling net energy will choke the world economy, and this will eventually blow up all paper promises. Including paper gold and silver. Its all based on trust, when trust is gone, paper will blow away like dust in the wind. The scramble for real stuff will be epic.

    • That is good. The closing of mines will make a supply shortage of physical gold which will move the prices higher (both metal and paper gold).

  22. Thanks again, Steve for another great article! I really appreciate your work and love reading everything you put out..!

  23. I would avoid all Gold and Silver stocks until 1 of the 3 following events occur;

    (1.) The mining CEO’s finally decide to band together and produce a clear plan that largely gets rid of paper Gold… this is unlikely to happen because the mining CEO’s enjoy large salaries even when they loose money.

    (2.) China & Russia finally do something material that actually sucks up the physical supply to break the back of paper Gold … the recent chatter from Russia/China is still largely just rumor/talk … clearly; what Russia/China have done to date is not enough to break the paper Gold market.

    (3.) There’s a break in the spot price above $1,400 US … this will begin a short covering rally in the Gold/Silver shares.

    Until any of the 3 things above happen, the Gold/Silver stocks will continue to be sold/shorted… of course; Rick Rule & Eric Sprott won’t tell you that.

    • Like i said several times on this blog, its ‘price’ is irrelevant. Crypto’s too are measured in fiat currencies, that’s weird. Lets talk about ounces and ehhh, bits ‘n bytes?

      • How about ratios?

        The current (as of today) ratio of gold to bitcoin is 9.4:1
        Would give up 9.4 ounces of gold bullion for one bitcoin?
        Didn’t think so. Me neither.

        • Hmmm.. wonder what the current debt/trust ratio is.

          Anyway, crypto’s are fine by me, there just isn’t the surplus energy to maintain complex communication structures.

          Today there is, tomorrow i won’t be able to exchange my ripples for Turkish lira’s and buy something with it.

          Good one btw, silver btc ratio would make me rush to the coin shop asap. I’ll look into it tomorrow morning 😬

    • IMO #2 is on-going, with a caveat. The East is accumulating fizz at a rate that does not “break” the current paper PM ponzi that is the “price” setting mechanism, i.e. the CONeX/LBMA-duplex that is leveraged 200+ ounces of paper pm for every deliverable ounce of fizz. They *could* pull the trigger any time the’d like (they have enough fiat/$ to do so) but their goal is to accumulate as much fizz as they can rather than kill the goose that lays the yellow nuggets. However, IMHO the drain of fizz to the East is not sustainable at these levels, so something is gonna give at some point.

      As for #1) agreed, that is unlikely; the banksters have the miners by the balls via debts to maintain their “breaking-even-at-best-operations”.

      As for #3) me thinks this is related to mentioned leverage in #2). The paper (naked/uncovered) short positions are so astronomical that there is no “normal” trading up from here. The paper markets have to die and for this to happen, “paper price” may even have to go down (for a short period of time, possibly in combination with some financial/geopolitical crisis or big war) and every “paper holder” will be settled in cash (and the paper longs at a significant loss). Then a cash for bullion market is put in place at a likely much MUCH higher price, leaving all non-holders behind. Time will tell if this is anywhere close to what will happen when the current debt-fuelled fiat ponzi dies for good.

  24. Its great that you bring the arguement of cryptocurrency withdraws. Personally I got out of the cryptocurrency market after a big german bank refused to receive paymants from a coinbase. Its a big red flag and many cryptocurrency investors might oversee this right now…

  25. Just a little more pain before the huge gain(s) starting after FED DEC meeting into 1H18.
    Gold will probably drift a little more and hit rock bottom at 1245.
    A couple more weeks is all; the FED raises interest rates a meaningless .25%
    and the dollar will tank even more on a steeper decline.
    Silver bottomed already; we’re safe at 16 and oil is oversold.
    I dabble in oil once in a while; BUT with a tanking USD oil will hit 60 in short order.
    Patience; back up the truck at 1245.

    • Thanks for this post. It gave me a little hope. If goes up after this you have made a perfect forecast. If you have other forecast you can write my by markun1@yahoo.com . I appreciate it much. I think i will sell Silvers it reaches 18+ again somehow.

  26. Charles Savoie and DC

    Yeah, low premiums on 90% us coins look enticing. One possible problem is found in a Tom Cloud article(savehaven.com)about reporting rules.

    He says he has to file a 1099-b report if customer sells to him more then one bag in a whole year(1K face value)Similarly 1k dollars silver rounds. silver eagles skate but very high premium.

    Seems absurb and maybe not true? But if false why would he say such a discouraging thing? have seen no mention of time periods elsewhere, but everything very murky.

    You guys know?

    • DisappearingCulture | December 6, 2017 at 1:39 pm | Reply

      Frank,

      I recall some bag denominations of 90% are tax-reportable. Solution: break up the bag into a smaller bag/lesser amount.

  27. Steve,
    as you have pointed out recently in your article “SELLING OUT OF PRECIOUS METALS & BUYING BITCOIN…. Very Bad Idea” you expect a falling oil price and a deflationary crash. On the other hand you showed us in a very convincing manner, that there is a strong positive correlation between the price of oil and the prices of gold and silver. Would you advice to buy gold and silver not now, but after the deflationary crash has happened – or is it to dangerous to wait, because after the crash gold and silver cannot be received at any price ?

    • Steve,

      I know, you have already answered the question in the sense that other asset classes will fall more sharply in a deflationary crash. But what is with cash in our hands ?

      • In a true deflationary crash one scenario would be to issue new currencies to “hide” the default(s) on their debts. With it all fizz cash would be /eventually become worthless; the debts would be re-adjusted to the “new” currency e.g. a mortgage of 500 000 old $ might be 5 000 new$ in a 100:1 revaluation of new$ to old/current$. The tricky part to figure out is what would happen to the various exchange rates (including gold and cryptos) and how long of a bank holiday would it take to re-boot the system. It would be royal mess to say the least. Nota bene, the day ofter the endpoint of a hyperinflation is factually similar to your deflationary bust as the currency is simply toast (no foreign entity would want to hold it or any debt denominated in it).

  28. Do we already have peak oil (for the West) at the current oil prices ($ 60 per barrel in the middle) ?
    The following analysis is from Goldman and Sachs from 2012 and it assumes that under the current conditions (“recovery”) OPEC will not (or cannot) generate new reserve capacities.
    At a price of $ 120+ per barrel it is estimated, that with 360 new projects for oil and gas world wide (no big oil fields included) peak oil will be reached approximately by 2022 with a share of 50 % of the new projects of the global production from 2011. On the other hand we do only have $ 60 per barrel. That means, that most projects are not profitable. Peak oil under that circumstances should be reached earlier – and don’t forget the population growth.

    That would explain a lot:

    – fracking/ shale oil in the US (not profitable – the banks have financed a big portion of the losses because most oil producers have hedged the price of oil – for how long ? – not so long if we remember the analysis Steve has made.

    – War in Yemen Saudi Arabia wants to control the oil of Yemen (Saudi Arabia has lied about their real oil reserves; selling 5% of Aramco)

    – Conflict between Saudi Arabia and Qatar

    – War in Syria

    – At current prices unprofitable new oil and gas explorations in the Arctic by the Russians

    – Reestablishment of large scale coal mining in the US
    and because of that the termination of the Paris treaty by the US

    – Riots in Venezuela

    and much more….

    https://aleklett.wordpress.com/2013/09/16/goldman-sachs-360-projects-to-change-the-world-english/

  29. John Mcafee claims it costs $2000 to produce one Bitcoin. Now I fully realize John may not be the most stable source of information but his company does mine Bitcoin. I believe, like you do, that gold and silver are a store of economic energy and it was that belief that got me interested in Bitcoin. It is not created out of thin air like fiat currencies are.
    Millennials will be attracted to Bitcoin as well as other cryptos. What else do they have to look forward to, social security? The stock market? I think they may be to young to understand the value of gold and silver but recognize similar value in Bitcoin, mining vs printing, scarcity vs unlimited supply. Bitcionobituaries.com has declared Bitcoin dead 203 times as of today and it is still here. It is those underlying values that will eventually attract more and more people to gold and silver as well as the tangibility they offer.
    I think the CME is interested more in the volatility both up and down that is associated with Bitcoin. Volatility is what is lacking in the stock market at present. That will change soon enough. The Shiller p/e ratio is at 32, even with TARP funded stock buybacks it is still higher than previous pre crash levels, with the exception of 1999/2000 tech wreck. Caterpillar p/e 98.2 yikes! Lets get this party started!

  30. Not enough gold in the world for everyone to own an ounce. Not enough Bitcoin for everyone to own one. Looks like PM investments turning to sand on the tax reform, only equities supported for the 0.1%. Bitcoin above $13,000. If Harry Dent is right about gold, I’ll eat my dick.

  31. Here is one of the best interviews Steve has ever given. I hope it is allowed to implement the link, even if many followers knows it already:

    https://www.youtube.com/watch?v=dfBfKQsMlys

    There are some points I would like to add:

    1. The gold to silver value-ratio today is more or less assigned by the production costs (mostly energy) and it is approximately 78 to 1. But: In former times the gold to silver ratio was more 15 or 17 to 1 as was the production-ratio. If we imagine that the current production ratio is 9:1 and we would return to the historical 17:1 it is clear that silver with much lesser ore grades has to be mined, thus the energy costs of the production would drastically increase.

    2. In the case where silver is mined as a byproduct (70%) you have no proper calculation and therefore the whole energy costs are assigned to the main product. But it would get very ugly for the silver price oppressors if the price of silver would exceed a threshold. Imagine if a gold or zinc mine would suddenly become a silver mine, thus the correlation of the oil prices and the silver price can only correlate in a bandwidth and then there are “jumps”.

    3. The signs also seam to be convincing, that the peak oil situation for the western nations has already taken place. I personally do expect higher oil prices in the near future for North America and Europe (we have already reached nearly $60 per barrel and it was about $30-40 not long ago. Here we have inflation. But there will be also deflationary effects (the bubbles: bonds, real estate and stocks).

    4. As we know the US-Dollar and the Euro have to be devalued (IMF, Lagarde and also Trump admitted it) to reach more growth in the USA and Europe and according to the elite (listen to the pope) a more righteous situation in the world. I asked myself if Bitcoin and other cryptos have something to do with it and if it is “only” to keep the people away from gold and silver – the most important lifeboats…
    Why for example is it now forbidden for Chinese Mainlander to buy bitcoins, as far as they have no offshore activities ?

  32. Hi Disappearing culture

    Yes of course but issue is cloud is saying even if several months go by between partial sales of a bag if adds up to 1 bag in a year a 1099b must be filed. other dealer sites mention a time period without being specific. IRS rules not available on IRS site! Or ICTA Will look further, just thot someone would know if they have had face to face contacts with dealers over 90% sales.

    Not that I’m interested in avoiding taxes and anyway would be in such low tax bracket by then taxes would be very low. Only sell if broke. Just compulsive when get on a subject but very limited research time.

    By the way was no mention of physical in that link you kindly left me on jpm. If was evidence, would not be so hard to find cause butler would have presented it. Awful lot of wind in this PM business, probably most of it. Just accepted and passed around so much everyone believes it.

    Now I just need to wait for prices to skyrocket 100% before I get some. cheers

  33. In the meantime Silver continues to Fail to perform. Its currently sitting below $16.

    Steve, you say Bitcoin will or should collapse because its a bubble .. well maybe or maybe not. But Silver has always crashed from its highs .. Look at 1980 when it was $50 and then suffered a slow motion train wreck down to $4.50 over 20 years. That’s a fall of over 90%.
    Same again whne Silver almost hit $50 in 2011 and here we are 6 years later and Silver is back to less than $16 a fall of 68% and who says it wont go lower.
    So Bitcoin is an unknown but Silver (& Gold) are known to always FAIL.

    • How many people may have the same thoughts like you? I would say there are many and you know what, that is a good sign. Buy an asset class when nobody wants to buy it.
      But when nearly all people want to buy don’t follow or when for example a taxi driver gives you an advice what crypto currency is the best, that is the moment to get out.

      Shortly after the following article there was the huge stock market crash in China:

      http://www.shtfplan.com/headline-news/its-over-this-is-the-only-picture-you-need-to-see-to-know-its-time-to-get-out-of-stocks_04252015

      • Herbert, who says Silver has finished its price drop. From the 1980 bubble in Gold & Silver it took about 21 years for the crash to play out where Silver suffered falls of over 90% and about 75% for Gold.
        You may have another 15 years or so of price falls and they could drop by more than 50% from current prices. In the meantime you miss out on a lot of opportunities by sticking with a dud investment in Gold & Silver.

        I also should say none of Steve’s theories about EROI have materialised. Its just his theory that many scientists, engineers & financials experts don’t accept. In fact he is about the only one pushing this EROI theory whilst people with PHD’s and intimate industry experience obviously don’t agree with him.

        • Stuart,

          yes, theoretical it is possible, that silver has not reached the bottom. If the all in production costs are above the price of silver the banks can decide to subsidize the metal or to manipulate the price by naked short selling (both could become more and more expensive in the future or even impossible). This can in my opinion only happen, as long as there are no other really mighty players in the room, who didn’t want this. But the times are different today, because China, Russia and others are mighty. Perhaps these countries think, that it is a good idea to have debt free money, because they (and others too) were betrayed by the USA in the past (remember tripple A rated MBS in 2008 for example) or do they want to pay for the wars of the USA and some other European countries by financing the trade deficits of these countries (would you pay for your own slavery if you can choose ?) – I don’t think so. And then think about all the Muslims. Sharia Law (which I generally don’t want to have) dictate, that money has to be a suitable good – generally gold and silver.

          When it comes to the EROI, I wouldn’t say the theorie has failed.
          I personally would not use this expression, because the economic decisions depend on the price of a good, the EROI does not. Let us make an example: If the price of oil goes up to let’s say $1000 pb, it could be profitable to produce oil, even if the EROI is only 2:1.

          It was clear from the beginning, that you cannot produce oil from tar sands, or produce oil by fracking or by offshore drilling, when the price is only $30-40 pb. The decisions to invest in such activities were made, when the price was $100-120 pb. The high oil prices are much lower now, but they will rise again. Growing populations need more food, need more transportation need more pharmaceuticals and so on – here more oil is needed and it gets more costly (per unit) to bring it out of the ground.
          You can imagine a cherry tree and all the cherries which were easily accessible are no more – the price has to rise or you will not get them.

          The truth is, that the population growth and the kind of western civilization we experienced in the last 100 years were only possible by using fossil fuel (which you also need, to produce gold and silver). Will the “western elite” try to cull the herd by famine, war and other methods (vaccination, the epicyte gene in food plants, GMO, the poisoning with pesticides, herbicides etc.), to bring us back into the 18th century with the population size of the 18th century (not themselves)?

          This would have possibly happened, if the elites world wide would have agreed to the NWO with one world religion, one world government, one world army etc.

          Believe it or not, some of the elites (most of them you will not find in the west) are more nationalists than globalists and it seems to be, that some of them may have a moral code or at least try to sustain some sort of national sovereignty and don’t want to cull their own herd – instead they ask the western countries to reduce their standard of living. It is also true, that these elites want a stable more sustainable world with higher standards of living for their own people. to achieve this, some currencies have to be devalued to eliminate trade deficits (Dollar, Euro, GBP), so what will be the prices of gold and silver denominated in those currencies ?

          We will not have a NWO in the sense of OWG but a multi polar world…

          • Herbert, Thanks for your considered reply.
            Firstly I don’t believe in manipulation of Gold & Silver that has any lasting effects on PM prices. Short term trading yes I am sure it happens like in every other market but it doesn’t affect the long term prices.
            Manipulation is used by Gold & Silver pumpers to justify why they are constantly wrong.

            I place no credibility that Russia or China are going to drive the Gold & Silver market higher .. they haven’t caused any noticeable change in Gold & Silver to date and I believe that will be the case in the future. Economically Russia is a basket case anyway and if people are concerned about debt in Western countries what about China massive debt level.

            The world is awash with oil and theories such as EROI and peak oil have come to naught. If oil goes up in price more supply will enter the market and if it goes down so will supply. Technology has unlocked billions of gallons of shale oil that was previously inaccessible as long as the price is right.

            Gold and Silver have shown us in recent times that they can fall by up to 90% and absolutely crucify investors. Miners are even more volatile and they often end up at their intrinsic value of nil as they go broke.

            The internet is full of all sorts of Gold pumpers ranging from outright frauds & liars to the misguided who believe in their flawed theories.

    • I can sympathise with your feelings, Stewart. Timing is everything. I got lucky in 2001 bought metals and hung on through drawdowns, especially 2008 was bad. But was able to cash out in 2012 and buy some land. Being able to read charts, technical analysis helps. Buy low when everyone hates them, even you. Silver is forming a huge cup and handle formation that started at the high in 1980. If it plays out, silver will eventually do well. I hope during my lifetime 😀.

    • Wrong.

      “Silver (& Gold) are known to always FAIL”. Patently FALSE.
      The precious metals will NEVER go to zero. Impossible.
      However bitcoin…

    • Stuart: You have selectively picked your dates. Yes silver and gold spiked and fell back, all commodities, even PM’s do that. Sometimes radically. Bitcoin is mimicing the silver spike in the late 70’s. It will likely follow that same path.
      As an old gezzer, I remember buying silver in 1970 at $1.50 – $1.60, and even still have have it as a memento of my youth. Now, interestingly, the dollar bill still looks the same, but it dont buy what it used to. So, that’s a 10-fold increase in the dollar value of silver AFTER the spikes and dips…. aka, apparently long-term appreciation, but its actually just wealth preservation.

      All you need to know is ……next time dont buy it AFTER it spikes. BEFORE is the key.

  34. Gold and silver heading down to their cost of production. Bitcoin above $15,000. Eenie meenie miny mo….

    • By all means please sell your PMs and buy Bitcoin. Ignore the free information disseminated on this blog. Price is king and bitcoin is going up. Go buy that.

      • OMG, With the sour grapes on here, I could have a years supply of salad vinegar. Sorry, can’t help pinching your tail. I already have too much metal to carry, Gotta diversify. You suggest the stock market?

        • I own some Bitcoin and lite coin as a speculative plays. I’ve cashed out several times on Bitcoin and made Significant gains. I think they are bubbles and won’t succeed as currencies in the long run for a variety reasons. I do get sick of reading about your poor investment decisions. Sell the asset and move on or be an adult and accept the consequences. You purchased gold and silver and are unhappy with the decision. You think it’s the Internet gurus fault because poor little Stuart didn’t make any money. Grow up get a life look in the mirror and accept responsibility for your poor decisions.

  35. If you have a look at Oil, Gold and Silver prices, Q4 1994, you will find the price increase, for all three, Q4 2017, equates around 250% in 23 years. I would have thought that is pretty stable compared to any thing else you can put your money in.

    You could nearly say if you expected more over this period of time; would be pure greed, NO?

    • That is interesting but meaningless, because in our world what matters is how much money you can make right now, whether through speculation or otherwise.

      All three things you have mentioned are not stable, and have suffered wild swings and often catastrophic declines which have wiped out millions. It is not the case that everyone was 30 years old in 1994, and earned steadily and patiently acquired these through thick and thin and can now retire at 53.

      See? Your analysis applies to virtually nobody. All of us face decisions we have to make in the here and now. The most successful people are those that make the key trades and decisions which earn them millions, and then they can take a safer route after that whether it is through cash, bonds, diversification, etc.

      Nobody is making any money in gold and silver except the bullion banks and miners! Stacking is proving to be a waste of life, just like stacking dollar bills under your mattress.

      • Well dolpf, the markets aren’t run around your philosophies. The markets are the markets, they are what they are. The SIMPLE realistic fact is Oil, Gold and Silver have increased 200% + since 1994, 23 years. How old you are and what time you hopped on the train has nothing to do with it.

        If you bought Gold back in Q4 2015 at $1060 and sold now you would profit some 25% in 18 Months. What is wrong with those figures? Or are you one of these genius’s in this world that believe you deserve more?

        • Bitcoiners want to retire in 2 years after the initial purchase, that’s why 5% or 25% in a year or so makes no sense to them. Funnily, they’d like to retire counting on current ordinary currencies are still in use and no negative revaluation takes place 🙂 . The currencies they are so against should support their lifestyle forever!

          I made a silly 0.73% net profit on stocks I purchased yesterday, so I guess I should sell my holdings and buy btc because it’s going to the moon (until smart money start cashing out) and <1% net profit in 2 days is so "oldbugs".

  36. Bitcoin just went to $16,337.00. Exponentially $16,384.00 is 819100% from $2.00. Next stop, to pick up 100%, $32,768.00, 1,638,300%……. Lol

    Good luck all you BITCOINERS!

    Silly question:

    Had I purchased 1000 Bitcoins @ $2.00 = $2000.00. They are now worth say $16,000,000 (Million). If I sold them today, “How long would it take for the money to appear in my WALLET and consequently my bank account in my countries denomination?

    • In most banks anything over 10K (USD or EUR) is marked suspicious. Good luck transferring anything over 100K or 1M within one bank-wire or within a short timeframe (remember, >10K per month is also suspicious!). Red flags everywhere, payment denied, person reported to authorities. The best case is taxman coming soon, the worst case is denied payment.

      Those millionaires are rich, but have very little possibility of reaching their wealth in full.

      Quite a safe way (but definitely impossible in the past when prices were acceptable for most) is to trade BITCOIN TRACKER ONE for instance. This can be traded on Nasdaq in Stockholm.

    • Hey, Graham B., who really needs $16 million? Big headache. Greed is good then it kills you. Simple life is best, just sell a bit each month for fun. No one really expected this mania, but it is what it is. Instead of whining, folks who have it good should be on their knees everyday begging repentance and thanking Creator.

  37. Newer reader here. Love your work Steve. One thing that’s often not mentioned regarding cryptos is the ridiculous cost of transaction. On the best info I could find, it looks like every Bitcoin transaction costs enough energy to power a typical American house for 8.5 days. Every transaction! Talk about EROI. In a world with sky high energy costs, that energy will have to be factored into the transaction, leading to far lower demand and a lot of merchants refusing to use it, imho.

  38. It’s better to be lucky than smart. 😁
    I find prayer helps. 😇. And buying at the bottom of a long term trend when everyone says you are a fool, and you believe it yourself. Hang on for higher highs and higher lows.

  39. Fairdinkum! One of my previous hats was in the racing industry (Horses). Walk around the betting ring just after a race is run and all the losers will tell you they were going to back the winner, until they changed their mind. LOl

    GOD has never done me any favours Sammy! BUT I have heard it said; “BootHill is full of people without any problems, so I don’t mind having my fair share. I have also experienced that flutter of excitement, having bought at the bottom; watched my profits rise substantially: waited for an even greater fortune; only to have sold what I bought them for and made nothing Lol. Experience is a great teacher.

    Give me the well thought out entry point in the slow moving trend anytime. NOT LUCK

  40. There are several very important reasons why legitimate analysts segregate investment demand from fabrication demand. One is that investment demand is distinct from fabrication demand in many important ways, including its relationship to prices. Investment demand drives prices, as anyone who studies the markets or has read ANY CPM reports for the past 40 years knows. Fabrication demand responds to prices.

    If one buries investment demand in with fabrication demand, one cannot see what this prime driver of prices is doing. So, it is a separate line item in real silver market research. That allows researchers to see when the supply-demand fundamentals are tightening enough to push prices higher or loosening signaling weaker prices. More critically, it allows researchers, and real investors as opposed to always-bullish ideologues and marketers, to see when investment demand is rising sufficiently to push prices higher, or weakening in ways that suggest lower prices.

    Steve, there is ignorance and stupidity. It is important to understand the difference. Ignorance means someone simply does not know what he or she is writing or talking about. It is a common weakness in U.S. society and the precious metals markets. Stupidity means that one does not have the intellectual capacity for critical thinking.
    Reading your work, I can never figure out if it is one, the other, or some combination of the two that drives your writing. Clearly you are totally ignorant of CPM’s research. When you write stuff like “Investors who follow the CPM Group’s analysis on gold and silver based upon fabrication demand only, are being misinformed” you are displaying a total ignorance of four decades of our work. Duh. You should buy our entry-level Silver Yearbook, available online at the link here. https://squareup.com/store/cpmgroup/item/cpm-gold-yearbook You also seem pretty uninformed about commodities markets, silver and gold, and other things that you regularly opine upon. That seems to be a human tragic condition, but each of us has an obligation to work to make the world better informed, starting with ourselves.

  41. Most schools of research have an “out” when a forecast does not work.
    Keynesian economists would call a booming economy as a policy “overshoot”. Going the other way, a recession was called an “undershoot”, as if policy had anything to do with it.
    When a forecast doesn’t work for Macroeconomists, they came up with a great one–“exogeneity”.
    And then there are those who insist that price moves for silver can be determined by thorough analysis of supply and demand.
    Not working since 2011, and upon disappointment, the unanimous explanation is “Conspiracy!”.

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