UPDATE: Physical Silver Buying Dynamics

It looks like the official sources grossly underestimated the amount of Indian silver buying in 2013.  When the Indian Government put restrictions on gold imports in 2013, their citizens switched to buying silver.

Thomson Reuters GFMS estimated that total Indian silver imports would be 5,200-5,400 metric tons in 2013.  However, Koos Jansen at InGoldWeTrust, recently published an article stated that the Indians actually imported 6,125 metric tons of silver in 2013.

Indian Silver Imports 2007 to 2013 Actual

Koos located the total silver import figures from India’s customs department DGCIS.  The 2012 & 2013 figures were taken from Koos Jansen’s site and data for 2007-2011 are from Thomson Reuters GFMS.

Indian silver imports hit a record 6,125 metric tons in 2013 due a huge amount brought in during the last month of the year (DEC = 825 metric tons).  6,125 metric tons are nearly 200 million oz of silver.

U.S. Mint Continues To Sell “ALL” of its Allocated Silver Eagles

As I mentioned on Monday, the U.S. Mint put a limit of 1.1 million oz of Silver Eagles for their Authorized Dealers to purchase this week.  Yesterday the U.S. Mint updated their sales figures to 959,500.  I thought this might be the first week that the total allotment of Silver Eagles may not be sold.

However, the mint just released their final weekly figures:

Silver Eagles Update MAR 7 2014 NEW

I gather one or several of the Authorized Dealers bought the remaining 140,500 Silver Eagles today to sell over the weekend… because it may turn out to be quite interesting with the situation taking place in the Ukraine.

I still receive emails from readers who are concerned about the paper price of silver.  My response is to tell them to STEP AWAY from the Kitco screen and get some exercise.

If we had record silver imports by the Indians in 2013 and continued purchasing of every Silver Eagle allotted by the U.S. Mint… what happens to physical silver buying when things really get BAD IN THE FINANCIAL SYSTEM & ECONOMY??

Lastly, I just want to take this time to thank all those who spend the time commenting on the blog as well as all the great emails I receive.

steve

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33 Comments on "UPDATE: Physical Silver Buying Dynamics"

  1. Steve,

    what I’m really not understanding is the lack of any industrial users or bullion dealers have trouble sourcing silver? As you note, a 4k ton increase y/o/y is 200 million oz…or about 20% of all supply. And no other sources were cutting back. You noted ASE’s and other mints were all at / near demand. Industrial / jewelry maintaining demand…and supply flattish.

    And supposedly silver has very low governmental or otherwise inventories?

    I’ve been stacking a long time but for this demand shock to be met w/ a supply wall…but I’m not following how this resulted in a price collapse and simultaneously no shortages anywhere in the system?

    What do you really make of this data?

    • If that sort of huge additional demand (far beyond what even a doubling of ASE’s can bring) can be met without shortages or price rises (and in fact with a price collapse)…then somewhere I fear I’ve got bad data or information leading to bad assumptions???

    • Imports into India are going TOWARDS industry and jewelry. It’s not taking away from those sources, but adding to it. The us is one of the largest importers of silver because of industrial demand, and increasingly so as production is plummeting domestically (2012 figures suggested 30% can be produced domestically).

      It’s interesting that the largest consumers of the metal are not able to produce a significant percentage of their demand domestically. interesting how that will play out.

      • phewww…ok, that makes sense that the Indian demand went towards industry/ jewelry. Thanks for talking me down.

  2. What is your take on this Steve?

    Chris Mayer argues the EROEI idea is fatally flawed……

    http://dailyreckoning.com/eroei-economics-without-the-money/

    • Gavaroo,

      I didn’t see a single argument in the article you posted that would “slay EROI concept” like the author promised and he even admits it himself.

      He talks about money (which is actually not money but fiat currency) and he asks questions like: “Why do people accept dollars in exchange for real goods?” without ever answering those questions.

      Whole market, gold, silver and forex are being manipulated which is keeping this financial monster alive, and the dollar’s power, which is the reserve currency is backed by nothing but the US military and oil, though there are indicators everywhere telling us the dollar is losing its status as reserve currency.

      What people need to understand is that gold and silver is real money and the store of economy energy and nothing else, all fiat currencies eventually go to zero, it’s only a matter of time.

      I wish I could see one valid point against EROI in the article so I could argue against it, but there isn’t any, he mentions: “If it doesn’t take into account money prices, then it isn’t about the real-world economy as it exists today” – the only problem with this is that the current economy that exists today is only possible because of markets manipulation, mainstream media propaganda and the brainwashing educational system.

      Energy is the blood of the economy, that’s why you have to study the energy and real money instead of fiat currencies like the author proposes.

    • TheRedPill | March 7, 2014 at 7:34 pm |

      When acquiring physical Silver (or Gold) there really is no such thing as “price”. I’ve acquired Silver at prices as low as $5 and as high as $42 (yeah, I’ll admit it) but the dollars used didn’t really matter in the end.

      The price of a Dollar Bill and a One Hundred Dollar Bill are the same price, right around 7 cents for the cloth, ink and labor. So what’s the difference? None. You are using your labor to acquire a promissory note that you are required to use as a specie under the threat of imprisonment.

      So when it comes to transferring your labor to acquire REAL MONEY, it matters not what “price” you pay for it. Why? Because you are “buying” REAL MONEY! Yes, the lower the so called price for an ounce of Silver may get you a little more Silver but after dollar-cost-averaging…it matter little how much you “spent”!

      Most of all, if you spend $5000 for a crop of Silver rounds, you never really PSENT that money. All you really did was transfer the $5000 from one account to another. But this time, the physical Silver is not only a REAL account of money, but it is far out of the reach and furisdiction of the Puppet Masters cointrol!

      You are buying your own freedom when you buy physical metals, primarily monetary metals! A gallon of gas is still just under 25 cents a gallon! How? If you took a pre 1964 quarter that has been run over by a truck three times and through a load of wash down to a coin store, they will give you $3.75 for it!

      Now, how much is a gallon of gas at your local pump?

      Think people, THINK!

      You were robbed (at gunpoint!) and are continuing to be robbed!

      Keep stacking Folks, no matter how much it….”costs”!
      ______________________

      Gold is the money of Kings,
      Silver is the money of Gentlemen,
      Barter is the money of Peasants…
      But PAPER is the money of SLAVES!

    • roguefaction | March 7, 2014 at 9:33 pm |

      Actually, that piece by C Mayer is quite a find, if only for the overthetop fatuousness of it all. If that’s the most trenchant critique of EROI(or EROEI if you wish), then it looks like clear sailing ahead!

      As the author himself confesses, he has switched from believing the model valid, to dismissing it in favor of an ambiguous thing he calls “modern money”… the pursuit of which apparently explains everything under the sun – including the role of energy in our lives. That’s absolutely riotous, since it nicely reverses what should be obvious to anyone with a beating pulse…

      we are alive only due to our consistent success in recharging our energy requirement. It’s the singlemost vital factor in our daily lives. It therefore stands to reason that pretty much every action we make is taken on the basis of an internal analysis of the return on the energy invested in that course of action.

      So while the scope and ramifications of “EROI” in micro and macro terms are both huge and endless, the role of “money”(nothing more or less than a stand in marker of the energy supplied in any economic exchange!)in our lives and economies is starkly limited… unless one lives as prisoner within a system that seeks to disguise it’s orchestrated pilfering of some folks energies by other folks too lazy or arrogant to gather their own!

      Cue the modern corporo-fascist state model – and it’s “libertarian” enablers.

      That’s the thread that will enable unraveling of Mr. Mayers’ “conversion” ; as a member of the AGORA FINANCIAL network, he is part of the nexus of business interests steered by Bonner and Wiggins, who in turn are proteges of Lord Rees-Moggs and the Rothschilds-Rockefeller alliance… who fund and control the libertarian, hard money movement and push an interesting but duplicitous agenda via limited hangouts which pretend to critique our debt-based system in order to sweep gullible newbies into the ranks of their zombie goldbug hordes who sweep the field clear of all who might seriously question the consensus party line of the controlled ‘alternative’ opposition.

      I could share some links about the various ‘friends’ of these high-rollers who enrich themselves from nourishing the illusory fantasies of finding freedom from debt-slavery via various schemes like those of Porter Stansberry, “Pirate Investors LLC” and so on, but for now, I’ll just throw out the name Peter G Peterson, and this link – http://mindbodypolitic.com/2009/01/11/pete-peterson-chair-of-cfr-ny-fed-lehman-blackstone-peterson-institute/ – from which article comes one particular jewel of a quote… “Selective libertarianism is not libertarianism any more. It’s reactionary statism in the service of big business, big banks, and big financiers” /// and leave it at that.

      If folks like this bunch of dudes have decided that EROI-based analysis is a threat to them… then there’s just gots to be a lot to love about it!

      • Quattroluvr | March 8, 2014 at 10:32 am |

        Generally speaking I have very high regard for Chris Mayer as a stock analyst, but his EROEI article left me puzzled as well, his insight is usually better than this. I’m going to write him about it.

        Roguefaction – As an Agora subscriber, I’m very interested in more reading along the lines of what you mention above about the Agora back story/agenda. I’ll read that link. More links? You have other writings/links of of your own? Always looking to question assumptions.

        • roguefaction | March 9, 2014 at 12:15 am |

          as per your request, I provide the following…

          but only with the caveat that a trip down the rabbit hole known as Agora Financial is something of a mind-altering experience… enter at own risk! No liability assumed for any damages. Perhaps it’s not without significance that the bio of Addison Wiggins, Bill Bonner’s chief henchman, announces that “he gained his most clear insight into free market capitalism while following the legendary rock band The Grateful Dead.”

          http://mindbodypolitic.com/2009/04/10/turning-beach-sand-into-gold-the-goldcor-swindle/
          http://webindexnet.wordpress.com/2009/11/07/fraud-by-agora-case-after-case/
          http://jenniferlake.wordpress.com/2009/10/10/the-debt-for-nature-scheme/
          http://webindexnet.wordpress.com/the-oxford-club/

          It would probably help to have taken some peyote beforehand to process all of the interlocking connections and loose ends which are uncovered therein; the briefest synopsis for those attention-challenged readers amongst us would include the following….

          penny stock pump n dump vehicles run from the same office occupied by the so called “National Association aginst Naked Short Selling”[!!!!-see Mr. Pills’ reference to ‘Hegelian Dialectics’ elsewhere on this page] involving Bonner Agora associate James Davidson n friends.

          A Gold extraction from Costa Rican black sands swindle that make BreX look penny ante!!!

          A nexus of connections between Baltimore Maryland, Boca Raton Fla, and Beltway, Langley and SEC office addresses, with a side dish of Soros, Eastern European geo-politics, Ukranian-Israeli oligarchs, Jim Rogers, Quantum Ventures, and some of the biggest names in the world of gold-based newsletter writers and punditry…Doug Casey and on and on… and that’s not even getting started on the connections between Austrianism, Mt Pelerin, and the Leninist\WallStreet strategy of controlling the opposition BY BEING the opposition…

          lot’s of coke … the usual connections to Mena Arkansas and flight schools in Florida..

          all very timely stuff, and more evidence that the GAME REMAINS THE SAME… only the dupes change!

          Speaking of dupes n such, I’ve decided that one of the reasons I get such a deluge of whiny, petty resistance whenever I choose to push back against the pm bug pre-emption of all debate is because they are terrified of finding out just who is behind their mind-control cultist conditioning…
          and their masters are terrified of other potential dupes finding out before getting sucked in.

          So, in honor of their discomfort…I am happy to hereby proclaim the new glad tidings every punter smart enough to grab some shiny needs to know – YOU DON’T HAVE TO BE A MIND-WIPED PM CULTIST TO OWN AND HOLD PRECIOUS METALS!!! Get free of all their manipulative nonsense, keep your own counsel, and give yourself a fighting chance to get out of their matrix of control!

          Cue knuckledraggers back in cages, on the with debates of substance, not style!!!!

      • “Selective libertarianism is not libertarianism any more. It’s reactionary statism in the service of big business, big banks, and big financiers” wow, that is a gem; thanks for the link.

        Yeah, C Mayer’s article made me laugh. I imagine that several of us read it with the original intention of critiquing its flaws, only to politely shut the door and walk away.

  3. I am in India and recently converted some gold that I bought from thailand (where there is no silver sold). In Delhi the dealer was happy to cut up the 30 kilo silver brick to to smaller pieces and get it to me in one hour as I waited and chated in his shop. I went three times and each time he got me smaller pieces from 400 gm to 1.5 kg. The cutting is not exact and you have to just take the size that he gives you.
    Now I can paint this black paint and so that the shine is hidden and paint thinner takes it off very easily.

    happy stacking….in India !!

  4. Lord Rees-Moggs and the Rothschilds-Rockefeller alliance… who fund and control the libertarian, hard money movement and push an interesting but duplicitous agenda via limited hangouts which pretend to critique our debt-based system in order to sweep gullible newbies into the ranks of their zombie goldbug hordes who sweep the field clear of all who might seriously question the consensus party line of the controlled ‘alternative’ opposition.
    You lost me about here.I wonder how many PM sites you have alienated yourself on?

    • roguefaction | March 8, 2014 at 4:33 am |

      Yu got that far? Really? You are definitely in the upper percentile of attentive readers then…Kudos. I’ve been warned by those who claim to know these things that stringing more than 16 words together in sequence here is a violation of some protocol or other. Appears to have something to do with the modern scourge of ADHD I gather.

      Can’t answer your question though… I make a point of keeping away from alienating myself on sites of any kind… and staying away from ‘goldbug sites’ of any description … find them totally lacking in humor and interesting debate, personally.

      Luckily this is an EROI site, so the question seems moot what? Did you have an opinion to express on the contention as stated, or simply wish to express your discomfort with it’s presence here?

      Cheers!

  5. I agree with the Ag prognosis BUT, as I keep asking, and nobody has yet satisfactorily answered, why is it then that Ag is NOT following Au higher? To repeat the other question, have the Cartel now moved to capping Ag because there is no more physical Au available. DO they hope to cap Gold down from Silver rather than capping Silver down from Gold??

  6. Everyone,

    Rogue actually did a good job in explaining Chris Mayer’s debacle on the EROI. I could write pages on this issue, but it’s almost like explaining why pointing a gun at ones head is a bad idea.

    Mayer makes so many lousy claims and assumptions… that I am baffled how anyone can follow his logic at all.

    That being said, the problem with the GOLD & SILVER COMMUNITY by and large, is that they are great at BEATING A DEAD HORSE… unless they are the DEAD HORSE. What I am trying to say is that many of the gold and silver bugs are just interested in becoming RICH, rather than understanding the more complex and troubling problems coming our way.

    I believe Rogue offers a side of the equation that most do not want to look at.

    So, in that regard… let’s keep the DEBATE OPEN and HONEST…

    steve

    • First, the energy situation is easily understood and shocking! Your research is superb! Many people do not get it, but that’s good. It allows those who do get it to prepare. You can lead a horse to water, but you can’t make the horse drink.

      Second, yes, It’ s amazing how many people still view the dollar as the common denominator. Individuals purchase the elements to preserve their wealth and their purchasing power. That’s it! You don’t make money off of gold and silver! They are money! In reality, all that one is doing is exchanging paper claims on gold and silver for real gold and silver.

      The majority of the people in this country are arrogant, ignorant, buffoons. Once a small majority of these people pick up a history book and use logic, the greatest transfer of wealth in the history of the world WILL occur!

      • Andrew,

        Agreed.

        However, the one area that I may differ on the gold and silver “PRESERVE THE WEALTH” ideal has to do with energy. I actually believe the values of GOLD & SILVER will rise above and beyond just a STORE OF VALUE due to the majority of investors stampeding out of paper and into physical.

        There is this notion that the price of gold will rise to say $5,000 or higher to back all the FIAT MONEY out there. This sounds good at face value, but does nothing to address the PEAK ENERGY situation.

        Who cares if the Dollar or whatever is backed by gold if we don’t have a growing oil supply to allow our economies to grow. Thus, PEAK OIL & ETC will destroy the valuations of most paper assets and a great deal of physical ones as well… Real Estate, Commercial Farmland, Infrastructure and so on and so forth.

        In this type of DISINTEGRATING ECONOMY, it’s best to be in physical gold and silver.. as most other so-called assets will continue to lose value.

        steve

    • TheRedPill | March 8, 2014 at 9:49 am |

      As Ive said all along when someone (and it’s always the majority) refers to Gold or Silver as an Investment I cringe and quickly correct them explaining that it really is an INSURANCE policy.

      “You have health insurance, car insurance, homeowners insurance? Then why don’t you have “wealth” insurance? Gold and Silver in the PHYSICAL sense is Insurance against the future.”

      But alas, the majority of the Sheople do not understand the “philosophy” behind the strategy of insuring ones own future, or what “wealth” really is.

      Mark Twain once said :I’m not looking fr a return ON my money as much as I am looking for a return ON my money!”

      Keep Stacking Folks, Keep Stacking!

      • TheBulePill | March 8, 2014 at 9:53 am |

        Oh come on RedPill, if that’s all true…then how come I’ve never heard about any of this on CNBC, FOX or CNN? After all, here in America we are to EVERYTHING that happens around the world instantly on our TV’s! Jim Cramer says to take your hard earned Paper and invest it to make MORE Paper, for retirement and profits. So why would he lie?

        You’re crazy Redill.

      • roguefaction | March 8, 2014 at 11:08 am |

        Awesome vid, Pill…

        Kind of like George Romero meets PBS Newshour – with the news imitating life for once, instead of the other way round! Makes Steve’s model even clearer and easier to understand.

        THERE ARE NO REMAINING TANGIBLE ASSETS LEFT WITH WHICH TO PAY FOR ALL THE OIL N STUFF AMERIKA HAS CONSUMED.

        But the creditors must and will be paid. The gold is gone. That was Amerika’s store of value…. saved by by 10 generations of thrifty folk who knew how to work, n how to save.

        “Despite a new world of tremendous wealth, Spain borrowed far more than the next ship was always carrying. For this reason, Spain became a serial defaulter beginning in 1557 followed by 1570, 1575, 1596, 1607, and 1647 ending in a 3rd world status. Their economic model was one of conquest rather than constructing a viable economic establishment.”

        “Therefore, this whole idea that we can live the high-life, be whatever we dream and never have to pay the consequences is simply dead wrong. The confusion that the Gold Standard advocates
        have created is this misconception that we print money and that is “fiat” that results in inflation. This is a far too simplistic view of finance. It presumes “printing” of actual dollars without restraint. Simply put, HAD WE PRINTED dollars instead of BORROWING DOLLARS, the national debt would be about 40% of its current size. Printing is MUCH LESS inflationary than borrowing. The reason, borrowing necessitates the creation of MORE money to pay the interest whereas printing does not… The United States poses the exact threat that USSR did upon collapse – rouge[sic!] nuks in the wake of political disintegration!”
        MARTIN ARMSTRONG

        • TheBluePill | March 8, 2014 at 1:43 pm |

          Rogue-

          I’ve always said that Gold is the cancer to the private Federal Reserve. In utilizing their proverbial Hegelian Dialectic tactics creating the crash of 1907, they ‘invented’ the 1909 Federal Reserve formula to (cough) solve the problem that they created. Then they repeated the tactic in 1929 leading to the demise of that “barbaric relic” known as Gold. Pretty slick, but we’ll leave the rest of history for another day.

          Of course the story continued but in addition to the Video Link I provided above, there is yet another link that is just as important to support one of the many tools our current Puppet Masters deploy upon us 14th Amendment ‘corporate citizen slaves’:

          Enjoy!

          http://www.youtube.com/watch?v=Xbp6umQT58A

      • @ The RedPill it is ” I am not looking for a return ON my money as much as I am looking for a return OF my money”. Getting a return OF your money far outweighs a return ON your money.

  7. Last year in an article or interview [I forget which] John Embry, who obviously has access to a lot of data, had recently reviewed said data for all known silver mining and recycling, and where all refined/coined product was going. He stated he couldn’t understand where all the silver was coming from, i.e.there was more documented as sold and shipped than mined and recycled.

    The ETF’s and industrial users seem to have well-established supply chains. I’d guess they have supply contracts with domestic and foreign refiners, and those sources and supply chain figures may not have to be publicly disclosed.

    For now there seems to be plenty of physical silver, although mints may not get an adequate supply of coin planchets. Or their production capacity is otherwise limited.

    But as readers here know [most of whom know more than me], big money investors aren’t moving into silver now. Exceptions for some hedge funds buying ASE’s or something like that, but when there is a big move of fiat into physical, supply will quickly dry up at these prices.

  8. You guys are all much,much,smarter than me. I hear about everything is energy,sounds like my ol’ beatnik buddies and i like it. A man said you don’t stack physical to get rich,and ended with something about the transfer of wealth. So witch is it to him really,i couldn’t tell you. What is being rich anyway,I think it maybe different for each of us. I just wanna go about my daily routine w/o worry about some,any gov. telling me anything, or taking anything,demanding anything from me. Having physical will hopefully allow me the buffer. To me thats wealth, thats rich. ENJOY!

  9. David, I think you are right and there are undisclosed supply chains for silver and gold.

    There are millions of artisanal miners whose gold production is not included in mining production numbers. There are many small mining companies all around the world like we see on TV shows such as being sea gold et.al. I personally saw indigenous peoples in the coastal jungles of Ecuador panning for gold with wooden pans made from a tree and only their hands. We easily found flake gold. As they live in the jungle 2 days from a city, this is their only cash income. So I know wherever there is gold indigenous people are panning for it. It is quite possible that some industial users have developed direct supply chains that are also not tracked. All I know for sure is that in spite of the incredible historic demand for gold and silver, there is still no shortage. However I am prepared to wait till hell freezes over.

  10. WhatsUpDoc1958 | March 9, 2014 at 9:58 am |

    Your graphic for U.S. Mint demand for American Silver Eagles has an incorrect date on it.

    It has March 7, 2012 instead of March 7, 2014.

    Thanks for your articles. They are much appreciated.

Comments are closed.