What Silver Chart Has The Bankers Worried??

There is a rising trend in the silver market that has the bankers worried.  This may seem like a play on hype, but I can assure you… the facts are clear.  If we look at the data in the silver market, there was a distinct change that took place in 2008.  Basically, the U.S. Banking system died in 2008 and more investors are finally catching on.

Before I show you the silver chart, let’s look at some of the nonsense taking place in U.S. published financial data.  According to the EIA – U.S. Energy Information Agency, supplies of diesel product to the U.S. market peaked in 2007 at 4.27 million barrels per day (mbd) and declined 11% to 3.82 mbd in 2014.  These figures represent the average annual amount of diesel supplied to the U.S. Market:

Diesel Supplied To U.S. Market 2007-2014

We must remember, the majority of diesel used in the U.S. is consumed by our huge trucking-transportation system.  So, how did the U.S. GDP grow from $13.8 trillion in 2007 to $17.4 trillion in 2014, while the country’s commercial trucking fuel consumption fell 11%??  It didn’t…. the U.S. GDP figures are all smoke and mirrors.

As I have stated many times, the Fed and U.S. Govt. manufactured financial and economic growth by propping up the market with trillions of Dollars of monetary liquidity.  If total U.S. diesel and gasoline consumption declined since 2007, how is it possible to show a 26% increase in U.S. GDP ($13.8 trillion to $17.4 trillion)?

Of course, some would have a knee-jerk reaction and say that “fuel efficiency” has increased in the United States, so that would account for the decline.  Hardly.  If we look at the table below, you will see that heavy-duty truck fuel consumption is the same at 6.4 mpg in 2012 as it was in 2007:

Motor Vehicle Mileage Fuel Consumption EIA

You see, the Fed and U.S. Government can manufacture all the financial and economic data to their heart’s desire.  However, the facts show that the United States commercial transportation industry consumed 11% less diesel in 2014 than it did in 2007.  Thus, the country’s GDP should be lower, not higher.

The Silver Chart The Bankers Are Worried About

Another fascinating piece of data that doesn’t seem to jive with the current value of this asset is shown in the chart below:

Global Physical Silver Bar & Coin Investment1

The figures in this chart are broken down in three-year time periods.  I like to show data in this fashion as it removes annual volatility.  As we can see, total global silver bar and coin demand from 2005-2007 was only 4,712 metric tons (mt).  This translates to 151 million oz (Moz).  So, before the Fed and Central Banks got caught with their pants down when the entire financial system nearly imploded in 2008, physical silver investment was relatively low.

However, this all changed in 2008 when Bear Stearns and Lehman Brothers went belly up and AIG filed for bankruptcy.  Investors who became quite worried about the sustainability of the financial system starting buying a great deal of physical gold and silver. 

This is shown by the massive increase of physical silver bar and coin demand in the 2008-2010 time period.  Investors purchased 13,005 mt (418 Moz) of physical silver during this three-year time period, up 177% compared to the prior period.  However, something quite interesting took place in the following period.

As the price of silver skyrocketed to $49 in 2011, physical silver investment shot up to 6,550 mt (210 Moz) that year, up from 4,457 mt (143 Moz) in 2010.  But, as the price of silver remained in a trend-bound fashion in 2012, physical silver investment declined to 4,292 mt (138 Moz).  When the market is unsure of the direction in price of an asset or commodity, they tend to hold back on purchases.

That being said, that all changed in 2013 when the price of silver fell from a high of $32 in the beginning of the year to $18… just six months later.  Investors piled into the precious metal in record numbers pushing the total of physical silver investment to a staggering 7,577 mt (244 Moz). 

Thus, total physical silver bar and coin demand during the three-year period from 2011-2013 was a massive 18,419 mt or a hefty 592 Moz.  During those three years, the total world net silver deficit was 220 Moz. (Silver Institute).  Which means, the bankers or institutions had to fork over an additional 220 Moz to supplement the increased global silver demand.  If it wasn’t for this increased physical silver investment demand, the world would have enjoyed a 70 Moz surplus.

When I say the bankers are worried about physical silver investment demand… they are.  Why?  Because they have been able to drain the Western official gold holdings (as well as private unallocated sources) to feed the insatiable Eastern gold demand.  Unfortunately, most of the Central Banks unloaded most of their silver holdings decades ago. 

While it’s true a few countries (China, India & Russia) supplemented the annual silver deficits by supplying metal into the market over the past decade, this supply totally dried up in 2014.  I discussed this in detail in my THE SILVER CHART REPORT in Chart #43 (of a total 48 charts):

Net Government Silver Sales 2003-2014

Not only were government silver sales a phat ZERO last year, global above ground silver inventories continue to be drawn down.  This is the REAL PROBLEM for the bankers.  How much silver is left to supplement the market in the future?  Well, if the price goes lower, there will be even less supply from recycling. 

I am working on my next report called THE SILVER MARKET REPORT.  I go into detail showing just how little above ground silver stocks are available.  Now, when I say above ground stocks, I am not talking about the billions of ounces of silver held in jewelry, silverware or art forms all over the world.  While a percentage of this silver would likely come back onto the market at much higher silver prices, it would take time.  Rather, I am talking about the availability of silver (mostly in bar form) to supply the wholesale and retail market.

On the other hand, even if 5 billion ounces of silver held in the world as jewelry, silverware or art came on the market when the price reached $100, it would only amount to a total of $500 billion.  This is only 3% of the total value of Global Conventional Assets under management ($105 trillion – 2014).

It is plain to see, investors continue to buy record amounts of physical silver even at much lower prices.  The bankers assumed at some point that investors would grow weary of holding onto a supposed DEAD-BEAT asset as its price decline.  However, the opposite has occurred as investors realize… nothing has been fixed.  So why stop buying, especially at lower bargain prices??

The day will come when the bankers lose control of the highly leveraged debt-based fiat monetary system.  This can take place at any time, but will be forced on the bankers soon after the peak of global oil production.

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

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

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

 CLICK HERE:   For The Silver Chart Report

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

NOTE Anyone who purchased but did not receive the report, please use the contact page to contact me. 

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44 Comments on "What Silver Chart Has The Bankers Worried??"

  1. Demonize silver, pardon me, demonetize silver didn’t work, dear moneychangers. Now what?

  2. Total fack it means silver will go down. when ever any analyst says that silver or gold will go up then definetly they break lows.

    • silver prices in the West are only based on COMEX actions; nothing else. Until they can’t control the market any longer with paper contracts.

  3. New lows => More PHYSICAL one can buy. It really is that simple.

  4. Hi Steve, I appreciate your efforts and enjoy your analysis. We are in complete agreement regarding where this is all headed. I do have a question: TPTB have passed legislation making it legal to manipulate the price’s of PM’s. Even if there is a massive breakdown in the whole system, how do you see this power being taken away. It is a law after all. My guess is that we will see the PM’s rise much higher in other currencies, but remain low in USD. Any thoughts?

    • Robert P. Bailey | July 28, 2015 at 7:04 pm | Reply

      Hello there,

      I have somewhat an interest in PM’s, since 2007, and the main reason why Gold and Silver are flat/low in US Dollars is because both these metals are arch enemies to the so called value of the Valuless, bubble fiat dollars in the world !

      This is one of the main reasons why both Gold and Silver are priced low in the US Dollar Ponzi markets! So both these metals should be and are priced much higher in other Fiat Currencies, so it does not take arocket scentist to work this out

      • You missed the point of the question Rob.

        • The manipulation of the PM price is legal through the Exchange Stabilization Fund in the US Treasury. Other laws have been enacted as well to obfuscate the manipulation. However the premiums paid for metals help to adjust the price when you actually receive the metal. Back in 2008 I remember premiums were around 100% of the price. This time its going to be much wore severe because the levels of fiat are higher and the number of people who are awake is so much greater. I was at a coin shop a few days ago and silver eagles premiums were $4.00 each and people were waiting in line to buy them.

      • Remember prohibition?? Black markets will develop with true market values established in physical PM’s, until the whole fiat system collapses shortly after when currencies and debt need to be reset in relation to tangible assets like PM’s.

    • The least dirty shirt is still a dirty shirt Brian. When $ loses it’s reserve status, look again. The dollar loses purchasing power every year, month and day. Like all other fiat currencies. Unfunded liabilities are huge. Something will break, energy, China, whatever. PM’s are not for fast paper profits.

    • It’s unlikely any end to price rigging will take place. Rigging began with interest rates and bonds but once one market was broken, eventually all markets had to be rigged. Otherwise, a real market would have found a gap in the defenses and true supply / demand would have set unacceptable prices (unacceptable to the TPTB). Banks and Fed holding mortgage debt would blow up as homeowners defaulted en masse. Vehicle sales would plummet…appliances…etc. etc.

      The problem for the Fed is there are things it simply cannot rig and the cracks are bulging…and the flood of false economic and financial reality is set to wash over all of us. Things like slowing population growth and outright declines across younger populations, declining commodity consumption, declining mortgage debt, rents to income ratios going crazy…these are the gaps the Fed cannot rig.

      A breakout / breakdown is imminent. PM’s true worth are likely to be found multiples higher…but of course how that plays out and what harm may come to their owners is a very valid question.

      Some things to consider…

      http://econimica.blogspot.com/2015/07/federal-reserves-therapy-has-nothing-to.html

      http://econimica.blogspot.com/2015/07/growth-and-recession-now-unrecognizable.html

      and the basis of all the trouble…why the Fed and CB’s have gone crazy…

      http://econimica.blogspot.com/2015/07/global-us-population-growth-and.html

    • Brian,

      Good question. However, hard to predict how things unfold. I believe the value of the U.S. Dollar will come under severe stress as U.S. Shale oil production declines. The top 3 shale oil fields have already peaked. We could see U.S. oil production down 33% by 2020, and 60-70% by 2025. This will spell disaster for the KIND DOLLAR>

      So, whatever happens along the way, the ENERGY CRISIS will most certainly kill it in the end for the U.S. Dollar and Paper Assets.

      steve

  5. Ever Vigilant | July 28, 2015 at 4:58 pm | Reply

    It may go down further but at that point you and i won’t be able to get our hands on any….But now while you still can find it.

  6. People are holding on to the silver and buying more when the price goes lower. Paper trading and physical trading are separate. When price is low, silver investors get to buy silver cheaper. Its a happy event. Buy silver. Buy the hope. Excitement in buying cheap silver gives out a higher hope.

  7. What bankers and Trolls don’t understand is that there is a spark within a % of the population that demands precious metals. Perhaps its an inherited generational memory instilled within our genetics. Its like brown hair or blue eyes. There is a % of the population that adores precious metals and price has always been the limiter. The bankers mistake was to assume it was a trait attributed to nurture. Let me tell you Mr. Banker. … false assumption. Precious metals lust is a genetic trait. IMHO your suppression scheme is doomed. That’s why Gold and Silver will always be a form of real money. Its genetically instilled within us by the hand of God.

  8. Silver is a great thing to buy and hold onto. We spend more money on other things daily. But buying a few ounces of silver each week is a great investment. The economy is very weak. No report can shut us down from what we see in everyday life, and poverty around us. So keep on buying silver while its cheap!

  9. New to all this PM and commodities stuff, never gave it a thought really. Then retirement reared it’s ugly head. Anyway, so I don’t know much. However, I know if JPM and Citi are cornering the market it’s not because it’s about to lose big anytime soon. While a lot of “fat cats” and banks will undoubtedly wash out, these two houses have played their cards beautifully in my estimation. Whatever a persons reasoning for doing it, I believe it prudent to hold physical Gold and Silver. It’s the currency of the future. As Yogi Berra might say, it will be deja vue all over again. PM may be the only weapon a guy has, in an attempt to at least level the playing field. Enjoyed the excellent report, good luck to all, in all you do.

  10. Steve, I love your work. In your analysis of this particular topic, have you accounted for the significant conversion of commercial diesel powered trucks (whole fleets even) and trains etc.(even autos) over to running on natural gas? I don’t have the numbers in front of me, but I have found them to be significant.
    Thanx, Mike

    • Mike,

      Good question. I answered this in another comment found here: https://srsroccoreport.com/what-silver-chart-has-the-bankers-worried/what-silver-chart-has-the-bankers-worried/#comment-21971

      Even though some of the trucking fleets now use LNG, its not a whole hell of a lot in the scheme of things. I can tell you two of the new LNG facilities where I live were built a few years ago and still sit unused. One is at a Flying J Truckstop. Brand new, but large plastic barricades around it. Has never been used in the last 2-3 years.

      Again, overall U.S. transportation consumption is down 7% since 2007. Can’t have a GDP of $17.4 trillion in 2014 compared to $13.8 trillion in 2007 if overall transportation consumption is down 7%.

      steve

  11. I like the reasoning in this article. In regards to the bankster’s silver shorts, each of these shorts is a 5000 troy oz option. So when do these options expire? Or are their options special and they can hold them for as long as they like? And how many short contracts are being held at what price? Every time they manipulate silver down by flash ‘fake’ selling or being the only ones to know when margin requirements go up one night, they make some money and cash in a few of their short options presumable. Which options at which price? None of this is ever known. Every option I ever had – had an expiry date. Theirs remain around for as long as they and the Fed want them to it seems.

  12. Hi Steve, I have read your work for a number of years now and have rarely disagreed. I am a libertarian and a Ron Paul reader and have studied most of his economic theories with a 100% agreement. My personal past experience is in manufacturing of automotive parts and been an employer of close to 90 people and have a realistic knowledge of supply and demand economics due to exporting my manufactured goods to 18 countries. The reason I elaborate on this is because I sold the business and started a precious metals business and can talk through experience.
    Right now, delivery of silver coins and bars is the worst I have ever seen. There is no shadow of a doubt that the price is manipulated, but the Comex and LBMA are about to fall. Not tomorrow,not next month, but very soon. In all of my experience, I have never come across of a product falling in price on the world market and at the same time, can’t get delivery.
    Most silver coins are 3-4 weeks dispatch and Sunshine Mint have stop taking orders, because they can’t estimate how long this situation is going to resolve itself. You can get better deliveries on small quantities from a retail establishment, but at a higher premium.
    This situation, eventually will be resolved by the free market and only at much higher prices and I am looking forward to see Banksters heads roll.

    • Brian P,

      Thanks so much for sharing that info. I am hearing that same thing through the folks I am in contact. If we continue to see low prices on top of contagion spreading from Greece, I do think we will see REAL WHOLESALE shortages of silver in Q3-Q4.

      steve

  13. With literally trillions of dollars of liquidity sloshing around the world EACH day the gold and silver markets are MINISCULE in comparison. Why would banks be concerned with them at all other than just another asset? We have been off a gold or silver standard for over most people’s lifetime, it’s completely out of their reality, this is easily demonstrated by the various videos online where a person offers a silver or gold coin for, say, some chocolate bars and they always take the chocolate…something they KNOW. Banks are not concerned with the price of gold and silver, as Armstrong says it’s a hedge against govt. , nothing more and as govts., are still in control it will remain depressed with further downside more than likely.

    • it is not that simple. Evrth depends from the experiment settings.

    • “Banks are not concerned with the price of gold and silver, as Armstrong says it’s a hedge against govt. , nothing more and as govts., are still in control it will remain depressed with further downside more than likely.”

      Exactly the opposite is true; banks and governments are VERY worried that gold [and silver], which are money [gold can be used as settlement of debt with the IMF and is a part of many countries official monetary reserves] will reveal the truth of the weakness of fiat currencies and the governments and central banks that manipulate economies using fiat.

      G & S prices may go down more due to COMEX manipulation, but they appear to have pushed silver about as low as they can, and perhaps the same for gold.

  14. Just a correction: 500 billion is less than 1/2 of 1% of 105 trillion, not 3%. It makes your point that much stronger.

  15. Steve , you stated “Not only were government silver sales a phat ZERO last year, global above ground silver inventories continue to be drawn down. This is the REAL PROBLEM for the bankers. How much silver is left to supplement the market in the future? Well, if the price goes lower, there will be even less supply from recycling. ”

    Is it possible that Toto might be pulling the curtain open to reveal the wizard , finally ?

    • Silvrwillwin,

      If it ain’t Toto, its the market. The Chinese Govt sold one hell of a lot of silver over the past several decades. I discuss this in THE SILVER CHART REPORT. That has all come to an end. I highly doubt we will see more Official Govt sales of silver. So, there will no longer be any supplement to annual deficits by Govts, except for the private market.

      So, as annual silver deficits continue, it will further deplete what above ground stocks are available. I think we are getting closer and closer to global shortages.

      steve

  16. Since 2007 several major trucking fleets have begun to switch to natty gas powered trucks. Railroads have taken a larger role in ground transport as well, and some of those trains are electric, natural gas powered and are quite efficient. So while I do not dispute that PMs are manipulated, the argument of lower diesel usage is not compelling evidence to suggest the US had turned a corner towards economic hell in 2007.

    • Scott,

      While it’s true that some large fleets have switched over to liquid natural gas, it’s not a whole hell of a lot. Matter a fact, UPS planned to add a lot more of their fleet to LNG, but they decided against it. So, I don’t see a lot of growth in LNG for transportation.

      Furthermore, overall U.S. transportation consumption in 2007 was 29 Quadrillion Btu’s… according to the EIA. In 2014, it fell to 27 Quadrillion Btu’s. This includes ALL TRANSPORTATION. So, this was a 7% decline in overall transportation consumption.

      Can’t have a GDP to grow from $13.8 trillion in 2007, to $17.4 trillion if transportation consumption declined 7% as stated by the U.S. ENERGY INFORMATION AGENCY.

      steve

      • “Can’t have a GDP to grow from $13.8 trillion in 2007, to $17.4 trillion if transportation consumption declined 7% as stated by the U.S. ENERGY INFORMATION AGENCY.”

        Out of curiosity is diesel fuel for ships figured into this equation and if not might that be worth further investigating for the common good ?

      • Why so much talking and analyzing?
        Where is the bottom for silver?

  17. I’m trying to keep cash on hand in case the market crashes. If I have $10,000 cash, how much should I keep as cash and how much silver should I buy?

    • I heard from some old investors that is good to have 6 months livelihood in cash. Rest of your savings should stay in investments. So in case of crash you will be able to pay for next 6months without worries

  18. There is a huge assumption in this community, that if there is indeed a hidden hand manipulating prices, they have not figured out step 2,3,4 and 5.

    If there is such a big conspiracy, don’t you think that if they have an IQ of 150+, haven’t they lobbied the powers that be than when the time comes. For example: Silver becomes a non tradable commodity. The Chinese have done so to most of their stock market. Who will care when they do this to silver or gold or bitcoin or cash ?

    It is naive, to think that once the bubble pops those with the silver will have the upper hand! It is always those with the power to lobby, which in turn influence the law makers which in turn ask the law enforces to enforce it.

    It will not be a walk in the park
    Jim

    • “It is naive, to think that once the bubble pops those with the silver will have the upper hand! It is always those with the power to lobby, which in turn influence the law makers which in turn ask the law enforces to enforce it.”

      Black markets arise with making something illegal. Industry, which has to have silver, will be buying at the black markets if the price is favorable or they can’t get enough elsewhere.

      The could pass a law that any food you have stored could be taken for the common good in an emergency [probably already have that legal right or they will just exercise it anyway]. Or access to your well. Or you must give up firearms. Or cash. Does that mean one should throw in the towel and just do what TPTB say is OK?

      • Of course not, but some items are of no interest to the powers that be. Jim Rickards suggests a combination of Art, Land and PMs. This gives a good hedge.My message is : Silver is not the one solution to protect your wealth, think what the others are thinking, cause they are! My assumption is that they are 10 times smarter than me.

        See also my post, with ideas on how to stop (or slow down) any possibility of confiscation
        http://resilientman.com/store-gold-silver/

  19. The FED has the power to do what they want.The greenback is in the whole world.The financial system is in danger.All countries are dependent on the dollar.

    They will destroy the PM market with unlimited paper.

    Only inflation or a short squeeze can stop them.

    • OR…everything comes to a screeching halt due to no power , as a result of no fuel .
      Even the bad guys are out of luck then.
      Can you say wood burning stove and out house !?
      Got my fishing pole ready !

  20. “Pundits” have been saying that the bottom has been reached since the end of November 2014.
    People who sell gold and silver should not be allowed to advice as it is not fair.

  21. I see in the chart that Heavy Duty Truck Fuel Efficiency plunged between 1965 and 1970, from 7.8 to 5.5 miles per gallon. Does anybody know why this happened?

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