A Report on Stocks of Silver Around the World, The Silver Institute, 1992.
http://www.sharelynx.com/papers/CRAAGReport.php) to the summary conclusions of the Silver Institute’s publication ‘Stocks of Silver Around The World’ (SSATW), prepared for them in 1992 by Charles River Associates (CRA).
[I have now, in the evening on 31/10/12 downunder here, corrected some typos and improved some awkward or misleading phraseology in what follows. I have also added the observation that the SSATW figues corroborate my earlier estimate that above ground silver stocks are four times as large as existing gold stocks.]
Nick’s posted material is provocative, to say the least, as it includes the CRA estimate that total world silver stocks amounted to 19.055 billion ounces, but then went on to present calculations that only 2,208 million ounces were available to the market under their then most generous market price assumption of silver at US$20 per ounce, and then advised that even at that price the amount of metal would only become available slowly and over a considerable period of time. Although the COMEX silver price had been, albeit only very briefly, more than double that price eleven years previously, its average price during 1991 had been only $3.91 (and ranged between approximately $3.60 and $4.60), so using a ceiling of $20 per ounce was not unreasonable at that time. To bring that price up to date, the US government’s 1991-2012 CPI price deflator for $20 is $25.40. Shadowstats.com puts it at $32.75.
The Silver Institute no longer distributes the SSATW report, and suggested when I contacted them that I enquire about it with the CRA. Before I got around to doing that, I thought of contacting Nick to see if he had the full report. He said that he did, but soon added that he was unable to locate it. Thankfully, he eventually did, and even more thanks to him for making it available to me. I have since been digesting it, which is no mean feat as it runs to 181 pages, all up, and is extremely detailed. In what follows, I will present, as succinctly as I can, what I think are the most relevant and interesting breakdowns of stock volumes and locations. I will keep my own comments to a minimum, for now, so as not to detract from the public service of making the highlights of the SSATW available on The Screwtape Files.
Out of the total of just over 19 billion oz of existing available and unavailable silver as of the end of 1991, SSATW reports (p. 3, Figure 1-1) that 7.3% was in Bullion form, 6.2% was in the form of Coins and Medallions, and a whopping 86.5% consisted of Silverware and Art Forms. Of the1,396 m oz of bullion (p. 8, Figure 1-5), 44% was held as Business Stocks (exchanges, industry, and dealers) 38% was Investor Stocks (individuals or institutions), and 18% was held by Governments, Mints, and Central Banks. Of the 1,178 m oz of Coins and Medallions (p. 10, Figure 1-7), 17% was in the forms of Medals and Medallions (owners unspecified), while 38% was coinage held by families or small holders, 27% consisted of numismatics or collectables, 20% was obsolete coins in ‘bags’, and a miniscule <1% was held by governments/mints. Of the 16,481 m oz of Silverware and Art Form stocks (p. 11, Figure 1-8), 48% was Jewelry & Art Form held by individuals, and 31% was Sterling and Holloware also held by individuals, and 20% was Ecclesiastic, leaving miniscule amounts held by other entities.
In terms of the geographical areas where the total stocks of silver of all kinds were held in 1991 (p. 4, Figure 1-2), 24.9% was in Western Europe; 19.5% was in the Middle East, China, Other Asia (?including Vietnam?), and Oceania; 18.9% was in the Indian Subcontinent; 17.4% was in North America; 10.0% was in Central and Latin America; 4.8% was in the CIS, Eastern Europe, and Other Communist countries; and 3.3% was in other non-Communist countries, not including the 1.1% in Japan.
Chapter 2, Introduction, is a brief discussion of the CRA methodology.
Chapter 3 contains a very detailed assessment of historical world mine production of silver, beginning circa 4000 BCE. The SSATW (p. 27, Table 3-2) comes up with a figure of about 37.5 billion oz of cumulative world silver production, a little more than half of which was mined after 1920, but when estimated cumulative refining losses of 2,350 m oz, particularly in earlier centuries and then reduced by 75% in the decades prior to 1970, are deducted, net recovered mine production totaled just over 35 b oz. Of course, many assumptions and estimates enter into such a compilation, particularly for the earlier periods and especially for certain parts of the world. For perhaps understandable although regrettable reasons, the SSATW figures for South, Southeast, and East Asia contain huge gaps. For instance, whereas they list (p. 29, Table 3-2) total production for Japan of 488 m oz from 600 BCE to 1951 they list nothing at all for Burma and only 61 m oz for China for the same period, and prior to 1971 they show only 12 m oz for India (presumably including Pakistan and Bangladesh before their partition in 1947). I think that total Asian silver production figures missing from SSATW prior to the second half of the 20th century would put the cumulative world production of silver at over 40 billion ounces, or perhaps only 37.5 b oz. excluding the unrecovered mine production. However, the missing amounts are not high in percentage terms (less than 7%, using the latter, smaller total net figure).
Chapters 4 through 6 contain copious details and arguments to back up the summary figures, above, presented in Chapter 1. For instance, Chapter 4 covers stocks of Bullion/Bars/Ingots totaling 1,396 m oz,, with the following percentages in six world regions, as follows: North America 41.6%; Western Europe 30.7%; Indian Subcontinent 14.6%; Japan 5.0%; Central and Latin America 4.1%; Middle East, China, Other Asia, and Oceania 4.0%. When these figures are broken down by the holders of the metal and the purposes for which it is held, there are some surprises. For instance, the total holdings (257 m oz)of governments, mints, and/or central banks are reported as follows: North America 124 m oz; Indian Subcontinent 92 m oz; Central and Latin America 25 m oz; Western Europe 13 m oz; and Middle East, China, other Asia, and Oceania 3 m oz.
Business (exchanges/industry/dealers) and Investor stocks (individuals or institutions) of all forms of bullion are also reported separately, but are combined in the following figures (from p. 40, Table 4-3) because the London Bullion Market is not an exchange but its member banking institutions are often the same as those that have registered and eligible holdings with the Comex exchange in the States. The combined total of 1,139 m oz were distributed as follows: North America 457 m oz; Western Europe 415 m oz; Indian Subcontinent 112 m oz; Japan 70 m oz; Middle East, China, other Asia, and Oceania 53 m oz; and Central and Latin America 32 m oz. The CRA estimated (p. 65, Table 4-9) that somewhat over 50% of world Bullion stocks would be come available to the market at a silver price of $20 per ounce. Of those 744 m oz, somewhat more than half (393 m oz) would come from Investor Stocks, and of that, somewhat less than two-thirds (251 m oz) would come from Western Europe comprising over 90% of their total bullion stock. An additional 135 m oz would come from Business Stocks (Exchanges/Industry/Dealers), half of it from North America.
Chapter 5 covers stocks of coins and medallions, which were reported to total only 1,177 m oz in 1991, including 972 m oz of silver coins. However, in the introduction to the chapter on p. 68 and again in the Conclusions on p. 90 they say that only about a tenth, or 950 m oz of the 9.4 billion oz of silver coins minted from 1911 to 1990 remained, 75% (or 80% on p. 90) of them being in North America and Western Europe. However, calculations from Table 5-18 (p. 88) and Table 5-20 (p. 96) both produce a figure of 61% (593 m oz) of the total remaining silver coins in those two areas combined. (Some other Chapter 5 numbers in the text and in different tables vary somewhat, and cannot be reconciled).
From Table 5-20 (p. 96), in terms of the total 1,177 m oz of surviving combined coins and medallions, the regional breakdown is: North America 535 m oz; Western Europe 203 m oz; Indian Subcontinent 189 m oz; Central and Latin America 99 m oz; Middle East, Oceania, Other Asia 56 m oz; Japan 42 m oz; CIS, Eastern Europe, Communist Countries 42 m oz; and Rest of the Non-Communist World 12 m oz (with some kind of rounding error of 1). Within those totals, coin holdings are broken down into Family, Small Holdings; Numismatic &/or Collectable; and in ‘bags’,while Medals and Medallions are listed separately. If anyone is really interested in those further breakdowns, they are in the Excel table presented below.
At a prolonged silver price of $20 per ounce, the CRA estimated that the following amounts of combined coins and medallions would eventually come onto the market: North America198 m oz; Indian Subcontinent 39 m oz; Western Europe 34 m oz; Middle East, Oceania, Other Asia 21 m oz; Central and Latin America 16 m oz; CIS, Eastern Europe, Communist Countries 9 m oz; Japan 2 m oz; and Rest of the Non-Communist World 2 m oz.
Chapter 6 covers stocks of silverware and art forms, which constitute the overwhelming majority of all silver stocks at 86.5% of the total. As a result, the world distribution of these forms by region differs little from the figures near the beginning of this post from Chapter 1 for the distribution of total silver stocks. However, some significant differences emerge when the stocks are broken down (p. 133, Table 6-15) into various Official holdings (including those by Museums) and Ecclesiastic holdings, on the one hand, and amounts of both Jewelry & Art Form and Sterling and Holloware combined held by individuals, on the other.
Of the 3,421 m oz of Official and Ecclesiastic holdings: 810 m oz were in Central and Latin America; 661 m oz were in Western Europe; 502 m oz were in the CIS, Eastern Europe, and Communist Countries (presumably not including China or Vietnam, which would be part of ‘Other Asia’); 437 m oz were in North America; 430 m oz were in the Indian Subcontinent; 413 m oz were in the Middle East, Oceania, and Other Asian countries; 175 m oz were in the rest of the Non-Communist World, and 3 m oz were in Japan. Of the 13,054 m oz of Silverware and Art Form in individual hands; 3,458 m oz were in Western Europe; 3,189 m oz were in the Middle East, Oceania, and Other Asia; 2,775 m oz were in the Indian Subcontinent; 1,771 m oz were in North America; 943 m oz were in Central and Latin America; 412 m oz were in the CIS, Eastern Europe, and Communist Countries (not including China or Vietnam), 403 m oz were in the rest of the Non-Communist World; and 103 were in Japan.
The CRA estimated that at a $20 silver price, the following amounts of Silverware and Art Forms would eventually come onto the market: 341 m oz from the Indian Subcontinent; 298 m oz from the Middle East, Oceania, and Other Asia; 218 m oz from Western Europe; 113 m oz from North America; 88 m oz from Central and Latin America; 58 m oz from the CIS, Eastern Europe, and Communist Countries (not including China or Vietnam); 24 m oz from the Rest of the Non-Communist World; and 3 m oz from Japan.
Click image to enlarge. Or click here to download in .xls spreadsheet form.
The table above contains the Chapter 4, 5, & 6 figures presented previously, plus a further breakdown of the percentages to become available to the market at $20 silver.
Chapter 7 covers identifiable irrecoverable loses of silver prior to the end of 1991 in terms of photography (at least 4,838 m oz); electrical usage (at least 3,341 m oz); dental usage (at least 532 m oz); braising and soldering (at least 1,431 m oz); and finally other losses, including electroplate, mirrors, missiles, and medical (at 1,085 m oz). Those losses total 11,227 million ounces.
Chapter 8 contains the Overall Conclusions to the SSATW, and it is only here, on p. 148, Table 8-1, that I could find figures included for ‘Total Recoverable Pool In Use’ of 987 million ounces spread over the Chapter 7 categories immediately above for identifiable irrecoverable losses, plus the Concentrator-Refining Losses of 2,350 m oz. discussed above in the commentary on Chapter 3, and additional Fabricator Losses of 394 m oz and Secondary/Scrap Refining Losses of 131 m oz.
When the total of all stocks, including the recoverable stocks in use plus the identifiable irrecoverable losses, which together equal 35,516 m oz, are subtracted from the CRA sum for cumulative world mine production of 37,459 m oz (p. 26, Table 3-1), produces a residual figure of nearly 2 billion ounces that have to be written off against ‘Sunken/Buried Treasure and Unidentifiable and Unaccountable Losses (p. 148, Table 8-1). That would make total losses equal to just about 13.750 b oz, or approximately one third of total mine production (including my estimation of missing Asian amounts).
Looking back at my earlier post on ‘So, How Much Silver Is Really Out There Somewhere?’ (http://screwtapefiles.blogspot.com/2012/08/so-how-much-silver-is-really-out-there.html) which reported on David Zurbuchen’s 2005 work on cumulative silver production through 2004, the SSATW figures for total mine production (which he did not include in his analysis) fits in well with the range of figures he compiled of from 42.62 b oz to 48.87 b oz if you add in the approximately 7,000 b oz produced from 1992 through 2004. Interestingly, the CRA figures for losses are also quite similar to the one third figure Zurbuchen used from 1954 (Minerals Yearbook).
So, no real surprises there, and my previous estimate of a 4:1 silver to gold stocks ratio still holds. However, what we do have now are some well documented, or at least well argued, figures for the form that existing stocks of silver took twenty years ago, and where those forms were to be found throughout the world.
As time allows, I will continue to post additional investigations into the issues of historic mine production and minted coinage, melted coins and changes in other categories of silver stocks over the past hundred years or so, as well as figures that I can find or derive for categories of documented and undocumented silver bullion hoards.
To that end, I will post as a first comment, below, my suggestions for a typology of categories for silver holdings that may be of aid in discussing these issues. (Note: I have now posted a further edited version of my proposed classification for stocks of precious metals as as separate page on the Screwtape Files blog: http://www.blogger.com/blogger.g?blogID=5673441815180854503#editor/target=page;pageID=5510295811206254504).
I would urge, as strongly as possible, anyone seriously interested in this topic to read, or re-read, Tom Szabo’s post from 21 May 2009. ‘How Much Silver? Part 1” (http://silveraxis.com/todayinsilver/2009/05/21/how-much-silver-part-1/). (Unfortunately, insofar as I am aware, Part 1 is all that ever appeared.)
Disclaimer: I have owned silver in various forms since 1977.