So, How Much Silver Is Really Out There Somewhere?

So, How Much Silver Is Really Out There Somewhere?

As silver led gold in last week’s breakout, all the old ‘silver shortage’ stories we have heard over and over for the past several years are coming out of the woodwork once again.

Are they believable?  Or are the usual suspects just ‘talking their book’ once again?

The short answer is that there is a whole lot more above ground silver than gold - around 4 to1. 

The longer version, below, is far more lengthy than I had intended, but the proof is in the details.

Sunday pre-game, 8/19/2012

 Hello friends. Please note I won't be blogging till September, as I will be in an undisclosed location tending to undisclosable matters.

For the past 4 months, my gold trading strategy has worked like a charm: buy when price falls between the 21-month moving average (green, dotted) and the brown dotted trend line. However, after one last scalp this week, I am done with this trade, as I think gold is ready for a big move either up or down, and I have no problem waiting a little bit in cash here. Jackson Hole looms. I should say, I'm inclined to to agree with Jim Sinclair: "Now the media has everyone looking at Jackson Hole for Bernanke to act. That is not the way it tends to happen."

 Here's the daily analog of the above monthly chart:

Dear GATA

Dear GATA,

I read your piece via Zerohedge.com yesterday and 

was pretty much in shock. I assumed your account 

got hacked and some rogue hacker is now running 

around twitting, twatting, skit skating, spamming and flambéing with your good names. 

However, it's been 24 hours and there is no denials so I guess you guys really, actually expect the price of Gold to double in the next 90 days. 

Now seeing as you have put this out there I'll assume you are going to buy some leaps and make some paper on this. 

Indeed (as newsletter writers like to say),  you are entirely comfortable having the general public make similar bets I have a proposal for you guys.

I will bet 1 Oz of 24K gold US mint issued coin that it will not double. I will also eat your shorts if it does double in the the next 90 days. If however it does not double in the next 90 days then you give me a 1 Oz 24 K Gold coin issued by the US mint. 

Sunday Pre-game 8/12

Every now and then an event occurs that makes me feel isolated from my species (T. tarsier). I'm talking about the opening and closing ceremonies of the Olympics. Do people really watch that garbage? Anyway, lately the PMs have become almost as boring.

Boring, to be sure, but not discouraging, considering that gold has not yet broken critical support lines, continuing to make higher lows, despite being one step (by which I mean one propaganda announcement from banquier centrale* mouthpieces) from what would appear to be a steep plummet. See below daily gold, monthly, and gold in euros.

Silver . . .

         worth following the next few days:

Sunday pre-game, 8/5

 Greetings, friends. Once again, I'll need to be brief, as I am in a desert south of El Paso on an entomology mission and signal is weak. Also, I must remain on the move, as I have drawn the suspicions of Border Patrol, who greeted with unusual suspicion our explanation that the opened bottles of Everclear in the trunk were to preserve the insects we captured. Idiots.

I couldn't trade this week, and missed yet another opportunity to buy at the dotted brown line on the monthly chart below. I'm bullish this week, because the 40-day EMA held for the week, and that's a first after a Bernankevent in a long time.

Nice to know that the euro is in such good hands

By now, presumably the whole world knows that Mario Draghi, President of the European Central Bank, has announced that  'Within our mandate, 'the ECB is ready to do whatever it takes to preserve the euro.  And believe me, it will be enough'.

On the face of it, that statement was reassuring enough that 'risk on' trades were on again, world equity markets surged, and gold and silver rose nicely a week ago Thursday.

But what else did Draghi have to say on that occasion?  Nickolai Hubble, writing in The Daily Reckoning Australia for Wednesday, August 1, "How the ECB will Print Money, and Buy Bonds" (dr@dailyreckoning.com.au), dissects Draghi's rhetoric and the thoughts they were intended to convey, for our edification and reassurance. I laughed, until I cried, at this.

Also, Bron Suchecki had an interview with Larry Klutz on FinancialSenseNetwork (http://financialsurvivalnetwork.com/2012/07/bron-suchecki-of-the-perth-mint-expect-precious-metals-shortages-during-the-next-crisis/) that has apparently not attracted the audience I think it deserves, as I have not seen it linked elsewhere.  The twenty minute interview is well worth the time needed to listen to, as it points out an apparently not very well known factor in why premiums for gold and silver coins were so high when metal prices were so low back in 2008-09.  Bron's Gold Chat site (http://goldchat.blogspot.com/, for 25 July 2012) has the above link to the interview, as well as a synopsis that presents his basic point, which is that mints cannot readily increase production of gold and silver coins, even when demand increases greatly, because there is a bottleneck that mints cannot afford to remove. That is not the scarcity of physical metals or their ability to quickly stamp out the coins themselves, but the limited supply of the blanks, or planchets, that feed into the presses.  They are made through very complex and expensive processes, and their supply cannot be increased quickly or easily since the major capital investments that would be necessary to do so in future cannot be justified under present circumstances.

A later posting on Bron's Gold Chat answers a number of readers' related comments and questions.

Contributed by Slow Loris Larry

BullionVault took my Gram (back)

A little while back BullionVault placed their bar lists under password protection, meaning that only registered users could download the full list. Automated downloading is the primary technique I use to get hold of my bar lists for the database, so for BullionVault I had to program a special emulation to bypass that requirement (this task was successful, but annoying). Part of the necessary parts was to have an actual account, so I signed up.

I was delighted when as part of the client experience, they gave me a gram of gold to start the account with. I felt richer, by the magnitude of one gram of gold, and to be honest felt a little smug having added some of the good stuff to my net worth, however small. I wondered a little about the business model but really gave it no second thought beyond the semantics of redeeming my one gram (the downloads were working, which was all I wanted).

About a month ago, I received the following email:

Dear BullionVault user,

We are about to reclaim the free gram of gold you received when you first registered your account 'BULLIONBARZ' with us.

As I'm sure you recall, it was given on a "Use it or lose it" basis.

And with new enquiries now running at very high volumes here at BullionVault, it's time to give someone else the same opportunity that you had.