BIG MOVEMENT AHEAD IN THE SILVER MARKET… Serious Trouble. .

[theo]

https://srsroccoreport.com/big-movement ... r-markets/

The Silver Market will experience a significant trend change in the future due the unraveling of the paper markets. Already we are witnessing a lot of political turmoil and havoc as President-elect Donald Trump gets ready to take over the White House in the next few days.

It’s also logical to assume the policy changes President-elect Trump wants to make will cause serious ramifications to the highly leveraged debt-based fiat monetary system… whether he realizes it or not.. . .

The Global Silver Market will experience a huge trend change in the future, thus impacting the price in a BIG WAY. The are two critical reasons why this will occur:

1.Cracks In the Highly Leveraged Debt Based Fiat Monetary System will force investors into purchasing silver to protect wealth
2.The 17 consecutive years of annual silver deficits totaling 1.8 billion oz, suggests the easy to acquire silver is now in tight hands. Which means, when investors finally start to rush into silver, there will be very little available to be purchased, only at much higher prices

The article later states that about 2.1 billion ounces were built up from 1975-1997. That leaves about 300 million ounces of that surplus left; roughly two years if the currents trends hold. I have a couple of questions:

1. How accurate are these numbers? Are they being over-stated or under-stated?

2. Are there any additional reserves that can be drawn upon to accommodate deficits beyond 2018?

[68Camaro]

Yeah - I saw that. Don't know quantitatively how accurate it is, but it's qualitatively accurate. (Some of here have been saying essentially this for some time.) I believe we hit peak silver in 2015 or 2016. I think the past several years have caused miners to use up their easy high-grade ore to keep the doors open at the lower prices. I think supply will continue to shrink going forward, while demand will continue to rise. This could get interrupted in the relative moment for months, or a year or two, and higher prices will cause some stored supply to be freed up in profit-taking, but I believe the trend is inevitable. Not going to risk timing it; not sure it's this year, or next, or the next, but soon-ish.

[wolvesdad]

https://srsroccoreport.com/big-movement-ahead-in-the-silver-market-serious-trouble-in-paper-markets/



1.Cracks In the Highly Leveraged Debt Based Fiat Monetary System will force investors into purchasing silver to protect wealth
2.The 17 consecutive years of annual silver deficits totaling 1.8 billion oz, suggests the easy to acquire silver is now in tight hands. Which means, when investors finally start to rush into silver, there will be very little available to be purchased, only at much higher prices

The article later states that about 2.1 billion ounces were built up from 1975-1997. That leaves about 300 million ounces of that surplus left; roughly two years if the currents trends hold. I have a couple of questions:

1. How accurate are these numbers? Are they being over-stated or under-stated?

2. Are there any additional reserves that can be drawn upon to accommodate deficits beyond 2018?

I call bullsh!T because those near exact same above ground/surplus/reserves/strong hands lines were all being said 8-10years ago. "supply dry up in a year or three" well it's 8 years later with the greatest period of silver bullion minting and hording and the 'spiget' hasn't slowed one bit.

The semi-easy silver is still plentiful in Peru. Probably in many countries and locations.

I love silver... But another 20year period of $10/ounce silver WOULDN'T SURPRISE me.

Do I see ALL the reasons that SHOULDN'T happen? Yes! But I wouldn't be shocked if it played out. The Fiat masters are better manipulators than most give them credit. They shouldn't be able to keep the house of cards up....But they've defied reason and odds for 10 years. For 25 years and for nearly 100years.
My 2c

[Robarons]

Whenever I see these articles my personal opinion what is the break-even price of mining these metals. The break-even price hold regardless of the market or demand. You could be in a straight recession but if the Break-even price is $7/oz for silver and the market is at $10 Silver- your still going to get as much silver they can produce to get that profit.

Only when you see the price fall below this break-even price will you see a measurable loss of metals hitting the market via mine supply (and indirectly scrap supply due to lower prices)

The break even price for Silver is still pretty low and is a by-product of most mines like Zinc or copper so it comes rather cheaply. Gold is closer to the $700-900/oz breakeven mark I would imagine which is a nicer cushion but still lower than spot price today.

With Silver for example hitting $50/oz and falling non-stop without significant mining companies going under shows they have some low break-even prices and profitability. You saw much more variance of oil companies going under this current oil bust with break even prices at $60 and it trading as low as $30-40/barrel. I figured with any new production coming in at the $20-30 oz break even prices for Silver (if that was even possible to have such high costs) being taken out we would see some kind of re-balance of supply yet nothing.

Just my rambles- of course there is various conditions and variations to this theory but when you get beat up this bad in the market you try to find the rock bottom of your losses

[68Camaro]

It's interesting how you can dissect opposing views and say there is truth in both of them; and ask where does reality lie. I think the truth in the views of wolvesdad and robarons is why nothing much has happened to date (and may not happen for some time yet). I think there is also truth in the peak silver view, though the time frame isn't certain.

One thing I will openly disagree with is saying that a breakeven point for something is 25-40% below spot and imply that the difference is pure profit. That implies a guaranteed return on investment that would make miners some of the most sought after take-over companies in the world, and they aren't, so the numbers can't be right for several reasons. One is that the amount of gold that can be mined at that rate is essentially fixed, so even if the prices were true those rates can't be scaled. Another is that those returns don't consider the fixed costs of exploration, site setup (labor and material), and cost of capital equipment. Some of the mines can (as the article notes) cherry pick higher grade ore veins during price downturns in order to keep themselves afloat for a period, but most mines - whether primary or secondary - can't keep that up forever. Some of the largest miners are in serious trouble at this time.

Time will tell.

[IdahoCopper]

The price of silver is not determined by supply.

In the correct order, the price is set by fraud, manipulation, greed, fear.

[wolvesdad]

But as Robarons and I said....
If above ground surplus and mine supply was really getting squeezed as Butler was shouting it was (and down to a bottle necked trickle) back from 2006-2010....
Then this cheap price would have swallowed up every last drop of the supply by the smart wealthy protecting their wealth.

But instead new mints (private and government) over the whole globe are ramped up to production 5-10X what they were doing in 2005, ANDDDDDDD...... supply has been steady. So....Kinda seems like there is plenty.

And if we see price hit $35-$40 in the next 5 years, 10's of millions of ounces will hit the market hard....Maybe 100's of millions. Yes, some johnny come lately's will gobble some of it up, but I bet we will see LCS's paying $5-$8 under spot UNLESS currency/economy collapse is 'mainstream-immenent'.

Again.... Even at current supply it's not like silver isn't worth $50 an ounce in USD. But that just goes to show how cheap milk, eggs, water and gasoline are in USD right now.

Anyway..... The writer of the article doesn't have some secret finger on the REAL pulse of things, they are just regurgitating what others have said. And it's either to sell bullion or some twisted ALT plan to get lots of gullible people gobbling up lots of bullion so that it can then be gathered at some future date to rebuild Rome.

And I'm still gobbling even though I smell something fishy....... Does that make me a Thanksgiving turkey?? Gobble gobble.

[pennypicker]

The price of silver is not determined by supply.

In the correct order, the price is set by fraud, manipulation, greed, fear.

I think that about sums it up!

[johnbrickner]

Regarding the cost to mine silver, according to the Silver Institute World Silver 2016 Survey:

In light of falling silver prices and the consequent squeeze on margins, GFMS has sought to present silver producers’
costs in a way that facilitates a clearer relationship between costs and margin. This involved a re-interpretation of the
data to also present costs on a co‑product basis, including capital expenditure (capex).

Silver Total Cash Costs (TCC) net of by-product credits fell for the third consecutive year in 2015, by 3% to $6.66/ oz.
Increased output in Mexico, was the influential factor behind the global trend. Primary silver producers accounted for
30% of global output and our cost data capture represented 81% of primary supply.

On a co-product accounting basis, TCC + capex in 2015 stood at $11.74/oz, down 11% from last year. The principal
element of this reduction was aggressively lower capex, with lower fuel prices and importantly, weaker local
currencies reducing costs expressed in U.S. dollars.

By the co-product TCC+ capex measure, 7% of the primary industry, was ‘underwater’ against the annual average
silver price of $15.68/oz, a 1% increase relative to 2014.

For what it's worth, straight from the mouth of the industry. And except for the possibilities of outcomes of our President and the President of Mexico pissing each other off, I'd expect similar for next year's analysis. And while I forget who came up with the idea, Mexico absolutely should put Melania on the Libertad and sell them back to us to pay for the wall. Talk about a pissing match if they did.

[Rodebaugh]

For what it's worth, straight from the mouth of the industry. And except for the possibilities of outcomes of our President and the President of Mexico pissing each other off, I'd expect similar for next year's analysis. And while I forget who came up with the idea, Mexico absolutely should put Melania on the Libertad and sell them back to us to pay for the wall. Talk about a pissing match if they did.

[68Camaro]

I'd buy one of those!

[everything]

I commented on this post twice so I won't go into much detail here. Much of silver demand is coin and bar demand which peaked in 2015, the deficit is being caused by this demand which is about 1/5th of total output, in 8 years we went from around 50 million oz./year coin and bar demand to almost 300 million oz./year coin and bar demand I don't think it's as much over speculation as it is physical demand and people not forgetting what happened back in 2008 with the feds easy money policy, which we are doing all over again. I know people who have oh so easily become paper millionaires via equities doubling since 2008. Gold is mostly purchased as an asset, when you have inflation eating up your fiat no matter what country you live in, conversion to hard assets is a must.

I still don't think silver is going much of anywhere up in price for years, maybe a green revolution someday but I doubt that, we've got way to much polluting left in the works. Why else would silver go up?, look at production over the last ten years, are we really consuming that much more well sort of, but the easy money creation makes it easy to buy up and hoard it.

[InfleXion]

I was reading this a bit earlier, which states silver has another 20 years assuming a predictable linear trend.

http://www.silverseek.com/commentary/fu ... tals-16290

As this article points out 70% of silver is mined as a byproduct. Silver prices aren't the driving factor for silver mining output. The main factor is demand for industrial metals, and if deflation is the equal and opposition reaction to inflationary policy and highly leveraged assets, then that doesn't bode well for prices which doesn't bode well for profits which doesn't bode well for the mining of any byproducts. That silver is as much a monetary metal as an industrial metal, yet is driven by demand that is not based on its monetary status means there is a disconnect there, and if it were to return to currency all trends would probably be bucked.