Let's just say that the value of all above ground silver supply at this point is $30-40 billion. (We could debate the number forever)
Think about all the young, freethinking billionaires out there. Silicon Valley has plenty of them. I'm sure we could did deep and come up with a list of billionaires that most of us have never even heard of. Assuming that billionaires strategize with each other, who is to say that someone wouldn't declare "Let's see what happens if several of us together try to accumulate $5-10 billion of physical silver over a 6-12 month period."
I remember very well the Hunt Brothers situation in trying to corner the silver market (ca. 1979-1980), but they made the mistake of depending on loans from bankers who cut them off. Let's say that this time it is agreed that everyone pays cash (no margin of any kind is used) and that they DEMAND physical possession.
Yes, storage would be a potential issue to deal with, but I'm not going to worry about that at this point. Admittedly, there would need to be a good way to quickly validate VERY LARGE QUANTITIES of physical silver to weed out counterfeits- something way beyond what Sigma Metalytics offers.
But think about the people who have lots of money and have huge quantities of it tied up in a single type of investment. Example: Mark Zuckerberg presumably has the vast majority of his net worth in Facebook stock. What if he wanted to put a few billion into physical silver? He isn't old enough to remember what happened with the Hunt Bros. And he is enough of a rebel with deep enough pockets to be able to challenge the past.
I'd be surprised if Bill Gates did much, because he is so close to Warren Buffett- and Warren would likely remind Bill about his own negative experience with silver around the late 90's. Also, Gates has everything he needs and spends more time and effort figuring out what charities are deserving of donations. So I don't consider him to be a likely accumulator of PM's.
Then there is Jeff Bezos, who has a ton of his net worth tied up in Amazon stock and could use some diversification. He should realize that the Amazon gravy train won't last forever. He has openly thumbed his nose for years at the notion of a company needing to be profitable for the stock to do well. So he does have the free-thinking spirit necessary to take a deep plunge into PM's.
Larry Ellison is another free-thinking type who has bought substantial real estate in Hawaii and could be a player in PM's if he so desired.
What about a true wild card like George Soros? And what about Elon Musk? And how about Carlos Slim, who is from Mexico, a country where there is presumably lots of silver available to buy? And Prince Alwaleed from Saudi Arabia- is he in jail or out of jail- have his assets been seized? Who knows?
Think about all the others who might be close friends of these guys who have net worths of perhaps $200 million to $2 billion. It could be really staggering if all of a sudden a rumor hit that someone (or some group) was making a move to accumulate a large quantity of physical silver.
I'll give you another reason- there has been talk for a long time (perhaps 15+ years) that China controls something like 95% of the world supply of rare earth elements. What if a consortium of the really wealthy people in this country tried to control a very large position in silver and use that silver as a bargaining chip with China so that China would loosen it's grip on the rare earth stuff?
The day that we hear a story that Ford Motor Co. or Apple is having a hard time getting silver and may have to shut down production could be the day that we all wish we had accumulated more physical silver. Look at what happened when Ford had a hard time getting physical palladium (not platinum) and the price spiked quickly to $1,100/oz. plus.
This day could happen quicker if more people who hold paper silver would demand to take physical possession and wouldn't settle for 20-30% incentives to take paper dollars.
I'll give you another potential trigger that nobody is talking about- hedge funds. Hedge funds apparently have had a decent year this year, but have largely underperformed the S&P500 over the past 5-7 years. That in spite of charging large fees for the privilege of investing with them. Don't you think it is reasonable for some of the money invested in hedge funds to have gone elsewhere (including PM's)?
Sentiment regarding silver has been horrible for years- look at the comments from many on this site who have essentially given up. This would be a FANTASTIC time (IMHO) for someone really wealthy to be accumulating a good supply of physical.
Never underestimate what the world's wealthy people are doing behind the scenes. In a related story, I just bought a few more ounces this month!
P.S. Does someone have a link to any recent commentary by Ted Butler? I haven't heard anything from him in a good while.
P.P.S. Sorry to be so wordy- I felt like something had to be said.
Posted: Thu Nov 23, 2017 7:34 am