Example of the silver shortage

[highroller4321]

Hi everyone,

An associate of mine is a huge silver advocate and puts a lot of money into silver. For the past 2 weeks he has been trying to buy a pallet of green monster boxes. 50 boxes per pallet and 500 ounces per box. He can't get anyone to take the order! Everyone is telling him that there is a 7-8 week delay and they can't/won't lock down the price for him!


Believe it or not there is a silver shortage!

[highroller4321]

I also heard from this guy that he was talking to some traders who had 1500 silver contracts (each contract is 5000oz) on comex and wanted delivery. Comex couldn't make the delivery so they cashed the contracts out at $50/oz if they would keep their mouths shut.

I can't confirm this but it is coming for a pretty reliable source.

[slickeast]

Hey, why are you telling everyone my business. Lol

1500@5000 oz each x $50/oz is 375 million dollars.

[AGCoinHunter]

I also heard from this guy that he was talking to some traders who had 1500 silver contracts (each contract is 5000oz) on comex and wanted delivery. Comex couldn't make the delivery so they cashed the contracts out at $50/oz if they would keep their mouths shut.

I can't confirm this but it is coming for a pretty reliable source.

Hmm, thats some pretty big news there. Supprised this hasnt bubbled up yet...

[68Camaro]

Hmmm! very interesting. I've also heard "lots" of unconfirmed reports of such; nothing so definitive. I'll ask my normal supplier if he is having any troubles. I had been thinking of buying another monster box if the price dropped back below 30, but I missed out on the last price drop (except for a small set of stuff from MH).

[68Camaro]

Hmmm! very interesting. I've also heard "lots" of unconfirmed reports of such; nothing so definitive. I'll ask my normal supplier if he is having any troubles. I had been thinking of buying another monster box if the price dropped back below 30, but I missed out on the last price drop (except for a small set of stuff from MH).

His reply, excerpted...

The monster boxes are about 2+ week lead time right now due to shortages...

...Silver is in demand and some shortages are happening, but we are not sure how long or bad it will get?

Silver from refineries who melt from scrap have a lot which in turn goes to 100 oz and 10 oz bars. The mints only use new silver from mines.

The last is important, as that helps explain why the mints might be short, but others have large bars available.

[Mossy]

His reply, excerpted...

...Silver from refineries who melt from scrap have a lot which in turn goes to 100 oz and 10 oz bars. The mints only use new silver from mines.

(scratches head) Why?

[Market Harmony]

Other than my local guys, I have not receive a silver scrap lot in the mail in just over a week... one of the longest dry spells ever for silver scrap.

Good thing that the local guys have stepped up their buying and that gold lots are moving along.

Got Scrap?

[68Camaro]

His reply, excerpted...

...Silver from refineries who melt from scrap have a lot which in turn goes to 100 oz and 10 oz bars. The mints only use new silver from mines.

(scratches head) Why?

Believe - in the US - it is by policy and/or law, to support the silver mines/miners. I know it was so in the past but not sure about current state. Haven't tried to research the current state, but if someone else gets to it and can post, I would like to see the law and/or policy.

[blackrabbit]

I got some scrap silver, but I am holding out for 50 dollar silver!

[Diggin4copper]

Other than my local guys, I have not receive a silver scrap lot in the mail in just over a week... one of the longest dry spells ever for silver scrap.

Good thing that the local guys have stepped up their buying and that gold lots are moving along.

Got Scrap?

How much at a time makes it worthwhile for both you and me?

[Rodebaugh]

I got some scrap silver, but I am holding out for 50 dollar silver!

At that price I am melting the family flatware and driving to KFC to stock up on plastic sporks for the family and changing my screen name to HoardSporksByTheTon.

[68Camaro]

I got some scrap silver, but I am holding out for 50 dollar silver!

At that price I am melting the family flatware and driving to KFC to stock up on plastic sporks for the family and changing my screen name to HoardSporksByTheTon.

HSBTT - think that's still available!

[68Camaro]

His reply, excerpted...

"...Silver from refineries who melt from scrap have a lot which in turn goes to 100 oz and 10 oz bars. The mints only use new silver from mines."

Looked it up. Above is true for Gold.

(c) Section 5116(a) of title 31, United States Code

7) Source of gold bullion.— (A) In general.— The Secretary shall acquire gold for the coins issued under this subsection by purchase of gold mined from natural deposits in the United States, or in a territory or possession of the United States, within 1 year after the month in which the ore from which it is derived was mined.
(B) Price of gold.— The Secretary shall pay not more than the average world price for the gold mined under subparagraph (A).

No longer true that silver has to be domestically mined. Silver for ASE was originally required to be taken from the strategic stockpile, but that was exhausted, and it is now - apparently - open market silver. However, it's not clear if the silver has to be freshly mined, or can be recycled. Not sure about that one. If anyone knows and can point to a reference, I would like to know. Thanks...

[Mossy]

No longer true that silver has to be domestically mined. Silver for ASE was originally required to be taken from the strategic stockpile, but that was exhausted, and it is now - apparently - open market silver. However, it's not clear if the silver has to be freshly mined, or can be recycled. Not sure about that one. If anyone knows and can point to a reference, I would like to know. Thanks...

Thanks. (And the EPA is doing all it can to make sure no metal is refined...)

[AGCoinHunter]

No longer true that silver has to be domestically mined. Silver for ASE was originally required to be taken from the strategic stockpile, but that was exhausted, and it is now - apparently - open market silver. However, it's not clear if the silver has to be freshly mined, or can be recycled. Not sure about that one. If anyone knows and can point to a reference, I would like to know. Thanks...

Thanks. (And the EPA is doing all it can to make sure no metal is refined...)

Once the governments debt payments defaults and the shumer hits the fan the EPA will go the way of the dodo bird. Cant really say I am looking forward to that but the EPA can go pound sand for all I care.

[Mossy]

...the shumer hits the fan...

That would be an instant hit on U-Tube.

[TXBullion]

Thats really interesting to here. Plus you guys can do a search for your own monster boxes and see that all orders arent shipping for 2-3 weeks. I think though you are able to lock in the price right now though but havent bought one so cant confirm. Pallets might be different???...

[Mossy]

Colorado Gold said 2-3 weeks for 100oz silver bar. That was 1 March.

[beauanderos]

Colorado Gold said 2-3 weeks for 100oz silver bar. That was 1 March.

It almost makes you a bit afraid to order. Someone in another thread was concerned that after a few months of non-delivery the order might be nulled and money refunded thus causing the buyer to miss out on an opportunity to buy at the earlier/lower price. Then again, what if you place a fairly large order and the firm goes under? I guess what we should do is call the various firms and ask them how long it took them during the previous scarcity time frame to make good on delivery. They might tell you two weeks just to make a sale and book the order, then take four months to ship, either because of absolute scarcity causing the planchet supplier to be out of supply for months, or their own inability to directly source sizable quantaties if they're minting from raw stock.

[Mossy]

Colorado Gold said 2-3 weeks for 100oz silver bar. That was 1 March.

It almost makes you a bit afraid to order.

Got that right. I strongly dislike ordering from people who are not holding what they are selling, precisely because /someone/ is going in the hole to cover the purchase. If it get's covered.

[mtalbot_ca]

Great thread.

I was reading that silver is usually considered a by-product of copper mining. Very few silver mines remain in production to this day. As prices go up, there will be more investment in prospection, but there seems to be a 5-10 year lag time in the investment curve to catch up with the real-silver demand.

Cheers,

[Dumpster Diver]

I also heard from this guy that he was talking to some traders who had 1500 silver contracts (each contract is 5000oz) on comex and wanted delivery. Comex couldn't make the delivery so they cashed the contracts out at $50/oz if they would keep their mouths shut.

I can't confirm this but it is coming for a pretty reliable source.

I think we should get $50/oz to keep our mouths shut too...

[theo]

Colorado Gold said 2-3 weeks for 100oz silver bar. That was 1 March.

It almost makes you a bit afraid to order. Someone in another thread was concerned that after a few months of non-delivery the order might be nulled and money refunded thus causing the buyer to miss out on an opportunity to buy at the earlier/lower price. Then again, what if you place a fairly large order and the firm goes under?

If a firm tried to void a sale simply because the price of silver went up, the buyer would have grounds for a lawsuit. Of course if the firm went bankrupt that would be different.

Now if the price of silver becomes more volatile (especially to the upside) mail order companies might start putting clauses in their sales contract to protect themselves against sudden price increases.

[beauanderos]

Would you go to the effort and expense to go after a company and sue them for non-performance if you were talking about an amount less than, for instance, 100 ounces of silver? If they were out of state I wouldn't even know how to start and I dare say most people would be in the same boat. Hire an attorney and that eats up all the potential profit you would have made by the price differential you lost out on. Most people would count themselves lucky to get their initial down payment back and consider it an expensive lesson learned.