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DRDGOLD Ltd. Message Board

  • jermarge2000 jermarge2000 Mar 20, 2003 11:41 PM Flag

    Need to Get Healed Up?

    DROOY will be a wholly adequate instrument for doing so, but listen to this!

    Bullion silver deliveries occur quarterly, end of June, Sept., Dec., & March. Comex, as a practical matter is the only source for commercial quantities. In December, Comex apparently had some large problems fulfilling contracts. The rumor is that some commercials were asked to voluntarily defer delivery until March to avoid an explosion in the silver markets! The parties involved apparently agreed, & sufficient silver was scrounged by Jan. 16 to fulfill obligations.

    Silver is presently at a 10,000 year low in price, when adjusted for inflation. How do we know this? One example is that Roman Military records reflect how much silver it took to buy a soldier a pair of standard issue boots.

    This will be the 13th year running that silver demand has exceeded supply. Demand presently exceeds supply by approximately 150,000,000 ounces per year.

    It currently requires 75 ounces of silver to purchase 1 ounce of gold. The two metals occur at a ratio of 10:1 in nature. The historic long term price ratio is 16:1.

    Not too long ago Ford heard rumors of a platinum shortage, and bought all the platinum in sight. You can't build cars without platinum for catalytic converters. Platinum went to $1600 per oz., Comex defaulted & made delivery in dollars rather than metal, and Ford shareholders were tickled pink to own a mountain of Platinum that rapidly depreciated to lower prices once the Russians decided it was time to sell some.

    Will Comex be able to make delivery in March? It was widely estimated that they only had 50,000,000 ounces available for delivery in December. The annual shortfall is 150 million ounces. You do the math. One source speculated that it might be possible to get through March delivery, but under no circumstance would there be enough silver for June delivery.

    Why is there a silver shortage? It took me 3 years to finally get a grip on that. That explanation requires quite a few pages. For now, suffice it to say that all 3 of the 100 year old silver mines in my locale have closed within the last decade.

    About the subject of the article: The silver short squeeze of 2003 will still be written about in texts 200 years from now. It will change the rules of commodity trading forever. Ted Butler has opined that you will go to sleep one night with silver at $4.00 and wake up the next morning to a $12.00 open! That will be the opening shot! Remember, the dollar is now worth 25% of what it was worth when silver hit $55.00 per ounce, and the world was still awash in it at the time!

    The way that I like to think about it is this: there is roughly 5 billion ounces of above ground gold, or 1 ounce per person on the planet. There is roughly 300 million ounces of silver, or 1 ounce per American. The only substitute for silver is gold. Since silver is now far more scarce than gold.............?

    Only my opinions, draw your own conclusions.