1. We produce twice as much silver as we USE each year.... We produce 1 billion ounces per year, and only USE half of that. All the excess silver is STORED in the form of bars and coins. There is a huge OVERSUPPLY of stored silver that grows larger each year.
2. We can produce all the silver we USE for under $3-$4 per ounce. Hecla produces silver for under $1-$3 per ounce, many copper mines produce silver as a free "waste" byproduct. Silver prices can crash to at least $6 and we'll still produce all the silver that we need.
3. Demand for silver is crashing and volume of SLV shares traded on "up days" is collapsing. The US Mint produced 6 million fewer eagles in 2012, yet the dealers are still swimming in them as they prepare to release the 2013s. Dealers are swimming in excess silver.
4. The SLV fund has stopped adding any net new silver. The SLV fund bought well over 11,000 tonnes of silver up until April 2011 and since then, they have been dumping it with no net new silver purchased. The SLV fund was one of the major drivers of the silver bubble, and now they will be one of the major deflators of the silver bubble as they dump silver on the way down. They've dumped over 1000 tonnes so far.
5. Silver will only go higher if oil goes higher, but oil can't go higher without choking the economy and KILLING demand. Falling demand will send prices crashing. Oil crashed to $33 and silver to $8 in similar circumstances 4 years ago. Gasoline prices have been crashing and are under $2.99 in many parts of the US.
6. Governments/central banks are starting to figure out that anything they attempt to do to "Stimulate" the economy too much just makes commodity speculators drive commodity prices higher which KILLS the economy. Central banks are starting to figure out that the ONLY thing that will stimulate the economy is LOWER commodity prices.
7. Fiscal cliff = reduced spending and tax increases = stronger dollar = crashing commodities demand = crashing silver prices.
We're heading MUCH lower