Warren Bevan has an article titled "Bull in a Bull Market" released on kitco today. In it, he quotes a comment made by Eric Sprott below:
"I’d like to mention the fact that in the Gold and Silver markets specifically, facts, well, they aren’t facts.
When you hear supply and even worse, demand figures,(from GFMS or Silver Institute), please take them with a grain of salt. These “bulls” who compile these figures are in fact guessing.
Recently the visionary Eric Sprott mentioned at a conference how the demand figures for Silver were a joke. I can say this and so can you and it wouldn’t matter. But Eric said they were a joke because his firm bought more than the entire demand figure mentioned by this group during the year referenced!
Let me repeat this.
Eric Sprott alone bought more Silver than was widely believed to have been bought in the whole world during this timeframe!!!"
If this is true, the physical stockpiles behind the scenes are potentially at critically low levels... This would explain the ambush by the CME on Tuesday, and the coming Dec contract settlements could push the delivery stress to the limits... the last few days rest might be the last we get into the December run... get some rest while you can!
First, PMs, IMO, are not in a bubble. Why do I think so? I worked in tech, in the bay area during that bubble, and at the height of it, EVERY SINGLE PERSON I knew was babbling about tech stocks, and going into debt to buy AOL for $200/share. Then I listened to the same people, who are not good with money, BTW, tell me that I needed to go and buy a house, which is what THEY did. Everyone else was busy trying to get a real estate license, of course, and every waiter, at every restaurant was 'dabbling' in real estate. Now those were obvious bubbles. Contrast this with this 'bubble'. Although I lived in Napa Valley, I only know one person, out of hundreds, who owned any PMs at all. This also aligns well with the fact those virtually all think that 'money in the bank' is the way to financial security. So, no, I don't think we are even close to a bubble. I myself own metals much more as a proxy for oil, as I am an energy analyst. Most silver you have ever touched was mined with oil less than say, $10/barrel. How should it reasonably be priced when the thing you ABSOLUTELY HAVE TO HAVE to get it is approaching $100/barrel? I listen to all talk of financial reasons why a person should own metals, but I also realize that some here seem to have forgotten whatever high school science they may have ever learned. I see the financial reasons as sort of arbitrary, relative to physical reality that you have to have oil, in the form of a hydrocarbon that is a liquid at room temperature to mine silver, or any metal for that matter. There is simply no substitute on the horizon to allow us mine metals like oil. Coupled with the fact that ore grades are in decline all over the planet...I don't know, but I could see metals, and all derivatives of oil, which is almost everything, BTW, becoming more expensive. Just some thoughts...
Well, if you look at the last gold bubble in 1970s. Gold stocks peaked two years later after POG peaked. i.e., even at half price of POG, gold companies are extreamly profitable and these are dividend players as well at that time. Cool, enh?
One thing I show no more respect for Warren is that his firm owns too much financial and insurance companies which basically put him in the same boat of fraudulent govenment. What he says now is disingenuous. i.e., you shall trust no body except God Almighty.
Considering more paper has changed hands on the Comex than silver is mined in a year, there's no doubt some change of net positions of late, LOL. If the "weak longs" wish to get stopped out by the paper shorts, they're just surrendering their positions. The near three month old uptrend has yet to even get violated, so I won't be waiting too long to buy the dip. Not too many more days before expiry!