Not so fast sport.
India, China, and the US are on pace to break their silver import records.
Bullion demand is at or near record pace.
Solar demand for silver is at record pace and will be for a long time.
Silver production is down.
Comex registered silver is falling every week.
So, demand is likely to grow worldwide. We do not have "the oppposite" of a silver shortage.
It is more accurate to say, there is huge demand and there are signs of tightness. Time will tell how this will be reflected in the price. Your statements are not objective.
You make a good point. All of the stimulus and ultra low interest rates got us to a labor nonparticipation rate of 37.6%. What is going to happen in the next 5 years? Real unemployment has been going higher for 16 years! That is a scary (skaire?) statistic.
I guess we should be looking at the labor nonparticipating rate of 37.6% not the 5.1% number that looks so good. You should see the number of taxpayers that actually pay. Something is amiss.
The numbers do not add up. Where is all of the silver coming from? There cannot be an endless unknown mystery pool of silver. At some point, the endless unknown mystery pool of silver will go dry. With time, we will know the details.
The disconnect is, there is more demand than when silver reached $49, but is somehow hovering at $16. The chart for silver looks good for higher prices.
The US is on pace to import 6-7000 mt of silver this year.
India is on pace to import shatter their silver import record.
China is projected to set silver import records for the next 5 years.
All while global supply and production are dropping.
So, there is a disconnect from the demand to price relationship which will need to be adjusted very soon.
Things may not be as good as they seem.
In September, another 579,000 potential workers gave up looking for jobs altogether and simply left the labor force. This figure dwarfs the 142,000 people that actually found jobs. The average workweek ticked down from 34.6 hours to 34.5. In short, in September, fewer Americans worked, and those who did had fewer hours and lower pay. This is not supposed to be what a recovery looks like.
The fact that the headline unemployment rate has remained at a very low 5.1% is immaterial. The projected Q3 growth rate of 2.4% may need to be revised down as the world GDP has slowed. How can such a low unemployment yield such a poor GDP result?
While you may be able to paint any picture you like about the health of the economy, a labor participation this low tells a different story and is purposefully under reported.
Derivatives and paper silver? It's worked so far.
I think the next 5-10 years will be very interesting for precious metals. We are getting a glimpse of what lies ahead.
To be honest, $15 silver is a gift, take advantage of it, because it will not stay there for long. With higher demand in all areas and decreased production, we should be in for a good ride.
Barclays Foresees Strong Chinese Imports Of Precious Metals Over Next Several Years
By Allen Sykora
Wednesday September 02, 2015 10:41
Growth in China’s imports of precious metals is likely to be stronger than for most commodities over the next half decade, said Barclays in a report published Wednesday. With the world’s largest population and as the country develops its infrastructure, China is one of the world’s largest consumers of commodities.
The country’s shift toward “green energy” and a consumption-oriented economy should boost demand for certain commodities. Coffee may be the one that benefits most, with Barclays projecting that coffee import growth to 2020 may increase at more than three times the rate of growth over the past five years.
“Natural gas, corn, silver, gold and palladium are also likely to see rapidly rising import growth,” the bank said.
The bank said it looks for China’s gold demand to rise by around 7.5% annually from 2014 to 2020, lifted by rising real incomes and associated jewelry consumption, along with investment demand and continued accumulation of gold as a reserve by the People’s Bank of China.
“At this forecast rate, China would produce more than 570 tonnes of gold by 2020; however, this would still leave import demand rising from 511 tonnes in 2014 to 912 tonnes in 2020, an increase of almost 80%,” Barclays said. “The main constraining factor we see in China’s gold production is its domestic reserves.”
Meanwhile, Barclays projected a steady increase in silver import demand averaging 7.3% annually over the next few years, similar to the average growth rate of 7.8% from between 2008-14.
If we buy a silver derivative ounce, it will be sort of like buying digital bitcoins.
Maybe we can invent it?
The silver derivative stockpile!
I should have added, good thing there is enough paper silver and derivatives to support all of that physical demand.
Otherwise, there would be a really big supply crunch.
The data I see is silver imports to India in MT by year:
Total silver available ( production + recycled): 27,000 mt
You almost have to ask, does India know something no one else knows, or are they ahead of the demand curve?
Solar demand will be kicking in as well.
Maybe a few people will be buying bullion as well.
I think one can observe that the debt is growing by $0.6 trillion per year when the economy is strong and by $1-2 trillion when it is weak.
We are and will remain in denial.
No need to plan for a rainy day.
No plan B
No bad weather will come again.
Maybe, just maybe we should own silver and gold. Just in case.
Due to environmental regulations to restrict carbon emissions and nuclear wastes the IEA has set a roadmap for solar power to become the leading source of electricity.
Solar energy is projected to become the top source of electricity by 2050, aided by plummeting costs of the equipment to generate it, a report from the International Energy Agency (IEA), the West’s energy watchdog, said on Monday.
IEA Reports said solar photovoltaic (PV) systems could generate up to 16% of the world’s electricity by 2050, while solar thermal electricity (STE) - from “concentrating” solar power plants - could provide a further 11%.
“The rapid cost decrease of photovoltaic modules and systems in the last few years has opened new perspectives for using solar energy as a major source of electricity in the coming years and decades,” said IEA Executive Director Maria van der Hoeven.
Solar photovoltaic (PV) panels constitute the fastest-growing renewable energy technology in the world since 2000, although solar is still less than 1% of energy capacity worldwide.
China is expected to lead PV expansion along with the the United States, while the U.S., Africa, India, and Middle East are expected to lead in the expansion of solar thermal energy.
At this point, a 1/4 point rate hike would be immaterial or even net positive for silver.
Stocks on the other hand, I'm not so sure.
I think silver goes higher
Shorting gold and silver here seems foolhardy.
While, I did not red thumb you, I would disagree with you.
Silver production has dropped and demand is at all time highs.
Silver inventories are dropping rapidly.
The IEA projects solar power to become the No. 1 source of electricity in the future ( you can google that to verify).
Ore grades have been dropping for 10 years.
India is projected to import 10,000 + MT of silver this year.
Maybe, it is appropriate to say be careful holding short paper silver this weekend.
Those holding physical have a better LT approach to the fundamentals.
Another substantial drop in inventory.
I have read that this is the number that is highly monitored and that 40 M oz. represents a tight silver market.
I have also read that US silver exports to India had been 1 mt per year, then jumped to 114 mt for the last 2 reporting months. The data is 3 months old, however. It is the only data available, but just another source of high demand.
It just took a huge hit today. about 2 million ounces.
Same for non-existent gold. Now, down to 163k.
The plot thickens for tightness.
2.8 million ounces goes in 1 GW of solar power and 54 GW of new solar power this year. This is projected to go to over 100 GW of new PV's by 2020 as China, India, Japan, Brazil, and the US have committed to increase their solar programs. There was 42 GW of new solar production in 2014.
This is 151 million ounces going to solar demand in 2015 and just under 300 million by 2020. India alone will take 350 million ounces of silver this year.
Good thing there is no shortage to meet that demand while supply is dropping. :)
To be honest, this sounds like a major supply crunch around the bend.