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main1event
12th September 2008, 07:30
Imagine silver is scarce from a fall of 21 to 10. Its no secret to people who love silver. So lets get this right, as prices fell people started buying it in such quantities that there is now and unprecedented wait for Silver. This never even happened in the 70's when Silver exploded.

Let me ask everyone this question. What happens if Silver prices snap back, lets say they get back to 15, which is a 50% snap back from current prices. If you cant buy silver at this price, what happens when prices start to climb?

The Dow jones fell 30% in 1987, Oil fell from 20 to 11 in the late 90's. We all know what happened after the bull shook its riders back then.

Now, I'm full aware that Silver could just completely collapse and not come back for decades. However, fundamentally I dont see that happening. Production has not kept up with demand. There is less silver today than there was back in the 70's and that trend should continue.

My belief is that deleveraging has caused the baby to be thrown out with the bath water as banks, hedge funds and individuals have sought cash. Which has caused the dollar to rise. However, they have thrown out paper silver and not physical. If they threw out physical there would be some to buy, and thats simply not the case.

Once this capitulated paper selloff ends, fundamentals will again rule. My point is that if this selloff snaps back in the next year, the shortage that exists today will manifest itself into a full blown silver crisis. 2 month waits will become 6 month wait times.

Just something to ponder.

VirtualT
12th September 2008, 07:52
you might find though that as the price rises, a lot more silver "mysteriously" starts to appear back on the market

main1event
12th September 2008, 08:12
you might find though that as the price rises, a lot more silver "mysteriously" starts to appear back on the market

While you might be right, investor demand is still less than 60 million ounces. Thats only 10% of the entire market. The majority of that silver is disappearing forever, lost to industrial use.

Thoriz
12th September 2008, 09:44
While you might be right, investor demand is still less than 60 million ounces.

How can anybody gauge demand when people can't find their preferred forms of silver?

main1event
12th September 2008, 09:59
How can anybody gauge demand when people can't find their preferred forms of silver?

There is only very limited amount of silver to retail investors. We know annual production, we know annual demand from industrial uses. So we know whats left over for retail investors.

However, what we dont know is what current retail demand as you stated because there is no supply for the extra demand. Although, we can gauge it by a current 2 month backlog. We are only talking about a few million ounces short, thats how tight this market is. At some point retail demand will cut into industrial demand and that is when we could see prices take off.

Kelly
12th September 2008, 10:08
Back when silver was at $20 early last spring, investor demand was nearer to 30% of the market, so this manipulated freefall has really taken it's toll. But at this point I don't trust most of the statistics because other sources report that investor demand has been on the increase, and people are just clamoring to find silver today. So what is the truth? Is there a shortage or no shortage? It'd be nice to see some statistics that a person could actually trust.

I don't see how silver could ever tank down to what it was during the 70s. Back in the 70s most of us didn't own computors; there was no electronic age to speak of.

Absolutely nothing high tech works without it. All that silvery stuff on every single printed circuit board contains silver and it is just too expensive to recycle it, so it gets tossed into the dumps.

mick silver
12th September 2008, 12:55
i think if price go back up to around 15 or more you well see a lot of people selling off , they are wanting to jump ship as i write this , on other forums you see this , they cry for lower prices when they get that , they are scare and lose faint in silver , just my thoughts

Argentum
12th September 2008, 13:50
I call them patsies! WE NEED $9 DOLLAR SILVER!

main1event
12th September 2008, 14:04
All I can say is that I'm glad to see so many bearish people on silver on a silver chat board. Its wonderful.

How do you find out demand? Try purchasing 1000 oz silver eagles. Try purchasing 10 - 100 oz JM bars. Thats all you need to know.

nuslvrkwen
12th September 2008, 14:23
Are people's purchasing choices/styles changing? Is sentiment changing around where you are? Like why you buy one thing over another. Investor and retail demand has grown alot! But not in the ways currently being tracked! It's what I call the "latte budget way to invest!" Not only will people pay premiums to buy bullion and coins online. They pay with cash for handmade jewelry on the street. That kind of market has been very slow until this year. How people buy and pay for things is what I mean. Women buy jewelry instead of bullion. They like to wear it, and each piece's total weight works out to be an affordable way to wear precious metal. I like going to the coin dealer. But other women wouldn't think of them when when they are spending money they would spend to 'go shopping'.

Kelly mentioned she'd purchased some silver beads some time ago, and they've really appreciated in value. To the point where they wouldn't be sold just to melt. Women can figure out value over spot price! When I was a working jeweler; my metal was silver. I liked the properties it has when you reticulate it; or marry it to gold. Great textural properties. I still have quite a collection of sterling beads myself. I wouldn't sell them to melt. I'd rather put something together and sell the piece. That's why those beads and the wire I have are still 'inventory' in my mind, and they've always had value over spot price. Past few years though, the stuff I've been making for myself to wear has been with gold. I can buy it by the pennyweight (dwt). Even though it's gold it works out to be an affordable way to wear a quarter or a third ounce. And I've spent what would be spending money/shopping money/extra money. Not an amount I'd normally take to the coin dealer for investment.

There is 'extra cash' around, due to people shorting stocks, closing 401Ks, and taking cash looking for someplace safe to put it. I've been watching trends as a result of all the crisis we've been experiencing all year. Seeing how the people on the street react. I think all the use of cash has given the talking heads the idea the dollar is stronger, when the average person is just holding on to more dollars! Like credit; people cut back on credit spending and now banks are whining they can't count on the consumer to bring a recovery to the economy! HOW can the consumer fix $9 Trillion dollars in derivitives put out by the banks? It's not the consumer's fault.

This spot price sell off is just paper trades selling off! People are really disillusioned with the market! Retail is soft. Retail like in the mall stores. There's street vendors selling sterling jewelry and white metal pieces near where I work. People will buy on the street now, when they used to buy at the mall! There are vendors taking credit cards; but the majority of people I see buying jewelry and hats on the street from vendors who make them; are paying with cash! Street sales, eBay, and craigslist really are the open market.

Main1event's statement about future wait times for delivery of bullion and coins is why locating more and more vendors for investment who aren't aligned with the banks would help shorten wait times. Suppliers who don't do business LIKE KITCO or COMEX. They would have forms and sizes people are looking for. Right now, those suppliers either don't exist, or have been swallowed up by KITCO or COMEX. We already know people can get wire, shot, and sheet with out a wait. But then, wire has it's processing charges and shipping. So people wouldn't be able to get it for the going spot price either.

Tribal Warrior
12th September 2008, 21:27
I know people who are getting silver easily, weekly. But they are paying $14+oz. If you want Silver you are going to have to pay the price. The price ain't no 10.75oz. LOL!!! Look at Ebay and other auction sites,,,a lot of large dealers are +3-4$ over spot. Some of your best buys, can be found at some of your small "Mom & Pop" coin shops.

On the waiting periods, some have increased to 4-6 months from 2-3.