The Phaserl


Why Is the Future Silver Supply More at Risk than Gold?

[Ed. Note: This report first appeared on SGTreport this morning by way of TF Metals, here. But it’s a MUST READ for silver bugs, so in case you missed it, here’s your second chance.]

by Steve St. Angelo, Financial Sense:

The focus of the markets and the alternative media is firmly placed on the continued disintegration of the world financial system.  Many believe that the collapse of the fiat monetary system along with the global banking cartel is the worst possible outcome.  However, this may actually turn out to be the good news in a sea of bad news that is lurking around the corner.

As the world’s attention is currently directed at its massive paper-debt dilemma, a physical problem looms larger each passing day.  This is what I call, the brontosaurus in the living room.  The information provided in this article may help connect the dots to the reader who has been grossly misinformed by the highly specialized analysts in the various industries and media.

In the future as tens of trillions of dollars of debt masqueraded as wealth implodes, there will be a stampede into the best safe havens available — the precious metals.  Many believe gold will play the major roll in this upcoming transfer of wealth.  While this may be true, silver could actually turn out to be the better choice when we consider the factors presented in this article.

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19 comments to Why Is the Future Silver Supply More at Risk than Gold?

  • Frank Zak

    This fellow makes the mistake they all do.


    When the grossly omitted information is
    presented, it changes the entire picture.

    Silver is overproduced and will be for years.

    It will only run out when copper mines run out.

    • Jack

      Hi Frank,

      Thank you for your comment. Do you mind providing a link/reference of where you found silver is overproduced? I would like to learn more myself. thanks~

    • SGT

      “Silver is overproduced and will be for years.”

      GATA disagrees with you, as does Adrian Douglas. Silver production worldwide is now less than 700 million ounces per year. Most of that gets used up in industrial application, the remainder is barley enough to meet bullion investment demand (30-40 million ounces in US Silver Eagles alone). If you are referring to JP Morgan’s over-production of paper silver, then we are in agreement. However, if you are referring to PHYSICAL silver and you’re privy to contrary concrete information proving that “Silver is overproduced and will be for years”, please share.

      • Frank Zak

        There is a well known site silver people use
        and I have lost the link. It takes all forms
        of silver produced and recycled, coins, etc.
        Silver analysts do not refer to this site often
        as it goes against their logic. Someone here
        will know it.

        At the bottom line it shows how much was
        purchased for investment.

        This is the overproduction. It showed 185 million
        oz of silver the last time I saw it.

        This is a high number compared to the past.
        This adds to about a billion oz now held by
        investors in all forms.

        In other words, silver hoards are increasing.
        The public owns a great deal of silver in these
        ETF’s and coins, etc. Not counting the fake
        Comex and commodities markets which have no
        silver. Worthless paper.

        In real terms, the public owns more silver then
        it ever has.

        At the same time, corporations own a lot of fake silver
        in paper. The fake market controls the real market.

        So real overproduction actually exists. This is not good
        for demand as it has to be bought by investors.

        Fake silver markets control everything, which actually
        lowers the price artificially.

        These fake markets may last beyond our lifetimes.
        That’s the problem.

        Silver is not money. Only gold is money.

        It costs $10 to mine silver.

        Only palladium is underproduced.

        Is silver worth $100, or is silver worth $10 ?

        Having spent a great deal of time researching this,
        I believe silver is worth $15. I believe gold
        is worth $5,000. I believe palladium is worth
        $1600 an oz (but would only buy it below $300.)
        Platinum is fairly priced. They last two metals could
        be bought after a stock crash.

        This with all the fake paper markets gone, which will happen
        someday. With no fake markets, these are the strange numbers
        I generate.

        My degree is in accounting and I produced the
        financial statements for 2 of the largest
        corporations in the world. I used to sell my scientific
        commodities trading systems in full page adds in Futures Magazine
        and Stocks and Commodities.

        • bubba

          silver is money, the real estate market (that your are in) is fucked nation wide and you better move your ass out of so cal…mentioned in your previous posts.

          Frank(ly)…your posts are always interesting…you need to decide whether you want to live in the past…or the future.

          • Frank Zak

            Hi bubba,
            As Sean knows, I was a major blogger telling
            people to get out of real estate in late 2005 and
            early 2006. I actually sold the house I lived in.
            I was contacting editors to get them to print.

            I have been a real etate broker for 30 years.

            Since Jan of this year, I have been posting the real
            estate market has bottomed. Long before anyone else.

            House listings are down 50 to 60%. There is a buying
            panic now and I expect it to last for the next 5 years.

            I also called the real estate crash in Calif in 1989.

            • bubba

              thanks for your reply Frank…the market in my area is supposedly booming also with homes at the very the bottom of the market. No high end stuff unless it sells for 75% less than appraised value of the boom years…

              I’m not questioning your credibility…just why you are still there?

              Money? You think that nothing is changing there? I have 2 cal friends…one is moving, the other remodeling their place at an exorbinant price and bs via the “rules/fees”…both were in the real estate development world…

              They both have places here in the “Redoubt”…

        • Jack

          Hi Frank,

          Thank you for your comment. Can you please try to find the link to the website you are talking about? I am not saying you are wrong but just want to verify the numbers myself. thanks~

  • mr620

    frank, how much investment dollars are in real precious metal presently, < 5%? When the USD start to devalue, fiat money will move to PM. The flaw in your accounting is that u are comparing current silver/gold demand with current production and future reserves. When the mass conscious shift more fiat money to PM to 25 to 50% level, i don't need a bean counter degree to know what would be the demand-supply picture.

    • Frank Zak

      I don’t see people moving to precious metals, as
      I see them moving to residential real estate.
      People like to buy low. The mathematics favor
      real estate now. You can get a title policy
      and it is recorded in your name.

      Stay out of bank and stock accounts and commodity accounts.
      These could ultimately get wiped out.

      I have American gold buffaloes with excess cash.
      These are 24 kt. Keep your excess cash in your safe at home,
      NOT IN A SAFE DEPOSIT BOX. Big scandals are being reported
      on safe deposit boxes being robbed by state gov’s.

  • mr620

    frank, your $10 silver supply cost come from copper/zinc/gold mine, real cost to mine silver from a silver mine is closer to 15-17/oz. Silver cost from a mix metal mine is a fictious number that accountant can jig around to suit whatever shareholder crowd they are doing the dog and pony show.

    • Frank Zak

      80% of silver mined comes as a byproduct.
      Typically from copper mines, etc. So too
      with platinum and palladium.

      I can only think of one major mine for platinum
      and palladium in the USA. Stillwater, SWC.

      Around 1980 silver was $50 and gold $800.

      Now silver is $27 and gold $1600.

      Which is better ? If you bought silver
      you lost half your money. If you bought gold
      you doubled your money.( Real estate was a much
      better investment.)

      Supply and demand catch up over a long
      time period.

      I am very familiar with the Hunt Brothers as
      I bought some of their ancient coin collection
      sold off after they went bankrupt.

      Right now residential real estate is low.

      You always want to buy hard assets when they are
      low. If you don’t, the odds are severely against you.

      You must buy when they are low and sit tight.
      If you can’t get them low, don’t buy them.

      You must have patience.

      In ancient times there were very little gold coins.
      Silver was the money. Now days this has reversed.
      Alexander the Great produced the most astonishing
      quantity of large silver coins one could ever imagine.
      They are in abundance even to this day for collectors.
      (Around 320 B.C.) (Coinage began around 550 B.C.)

      Silver should be money. There is no reason for it not
      to be. It was money up to recent times.

      There is a possibility if the economy survives palladium
      could go to $4,000 an oz real easy. It must be used
      for gasoline engines. (Platinum is used for deisel)
      The Russian stockpile is gone this year and it is underproduced
      500 thousand oz beginning this year.

      Under $300, palladium is the buy of a lifetime. Wait for
      a stock crash. Buy Canadian Maple Leafs.

  • Glitter1

    Read this and try to wrap your head around the meaning of it. Anyone $500oz and silver is much more valuable a metal than Palladium.This chart verifies a diminishing resource.Currenty 50% of all silver is consumed and gone forever.It is getting scarcer and scarcer.

  • Frank Zak

    How did Weimar Germany finally stop its hyperinflation ?

    Not with gold.

    But, with land (real estate) backing the currency.

    People think gold is the hard asset to stop all
    problems. It’s not.

    It’s ultimately land.

    • Mr Numbertaker

      Real Estate has not bottomed as interest rates are yet to return to historic averages.

      Once interest rates on mortgages rise, and they will, we will see further corrections to the downside, some very significant indeed – especially in areas of high unemployment / industrial decline.

      Interest rate rises, rising unemployment, and stagnant (or declining) earnings will produce a perfect storm. We will then see just how ‘affordable’ residential and commercial properties are at current prices.

      As for Silver, most of the evidence I have seen points to declining stockpiles. Even if the global economy flatlines for the next few years the amount of silver being consumed and destroyed in modern weapons is stagering. That use alone should see prices rise somewhat – if not ‘explode’ (pun intended).

      Gold and Silver are safe harbours from the brewing economic and geopolitical storm.

      • Glitter1

        You have it right!Silver resources are diminishing due to consumption, these facts are proven.Real Estate other than farmland is dead as an investment.The Babyboomers have driven the values up over the last 70 yrs,now the tide has turned. Houses will be for living in, not a primary vehicle for capital appreciation.

  • mr620

    land and real estate is good but not best at the moment. Problem is land and RE have 3rd party risk like taxes, insurance, maintenance for houses and weather risk for land. Since RE has title to it, it also mean RE can’t escape from the governments. Under NDAA, US government can annex your RE or land for security reason, be it strategic location for combating terrorism or confiscate any of your excess food production. Also, land and RE are not easily transportable.

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