Silver: Rationed sales, falling prices

Got silver?

By Rory | Daily Coin

The blatant criminality that is the COMEX has reached a point of being in your face. Really, the only way to not see it is to know absolutely nothing about gold and silver. The worldwide demand for both precious metals is running at record levels and has for the past few years. The US Mint, which is one of the few measures for silver investment demand, has set new volume records for the past four years in a row! While the demand is on a steady uphill climb the acquisition cost has been going down. Even if you know nothing about economics or precious metals you know that when demand is high for a product and the supply is limited the acquisition cost usually goes up. Look at how the price for some of the latest igadgets responds when they are first released or concert tickets for a sold out show and the list goes on. One doesn’t have to be an economist to understand the basic concept of supply and demand.

So, I ask, how the acquisition cost of any product goes down when the demand is going up and the supply of the product is limited? The laws of nature, and economics, would say that something is very wrong.

The past four plus years we have seen the mining industry all but gutted. When mines close we are left with only the gold and silver that is “above ground” – the product that has already been pulled out of the ground. Mines are closing or slowing down. A lot of the silver that comes to market for investment and industrial purposes is actually a byproduct of copper, zinc or gold mining operations. With the global slowdown in construction, manufacturing and the economy in general the need for these products has diminished, thereby, manifesting into supply shortages. If mines that have traditionally sourced industrial metals, like copper or zinc, are beginning to slow down or close, where will we source silver in the future? As you can see it’s a like snake eating itself; but it still begs the question, how does the acquisition cost of any product go down when the product is in short supply? How?

As Gary Christenson explains it

“I’ve been very suspicious of gold and silver prices for the last six-seven years as not representing physical demand and not representing the real need for them in the economy but more representing the need for paper manipulation of those prices. We all know paper prices are pretty well set on COMEX and yet, somehow, prices are going down as demand, worldwide, is going up. So, I’m very suspicious of prices representing the real physical situation out there.”

You can say whatever you wish regarding the supply of silver coming to market, but the fact of the matter is this: if mines are closed or slowing down the supply those mines once generated is now gone or eroding. If you are able to still acquire silver from your local coin dealer or wherever you pick up some coins, you should be very grateful. This will change and when it does it will be like a thief in the night. We will awaken one morning and our favorite source will be dry with no prospect for replenishment. Remember July 8th, 2015? I believe we received word around lunch time that the U.S. Mint had sold out, again, of American Silver Eagles. It was initially reported to be a three-week delay in shipments and then it turned out to be approximately eight weeks with premiums sky-rocketing and supplies either extremely thin or completely wiped-out. The shortages began spreading to Canadian Maple Leaf and other coin products from around the world. We are, to this day, dealing with allocated sales (allocation is a fancy way of saying rationing sales – like Quantative Easing is a fancy way of saying printing money) of American Silver Eagles.

If we look at what happens to 90% silver coin when the U.S. Mint runs out (which is now a fairly common occurrence), 90% silver disappears from the market. Why? Because 90% silver coin is no longer minted and the people that have it, are reluctant to let it go. Why wouldn’t this exact same phenomenon occur with newer minted coins, bars and rounds once it is known that back filling their supplies may be a slow process or a “not happening” process? My local coin dealer has been telling me for months that I need to get whatever I plan on having as the supplies from his wholesalers has been spotty since July!

Vision Victory/YouTube

What role does the Federal Reserve play in setting acquisition cost for silver and gold? Well, the Federal Reserve OWNS all of the gold that once belonged to the people of the United States. One would think the Federal Reserve would play a pivotal role in the current market value of gold and probably silver as well. No they do not play a direct role, but it would be naive to believe the Fed doesn’t have an interest, and a voice, since they, supposedly, have the largest stock pile of gold known to mankind. If you had the largest stock pile of any item in the world don’t you think the current market value would be of great interest to you?

The Federal Reserve is meeting on Wednesday December 16, 2015 to determine or announce or speak about interest rates and wether they can raise interest rates or not. The past decade has boiled down to a ten minute discussion given in the afternoon by Janet Yellen, the current Fed Chairman. The Federal Reserve has not raised interest rates since 2006. So, the entire financial world awaits with bated breath! The Fed has been squawking about a 0.25% interest rate increase for almost two years.  That’s right one-quarter of one percent. The last time your credit card interest rate went up did you have a meeting and feel the need to discuss it at length? Did it go up by more than 0.25% points? My guess is it went up substantially more than a lousy one-quarter of one percent.

What impact will this have on gold and silver? No one knows, but what we do know is this. The criminals in charge of the COMEX will put the market value of silver and gold where it best suits there need and produces the most profit for the criminal bullion banks. You see, at the end of the day, they don’t care about you, your family or the economy. They are only concerned with what is best for the banking cabal. Everything the Federal Reserve says and does is for the specific purpose of benefiting their member banks. The Federal Reserve is a private, offshore corporation and pays no taxes, so the policies they dream up and pass along to the American people are for the sole benefit of the member banks, not the people. Got physical?

Via Daily Coin

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