According to reliable sources, commodities exchanges are almost out of PHYSICAL silver. On June 3, 2016, 13% of the entire silver inventory at the New York Commodities Exchange was withdrawn. It was reported that -as of Friday June 3- less than $400,000 of actual silver remained for delivery at the NYCOMEX. This is an unprecedented NAKED-SHORT position in silver.
The concentrated short positions in silver held by a small number of “bullion banks” DWARF the Hunt brothers’ 1980 long position of only 100 million oz.
Everything has gotten bigger since the last major silver short squeeze (2011). Debt is bigger, leverage is bigger, and the number of major players taking delivery of physical silver is bigger. Unusual demand for PHYSICAL silver (JPMorgan) is straining supply channels.
Based on supplies of actual, available bullion and the last six months of demand, we expect to see a short squeeze (RUN) on silver [and gold] in 2016. Odds are: SILVER COINS will be the trade of the year.
Since August 2015, and especially since the beginning of 2016, large private banks, central banks, mega-investors, China, India, Russia and other sovereigns have been aggressively dumping dollars in exchange for precious metals. As “good delivery” bars have become available, buyers have been taking delivery of gold and silver by the metric tonne (gold 400 oz bars; silver 1,000 oz bars).
HOLD ON TO YOUR HAT!
A scramble for actual silver (and gold) is coming. When silver and gold began moving like this five years ago, demand overwhelmed supplies. Supplies of coins and bars quickly dried up around the world. As a consequence of shortages at the five major mints, silver climbed 160% in less than a year. Coin dealers could not get delivery of bars or coins for 8-12 weeks.
THE U.S. SILVER STOCKPILE IS GONE.
Before World War II, the United States owned about two billion ounces of silver for national defense. Now, that strategic stockpile of silver is gone. That means the U.S. Mint must acquire silver bullion on the open market.
1 oz American Silver Eagle
The U.S. Mint and the Canadian Mint will not increase output to meet demand. In the last few years, demand for American Silver Eagles has gone through the roof. But although demand for U.S. silver coins has been extraordinary, the U.S. Mint has curtailed allocations of 1 oz American Silver Eagles (to only 1,000,000 coins per week). The Canadian Mint also cut allocations to primary dealers of Silver Maple Leafs.
1 oz Canadian Silver Maple Leaf
Something has been fishy in the silver market since 2011. We have had supply disruptions because of high demand— yet, silver has been selling at the price it costs to get metal out of the ground. (Most miners break even at $18/oz.)
Compared to the gold market, the silver market is very small. It is estimated the value of the entire silver market is somewhere between $30 to $45 billion. Certain financial institutions have been able to manipulate the silver market by using a trading technique known as naked silver shorting.
The price of silver has been easier to suppress than the price of gold. That is why the ratio of gold to silver has gotten so far out of whack (78 to 1). Short-sellers have been able to keep a lid on the silver price since the last run on precious metals. Each time silver began to explode to the upside, the shorts went into high gear, increasing short positions until the price was either brought down, or the directional move was stopped.
The spot price quoted by the exchanges in London and N.Y. is about to disconnect from the price buyers will have to pay to acquire PHYSICAL silver. When that happens, dealers will no longer rely on PAPER pricing (derivatives such as futures contracts or ETFs). The physicals market will determine the price of actual silver.
For now, the NAKED PAPER SHORTS have provided you with the opportunity to buy actual silver at a bargain price. Buy silver now while we dealers still have coins: (Model Precious Metals Portfolios).
Buy real U.S. silver money. Pre-1965 dimes,
quarters and halves are 90% silver.
Physical silver coins (and bars) carry a premium over the benchmark “spot price.” A dealer’s cost includes the coin or bar premium. Premium is a function of supply and demand. Both the spot price and the premium on a particular bar or coin are constantly fluctuating. Premiums are bid up if supply is low and demand is high.
During the coming economic upheaval, gold and silver will perform as “monetary metals” and the world’s only real money: GLOBAL DEFLATION WILL LEAD TO CREDIT COLLAPSE/ CURRENCY FAILURES.