Silver Shortages?

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According to reports, the demand for silver from retail investors is driving the refiners to produce 24/7. The price has been slammed down by those behind the scenes in the derivatives markets, but according to the CEO of Sunshine Mint – Tom Power, he’s running at full capacity, and has already turned out 75 million ounces in 2015 so far, three times the level demanded in the last shortage year of 2008.

This has been exacerbated by “a major mechanical production issue” at the Royal Canadian Mint, who contracted with Sunshine, to produce the RCM 10oz silver bars.

Also according to reports, the Fund Manager Dave Kranzler, of Investment Research Dynamics Inc., has speculated that the U.S. Mint, is diverting output to both China and India, to satisfy massive demand there too.

BUT, also the Sunshine Mint, has already sold forward its entire productive capacity for the rest of 2015, and is now not accepting further orders.

Does this mean the price rise is imminent, that I have speculated about in several posts?

Perhaps it has already started, as the price has rebounded slightly, reaching $16.00 several times in recent weeks, and bullion dealers are already charging premiums as high as 30% over spot on bulk orders for less than 1,000 ounces, and even $4.75 per ounce for orders over 5,000 ounces…

Of course this might be coin dealers taking advantage of a short-term rise in demand, having bought silver slightly higher up in price, to get coins out to retail buyers without selling at either a loss, or a lower profit margin than they want, (or need?).

However, the Managing Director of the IMF, Madame Lagarde, has intimated that before 2017, we are likely to have another recession. She has avoided blaming China, which suffered its own slowdown in recent months, for the expected downturn, and the financial commentators have also supported this, partly because India is growing at a robust clip,which according to the Times of India, is forecast to grow at 8% p.a.

To be honest, I have long felt that the rise in precious metals of which I have often spoken, is unlikely to occur before the demographic timebomb that reaches its crescendo in the period 2017-2023, has begun falling. Then all that money that has been pushed into the system, will begin leaking into the economy in circa 2018-19.

However, it could also be the start of the third stage of this precious metals Bull-market, that I have been waiting patiently for ever since I began watching this financial crisis back in 2001. That happened to coincide with my being made redundant, for the third time within 28months, as the Software Company I worked for was wound down, post the Tech fallout in the March of 2000, and the parent Company went from having $4billion in cash reserves, to having the equivalent in debt as the companies they’d bought in the height of the tech-boom failed to realise the income that some thought they would and valuations collapsed.

It was then that Alan Greenspan, began juicing the economy, lowering interest rates to 1%. It was Greenspan’s reference to “irrational exuberance” in 1996, that meant the good chairman raised interest rates to their peak of 6.5% in May 2000, before the economy stalled, and starting January 2001, over the next two years interest rates were lowered in 12 baby steps to June 2003. This provoked the housing boom, as baby-boomers saving for their retirements bought buy-to-let property pushing up an already over-heating market due to the shadow boomers – the children of the baby-boomers – who began moving into starter homes, and trading up in their droves.

Of course the Banks, played along on this wild ride providing “Liar Loans” on the back of dubious proof of income – what did they care if people wanted to borrow 6,8,10 times their income, pushing up property prices still further, into the realms of fantasy. By 2006, prices at the high end were reaching the stratosphere.

And then, when the banks, having loaned out this toxic debt, packaged it up into parcels, bribed the ratings agencies to give it a “Triple A” rating, and then sold it on to unsuspecting pensions companies as Collaterised Debt Obligations – CDOs, but knowing it was bound to fail, then shorted the market to make a killing on Mortgage Backed Securites (MBSs) as they did so.

Hank Paulson, who went on to become Treasury Secretary, after he’d made his millions with his Bank Bonuses after serving as Chairman and CEO of Goldman Sachs until 2006, then begged the President and Federal Reserve Chairman, to bail his sorry ass out, and rescue the banks, post Bear Sterns, and after the weekend when it was decided to let Lehman Brothers fail and the Credit Crunch got under way.

In all, eight major U.S. financial institutions failed – Bear Stearns, IndyMac, Fannie Mae, Freddie Mac, Lehman Brothers, AIG, Washington Mutual, and Wachovia — six of them in September alone, yet not one of the senior excutives of any major financial institution, has been charged with malfeasance of any sort. Of course this side of the pond, Northern Rock went under, and Lloyds-TSB, and RBS (Royal Bank of Scotland) along with other major financial institutions across the continent, were supported by government’s access to the nation’s credit card.

Were the actions of these banks’ loans officers not monitored by their supervisors? Were the supervisors not monitored by their managers? Were the managers not monitored by their executives? And finally, were the Banks not monitored by the regulators?

Whose heads then should roll?

After $4 trillion was pumped into the American Financial system, with the Troubled Asset Relief Programme (TARP) and then QE1, QE2, Operation Twist, and lastly QE3, which put $85 Billion a month in for nigh on 18months. But not forgetting the $15 Trillion, that was pushed through to Europe’s Banks and Financial Institutions via the Federal Reserve of New York, and RBS., or the heavy hand of the Federal Reserve, when the BLICS – Belgium, Luxembourg, Ireland, Cayman Islands and Switzerland, mysteriously bought Treasurys as the QE programme came to an ignominious end after the taper tantrums, raising their Bond holdings from $151Billion, to $818 Billion. (Source: Treasury (TIC) Federal Reserve)

And through currency swaps, these nations are helping the Federal Reserve export QE. Yet, as Madames Yellen and Lagarde admitted this week another recession looms on the horizon, and so does QE4 according to Bloomberg.

When that does happen, I wonder what that will do for Silver and Gold purchases? Or the value of crypto-currencies such as Bitcoin.

For those still not sure what crypto is all about, here’s a couple of videos.

– Bitcoin, the fundamentals

– Why Bitcoin worries the Bankers.


As many of those contributors to the above videos say, part of the reason for the rise of Bitcoin, is because of overly regulated markets, and governments increasing involvement in markets via central banks.

As government involvement has increased, so has the volatility, as decisions are poured over, by the markets as soon as announcements are made. And volatility threatens markets, because it frightens people away. They can’t make investments, when their lives are guided by making a living, and investing the excess (savings). People need relative stability.

One of the strengths of the free market is that each purchase and sale decision sends a signal to the markets. Is the deal price above or below other prices for similar products, thus sending a signal to other participants in the market. This leads to relative stability. Increases in prices, sends a signal to entrepreneurs to produce more of something, whilst a fall in price sends the reverse signal.

When governments and central bankers get involved, their heavy hand pushes markets this way and that, and those on the inside get the information before the rest of the market meaning they get to benefit. That’s why Bankers’ power has risen exponentially since the dawn of the Federal Reserve in 1913.

For those of you concerned about your privacy, there are tools that can limit the capability of the industrial recording of your on-line inter-actions.

Whilst we don’t advocate nefarious activity, we also believe in the Magna Carta principles enshrined in law in 1215AD, that required a “Writ” to be produced, making an accusation of wrongdoing, “Habeus-Corpus” and for a conviction to be made, there had to be undeniable proof laid before 12 of the wrongdoer’s peers, the basis of our jury system.

Without the government services trawling the internet and recording everything. You should be innocent until proven guilty, and mass surveillance serves no-one’s interests, least of all the wider public.

In a world where almost every activity can have political overtones, theoretically, any action could be used against you in the future.

You have been warned.

The following link, leads to a free download page, of a browser, that allows privacy. Yes there are restrictions, but it is a lot better then having nothing.

And for those who wish to go down the rabbit hole, and disappear from view, there’s a whole new operating system, that can be booted from a DVD or Flash-drive.

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After posting this, I came across this link, which shows the extent of the government largesse on behalf of the taxpayers of the U.S….