Silver Shortage???????

**Catbert** · 03-24-2008, 08:03 PM

I saw this on an investing message board. Do you agree we have a silver shortage? Here's the message board post:

Interesting Article on Physical Silver Shortage
Supply and demand figures on silver are about at clear as the Mississippi River. Jason Hommel is a respected author concerning silver. Open interest of the silver futures contract is 155,000. Many will be spreaders but lets say 120,000 contracts are not. This represents 600 million ounces of silver that the major shorts have sold. I have heard of spurratic shortages but not to the extent that this article highlights. Silver longs need to ask for delivery and store in somewhere else than Comex. Should they do this, an 80's style Hunt brothers silver price surge could happen. What is different today than then is government stockpiles of silver was in the billions. Now only about 150 million ounces is left.

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Silver Shortage: 19 dealers reported "Sold Out"
</STRONG>
By: Jason Hommel, Silver Stock Report

You know me, I don't send out two emails in one day, so this must be important. Since my email earlier tonight, where I reported that 5-6 major silver dealers (Amark, Tulving, 2 in Vancouver, my local dealer, NWT Mint) are "out of inventory", 13 more reports came in, saying that the dealers were out of silver inventory. Some of these names are big names in the business, Scotia bank, the Perth Mint in Australia, CNI Numismatics in LA, APMEX says they have some items, but are looking to buy.
If there are any coin dealers or bullion shops that have an inventory, in stock, of more than 100, 100 oz. bars, let me know, and I'll give you FREE Advertising within 24 hours in my next newsletter.
Robert Mish reports that he has 100 x 100 oz. bars still, but he had 250 bars last week.
Mish International
Menlo Park
650-324-9110
Now think: How can the silver price drop by nearly $2/oz., when all these reports come in saying that the dealers are sold out, or nearly out, of physical silver? This is the clearest evidence of paper short selling manipulation that I've ever seen since I started watching the silver market back in 1999, and I've seen a lot of evidence!
Unfortunately, the COT reports only report through Tuesday. This Wednesday's action will not be revealed in the COT's until next Friday.
The public switched and turned buyers after gold hit $1000/oz. The coin shops normally sell to the refineries, and this creates a large part of the ~250 million oz. of silver recycling each year that meets the deficit between ~650 million oz. mine supply, and ~1000 million oz. demanded by inventory.
But now, this flow of silver just reversed. And if the refineries are not getting silver from the coin shops, industry will get squeezed, hard, and so will the major short sellers on the COMEX.
This is crunch time. Panic time.

The unedited reports follow (Names removed for privacy.)

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Coin shop report from St. Louis, MO. I shop at Missouri Coin and have purchased bulk 10oz bars (20 at a time) on several occasions. I went shopping yesterday and they only had 9 10oz bars available and the owner commented that he cannot find more anywhere. He was out of 10oz bars when I left...
I ended up picking up a bag of quarters as well since they didn't have the bar stock I was looking for.
A crunch is on.
J in St. Louis
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From: Ainslie Bullion Coy [mailto:info@ainsliebullion.com.au]
Sent: Thursday, 20 March 2008 10:53 AM
To: 'Linda Wagner'
Subject: RE: price
Sorry, I can’t quote silver until the middle of next month.
The supplier won’t quote until then
Kind regards
Geoff

Ainslie Bullion Company
GPO Box 1870
Brisbane Qld 4001
Tel: +61 7 3221 0500
Fax: +61 7 3229 1895
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Jason,
My coin dealer is in Bakersfield CA. Mike's Coin and Stamp. My wife and I went in on monday and bought 4 100 oz. bars. Said he had a good supply of those. I also wanted some smaller bars and I wiped him out. Only 160 oz total. He says he can't keep them in stock very long before someone comes in and empties his supply. He's having a hard time getting replacements. He's the largest dealer in the area and very trustworthy. We also bought gold. At least some people seem to be taking serious what's going on.

H
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HI Jason:

CNI near the L.A. airport at www.golddealer.com is the dealer I have used....They were out of silver today also...

E
(CNI is a major dealer --Jason)
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Jason,
Just placed another order with Perth Mint, they are out of stock on everything, however there waiting period is no longer 6 months (Im guessing they received alot of complaints) its now 6-8 weeks.
Just got off the phone with them, they have no bullion in stock, its all on backorder, the official excuse is that it takes along time to make the bars and everyone wants them, could be viiewed as a good thing knowing demand is high, but I personaly dont like waiting 6-8 weeks for delivery.
I contacted several other dealers in Sydney, only 1 out of 5 has stock...... Everyone has back orders with PM which is the distributor.
Regards,
S
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APMEX reports, at apmex.com
Due to the OVERWHELMING demand for precious metals, our online ordering system has been unable to keep up with our customers’ needs. We have had to disable the APMEX ordering system to allow us ample time to upgrade our site to accommodate the increased demand. We apologize for this temporary problem.
. . .
P.S. We are actively looking for new bullion inventory to purchase. If you have items that total $2,500 or more and are interested in selling, please call our trading offices at the number listed above. We are paying strong numbers for ALL Precious Metals!
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I want to tell you that your site is very helpfull and,i believe what you are doing,nice job in telling people about GOD money.I am a very smol investor, and i have in my posesion until now around 2000 ounces of silver bars,10 ounces and 50 ounces bars.Tuesday the 18. at scotia bank they did not have enouf silver.I wanted to buy but the vault was empty,they had only coins.And today is 19...19..This evil people work with numbers.They have dates for everything.19 is an important number for the ocult.All the best.GOD bless you and your family.
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Hello,
This past Monday I wired funds to purchase eleven 1,000 oz bullion bars from my dealer who I have purchased & sold sizable silver orders several times before. He called Monday afternoon and stated that none of his suppliers had any 1,000 ounce bars available, but not to worry, the next day they would probably have eleven bars to fill my order.

Tuesday, he called again, stating still none had bullion except one person had some, but he would only sell them at a ten cent premium over the dealer stated price or $1,100 more. I am a long term holder so I bought them just to have the silver in my depository possession.

By the way, my dealer is a high quality company and individual and he also stated he was flat covered over all day with transactions with people like myself buying silver. I also wonder with this condition, why the silver went down, and can't help to think about Ted Butlers assertion.

Cheers
FH
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Ordered 100 oz. from them early Jan. due to deliver this Friday. Way too long. My dealer in Arlington Texas is almost out of silver. Probably only has about 1000 oz. left. I will be taking some of that off his hands tomorrow.
Love your reports!
Have a great day
B
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mEDFORD ORE WAS OUT HAD A LINE WANTING TO PURCHASE
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Mr. Hommel,

I live in a small town of 16,000 In S. Illinois. I stopped by my local coin shop to pick up some Silver Eagles, and the cases were empty, except for numismatic value coins. He stated he had sold over 600+ Eagles in the last week and was waiting to receive more. I thought that to be a good indicator for the future direction of Silver. I also want to tip my hat to James Rawles for pointing me in your direction. Your e-mails are part of my recommended reading to my friends.

Thank you, RG

"Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety." Benjamin Franklin
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Jason,
I called the most consistent coin dealer in Memphis Monday. I like junk silver.
I could not buy a bag at any price. I was offered 5 100 once bars, period.
He stated that he hates ordering bags as the cost leaves him with indigestion.
Usually he is buying junk on a regular basis. At this time there seems to be
NO SELLERS.
Your old homie now in the Ozarks,
goatman
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Locally the dealers I've done business with are always in chronic tight supply and several of them recently couldn't fill a tiny $1,000 deal, let alone what I wanted to buy. I have bought hundreds of times but never more than 7461 ounces at a time. Got it from Bill Haynes in Phoenix. I was buying 90% when it was at 3.24x face and know it's still badly undervalued. I almost felt bad when a lady came in with bags of Franklins and she heard me tell the dealer I wanted them, her heart sunk, but it wasn't me that made her sell the gem BU coins. That's how quick the turnaround is. When investors go on waiting lists for hard metal, I believe it will cause the mining shares to finally zoom. We have several stupid billionaires in Dallas-Fort Worth and I wish they'd try to take a big position---it would benefit me!
--CS
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Again, to get silver, make sure you go local, take cash, and get the actual bars, if they have any! At this point, it matters little which product, just get any silver that they have that is somewhat close to the spot price, rounds, bars, odd weight bars, anything.
http://find-your-local-coin-shop.com/
It was for the inevitable time like this that I diligently complied the names of people in the industry who have 100,000 oz. of silver. I have 5 names on my list, but one of those 5, CNI, is now reported to be out. I don't know about the other 4; I've heard no reports about them. See the list of large dealers at http://find-your-local-coin-shop.com/

Sincerely, Jason Hommel

modernman · 03-24-2008, 11:28 PM

I've also read a few articles that were written recently about the silver "shortage."

I went to the local coin shop this past Saturday and bought a 100 oz. silver bar. While I was there they sold another 5 100 oz. bars. That was all that the store had left. The shop was completely out of buillion ASE's. I didn't ask about junk silver coins. The shop has been selling lots of silver, but not that much gold lately. The shop won't be getting in silver bars and buillion ASE's for a week or more.

ASE's are hard to find right now. I was planning on buying 100 if I could get them under $20. A few weeks ago I hesitated thinking that ASE's would be plentiful. I'm not sure what's causing the shortage so I've been reading up trying to decide if I should buy more now or wait.

I'm trying to understand why there's suddenly a "shortage" of silver.

Magman · 03-25-2008, 12:00 AM

When I was in the coin shop about 2 weeks ago, some dude bought like... 5,000$ worth in ASE's...

General_Godlike · 03-25-2008, 12:04 AM

I would love a 100 oz bar.

spock1k · 03-25-2008, 12:35 AM

Quote:

Originally Posted by General_Godlike

I would love a 100 oz bar.

you dont want to buy silver in ozs you want to buy it in pounds or kilos for it to mean something

General_Godlike · 03-25-2008, 12:37 AM

umm why? i thought silver is silver

modernman · 03-25-2008, 12:55 AM

Quote:

Originally Posted by General_Godlike

umm why? i thought silver is silver

yeah, but 100 lbs or 100 kgs of silver is much better than 100 ozs of the shiney metal stuff.

cesariojpn · 03-25-2008, 05:06 AM

Quote:

Originally Posted by General_Godlike

I would love a 100 oz bar.

I'd want a 5 or even a 10 oz bar.....all I have are the singles and a couple oddball 15 gram JM bars.

Aslanmia · 03-25-2008, 12:12 AM

It's obvious... people are hoarding it.

It'll be interesting to see if this shortage actually has any real impact and how the US government reacts to it.

I seem to remember reading somewhere that China has cornered the market on silver and most of it came from the US govenment? Might have been complete fiction, or another North American Union conspiracy theory, I forget. lol

DoubleDie · 03-25-2008, 12:31 AM

The demand is higher then the mining production. I think the demand just out-stripped the supply. Don't think many silver dealers expected the market surge and where not prepared for it. No need to panic.

gxseries · 03-25-2008, 08:01 AM

There aren't many mines that are purely silver mines, in fact I can't think of one right now but it's often a byproduct of gold and copper mines or at times nickel if I am not mistaken. There are in fact several major mines underway due in 2010-2012 so if prices are to keep after that period of time, something is just wrong. Obviously high metal prices would make the lives of miners a lot happier so you might as well keep the prices higher up.

AgCollector · 03-25-2008, 08:10 AM

I think the other issue is that the price went from around $21 to $17 in a week so many people see that as a buying opportunity, and have bought up much of what was available.

C Jay · 03-25-2008, 09:29 AM

What I really don't understand is that SAE's were in fine supply when people were buying and selling at 20, 21 and 22. Now that SAE's are in short supply they are down to 19 with a slugish move up, if at all. You would think that market demand would move the price at least in the short term. Can we get gasoline to work this way?

cecilstarcher · 07-21-2009, 04:08 PM

As a holder of many ounces of silver both privately struck and mint issued, I find that there is a shortage of "cheap" silver. I'm not selling and neither are most collectors/investors I know. Thousands of ounces were bought in the Spring of 2008 in the $16 - $20 range and those ounces are not going to be resold at the current level. The only silver I see being offered for sale are family holdings of what is commonly called "junk silver". The economy is forcing a lot folks to part with their old silver coins.

The shortage will disappear overnight when silver once again passes the $20 benchmark. For me, $25 will get me motivated to part with commonest of my goodies, Silvertown and the like.

As for ASE's, they have become a mainstream collectible, shedding the orginial purpose of putting a precious metal in the citizen's hands. Watch eBay and visit coin shows, they are going for $19+ and the 1996 in the $60 range. Only collector value can sustain these prices. They are no longer mere bullion.

traderjoe · 03-25-2008, 07:42 PM

I have heard that we have shortage of silver through a few articles and dealers talking about it.
People are buying up as much as possible. I was just at my local coin dealer and I saw a guy buy $20K worth of SAE. Crazy...
I wish I could do that.

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