...and down she goes!

Noting you advise us to sell, while you are probably primed to buy.

 

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Now that we're not flying hump-back station
wagons into sub-orbit any longer we can focus
on star ships to get us out of here before the
sun goes nova.

 

And we'll have to leave long before that or we'll
just go extinct from over population or a nuke
war.

 

The Silver Institute posted this information
"Primary silver mine cash costs rose to $8.88 an ounce, reflecting higher prices for labor, electricity, and maintenance charges."

If this is the case the price of silver price has alot of room to drop before established mining operations cease production.

 

Forum rules say NO RELIGION. and considering that is mathematically impossible I want to know where u went to school; so that your physics teacher can be relieved of duty.

 

Red matter.

 

Back to silver, it seems to be holding around $22.50 today. No rise back to high prices. Maybe this is the new normal.

 

What goes in must come out.
When it comes out, it's recoverable.

 

Very well then, you're hired! You start today! :devil:

 

Well, in this case as well it depends on price. It's not going to be cheap to mine an asteroid. It's not going to be cheap to do nuclear cold fusion if we ever get that capability. $20/oz wouldn't justify the expenses in most cases, but generally I would agree that as technology progresses we will get more efficient at metal extraction.

 

The Silver Institute is good for documenting historical data, but for real time data I prefer more up to date sources.

http://seekingalpha.com/article/1303691-the-true-cost-to-mine-silver-complete-2012-figures

 

Just 10 years ago in 2003 mine production was 600 million with a silver price @ $5.00. For production cost to now be at the level you and seekingalpha suggest - you are trying to convince me that cost have increased 5 fold in ten years. Labor cost hasn't increased by this amount. Fuel hasn't increased by this amount. Machinery hasn't increased by this amount. None of the input costs of mining have increased 5 fold. Well except maybe for the stock options and warrants paid to the top executives as compensation.

Useing financial accounting data and statements to produce cost accounting conclusions and assumptions creates nothing but folly.

 

There are other things to consider besides inflation and energy with mining costs. How about declining ore grades of silver? Strikes in Africa? Miners being less profitable than usual? Many primary silver mines being offline the last few years, silver being mined primarily as a byproduct and not necessarily impacting a mine's bottom line because it isn't the purpose for the mine being in operation, and thus mining costs not being fully factored into cost of production? It's not so cut and dry. I will defer to the sources that provide examples with verifiable information vs. hearsay on the Internet. If you have a source please share.

 

The problem with silver is that it has been largely demonitized in the modern era, and the global recession has dampened demand for silver in industry. The wild card here is if there is a major currency crisis among the developed nations, which could encourage a reconsideration of silver as a monetary metal. I also think commodities will be more costly in the next few years, since global demand will outstrip supply. I think silver is a good hedge, and gold is arguably better outside the U.S. What I learned, though, is that it's better to buy silver on dips rather than continuously, as some permabulls assert, 'cuz there AIN'T no damn shortage.

 

So...if you take away the '80s bubble and this recent shot up in silver...that began during the housing bubble and REALLY took off during the liquidity bubble, silver is at an all time high in current dollars and has quite a ways more to fall to return to supply/demand equilibrium.

However, before that happens, the price will meet stiff resistance around the $18/Oz mark due to the cost basis of those holding the physical metal. Folks simply have too much equity tied up in the metal. That needs time to unwind...then prices will drift lower.

You can see the "Cost Basis" bump of 1982 in the chart below. The price collapsed to its historical supply/demand level ($5/Oz), then bounced back to $15/Oz...after the speculators were driven out of the market. The price stayed between $10/Oz and $15/Oz for a year before it began drifting lower again.

You can also see that the time period of the current run-up is greater than the 1980's. That, along with broader ownership (e.g. ETFs) makes me believe silver will fluctuate between $15/Oz and $20/Oz for a greater period of time (maybe 2-3 years) before heading lower.

Of course, all this depends on continued strengthening of stock and bond market fundamentals...which means getting our debt and spending under control. If we fail to "Stay the Course", PMs could take off again.

Note: Contrary to what you might read, rising PM (commodity) prices are NOT bullish economic indicators. :kewl:

 

Every year mining supply fails to meet demand. Government stockpiles are at zero. Above ground available silver inventory is at multi-century lows. Yet supply/demand equilibrium requires a lower price? By that logic we will reach equilibrium by removing all silver from the market. I suppose that's one way to do it.

Priced in 1998 dollars the all time inflation adjusted high for silver is over $800/oz. Priced in today's dollars we could easily double that. We are nowhere near inflation adjusted all time highs.

 

"price of silver in 1999 dollars" lol

 

Demand is dropping while supply is rising. What's interesting is how silver stayed at $5/Oz silver from 1985-2005 as demand rose. Fundamentals suggest the price should be even lower...once the Cost Basis is unwound.

I don't see how the relative price of silver 300 years ago...when folks were pulling it out of the mountains in ox carts, is relevant to today's discussion. I was looking at the price of silver over the recent past...a range that takes current economic and technological conditions into account.

However, you're chart makes one very good point...for the past 600 years...from 1500 to date, has the value of silver (adjusted for inflation) been trending up or down?

 

I hearld the mint has run out of silver 3 times so far this yeat not sure how true this is i hearld it on a commericial wile listing to coast to coast am at work

 

C2C AM, the only source of truth.