...and down she goes!

Its far from just Japan doing it. from 2008...

http://www.ecogeek.org/component/content/article/2128

"These mines, according to a new survey by the National Institute for Materials Science in Tsukuba, have untapped resources that no one has figured out how to extract yet. With all the materials found in the discarded electronics, Japan now has three times as much gold, silver and indium, a thin coating used for LCDs, as the world needs each year. The amount of platinum hidden in them thar landfills is six times as much as global consumption.

 

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The Japanese replace cell phones at the fastest clip in the world. They're an electronics driven society, and have only recently (over the past few years) aggressively promoted electronics recycling as a public policy issue.

 

but read it....it is buried amongst trash, which people have to go through and find the electronics...next to a bag of dirty diapers..... and i quote from your article...

"no one has figured out how to extract yet."

sure if someone just handed me a truck of cellphones i could get through it all in a year and make a half million...minus chemical costs...etc. its not just gold bars hidden in the dumps

 

Here's a "link" for you.
It was taken from a Japanese television program about recycling electronics. The caption in the upper left translates as: A lifeline for Japanese industry Devoting a lifetime to securing rare metal sources

The caption in the upper right translates as: Turning trash into treasure

The caption at the bottom reads: Roughly 300,000 cell phones yield 10kg of gold.

Users can take their discarded cell phones and other electronic devices to electronics retailers and other outlets, who collect them and eventually send them to a recycling plant in Tsuruga City

 

The cell phones at the Japanese recycling plant are processed as follows:

A plastic bag containing 5000 cell phones is placed in a rotary furnace and heated until only the metal parts remain. These metal parts are then heated at 1100 degrees centigrade (2012 degrees F) in a special treatment process. The recycling process can yield not only gold, but also silver, platinum, palladium and cobalt.

 

That article is from 2008. A lot of things have happened since then. A metallurgist named Shigeo Nakamura, who has spent his life developing innovative ways of recovering metals from trash, recently developed the process for extracting metals from junked cell phones. And people in Japan usually don't just toss their old cell phones in the trash-- the cell phones can be taken to a retail outlet or even a community center for disposal (recycling), and there are even trucks that drive around neighborhoods that offer to collect junk computers and other electronic trash. There is even a site in a city near mine where people can dump their junk electronics into an empty lot, and the city will collect them and send them on to a recycling plant.

And the Japanese government officially started encouraging this collection/recycling movement earlier this year.

 

This is a recent post by renowned Japanese metallurgist Shigeo Nakamura. He says that although it is not economically feasible at this time to recover most rare metals and rare earths from "urban mining", it is economically feasible to recover precious metals like gold, silver, and palladium.

http://toyokeizai.net/articles/-/13775?page=4

 

And asteroid mining will one day be feasible. The problem is that there are significant costs to such projects, and if it were the case that the Japanese could just dredge up tons of gold and silver from landfills in a cost-effective manner, they'd probably be doing it already. It's one thing to talk about something and another to do it. No doubt some time in the future it will be done, but not likely within the next few years or even decade.

 

I don't see how you can possibly equate "asteroid mining", sending spaceships to asteroids millions of miles away and then trying to bring them back to Earth filled with usable minerals, with a viable technology that has recently been developed and for which the infrastructure is already in place.

I live in Japan. I have close ties with the Japanese mining industry. Once a week a truck comes around the neighborhood to collect junk computers and electronic devices, and the Japanese government has made it official policy to promote the recycling of junk electronics to recover their usable metals. And many companies in Japan are already in the business of recovering precious metals from electronic scrap, as noted, for example, in this English-language article written by a senior researcher at the Metal Economics Research Institute of Japan:

"At the same time, efforts are being made to improve recycling technologies to recover precious and rare metals from discarded home appliances, electronics, mobile telephones and automobiles.

Businesses are already established to recover gold, silver and platinum-group metals, and Japan is investing in recycling projects in Southeast Asia, China and elsewhere. It is highly likely the number of metals targeted for recovery will increase as recovery technology advances.

By viewing metals contained in discarded products as reserves, these products are beginning to be treated as "urban mines".

These are important resources for Japan and other countries, which are dependent on foreign supplies. For Japan, as a technically advanced country, major topics for the future will be how to economically extract useable metals such as rare earths, tantalum, cobalt, tungsten and gallium from urban mines, and whether or not they can be supplied to processing industries as raw materials."

http://www.kwrintl.com/library/2011/japansnewstrategy.html

 

You'll have to excuse me. I was under the impression that you were talking about digging up landfills and extracting the gold and silver from them, rather than people turning in their electronics and having their metals recycled. The latter is obviously much easier to do. I am aware that recycling programs are popular, having lived in both the U.S. and Europe. As for asteroid mining, I was not being sarcastic or writing tongue-in-cheek. Asteroid mining will be very serious business within a few decades, perhaps.

 

I mentioned in two different posts upthread that junk cell phones and other electronics in Japan can be turned in to retail outlets or other collectors...

 

It's not unique to Japan. There are people in the U.S. that also extract gold and silver from used electronic devices. Like I said, this practice is nothing new. Now, with greater adoption of recycling, it may have an impact on the amount of scrap metal collected each year.

 

Silver is down again and the dollar index is up:

http://www.marketwatch.com/investing/index/dxy

It's a simple equation. Personally, I am not impressed with the numbers typed into these threads regarding supply and demand from organizations like the Silver Institute. Of course, they are important over the long run (which can mean years or decades), but to a greater extent the recent commodities sell-off seems to be related to dollar strength. This means that if the dollar is to significantly weaken at some point in the future, silver will make a huge move up, the numbers pumped into these threads notwithstanding.

 

It actually does a number of things better than silver. It can be drawn into finer wire (useful for microelectronics), hammered into thinner sheets (useful for all sorts of things), and resists all forms of chemical attack better than most other metals. It's not used in such enormous quantities as some other metals, but its "foothold" is very well established.

 

You are of course correct, that gold has these additional benefits over silver, so my bad on that one. However you can hammer an ounce of gold into a thread a mile long. There is still very little meaningful amount of demand for gold in the technology sector, in spite of its usefulness, since it is used in such small quantities as a very thing coating. My original point in all this in spite of the details is that gold is influenced slim to none by the economy from a technological demand standpoint. Its influence is from monetary policy and electronic markets.

 

The dollar index was up because of the Yen getting hammered. However the commodities selloff is much larger on a percentage basis than any gain in the dollar index which is not a reliable indicator of dollar purchasing power anyway since it's compared against other devaluing currencies. The dollar has not gained any real strength. It is continuing to be diluted and devalued by at least $85 billion each month (since we don't know what they do off the books). The velocity of money is down however since that new money is in stagnation which is why we are having deflation instead of inflation right now.

The dollar index went from ~81 to ~85 over the last month (~5% gain) where as gold was down more like ~15% in that span. The dollar index has dropped back down to around ~83 now (~2.5% drop) and gold is up something around ~4%. I am using rough numbers but the point is that the moves in gold are no where near justified by the relationally small moves in the USD.

The reason for the April sell off in metals was a coordinated takedown as I explained to you here:
http://www.cointalk.com/t227813-5/#post1710645

This really has absolutely nothing to do with the SI numbers so I'm not sure why you're going out of your way to demonize the only real values that we have to look to in that regard. Feel free to provide a better source if you have one.

 

Can't resist a related story, a friend of mine was a glassblower who sometimes had to deal with chemical glassware that had platinum connector wires. He needed some and decided that he should just get a spool. Not realizing the consequences of the very small diameter of the wire he needed, he went into the stockroom and picked up a small spool of copper wire and noted that it was 1/4 pound, so he ordered a 1/4 pound of platinum wire of very fine diameter. A couple of weeks later he had not received his order and so he called the company. They told him they had been working non-stop and had made almost 25% of his order when he advised them to stop.

 

Silver, as a volatile metal, will tend to have exaggerated movements based on economic data and its correlates. For example, when the dollar lost value in early 2011, silver shot up to $50 -- yet no one (I think) would suggest the actual gain in general price inflation was equal to the surge in the price of silver at its peak. So when it is claimed that silver is a hedge to inflation, I think it's partly true. Silver has the tendency to overshoot in either direction, certainly more than gold.

I also believe, while the supply and demand numbers are important for the long term, those scrutinizing the numbers in great detail may be missing the psychological factors driving the market in the short and intermediate term. For example, some anti-silver bugs believe the drop in the price of silver is the result of excess supply, whereas the silver bugs insist there is a shortage somewhere in the supply chain. I find it interesting that neither side mentions the dollar index, though reference to dollar strength and its relationship to the drop-off in commodity prices is noted on occasion within the mainstream media. Mind you, that banks coordinate to fix prices and that commodities move based on currency strength are not mutually exclusive ideas.

If the dollar index breaks past 84-85 and reaches 100, you can bet silver has a good chance of falling into the teens. This would be a symptom of deflation overpowering inflation, by the way. Of course, the market may be wrong in its assumptions, leading to large corrections at times.

 

Silver is up a little today. It was at $23, but slid off near the close. We'll see what it does tomorrow...

 

There's something else I want to point out, since I am somewhere in between the hyperinflationist and deflationist schools. I used to read the silver bug websites daily, (and still do) and I found over time, after listening to the bears on YouTube, that there is a conflict of interest in that they often hype up silver while selling it at the same time. Silver bug websites are loaded with information on the dangers of hyperinflation, and tend not to cover the strong deflationary forces and how the Fed is combating them. I'm writing in general terms, as Mike Maloney has predicted strong deflation followed by hyperinflation. What I am observing, surprisingly, is that the silver bug websites are making no mention of the dollar's recent climb, and are putting all of the blame for silver's price drop on manipulation.

So that I am not misunderstood, I believe it's entirely possible for silver to go to the moon. The reason why I write this is because by competitively devaluing currencies, central banks are engaging in unprecedented experimentation that may lead to hyperinflation at some point in the future. In my view, anyone who thinks it impossible for gold and silver to skyrocket within the next few years is naive and probably does not understand economics. We, as human beings, simply cannot predict with absolute certainty the outcome of something that has never before in economic history been tried on the scale of today. This is not to say silver will skyrocket, only that there is some probability of its occurrence.

I believe the price of silver is manipulated, but that does not mean traders and short-term economic trends are not helping the bankers in suppressing the silver price (just to be clear, my assumption at this point is that everything is manipulated, because there is a strong concentration of power in the world in the hands of a few). If the bankers conspire to clobber the price of silver, traders will look at the charts and trade on that reality. With other nations besides the U.S. devaluing their currencies, many investors feel safer holding dollars given that it is the global reserve currency. A rising dollar will cause the silver price to drop. So in this environment the bankers do not have to work that hard if they want silver to go down. It's entirely possible that the bankers, for whatever reason, will decide to go long silver and will allow it to form a huge bubble, and will short it before they let it pop.

Admittedly, I am less bullish than before, though I still think the commodities bull run will continue as the world's resources are used up by a growing global population and a growing global GDP.