How much silver is left in the ground?

Discussion in 'Bullion Investing' started by Vess1, Apr 29, 2012.

  1. Cloudsweeper99

    Cloudsweeper99 Treasure Hunter

    The ETFs are a possiblity, but then you get into the problem of double counting the ownership. But I realize that the Silver Institute numbers are the only game in town. People use them because nobody else puts out this sort of data that I know of.
     
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  3. InfleXion

    InfleXion Wealth Preserver

    The thing I like to point out with these numbers is that total demand is identical to total supply. Some people may ask how this is possible? It's because of the "Old Silver Scrap". That is the amount of already mined silver that must be brought back to market each year in order to meet total demand. Even if it were not growing, which it is, any amount in that row is highlighting a mining shortage and decreasing the available silver on the market. The fact that it is growing means that the shortfall is increasing, and currently there is only enough scrap available for a couple more years of this. In order to get more scrap the price would need to rise to bring more it to market.
     
  4. medoraman

    medoraman Supporter! Supporter

    Well first, supply and demand have to equal. Second, how do you know the age of this "scrap"? How do we know its not a necklace made last year? If you read my post #78 it basically talks about this, and IS jewelry, coins, silverware REALLY usage? Does it disappear with this "usage" or is it simply future "scrap"? I imagine all of this "scrap" had to be "usage" in prior years. If total "usage" in these categories is going up, doesn't that directly lead to more and more available "scrap" in the future?

    Like I said sir, two ways to look at this chart and have totally different takeaways. :)

    Btw, the big difference is the "implied net investment". like most I would like a better explanation of this, as if its bars put away by an ETF its pure inventory, if its something else it could change my opinion. I am assuming its a type of inventory, if its not, I may change my mind.
     
  5. InfleXion

    InfleXion Wealth Preserver

    There's really no way to know the age of the scrap. It could be from the previous year, or 100 years ago. My point is simply that it had to come from somewhere other than mining supply which does not meet demand. Whether that is coins, jewelry, or something else, the price must be high enough to provide incentive for someone to part with it.

    This is where supply and demand comes in, but I don't think they have to be equal because it is price that balances them out. Price rises if demand exceeds supply, or falls if supply exceeds demand, and then you have equilbrium. That's how it's supposed to work, and in theory I do agree with you. However, when price discovery is not representative of the physical market, and is instead representative of highly leveraged paper contracts that do not have the actual corresponding metal in reality then supply and demand do not equal out because the price is not allowed to do its job. Demand is exceeding supply otherwise there would not be a need for any old silver scrap, because price would take care of it. After decades of this being the case there is less than a year's worth of mining supply readily available in the silver market, so either demand must fall or price must rise, because supply is not rising quickly enough. We've had hundreds of years worth of stockpiles to use up over the last century of the technological revolution, but that will not be the case for much longer if price remains at current levels and does not reverse the trend of scrap usage.
     
  6. InfleXion

    InfleXion Wealth Preserver

    Double Post. Delete OK
     
  7. medoraman

    medoraman Supporter! Supporter

    See :) Completely different reads fom this graph. And that is ok.

    I would say if the price discovery method was not functioning, there should be a $10 premium for physical silver. That would be my evidence for my intellectual conjecture. Are you seeing any spread in the price premium for physical silver? Supply/demand works regardless of market manipulation. If physical silver is in a shortage position at the CME price, then physical silver sellers should be able to command a premium price over CME pricing, right?
     
  8. fatima

    fatima Junior Member

    Computer processing takes place on chips made of silicon and various other semiconductors and not across metal wires. They use gold to wire bond the chips to the package where it's mounted on a circuit card. Those circuit cards are layers of copper and various other non-conductive materials. Resistance is important where current is involved. In todays computer circuits, the objective is to do this with as little current as possible else you generate heat. Likewise, the vast network of computers that make up "them internets" are connected together with either copper based Cat 5E/6 cable or where real speed is done, by light waves sent through glass fibers. The next quantum leap in computing will be moving more off metal and onto glass cabling.

    In other words, silver pays no role in the speed of computers or computer networks. It never has and never will. As I said above, they will use copper, gold where it's needed and of course sand (metaphorically) arranged, these days, almost at the atom level. If you wish to find me a computer that is designed with silver based circuits, I'd love to see it. But otherwise you guys are engaging in wishful thinking.

    Since you are asking, you would gain more benefit by applying it to the light bulb example.
     
  9. medoraman

    medoraman Supporter! Supporter

    Just asking, Fatima, not trying to start a war, but would the greater conductivity play a role in lowering temperatures? Lower resistance should lead to lower heat generation versus copper, no? Or would the difference be negligible?
     
  10. fatima

    fatima Junior Member

    The heat isn't generated by the + & - DC power pins on the chip. The heat is generated within the chip when transistors are switched. During this transition you get a instantaneous short between positive & negative. On paper this means infinite current for a very short amount of time. In reality their is some resistance which prevents it but this is where the heat comes from. It's infinitesimally small, but in a chip with millions of transistors being operated at the gigahertz range the heat rises fast. Look inside your computer. The heatsinks are mounted right on the processing and graphics processor chips because this is where all the switching takes place. The rest of the computer is relatively cool in comparison. As I mentioned above, the switching takes place on silicon based semiconductors. There is no place where silver would benefit this.

    In regards to the wiring in the circuit board, which is almost 100% copper, DC resistance isn't the issue. The address bus, data bus, control lines, etc are all moving at very high frequencies. This is where impedance & capacitance are important and that has more to do with the shape and position of the circuit wiring relative to each other and ground planes. The properties of copper are well understood in this realm and until a different technology comes along it won't be replaced.

    I am a bit rusty with it, but over the last 20 years, computers chips have been speed up by making the circuits smaller and thus they can be placed closer together. The other places where a moderate amount of heat are generated inside a computer are with the power supply. You could build a silver power supply but why? It would be like using silver cables for car wiring and it wouldn't prevent the heat. And heat is generated by the hard drives mostly due to the heat of the motors.
     
  11. InfleXion

    InfleXion Wealth Preserver

    The rest of your post was accurate, and upon further inspection I was misrepresenting the actual usage of silver in microchips. However, it does play a role.

    http://www.siliconfareast.com/semicon_matls.htm

     
  12. InfleXion

    InfleXion Wealth Preserver

    I would be interested to see how the price behaved if places like APMEX and Gainesville didn't hedge their inventory with paper contracts. They profit strictly from the buy/sell spread. Price is irrelevant to them, and therefore it trickles down.
     
  13. fatima

    fatima Junior Member

    Well, if you read that entire website, rather than picking out paragraphs with no context, you will find that for each of the uses specified for silver, there is a much more commonly used materials for each.
     
  14. fatima

    fatima Junior Member

    Yes. In other words, you were making assumptions with no facts. Now you attempt to google up something else. I will stand by what I said earlier in that silver demand will not be driven by electronics production.
     
  15. webomatic

    webomatic Member

    I find the chart interesting do to the industrial demand between 2009 and 2010. The chart might be off, but I'm sure it's in the ballpark of the 20% jump in industrial demand. If the economy picks up these industrial demands will certainly increase dramatically once again over 10 years as it has over the last 10 years.
     
  16. snapsalot

    snapsalot Member

    Oh common now Medora you know they have the nicest trailer in the park and are the envy of all the other speed freaks :D.

    Just remembered he used to himself live in a trailer park as a child and my mom could not even afford a bike with round wheels...

    [​IMG]
     
  17. snapsalot

    snapsalot Member

    Apmex probably profits more off their shipping then they do off the spread, especially for medium or smaller purchases.
     
  18. webomatic

    webomatic Member

    Do you think it would be minimal at best since contracts are just gamble on the price of the comodity?
     
  19. InfleXion

    InfleXion Wealth Preserver

    This does not change the fact that when you said there was no use that you were wrong. Swallow your pride for once and don't belittle someone every time you are proven wrong. I admit it freely because I care more about truth than my persona. If I am wrong I go out of my way to point it out because I don't intend to mislead anyone.
     
  20. fatima

    fatima Junior Member

    No I'm not wrong and you are putting words in my mouth. I said that using silver would not speed up computers which you claimed it did. I also said that it would not do anything about heat. I did not say it was not used. But with that, for the website you have cherry picked an example from, you have not proved that other alternatives are not more commonly used.

    Finally I said that electronics production will not drive silver demand. There has been nothing presented here that says otherwise.

    if anyone should be swallowing price it is you for having claimed that silver will be used to speed up computers.
     
  21. coleguy

    coleguy Coin Collector

    The sky is blue....
     
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