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<p>[QUOTE="InfleXion, post: 1432998, member: 29012"]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.</p><p><br /></p><p>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.[/QUOTE]</p><p><br /></p>
[QUOTE="InfleXion, post: 1432998, member: 29012"]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.[/QUOTE]
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