Please, no “silver crowd” hate. I was in the stock crowd in the late 90s, I’ve even been in the “casino crowd” for those who like to lose fast, so I get the risks with any investment. My question is, do folks here think that we may have a lot more silver out there since the price went crazy back in the early part of this decade that with another big move in markets or the economy, we wouldn’t see a reasonable increase? I hope I’m making sense with this question. I’ve read several times that “big banks are hoarding silver” for this purpose but I’m not sure how much of that is true.
I'm not sure what "out there" means in this context. I suspect that there's more silver available now, because more has been mined than has been consumed. Then again, this is also true if you compare 2011 to 1979 (the previous silver bubble). Then again, that bubble was clearly caused by manipulation (the Hunt brothers). The thing about bubbles is that one can always find a new stimulus to blow air into them. (And, of course, new needles to let the air out.)
Well put @jeffB, and I was thinking supply by out there. I recall reading the Hunt Bros story a few years back which was really interesting. I should have mentioned in my op that I wonder what effect the net and ebay have had since the last run up too.
I see tons of silver now that it is not sexy like the early 2010's. I am running out of room for it, but still buy stuff like poured Englehard bars because I think they look cool, and stuff for my kids. I have no clue why "big banks" would want to hoard silver.
The big banks story was floating around a few years back with the notion being they would flood the market if the price went up like in 10/11. I even recall an ad on tv saying something to that effect.
(1) Big Banks are not speculating in silver or PM's...they are depositories or holders for exchanges, speculators, hedgers, or industrial users. Anybody who thinks any regulated bank is tying up precious capital in a non-interest bearing asset is crazy. (2) Silver has been in SUPPLY DEFICIT for a few years. Industrial demand has to take up the slack from photography and other stagnant/declining end-uses. (3) New mine supply is tough to come by. Good news, however...wealthy industrialist/philanthropist/cyclist AG Pennypacker says he is opening up a new silver mine in Peru:
To be fair, Chase was the market maker for silver on Comex. I think they gave this up because of the press. As a market maker, they created the futures, which entails they had to sell silver short from their inventory. This is where this story of big banks "manipulating" silver came from.
I think the silver market is slack but slowly growing and supplies are about even with demand. If the demand was higher the price would be higher.
Most trading is done electronically, I think the outcry pits are largely gone (you might recall them from "Trading Places", 1982). There are usually multiple market makers or specialists and when there is only 1 specialist (again, largely gone) oversight was very tough, esp. after the 1987 Crash fiasco with NASDAQ stocks.
