Análisis Plata Metal

November 3, 2014

Embry“I’m focused on silver, which is something I strongly believe represents an unbelievable opportunity.  Right now the open interest is at all-time highs, despite the price having been pounded for the past six months on the back end of a 3 1/2 year price decline of nearly 70 percent….

“Normally when there is a price decline like we have recently seen on the Comex, the longs are flushed out and the shorts reap their profits.  But despite continued pressure on the price of silver, the longs are not capitulating.  If anything they are digging in and the open interest is growing, which is unheard of.

The open interest in the December trading contract, which matures in 17 trading days, dwarfs the available inventory on the exchange.  So it will be very interesting to see how this situation unfolds.  When you put that into the context of the fact that silver is now trading dramatically below what it takes to extract an ounce from the ground for a pure silver producer, it really demonstrates the absurdity of the situation.

With a price that has been under so much pressure, this would normally suggest that silver demand has been weak and the market is being overwhelmed by supply, but that’s not the case.  The demand for silver coins from the U.S. Mint has risen dramatically and there has been continued demand from the industrial side, which takes up the lion’s share of supply.

People have to remember that in the aftermath of World War II there were massive inventories of silver in the world.  And following the Hunt Brothers attempt to corner the market in the 1970s, above ground inventories remained huge.  But all of these above ground inventories have been absorbed as physical demand has outstripped mine supply for many, many years.

Also, the majority of silver mine supply comes as a result of base metals mining.  With the world now moving inexorably toward a recession/depression, and with excess supply everywhere, the demand for base metals is going to decline sharply.  This will curtail production and mean there will be less silver byproduct.

So I see an extremely positive supply/demand situation building here at a price that is remarkably discounted for silver.  What doesn’t get discussed is the fact that not too long ago roughly 1/3 of the industrial demand for silver was related to photography.  But all of that demand from photography has disappeared and been replaced by solar demand, medicinal demand, etc..  And these new sources of demand continue to grow well beyond what we used to see from photography.

But because the paper manipulation is beyond remarkable, silver remains as undervalued an asset as I have ever seen.  As an example, in the last 135 trading days the silver price has declined in the thinly traded access market 130 times at the open.  So to be clear, in the early hours of the east coast of the United States silver has declined at the opening of trading 130 out of the last 135 trading days.  That is preposterous.  And some of these declines have been precipitous.

This is purely manipulation by high-frequency and algorithm programs and it sets the tone for each trading day and permits the powers that be to keep the pressure on the price.  This is all part of how they attempt to keep the public away from gold and silver.  But gold and silver are the only real money and it remains the arch enemy of the failing fiat currency system.  So the central bankers are in overdrive here trying to discredit gold and silver.

Sadly the Western governments and central banks have failed their citizens and are now trying one last time to keep things afloat.  Unfortunately they are going to fail, and all investors can do as that day of failure rapidly approaches is to own physical gold and silver in order to protect themselves.  This is the most dangerous time in world history, both economically and financially — strictly on the leverage in the financial system — and the sad truth is that I don’t even think we are going to recognize the world when this is over.”

Una fuente de información más. Relativizando la visión un tanto extrema de Sprott y colegas…aunque me quedo con la duda de la ecuación producción-demanda-coste-beneficio


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