SoT #53 – Doc @ Silver Doctors: Retail Silver Supplies Are Disappearing

People also need to recognize that the gold and silver shortage is real. We’ve got the Royal Canadian Mint, for example, not being able to supply silver coins without a lengthy time delay…Eric, you and I believe the metals are headed for a complete turnaround that’s going to astonish everybody. If we look at the 90 percent junk silver bags. I deal with one of the largest companies in the world and what we are seeing is what I call ‘The 90 percent factor.’ Historically, when gold and silver are set for an explosive move, 90 percent bags become virtually unavailable.

When the biggest suppliers in the industry, and I’m talking directly with two of them, are saying ‘We can’t even get 90 percent bags and we probably won’t be able to fulfill any order for at least 8 – 12 weeks on those,’ you know we have serious supply problems. So 90 percent bags are virtually unavailable at these prices and those who are primary dealers in them can’t even acquire them.   – Steve Quayle on King World News

The Federal Reserve and the bullion banks are now blatantly manipulating the price of gold and silver using paper gold and silver, which can be printed in unlimited supply.  They no longer try to hide or disguise their operation and certainly never deny that they are constantly intervening in every market – not just the precious metals – in order to disrupt and prevent the valid price discovery mechanism of free markets.

I’ve always said that 90% bags are the leading indicator of impending market shortages…we saw that the week before the big smash-down in the silver price the first week of July, when premiums on 90% bags spiked.  Then around July 6th or 7th,  90% bags went “no offer” at the largest market maker of 90% bags in the U.S. at the wholesale level.  And it’s been “no offer” ever since. – Doc from Silver Doctors on Shadow of Truth

I used the quote at the top because it independently confirms everything we heard from Doc at Silver Doctors today, who told us that across the product spectrum silver coins are selling out at the wholesale level.  The only reason this can be occurring is because there’s a shortage of unrefined silver that has developed globally.

The U.S. mint production has been going down about 20% per week. The first week they resumed sales the total allocated to authorized dealers was 1.4 million coins, the next week it went down to 1 million, last week it was down another 20% and I haven’t heard the number yet for this week. The Royal Canadian Mint didn’t take any orders last week and they’re not advising when they’ll resume taking orders for maples.  – Doc

China and India are primarily attributed with importing most if not all of the annual mined supply of gold for the past couple of years and both are on track to import a record amount this year. But very little is mentioned about their silver consumption. India is on track to import a record amount of silver and China is using all of its internally mined silver to supply its massive solar program (see this SoT podcast:  Solar Energy Drives Silver Demand).

The reason it’s important to understand the retail demand function for silver is because, at the margin, it will be the retail investors who will “tip the scale” on the Government’s silver manipulation operation and force shortages that will overwhelm the naked paper short interest, both on the Comex/LBMA and in the OTC derivatives market.

Rory and I visited with Doc today because we wanted to hear first-hand about what he’s seeing in the markets which feed into the retail supply for silver investment products.   The only time premiums across the board for retail silver products were higher than they are right now was during the 2008 take-down of gold and silver. There were a lot less retail participants back then, which means that the current market has been set-up to become even more extreme than it was in 2008.

Of course, do not overlook the fact that the price take-down and shortage of metals back then preceded the Great Financial Collapse, because we know that current fundamental conditions are worse than they were in the period leading up the de facto collapse of the financial system.

13 thoughts on “SoT #53 – Doc @ Silver Doctors: Retail Silver Supplies Are Disappearing

  1. I’m with you on most of what you write Dave. However, I disagree about there being a silver shortage.

    If there were a true shortage of the metal, and not specific products, I would expect it to be difficult to find 1,000 oz silver bars and kilo-sized gold bars and/or expect to pay a large premium. That is not the case. I can buy 1,000 oz comex bars and Kilo gold bars all day long for a smidgen over spot.

    What we are witnessing is a shortage of what the ‘little guy’ likes to buy. The metal itself is available as described. Just checked Apmex (whose prices are a bit on the high side) and they have numerous comex silver bars at spot + fifty cents w/ free delivery. I can buy 100 oz silver bars locally for the same price.

    I have read where gold is tough to buy ‘in size’ which a assume to mean by the metric ton. This I believe. Gold is one of those rare birds where it is worth far more in larger lots. I suspect nation states are paying MASSIVE premiums to buy gold in size -perhaps multiples of spot prices.

    1. Listen to the podcast. You are looking at 1000 oz bars from retailers – most little guys don’t have the jack to buy 1000 oz bars. Thats primarily an institutional/professional/very high net worth form of silver. Several sources in London have now said that it takes time to fill a large order for silver. You can disagree with me, but I know that myself and everyone who has been involved in this market since at least 2001 are right.

      1. Just finished listening to the podcast. Interesting stuff.

        Like you said, maybe most little guys don’t have the jack for a 1,000 oz bar. However, a $15,000 bar of silver is not like buying a 100 share block of BRK/A. It is not crazy serious institutional money. It is doable for most investors looking to buy silver. Shit, what would you rather have a 1,000 oz bar or a bag of 90% (selling for same price) which will sell at spot minus X when/if the market takes off? Happens every time. My point is silver IS available near spot and I think it is insane to pay these premiums on eagles or 90%. As soon as prices go up the premiums will fall.

        BTW, the reason the wholesale dealers are no offer on 90% bags is they are greedy pigs. They quote spot + $6 or whatever, but when you call them to offer ten fricken bags they want to pay you spot +1.00 or less. People are not stupid. They are not going to sell you something for a dollar when they know you are going to flip it for $6. So people sit tight.

  2. I left two comments at RogueMoney.net and will also post them here since I think it applies:

    ArcLightInstitute tweeted 8/12/15
    “For those doubting “Dow 28,000″… a 500 pt recovery in one day… upward inflationary momentum much?”

    Skip Danger – email Update 8/14/15
    “Traders should take note that I see a 60-90 day rally, straight ahead.”
    (Skip has been extremely accurate, and I usually doubted him only for me to be proven wrong every time.)

    Everyone (else) is predicting a stock market drop in September. The Shemitah may not play out as everyone expects. Maybe instead, both the stock market and the precious metals will start moving in the same direction (up). The US Dollar should get stronger and thus draw in money from the rest of the world, yet simultaneously all currencies may devalue against the gold and silver, just other currencies will devalue more dramatically than the dollar.

    Silver availability is declining and premiums are increasing. Silver RCM 10 oz bars are mostly unavailable. But ebay buy-it-now Daily Deals are still occurring. These are fewer, the premiums are higher and the deals don’t last as long. I have been puzzling over why the ebay deals even exist. I concluded that there is so little sold there (compared to the entire PM market) that the PTB cause it to happen so the sheeple will not wake up to the developing PM shortage.

    Regarding the recent the Silver Doctors article (cited above by Wolf Gray), I have never before seen the number shills/trolls and such energy expended to poo-poo the developing shortage. They were all over that article from the time it was posted. My conclusion is that the disinfo campaign has been ramped up to full power.

    Today the price of silver was slammed down below $15 again, but the retail purchase price of silver is virtually unchanged. Therefore keep buying if you still believe the things discussed on the RogueMoney site. Yes, we all have to face our doubts and deal with our emotions but you must use rational thought and retest your beliefs. If the underlying basis for your beliefs remains unchanged, then it is the time to use self-discipline and buy more.

    The old adage is to buy when there is blood in the streets (this means when everyone else is discouraged and buying seems to be the dumbest thing in the world). But when that condition existed in the past, the foundation for future fortunes was established!

    At RougeMoney.net Wolf Gray said in his article: “…the billboards sale signs for hard assets will hit mainstream Joe & Jane SixPack, right about the time the supply runs out. “

    Clif High mentions future ads for buying silver from the public http://www.halfpasthuman.com/audio/wujo/ALTA_QA_8_2015.mp3

    I think it will play out this way:
    When the price of silver is between $60 and $100 the ads will come out and the PTB will try to get most people to sell their PMs for a nice gain. That will put the stackers back in the US Dollar right before the hyperinflation hits. Few people will have the foresight and fortitude to hang on for the really big gains. In this way the PTB can ride the upcoming stock market boom and flight to the Dollar before switching to PMs for the astounding ride to unimaginable PM value.

    1. “The old adage is to buy when there is blood in the streets (this means when everyone else is discouraged and buying seems to be the dumbest thing in the world)”

      Your argument is a bit circular: you argue there is a shortage b/c everybody is wiping out dealer inventory to take advantage of these bargain prices. Then you assert there ‘is blood in the streets’ and everybody is discouraged. Which is it? Buyers are certainly not discouraged as evidenced by the crazy premiums on items hoarded by public.

      Don’t get me wrong. I agree there are some parallels with what preceded other bull markets in the past. However, I must believe my lying eyes when I can buy 100 and 1000 oz bars all day long at small premiums.

      I own silver as well. A bunch and recently took advantage of the premium insanity on 90%. My dealer told me the reason the bid is weak on 90% b/c nobody wants to get stuck paying larger premiums when they vanish. Since he had none in inventory I consigned a number of bags (no risk to him)- each bag would be paid for w/ 700 oz in bars Plus $2,500 cash. I ended-up with the same amount of metal plus a chunk of free cash. I submit this is a good way to ‘play’ this market.

  3. Supply disruption usually shows-up with retail products and mint production first. But those that point to the situation w/ 1,000 ounce bars as a rebuttal need to review what happened in 2008-2009. The same rebuttal could have been made (and was) during the early stage of supply disruption that happened in 2008. But as the months passed, the delivery time on 1,000 ounce bars out of COMEX and the LBMA were being pushed out and eventually, the juggling act (raiding from SLV, etc., to try to meet demand) going on behind the scenes was a fair conclusion to draw. Something was causing major push-outs for delivery of 1,000 ounce bars, and that something was physical market demand starting to swamp even the 1,000 ounce bar market. Prices eventually rose out of the single digit, manipulated paper “price discovery” (ha!) depths of hell (got below $9 on the COMEX but no one could buy a Silver Eagle at that exact same time for anything less than $14 if memory serves) and that is what eventually led to conditions that pulled back to “normal” delivery schedules.

  4. Silver plentifully available in paper form. Anyone check out the volumes of silver on a monthly chart on netdania… Volumes now are ~ 5 times higher than when silver was above 26. As for the US mint, I think with the new regulations Jack Lew can tell them how many coins they can make. So he is probably making sure that *important* manufacturers and insiders will have enough of it when the fat lady sings.

  5. Dave,
    Great show. Rory just sounds like a heck of a fun guy, his little chuckle is pretty special. I bet he likes fishing (highly recommended sport) I don’t know why but every time I listen to you guys I feel like blowing the dust off my reels and cold box and heading up to some creek or river just to see if there is anything about.

    1. LOL. I dunno – he’s from Tennessee – I think he’s into manufacturing and selling pre-fab moonshine stills.

      Thanks for the feedback – I’ll pass it on to Rory.

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