In Ted Butler's Archive


It was a developing silver shortage in early 2011 that almost brought the COMEX, JPMorgan and various U.S. government interests to their knees. It will be another physical shortage that finishes the job. The potential for a physical silver shortage hasn’t changed much since 2011. The world produces a certain amount of silver and after deducting industrial consumption, there is a remarkably small amount left for investment.

Sooner or later it is going to dawn on enough new investors that silver is grotesquely undervalued. The realization that the U.S. Government may be involved, along with JPMorgan and the CME in suppressing the price can only serve to whet the appetite of large investors. The coming silver shortage will break the back of the short sellers and send the price of silver into the stratosphere.

While its timing remains unknown, the preconditions necessary for such a shortage appear to be in place. You only need observe the extraordinary multi-million ounce physical turnover in the COMEX-approved silver warehouses. Tight supply conditions, suggested by this turnover, can easily morph into an outright shortage. A shortage is nothing more than noticeable delays in delivering. A shortage doesn’t mean no material at any price; it’s more a case of an inability to deliver in a timely manner. Nothing will stop a price explosion in silver when delays to industrial users begin to harm their production levels.

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