In Ted Butler's Archive


The only component of world silver production or consumption that has ever influenced price is investment demand. If silver is destined to truly run up in price again (as I believe to be the case), then that can only come from a surge in investment demand. The world produces close to a billion ounces each year, between mine production and recycling. The world consumes almost 900 million ounces each year leaving 100 million ounces (8 million ounces a month) available for investment in the form of 1,000 ounce bars. It’s not as if there is some type of lump sum annual physical deposit of 100 million ounces from which investors can accumulate that amount – the leftover metal is made available to the world’s investors in dribs and drabs.

This is precisely how JPMorgan came to acquire 700 million ounces of physical silver over the past seven years. I’ve described those means in the past – by COMEX deliveries, conversions of shares to metal in SLV, by buying Silver Eagles and Canadian Maple Leafs and melting them into 1,000 ounce bars, and siphoning off from COMEX silver warehouse turnover. JPMorgan has been the sole accumulator of the world’s leftover amount of physical silver for seven years running. It’s not as if JPMorgan could put in a single order to buy 700 million ounces of silver and not cause the price of silver to explode. What makes it criminal, of course, is that JPMorgan was also, at all times, the largest short seller on the COMEX and as such was the principal actor in keeping the price of silver depressed.

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