In Ted Butler's Archive


Over the past three years, the growing physical shortage in silver (more demand than supply) has resulted in a dramatic reduction in recorded world inventories. Each week, I highlight the shrinkage in the two largest stockpiles of recorded silver inventories, the COMEX warehouses and in SLV, the largest silver ETF. Together, these two stockpiles represent fully half (700 million ounces) of all the total recorded world silver inventories of just under 1.3 billion ounces.  The key is the rate of reduction or shrinkage in recorded world silver inventories. While it is true that both total world silver inventories and the combined holdings in the COMEX warehouses and in SLV have both declined by 400 million ounces from three years ago, 350 million ounces of the decline occurred over the two years into the end of last year, 2022, and with 50 million ounces occurring over the balance of this year.

Clearly, the rate of decline in world recorded silver inventories has slowed dramatically this year, despite what the Silver Institute describes as perhaps the tightest supply/demand situation ever in silver and with other reports pointing to sharply growing industrial demand for silver for as far as the eye can see.* What could possibly explain the sharp reduction in the rate of decline in the level of recorded silver inventories in the face of what can only be termed ever-greater industrial demand and stagnant to shrinking supply? The answer led me to conclude that the combined silver inventories in the COMEX and in SLV, then close to 750 million ounces, had reached bedrock bottom levels. It was likely that those remaining inventories were owned by investors that were unlikely to sell at current (or lower) prices. After declining by 350 million ounces over the prior two years into the end of 2022, an annual rate of 175 million ounces; the rate of decline has fallen to 50 million ounces this year.

We are close to the bedrock level of how far recorded silver inventories can fall. The actual owners are demonstrating an extreme reluctance to part with their silver at the current ultra-suppressed prices. Therefore, the rate of decline in recorded silver inventories should continue to abate, just as it has done this year. While the collusive and crooked COMEX commercials may have more price-rigging intentions, at some point soon that price-rigging will run into the wall of the physical silver shortage. And please keep in mind that my dissertation on whatever the actual rock-bottom level of COMEX and SLV silver inventories may be is central to my still-unanswered question of the SEC and CFTC possibly double-counting in these two holdings – a question requiring little more than a phone call to JPMorgan.

The good news is that the regulators’ failure will not matter for much longer. Their malfeasance will be superseded by the deepening physical wholesale shortage. Once the physical silver shortage begins to drive prices higher, as it must, investment demand should kick in, further amplifying rising silver prices.  Combining all the above should help explain my profound bullishness, particularly over the past six months or so, starting with “Code Red” and “Bonfire of the Silver Shorts” and the “Last Selloff”. Look not at the precise timing of the coming liftoff in silver prices (because the  exact timing is not so important with fully paid-for silver positions), but look instead at the accumulating evidence that we are quickly approaching the point of no return in silver, where continued artificially depressed prices can’t be sustained in the face of physical (industrial) demand outpacing current supply.

While there will always be uncertainty as to the actual timing of the silver price explosion, considering the nature of this specific irresistible force and immovable object, please be certain that the extent and force of the explosion will be beyond epic.

*The most recent statistics from the Silver Institute indicate that non-investment demand (industrial, photography, jewelry and silverware) for silver for 2023 consumed the entire annual world mine production of 820 million ounces, plus another 59 million ounces of recycling supply.

For subscription info please go to

Start typing and press Enter to search