In Ted Butler's Archive


In the past week, Ted Butler uncovered two new and potentially bullish circumstances relating to silver.

I’ve monitored the daily movement and total levels of the COMEX silver warehouse inventories for more than 35 years. A remarkable physical turnover of metal in and out from the COMEX silver warehouses continues and seems to be accelerating Regardless of what is behind this remarkable, highly unique and unprecedented physical turnover in the COMEX silver warehouses, it shows no sign of abating. I am referring to actual silver being physically moved, via trucks and warehouses, into and out of the nine COMEX silver warehouses. Because a large percentage of the total COMEX silver inventories is held for investment storage purposes and just sits there and is never moved, the amount of actual silver available for sale is a small fraction of the total inventories of around 300 million ounces. In effect, this makes the unprecedented turnover much more extreme than the raw numbers might suggest.

An annual turnover of 300 million ounces would suggest a 100% annual turnover rate on the 300 total million ounces of COMEX silver inventory. But if the real “working” inventory (minus long-term investment holdings of 200 million ounces or more) is only 100 million ounces (or less), that explodes the annual turnover rate to 300% (or more). Please try to understand what I’m saying – a 100% annual turnover rate is completely off the charts and so different from what is occurring in any other commodity as to be astounding. But if the real turnover rate is much greater (as it appears to be), then I don’t know what words to use – other than this turnover business in the COMEX silver warehouses is much more extreme than I have ever previously suggested and infinitely more bullish.

The frantic turnover occurring in the COMEX silver warehouses means that physical silver is in such high industrial and fabrication demand that the repositories originally intended for professional investment storage are increasingly being held up as the physical providers of last resort. This is yet another indication of the developing clash between what is happening in the real world of physical silver and the artificial and manipulative world of paper pricing on the COMEX. Virtually everything developing in silver points to prices being artificially suppressed. In other words, the only thing wrong with silver is its price, and that must inevitably change and soon.

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