Saturday, September 24, 2011

The Silver Siren: Reversion To Reality - Rob Kirby (from

The Silver Siren: Reversion To Reality
According to the World Gold Council – the overall level of global mine production is relatively stable. Supply hasaveraged approximately 2,497 tonnes per year over the last several years. 2500 tonnes is equal to 80.4 million troy ozs. 
World Silver Supply and Demand
(in millions of ounces)
Mine Production606.2593.9596.6613.0637.3641.7665.4681.9718.3735.9
Net Government Sales63.059.288.761.965.978.542.528.915.544.8
Old Silver Scrap189.0196.3194.0195.2198.6203.3199.0193.7188.4215.0
Producer Hedging18.9----9.627.6--------61.1
Implied Net Disinvestment--18.91.6--------------
Total Supply877.1868.3881.0879.7929.5923.5907.0904.5922.21,056.8
                                               Source:  Silver Institute
The Silver Institute tells us there were 735 million ozs. of Ag mined from the earth’s crust in 2010.  Simple math [735 / 80.4] tells us that “nature” is implying that the gold / silver ratio should be 9.14: 1.

Rob Kirby comments below
We will return to 15 to 1 gold/silver ratio at a minimum. 
We are approaching a situation where real gold and silver will not be obtained for fiat money - period.
Paper markets are much worst than a joke they insult to free markets and humanity.

Looking on historical ratio: 650 years where ratio never went above 20. We stand at 53.58 as of September 23, 2011.

650 Years of Silver Prices

This is a 650 year graph of silver prices and silver/gold ratio from 1344 to 2004.

Silver Prices live silver prices

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