In this video we discuss whether the much acclaimed silver squeeze shortage is developing or not. It is our main contention is that it isn't and we highlight the reasons supporting our arguments.
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Today is Thursday 28th November 2019 and yesterday we produced a video entitled:
$100 Silver and Silver Supply Squeeze - Coming Soon?
which shows some of the headlines a number of YouTube click baiters and pumpers use to suggest that you have to get into silver and often gold now before its too late as its about to skyrocket to the moon.
We mentioned in that video that today and tomorrow we shall actually tell you the truth, as far as it can be discerned from information provided by both those involved in mining and those actually who create relatively objective reports about the industry.
So, let’s now address this issue of a silver squeeze.
Firstly, we have to separate the two usages of this term. Traders use the term ‘short squeeze’ which is a rapid increase in the price of a stock that occurs when there is a lack of supply and an excess of demand for that stock. Short squeezes result when short sellers cover their positions on a stock, resulting in buying volume that drives the stock price up.
The same applies to commodities. It’s often a short-term phenomenon as usually the market then corrects itself as more stock or supply becomes available to the market. It doesn’t mean there is a shortage of that stock, there is just a temporary shortage available to sell at the time buyers wish to buy.
The second usage is in terms of actual physical supply vs demand over the medium to longer term, and it is this issue we wish to address specifically today.
So, if we ever paint a not so enthusiastic picture or let’s say a less enthusiastic one than others, its always because that’s how we see and calculate the situation, not because we want the prices to fall further. Yes, if they do fall, we may buy more, but we really do have enough not to worry about it.
It’s important that we convey that message as there are some conspiracy theorists who believe, or pumpers who come on our channel to create trouble by claiming that, we want prices to fall to help the global banks achieve their goal.
Well, if we had a million subscribers, perhaps their accusations would have at least some logic, though inaccurate, behind that assertion, but the thought that with our very dedicated and loyal 16,000 subscribers we could change precious metal prices, of whom perhaps 2,000 – 3,000 watch our videos regularly, gives us all far more credit than we deserve.
OK getting back to a silver supply squeeze. Well where are the facts relating to this actually held.
Well the first source document is the Silver Institutes Annual Report. Let’s take a look:
So, having now looked at these 3 separate entities, we challenge any pumper out there to tell us why there will be a supply squeeze when even taking the worst case scenario over the past 10 years into account, there is still multiple years-worth of supply available?
So our conclusion ids that there is no silver supply squeeze but we admit that prices can go up if there is a short term unexpected demand, probably financial demand via the exchanges, until the supply then leaves the hands of the 1 billion or 2 billion ounces that are currently held by investors.
Admittedly we do not know what that price would be to wrench it out of their hands, but we have seen over the past couple of years is that supply quickly seems to re-enter the market at or around the $20 level.
This does not mean that the level cannot be breached but purely from a mining supply and demand point of view, this is unlikely to be breached by much.
Tomorrow we shall discuss why we do not believe $100 silver is feasible unless there is a pretty cataclysmic financial or geopolitical event which would cause such a rise.
Thank you for listening – do share your thoughts and if you haven’t already done so, please subscribe to this channel not forgetting to press the bell sign.
Finally, we also produced a video yesterday entitled:
Join Us Live on Saturday on Discord for Q&A and Trading Platform Details
Which is self-explanatory and alerts you to a live Q&A session we shall be holding on our discord channel this coming Saturday.
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