For some reason, I enjoyed the following comments from a news story:
"The problem with silver is there's an awful lot of it sitting above ground," Mr. Flores said. "The bulls believe the stockpiles are finite and once they're gone, we're off to the races. Worse, the stuff keeps coming out of the ground."
The supply-demand balance in the silver realm vexes the true believers. Since 1990, industrial demand has outpaced silver supply from mining and secondary sources by about an average of 100 million ounces annually, according to CPM Group, a New York-based metals consultancy.
Sales by institutions, individuals and governments have made up the difference. Such stockpiles are dwindling, though by best estimates there's still enough around to supply the demand gap for a couple years.
"But at some point, you run out of silver," said Jeffrey Christian, CPM managing director.
In theory, the price then rises. But supply is still an issue. About three-quarters of the world's mined silver is a byproduct of other metals, such as zinc and gold. So a load of silver appears annually, even though miners aren't specifically digging up silver.
FULL STORY: theglobeandmail.com |
