TD: Why Trust CPM now when, in the past, their data was seriously flawed? As you note, no one knows exactly how much "off the books" silver exists. Silver users require about 4 weeks equivalent of consumption as a "normal working stock" of silver. Assuming consumption is running at a rate of 850 million ounces year, the working stock level is about 65 million ounces.
Presume that there is 600 - 800 million ounces of available silver stocks. For the next twelve months the deficit may narrow to only a little over 100 million ounces leaving 500 - 700 million ounces of available silver stocks. That is, at the minimum, 435 million ounces in excess of working stock requirements. There is no shortage!
Presume that the deficit rises again to about 160 million ounces per year as Asian consumption will lag for several years (for obvious reasons). The arithmetic says that, at a minimum, 32 months would have to pass before silver inventory reduction reaches a critical stage.
Silver prices could continue in a rising trend, albeit in irregular fashion, but not present the "buy of a lifetime" until the excess inventory has been reduced to, or below, the 4 weeks stock level.
RH |
