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Gold/Mining/Energy : Silver prices -- Ignore unavailable to you. Want to Upgrade?

To: paul ross who wrote (1109)	5/8/1998 2:47:00 PM
From: Ray Hughes	Read Replies (1) \| Respond to of 8010

Hi Paul, Pardon me for a slightly tongue-in-cheek answer - there were, temporarily, more buyers than sellers. I too remember stories but about people waiting in line for hours to BUY bags of coin, etc.. The short squeeze triggered by elimination of margin also created a flurry of buying that overwhelmed the refiners ability to turn around old silver artifacts into "good delivery" form. Often in analysis of metals cycles one finds that there may be ample, or surplus, supply of raw material, i.e. ore or scrap, but a bottleneck in smelter and/or refinery capacity. After some lag, smelter/refinery capacity catches up with demand (which often is, by then, faltering) and the market becomes over supplied. So, one needs to have good data on ALL aspects of supply, demand and inventory to sort out the timing and duration of price cycles. The present situation is similar to 1980 but better in that overall inventory of silver is vastly less than then. Now, demand exceeds supply so inventory will, this time, actually be drawn down below the "normal working stock" level, about 4 weeks worth of consumption, and users' purchasing agents (film, jewelry, etc.) will panic. Users will start hoarding and smart money will, because silver is a tiny market, be able to take enough supply off the market to really squeeze the users. Panic buying by users will ensue, which the public will hear about, and the public will again line up at coin dealers and brokers will be marketing all forms of coins, bars, bags, etc. Deja vu all over again! The price will soar - the selling will begin but scrap refinery capacity may not keep up and there should be a considerable lag before scrap will be available in useful form. Haven't I seen this movie before? Regards RH