The U.S. mint has suspended sales of American Silver Eagles because… they ran out of “blanks.” It was Jeff “GATA you are liars” Christian who explained to us a few years back that “blanks” were the machine that stamps out the coins, how funny and uninformed for a so called “expert.” Anyway, Silver Eagle sales so far in January are already equal to the total in all of January last year (which was a record in itself)… in just 9 days… from Jan. 8th until sales were suspended today. They won’t be for sale again until the week of Jan. 28th. But wait… the ETF that is so popular and “so” represents and holds actual physical (sarc) Silver, SLV bought 572… wait for it….. TONS of Silver… yesterday.
Yes, that’s right. They bought 572 tons of Silver in one single day before the sun came up the next day! Do you realize how much Silver this is? More than SLV accumulated… ALL of last year. This is some 20 million ounces or so. But wait it does get better. When Eric Sprott buys Silver for his ETF which is usually 2 or 3 times per year, he buys roughly $300 million worth of Silver which has been 10 million ounces (at current prices) or so for the last couple of years. More or less this is 300 tons at a clip BUT it takes 3 months? 4 months to receive full delivery? …and SLV owns, holds, now has 18,000 tons of Silver? Really? Where did they get this “supposed” Silver? If you do the supply and demand math it is nearly impossible to figure out where this much Silver actually came from. Maybe they should sell just a smidgeon to the U.S. Treasury so they can mint a few Eagles to sell to us peons! Peons need Silver too! By the way, The Bundesbank is willing to wait 7 or 8 years to have a mere 320 tons of Gold delivered to them from The Fed, maybe they should have used “SLV” as their custodian since moving 572 tons is merely a day’s work for them?
Which brings me to the title, “hoarding.” Central planning and stupidity of course are the reasons for this occurring. Just look at guns… or ammunition. These are being hoarded by pretty much everyday people everyday because, well, the government is telling them that a shortage (ban) is coming.. .or … no, better yet, YOU CAN’T HAVE THEM so you had better hoard them now! No guns. No bullets. You can’t have them because they will be outlawed. They will be banned because they are bad and only bad people want them. Never mind that, The Constitution, common sense and the God given rights of a free people say that “a truly free people have the right to bear arms.” To protect yourself from thugs, villains or criminals? Well yes… but… our founders and creators of The Constitution thought this through just a little bit further. They decided that the right to bear arms was not only for hunting, not only to protect yourself from villains, no, also to protect yourself from a tyrannical government! Sorry, I digressed here a bit.
But never mind this (you shouldn’t), government regulations (and actions) are actually causing shortages. Guns? Shortages and now hard to purchase. Ammo? How do you compete with a purchaser of 1.6 billion rounds. Silver? Well, that is REALLY plentiful unless you want the real thing. What’s next? Food? I think you can pretty much bet on this one. As I’ve written before, food doesn’t grow on the shelves, it must be distributed and distribution will break down as the banking and credit system breaks down. Speaking of shortages, what about our new healthcare program? Many business are cutting back on employee hours because they can’t afford to pay for healthcare and many Doctors are planning to leave their practices. The unintended consequence here is that the “supply” of working hours and health professionals are going into shortage.
Whether or not the Silver situation completely blows up here and now or at a later date doesn’t matter because it’s going to happen. Think back to late 2008, paper Silver was crashed to $9 per ounce and getting real Silver on the street for $15 was VERY hard. Silver as in any market for any good or product, when the “set” market price is too low, people will clear the shelves. This is pure supply and demand, when something gets too cheap and people realize this they will buy as much as they can as fast as they can. The current situation in Silver is a little different. Yes, the price as hammered down and managed by our central planners is below where it would be in a free market so we do have more demand than there would be at the much higher Mother Nature natural price. But in my opinion something else is happening. Americans are watching as The Constitution is being shredded to pieces and their liberties crushed. I believe that the “gun” issue is bringing this to a head. People see that the financial system is a sham and are acting to protect themselves. Silver, because it is priced at a 55 to 1 ratio to Gold is affordable which is why it is called “poor man’s Gold.” The masses are simply acting rationally as you would expect… they are hoarding goods that they believe they will need and may not be able to get in the future. Call it “Mother Nature,” individuals are actually protecting themselves!