I got this in the mail today: Thomson Reuters Releases Interim Silver Market Review Please see the link below for a press release from the GFMS Team at Thomson Reuters on their interim silver market review, presented this evening at the Silver Institute Annual Silver Industry Dinner in New York City. http://www.silverinstitute.org/site/wp-content/uploads/2016/11/SIInterim-ReportPR2016_rev.pdf
Distilled points: - The silver market is expected to be in an annual physical deficit of 52.2 Moz in 2016, marking the fourth consecutive year in which the market has realized an annual physical shortfall. - [this will ]have increased ... the physical deficit, bringing the net balance to -185.5 Moz - Total silver supply is forecast to fall 3% to 1,012.4 Moz in 2016. - Silver bullion coin and bar sales are expected to contract 24% to 222.0 Moz this year - Physical bar demand is expected to contract by 38% this year to 99.3 Moz. - Silver demand from the photovoltaics industry is forecast to increase by 11% to reach a record high of 83.3 Moz this year. The most interesting point - there is currently a physical deficit of -185.5 Moz. Supply and demand would, in my opinion, lead to increasing prices. That is the supply is less than demand, and the gap is increasing. In economics, this demands that: - Demand will decrease - normally because price increases to a point that demand no longer exists (i.e. bullion becomes more expensive, and therefore less is purchased for the same money). This balances the demand down to the available supply. - Supply will increase - normally because a price increase to the point that suppliers (bullion and mines) have incentive to produce/sell more. This balances demand by increasing supply. - a false economy exists (i.e. commodities that don't exist are traded or controlled). This means that deficits continue to grow until such time as the bubble bursts (because there is no physical product to back the paper "promise" commodity). A bubble burst would "burst up", in that there would be an unrealistic increase in silver price, as seen a couple of years ago when silver went above $40. That's my thoughts and why I just got a few oz of silver. I'm very glad to see this report backs my assumptions of a growing deficit of physical silver.
