Over the past week we have learned of at least 4 cases of large silver purchases (5-10 million ounces) either being flat out refused delivery (such as Ned Naylor-Leyland discussed with 2 large orders from the LBMA), or else experiencing severe delays in fulfilling the order. This comes as silver has rallied nearly 15% from it’s recent lows near $27.
We would like to officially recognize and congratulate AGXIIK for his foresight in predicting the EXACT TIMING of this sudden supply shortage of silver back in early March, at a time in which the world appeared to be awash in silver.
Reposted in it’s entirety, here is AGXIIK’s March 11th call for a ‘Severe Supply Shortage of Silver in August of 2012‘:
Placing my a** hat on the table in front of me, I predict that silver will go into a severe supply shortage by August 2012 or sooner.
Why?
Greek sort of got bailed out, leaving the price of silver to float upwards as opposed to downward should central banks and private owners need to dump PMs to get liquidity.
Absorption of silver continues apace with speculative and aggressive longs outnumbering shorts two to one.
The discount to real silver value will not go unnoticed for long. Sovereign wealth funds in China and Middle East have over $2 trillion in funds ready to deploy. War brings out the best in wealthy buyers. They buy for safety when the chips are down and financial insecurity abounds.
The physical silver is being held for personal investment and industrial and commercial purposes. Miners are holding supply hostage to buyer requests to avoid the taxes on the profits of their silver sales.
The numb-nuts at EPA are stopping mine production due to environmental issues.
Miners are starting continent-wide strikes in Africa for gold, silver, platinum and palladium.
Nearly 100 million ounces were kept from the market in those recent strikes.
Nationalization of silver mines continues apace in south and central America.
Thanks to The Doc for getting the price of 100 ounce bars down so low I could not resist another purchase. I topped up on those 100 oz bars Friday from SD Bullion. That took about 100,000 ounces of paper silver (1,000 oz of real phyzz) out of the physical supply.
I found a new hidey hole.
Door stops!!!
Kid you not.
I plan to put a few in small colored plastic boxes like Tupperware(R) and hide them in plain sight.
But back to silver supply.
In another four months I expect that silver supplies to hit crunch time.
High costs of extraction due to skyrocketing fuel prices. Diesel could go to $9 a gallon. Economic slowdown reduces demand for zinc, lead and copper (silver being a byproduct). Mines are buttoned up due to extraordinary costs of production.
Rapid buying of silver by Asian central banks and sovereign wealth funds.
Since silver is a strategic metal used in vital communications and weapons manufacturing, and war with Iran is a certainty, this demand for silver will get very interesting. We have not had a war in which strategical metals was in critical shortages. But we do now and our purported allies are not quite so friendly to us now.
The lack of this strategic metal will curtail the war efforts. China and Russia doing anything they can to strip-mine silver from the supply chain will cause us to use our already depleted inventory of war materiel, soon finding ourselves unable to replace these silver-laden items.
Without firing a shot they will effectively round up supplies to hamper our efforts. China has a lock on over 90% of the rare earths too boot.
Do I have exact numbers on each of these factors?
No.
But with about 700 million ounces of silver available in a year, 200 million ounces coming from scrap, the US producing less than 10% of the entire world’s annual supply.
That is the key figure. We have less than 10% of the world’s annual supply and things are going to get sticky real quickly. Plus it would be an idea time to help move the US Dollar further off its reserve status.
The reason I chose August 2012:
Israel has about 3 months before it has to get moving on its attack on Iran.
PS:
$3 trillion in new money for Euro Bank bailouts will wash across the Atlantic to the perceived safe harbor of the dollar, flushing up prices in the US.
ZIRP created gross mis-allocation of assets chasing yields, safe or not. PM safety will be quickly seen as a great place to be.
Inflation of 10% will become 15-20% and the US and Euro consumers will scream for a shield against this inflation. Where do they go?
Where anyone trying to safeguard themselves goes: Physical precious metals
Gold is being shipped east at discount prices. When the COMEX is marginalized by physical demands, like the recent 3 million ounce order, gold prices will bounce and silver prices will race upwards, hugging the backside of the Golden Jackass (Thanks Dr Willie for your recent insight)
Like Brother John said, if even 1 tenth of one percent of SWF goes to silver, 200% of the world’s annual supply of silver will be up for grabs immediately.
Got phyzz?
Original post link is here:
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That’s exactly what came to my mind when silver hit 30.50$ per ounce. It’s all thanks to him that I’ve bought as many silver that I’ve could at 28$-35$ in April, May and June. Thank you! Here’s the link from the old website: http://silverdoctors.blogspot.ca/2012/03/agxiik-silver-will-be-in-severe-supply.html
Way to go AGXIIK!! Very prescient.
This is just one of many reasons I point all of my friends to this site. The Doctors always seem to be in at this office!!
Calling the time-frame WAS extraordinary intuition, I have to say! CUDOS
I was thinking of this very call just today. I thought, “can’t remember who that was, but he totally called it”. Well done, and congrats!
Excellent Intel! My Complements!
Great call. Now lets hope it creates some serious price movement to the upside and sends the cartel into a tail spin.
Great call, now make the next great call!
Well done AGXIIK!
AG12K…good call on the trajectory of silver. Frankly, I am surprised there is any silver available to purchase. How’s this for public apathy. The Republicans just announced that they were considering going onto a gold standard. I would think the lines would be out the door and around the block at the local coin shops. But what do we see. Nothing. No lines. Total apathy. People are in a trance from their cable TV and cell phone games. I don’t think they’ll wake up until the ATM machine stops working some Monday morning.
We haven’t seen anything yet. Price-wise and gold to silver-wise there’s still plenty of room for improvement.
There was a set of posts at silverstackers about upcoming events over the next two years or so that I considered quite thoughtful. I made a prediction about US banking holidays and martial law that is pretty grim but there was not a timeline within my post. If I was to pick a time line it would be within the 60 day time period between the US election and inauguration of the next president, whether that is BHO or MR.
My comment was a note as to what we might want to watch as a telltale sign that uses a banking holiday as a precursor for some sort of martial law. If it comes to banking holidays, the complete integration of banking into our systems of business, personal, government and currency transactions, would create a calamity so great as to force the government, in it’s delusion way, to enforce a civilian encirclement by police and paramilitary resources to maintain order. I speculated that the banking holiday would be a false flag or ruse to declare martial law. It might not be the violent type you see in other countires but curfews, travel restrictions and rationing are just variations of that theme.
I picked up this idea from Susanne Posel of Occupy Corporatism and took it a couple of steps further. If someone can haul my post over here and it’s ok with Doc, maybe that will qualify for my next prediction.
Between December 2012 and January 2013 seems like a time line that make sense given the presidential election cycle, the ME troubles, racial troubles if Romney gets reelected, total systemic collapse in Greece, subsequent losses on the loans and CDS that impact our shores, the timing of an Israeli attack on Iran and China’s saber rattling in the South China Sea to take it’s population’s focus off the economic rough patch coming in China.
Right now China’s 14 key economic indicators are all down except finished goods as China channel stuffs everything from cars to empty cities into the pipeline. Buyers in every country are full up with Chinese stuff as China is chock full of our stuff. Every country of substance in the world seems to be in or moving into recession or worse.
With every currency backed by air, this timing has all the portent of Hurricane Isaac hitting Florida. It’s not when; it’s more a matter of how bad.
And in this I hope I am wrong as can be and will wear the a** hat if needed.
PS Hurricane Isaac. The timing for the RNC could not be more apropos. The big blow slows the coronation and gives Paul some wind in his wings.
The timing of the hurricane as it shuts down swaths of the oil rigs in the gulf and refineries on shore could not work worse for the price of gas or the DNC convention. HAARP cuts both ways boys and girls.
GREAT insight & foresight AGXIIK, thanks! They are equally impressive & scary. I am fairly new to all this (ayear) Tho I am probably the shortstack @ the table i feel blessed to be here with eyes now open. Sometimes I wish to just be preparing for another enjoyable football season in ignorance. But ive been given knowledge (thx! to SD & others) and do my best to help fellow sheep awaken. Thx again AGXIIK