Doomsday supply

In 1969, my mother was a foreign exchange student to Peru. She must have told me hundreds of stories about it over the years, but many of them came back to the silver she got while there. In the main picture, you can see a few of the pieces I have, with one chain badly tarnished. All put together on a scale, everything comes out to be about 5 ounces. These are in my possession because sadly, my mother passed away at the very end of 2019 from stage 4 pancreatic cancer – the same affliction Alex Trebek had. He announced his cancer several months after my mom was diagnosed, and he passed away months after my mom did.

I mention this because in the totality of my combined portfolio, 5 oz of silver has far more meaning to me in sentiment than any amount of money. Just as I took these pieces out to take a picture, I was flooded with memories of my mother. There is no amount of money that could replace that for me.

Yet people like Jeff Currie think that silver is for sale. This is the logic here. Just because it is supply means it is AVAILABLE supply. Those two items are very confused when you are considering how to price something. I’m not saying that because I think he’s Dr. Evil, I just want you to understand that all supply of silver is not created equal.

One thing the United States knows little about is precious metals. We see the shiny, but we don’t understand it. We see cash. Wall Street. Big houses. Fancy cars. But one thing many just don’t know about is the monetary value of gold and silver throughout history.

For example, I heard that people in India are given gold and silver as part of wedding gifts. Jewelry made of gold and silver is passed down in many countries for generations – not to add “bling”, but these people were smart in that they all knew of bad times, and gold and silver are ways to protect your family. They have all seen many iterations of terrible currency failures, and precious metals are there to preserve their wealth.

Consider the famous chart I posted a few times about Weimar in Germany…

What if before this hyper inflationary event, you had several ounces of gold and silver?

See the source image

So many of my friends in my country have mocked me over the last 18 months about my foray into this field. First buying some physical, but then going bananas on miners. Many said they had discussed with their financial advisors – and every single one discouraged them from ANY metals exposure, let alone miners.

My jaw dropped. All of them.

How the hell do you become a financial advisor in this country and not understand the precious metals as a hedge against doom? I had read that years ago, they used to advise maybe 2-5% in physical metals as a hedge. Last I heard, the average is somewhere at .5%. Rick Rule says that even if we just reverted to the mean of 2.5%, things would be electric with prices of gold.

Anyway…I digress. The setup for this was that I felt everyone should know that there is a tradition in many countries of holding gold and silver. Notice I said “hold”. This supply is not mean to run out and sell when silver goes up a dollar. It is not…AVAILABLE.

Three types of (physical) supply means not all supply is created equal

With this, I’d like to pose to you my hypothesis where there are 3 types of precious metals supplies that exist.

  • For sale – some of my friends want to go buy some silver because they think it could go 4x or something and they can make money. Cute. Possible. Not why I would buy precious metals, but yeah – these guys have bars and coins and they will rush in and buy when spot is $29, but when it’s $18 and I’m literally begging them, they ignore me. Anyway – this is a pile that is in registered as well on the COMEX in registered.
  • Then we have eligible. For argument’s sake, maybe I figure I only need 25oz of silver for me and my family as a protection. However, I speculated and bought 75 more. Maybe I say I will sell this at $50 to make a few bucks and double my money. These are stores that many stackers may have – but maybe only a fraction of this is available, at this price. I would venture to say any stacker out there has a part of his stash that is for doomsday, some to sell off the top, and maybe more to sell “at the right price”.
  • Doomsday. Those pieces my mom left me fall into this category. If my family is starving, and those 5 ounces can feed my family for a few months, I will sell then to get food. I am not selling this at $50, $1000, or $10,000. The value to me with these pieces are associated with “last resort” and “survival”. Likewise, maybe the junk metal stackers have will never be sold.

So, let’s now go back to what was said in an interview in early February. Jeff Currie of Goldman stated there is a 25 billion ounce market. I started this writing a few days ago and before I posted, I wanted to get some feedback from the internet on what he might have been referring to. At 55 seconds in, he says the ETF is a 900m ounce ETF versus the 25 billion ounce market. The first part of that sounds like maybe he’s adding up ALL of the ETFs combined (like SLV, PSLV, SIVR, etc) to get that 900m, and that is approximate to what Ronan Manly had reported where he was discussing the ETFs utilizing a lot of the LBMA stores.

If there was 25b in supply, OBVIOUSLY silver would be low, right? This is the chart we all see in micro 101 in the first week.

See the source image

The problem is, how are you defining supply?

The second part of that he talks about a 25 billion ounce market. This is something I think we need to discuss.

I have heard this clip dozens of times and not one person has really dug into what he’s saying. I cast the net in Twitter….

Please – PEER REVIEW my work. Please cite your sources for this 25b ounce pile so we can crowdsource this and get complete information.

I asked Twitter to try and get some ideas, and this is what I got….Taking names off because I don’t want to get anyone in hot water.

The first one below is what I was thinking he was referring to at the start of this, but after seeing the pie chart below I decided to focus on data I could at least back up.

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And for the win…

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Gotta love twitter.

The first response above was in my line of thinking – but remember everyone, I’m big on sourcing. If I speculate or guess, I will disclose. But I needed to dig in to this 25b number and this number just feels wrong. Still, I plodded on. I needed to find something a rational person could consider in the ballpark of 25b oz.

Then….I did get a good reply and dug in a lot. More on that after the Arcadia Economics reply.

I then saw a reply that made me chuckle as well….

In his interview, he did mention “below ground open interest”. More on that below where you see the open pit mine…

To get back to the Jeff Christian response…

Early in my silver research, I did stumble in to this, but it was good to see again. Let’s take a screen shot to essentially put some numbers out there.

Now – I think of silver in millions of ounces, not tonnes. So let me convert all of this for you and show you how this unfolds.

That shows 56 billion ounces above ground. I had seen about 60b before, so let’s dig in further. This number is still not 25b.

The numbers above suggest about 3.5b in investment grade silver. I have heard 2-3 in 1,000 oz bars and perhaps 2-4b with the stackers.

Let’s go with a higher number of saying 6b oz are above ground, today, that could be sold immediately in investment grade.

Maybe you are all thinking these 6b oz are “for sale”. Ummmmm…no. One would have to say, “for sale, at THIS PRICE“. Otherwise, they are part of “eligible”.

If you look at the COMEX registered, you see 127m oz. However, David Morgan called this the “show room floor”. And through independent research over the last 6 months, I have shown several times that just because it is sitting there, “for sale”, this also doesn’t mean they want to part with it.


I showed that over the last month, there were 58m or so in deliveries, but only 26m left the COMEX. A reader pointed out that deliveries could be to other bankers, and never leave the registered, just change title. OK, cool. I get that. Just to put it into perspective, this last month about 20% was drained from this “show room”. I had also seen where Goldman handed over 15m oz they had in SLV, not from the COMEX.

What I have seen is that they have this silver on the COMEX, and they strategically short against it and items owned in SLV. They push paper at certain times to drive prices down, then after they have pushed people aside, they buy back. Likewise, if they owe 5m oz at the end of all of this, they make attempts to rollover this short, buy them out, or source from the spot market to then hand this over to the recipient as it seems taking silver off of the COMEX is a PITA.

So how much silver is FOR SALE, AT THIS PRICE?

The last 8 weeks I have heard time and time again how “tight” the 1,000 oz market is for bars. High premiums. Online bullion dealers are getting wiped out, even with silly high premiums. Rick Rule of Sprott suggested that PSLV has bought all of the available commercial bars in Canada – this I did not hear personally, but it was commented on by a user on Twitter, so I cannot verify I heard him say this. I did hear him say they buy from Chicago, Toronto, NY, and London.

Meaning – overall, the demand of PSLV over the last month was perhaps 10 million ounces, which they struggled to find. You saw massive outflows from SLV, but it has been rumored this is simply bought back by JPM until another run up – at which time it is sold back to the SLV trust for a profit. Rinse and repeat there.

Overall, I’d suggest that today, at $25 silver, you may have massive numbers of industrial, bullion banks, and large scale investors chasing maybe 10-20m of bullion available at this low spot price at any given time. I’m willing to even suggest this is maybe 50m to reduce arguments from people.

At this price. AT THIS PRICE.

Say it with me…AT THIS PRICE.

The problem is the Curries of the world want you to see this sea of massive amounts of silver and be hopelessly turned away from any kind of squeeze. What he wants to obfuscate, from you, is the sheer lack of silver, available, AT THIS PRICE (do you see a pattern emerging yet – I need to train all of you to speak like this lol?).

Now, as price goes up, it stands to reason perhaps some more supply becomes available. Maybe I was an investor back in the day who bought silver at $4 an ounce in 1,000 oz bars and at $32 I made an 8x and I’m ready to cash out at 80 years old. Possible.

However, let’s perhaps take a look at what might be available…at what price?

The above are guesses – obviously. The point is to show that available supply is not a static number, but dynamic based on price. Higher price means some people at home with coins may want to cash some in. Remember, there may be people who bought silver at $8 who want to sell at $28. Maybe there are some people who come on hard times and just want to break even to get money back? Right now, you are seeing floods of people buy at $34 with premiums – they aren’t selling for a long time.

So this suggests a possible supply number increase, as price rises.

Now if we look at that as a percent of ALL silver supply….

So while Currie may wave 25b oz out there, this shows that of all above ground ounces, only .0892% may be available for sale, at this price. And that number may be double or triple than what it is in reality.

What this shows, is, even at $40 silver, there may be only 1 out of every 200 ounces in existence for sale. Why? 90% of it is “locked up” in dumps or jewelry. What if I’m wayyyy off and this is 1 out of every 10 ounces?? That still shows 9 out of every 10 ounces on the planet is not for sale – at $40.

One thing people forget is that silver is one of those fun items that as price goes up, investment demand goes up. I could make a STRONG argument, that as price goes up, the percent of available silver decreases relative to demand spikes. At some point – perhaps $50, is where the equilibrium of FOR SALE – AT THIS PRICE meets DEMAND. This is the FREE MARKET we have talked about here. Price discovery.

Right now, suggesting even 50m oz are available for sale at this price is probably WILDLY overestimated. Remember, you had Chris Marcus and several people calling around to people trying to make $10m orders, and no one could source that inside of a month. That’s just 400,000 oz. You need to let that sink in.

So now, perhaps, lets look at the “eligible”. This is akin to the “eligible” on COMEX. The COMEX has 250m oz or so sitting there in bars, registered to people and banks. They COULD sell someday, perhaps, for the right price – but are now using these vaults as their personal vaults.

So what is ELIGIBLE? I would think this is also perhaps FOR SALE – AT A PRICE, but I’d suggest all of this is much higher price points. Maybe $40+?

If you look at the pie chart above and for the sake of argument, strip out the 27m from industrial, which cannot be recovered economically – at this point, this leaves you with 29b oz. This is closer to Currie’s number of 25b. This is:

  • “For sale” or “Registered” – Bullion/coins/COMEX- which may be for sale at a near term price point of perhaps $40 – which I’m guessing is about 300m out of 6b, or roughly 5% of this 6b.
  • “Eligible” Bullion/coins – which may be for sale at HIGH prices ($40+). I’d suggest this is perhaps 75% of the 6b, or maybe 4.5b oz. As price goes up, more of this gets unlocked.
  • “Doomsday” – which is the hoarded bullion/coins for end of days in addition to the jewelry. That’s 1.5b oz in coins/bars and perhaps 21b in jewelry. Of this doomsday pile, the jewelry/silverware would have to go to a refiner to get to 1,000 oz bars and to strip out the non-silver items. Just 7.1% of this doomsday supply could be liquid for investment sales/purchases.

The big thing that jumps out at me is this. AVAILABLE SUPPLY.

With the non-industrial above ground silver, 72% of this would need to be refined in order to be sold into investment grade silver.

I think this is where Currie misses it. This 72% is doomsday silver. The jewelry/tokens I inherited from my mother are never going to a refiner, unless it is doomsday. Maybe at $50 you will get some jewelry and cutlery, maybe a LOT. I don’t know. But the truth is, at $25 silver, this is not AVAILABLE SUPPLY.

I think, therefore, in terms of PHYSICAL silver, we need to stay with the number of AVAILABLE supply. Why?

Consider this – I wrote before that when $50 silver hit, there were stories that refineries were backed up for 8 weeks and while you may have had silver, and while the price was high $40s, no one would take it because the refineries were so backed up.

So while there in theory MAY be 21b oz of doomsday silver out there, virtually zero of that can help you in the delivery of your COMEX contracts in regards to physical supply.

Mine supply is roughly 2.5m oz per day and recycling is roughly 300k oz per day which adds to the available supplies above. Regular demand over the last 5 years has gobbled this up and more, creating deficits. This is before the last year with silver investment demand exploding.

If we had months or years over $50, perhaps the refineries have enough time to process everyone who wanted to sell at $50? Maybe demand continues the higher it goes? Remember, in my writing yesterday – I showed that in both cases of $50, it was artificially taken down. We have seen with bitcoin that as price rises, there continues to be people chasing that, thinking it will go higher forever. If in 1980 and 2011, this was NOT taken down artificially, how high could price have gone?

You then consider those 2 months of backlogs at the refineries processing junk silver and silverware, but this pace is nothing compared to the buying frenzy that would outpace refinery production. We use $50 silver as a benchmark, but if there were no means of artificially suppressing this back below $50, one could conceivably see silver rising faster than people are able to get “eligible” and “doomsday” silver in to the system due to refinery processing capabilities.

Reinforcements coming in demand will expose supply side weakness

What I did not tackle yet, and need to, is to consider what derivatives may be out there, and how this could shake out over the next few months.

What if Jeff Currie was trying to talk about 25b oz in the forms of derivatives? Meaning, for example, the Perth Mint’s unallocated silver investment vehicle. I can’t in good conscience suggest that there are 19b oz of fake derivative monies out there because I just don’t know. I have to assume Currie is discussing the PHYSICAL silver market of 25b AVAILABLE ounces.

So let’s now look at the paper side of things. People buy PAPER products and THINK they have silver. The big two I’m going to discuss are futures and unallocated.

With futures, it’s a paper game. On any given day, you can see 75,000-100,000 contracts trade. Each contract is 5,000 ounces, so that’s up to 500m oz, per day, traded. If you are “long” silver, this is a paper contract and one in which very little people “take delivery” on. This is not “owning silver”. It’s a derivative instrument and somehow sets the price of silver. I say it’s like determining the winner of the super bowl not by play on the field, but by the betting line. Supply and demand is the play on the field. We just saw Tom Brady win his 25th super bowl title. Can you imagine before the game started, that the Bucs were favored to win by 600 points?

This would make you scratch your head. Most games the total score is maybe 40 or 50 points. But the betting line is soooo far off from reality, you have to discount the information this betting line is giving you. That’s what’s going on right now. And the guys running the betting line stuff don’t want you to look at the actual game.

One real problem is this….the unallocated accounts. This is some shady stuff.

I had originally thought, probably like all investors, that these are big piles of silver in a vault that you have a share of.

See the source image

The problem is, what we are all finding out, one at a time, is that this is more of a fractional reserve system. For example, in a smaller example, maybe they have 100 oz in their vaults, but they sell 1,000. The 900 they say is “backed by silver”, but this could be silver in the “pipeline” at the refineries or perhaps bought from a mine on paper and still yet to be dug out. Part of me also feels the below is what Currie was talking about with the underground comments. If you have the Perth Mint actually having this part of the supply chain as part of their unallocated, you must consider the possibility that Currie could be referencing this. Suggesting he IS talking about derivatives in the 25b number.

Or – they may not have it, at all. In any form. You just don’t know. You try and get it, and they say in their documents it will be 10 days, but it seems the first batch of people took their share out of that 100oz pile, and you are put in line to get yours. No silver in the pile for you to take.

So if you want to get your unallocated silver, you might have to wait months until it is dug out of the ground, refined, and shipped. Or you might not get it, at all. Consider the below scenarios:

  • A mint makes a deal to divert silver to a bullion bank, refinery, or manufacturer. This takes silver out of their pipeline and adds months or even years until you get yours.
  • Your bank has too many people coming for it, and paid out too many people in cash and they go bankrupt. Your investment is lost.
  • The refiner promising to get your people the silver get backlogged and your institution gets bumped in line by Toyota for 6-12 months. Your institution is now on a years long wait list.
  • The mine you were buying from either became nationalized or got a better deal to sell to someone else.

The above counterparty risks are real to unallocated silver accounts. And, I cannot tell you how many “ounces” these people bought. Craig Hemke refers to not only the Perth Mint, but Kitco, Credit Suisse, UBS, and others. I also have no idea how many 401k, IRAs, or institutional funds are investing in “silver” which actually may not be there.

It is estimated that for every 1 ounce of silver in existence, there are 500 paper claims.

What I can tell you is that I see a beginning of the unwinding of this.

What if there are 500m oz worldwide in these unallocated funds? 2b? 5b? No one really knows.

What if this Perth Mint thing is the beginning of people from all over the world running and screaming from unallocated funds. They cash out their money, and want to buy “the real thing”. Or, perhaps, they realize PSLV is the best substitute if they don’t want to have 30,000 oz stored in their house? They could take delivery from PSLV, and it’s trusted they are indeed backed by silver.

What if only 100m of those ounces went from paper unallocated accounts, to selling it, to being buyers in the market? What would just that 100m oz of immediate demand do to the system?

In the next few weeks, we should start to see some billboards get the attention of people worldwide. Perhaps they get involved? This could be another group of people buying physical and PSLV.

What if a small fraction of the Wallstreetbets crowd joined the force?

What if Wallstreetsilver grows over the next 1-2 months to 100,000? 200,000?


Given the above information, here’s what a reasonable person can conclude from this writing.

  • No one knows exact amount for sale – AT THIS PRICE.
  • Of the investment side supply, very little is available – AT THIS PRICE. It can perhaps be demonstrated to be a fraction of a fraction of a fraction of the 25b supply Currie stipulates as the silver market supply.
  • Media/Currie wishes to confuse TOTAL SUPPLY (56b oz) with FOR SALE – AT THIS PRICE (10-30m oz)
  • People are not running to the coin shop in droves to sell at a few dollars more price. Many are expecting much higher moves before they part with their “eligible silver” – perhaps $40+?
  • Jewelry and silverware may be family heirlooms and may not be available – at any price. However, they may be activated in times of severe economic distress as a means of survival. Perhaps barter?
  • A vast majority of silver is either in industrial or jewelry (90%). To access jewelry for supply, it is reasonable to assume times are much worse than now (depending on the country you live, you may be there already like in Venezuela)
  • It is reasonable to assume that as price reaches $50, more “doomsday” articles reach refineries, causing significant backlogs. Meanwhile, demand may continue up as price goes up – meaning supply may never be able to satiate demand and create parabolic spikes. I believe THIS is why artificial price manipulation downward was introduced in 1980 and 2011. Due to refining limitations, you cannot access the non-.999 supply as fast as demand is activated. This is why a price overshoot to $100 or more can be seen quite easily until some invisible hand comes in to manipulate the price down.
  • The pricing mechanism for silver, the COMEX, is completely disconnected from supply and demand at this point and when these items are too far out of sync, it can cause significant and violent price moves when price starts to move up. IF the pricing mechanism were more closely tied to supply and demand, price could rise faster and activate supply more quickly. By depressing prices, you are having legitimate physical supply being bought by the truckload at deep discounts while chart people are talking about price doing down.

So when the Jeff Curries of the world want to talk to you about massive supplies, please consider not all supply is created equal. Also consider that about 3/4 of all of this supply that Currie references would need to be refined prior to being sold as investment grade silver and the processing limitations of these refineries would have no chance to keep up with the purchasing demand that could be seen as price escalates. IF this disconnect really happens and price is not artificially capped, those entities anywhere who are naked short could have losses in their silver desks that would take down the entire bank.

So, once again, I urge anyone reading this in a compliance department or risk department of a bank or hedge fund to significantly reduce short positions and completely eliminate any naked short positions you have. You have no idea of how bad this is about to break and when it does, your entire institution can be brought down by this.

Lastly – this “squeeze” really happens when the demand comes in that pushes price above a point where the 72% of grandma’s tea sets that come in are backed up in a refinery while a finite number of ounces are bid up in a feeding frenzy. At this point, anyone short on the COMEX that does not hand over ounces are pulverized into extinction with no hope of refineries catching up to demand.

The price of silver going over $30 can also trigger the explosive demand yet – and the only thing that really stopped this was the 10yr moving up. It seems some are thinking a bond rally is about to happen where many rotate out of risky stock market assets and into bonds. This drives yields down, just as CPI data should be creeping up more.

Add those who are disenfranchised in unallocated going to PSLV, billboards bringing in more WSS apes, and some WSB folks jumping on this play as they do their own DD.

That is game folks. So, please disregard CNBC muppets trying to make you feel like you are on the wrong side of this. I have been trying to tell you there are 4 levels of media I’m watching for metrics.

  • No attention. Not on anyone’s radar. As important as PSLV is to drive 1,000 oz bars, continuously clearing out retail is something we can visibly measure and point media to.
  • Mockery. We have seen this by Currie and the Perth Mint. They try and mock you. This is usually meant to tell the goldfish investors to look away. If it’s on CNBC, it MUST be true. Right? Media would never lie to me.
  • Misdirection and lying. This is where they attempt to confuse, obfuscate, deny, and completely and utterly shift directions. This is what PR people do.
  • Acceptance. This is when you see something blasted on the front page of every newspaper and then the TV people acted like they knew this all along, as the evidence was so clear. The other muppets then come on and tell the narrative of the story.

We are fighting a war at the mockery and misdirection levels now. It means we struck a nerve. Continued pressure.