Welcome to illuminati silver, we tell you
the truth about silver. Today is Sunday 19th August 2018 and we are
asking the question what will it take to cause silver prices to rise again?
On Tuesday 24th April 2018 Reuters reported the following comment from CPM Group…..
“The price of silver will depend heavily on trends in investment demand in 2018, but
could get a boost from international political and economic risk purchases.”
Now just to remind you who CPM Group are – They are based in New York is a commodities research,
consulting, financial advisory and commodities management firm providing independent research,
analysis and advisory services. In other words, this organisation essentially
supplies data to the Industry at a cost e.g. they charge $160 for a copy, of their own
Annual Silver Survey which incidentally quotes: “The enormous range of economic, financial
and political issues facing the world and individual investors seems more likely to
lead to a rekindling of silver demand from investors.’
So let’s take a reality check here for a moment. Average Silver prices declined 0.5%
in 2017 and so far, this year they are down 14% or $2.40 an ounce as investors pursue
higher-yielding opportunities, including global equities.
As we have quoted in other videos, Silver investment demand dropped 52% in 2017 to 50.2
million ounces. CPM Group expects 43.9 million ounces in investment during 2018, the lowest
since 2006 when investors added just 30.6 million ounces to holdings.
Their Report also quotes: “On various occasions over the past few years, silver prices have
risen only to fall back. This sort of price pattern often turns investors away, putting
them in a cautionary, wait and see frame of mind. Though geopolitical issues, including
looming U.S.-Russia and U.S.-China tensions may stimulate investor safe-haven interest,
they may not buy aggressively.” “While there is a lot of silver available
in the world, compared to gold, and unlike gold silver tends to be liquidated from inventories
more readily, there has been a decline in mine supply since 2016 which is expected to
continue over the next decade. Declining mine supply and rising fabrication demand are expected
to tighten the market, this could lead to an increase in prices.”
But despite this latter comment they admit that whilst solar panel demand will rise this
year probably by around 1.2% this in itself will not be sufficient to affect prices.
Well This sounds slightly positive does it not but perhaps a little pedestrian?
So what is the catalyst that is likely to push up silver prices in the very near future?
Now we ask you to bear with us on this video. We have listeners who are new to silver purchasing,
stacking or investing and we have listeners who have been involved for many years and
trade daily in this market. But to keep this video simple and frankly easy to digest we
confine future silver price growth to essentially be determined by 3 factors:
1. The continuing deficit in supply vs demand 2. Increase in Industrial usage
3. Increase in purchases for investment or speculative purposes.
Let’s deal with each of these briefly in turn:
1. The continuing deficit in physical supply vs demand.
Since 2011 the actual physical deficit (that which has been mined and recycled vs that
which has been demanded by investors and industry) amounts to a deficit of approximately 281
million ounces or an average of 40 million ounces per annum. Now if we add in Inventory
Build and Net Investment build, this deficit increases to a deficit of 655 million ounces
or 93 million ounces per annum. Now if we assume there is approximately 2 Billion Ounces
of above ground silver to mop up these deficits – then there is sufficient for the next
26 – 50 years not allowing for new discoveries or a decline of existing ones. Just hold on
to that thought. 2. Increase in Industrial usage. Well since
2011 Industrial demand has moved from between 50% – 60% of total demand and 55% to 61% of
total supply. However, we have seen the actual demand figures decrease from 661 million ounces
in 2011 to 599 million oz in 2017 which was up a little compared with the previous 3 years
admittedly. So where is this Industrial demand going to come from? Just hold on to that thought.
3. Increase demand for Investment or speculative purposes. Well in terms of physical coin and
bar demand since 2011 we have seen demand fall from 212 million ounces in 2011 to just
151 million ounces in 2017. So just hold on to that thought for a moment.
So despite what CPM Group stated, we seem to have a situation that frankly does not
look very bright on the surface – we have enough silver above ground to last anywhere
from 26 – 50 years subject to current supply and demand levels; We have industrial usage
falling in real terms and which may be even further affected if we enter into tariff territory
and trade wars; and we have a general public and investment community just not interested
in buying silver for monetary or investment purposes and yet we see all over YouTube pumpers
cry ‘Silver prices are going to the moon.’ The question we all must ask ourselves is
How? Well before we answer that we shall depress
you just a little further. We also have a rising dollar value and as silver is Internationally
priced in dollars, this too has a downward effect on price.
So before you run off and throw yourself into the next passing car or jump off that bridge
nearby, we are going to address the options as to how prices are going to rise? But first
let’s listen to what other people suggest. 1. We hear some people cry – get rid of
the manipulation and the price will sky rocket. Well why would it? Physical supply and demand
is pretty much on parity or is mopped up by above ground stocks, and most companies have
All In Sustaining Costs either at or below current price levels, so why is there a need
to jack up prices? In fact, any price increase is likely to result in miners developing more
seams or perhaps those seams which are currently uneconomic, thereby increasing supply and
thus having a downward pressure on prices again.
2. Well the world’s economy is growing and Industrial usage will cause prices to rise.
Really? Well they haven’t over the past 7 years and frankly we have already mentioned
that the increase in solar panel demand is very unlikely to influence price. Yes there
are advances in medicine and refrigerator purchases from emerging and far eastern Markets
such as China. However we are already witnessing that world trade is in flux because of the
imposition of tariffs and the threat of more and emerging markets are suffering major currency
crisis so they are unlikely to increase demand any time soon.
3. OK option 3 investors will invest. Why should they? They have equity markets which
are still rip roaring ahead, we have interest rates slowly going up so bonds or interest
bearing investments will become more attractive and there is also the flavours of the year
such as cryptocurrencies in which to make a serious speculative buck, especially as
their prices have fallen back recently. So what is the answer? Well it depends on
your time frame. If you are looking over the next 20 years, then frankly you are relying
on gradual stock depletion, depletion of above ground stocks and the consequent rise in silver
prices. So, in our view, if you are aged between 20 -50 and can hold on around 20 years, regular
accumulation could prove a most attractive pension opportunity, providing of course you
will have a large enough safe to keep it in. However, short term there is only 1 remedy
made up of 2 parts namely; Fear and Panic. We need something that will suck the monies
out of the equity markets and into a safe haven investment such as gold and silver.
But not only that, whatever happens those monies must not go into the US dollar, as
we have seen recently seen with the Turkish Crisis but into gold and silver. Well here
are some of the remedies we have come up with: 1. A serious Military conflict involving the
United States and the more serious the better. 2. A major Banking or Financial Services default
such as witnessed in 2008 but on a much larger scale where the contagion spreads throughout
the whole Industrialised world. 3. A crisis in the support of the US dollar
with could be geopolitical, commercial as above or possibly domestic political – for
example the uncertainty that would be caused say if President Trump was impeached – though
this would only have a short-term effect. 4. Our proverbial black swan, something none
of us have thought of. The bottom line is something that will panic
the traders and investors causing both the physical demand for gold and silver to rise
but also, and the conspiracy theorists or market manipulation accusers will love this,
also, cause the speculators on Wall St and the Comex to paper trade silver – yes paper
trade it via calls and call options, causing its price to rise dramatically.
Now will these things happen? They might, but can you see why the gold and silver pumpers
are constantly spreading the fear of an imminent market collapse, dollar collapse or impending
war – as essentially it is one of these factors during the next few years or so that
will cause silver prices to rise well above what normal trading conditions will allow.
This is why we have continually reinforced our message for those who purchase silver
for capital appreciation, do so with the longer term in mind. If any of the events occur as
mentioned above, and prices sharply rise, then that’s an economic bonus, and if they
do not then you will have preserved your wealth while the fiat currency will have depleted
over those years. We hope you have found this video food for
thought. Of course you can disagree with us – by all means please share your views on
what you believe it will take to turn the silver market around.
We hope you have found this video interesting and informative and if so, please give it
a thumbs up and share it on twitter. Please ensure that you have subscribed to our channel
and pressed the bell sign so that you are notified of any future videos. Also kindly
visit our website at illuminatisilver.com and if you haven’t already done so please
subscribe as a free member for regular email updates and offers.
Disclaimer: Illuminati Silver owners come from a background
of Banking, International Wealth Management and Economics. Having now retired from these
worlds we are not qualified to give investment advice. Therefore, this and other productions
must not be deemed to be giving such advice and merely represent the personal views of