Three of the largest silver producers in the world saw their combined mine supply continue to weaken in the first seven months of 2019. While Mexico and Chile experienced declines in their silver production, Peru was by far the biggest loser. Peru, which is the second-largest silver producer in the world, suffered an 11% decline in the country’s domestic mine supply Jan-Jul 2019.
Even though the decline of silver mine supply at these leading producers isn’t impacting the current silver market price currently, it will likely do so as the Fed and central banks lose control of their QE money printing and asset purchase policy. In less than two weeks, the total U.S. debt has increased by another COOL $85 billion. With total U.S. public debt now at $22.92 trillion, it’s only a matter of time, maybe just a few weeks before we reach another record of $23 trillion.
With the global silver mine supply this year to reach an estimated 850 million oz of production, the total value based on the Kitco $16 average for the year would only be $13.6 billion. Thus, the U.S. Government has increased the public debt in the past two weeks by more than SIX TIMES the value of the Global silver production this year.
Yes, I do realize that comparing the value of silver to the increase in U.S. debt hasn’t mattered to the markets, but it will. What will happen with silver (and gold) will be very similar to the investor reaction to ENRON when the market realized that the company was a fraud. And, let’s not forget that several top Wall Street analysts, in their glorious (Let’s continue to bamboozle investors) fashion, continued to put out BUY recommendations days before ENRON collapsed.
So, the market will continue to be BAMBOOZLED by Wall Street and central banks right up until the time that the GIG IS OVER. This means the time to acquire Gold and Silver physical insurance is likely much wiser to purchase BEFORE than the day AFTER the GIG is up.
Okay, let’s look at the Top silver producers decline in silver mine supply Jan-Jul 2019:
In the first seven months of the year, Peru’s domestic mine supply is down a whopping 278 metric tons (11%), while Mexico is down 146 metric tons (4%), followed by Chile down 57 metric tons (8%). The total decline in silver production from these three countries is 481 metric tons (mt) or 15.5 million oz.
Furthermore, Polymetal International (LON:POLYP), Russia’s largest silver producer, which accounted for 58% of the country’s total mine supply last year, is down 14% in the first half of 2019. Russia is the fourth largest silver producer in the world, followed by Chile. So, four of the top five silver producers in the world are showing considerable declines in mine supply.
I get a laugh at the analysis put forth by some members of the precious metals community. Trey Reik, a managing member of Bristal Gold Group, was interviewed by Kitco at the October Mining Conference in New York. Here was the summary of Reik’s gold analysis:
When it comes to gold’s price performance, while monetary policy is an important driver, the long-term key force remains the overall debt to gross domestic product (GDP) ratio, this according to Trey Reik, managing member of Bristol Gold Group.
In my view, gold’s all about monetary imbalances.
When Reik was asked a question about silver, he stated that he wasn’t interested in silver because it was not a monetary metal, and it was likely to see a higher 100/1 Gold-Silver ratio going forward. This is the typical reply from a precious metal analyst who believes the world is run by ENERGY TOOTH FAIRIES.
These analysts who state that silver is not a monetary metal fail to realize the ENERGY DYNAMIC that drives the MONETARY SYSTEM won’t matter if gold is used to back all the debt. That is their M.O. or modus operandi. If we found another 4-5 Saudi Arabia’s worth of oil in the world, then what Trey Reik states, makes some sense. However, we haven’t found 4-5 Saudi Arabia’s worth of oil, as the world’s new oil discoveries are at a 70-year low. That is not a good sign, indeed.
Lastly, we got some BIG PROBLEMS ahead with that ENERGY TOOTH FAIRY as U.S. shale oil production seems to be struggling to keep production at 7 million barrels per day. There’s a lot more interesting stuff coming up that should wake up the DEAD.