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Thread: Been away for quite a while - silver outlook looks grim for a few years

  1. #1

    Default Been away for quite a while - silver outlook looks grim for a few years

    1. Bitcoin is the new darling, it has three huge advantages over silver/gold. No storage costs, no premium, incredibly easy to move funds around the world and hard to trace.
    2. Industrial demand is consistently falling thanks partly to the $50 price in 2011. Solar cells are using far less silver paste, many are switching to all copper or aluminum. Electronics are moving away from silver usage as well, and above ground supplies (contrary to the silver bulls ridiculous assertions) are very high, there is no demand shortfall. I am puzzled by those who quote silver bullion sales, these are totally insignificant as a percentage of worldwide consumption.

    I'm thinking $12-$13 and at least 2-3 years before we see improvements. There are political events that could change that but they would have to be pretty drastic, an economic slowdown would help but if it is severe people tend to cash out of their positions, something to remember. Also, bitcoin will get tested in a recession, if it survive that we may be in trouble. Bitcoin however is becoming too large for its own good and attracting the attention of regulators. A crash in bitcoin when its total market value is 10 billion can be ignored but if it starts to hit numbers like 500 billion it poses a risk.

  2. #2

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    Quote Originally Posted by Silver76 View Post
    1. Bitcoin is the new darling, it has three huge advantages over silver/gold. No storage costs, no premium, incredibly easy to move funds around the world and hard to trace.
    2. Industrial demand is consistently falling thanks partly to the $50 price in 2011. Solar cells are using far less silver paste, many are switching to all copper or aluminum. Electronics are moving away from silver usage as well, and above ground supplies (contrary to the silver bulls ridiculous assertions) are very high, there is no demand shortfall. I am puzzled by those who quote silver bullion sales, these are totally insignificant as a percentage of worldwide consumption.

    I'm thinking $12-$13 and at least 2-3 years before we see improvements. There are political events that could change that but they would have to be pretty drastic, an economic slowdown would help but if it is severe people tend to cash out of their positions, something to remember. Also, bitcoin will get tested in a recession, if it survive that we may be in trouble. Bitcoin however is becoming too large for its own good and attracting the attention of regulators. A crash in bitcoin when its total market value is 10 billion can be ignored but if it starts to hit numbers like 500 billion it poses a risk.
    Good analysis. My thinking lines up pretty close to this too.

  3. #3

    Default

    Quote Originally Posted by Silver76 View Post
    1. Bitcoin is the new darling, it has three huge advantages over silver/gold. No storage costs, no premium, incredibly easy to move funds around the world and hard to trace.
    2. Industrial demand is consistently falling thanks partly to the $50 price in 2011. Solar cells are using far less silver paste, many are switching to all copper or aluminum. Electronics are moving away from silver usage as well, and above ground supplies (contrary to the silver bulls ridiculous assertions) are very high, there is no demand shortfall. I am puzzled by those who quote silver bullion sales, these are totally insignificant as a percentage of worldwide consumption.

    I'm thinking $12-$13 and at least 2-3 years before we see improvements. There are political events that could change that but they would have to be pretty drastic, an economic slowdown would help but if it is severe people tend to cash out of their positions, something to remember. Also, bitcoin will get tested in a recession, if it survive that we may be in trouble. Bitcoin however is becoming too large for its own good and attracting the attention of regulators. A crash in bitcoin when its total market value is 10 billion can be ignored but if it starts to hit numbers like 500 billion it poses a risk.
    While I agree with it taking 2-3 years before we see improvements, I don't agree with your statement about industrial demand falling.

    The Thomson Reuters 2017 Interim Silver Market Review (PDF) (Published 2017) shows that industrial demand for silver is estimated to have increased by 19 million ounces from 2016 to 2017. Solar demand is up slightly in 2017. Jewelry and Silverware are up an estimated 7 million ounces in 2017.

    Coins and Bars have fallen off a cliff in 2017, with an estimated decrease of 76 million ounces for 2017. Of that decrease, a decrease in demand of 47 million ounces came from North America. North America was responsible for a decrease of 51 million ounces in investment demand offset by slight increases in jewelry, solar and other areas. You can see that part of this decline is that the sales of American Silver Eagles seems to be down from 37.7 million in 2016 to 18 million in 2017. The Silver Institute says: "Strong decline in physical bar and coin demand which has been particularly driven by very weak sentiment in North America."


    I believe Indian Silver Imports are also down dramatically in 2017. Typically, India imports over 200 million ounces of silver in a year (6,220 metric tonnes), but the first 9 months of this year only imported 129 million ounces.

    Annualized, that's 172 million ounces, or down roughly 30 million ounces.

    Indian Silver Imports Spiked 152% in September.

    Indian Imports of 4,035 tons of silver in the first nine months of the year equaled approximately 129,728,264 ounces.

    Indian Silver Market Study (PDF) Published 2017.

    This report says Indian demand was 160 million ounces in 2016, but I believe the Silver Institute's 2017 report says that for the last 4 years India has imported over 200 million ounces. There appears to be a discrepancy in the reporting there.

    " the fall in silver prices between 2012 and 2015 saw a massive expansion of local demand."

    Investment Demand
    " in a period of five years from 2010 to 2015, this surged from 25.7Moz (800t) to 110Moz (3,400t)."

    " However, the previous rise in investment demand come to an abrupt halt in 2016 as investors used the rise in silver prices to book profits and as an even tougher clampdown on unaccounted money and the parallel economy hurt demand, which fell by around 70%."

    I believe the return in investment demand awaits an upward trend in silver prices, which I hope to occur with 2-3 years.
    Last edited by WhatsUpDoc1958; 12-05-2017 at 10:11 PM.
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  4. #4

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    Quote Originally Posted by SilverStocker View Post
    Good analysis. My thinking lines up pretty close to this too.
    Not suggesting you are being short sighted, but;
    What if I told you, block chain is going to be a way for entities to accumulate electronic, and then physical PMs with no audit trail.
    In time, this will be a new way to accumulate PMs.

  5. #5

    Default

    Quote Originally Posted by CMegladon View Post
    Not suggesting you are being short sighted, but;
    What if I told you, block chain is going to be a way for entities to accumulate electronic, and then physical PMs with no audit trail.
    In time, this will be a new way to accumulate PMs.
    There may be new ways to accumulate PMs, but outside of a world crisis (it can happen but will not likely be over a sustained period) I just don't see anyone really caring anymore. The farther away we get to people thinking PMs are anything close to money, the more demand will wane. Who cares if there are new ways to accumulate PMs when no one even wants them anymore? Do the upcoming generations care at all about PMs? Those who do care are dying off.

  6. #6

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    I think it’s still too early to treat electronic currency the same as a market. Markets rise and fall with supply and demand, Bitcoin just has not behaved that way so far. I don’t trust anything that only goes up and it might take the same two or three years for it to stabilize. In the mean time, I’ll keep using PMs as a more conservative play.

  7. #7

    Default

    BitCoin isn't an investment. It's a darn good currency. It's lost half its value several times, and while it does keep rising nominally, it is losing marketshare to other copycats. With corporations and central banks developing their own blockchain currencies going forward there is a yet to be realized incentive for the powers that be to clamp down on the BTC exchanges as a competing and unregulated currency. Yet the cryptos are being all but allowed to run rampant to get the tech off the ground for now. Though of course cryptos have no intrinsic value and are only as valuable as the utility they are capable of providing plus or minus rampant speculation. Metals on the other hand can't be conjured from cyberspace. BTC mining is going to hit a ceiling someday, and the speculators will find a copycat that hasn't hit its ceiling yet, and both the ceiling and the mining resource requirements are arbitrary based on the whims of the protocol's developers for which there is an nigh unlimited supply of electrons. Hardly wealth, a lot more like fiat in that respect.

    I'm not worried about industrial demand. Silver follows gold. Gold demand from industry is miniscule. For silver that's simply an added bonus if it kicks in, and if it ever does kick in, there is no substitute for silver. There would be no going back to today's prices once industry is forced to pay higher prices, assuming that fiat currency can survive in a high priced metals environment signalling the lack of fiat buying power.
    Trading debt based fiat currency for precious metals is not an investment. Rather, making such an exchange amounts to divestment from the currency which we are invested in by default due to how earnings and taxes are denominated.

  8. #8

    Default

    We haven't been down the road far enough, to know what power will be required to resolve the chain algorithm requirements, currently they serve to create security for each chain.

    As transactions go up in volume, the more the miners have to work to resolve the crypto chain's requirements, that's why we hear of 8 hour transactions times, etc

    IDK, I've not done this, just putting a picture together. just kinda cleared up tonight to put into english for you to read

    We've been through several tornadoes and crypto currencies were worthless as a currency and they were not regarded at all as to their availability or not

    FRN Cash was king

    Crypto's are NOT a Currency.
    Merchants will generally not accept this as a currency and will not go out of their way to change
    unless the change comes to them

    IDK

    There is NO good reliable replacement for silver in many industrial applications
    It Works, It Has Value, always will
    Is a second class metal in many ways yet is still superior over most others, IMHO

    Copper is a First World Countries Best Friend Forever!!!
    Really a Best Bet!
    Creates lots of silver too! (gutter metal pays the bills, says the miner )

    LOL

    Gold is Gold, it's the Kings Metal!


    The Elites are using their FRN Cash king, to manipulate the Kings Metals markets, what to do?


    1st:
    Treat all cryptos as an investment, whether or not you can use it to trade for anything
    Block-Chain DOES TRACE and STORE ALL TRANSACTIONS but what happens to it's power requirements in the future?
    Are they exponential? as uranium has a half life, do crypto security chains require double energy to secure future links?

    2nd:
    Treat all cryptos as an investment, resolve #1 and then; make a ton of money, ask for a cut of the find and pay to help the poor bloke who is considering digging up a landfill for a lost hard-drive, I remember the story from several years back, he gave up then, he claims to be rich if he found it today

    in any case
    GL
    Last edited by Chump Change; 12-06-2017 at 10:56 PM. Reason: Wrong Capital Letter
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  9. #9

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    Quote Originally Posted by WhatsUpDoc1958 View Post
    While I agree with it taking 2-3 years before we see improvements, I don't agree with your statement about industrial demand falling.

    The Thomson Reuters 2017 Interim Silver Market Review (PDF) (Published 2017) shows that industrial demand for silver is estimated to have increased by 19 million ounces from 2016 to 2017. Solar demand is up slightly in 2017. Jewelry and Silverware are up an estimated 7 million ounces in 2017.

    Coins and Bars have fallen off a cliff in 2017, with an estimated decrease of 76 million ounces for 2017. Of that decrease, a decrease in demand of 47 million ounces came from North America. North America was responsible for a decrease of 51 million ounces in investment demand offset by slight increases in jewelry, solar and other areas. You can see that part of this decline is that the sales of American Silver Eagles seems to be down from 37.7 million in 2016 to 18 million in 2017. The Silver Institute says: "Strong decline in physical bar and coin demand which has been particularly driven by very weak sentiment in North America."


    I believe Indian Silver Imports are also down dramatically in 2017. Typically, India imports over 200 million ounces of silver in a year (6,220 metric tonnes), but the first 9 months of this year only imported 129 million ounces.

    Annualized, that's 172 million ounces, or down roughly 30 million ounces.

    Indian Silver Imports Spiked 152% in September.

    Indian Imports of 4,035 tons of silver in the first nine months of the year equaled approximately 129,728,264 ounces.

    Indian Silver Market Study (PDF) Published 2017.

    This report says Indian demand was 160 million ounces in 2016, but I believe the Silver Institute's 2017 report says that for the last 4 years India has imported over 200 million ounces. There appears to be a discrepancy in the reporting there.

    " the fall in silver prices between 2012 and 2015 saw a massive expansion of local demand."

    Investment Demand
    " in a period of five years from 2010 to 2015, this surged from 25.7Moz (800t) to 110Moz (3,400t)."

    " However, the previous rise in investment demand come to an abrupt halt in 2016 as investors used the rise in silver prices to book profits and as an even tougher clampdown on unaccounted money and the parallel economy hurt demand, which fell by around 70%."

    I believe the return in investment demand awaits an upward trend in silver prices, which I hope to occur with 2-3 years.
    I'll take you at your word however I think it warrants a more careful overview. Industrial demand may be up a little but it is just as important to know what component is driving that. I'm not sure but I'll hazard that it is demand driven by third world countries who are coming on board to modernization and thus consuming more televisions, cell phones and other electronic gadgets. This is offset though by the huge decline in per unit use of silver in products (especially in photo voltaic) which continues unabated. Eventually that will catch up and I think we are close to that turning point. Indian demand is volatile and driven by political considerations as well (taxes on gold, etc.), what makes silver special in my opinion is industrial demand, the rest is more of a speculative nature.

    One more comment on bitcoin. Many countries use currency controls to mitigate the "risk" of capital flight, this is what makes bitcoin so attractive. If you're in Greece when they declared capital controls getting your money out via gold/silver is impossible except perhaps in small quantities through smuggling (and many get caught). I think at the peak of the Greek crisis there were about 80 different alternative bartering/currency systems, all were beneficial in the sense that none of them were subject to regulation.

  10. #10

    Default

    has anyone read that article that says if silver were to historically match the amount of US$ in circulation, which it historically has, silver would have to get to about US$1400/oz.
    "If Americans ever allow banks to control the issue of their currency, first by inflation and then by deflation, the banks will deprive the people of all property until their children will wake up homeless"
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    "the FED is a bank"

    "I, however, place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared."
    Thomas Jefferson

    "US debt is US$20Trillion" and counting

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