$ Silver $

How Much Uncounted Silver?
To demonstrate that there is a large amount of silver that is going uncounted, the May 11 report centered on just one form of under-reported silver available, old silver coins, particularly old U.S. coins. Pre-1965 U.S. dimes, quarters and half dollars, which contain about 90% silver and 10% copper, are traded today in bulky cloth bags each containing $1,000 face value of the obsolete, so-called “junk” silver coins. The word “junk” is used in the industry merely to distinguish the coins in those bags from more valuable coins from a numismatic point of view.
A very popular way to accumulate silver over time, each bag of circulated “90%” is traded as though it contains about 715 ounces of silver to account for wear. When new $1,000 face value of the coins would have contained 723.38 ounces plus or minus the mint’s tight tolerances. So a little over 1% of the actual metal is assumed to be missing from the coins due to circulation.
Individuals have been accumulating silver coins for decades. In order to attempt to quantify how much silver remains available from that source, one would have to first determine how much there was to begin with, how many coins were first made and assume a starting point that would include virtually all coins that could possibly reside inside those old moldy cloth bags. Then subtract an amount assumed to be held by collectors for their numismatic value (which is assumed to be more than the bullion value). Then subtract an amount assumed to have been lost or destroyed during the period. Then subtract an amount assumed to have been melted, either for conversion into bars or for use in industry. (Coins melted for conversion into investment bars remain in above ground stocks, but should not be counted as in bags, they are bars now. Coins melted for use by industry can be assumed to have been consumed, although some portion of that will return to the market in the form of scrap from time to time.)
It is beyond the scope of this paper to account for all the silver coins produced globally that might still be hoarded by individuals purely for their bullion value. Since silver was widely used for making coinage by dozens of countries, including notably the U.S., Mexico, Canada, the U.K., Austria, Australia, the Bahamas, Belgium, France, Isle of Man, Italy, Switzerland, and others, assembling mintage records of all minted silver coins would be a daunting task. Yet one can hope that some intrepid researcher with tons of time and the drive to accomplish the tedious work required will attempt it some day.
For now, since mintage records for U.S. coins are readily available and easily assembled (see mintage figures and calculations), and since the U.S. was by far the largest source of modern silver coinage (after 1900), we can at least establish how much silver there was to begin with from that one country.
If we assume that any coin minted before 1900 is unlikely to be traded in so-called “junk” silver bags, but rather the surviving pre-1900 coins are tucked away in coin collections, and if we assume that beginning with coins dated 1900 going forward an increasing percentage of the minted coins would be contained in those bags. And if we assume that after World War Two, a large percentage of the circulated coins would still remain in the bags, because they are worth more in bullion value than to collectors. Then it just boils down to assigning various percentages to those limiters.
As it turns out, the U.S. used 2,283,853,459 ounces of silver to make silver coins from 1900 to 1964 (source, U.S. Mintage Records, “A guidebook of United States Coins,” R. S. Yeoman).
Call it roughly 2.3b ounces or a little over 71,000 tonnes. Interestingly, 551,888,075 ounces, or about 17,000 tonnes were used in the year 1964 alone. In other words nearly one-quarter of all the silver used by the U.S. for making coins from 1900 to 1964 was used in the last year of silver coinage. (Probably in anticipation of hoarding as the U.S. quit making silver coins). Also interesting, from the end of World War Two to 1964 the U.S. used 1,344,282,888 ounces or just under 42,000 tonnes of silver to make dimes, quarters and half dollars. So the period 1946-1964 accounts for about 59% of the total used since 1900.
Taking a stab at assigning percentages to reduce the mintage figures into estimated amounts held is subjective at best, and just a guess, but here is one writer’s estimates:
If the above estimates are anywhere close to reality, then there is something on the order of 900 million ounces of silver sitting in private hoards in cloth bags. That is the equivalent of about 1.3 million of those bags, or about one bag (715 ounces) for each 240 U.S. citizens. Intuitively that sounds about right having been involved with the rare coin and bullion industry for nearly three decades, but the invitation goes out to other analysts to take this work and see what they come up with. It is by no means meant to be a definitive work, but just a way to roughly quantify how much bullion is going uncounted.
While looking for estimates of the amount of silver bars and rounds which have been produced and sold just since 1972, it has become apparent that will end up being a subject for the same intrepid researcher that tackles the global mintage records. In other words, that will also be a daunting task, if it is even possible. Suffice it to say that there are millions of ounces of bar and generic-round silver out there in private hoards as well.
Easily identifiable silver stocks which some analysts used to base their figures are just a fraction of the global silver products held in private hands. The private-market silver network is efficient and able to move silver from private hands to regional demand in a matter of hours or days, nearly always in answer to price movement. While imbalances do occur sometimes, availability is always there at a price.
At the end of the day it really isn’t necessary to know precisely how much silver is not being counted, but rather to understand there is an amount that is uncountable. People who watch the market closely, both on the paper trading and the physical bourses, will get an advance warning, measured in a matter of days or weeks, when supplies really do become short. That will come in the form of rising prices and steeply rising premiums as the market strains to fill larger-than-normal orders and the (mostly) free market finds the sweet spot in the price-availability equilibrium.
To sum up this thought, so far the new silver ETF has seen an off take of about 73 million ounces or so, which is probably far less than the amount that it would take to put a crimp in available supplies at current prices. A good portion of those 73 million ounces does indeed represent new investment demand for the metal, but we have to recognize that most of the new investment demand got in ahead of the well-publicized-in-advance ETF in a collective front-running maneuver. The Silver ETF is yet one more example of the time-tested market axiom: “Sell long-expected news once it arrives.”
However, having said all that, the new ETF has provided a completely new source of liquidity and provided a way for much larger institutional investors to get happily involved with silver going forward. Now they can do so without having to fuss with security and storage of the bulky metal. They are probably the ultimate bargain hunters just waiting for some level of pullback. That means it probably won’t be all that long before enough new wealth flows into the silver market enough that the small mountain of uncounted silver out there is no longer as much a factor. After all, it is new demand that will move silver higher ultimately, not today’s faithful.
Potential bear raids notwithstanding, things may be looking up for silver short term. The latest report available, for June 2, showed silver holdings ticking to the upside for the first time since the May 18 SLV report. On June 2 SLV reported adding 14.7 tonnes of silver for 2,161.5 tonnes total. It is too early to tell for sure, but the money flow for SLV may have finally turned a corner from “sell-the-news” negative to “get-some-silver-exposure” positive with that June 2 report. And, while it may take a while for enough new wealth to overcome the uncounted silver supplies out there, it’s a good bet that silver will find a new, higher equilibrium level than where this story began last August.
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there is this guy who has a reasonable view of the market.....and kind of keeps track of things

go here for your daily fix:

http://www.silveraxis.com/index.html

 

What's with the silver/gold divergence for the past 2 days? Bouncing back from 11.90 and drifting anemically while gold making fresh new highs.

 

Gold's only making new very short term highs. It's still way below its recent record price... Gold is reacting to the middle east situation whereas silver is not. Silver usually tends to lead gold in the abscence of geopolitical pressure so it's possible we could see a big sell-off in gold again if the geopolitics calms down.

 

657 is the .618 fibbo pull up resistance from the 543 low and the fact that the Gold Spike Prevention Team (GSPT) is up late at night due to the latest Middle East Festivities............

gold left to it's own market should be up $30 today...........just an opinion..

 

Doesn't seem like they were doing too much good today, did it?

I thought that the boys were gonna hammer it again to make that nice double peak formation with the second peak lower just like 25 years ago... but seems like the world is starting to do its own thing...

Kinda scary, with gold at these levels.

 

$80-$90 oil will force Bernanke to raise some more....I wonder who will want to be short gold/oil come Friday afternoon...

 

I haven't looked at gold, but according to the weekly committment of traders report, most of the oil shorts are commercials, with speculators and funds making up the longs.

I guess if you are at NISOC (National Iranian South Oil Company) or Exxon Mobil you might be happy locking in the current price.

Can't you just imagine the Iranian Oil Minister saying "Pssst, Ahmadinejad, we want to hedge our 2007 production... Say something scary about solidarity with Hezbollah and do your wink thing again when you say we won't use oil as a weapon."

 

Iran imports 50% of its gasoline since they dont believe in building too many refineries...so Iran is calling a bluff on the west to throw up a blockade...Iran then becomes a "victim of the imperialist US"`and further unites the Islamo cause...

Iran sells its oil to China and the EU, not the US ...so you get the idea.....

 

looks like mini fat finger struck overnight in YI

at around 6:14-6:15 am EST

I play by the rules so I did not try to pick up

truely erroneous trades ... do not want a problem
with ECBOT operations or my broker busting silly prints
on me