Silver Market Fundamentals: The Numbers Don’t Lie by Jeff Nielson, Sprott Money
“Statistics can be used to say anything.”
Many readers are familiar with this cliché, but few understand its real significance . Numbers don’t lie, meaning the raw data which we collect on a nearly infinite number of subjects. Statistics, on the other hand, are rarely just raw data. Instead, they are numbers that have been massaged (i.e. manipulated) with various adjustments.
Deception and deceit enters into the picture when our governments (and charlatan economists ) create their statistics, and do so by making adjustments which are completely indefensible from an analytical standpoint. These adjustments don’t improve upon the raw data in terms of adding clarity, but rather they pervert the data into numbers which cease to have any resemblance to the real world.
Thus, with their adjusted statistics, these frauds-with-numbers can make the U.S. Great Depression look like a recovery. An even more obvious example is found in all the imaginary “jobs” the U.S. government claims to have created during its imagined recovery .
Fewer and fewer people are working in the U.S. every year, and virtually every month. Since the start of the “recovery,” the U.S. economy has lost an additional 3+ million jobs. The “11 million new jobs” boasted of by the political puppets, and manufactured by charlatan economists, never existed. They were completely created with mammoth – and bogus – adjustments.
“Numbers don’t lie – people do.”
This brings us to the silver market, and some numbers that illustrate some unequivocal truths. There are few better sources for numbers on silver than precious metals icon, Eric Sprott. In a recent interview with The Daily Coin , Sprott provided a few interesting numbers.
Silver is mined at an 11:1 ratio to gold. This is raw data. This becomes significant when we look more raw data numbers: the natural occurrence of these two metals in the Earth’s crust. Silver is approximately 17 times as plentiful as gold. Therefore, all things being equal, we should expect silver to be mined at a near-identical ratio of 17:1.
Instead, silver is under-produced by roughly 50%. How? Why?
We know it could not possibly be due to lack of interest or demand. Historically, over a span of thousands of years, the price ratio between silver and gold was a very steady 15:1. This means that (over thousands of years) humanity has exhibited a slight price preference for silver. It occurs at a 17:1 ratio, but people have been willing to pay for it at a slightly higher 15:1 ratio.
In more modern times, we have proof that humanity’s desire for silver hasn’t waned at all. As was explained in a previous commentary , the silver market has been in a state of supply deficit for thirty consecutive years – something totally unprecedented with any other commodity market in history.
Indeed, it is impossible for any other commodity on the planet to ever experience a supply deficit of this magnitude, with one exception: gold. What makes gold and silver totally unique in this respect? Being “precious,” we have conserved these metals over thousands of years, and as a result humanity has accumulated gigantic stockpiles of them. In fact, nearly all the gold ever mined has been conserved.
However, this is no longer true with silver. In addition to being a more brilliant metal than gold, silver is incredibly useful. Over the past quarter century, more silver-based patents have been created than with any other metal on the planet. But not only does silver have unparalleled versatility, it is an extremely potent metal, meaning that in many of its commercial applications it is used in only trace amounts.
Why is this of significance? Because in such tiny quantities it is economically impractical to ever recycle any of this silver, at prices anywhere near the (absurd) levels of recent decades. Thus this silver is being consumed in tiny amounts, but in billions and billions of consumer products, over a span of decades.
Unlike gold, our stockpiles of silver are disappearing. As previously mentioned, for at least the last thirty years, the only way that our strong demand for silver could be satisfied has been through consuming portions of these stockpiles. Perhaps no one has studied this dynamic longer and more closely than noted silver researcher Ted Butler.
Butler argues that consumption of the world’s silver (on a net basis) dates back more than 70 years , to World War II. This begs the obvious question of how much (above-ground) silver is left in the world, but no one can supply a precise answer. Estimates have ranged from a high of 6:1 (versus gold), all the way down to where some commentators argue that the stockpile of gold is now larger than the dwindling stockpile of silver.
Give these numbers, there could never possibly be any legitimate explanation as to why silver is under-produced by 50%. In fact, there is only one illegitimate explanation: price suppression . Let’s toss out some more numbers. In the 1990s the price of silver was manipulated to a 600-year low.
Silver Market Fundamentals
We’re not talking about minor, subtle price suppression here, but rather a massive, systemic attack on this market, which began (originally) a hundred years ago. Another silver historian, Charles Savoie, provides the background here, in his noted chronology The Silver Stealers.
Savoie points out that during World War I, the British Empire conscripted vast numbers of soldiers into its army from India’s immense population. But these soldiers would not accept banker-paper for wages. They would only fight if paid in hard silver – the “Peoples’ Money.”
By the end of World War I, a large percentage of the world’s silver had flowed into India. Enter the Old World Order , the oligarch crime syndicate which readers know today as “the One Bank.” Both contemporary sources like Bill Still (The Money Masters) and historical sources like Charles Lindbergh Sr. ( The Economic Pinch) document how this crime syndicate was already pulling the strings of our puppet governments a hundred years ago.
These Western oligarchs ordered the British government to loot all the silver from India after World War I. Once that had been done, the Old World Order then commanded that much of that silver be dumped into the global market, virtually all at once. It was these massive twin crimes which distorted (and destroyed) the historic 15:1 price ratio which had existed for roughly 5,000 years.
Silver has been under-priced, both versus gold and in absolute terms, ever since. However, it was only in the 1990s that the One Bank took this price suppression to a criminal extreme. The 600-year low they produced by that systemic price manipulation literally destroyed the global silver mining industry .
Well over 90% of all silver mining companies were bankrupted. Since this era of extreme silver price-suppression began, roughly 80% of the world’s silver is now produced as a by-product of other mining (primarily lead, zinc, and copper) – further proof of extreme price manipulation.