The U.S. silver supply will likely be in jeopardy in the future when the
highly inflated paper markets finally crack. This is not a matter of
if, but WHEN. If we consider the top two precious metals and copper,
silver has the highest net import reliance as a percentage of domestic
consumption.
According to the data put out by the USGS – U.S. Geological Survey, and
the GFMS team at Thomson Reuters, the United States silver net import
reliance as a percentage of total consumption, was 72%, versus 36% for copper
and a negative 48% for gold:
The USGS reported that of the apparent 8,100 metric tons (260 million oz)
of total silver consumption in 2015, the United States relied on 6,156 metric
tons (198 million oz) of foreign silver imports to meet total demand.
As we can see this was nearly the opposite percentage for copper. The
United States only relied upon 36% of copper imports to meet its total copper
consumption in 2015.
Now, for gold… it’s a much different story. The USGS did not provide
any net import reliance percentages of total consumption for gold due to the
following footnote in their 2016 Gold Commodity Summary:
The United States has been a net exporter; however, large unreported
investor stock changes preclude calculation of a meaningful net import
reliance.
Taking this into consideration, I came up with my estimate of U.S. gold
net import reliance as a percentage of consumption. While it is
difficult to estimate “Investor gold flows” in and out of the United States,
I focused on total demand versus total supply. I used the data from
GFMS 2016 Gold Survey and the World Gold Council 2015 Full Year Demand Trends
Report.
Yes, I realize these figures may be corrupted, manipulated or inaccurate,
but it is the best we can go by to get a BALL PARK figure.
NOTE: Different official reporting sources post
figures in metric tons and ounces. Here is the conversion for metric
tons (1 metric ton = 32,150 troy ounces).
In 2015, the United States produced 216 metric tons (mt) of gold and had
additional scrap supply of 70 mt to equal 286 mt. According to the
World Gold Council, total U.S. gold demand in 2015 was 193 mt. Thus,
the United States had an extra 93 mt of gold above and beyond its “supposed”
consumption. If we divide the surplus 93 mt into total
consumption of 193, it equals 48%.
This allowed the United States to export that extra gold to Eastern
countries. Why? Because, most Americans believe gold is a
“Barbarous Relic”, due to the brainwashing by the Einsteins at CNBC,
Bloomberg and Fox Business.
The U.S. Silver Net Import Reliance Has Surged Since 1999
In 1999, the United States only relied upon 39% of its total silver demand
from foreign import sources. According to the USGS figures, the U.S.
relied upon 2,145 mt (69 million oz) of foreign silver imports to meet its
total demand of 5,500 mt (177 million oz) in 1999.
However, as time went by, U.S. silver import reliance as a percentage of
total consumption increased to a record high of 72% in 2015:
Since 1999, the United States silver net import reliance has increased
from 2,145 mt (69 million oz) to 6,156 mt (198 million oz) in 2015. Now,
a majority of that increase is due to AMERICANS BUYING lots of physical
silver investment.
This chart below says it all. In 1999, total U.S. physical silver
investment (my estimation including GFMS 10.7 Moz of Official Silver Coin
sales) was 15 million oz (Moz) versus total demand of 177 Moz. However,
Americans purchased a record 100 Moz of physical silver investment in 2015 versus
260 Moz of total demand (GFMS 2016 World Silver Survey):
Thus, U.S. physical silver investment surged from only 9% of total
domestic demand in 1999 to 38% in 2015. As we can see, the BLUE
area in the chart above stayed about the same, while the SILVER
area increased significantly. Matter-a-fact, if we subtract
physical silver investment from total demand during these two periods, this
would be the result:
1999 Total Silver Demand – Physical Silver Investment = 162 Moz
2015 Total Silver Demand – Physical Silver Investment = 160 Moz
Basically, the big increase in total U.S. silver demand has come from the
surge in American physical silver investment since 1999.
That being said, U.S. silver net import reliance surged even move than the
increase in American physical silver investment demand in this sixteen year
time period due to falling mine and scrap supply. For example, the U.S.
produced 1,600 mt (51 Moz) of silver in 1999, versus 1,100 mt (35 Moz) in
2015.
One more very interesting data point. According to GFMS, Americans
purchased 2.3 Moz of physical gold investment versus 100 Moz of physical
silver investment in 2015. Thus, for every once of physical
gold Americans invested in 2015, they purchased 43 oz of silver.
The data and figures shown above presents a serious situation for
Americans who want to invest in silver when the highly inflated paper markets
crack…. and crack they will. Today, we are watching the gold and silver
price surge higher while the Dow Jones Index falls 150 points from its CLIFF
upon the MOUNTAIN OF DEBT that it rests.
I have to tell you all, this will get very ugly when the markets finally
succumb to the forces of gravity and the true fundamental financial laws…
which we haven’t followed for quite some time. And yes, keep an eye on
the ENERGY MARKETS.
Even though the DRILLING RIG GERBILS are running faster to produce more
oil in the United States currenty, this is not sustainable over the long
haul. Unfortunately, there is a lot of LOUSY ENERGY ANALYSIS in
the media which is misleading investors to believe the earth has a CREAMY
NOUGAT CENTER of oil…. for the taking. Thanks to James Howard
Kunstler for that wonderful definition of abiotic oil.
I will be providing articles and reports in the future showing why DEEP
ABIOTIC OIL is a RED HERRING and will not save us from the oil collapse
heading our way.
Lastly, if you haven’t checked out my newest guest post, Dow Companies Report Worst Revenues since 2010,
Dow Rises to 20,000 (LOL?), I highly recommend it.
Check back for new articles and updates at the SRSrocco Report.
