THE DISINFORMATION WAR: The Attempt To Disregard Silver Investor Demand In The Market

by Steve St. Angelo, SRSrocco:

There is a Disinformation War taking place in the silver market as certain industry analysis is confusing individuals by purposely disregarding the tremendous impact of rising investment demand.  Not only do I find this troubling, but I am also quite surprised how much the silver industry pays attention to this faulty analysis.  So, it’s time once again to set the record straight.

Setting the record straight has now become a new mission for me at the SRSrocco Report because the amount of disinformation and faulty analysis being published in the mainstream and alternative media is quite disturbing.  I decided it was time to say enough was enough, so I started by destroying the myth about the 1 million tons of gold hidden in the Grand Canyon in my recent article, THE BLIND CONSPIRACY: The Gold Market Is Heading Towards A Big Fundamental Change.

If you haven’t read that article and are still confused on whether or not there are billions of ounces of gold hidden in the Grand Canyon, I highly recommend that you do.  Now, if you read the article and still believe the U.S. Government decided to make the Grand Canyon a national park to protect all that gold, then you have my sympathies.  However, the reason certain individuals in the U.S. Government decided to make the Grand Canyon a national park because it was probably a GOOD IDEA to keep a beautiful part of the country off-limits from those who had no problem with destroying the banks of the Colorado by trying to extract gold at a pathetically low uneconomical yield.

If you have seen some of the episodes of the Discovery Channel’s Gold Rush show, the result of gold dredging operations isn’t pretty.  Here is a picture of the beautiful landscape outside of Dawson City in the Yukon that shows the effects of placer mining and gold dredging.  Now, how many families in the U.S. and abroad would have taken their kids on vacation to the Grand Canyon if it looked like this?  I am quite amazed at the lack of dignity and respect by individuals who only seek at the almighty Dollar.

(aerial photo of Dawson City, Yukon – picture courtesy of Peter Mather)

(aerial photo of Dawson City, Yukon – picture courtesy of Peter Mather)

 

To tell you the truth, I am glad that Teddy Roosevelt had the foresight to dedicate the Grand Canyon as a national monument back in 1908.  At least some politicians had the wisdom to keep OFF LIMITS parts of the country, so we weren’t able to destroy it by mining it for ultra low-grade gold or bulldoze it, pour concrete and build another million suburban homes.

Okay, let’s get back to subject at hand… Silver Market Disinformation.

Precious Metals Analyst Totally Omits Silver Investment Demand From Market Fundamentals

The motivation to write this article came from several of my readers who sent me an interview by CPM Group’s Jeff Christian, at the San Franciso Gold and Silver Summit.  In the video, Jeff claims that there has been a silver market surplus for ten years and those industry analysts, who have reported deficits, “Are simply wrong.”  Jeff goes onto to say, “they have been wrong the entire time they have been on the silver market.”

Jeff continues by explaining that to analyze the silver market correctly, you must look at surplus and deficits based on total supply versus total fabrication demand.   Furthermore, he criticizes industry analysts who may be promoting metal by throwing in investment demand to arrive at a deficit.  He says this is not the proper way to do “commodities research analysis.”

Jeff concludes by making the point, “that if you keep silver investment demand as an “off-budget item,” then the price matches your supply-demand analysis almost perfectly.”  Does it?  Oh… really?

If we look at the CPM Group’s Supply & Demand Balance chart, I wonder how Jeff is calculating his silver price analysis:

CPM-Silver-Supply-Demand-vs-Avg-Price-768x574.png

This graph is a few years old, but it still provides us with enough information to show that the silver price has nearly quadrupled during the period it experienced supposed surpluses.  According to the CPM Group’s methodology of analyzing total fabrication demand versus supply, how on earth did the silver price rise from an average of $5.05 during the deficit period to an average of $19.52 during the surplus period?  I arrived at the silver prices by averaging the total for each time-period.

Again, Jeff states during the interview that their supply-demand analysis, minus investment demand, provides an almost perfect price analysis.  According to the CPM Group’s 2016 Silver Yearbook, the total surplus for the period 2008-2016 was approximately 900 million oz.  With the market enjoying a near one billion oz surplus, why would that be bullish for a $20 silver price??  It isn’t… and I will explain why.

Read More @ SRSrocco.com