What Happens If Silver Exchanges Can't Meet Demand? - Peter Krauth

Summary

In this Kito News episode, host Jeremy Saffer discusses the rising prominence of silver in various industries with guest Peter Krauss, author of 'The Great Silver Bull.' Krauss explains how gold's all-time highs and a shift towards green technologies are driving silver's demand. Despite silver's price consolidating, he predicts a sustained upward trend, potentially reaching $300 by 2030 based on historical ratios and inflation. Strategies to mitigate supply-demand constraints include investing in silver now and exploring alternatives like silver ETFs trading at discounts.

Takeaways

• 🌟 Silver's price is experiencing a significant increase, breaking past the $26 mark and approaching $30.
• 🔋 The rise in silver's value is attributed to its diverse applications, including solar panels, electric vehicles, and 5G technology, beyond just jewelry and coins.
• 📈 The silver market has been forming a triangle pattern on charts since March 2023, indicating a potential for a major price movement.
• 💡 Peter Cruss, author of 'The Great Silver Bull', suggests that gold's all-time highs and lack of mainstream excitement could be a bullish sign for silver.
• 📊 Despite the potential for a short-term correction, Cruss believes we are at the beginning of a sustained, long-term upward trend for silver prices.
• 🔄 Silver's industrial demand is growing, with solar panel production alone forecasted to require over 200 million ounces in the coming year.
• 🌍 Geopolitical tensions and economic policies are also contributing factors to the reshaping demand for silver globally.
• 🏭 Silver mining output has dropped significantly in countries like Mexico and Peru, raising concerns about future supply.
• 💰 The gold-silver ratio and historical comparisons with real estate prices and inflation rates are used to make bullish predictions for silver's future value.
• 🚀 Cruss projects a potential silver price climb to over $30 in the latter half of 2024 and speculates about reaching $300 by 2030 based on various indicators.
• 💡 Investors are advised to purchase silver now while premiums are relatively low, as demand and prices are expected to increase.

Q & A

What is the current trend for silver prices as discussed in the transcript?

The current trend for silver prices, as of the discussion, is an upward movement. Silver has broken past the $26 mark and is getting closer to $30.

What are the main factors driving the recent silver rally as per the discussion?

The main factors driving the silver rally include gold making all-time highs, increased industrial uses of silver especially in solar panels and electric vehicles, and its role in 5G technology. Additionally, the lack of mainstream media attention and public excitement about gold is seen as a bullish sign for precious metals.

What is the triangle pattern on silver market charts and what does it suggest?

The triangle pattern on silver market charts is a technical analysis pattern where the price swings become progressively smaller, suggesting that the silver market is at a crossroads. This pattern usually indicates a period of consolidation before a significant price movement, either up or down.

What does Peter Cruss think about the potential for a sustained upward trend in silver prices?

Peter Cruss believes that the current market conditions indicate the start of a very long and sustained move much higher for silver prices. He bases this on the lack of public excitement around gold reaching all-time highs, which historically has been a sign that the market is closer to the beginning of a bullish phase rather than the top.

What are the potential short-term challenges for silver prices near the $30 mark?

Peter Cruss suggests that there may be a small correction in the short term due to high speculation levels in the futures market. However, he believes that any potential short-term dip would not significantly affect the overall sustained upward trend for both gold and silver.

How is the global push towards green technologies affecting the demand for silver?

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What is the significance of the solar industry in the silver market according to the transcript?

The solar industry is significant in the silver market as it represents a large portion of industrial demand for silver. The solar industry's growth has led to an increase in silver usage, with forecasts suggesting a demand of over 200 million ounces of silver in the coming year, which is about 20% of the entire silver market.

What are the implications of the shift towards newer solar technologies that require more silver per panel?

The shift towards newer solar technologies that require more silver per panel indicates a growing demand for silver in the industry. Even if the growth in solar manufacturing capacity plateaus, the transition to these newer technologies will continue to drive up silver demand.

What are the challenges in silver supply as discussed in the transcript?

The challenges in silver supply include a significant drop in output from major silver-producing countries like Mexico and Peru over the last decade, and the fact that there are limited places in the world where silver can be found and mined. Additionally, mines reach the end of their productive lives or face geopolitical and profitability issues, leading to a structural deficit in the silver market.

How does the silver market's structural deficit affect its price?

Despite the structural deficit, the silver price has not significantly increased as one might expect from basic supply and demand economics. This discrepancy suggests that large industrial users may be sourcing silver through other means, such as futures contracts and silver ETFs, which could be drawing down the available silver inventories.

What is the potential impact of large consumers demanding physical delivery of silver?

If large consumers demand physical delivery of silver and the exchanges are unable to fulfill these contracts, it could lead to a significant market disruption. This scenario could result in a situation where consumers demand silver over cash settlements, potentially leading to a sharp increase in silver prices.

What is Peter Cruss's long-term outlook for silver prices?

Peter Cruss has a bullish long-term outlook for silver prices. He projects a potential climb to over $30 in the latter half of 2024 and even suggests that silver could reach $300 per ounce by 2030, based on historical price trends, gold-silver ratio, and comparison with other asset classes and inflation rates.

What investment strategies does Peter Cruss recommend for dealing with the silver market's supply and demand crunch?

Peter Cruss recommends investors to buy silver now while the interest is relatively low, as it is likely to become more expensive in the future. He also mentions the option of investing in silver ETFs that may trade at a discount to their net asset value, providing an alternative way to gain exposure to silver without overpaying.

Outlines

00:00

📈 Silver's Market Surge and Its Driving Factors

Jeremy Saffron introduces the discussion on the rising silver market, highlighting its significance beyond jewelry and coins. Silver is now crucial in solar panels, electric vehicles, and 5G technology. The market has formed a triangle pattern since March 2023, indicating a potential breakout. Peter Cruss, author of 'The Great Silver Bull', shares his insights on the market's dynamics, attributing the rally to gold's all-time highs and a lack of mainstream excitement, which he views as bullish for precious metals.

05:02

🌐 Impact of Global Shifts on Silver Demand

This paragraph delves into how global shifts towards green technologies and geopolitical tensions are reshaping silver demand. The surge in industrial uses, particularly in solar panels and electric vehicles (EVs), is a key driver in the silver market. Cruss explains that solar demand, led by China, is a significant factor, with forecasts showing a dramatic increase in silver usage for solar panels. He also discusses the transition to newer technologies that require more silver per panel, thus increasing the demand further.

10:04

🤔 Market Manipulation and Silver's Price Trends

The conversation turns to potential market manipulation and its impact on silver prices. Cruss discusses the high level of speculation in the futures market and the possibility of a minor correction in the short term. However, he believes this could be a sustained upward trend. The discussion also touches on the lack of public excitement about gold and silver, which Cruss sees as a sign of a market that's closer to the beginning rather than the peak.

15:05

🌍 Regional Dynamics in Silver Production

This section explores the regional aspects of silver production and demand. Mexico and Peru are identified as significant silver producers, but their output has dropped significantly over the last decade. Cruss raises concerns about where new silver will come from, given the lack of new discoveries. He mentions potential areas such as Australia and Europe that might see increased silver production. The focus is on the need to watch these regions closely as they could impact the global silver market.

20:06

📉 Silver's Structural Deficit and Price Impact

Cruss discusses the structural deficit in the silver market, noting that despite consistent deficits and increasing demand, the price has not reflected this imbalance. He suspects that large industrial users are sourcing silver through futures contracts and ETFs, leading to a decrease in available silver inventories. This has implications for the market, as these contracts may not be fulfilled with physical delivery, potentially leading to market chaos if silver becomes scarce.

25:08

🚀 Silver's Future Outlook and Potential Reach

Peter Cruss shares his bullish outlook on silver, projecting a potential climb to over $30 in the latter half of 2024 and even reaching $300 by 2030. He bases this on historical silver price trends, comparisons with gold, and inflation rates. Cruss suggests that as gold reaches new highs, investors will shift their interest to silver, driving up its price. He emphasizes that this is a long-term view and that silver could see a mania phase similar to other assets.

30:11

💡 Strategies for Investors Amidst Silver Market Dynamics

Cruss provides investment strategies for dealing with the silver market's dynamics, advising investors to buy silver now while premiums are relatively low. He mentions the Royal Canadian Mint's silver ETF as an alternative for gaining exposure to silver at a discount. Cruss encourages investors to get involved early, buy a little at a time, and suggests that the shift from gold to silver will increase investment demand and push silver prices higher.

🙌 Wrapping Up the Discussion on Silver

Jeremy Saffron concludes the interview with Peter Cruss, thanking him for his insights and contributions to the discussion on silver. They touch on the importance of understanding the silver market and the potential opportunities it presents for investors. The conversation ends with a reminder for viewers to engage with KITO's content and look forward to future discussions.

Keywords

💡Silver

Silver is a precious metal that has a wide range of applications, from jewelry and coins to industrial uses such as solar panels, electric vehicles, and 5G technology. In the video, silver's increasing role in modern technology and its impact on market demand are discussed, highlighting its significance in both investment and industrial sectors.

💡Market Trends

Market trends refer to the general direction or pattern that prices of assets, like silver, follow over time. The video discusses the formation of a triangle pattern on silver market charts since March 2023, indicating a potential for a significant price movement. Understanding market trends is essential for investors to make informed decisions.

💡Investment Demand

Investment demand refers to the desire of investors to purchase a particular asset, like silver, as a store of value or for potential profit. In the context of the video, investment demand is a significant factor driving the price of silver, with gold's all-time highs influencing silver's rally.

💡Supply and Demand

Supply and demand is a fundamental economic concept that describes the relationship between the quantity of a commodity that producers wish to sell and the quantity that consumers wish to buy. In the video, the dynamics of supply and demand for silver are explored, with a focus on the impact of industrial uses and the potential for future shortages.

💡Solar Panels

Solar panels are devices that convert sunlight into electricity. They are a key application for silver, as the metal is used in the photovoltaic cells to enhance their efficiency. The video emphasizes the growing significance of solar energy in the global push towards green technologies and its impact on silver demand.

💡Electric Vehicles (EVs)

Electric vehicles, or EVs, are automobiles that run on electric power rather than internal combustion engines. Silver is used in various components of EVs, including electric motors and battery systems. The rise in popularity and production of EVs is a factor contributing to the increased demand for silver.

💡5G Technology

5G technology refers to the fifth generation of mobile networks, characterized by faster data transfer speeds, lower latency, and improved connectivity. Silver plays a role in the components and infrastructure necessary for 5G, making it a critical material in the advancement of communication technologies.

💡Price Manipulation

Price manipulation refers to the act of artificially inflating or deflating the price of a security or commodity. In the context of the video, there is a discussion about potential manipulation in the silver market, particularly in the futures market, and its impact on short-term price movements.

💡Geopolytical Tensions

Geopolytical tensions refer to the strain in relationships between nations due to various political, economic, or strategic factors. These tensions can affect global markets, including the demand and supply of commodities like silver.

💡Economic Policies

Economic policies are the actions taken by governments to influence economic outcomes, such as growth, inflation, and employment. These policies can have a direct or indirect impact on the demand for commodities, including silver.

💡Industrial Uses

Industrial uses refer to the application of a commodity or material in the manufacturing and production processes of various industries. For silver, its industrial uses are significant and growing, particularly in green technologies, which drive up demand and influence market dynamics.

Highlights

Silver is making waves in the market, breaking past the $26 mark and getting closer to $30.

Silver's role is expanding beyond jewelry and coins to power solar panels, electric vehicles, and 5G technology.

The silver market has been forming a triangle pattern on the charts since March 2023, indicating a potential breakout.

Gold reaching all-time highs is a significant factor propelling the rally in silver prices.

The lack of excitement in mainstream media about gold's all-time highs is very bullish for precious metals.

The potential for a small short-term correction in silver and gold prices due to high speculation levels.

The global push towards green technologies is reshaping the demand for silver, with solar panels being a significant driver.

Solar capacity is being built out dramatically, with China leading about 80% of the market in manufacturing and demand.

The transition to new solar technologies requiring more silver per panel is expected to continue feeding the demand for silver.

Supply and demand issues in the silver market, with demand rising and supply falling, have not yet led to a significant increase in prices.

Large industrial users may be buying long futures contracts and standing for delivery, draining silver from exchanges and ETFs.

Peter Cruss, author of 'The Great Silver Bull', predicts a potential climb of silver prices to over $30 in the latter half of 2024.

A long-term projection by Cruss suggests silver could reach $300 per ounce by 2030 based on historical ratios and inflation rates.

The gold to silver ratio historically has been around 15:1, which could indicate a higher future value for silver if gold continues to rise.

Investors may shift interest from gold to silver as gold prices rise, making silver a more attractive alternative.

Strategies to mitigate the impact of supply and demand constraints include buying silver now and taking advantage of silver ETFs trading at discounts.

The importance of getting involved in the silver market when investor excitement is low to benefit from more reasonable delivery times and premiums.

Transcripts

hey everyone I'm Jeremy saffron and this

is Kito news make sure you hit that

subscribe button for the freshest

insights in markets and of course

Commodities well silver is Making Waves

again folks today we're seeing a break

past at $26 Mark aging closer to $30 so

why the buzz well it's not just jewelry

and coins anymore Silver's powering our

future from solar panels lighting up our

world to electric cars zipping around

our cities not to mention its role in

The Cutting Edge world of 5G technology

however the journey for silver has seen

its twists and turns since March 2023

the silver market has been forming what

analysts call a triangle pattern on the

charts this pattern where the price

swings not progressively smaller

suggests that silver is at a Crossroads

with its price consolidating and

building energy for its next big move

now the setup often leads to a breakout

but whether silver will shoot up or

tumble down Remains the big questions

keeping investors on our toes today to

explain this author of this book The

Great silver Bull and publisher of the

the silver Focus newsletter the silver

stock investor Peter cruss joins us now

thanks for coming on the show Peter

Jeremy pleasure to be here always a

pleasure uh we were just talking off

camera a second I saw you a couple

months ago there was a lot of excitement

in the industry even more today so let's

break it down Peter with today's price

breaking the $26 Mark covering around 26

almost 27 getting closer to $30 anyhow

talk to me a little bit about the main

factors propelling the rally and how

does it the line with your long-term

predictions so I mean I think that

really what's driving silver right now

because you're right you mentioned as

your opening this it's been in a sort of

consolidating uh uh move for the last

few years in fact I think that um really

what's driving it right now is gold

making all-time highs and uh you know

that's actually impressive and

impressive by the fact that uh people

are not excited about it you don't gold

being quoted on mainstream media through

their their their ticker um their ticker

marker running across the screen um I

just read yesterday that you have uh

coin dealers are actually receiving

twice as many requests to buy back gold

from their clients than they are to sell

to their clients so sentiment really is

nowhere close excitement and that is

very very bullish for the precious

minals because it tell tells you that

we're much closer to the beginning than

we are to any kind of a top where when

you get you know at a top when you get

this fear of missing out and everyone's

overly excited that's when your odds of

uh you know it being sustained are are

much lower people have have done all the

buying they're just everyone's sort of

piling in and there's not much of the

move left here we're we're really at the

opposite end so I think that this is a a

the start of a very long and sustained

move much higher okay okay so you think

this will be a sustained upward Trend

I'm curious you know this price action

we always see it get close to that $30

mark it almost seems like the Market's

short a little bit talk to me a little

bit about the manipulation what happens

here at these

levels so I mean you know we also don't

have uh too much excitement there the

one side where there is I guess a fair

bit of participation and that is in the

Futures I was just looking at some of

the numbers this morning and so we are

getting to a point where speculation is

kind of high uh we may get a small

correction that would certainly not

surprise me um I hope we don't get all

kinds of hate mail because of it and I'm

as big a silver bow as anyone but that's

my point is on a very shortterm basis I

think both both gold more more gold

actually because gold is at all-time

highs uh but I do think both medals

could be in for a really small

correction I'm really talking small

amounts over the next sort of week or a

couple of weeks um just because really

has become little sort of near-term Bry

absolutely much more gold and silver um

that would not surprise me but yes these

are mes that could could certainly be

sustained and I think that where when it

comes to manipulation my view at least

is that uh there is manipulation and not

just but not just in these markets and

that that tends to be kind of on a on a

shorter term basis uh the big players

play with the markets play with the

price benefit from it in terms of a sort

of a longer term um uh managed kind of

manipulation that's where I honestly

don't know a lot about uh the the the

Futures Market but also have a hard time

understanding how that would be uh

possible to sustain on an ongoing basis

I'm talking years and perhaps even

decades now let's give a little bit of a

take on let's let's go back a little bit

and talk a little bit about silver just

as a metal here you've highlighted how

the global push towards green

technologies is coupled with of of

course geopolitical tensions and then we

got the economy and econ economic

policies here it's really reshaping the

demand for silver so as we see a surge

in the industrial uses particularly as I

mentioned off the top and solar panels

and EVS elaborate a little bit on how

these factors synergize to influence the

Dynamics here in the silver

market so you know if if you're looking

at the silver market really if if you're

not paying attention to what's happening

in solar in particular then you're

really missing uh I would say probably

the biggest single driver other than

investment demand because solar has

really become what I call sort of the

800 pound gorilla in the market U it

went from few tens of millions of ounces

maybe a decade ago to over 200 million

ounces next year that's what the

forecast is we were at apply 190 or so

million ounces in

2023 and um so so industrial has become

more than half of the silver market in

terms of demand and solar represents

something like 30% of just industrial so

solar at 200 million ounces is 20% of

the entire solar Market every year right

which is roughly about a billion ounces

so you've got to watch what's happening

in solar and the fact is that solar

capacity is being built out dramatically

led by the Chinese about 80% of the

market is China terms of

manufacturing and solar demand so sales

of these panels has also been beating um

forecasts dramatically now if you take

sort of a I think a reasonably even

conservative view of solar and you say

to yourself all right so there's been

all this

capacity um what if there's some sort of

uh recession things slow down and

there's less demand for solar and solar

kind of plateaus and and building out of

the solar um uh

uh e economy and the solar sector starts

to Plateau you are still going to get a

lot of demand of silver in from the

solar sector just because we are

transitioning to new technologies so the

I guess incumbent technology is what we

would call Perk um it's about half of

manufacturing capacity right now about

three or four years ago the next two

technologies that by the way require

from 50 to 150% more silver per panel

these were about 10% of manufacturing

capacity last year combined they were

already

35% the silver Institute thinks that the

Next Generation which is 50% more silver

per panel is going to already represent

50% of new manufacturing capacity this

year alone so even if we plateau in um

silver sorry in solar manufacturing

capacity the fact is that we're moving

to techn IES that require more silver so

that is going to continue to feed the

demand um of silver from the solar

industry Peter you continue to talk a

little bit about supply and demand

supply and demand and that Divergence

over the past couple of years I'm

curious if you anticipate any specific

regions becoming maybe more pivotal in

silver production or innovation

here well when you talk about regions

you mean

geographically yeah I'm thinking

geographically I mean silver mining

obviously you know Mexico's largest one

here are you seeing any specific regions

you know trying to really bolster up

their supply and demand issues going on

in silver and trying to take over that

that

demand well as you say uh Mexico

certainly is by far the largest producer

from there you have S in second place

and it's a little bit debatable whether

it's China or Peru uh but both Mexico

and Peru where we have I guess what

you'd call relatively reliable data have

seen their output drop dramatically

something like

20% over the last 10 years or so so

that's kind of concerning where are we

going to get new silver from um great

question there aren't that many places

that you can actually find silver if you

look at the Americans it tends to be uh

focused on sort of the West Coast so you

see whether it's Canada the us all along

sort of that uh that the these um

mountain ranges is where you tend to see

concentrations of silver in South

America it's the same thing mostly along

the Sierra mandre the Andes and so on um

there is a potential that we're going to

see more silver come out of places

perhaps like Australia uh perhaps even

Europe there there is a lot of silver

that comes out of Poland um there are

there is one um sort of smallish

potential project that I see in Germany

for example that's a long ways off uh

there is a project in I believe it's

Serbia starting to come online uh

there's a large producer uh a relatively

large producer out of Morocco that's a

place I think we need to watch carefully

that's a gold and silver uh they're

actually in the midst of a big expansion

that's going to take their production

from 2 million ounces to 8 million

ounces now that's fantastic for a and

for a investors but it's going to do

very little to uh impact Supply and I

was actually talking to a re um silver

researcher this morning and talking

about the whole sort of demand Supply

um aspect of the market and really there

are constantly new minds coming into

production the fact is that there are

also regularly mindes going off

production either they've reached the

end of their lives um or there are some

sort of geopolitical issues um they

could be not profitable The Mining

Company decides

we're there are some serious challenges

there was a a interesting bit of

research from Bank of America a little

while back that looked at they went and

looked um at the 13 largest primary

silver Ling companies asked them where

they thought Silver Mine Supply was

going to be over the next couple of

years and they all said on average it's

going to be flat for the next at least

two to three years it peaked at 900

million ounces in 2016 they expect we're

going to be about 800 million ounces

over the next you know per year over the

next couple of years which is just

incredible when you think of how land

has just been ballooning and and the the

deficit deficits that we've been living

through uh each year for the last four

years have um have been sustained and

the silver Institute thinks those will

continue to be sustained so I mean we

can talk about that a little bit too

there are structural deficits uh why is

the silver price sort of uh capped if

you wish if we're facing deficits and uh

you know i' I've spent some time doing

some research and some digging and I and

I think I know what what is um affecting

the market this way what what we've seen

in the last couple of weeks um it looks

like it may actually be starting to uh

reverse but um there are some really uh

specific things I think that have have L

to where we are right now that's

interesting I want your outlook on

Silver but before we get to that then

talk to me a little bit about that

what's holding us back usually when you

have a supply and demand issue and

demand is up and Supply is down the

prices go up but it hasn't really been

there exactly so that's economics 101

exactly right Jeremy so you know I I had

sort of a susp suspicion that if we had

structural deficits and the price was

really not moving and we had you know

it's it's not just one year or two years

it's been four years straight we still

have forecast for these sizable deficits

we're talking multi you know say well

above 100 million ounces a year so more

than say 10 to 15% of the entire Market

again in structural deficit for the next

couple of years at least how is it and

why is it that um we're not seeing the

silver price move and I had this

suspicion that industry especially which

is the big consumer is getting their

silver somewhere somehow um rather than

from mining or from from the uh

recycling which are the two main

suppliers normally and so if you look at

and so I did some digging found um

inventory charts for the comx for the

lbma for the Shanghai and over the last

three to four years each and every one

of those exchanges has seen their

overall silver in inventories drop about

30 to

40% wow and now that's just overall

inventories that's not what is supposed

to be available for delivery they've got

something called registered silver which

technically apparently is what is

available for delivery if if you want to

take delivery um and that's down 70 % on

two of those three exchanges so I

suspected and still do that you have

large industrial users going to these

these Futures exchanges buying long

Futures contracts and simply standing

for delivery going to The Exchange and

saying okay you know my contract is

expired now I'm entitled to take

delivery here's the address here's where

I want it shipped and and that's that

and so there's another aspect too and

that is the silver ETFs and right they

have seen um their inventories drop

dramatically you know I did some

research on this and there's some really

interesting um uh charts that I've put

together one looks at you know the you

really kind of uh can can look at one

which is the largest which is SLV goes

back to 2006 the first uh and of all

silver ETFs and the largest has about10

billion dollar worth of silver and um if

you look at how two two aspects of SLV

you look at how the silver price has

behaved and you look at the number of

ounces that are held by SLV so going

back to 2006 there are two periods where

early on in its life where you would

have um you know silver the silver price

ran up went through a correction the

first one was in the great financial

crisis so silver went up to about I

think it was about 18 or 19 $20 or so

corrected to about $10 and then um and

what happened during that period was you

still had the number of ounces held by

SLV rise in that in that period when the

silver price corrected during the the

financial crisis so that means that

people were still buying SLV despite the

silver price falling the next period was

um when silver the silver price peaked

in 2011 at say $49 and over the next

couple of years went into a big

correction and went down to about $25 or

$30 during that period the number of

silver ounces H held by SLV also moved

or this time moved in a sideways uh

pattern so people on balance were not

selling their SLV uh units now fast

forward to 2020 2021 you had this big

runup in the silver price when the co

pandemic hit silver went from uh say $12

when it corrected in say March of 2020

run up to $30 and since then have been

in a range of say 22 to almost 28 $30 U

ever since about mid

2020 however since early

2021 the number of in fact in that

period in 2020 when covid hit the number

of silver ounces held by SLB ran up

dramatically to like an all-time record

high I think it was something like um

600 million ounces and ever since then

it's been dropping and dropping steadily

so we've had about three years of

sustained drops uh in the number of

ounces of silver held by SLV and yet the

silver price moved sideways there has

not been in SLV a period of sustained

falling of ounces held by the ETF until

the last three years I believe here

again you have the large consumers are

buying SLV are allowed to exchange their

units for physical silver and taking

delivery and that explains in my again

my view that explains why we've seen the

silver being drained out of SLV as much

as out of the U out of the Futures

exchanges interesting interesting stuff

I'm curious what are the implications of

a market where these contracts can't be

fulfilled with

delivery so that's what um I'm wondering

about myself and sound like what do you

do yeah I mean I think that's going to

be some sort of chaos uh I think that

you're gonna have a big consumer of

silver stand for delivery these markets

were not really meant for that but this

is as I say based on what I can tell how

a lot of uh the industrial users are

actually getting some of their silver um

this is where they're getting it and all

it takes is for one big consumer to go

to the market hold a long contract say

okay it's expired now I want my silver

and for the exchange to say oops sorry

we're out of silver um we're gonna have

to pay you out in cash and they're GNA

say no no no I want I want the silver I

don't want the cash and you'll say sorry

Force meure noral silver left here's the

cash and that and there and that

consumer that user silver is going to

scream and we will hear about it

interesting does the user or consumer is

is there Rumblings of this I mean do

people know about this have you been you

you're in the industry people talking

about these

Rumblings I have not heard about it uh

you know I've what I have heard is in

fact uh just about a month and a half

ago a large large-ish silver producer

has told me that they sell part of their

production to China they sell part of

their production to the west and the

Chinese are coming to them and they're

saying we really really really want the

silver we we're prepared to pay you a

couple of weeks in advance and we're

actually prepared to pay you $3 over

spot in order to get our silver we

absolutely want our silver so that to me

is the best indication of the tightness

in the market it is severely tight but

we're we're just not hearing about it

and this is um you know it's these kinds

of of anecdotal bits of evidence that

certainly point to it yeah interesting

uh what an analysis uh okay let's get

back on to the Outlook because of of

course supply and demand should mean

prices go up and you've suggested

obviously you have a bullish Outlook but

you've projected a potential climb to

over $30 in the latter half of 2024

we're currently sitting around that 2686

we're getting close right uh you

probably were correct in there but

you've even positioned yourself uh maybe

a scenario where silver could reach $300

Us by 2030 so let's break this down you

may have been correct about the 30 but

300 well 300 I mean I know it's sounds

Sensational but uh when I got to that

number what I did was um I looked at

what had happened to silver prices in

the past uh and and I compared it to

other other assets important assets hard

assets typically or U stock indices for

example large indices and so couple of

examples are one of the probably your

your viewers understand and know the

best is the gold silver ratio so I said

okay if I'm going to look at where where

Sil silver could go ultimately uh what

has it done in the past well in 1980

when gold peaked and silver peaked the

ratio fell to somewhere around 14 or 15

at the time gold was $800 silver was

about $50 and the ratio as I say was

let's use 15 so I said okay if I look

forward and I make my own projections

and I'm not the only one by the way and

I and I detail this very I provide lots

of detail about this in the book how I

get this uh the fact that I'm not the

only one I I believe some very very very

smart uh you know observers uh

researchers in the sector have forecasts

for gold and um I went with 5,000 I

think that's a realistic Target we're

almost halfways there at this point so I

don't see 5,000 as the biggest stretch

in this bull market in any case if you

use $5,000 gold Target and um you say 15

to one you're to $333 Silver so to me

not a stretch if you use and I think

it's probably perhaps more realistic

ultimately perhaps say we go to and

again I'm not the only one some very

Savvy very accomplished very well

respected analyst it's all in the book

have reached

$10,000 um as a target for gold and if

you do perhaps say $10,000 and you use a

more conservative gold silver ratio of

say 30 instead of 15 you're still AT3

$33 for silver so that's the gold silver

ratio if you look at for example in 1980

when silver peaked uh you look at the

silver price versus let's say the

average home price so at that point when

silver peaked it took just shy of about

1500 ounces of silver to buy the average

us home if you go with to today's

numbers the average us home costs about

$500,000 let's say make it even easy

round numbers if you use that same ratio

you're looking at um again uh right

around I believe it was3 $333 silver so

by that measure again you're

at over $300 in silver if I look at the

inflation rate and you know officially

we're at say 3% if you look at where

we've been for the last several decades

it's probably averaged about somewhere

around three maybe four uh but more

realistically and everybody in their

daily lives will tell you that uh they

don't they're not comfortable with those

numbers they don't feel that they

represent what people actually have to

deal with and live with and there's a

fantastic research uh service called

Shadow stats that calculates in fact

inflation um the way it was back in the

1980s and um they have uh inflation

running at more like seven or eight% for

the last say 40 or 50 years so if you

project um using inflation rates that

are more realistic again you get a a

peak in silver much closer to about $300

so I think I'm being quite reasonable

and and I also say that to get to that

Peak um we're going to be in some kind

of a Mania phase I'm not saying Silver's

going to steadily to $300 and it's going

to stay there and then and or it's going

to keep climbing I'm saying you know

ultimate crazy F Mania silver could

easily reach

300 yeah well I mean we've heard we've

heard crazier things over here so uh I

could probably you know I'm not going to

call you out on it I'm I'm curious so

you know when you talk a little bit

about that gold silver ratio it seems to

be very Divergent I talked to an analyst

last week saying he's not sure if it'll

ever go back to the place that it was

but I'm curious are consumers or

investors purchasing silver because it's

easier entry to the market in terms of

price than

gold so that's one of the reasons I

think that silver lags gold but then

eventually outperforms it

because I so so people will go to gold

first or pay attention to gold first

because it's it's the king of of assets

it's the king of uh it's certainly the

king of precious metals it has been for

thousands of years and so everyone pays

attention to gold first and as you see

people ultimately

eventually decide they absolutely need

some exposure to gold and gold you know

let's say we're talking about 12 months

from now gold has run up it's 2500 it's

2600 let's say um they're going to look

at gold and say wow that's that's rich

you you know for me to buy an L of gold

and to put that kind of money out um

what else what else can I get and silver

is the natural alternative to that and

even if silver is at say 30 or 35 or $40

they're going to look at gold 2,500 for

an ounce silver $40 for an ounce um much

less

uh it will have run up much less even at

that point still below its all-time high

gold will have set new all-time highs

and I think that um that's one of the

reasons that silver will gain in appeal

you'll have investment demand really

become the wild card it will pick up

dramatically and people will shift their

interest from gold to Silver and and

really push through investment Dem man

push the price ultimately a lot higher

interesting you know we talked a lot

about the supply and demand crunch here

how do we prepare for it are there

strategies that you could talk to

investors about that could maybe

mitigate the impacts of these

constraints on the market

so if you're talking are you talking

about say investment demand specifically

exactly

yeah uh buy it and buy it now because

it's probably only going to get more

expensive uh you know yes people will

say well the premiums are high they're

actually not as high as they have been

uh if you look at um and I'm not saying

that that they're that they're not that

they're low I'm saying that they're not

as high as they've been if you look at

what happened during Co you could not

even get your hands on Silver if you

looked at what happened um during the

silver squeeze of late January

2021 again you could not get your hands

on Silver I mean there are stories I

talk about that in the book where you

have um you have these uh bulling

dealers just never witnessed anything

ever like that and then these are people

who've been in business for decades at

sometimes a second generation they've

never lived through markets like that

their their computer systems were

overwhelmed their phone systems were

overwhelmed and they knew it was

basically retail buying because it was

mostly small orders and they were

starting to tell people I'm sorry I

can't I can't ship this in two or three

days I'm going to have to ship it in two

or three weeks and in India for example

best uh to the best of my recollection

some of the uh some of the premiums this

would have been uh during the covid

pandemic Panic went up to uh almost 100%

over spot right so people really really

wanted the silver and were willing to

pay for it and I'm suggesting get

involved when you know people are not

excited you will have the the benefit of

having access getting delivery under

reasonable times um you know being able

to shop with with peace of mind you'll

you'll pay as I say reasonable uh

premiums relatively reasonable they tend

to where normal premiums historically

have been say 12 to 15%

if you're even at somewhere around 20% I

think that's attractive today and I

think you can probably find those kinds

of premiums right now um so I I think

get involved get involved now buy a

little bit at least to get your feet wet

get that coin in your head appreciate

what it feels like what it looks like

and uh I think you'll be sold and and

start building on it um yeah someone

pointed out actually a subscriber

pointed out to me something interesting

and I'm not suggesting people do this

but it is an option and that is that the

Royal Canadian Mint has its own version

of a silver ETF and the silver is stored

at the mint well not just their product

but others as well will over time trade

anywhere from you know um discount to

net asset value to premium to net asset

value and so this subscriber these are

the kinds of things that I that I know

of but I'm not constantly tracking yet a

subscriber wrote to me and told me about

this and said you know right now this

product is trading at about 12% discount

to the silver price to that for the

silver that's actually being held by

this ETF so I went and looked at it and

then I told my own subscribers about it

and I said right now that's actually got

worse it was at 16% so worse one from

one point of view better from the buyer

point of view you're actually buying

silver at a 16% discount so um you know

these things don't tend to last

uh that's likely to correct especially

if you get people piling in and and you

know Silver's making new highs new say

20 12 or 20 24 month highs and um that's

one way I'm not saying that's the same

as buying physical silver there is no

equivalent but I am saying that you can

get exposure you can get it quickly you

can get it you can buy something like

that wait for it to reach uh nav or net

asset value or wait for it to reach a

premium to net asset value then sell it

and switch to physical silver these are

the kinds of things that people do kinds

of things I talked about tactics you can

use uh I talked about that to my

subscribers and kinds of things people

can take advantage of it's it's

certainly one way to gain exposure and

not

overpay right and to mitigate that risk

a little bit well like our friend Rick

rule says he loves silver because it's

hated so maybe not a bad strategy there

absolutely uh the author of The Great

silver Bull and the publisher of silver

Focus newsletter the silver stock

investor my friend Peter KRA joining us

today hey thanks for coming on the show

Breaking it down for me and the viewers

today Jeremy always a pleasure um it's

always fun to to chat and to to give my

insights and hopefully I have helped to

contribute something that um your

viewers will will find helpful you

absolutely did and I could have chatted

to you all day but we'll have you on

again soon Peter appreciate your time

today thank you so much thank you thanks

so much and thanks again to our viewers

don't forget to go to kito's YouTube

channel subscribe like that video

believe it or not I read the comments

and we'll see you tomorrow we'll see you

next time I'm Jeremy saffer for Kiko

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