Weather or not you buy into the notion that the SLV was created with inventories that didn't exist, current SLV physical demand makes up the slack in physical demand left by the eroding market in photography, silverware and jewelry.
Had there not been the inception of the SLV in 2005, would not the demand of Silver have gone down by these naturally declining markets. The SLV seems to have simply filled the void. Thoughts...
Look to the bottom of this link under "implied net investment" in the chart. This includes all ETF's, but the SLV does claim to have 300 mill oz in 2009 filling the decline in the markets I mentioned above.
But, at the same time as there was a dramatic decline in the use in silver for photography, hasn't there also been a dramatic increase in the use of silver in solar energy infrastructure? And has there been lessening or increase in the use of silver in every sort of electronic gadget out there, from iphones all the way to cruise missiles. That's what the chart seems to show.
You put forth an interesting thesis but I'm not sure that the assumptions on which it is based are true.
If you go to the link I provided you will see the breakdown including industrial. You can see the increases and drops over the years and how they correspond.
I merely bring up a question I don't think may have bothered to ask, regarding supply and demand... and price.
When the dollar falls it will be prudent to have physical, but I offer some explanation to current prices when many are proclaiming there to be a shortage.
Interesting. I just posted to a different thread on this. I always wondered why, in late 2010/early 2011, the G:S ratio suddenly dropped to values not seen in 30 years, and what caused the sudden change in slope of the SLV price that began around Sept of 2010. Then it dawned on me. Sept of 2010 was when Eric Sprott began buying up physical silver to fund PSLV. So, he was acting like the Hunt Bros, in a way. In fact, when the Hunts were active was the last time we saw such a low G:S ratio. If you look at a 5-year chart of SLV, you see the sudden change in slope around Sept 2010.
Why is this relevant now? (1) ES has stopped buying silver for PSLV, though he has apparently been buying up silver to fund his "physical silver" mutual funds. (2) it is possible, with a crash in silver prices, that all of this physical silver from SLV and PSLV may appear on the market. (3) with a price decline in silver, some (probably not too many, but some) stackers would also sell. On the other hand, I think there probably was a lot of price suppression of silver over the years, as per Ted Butler, and so the "shortage" of silver, due to silver being kept in strong hands, may well continue and keep the price high.
The ETFs were created by the banks, ie shorts, as private cookie jars of silver holdings financed by the suckers who bid them up, and used to cover their physical shorts on the Comex on the raids such as in May. They have taken away monies that typically would have went into stocks, a brilliant move.
The silver price was ready to move up anyway, why not cover ones shorts with other peoples silver. Can't do that with their PM equities:)
dabrini wrote: . Then it dawned on me. Sept of 2010 was when Eric Sprott began buying up physical silver to fund PSLV. So, he was acting like the Hunt Bros, in a way. In fact, when the Hunts were active was the last time we saw such a low G:S ratio. If you look at a 5-year chart of SLV, you see the sudden change in slope around Sept 2010.
Keep in mind that Eric Sprott's fund only contains some 25 mill oz's. Half of which he already had, and half that took 3 months to get delivery. That seems a small amount to move the entire market... but I could be wrong.
Regarding the SLV, I believe physical is routinely removed from it, and may or may not be replentished with physical.