Silvers supply and demand fundamentals have been very strong for the past 15 years... On paper. But the problem is we don't see the undeclared repositories of aboveground available silver. When trying to evaluate the market with any level of accuracy, you cannot factor in what you cannot see. This is a problem.
It's a fact that supply has come from somewhere when there's been a deficit. Some of this comes from repositories (transparent silver holdings) such as the Comex, SLV, Sprott etc, but they rarely deliver enough to match the deficit completely. There has to be another undeclared source.
We had a 200+ million Oz deficit last year and the silver price actually went down. In no 'normal' market would that ever happen. What we have is some entity feeding the markets whenever there's a deficit. Price controls become a feature of this ongoing intervention, whether you think there's a conspiracy to control the price or not.
With silver being a finite resource and mine supply being so limited at these price levels, it doesn't matter if the undeclared repository has 2 billion+ Oz's - it will eventually run out. The transparent silver holdings of hedge funds and ETFs only total approx. 1 billion Oz's. It would only take 5 years @ 200 million Oz's per year to drain these repositories, and the possiblity of them giving it all away is nearly zero.
It's all a waiting game. It always has been. Most people (including myself) only looked at the available market information when assessing silver, and didn't fathom an entity with abundant aboveground reserves, who's hellbent on supplying the market whenever there's a deficit. It happens to be a critical piece of the puzzle but an easy one to overlook.
