➡ The demand for silver is expected to exceed the amount we can mine and recycle until 2050. This could deplete the existing supply of silver. Higher prices might encourage more exploration for silver. If the demand for silver increases, this could speed up the depletion of the silver stockpile.

There is no correlation between the overall level of above ground stocks and the silver price. And I think I did this last week a little bit of repeat here. There is no correlation between the overall level of above ground stocks and the silver price. In contrast, movements in bullion stocks have an impact on the silver price and vice versa. So movements of bullion stocks. The vast majority of above ground stocks are immobile with only small net additions or subtractions from stocks on an annual basis. And on and on it goes. Here’s the report itself. It’s longer than 33, I believe.

I went through it, read the whole thing once. It’s got a lot of interesting breakouts. And one of the two things I really want to point out here is the inconsistencies that I found in this document. First of all, there was a document that was similar in nature. And it was again commissioned by the Silver Institute. And it was done by Charles Rivers Associates. I bought the study. It wasn’t cheap. It wasn’t real expensive. It’s in my bookcase somewhere. I’ve read it a few times. But first of all, I’ve talked about how much above ground silver there really is.

And it talks about how much silver is lost. And that cycle is in a dime in the 1880s and not recovering it. And there’s some loss like that. But the main loss is in modern times where we have e-waste that’s in landfills. There are an estimate from Charles Rivers Associates to invest my memories about 50%. So if you go to Jeff Christian or this study, they both come out about the same. They’ll tell you that in all of recorded history, there’s been about 60 billion ounces of silver brought above ground. So if you go with Charles Rivers Associates, that means 30 billion is left.

And this study, which I’ll get to here in a minute, is kind of vague on how they do it. But regardless, so much of the silver that’s in objects that really cannot be retrieved economically, it’s not available to the market. I mean, you’re not going to take $1,000 cell phone to get out 12 cents worth of silver. But a lot of people don’t account for this. In fact, if you go to the major performers, let’s say the establishment, they’ll basically pretend that all the silver that’s ever been mined is available to the market.

That’s simply a lie. It’s just not true. But anyway, let’s move on here a little bit. So one of the first graphics you’ll come to is the real silver price. And what they tell you here with the asterisk is real silver price is based on US CPI in 2023 US dollar terms. Now let me just look at this for a moment. If you see this real silver price in red, and you come over here to the right side, you’ll see that’s about 80 bucks in 2023 prices. And you see the high in 2011, which was around 50, still at 50.

So they’re saying from 2023 to 2025, there’s basically zero inflation. Well, let’s do a little math on that. So they’re using the CPI from the government. So I am using the CPI from the government. This is the US Bureau of Labor Statistics. It’s their calculator, which I believe is very conservative and underestimates the true inflation. But that’s what they use. So if you see here, I put in $50 here in January of 1980. And what is the price in January of 2025? I really could move that to, I guess, February and calculate.

I had to move back to January. So it says that $50 in January 1980 by their CPI is $204.16 January 2025. That’s what it says. 200. We’ll just round it down to 200. So this number over here in 1980 should be 200, not 80. And this is the kind of stuff that goes on in what I call the establishment. It’s just not true. Is it a small thing? Yeah, I don’t think it is. I mean, the truth is people would see how much the real silver price has been the place it is.

I’m not going to even say manage or manipulate. I’m not going to use those words. I’m just going to say the price today is far below in real terms what it was in 1980. And yeah, that was a spike high, but the average price in 1980 for the whole year was about 20. So I’ll round it up to 25, do the math in my head. So that would be $100 in 2023 dollars and somewhat higher in 2025 dollars. All right, we did 2025 dollars. So it’d be roughly 100 and we’re sitting there, you know, roughly 30.

So one of their next graphics is here. We’ve already talked about the real silver price. And then, of course, what we see here is increase in above ground silver stocks. And you can see this gray line, how it’s been building, building, building, and it’s coming down, down, down, down. And that is valid. Then they show it from about 2016. If you look at the Silver Institute, they’re going to tell you it’s been the last four years, which would start about here. But anyway, I’m showing you their study. I’m not saying it’s absolutely correct.

I’m just showing you the graph. But it’s interesting. We had a pretty big build, but if you look at this curve coming down, that’s a fair amount that’s come off in a fairly rapid amount of time. And this shows fabricated stocks, which is pretty self-evident. I think anyone that’s serious about the silver market knows that the trend is continuously up. I mean, it continues to increase. Fabricated product stocks continue to increase. And x scrap, same thing. Just another way of looking at it, this is the above ground fabricate. It continues to increase, as you can see, and yet here’s the price of the background.

And it doesn’t track, obviously, you know, shot up here in 2011. And then it’s backed off and gone sideways and we’re trying to fiddle it around with the 30 level. This graph is kind of interesting. This is, again, showing you the real silver price. Again, I showed you where that, how realistic that is. But go back into the 70s, there’s a deficit for these years. So plus here, meaning the stocks above, this really says that the above ground stocks were being depleted. It doesn’t mean all the silver’s gone. It just means the above ground stock pile is being depleted somewhat.

And then it builds and then it completed from 1990 to 2005 and started building again. And in this area, they say 800 million, I believe. I read this once to my memory. If you go to a CPM group, and I think the Silver Institute degree, it was like 1.5 billion ounces. So I don’t know the exact number. They don’t know the exact number. It’s an estimate, guesstimate. But anyway, I’d round it up at least to about a billion ounces here in that 15 year timeframe. But the above ground supply at that time in bullion only was probably 2 billion.

I’m talking a thousand ounce COMEX or LBMA bars. I’m not talking the periphery that’s used in these studies. And it went from like two down to maybe 500 million. Maybe that’s a little biased on the positive side. But regardless, it was quite an amount of silver that was taken out of the above ground supply. And then the boom started about 2000. Mining really started going a few years later and then with Chinese, it just shot up because we were mining like crazy, like we never had before, all throughout the sector. Copper, lead, zinc, tin, copper, you name it.

And the inventory’s built, built, built, built, built. And as this shows the last few years, according to both studies. So I don’t know CPM, but silver institutes claiming that there’s been a deficit the last four years or so, around 200 million ounces per year. Again, going back to one of the premises I’ve talked about right at the very beginning, there is no correlation between the overall level of above ground stocks and the silver price. And it’s hard to even grasp that, but here’s that 15 year deficit right there. And there’s the price that whole time was basically flat.

And then we started to build inventories and that’s, and the price went up from 2005, six up to 2011, as it shows here where we got this price of about 50. So again, it shows what they’re saying, that there isn’t a correlation between inventory or supply and price. So I’m going to leave you with this. It’s from Matt Watson. He shows silver demand, low case, going forward. And what you see here is this red line, which is all mined and recycled silvers, roughly 1 billion ounces a year. So it’s like a 30 billion ounce market.

Buffett has 10 times that amount of cash. I mean, Buffett in theory could buy up all the above ground silver and probably seven or eight years worth of future silver at this price at $30, roughly. So what this shows in this graphic is that if you look at all these factors for the industrial side and the silver or the gray, which is investment demand, it exceeds what we’re able to mine and recycle from current year basically out to 2050. This is Matt’s work. It’s not mine. Let me give him credit. I think he’s right.

I think this is going to be flat. At least it has been for several years now. And I don’t see any huge silver mines coming on board. And the ones, the biggest ones that I know about and my readers know about, by the way, we just published the March edition, Morgan Report will follow me up a few minutes after this is posted. Regardless, all of this is going to eat the above ground supply. Whoops, I can’t draw a prehand that well. But all that triangle there eats the above ground supply. Now, this is all things being equal and markets are dynamic and the higher price would send more people out into the exploration industry to look for silver and on and on it goes.

I think we’re all aware of that. But regardless, I think it’s important to take a look at this and see what it really means when you see that there is this ongoing deficit for a long time. And that assumes a steady increase in investment. All those silver or gray blocks there are just investment demand being constant. Well, if the price starts to go higher, I think there will be more demand, not less. So I think this is conservative and he does call it the low case. But if silver catches fire, which it may or may not, but if it did, then anything that’s above normal demand or average men, again, I believe it would be, would put this deficit or above ground stockpiled depletion and a faster rate.

So I’m going to leave it there. This is David Morgan of the Morgan Report with the weekly perspective and I’ll leave it there. I’ll be back next week. Thank you. [tr:trw].

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