Though it is no longer common knowledge, I’m going to assume my readers understand supply and demand. Thus the picture below should be worth a thousand words to you, though I think that sells it short.
Since 1950, 925,000 tons have gone to demand while 570,000 tons came from production. The 350,000 ton shortfall has come from central bank sales, stockpiles and scrap. This deficit equals approximately 16 years of production.
The scrap is running out. The central bank stores are gone. Grandma’s silverware and Mom’s tea set can only do so much. Silver buyers are going to be competing on the open market and that will raise prices.
With that overlay, here’s the picture.
