Silver Shortage

I have been yelling about silver shortage in my blog. Even in my recent radio interview with BFM (89.9) I could not stop emphasizing how industry has been using up physical silver and when silver is used up, it is gone forever. Apparently the reality of silver shortage is not too far away from us.

American Silver Eagle

American Silver Eagle Sold Out

American Silver Eagle (ASE) has always been my personal favourite coin. It is a very beautiful coin selling at low premium. I could get it easily anytime I want but I’m afraid things have started to change…

  1. On 17th December 2012, US Mint informed authorized purchasers that ASE 2012 had sold out and no additional ASE 2012 would be struck. The new coin ASE 2013 is only available for order on 7th January 2013 onward.
  2. On 7th January 2013, US Mint announced 3.937 million Silver Eagles were sold in a single day. This is the highest sale in the single day history!
  3. On 8th January 2013, US Mint sold another 300,000 oz of physical Silver Eagle coins. It is expected that January 2013 would hit the highest sale per month in the history.
  4. On 17 January 2013, United States Mint is sold out for 2013 American Eagle Silver coins. As a result, sales are suspended until they can build up their silver inventory.  Sales will resume on or about the week of 28th January 2013.
  5. The week of 28th January 2013,  all the authorized dealers are queuing for another massive round of Silver Eagle coin order!

Apple iMac Delay

imac

Apple announced the new iMacs on 23rd October 2012. The new model uses a lot more silver on the new Iris screen (which is much brighter) compared to the older models. In January 2013, Apple could not supply enough of this model.

“There is simply not enough silver available to produce them”, Bally A. said. The brighter screens require substantially more silver than the earlier models. That is also why there was a $100 price increase on most models of the iMac, he added.

A 3-month delay after the announcement has never happened before in Apple history! No business will ever tell the public what exactly went wrong within the business. Apple only addressed this as “production problems“. Well, common sense, it does not take 3 months to handle any “production problems“. If a problem continues for 3 months, it is very likely to be an external factor that is out of Apple’s control. Silver shortage fits perfectly into such “production problems“.

Do you know what is more interesting?

Apple manufactures their iMacs and iPads in China. China being the 3rd largest silver producer in the world yet, China does NOT have enough silver and have to import more silver from other countries!

(You can check out more about China Silver Market here.)

SLV Purchased 572 Tons of Silver

iShares Silver Trust (SLV)

On 17th January 2012, there is an unconfirmed report that SLV purchased 572 tons of silver. SLV is silver exchange-traded fund (ETF) in the US. It is also the largest silver ETF in the world. In layman term, it is called Paper Silver. Similar like Maybank Silver Investment Account, you can never demand delivery and you can never get your physical silver. You just have to assume they have all the silver they claim to have sold you.

SLV claimed they have bought 572 tons of silver. What is happening here? Two scenarios:

  1. They claimed they have bought 572 tons of silver so that they can sell more paper silver to the market. Why do they want to do that? Are they are expecting a huge increase in silver price soon?
  2. Let’s assume SLV did purchase 572 tons of physical silver, that means the world has 572 tons less physical silver for average investors like you and me to purchase. Economics 101, the lesser supply of silver, the higher silver price will rise!

I intentionally discuss both physical silver and paper silver. The reason is I want you to see the difference. When Silver Eagle coins are sold out by US Mint and when Apple needs physical silver to make iMacs, what is the point of holding paper silver that the private organization can print out anytime they like? Give the paper silver to Apple to get them start manufacturing? Give the paper silver to US Mint to get them start minting more coins? Whether or not the physical silver shortage has started, we will soon find out from the market.

I have personally bought enough physical silver. I have started buying silver since 2010. Today, I continue buying silver every month or whenever I have spare cash. I pay close attention to Malaysia silver market so that I can grab undervalue deal whenever it comes. Thanks to all the research I have done and the personal experience I have, I can tell which silver is suitable for investment or not. I know Malaysia silver market well enough to have helped many Malaysians started their silver investment journey. You see, keeping the information to my own advantage is selfish. That’s why I have written the eBook Practical Guide For Investing Silver In Malaysia to share with Malaysians.

In the eBook I’m going to guide you step by step and you are going to learn how to buy your 1st oz of silver. If you are a big boy and want to invest 1000 oz, I will show you how to buy from the cheapest source. Click here for the A-Z guide in Malaysia silver investment.

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