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Posted - 01/31/2007 :  18:30:40  Show Profile Send pencilvanian a Private Message
Although more opinion than fact, it is still worth repeating

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David Morgan Discusses Silver Demand and Supply Statistics

The overriding philosophy behind our radio program, “The Korelin Economics Report”, has been to look at all sides of economic and political issues in order that our listeners can make up their own minds on financial questions of the day.

One issue that, on the surface, can appear to be confusing is the concept that the total supply of silver has been greater than the total demand during recent years.

If you go to Kitco Silver, which I must say is one of our websites of choice when gathering material for the Korelin Economics Report radio program, you will note that under “Technical Indicators” the supply of silver has been greater than the demand for the years ending 2003, 2004 and 2005.
Being an old economist, I found this to be very confusing since the price of silver has been increasing in recent years.
How could this be, given the fact that when the supply of a commodity exceeds the demand for that commodity, the commodity’s price will decrease.

I called David Morgan of The Morgan Report, pointed out the historical supply/demand table I found on Kitco Silver, and said, “I don’t get it, Kitco is well-known for accurate statistics and this one makes no sense.”

David told me that these statistics were obtained from Goldfield Mineral Services from the United Kingdom and of the three components making up the supply numbers,
government sales and scrap supply, often known as “above ground supply” are somewhat open to conjecture.
The only component, which cannot be questioned, is “mine supply” and there is a deficit between mine supply and total demand.
This fact coupled with the growing medical and industrial demand for silver is one of the reasons that the price of the commodity is increasing.

.........(Silver price manipulated, or investors looking at the white metal as gold's little brother, not worth bothering with? Silver bias still exists since the low price and percieved oversupply keeps silver relegated as the poor man's gold. What will silver's future hold when government sales and scrap supplies dry up?
Anybody want to take a guess?)
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