The physical silver bullion market is seeing a “perfect storm” brewing according to an article replete with some recent videos about the silver market by Rory Hall of the precious metals website, The Daily Coin.

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From the Daily Coin:

Silver has been money longer than gold. Silver is called the “people’s money”, while gold is called the “money of kings”.

In the U.S., silver was an integral part of our monetary system until 1964 when it was gradually removed from coins. This change has not slowed the depletion of above ground silver stocks, nor has it changed the volume of silver being used, on a global scale, for everything from computers, TV’s, cell phones, bombs and solar panels to name but a few. Silver is vital manufacturing material in today’s world and, as stated, is money.

This is to say nothing of the investment demand that has exploded over the course of the past ten years. Investment demand for silver coins and bars has never been higher. The U.S. Mint, Royal Canadian Mint and Perth Mint all set new records for silver in 2015. All three of these mints are on pace for another new record in 2016. Physical silver is in high demand for every purpose in which it can be used.

Let’s review some of what we know to be absolute facts regarding physical silver in 2015-2016 and beyond.

  • China and India both have massive solar energy programs for each country – which requires, literally, tons of silver
  • China alone will produce over 100GW (gigawatts) of solar power by 2020 (they are currently way ahead of this deadline and may increase the amount of solar power they produce) – this will power some 300 million homes (100 million U.S. equivalent)
  • Morocco has plans to energize over 1 million households with solar power by 2018

As noted in the following interviews with Jeff Brown, China Rising, China has been importing raw silver dora bars as well as silver ore/concentrates. This means China will take all the physical silver available in whatever form is readily available. This is to say nothing of the fact that China mines approximately 100 million ounces of silver annually on her own soil!! That is massive demand for a single item.

Solar Energy Drives Silver Demand in China

Unlocking the Secrets to China’s Silver Demand

If we look at the mining industry, which is how silver comes to market, we see an industry that has been abused, unloved and drained of capital inflows for the past 3-5 years. Without mining companies digging silver out of the ground silver will be completely depleted and we will only be left with above ground inventory. This will never happen, but the mining industry is a capital intensive industry and without new inflows of capital, either from the sale of their product, at a profit, or investment capital, mines begin struggling and, in a lot of cases, will slow down or shut down the operation very quickly.

This has been the case over the past several years.

  • China is buying, outright, or acquiring controlling shares of mines around the world – primarily gold mines, but probably silver mines as well
  • First Majestic, a primary silver mining company was recently contacted by a large technologies manufacturer to directly purchase silver from the source
  • U.S. Mint has, not only sold out 100% of their stock on three different occasions in the last three years, but have been rationing sales of American Silver Eagles since June 2015 with no sign of change for the near future
  • U.S. Mint has set new all time sales records of American Silver Eagles for the past three straight and is on pace for another all time sales record in 2016 (personally I believe the U.S. Mint will manage their inventory and avoid a new record in 2016)
  • Royal Canadian Mint has set new all time sales records for Silver Maple Leafs for the past two consecutive years and is currently on pace to three-peat
  • Royal Canadian Mint (RCM), like the U.S. Mint has struggled over the past two years to keep up with demand. RCM, like the USMint sold out of product and had to shut down operations until they could produce enough product to reopen.
  • RCM was completely sold out of 10 oz. silver bars between June 2015 and February 2016 due to a lack of product to produce the bar