Most Silver is Produced For Under .50 cents per ounce
The world produces 1 billion ounces of silver per year, but only uses 500 million ounces. All the left-over silver is stored in massive piles.
All the silver we use each year (500 million ounces) is produced as a byproduct of other mining (like copper and zinc and lead). Byproduct silver is produced practically free of cost (but certainly under .50 cents per ounce), because the silver just goes along for a free-ride in the copper and zinc and lead mining process.
There is a massive glut of cheaply produced silver.
If silver prices dropped to $3.00 per ounce (or even $2.00 per ounce), we'd still produce enough silver to meet 100% of our commodity needs.
In the last 20 years, Silver shorts (in Silver futures, based on the Commitment of Traders data) has only been as high as it is currently for five periods. Four of those five periods were followed by considerable rallies in silver prices. The one period where prices flatlined (fell modestly) was a slow and steady rise in shorts (as opposed to the spike-like move currently). Of course, with near record amounts on the short side of the boat, it would seem clear where Silver should go next but this time is different we will be told.
•Jul 1997: +70% rise over 29 weeks, •Nov 2000: -13.5% in 53 weeks, •Oct 2002: +13.2% in 12 weeks, •Apr 2003 +19% in 24 weeks, •Aug 2005 +114% in 37 weeks, Average +40.5%
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