Quote of the Week - Silver

Few know the silver markets better than Ted Butler, who last week summed it up insightfully as follows:

“There is only $20 to $25 billion worth of silver bullion in the world or one one-hundredth of one percent (0.01%) of the $200 trillion of total personal financial wealth. By comparison, total world gold holdings of 5.5 billion oz are worth more than $7 trillion or 300 times the value of total silver bullion. Of course, all the world’s silver bullion is owned by a wide variety of investors, so it is somewhat presumptuous to call it available. Only the actual owners will determine at what price the silver is truly available. All the silver bullion in the world is very much different than all the available silver bullion in the world. One thing much more certain is that $200 trillion worth of world personal wealth exists and if the smallest fraction of one percent of that wealth tries to buy the metal, the price lid will be blown off.” 

Just for further context New York-based research company CPM Group estimate about $5 trillion of silver and $18 trillion of gold circulated globally last year.  Sharelynx estimate about 900 million ounces of silver was mined in 2013 worth about US$18 billion.  This means the paper market in silver is 275 times the size of the physical market. Further, there are estimates of between 9:1 and 16:1 extraction rates of silver to gold and yet the paper market in gold is only 3.6 times the size of the paper market in silver.  This goes some way to explaining the volatility of a relatively small market attracting an enormous amount of trade.