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What Just Happened To The Silver Market

What Just Happened To The Silver Market. The Economic Ninja Talks with Wall Street Silver about how the American Silver Eagle Coins now have a 100% premium due to crazy wild demand for physical silver and what is happening with silver mining stocks.

Hey everybody economic ninja here i hope you’re doing great we’re going to talk about the federal reserve we’re going to talk about silver we’re going to talk about the comex and we’re going to talk about our favorite guy right behind my guest jim lewis of wall street silver jerome powell jim how are you doing doing great thanks for inviting me yeah there’s not a

Lot going on right now except for we have a crazy silver shortage in the comex it’s dr being drained silver eagles are at crazy prices and jerome powell wants to spike interest rates again what do you think of that you know um the speculation is he’s going to do it at least two more times probably 75 basis points this week um probably another at least 50 basis

Points in december that’ll get us up to four and a half or so four and a quarter on the fed funds rates probably get in you know mortgage rates up to five percent so you know the speculation is that’s gonna have a huge impact on the housing market so there’s a lot going on right now yeah right now i’m seeing uh mortgage rates uh sitting in the low seven some of them

As high as eight percent right now and uh to get low sevens you’d need like an 800 fico score but they just came through and changed the fico scores that more people that shouldn’t buy a house are gonna be able to buy a house so let’s share a couple screens i want to and then we’re gonna talk about it because i think there’s some really interesting things going on

Right now here this is the one i want to start with actual physical silver at max right now you can buy a silver eagle for as low as 37 and that’s crazy that’s crazy what is the spot price for silver as we’re talking right right now it’s 1951 so when you look at this chart now this is this is pre-sale right for the 2023s you’re like okay that’s pretty high but when

You go down to the um the 2022 it’s the same price so if you bought just less than 20 ounces you’d be paying 39.50 so we are literally at like a hundred percent premium right now that’s nuts what is just regular silver you know i mean i get it the american silver eagle there’s some some issues with shortages but just regular more more common silver coins yeah i was

Talking to well yeah actually yeah let’s dive back down into that because i was talking to my broker the other day and she was saying that right now uh like a silver buffalo we’re talking about um what’d they say four dollars over spot but just curious while we’re here let’s just look at just best sellers right now because that’s what the people want and they’re

Usually looking for deals so right here one ounce silver round for a buffalo is as low as 25 40 that’s generic that’s essentially generic silver rounds yeah there’s no pre there’s no nothing special about those at all nope lots of people make that and that’s six dollars over spot so almost 30 33 percent pre um physical you know premium over spot right now even for

Just generic that tells you there’s a massive imbalance in the system right now absolutely totally agree and that’s that’s great to bring it to here because i used to pay 39 cents over spot on sales uh with companies like appmax um just three years ago but right now this is from mike say and it he’s talking about the registered uh amount of silver is continually

Dropping the eligible is dropping tell me about what’s going on in the comex because you’re the pro at this you’ve been tweeting about this like crazy okay so you know it it shows 30 okay i want to i want people to focus on registered up there in the upper left-hand corner 35 million 500 000 ounces in registered now that’s the those are the ounces in the vault in

Comex that are available for delivery yep um eligible at 265 million that’s stuff that’s in the long-term storage a lot of that’s owned by etfs i’ve seen reports that only half of that is actually really potentially even available um but the registered category at 35 million a year and a half ago in in early 2021 that number was 150 million so we’ve fallen by

What what is that 70 yeah in the registered category in 18 months yep the last time it was this low is june of 2019. um we’re approaching the lows of 2016 or 2015 at this point wow and and back then comex was not used as much for delivery it was only during the covid shutdowns that all of a sudden people started using comex seriously as a delivery vehicle um so

Some you know the the leverage the a number of paper contracts relative to the amount of silver in the vaults is getting crazy absolutely if you’re going to go to that other here do you have that other chart yeah you talk about the one that you uh pulled up yeah and just you know i want to also later talk about that company that you were talking about prismo with

Chris taylor on financial fitness i want to talk about that in a little bit too so let’s take a look at this so so let me talk to us talk us through this what are we looking at okay so this is a graph um that shows the silver open interest relative to the percentage of registered silver in the vaults and you can see it over and the vertical line there at the zero

Point that’s at the first delivery day at each month uh for a futures contract so you can see historically the number of paper contracts relative to the underlying silver and the vault is in the 500 percent to thousand percent range okay um but you can see in the last contract in september the great one there it’s their traditionally it’s closer to 500 percent in

The last one the great i’m there it was closer to a thousand percent um and this one it’s closer to it’s sort of at a record here uh or at least recent record at fifteen hundred percent and what that means is there’s a lot more paper trading of the futures contract paper silver and a lot less actual physical silver backing it in the vault wow and what that means

Is a certain percentage of these contracts not all of them but a certain percentage of them are going to be effectively delivered upon there’s always a certain you know x number of million ounces to get pulled out every every contract uh people actually do take delivery on but there’s so many contracts and so little silver they’re running the risk of actually

Running out of silver in the comex vaults and at the current rate of decline i’ve seen some other graphs that we don’t have here with us right now that are projecting by march if the current trends of silver exiting the vaults continues uh the comex registered category will be at zero by march or april of next year wow wow and and do you think what happens if

All of a sudden there’s a spike in interest in pslv or not pslv but slv because normally they got to go out and buy silver on the open market right if all of a sudden there’s this massive interest and people sort of buying up the paper shares well slv there’s a lot of funny business going on and so slv doesn’t really reflect what’s actually going on in the market

The um the uh authorized part participants that’s what they call them the aps the authorized participants they play a lot of games with withdrawals and deposits into slv so i wouldn’t really use that as a gauge for what’s actually going on with the price of silver i totally agree because i’m not a fan of slv i don’t like paper i want physical but something else

Really interesting about slv and the comex is didn’t we see a ton of thousand ounce bars coming out of the comex and literally being sold on outlets like sd bullion at max miles franklin all these companies for the first time that i’ve ever seen started literally selling these right out of the comics do you know of have you been hearing of anyone still interested

In buying those bars because i talked to my broker and she was selling a thousand ounce bar just the other day yeah um sd bullion um uh silver gold bull there are brokers there are retail brokers out there who are actually doing thousand ounce bars um i do know that um silvercrest the actual mining company is planning to sell thousand ounce bars direct to retail

Wow and skip skip and literally just skip the bullion banks they want to just sell direct to retail at this point man well this is a great segue because i want to talk about a mining company that you were talking about an exploration company prisma metals and i’m noticing because you’re talking you’re in deep talking to all these mining companies because countries

Are starting to get very worried that they’re not going to be able to take delivery very similar to what france did in the early early 70s pulling gold out of our vaults until nixon said stop um let’s talk about that because you were talking with chris and what are you seeing in the mining industry specifically right now well as i just said some mining companies

Are starting to try to figure out uh they’re seeing these crazy premiums in physical yep i mean they’re they’re talking directly to uh retail uh bullion dealers about can they just sell direct to uh retail gotcha trying to just cut out the bullion banks uh prisma metals is one of those where you’re looking to get involved in a company that has a great deposit and

Is has a lot more leverage to the upside all of us are speculating that if something like the comex runs out of silver silver is going to take off to 25 30 and then these these exploration companies or the junior producers who have the most leverage to the underlying commodity price those are the ones that are going to take off the most yep what do you look for

You look for the companies that have um solid geology and solid people behind them and prisma metals i know is backed by dr peter mcgaugh who’s famous from the days of mag silver from reina silver um you want to look for companies that have really solid people behind them and peter mcgaugh is mr mexico silver in terms of geology dr peter mcgaugh right here yeah

Yeah because he was he was a co-founder of mag silver so he literally bit off the a big chunk of his fame came from what happened mag silver and then it just kept following through other companies yeah so when you see a guy of peter mcgraw’s caliber uh jumping on board with um an early stage exploration company like prismo number one it gives you the confidence

That the geology is solid and the size of the deposit is solid yep uh and that’s what you look for in these things if you because peter mcgaw is not going to risk his reputation on something that’s not serious right yeah on the line for something that’s big and for real and i i’ve learned i’ve learned in my time of investing in these companies you got to stick with

People who are legitimate and have a background of being successful that’s the best way to go yeah peter is a really great guy got to meet him in beaver creek just recently know his daughter lauren that family is becoming a geology a super like a powerhouse there they take this extremely extremely serious yeah yep and so you know don’t don’t spread it i would advise

Anyone who’s investing in exploration company so don’t put it all on one company yes you spread it around you nibble up the stock you you buy a small position a thousand shares um or which is for something like this just a couple hundred bucks 300 400 yep um and you just put it on your radar screen and able to whenever you see a down day on silver and you see the

Stock is sort of down with it go nibble away some more at it that’s what you do with these things things i can’t agree more jim that is such solid advice everyone i want you to understand that that’s what makes winners not speculating diving in with all your money and then it takes a dip because the price of silver really can fluctuate and that also causes these

Exploration and my junior exploration our junior mining companies to really swing but on the upside there could be a lot of power now jim can we talk about just let’s use one of these examples like the drilling results what should people be looking for because a lot of people they they’ll click on something like this and they’ll go what am i looking at when they

Start talking about all these numbers what’s important well what i look for uh on drilling results is how many grams per is it thick and what are the grams per ton okay so let’s let’s click on this one october 20th is just a as just just an example perfect so you can see here under technical summary they’re hitting they’re hitting widths up to nine meters in width

And that’s huge and mexico a lot of mexican vein structures are are very thin they’re high grade but thin when you see a company that is hitting very wide veins up to nine meters in width you know you’ve got something serious gotcha and you’re looking at depth too right that’s important like what is this a shaft mine is it going to be a strip mine you’re looking at

How much it could cost correct yeah and and most mexican minds are going to end up being underground mines that’s just the nature of the beast for uh silver in mexico okay that’s good to know awesome so another thing too is um when we’re talking about numbers is there anything else that really stands out that you could teach somebody because you got so much darn

Information and experience in this i just want to give the the everybody listening to this as much value as possible well prismo metals um they’re they’re in an area called the panuko district okay which is right next door to visa la silver and so the theory on this one is these are these little silver is a much bigger company several hundred million dollars in

Market capitalization okay so the theory is here um prisma a piece of silver needs to buy prismo medals because prismo may have the heart of the deposit that visla wants for the panico district the goal here is for prismo to completely explore these deposits that they have okay and then uh likely visible silver is going to come in and take them out okay so that

Makes a lot of sense so when you’re dealing with exploration companies part of you looking uh into this company is what other majors are around that company that might be interested in the work they’re doing and all of a sudden because they’re putting them time and money into that property drilling coming up with these results they’re making it more available and

Desirable for a larger company to possibly acquire them that’s exactly what the play is yeah awesome and as silver goes up which is pretty much inevitable at this point in 2023 we’re going to see a rally in silver um both visa and prisma will probably take off um and uh we’ll we’ll see probably the use of it i don’t know when it’ll happen but ultimately at some

Point in the future visa probably takes out prismo nobody does and like jim says you know don’t dive all in nibble take your time learn the team that’s what we do and that’s what we want to pay attention to and understand there’s going to be dips there’s also gonna be spikes when it comes to the mining stocks in relation to the actual physical metal jim i want to

Thank you so much i know that prismo’s got some news coming out i don’t know what it is but as the the probably the release of this i’ll put a link for everybody to take a look at it i don’t know what the news is though so but they’ve got true they’ve got they’ve got a lot of drill cores in the lab so probably in the next month or two you’re going to see a lot of

Drill results coming out oh and actually confirm the actual essay out of the actual uh how much silver uh per how many grams per ton are in the actual drill course that they’ve just been uh releasing oh nice awesome well hey again jim thank you so much for coming on can’t wait till the next time we see you i’ll probably end up seeing you in vancouver i think in

January and january yeah we’re both going to be there for another uh party that’s gonna be awesome can’t wait to see you guys there all right guys that being said the economic ninja and jim lewis are out

Transcribed from video
What Just Happened To The Silver Market By The Economic Ninja