Why Silver Investables Are Drying Up

by Rick Ackerman, Rick Ackerman.com:

For a while, we’ve had a nagging feeling that we’ve been witnessing something profound that the markets have yet to grasp. We are not talking about a global smorgasbord of events that has been amply covered elsewhere. As readers might know, our particular interest is in silver, and that is where we see an elephant in the room that has yet to attract any headlines. No doubt most readers are aware of the recent developments in countries like Argentina, Bolivia, Peru and others, with respect to what can be broadly classified as “resource nationalism.” Our general views on the subject were detailed a few years ago. As discussed by this writer and others, such developments are not new and certainly not limited to silver or even the mining sector. However, in our opinion, it is in the silver space that these events are likely to have the most profound effect.

Why? Because the silver sector is so small and the above-mentioned countries collectively make up a big piece of it. According to CPM Group’s 2012 Silver Yearbook, the countries named above are projected to produce some 170 million ounces of silver this year versus anticipated total global silver production of 788 million ounces. While at first glance that only makes up 21.6% of total annual mine supply, which in itself is significant, we submit that it represents an even greater percentage of “investible” silver production.

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