I’m going to keep this one short and not-so-sweet: I’ve just gotten wind of some startling commodities news that could present a rare opportunity for stackers and investors alike: the latest government data reveals that silver production in the United States is now the lowest it’s been in 70 years.
You can read the long-winded, granular version of it straight from the mouth of Uncle Sam here, or you can get the much more interesting condensed version of this startling development from the great Steve St. Angelo here. For your convenience and entertainment, I’ll condense it even more for you right now.
First, let’s start with the ugly numbers. In 2018, American mines produced approximately 900 tons of silver, a decline of more than 10 percent from the previous year and part of a multi-year downtrend:
Courtesy: minerals.usgs.gov
The USGS (U.S. Geological Survey) report also states that U.S. silver was produced at 4 silver mines and as a byproduct or co-product from 38 domestic base and precious-metal mines. Few investors are truly aware of just how few pure silver mines exist in the U.S. – and how little silver they’re producing nowadays.
Much of this has to do with the high level of environmental and governmental regulations surrounding silver production. Rather than deal with the expense and the red tape, miners have been or relocating to or starting new exploration projects in Mexico, Canada, and South America.
It’s an unsettling trend for the domestic silver community, as U.S.-based production has declined since the turn of the century:
Courtesy: SRSRoccoReport, USGS
From 63.7 million ounces in 2000 to just 29.7 million ounces last year – less than half. To find a worse year than 2018, we’d have to go all the way back to 1946, when the United States only produced around 25.15 million ounces of silver. And at least we had a reasonable excuse back then, what with the war and all.
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Not that the rest of the world is doing much better, as the USGS has publicly stated that the world’s silver supply will be depleted by 2020 – faster than gold, copper, or zinc:
Courtesy: USGS, 401kRollover.com
This could present an unpleasant situation in a few years for makers of electronics, electric vehicles, batteries, jewelry, silverware, solar cells, catalytic converters, dental amalgams… but it’s a major opportunity for anyone seeking to profit from physical silver as well as silver mining stocks.
As Keith Neumeyer once said, “We’re going to have a compression that’s going to send the price of silver to triple digits.” With demand still high and bound to increase over time, and a severe silver shortage in the making, I can only call Mr. Neumeyer’s prediction a foregone conclusion.
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