No more silver bars

[voytechs]

APMEX is completely out of silver bars. They had some Johnson Mahoney bars until yesterday and those were only for Oct. delivery and those are sold out as well.

On Sunday they had I guess received several different products because the list was all of the sudden full of stuff, but by Monday morning it was all gone and only the Johnson bars left, which are now gone as well.

[RickyJ]

They aren't gone, they just aren't selling them at these prices.

[voytechs]

They aren't gone, they just aren't selling them at these prices.

Not true. They only make money on the over-the-spot fees. They hedge all their purchases so they can't loose money if their product suddenly drops in value. They just don't have product to sell.

[Mahkato]

They're really low on a lot of other silver products too. 10-oz bars on eBay are selling for $170+ last I checked.

[ARealConservative]

Not true. They only make money on the over-the-spot fees. They hedge all their purchases so they can't loose money if their product suddenly drops in value. They just don't have product to sell.

They could really help the bottom line by claiming to run out of inventory at the
sharpest point in the dips.

And since I don't have access to the warehouse, I'm going to assume they take actions to improve their bottom line.

[voytechs]

They're really low on a lot of other silver products too. 10-oz bars on eBay are selling for $170+ last I checked.

If the disconnect between the physical metal and ETF/paper exchanges diverge even more, the market forces will prevail no matter what they try to do on paper. The reality is that no one is selling their physical silver and the supply is drying up. At some point you may have to pay $20 over the spot-price or more to get physical metal. Currently some exchanges are charging $4 over the spot. APMEX is only charging $1.48. Just a few months ago all their products were simply $0.38/oz over the spot.

[brandon]

Demand up + Supply down = lower prices

Makes perfect sense. amirite?

[SevenEyedJeff]

Yep. Silver back below $ 13 today. They must be all out then. :D

[tmosley]

They could really help the bottom line by claiming to run out of inventory at the
sharpest point in the dips.

And since I don't have access to the warehouse, I'm going to assume they take actions to improve their bottom line.

If they have hedged against the price of silver, it wouldn't help, as they are gaining an amount equal to what they are losing on the silver's actual price. If it is set up the way I think it is, then they just want to sell as much as they can, so long as it is above spot (the higher the spread they get, the more profit they get, regardless of the value of the silver itself).

The equation might break down if silver went down to, say, $3/oz, but this type of volatility is probably expected and countered.

[jonahtrainer]

They could really help the bottom line by claiming to run out of inventory at the sharpest point in the dips.

And since I don't have access to the warehouse, I'm going to assume they take actions to improve their bottom line.

Talk about extreme ignorance on how coin shops work.

I have a good friend whose family owned one of the largest coin shops in the world. They usually hedge their inventory and only make money on the spread. Apmex's bottom line is suffering big-time from the shortage of small denomination metal. If they had product they could be making a lot more money than they are. Perhaps you should read this article (http://www.runtogold.com/Run_To_Gold/Run_To_Gold_Blog/Entries/2008/8/15_No_Sausage.html).

GoldMoney (http://www.mygoldmoney.com) does not appear to be having any metal shortages but they deal only with LBMA bars. I suspect the issue is with fabrication and not necessarily with lack of metal, just yet. But that is coming as the bullion market is very shady. JP Morgan claimed (http://www.reuters.com/article/bankingfinancial-SP/idUSN1225115120070612) it was 'usual practice' to engage in fraud by taking peoples cash for 'allocated metal', charge storage fees but not actually buy any metal.

[ARealConservative]

If I was convinced this dip was going to be short lived, I would be ignorant to sell my product right now.

Who cares if they would still profit. They will profit more by taking a vacation for a couple of weeks.

Not sure why this axiom produces such angst.

[Dr.3D]

If I was convinced this dip was going to be short lived, I would be ignorant to sell my product right now.

Who cares if they would still profit. They will profit more by taking a vacation for a couple of weeks.

Not sure why this axiom produces such angst.

Probably because it does not fit the supply and demand profile of a free market.

Edit: Rather than go on vacation, wouldn't you just sell your product at a higher than spot price?
In other words, increase your margin.

[Dr.3D]

Let's take a look at what has happened with one place that does actually sell physical silver.
http://www.silverprice.com/

Notice the price is pretty high for generic silver rounds?

$1.79 over spot is pretty high.
Just a couple of weeks ago it was $0.96 over spot on the same site.
Last year, it was only $0.65 over spot.

[SevenEyedJeff]

I think we need some way to set up a system for finding the "real" spot price, meaning the market price for the physical metal. I don't like going to the coin shop and not knowing what the market price should be.

[Dr.3D]

I think we need some way to set up a system for finding the "real" spot price, meaning the market price for the physical metal. I don't like going to the coin shop and not knowing what the market price should be.

You could check ebay and see what it is selling for there and get a pretty good idea.

Here is a pretty good article about doing that.
http://silverstockreport.com/2008/400k.html

[ARealConservative]

Probably because it does not fit the supply and demand profile of a free market.

Edit: Rather than go on vacation, wouldn't you just sell your product at a higher than spot price?
In other words, increase your margin.

The spot price of silver does not fit the supply and demand of physical holdings either.

[Dr.3D]

The spot price of silver does not fit the supply and demand of physical holdings either.

Exactly!

Edit: The silver spot is not valid anymore. It is only valid for paper silver.

[RickyJ]

The spot price of silver does not fit the supply and demand of physical holdings either.

If that is the case then silver will soon be back to $17.00 an ounce. A long future contract right now would be a good deal I think.

[ARealConservative]

Exactly!

Edit: The silver spot is not valid anymore. It is only valid for paper silver.

ok. So when the spot price of paper goes down artificially low, why am I ignorant to claim that silver dealers might not be upfront about inventory?

[Dr.3D]

ok. So when the spot price of paper goes down artificially low, why am I ignorant to claim that silver dealers might not be upfront about inventory?

Because all they need to do is increase their margins and continue to sell the silver.

[ARealConservative]

Because all they need to do is raise their margins and continue to sell the silver.

how?

Everybody is claiming a silver shortgage - except in paper....They are concerned with product replacement.

[Dr.3D]

how?

Everybody is claiming a silver shortgage - except in paper....They are concerned with product replacement.

If they have set a high enough margin, they can replace their product.
They should make their price increase as the supply becomes less available.
This is how the free market is supposed to work.

[Dr.3D]

Here is an example of how things should be working in the free market:

If you were selling bricks, and the price of bricks was listed at $1.00 and it costs you $1.50 to make more of them or buy more of them to sell, wouldn't you sell the bricks for $2.00 or more? Just because the price of bricks is listed at $1.00 it does not mean you have to sell those bricks at that price.

As the bricks become harder to get, the price has to go up.

If later, the listed price of the bricks becomes $0.50, but you notice you still can't buy bricks for less than $1.50, you would still be selling them for $2.00 so you would be able to stay in business.

Let's say you have been selling the bricks for $2.00 but as time goes by you find you can not buy or make them for less than $1.75, you would then increase your selling price to $2.25 so as to make the same profit as before.

[ARealConservative]

Here is an example of how things should be working in the free market:

If you were selling bricks, and the price of bricks was listed at $1.00 and it costs you $1.50 to make more of them or buy more of them to sell, wouldn't you sell the bricks for $2.00 or more? Just because the price of bricks is listed at $1.00 it does not mean you have to sell those bricks at that price.

As the bricks become harder to get, the price has to go up.

If later, the listed price of the bricks becomes $0.50, but you notice you still can't buy bricks for less than $1.50, you would still be selling them for $2.00 so you would be able to stay in business.

Let's say you have been selling the bricks for $2.00 but as time goes by you find you can not buy or make them for less than $1.75, you would then increase your selling price to $2.25 so as to make the same profit as before.

I understand all of this, but without an audit of the paper commodity floating around, I don't believe that we are actually practicing free market principals, and I imagine many dealers have their doubts as well.

[Dr.3D]

I understand all of this, but without an audit of the paper commodity floating around, I don't believe that we are actually practicing free market principals, and I imagine many dealers have their doubts as well.

This is why the dealers should and many are, setting their prices according to what the market is doing rather than what the spot says. They have increased their markup price in relation to the spot price.

The others who have probably been less than honest, don't have silver to sell because they never had any in the first place. So, they are not able to do business at the current spot + markup prices. The markup would be how far above spot the market is really selling silver for.

[ARealConservative]

This is why the dealers should and many are, setting their prices according to what the market is doing rather than what the spot says. They have increased their markup price in relation to the spot price.

The others who have probably been less than honest, don't have silver to sell because they never had any in the first place. So, they are not able to do business at the current spot + markup prices. The markup would be how far above spot the market is really selling silver for.

Right now, the market is saying I can't buy physical silver in quantity so I can understand the reluctance of dealers to move any until time that the market settles down.

[Dr.3D]

Right now, the market is saying I can't buy physical silver in quantity so I can understand the reluctance of dealers to move any until time that the market settles down.

You can buy silver in quantity right here. http://silverprice.com/

[Lafayette]

I bought some 1oz and 10oz bars thru NWTM , paid a few dollars over spot price, but i got to use a credit card so it wasnt a bad trade off.

[Dr.3D]

I bought some 1oz and 10oz bars thru NWTM , paid a few dollars over spot price, but i got to use a credit card so it wasnt a bad trade off.

Did you ask how long it was going to take to get delivery?

Edit: The reason I ask is, the last time I bought from them, it took three months for them to send it.

[rockandrollsouls]

Talk about extreme ignorance on how coin shops work.

I have a good friend whose family owned one of the largest coin shops in the world. They usually hedge their inventory and only make money on the spread. Apmex's bottom line is suffering big-time from the shortage of small denomination metal. If they had product they could be making a lot more money than they are. Perhaps you should read this article (http://www.runtogold.com/Run_To_Gold/Run_To_Gold_Blog/Entries/2008/8/15_No_Sausage.html).

GoldMoney (http://www.mygoldmoney.com) does not appear to be having any metal shortages but they deal only with LBMA bars. I suspect the issue is with fabrication and not necessarily with lack of metal, just yet. But that is coming as the bullion market is very shady. JP Morgan claimed (http://www.reuters.com/article/bankingfinancial-SP/idUSN1225115120070612) it was 'usual practice' to engage in fraud by taking peoples cash for 'allocated metal', charge storage fees but not actually buy any metal.

bingo. conservative is just being paranoid.... aye...those ron paul supporters. everyone's out to get em everywhere!