Steve St. Angelo: Why is the SLV Bleeding Silver?
Tom welcomes back an always interesting guest to the show, Steve St. Angelo from the SRSrocco Report. Steve discusses the strength in physical silver demand and compares it to last year. ETF demand is lessening somewhat, but we still see strong physical demand. People are waking up to the need for silver, and that’s bringing new people to the markets as the Fed’s actions continue to reinforce the need for the metal.
Steve gives us an overview of the silver market and a breakdown of the various Exchange Traded Funds. JP Morgan’s inventories have been reduced, and the PSLV has added significant amounts of silver. Since February 3, the SLV has lost 84 million ounces, while Sprott has added 26.
Steve argues that energy drives the economy instead of the markets. He believes silver will get stronger because the energy dynamic will get weaker. It’s just a matter of time as investors continue acquiring ounces of the metal.
The gold to silver ratio is at a key technical level and currently seems to have bounced off the 65 levels. He argues this ratio is a reflection of the cost of mining silver compared to gold.
Banks are hoarding cash and not lending; therefore, higher inflation rates seem unlikely for some time. Sentiment is currently negative for treasuries while very bullish for copper. From a contrarian standpoint, we could expect to see a considerable shift in the direction of both.
Steve discusses his energy cliff thesis. Large oil companies are getting less and less return on every dollar of capital invested in oil. The US will not be unable to maintain, let alone grow its oil energy reserves.
Texas experienced many issues due to a lack of proper winterization, and overall green energy requires a lot of capital, energy, and technology in its production.
Talking Points From This Episode
- Physical silver and ETF demand
- Energy as the principal market driver.
- Cost of mining and the gold/silver ratio.
- Bond markets and inflation.
- Global supply change risks.
Time Stamp References:
0:00 – Intro
0:39 – Silver Demand Strength
3:06 – Overall Metal Demand
4:22 – Major ETF Flows
6:58 – SLV Withdrawals
8:14 – Silver Endgame
9:44- 1000oz Bar Market
10:52 – India & PM Demand
13:36 – Gold Silver Ratio
15:22 – Mining Costs
19:32 – Consensus Being Wrong.
23:20 – Stimulus Cheques & Equities
25:14 – Metals as Stores of Energy
28:14 – Energy Cliff and Viewpoint
31:00 – Texas Storm Lessons
35:46 – EROI on Green Energy
39:56 – Crypto and EROI
44:32 – Wrap Up
Energy Cliff Video: https://www.youtube.com/watch?v=wwDQ5iorYxc&t
Independent researcher Steve St. Angelo (SRSrocco) started to invest in precious metals in 2002. Later on, in 2008, he began researching areas of the gold and silver market that, curiously, most of the precious metal analyst community have left unexplored. These areas include how energy and the falling EROI – Energy Returned On Invested – stand to impact the mining industry, precious metals, paper assets, and the overall economy.
Steve considers studying the impacts of EROI one of the most important aspects of his energy research. For the past several years, he has written scholarly articles on some of the top precious metals and financial websites.
You can find many of Steve’s articles on noteworthy sites, such as GoldSeek-SilverSeek, Market Oracle, Financial Sense, GoldSilver.com, SilverDoctors, TFMetals Report, Outsiderclub, SGTreport, BrotherJohnF, Hartgeld, Der-Klare-Blick, PeakProsperity, SilverStrategies, DollarCollapse, FurtureMoneyTrends, Sharpspixley, FinancialSurvivalNetwork, PMBull, Deviantinvestor, PMBug, Wealthwire, and ZeroHedge.