I believe the big players could in theory drive the paper price of silver as low as they want. But in the physical market they have to be able to deliver the metals at those low prices on Comex and such, and at some point the paper price will be too low for physical to be had, without adding to it some "premium" amount that must be paid by the party responsible for delivery.
The $18 level so far has held. If they push the paper price below $18 I believe the paper price will drop fast to some much lower number. I don't think that level would last long and the price would probably spike back to here or higher. Whether a person could score physical at that very low level is doubtful. If the price stays low long enough supply will come back into the market but even at 16 it seems difficult to imagine. My coin stores here are loaded with inventory now but if silver fell to 16 in a hurry, the supply would be gone in a day or two. It took weeks to get supply in on some items when we had that big fall from the higher 20s to lower 20s last year. People were lining up and paying and waiting for several weeks to get ASEs and such.
It's hard for me to understand how a physical item (silver) can be purchased by us consumers for about what it costs to dig up and refine said raw metal into .9999 coins/bars, Plus think of all the middlemen who take their cut and make a profit along the way- refiner to the wholesaler then to the retailer. I don't know how the $1.00 premium on generic creates a profit for all of those in the chain, including the mining company.
What makes it even more unbelievable to me that silver is this cheap now is that silver is an item that cannot be created or manufactured our of thin air but has to be found and extracted then refined, etc, it has many industrial uses and even more every day in the areas of electronics, medical, solar, defense applications, and now even in clothing, etc. What other assets can you think of where the price is like that? Even if the "money" aspect of silver is ignored the need for silver in modern machines is only going to expand in the future, while the supply gets depleted year after year.
I hope I am not in the future like one of the poor souls from the early 80's who got stuck with gold and silver they paid much for as the price went to peanuts, and had to hold the metals for 20+ years to break even. I don't think that is going to happen to current PM bugs like myself, but it's possible I suppose.
Just my opinion.
Jim
