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World Production of Silver is Relatively Small

Transcript of Video
February 2, 2010


It is estimated that the total amount of silver produced in the history of the world is around 45 billion ounces of silver [1]. It is also estimated that the current world population is around 6.7 billion people. If you think about the amount of silver ever produced in the history of the world per person alive today it is roughly around 7 ounces of silver per person.

I have a demonstration here. This is 7 ounces of silver. If you wanted to get your share of the amount of silver ever produced in the history of the world you would pick this up at today's price of around $16.70 (per ounce). It would cost about $115 or $120 to get your share of silver. If somebody worked minimum wage here in Florida, where I am from, they could purchase all this silver for two days worth of labor. You can get your share of all the silver mined in the history of the world.

How much of this is above ground? Actually a lot of this is no longer above ground with various things such as wear and tear of coins over the thousands of years. People throw away silver backed mirrors. A lot of computer components are made with silver. A lot of silver doesn't get recycled and just gets consumed by industry. There are a number of estimates as to how much silver actually remains above ground. One of the estimates I read was around 20 billion ounces which corresponds to about 3 ounces per person, but there are other estimates that correspond to only an ounce of silver or just a fraction of an ounce of silver that was ever produced is still above ground and in usable form [2][3]. Currently, the silver that is left above ground is mostly silverware, jewelry and artwork. Although there are also coins as well too like silver quarters and things like that.

The amount of silver produced per year in the entire world is roughly around 680 million ounces of silver [4]. If you take our world population of roughly 6.7 billion people that means about one tenth of an ounce of silver is produced per year per person. A good way of visualizing that is a dime. If this dime were made of silver this would be about one tenth of an ounce of silver and it would cost you about $1.67 today is what it would be roughly. If you want your share of the amount of silver produced this year you would want to buy yourself this much silver per year. You probably are buying this amount of silver per year if you buy cell phones and computers and all the things that have silver in them that we don't even know about like RFID tags. If you wanted to be sure you got your share of silver per year you would want to get this much and spend like $1.60 per year.

Another way of visualizing how little silver is actually produced per year is tot look at something like the US government budget which was issued recently at about $3.8 trillion. If you think about the budget of the United States, which is just one country in the world, it is a large part of the economy at roughly about 20% of the GDP of the entire world but it is still just one country. Also, the government spending is just a portion of the GDP. Look at just the government spending of the US this year. The full year of spending is 3.8 trillion but then look at a month's spending and a week's spending and actually one day's worth of spending of the US government budget is enough to buy all the silver produced in the entire world in one year. Obviously if the government started buying silver it would go up in price but if they bought it at today's price of $16.70 per ounce they could buy with one day of government spending all the silver produced in the entire world per year.

Another way of thinking about this is our national debt. The US national debt is a little over 12 trillion and counting. Actually a small fraction of that, 0.1% of the national debt, like a small fraction of the interest paid on the nation debt could buy all the silver produced by the entire world in a year.

Another way is to look at the trade deficit of the US and China, just two countries in the world and just the trade deficit. The US imports more than what we export. Less than 5% of that amount (US/China Trade deficit) could buy all the silver produced by all the countries in the entire world combined in a year [5].

I hope we see that the amount of silver produced is a small quantity. We talk about millions and billions of ounces and things like that but in reality the amount of silver produced per year by our world is a very small amount.


[1] Estimage of total silver mine production through 2001:
http://pubs.usgs.gov/of/2004/1251/2004-1251.pdf

[2] Around 25 billion ounces of silver still above ground:
http://www.financialsense.com/fsu/editorials/2006/0526.html

[3] Very little silver above ground:
http://news.silverseek.com/TedButler/1208878782.php

[4] Yearly world silver production:
http://minerals.usgs.gov/minerals/pubs/commodity/silver/mcs-2010-silve.pdf

[5] Trade deficit between US and China:
http://www.census.gov/foreign-trade/balance/c5700.html