How much has the silver stockpile been depleted?

June 5th, 2009

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During the Great Depression, President Franklin Roosevelt signed the Silver Purchase Act of 1934. That started the world’s greatest stockpile of silver, peaking at 3.5 billion ounces in the 1950s.

As we wrote in Third turning point for silver, the US government sold down its massive silver stock in the 1960s in an attempt to keep its price down. Also around the same time, as we wrote in What determines the gold-silver ratio?,

… scientific discoveries in the 1960s saw the widespread industrial applications of silver.

The problem with industrial use of a metal is that it gets ‘consumed’ and used up in microscopic amounts, thrown away and eventually ends up in the landfill. Therefore, unlike gold, most of the silver ever dug out from the earth are lost through ‘consumption.’ Only jewelery and silverware preserves the silver.

By 1980, only 2.5 billion ounces of silver are left. By 1990, 2.1 billion ounces are left. As in late 2008, only 20 million ounces of silver are left in the US government’s stockpile. Other government around the world did likewise. Today, government stockpiles around the world hold only 0.016 percent of the original 3.5 billion ounces that the US government used to hold!

In other words, the amount of silver left in the world that is available for investment is less than gold! Gold, on the other hand, has a rising quantity of stockpile. If all mining activity are to stop today, the aboveground stocks of silver will only last 4 months!

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  • Pete

    Wow, interesting info there Ed.

    Does that make silver even more rare than gold?

  • Pete

    Wow, interesting info there Ed.

    Does that make silver even more rare than gold?

  • http://contrarianinvestorsjournal.com Contrarian Investors? Journal

    Hi Pete!

    Yes, in the sense that the aboveground government stockpile is rarer than gold. But what if we include the below-ground stock pile, existing silverware, recycling, etc?

  • http://contrarianinvestorsjournal.com Contrarian Investors’ Journal Editor

    Hi Pete!

    Yes, in the sense that the aboveground government stockpile is rarer than gold. But what if we include the below-ground stock pile, existing silverware, recycling, etc?

  • http://neuralnetwriter.cylo42.com/ Steve Netwriter

    Down to “20 million ounces” !
    Amazing.

    Great set of articles. You need to add this one to the list ;)
    Steve

  • http://neuralnetwriter.cylo42.com/ Steve Netwriter

    Down to “20 million ounces” !
    Amazing.

    Great set of articles. You need to add this one to the list ;)
    Steve

  • http://neuralnetwriter.cylo42.com Steve Netwriter

    Down to “20 million ounces” !
    Amazing.

    Great set of articles. You need to add this one to the list ;)
    Steve

  • Talnik

    Wouldn’t that be .016 times (56,000,000 ounces) rather than .016% (560,000 ounces)?

  • Talnik

    Wouldn’t that be .016 times (56,000,000 ounces) rather than .016% (560,000 ounces)?

  • http://contrarianinvestorsjournal.com Contrarian Investors? Journal

    Hi Talnik!

    Yes, you are right. It’s a typo.

  • http://contrarianinvestorsjournal.com Contrarian Investors? Journal

    Hi Talnik!

    Yes, you are right. It’s a typo.

  • http://contrarianinvestorsjournal.com Contrarian Investors’ Journal Editor

    Hi Talnik!

    Yes, you are right. It’s a typo.

  • Talnik

    Yeah, for a minute there I thought I had a much more substantial percentage of the world’s silver! It was fun while it lasted.

  • Talnik

    Yeah, for a minute there I thought I had a much more substantial percentage of the world’s silver! It was fun while it lasted.

  • Paulg5

    What accounts for all the silver coins that were produced before 1965, where did all that silver go? It was apparently replaced by base metal coins after 1964! Wasn’t that melted down and stockpiled?

  • Dude

    Seems like silver will go to 2k an ounce!

  • C4jay

    yes, right now there is much less silver above ground and refined than gold. 10 oz on silver are mined on average for every 1 oz of gold. Hi-Ho Silver away!

  • Henry

    How much silver is left in the world today, July 2011

  • http://www.facebook.com/people/Randy-Crow/100000098494859 Randy Crow

    Incredible. This article states there is as much gold in the world as silver. There should be 16 times more silver than gold. Did you know? If the USA sold its gold’s reserve, said to be over 8,000 tons, to pay off the national debt of $ 14.3 Trillion, the US would have to sell it for more than $54,000.00 for each ounce we own to pay the
    ?$ 14.3 T. Gold produced in ?2007 in the USA, 240 tons. Each ounce would have to be sold for more than $ 270,000.00 per ounce to pay this year’s US deficit of $ 1.3 Trillion. The USA has sold its 3.5 billion ounces of silver to keep the price of silver down and hide the fact the US dollar is worthless. ? ??

  • Henry

    I have bought 2.000 Canadian Maple Leaf silver coins the last year in Norway – and I keep on buying – long term investment – it will make me very rich!

  • Jamienieminen

    Good article but what silver that is left in the world and what silver that’s left in government stockpiles are not the same thing.