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Author Topic: How Bolivian Miners Affect the Price of Silver in Your Pocket  (Read 1026 times)
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tamo42
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« on: 2011 Mar 30, 10:59:46 pm »



If you have been watching the silver market closely, you may already know that there is a strike going on in Bolivian silver mines. Normally, this kind of thing doesn't really matter that much other than a temporary blip in silver prices.

However, these are not normal times. Silver is still in backwardation. People are demanding to receive the silver they have bought contracts on. Physical supplies are scarce - much scarcer than the market price implies (hence the backwardation).

Into this witches brew of market distrust the Bolivian mine workers seem to be serious about their strike. The union of workers at San Cristobal are demanding better working conditions. It's not clear from reports whether this means safety improvements or better hours and pay. For the moment, it doesn't matter because San Cristobal mine is at a stand-still with no indications that this will be over any time soon.

So, again, why does this matter so much? Well it turns out that this one mine produced 3% of all the silver production in the world for 2009. Changes happen at the margin. That kind of reduction in supply is significant.

Yet another check mark on the bull side.
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« Reply #1 on: 2011 Mar 30, 11:07:38 pm »

I keep looking for signs of slowing, and I'm just not seeing anything yet.
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