Unlike the US which has energy to 'back up' its monetary expansion, China must import 14 million barrels per day of energy, making China's currency less secure and more vulnerable if it engages in excessive money printing

Indian physical silver buying of approximately 9,200 metric tons in 2022 was responsible for the sharp decline in LBMA inventories that year

There are transparent inventories held on COMEX, LBMA, and in ETFs, but there are also significant off-balance-sheet inventories privately held (and possibly in government reserves) whose size is unknown

Oil remained at $1.80 per barrel for the entire decade of the 1960s because of abundant conventional oil supply brought on from the Middle East, demonstrating the historic relationship between cheap conventional oil and stable energy prices

After the 2011 gold peak at $1,923, the price fell all the way back to $1,300, though the new production cost floor is now $1,900, so a similar correction would not go as low as 2011

The silver price over a 50-year historical chart (going back to the 1970s) shows a pattern where price spikes occur but afterward the silver price reverts to the cost of production, and this same pattern holds for gold and copper

The Commitment of Traders (COT) reports provide useful signals about precious metals markets: when commercial net short positions are low (near zero or negative), metals tend to be at lows; as prices rise, commercial short positions increase as normal business activity

Copper inventories have increased significantly: from approximately 300,000 metric tons in August 2023 to nearly 600,000 metric tons in August 2024 (a tripling), with the majority of the increase coming from London Metal Exchange (LME) inventories

Inflation hit 9% then came back down, and the pattern will repeat: prices will go back up again but it may take time, as the system cycles through periods of high and low inflation

Low-cost gold miners like Agnico Eagle and Alamos Gold have performed much better than higher-cost producers like Newmont and Barrick, demonstrating that lower production costs translate to better stock performance

Top primary silver miners like Fresnillo, which produces 50 million ounces per year, now have a full cost of production over $26 per ounce, establishing this as the new floor for silver prices

Base metal miners like KGHM (a Polish copper miner) that produce 40 million ounces of silver as a byproduct are barely profitable, meaning they are not selling their silver for nothing and require the revenue from silver to remain profitable overall

The all-in sustaining cost (AISC) metric used by miners has a fundamental flaw: it excludes developmental and expansionary capital expenditures, which represents a significant and artificially conceals the true cost of production

If shareholder dilution from mining companies issuing shares to fund expansion is included in total costs, the true cost to produce silver and gold becomes even higher than St. Angelo's already-elevated cost calculations

The two primary factors that will push the cost of production (and thus the price floor) for precious metals higher are energy costs and money printing

The shift to very expensive unconventional oil (shale, deepwater, tar sands) has replaced the one-time benefit of abundant cheap conventional oil, and this transition is permanent and cannot be reversed

Despite the recent rally in gold and silver, St. Angelo expects a significant market correction to occur when a US recession and global recession finally hits, and he believes this will be the last opportunity for investors to buy precious metals at low prices

When the Fed lowered rates starting in August 2007, the Dow Jones and silver prices both continued higher until October, with the real correction not starting until December (six months later), suggesting Fed rate cuts trigger asset inflation before the underlying weakness emerges

Even the Fed's 500 basis point rate cut and $2 trillion in government debt added in 2008-2010 did not stop the 2008-2010 recession, proving that monetary and fiscal stimulus have limits in preventing business cycle corrections

In 2011 when silver hit $50, commercial net short positions did not increase for 6-8 months (unlike recent behavior), but now in 2024, commercial shorts are increasing significantly as prices rise, suggesting the current rally is different from the 2011 spike