Lear Capital: Growing Silver Shortage Ignites Demand for Silver Polar Bear Coin

By Roger Baettig | March 13 2013 8:53 AM

With silver prices off 10% in the last 30 days, it’s hard to believe there is a growing silver shortage. I liken it to crossing the desert with a canteen full of water. As long as there is at least one drink of water left in the canteen, there is no shortage. And then with the last drink, as you attempt to shake out the last drop, you realize your canteen is empty. But, even then you don’t totally believe it. As thirst sets in you desperately try one more time to pour out any remaining drops. Then, it hits you. Ahh Nuts!

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First signs of a silver shortage came when the U.S. Mint announced they were out of Silver Eagles. As the New Year turned, sales were suspended. Then sales resumed, only to be met by record demand and another shortage was announced. We’re not even through first quarter.

While our mint struggled with its own supply-demand dilemma, reports hit the industry that the Canadian Mint had begun to ration its most popular silver coin, the Maple Leaf. Yet, the silver price continued to decline as if to tell would-be investors, “there is no shortage, wait for the bottom.” Of course everyone thinks they can time the bottom and buy in at exactly the right moment. Never mind reports of a shortage, the declining silver price proves any notion of such is folly. After all, Chinese silver is still available. Or is it?

No kidding! Now reports suggest Chinese citizens are having difficulty acquiring Chinese Silver Pandas despite a massive 1200% increase in production. Is the canteen down to its last few drinks?

As supply of some silver coins seems to be shrinking, demand for alternative coins has ignited. One of those coins is the 1.5 oz. Canadian Silver Polar Bear. It’s a larger coin. It’s made from the finest .9999 silver and its government guarantee makes it suitable for placement in IRAs.

So while the silver shortage brews, there remains a multitude of coins available for purchase. The canteen is not empty. But, if silver has been on your radar to diversify your portfolio, see the signs.