By coincidence I just got a part of the answer on my question, while listening to Jim Puplava's Financial Sense Newshour. In his interview with Jeff Christian of the CPM Group, Jim Puplava estimates the share of silver production as a by-product of other metals (including Gold) at 80% of total annual silver production. That is a much higher share than I thought.

http://www.financialsense.com/fsn/ma...

Even though I do not know how hard base metal and gold production has been hit since September/October 2008, silver supply must have dropped tremendously during these last few months. And as far as I can think there are only three theoretical explanations for the silver price to remain at the present low level.

1) There are substantial above ground reserves of silver from where to tap from.

2) Demand for silver has declined in line with the fall of supply.

3) Some institution is building up a cascade of derivative positions in the futures markets geared at suppressing the price of silver.

For the time being, I am not aware of any evidence that points 1) and 2) are in play.

Leaves us point 3). Given the huge fall in silver supply, they must be creating a derivative monster, that grows very fast by each day that the price of silver remains around the present level.

Rests one final question: how far can they go, before the monster bursts out of its cage?