yesterday i mentioned that numerous coin and bullion dealers were experiencing shortages of silver bullion. this seemed odd, since the price of silver has fallen so low in the past week. normally a low price would imply that there is an ample supply around. it didn't make sense that there could be shortages of something when its price is so low.

so i checked on ebay where silver bullion (and everything else in the world) is always available. i reviewed several dozen completed transactions today, and the lowest price i could find on a sale of silver bullion worked out to about $21/oz for 20 ounces of silver. most of the sales were about $22-23/oz. and the rest were even higher. these aren't rare coins, just bullion rounds or common coins like the us eagle or canadian maple leaf. this is with silver quoted at $17.21.

i can't remember ever seeing a spread like that. a few months ago when silver was selling for about $16.50 i was buying junk silver coins on ebay, and i had to pay almost $18 for them. at the time, i though that was excessive.

it's starting to make sense now. i don't think the dealers are out of coins and bullion, they just don't want to sell them at artificially low prices. they don't believe the silver price, and neither do i. if you're willing to pay up, i think the coin dealers have plenty of silver. visit ebay and see for yourself. you can buy all the silver you want there, but you'll have to pay a true market price for it.

so this week i am going shopping on the tsx, where the wares have just been marked down 20%.