The silver market can be divided into several sub categories, such as collectible silver, which might include some silverware or fine jewelry items or certain period silver from silversmiths both modern and ancient.

The rare silver coin market exists and is a subset of the overall coin market.

However, the purpose of this article is two main categories—bullion and coins.

Both of these categories are roughly divided in half. Of the total one billion ounces of "investable" silver, 500 million is in coin form and approximately 500 million is in bullion form.

There has been a huge rush into all things silver and gold lately and it is becoming increasingly difficult to find any merchandise. Silver eagles have been especially difficult. At this point there have been an estimated 160 million silver eagles produced since 1986 when the program began. Investors might be interested to know that those eagles all started their beginning as an industrial bar. Yes, the process involves first melting down ~1000 troy ounces of silver (or multiples of that amount) and adding a very small amount of copper.

For all practical purposes the silver coin market is very tight. In other words, those who own silver in any coin form, rare coin, silver round, government-issued coin, or medallion, are in strong hands and their silver is not likely to come back on to the market until much higher prices are achieved.

The bullion market is also tighter than many consider, which is counter to the mainstream thinking. First, let us look at the COMEX market; as of this writing, it holds approximately 136 million ounces of silver in industrial grade bars, which are roughly one thousand ounces. Of that amount, more than 51 million are held in the eligible category, which is long-term investors holding receipts for their property and paying fees to have their metal stored. The remaining 85 million ounces of silver is the "dealers" inventory. This amounts to a mere 85,000 bars or so, because these bars are poured and are generally around the 985-troy oz. weight, but the weight does vary and is stamped into each bar along with the serial number and manufacturer, e.g., Johnson Matthey (JM).

As this article is being penned, the silver price as quoted by New York is in the $12.00 area. The amount of open interest for silver is 100,000 plus, which is almost 6 times as great as the entire dealer inventory. In monetary terms, 85,000,000 ounces at $12 per ounce, yields just over one billion dollars, or in terms of today's financial parlance, about 1/700 of the amount Paulson just pushed through Congress for the latest "bailout."

Speaking of Congress, with their ability to spend a million dollars per minute, the entire dealer silver supply would last for around 17 hours, if you catch my meaning.

Reports came in from around the globe today looking discouraging for retail investors: London—no silver in any form available; the rest of Europe—good luck finding any; the U.S. market—how much over the spot price are you willing to pay? You may find some, as the dealer inventory is accessible at this time and some savvy investors are looking to that source currently. Where will this lead? Possibly, to determine what's left of the silver market.

I have been "called out"

I do want to take a minute to explain about something that some have called or written me about—the signoff in my weekly column: "It is an honor to be, David Morgan." It might sound egotistical and I gave it a great deal of thought before deciding to use it. Most, including myself, are not scholars in the use of the English language. That statement was taken from one of the original patriots, and it means it is an honor to be (alive), to exist, to be of service to others, or to be given the privilege of "being" alive. Since it is followed by a comma, it could apply to anyone—I'm sure you get the idea. It is my understanding that Thomas Paine used that complimentary close.

The United States of America has come a long distance from the original intent, yet freedom of speech prevails, in newsletters like this and across the Internet. In my view, there is nothing as important as the Free Market of Ideas.

"Where freedom is," said Benjamin Franklin, "there is my country."

"Where freedom is not," replied his friend Paine, "there is mine."

What I believe Paine was referring to (no, I do not consider myself even close to "being" as significant as he) is that freedom was not what it once was, and in my very small way I wish to contribute to the idea that freedom is the most important gift any of us will ever receive.

So again this week I sign off stating…

It is an honor to be,