I'm sure someone more knowledgeable will chime in, but for now . . .
I had heard (Bloomberg I think) that the supply of silver is determined in large part by how much the various mines want to pull out of the ground. In other words, it's not truly scarce. I mean it is, but at least one major parameter is how much of an incentive do the mines have to mine it.
You could technically say this about anything but, let me try this again, in the case of silver, there seems to be plenty of spare capacity.
From this I would extrapolate to say that if silver spiked up, you would see it come down fairly quickly since the existing mines would just up production.
If I'm wrong, I'll happily be schooled by someone who actually knows what they're talking about.
As to why your guy is doing this, who knows. Dealers are human too . . . well, you know what I mean. He may think he has the inside track on something and is hoarding. Wish him luck because I think he'll need it.
