Invisible Supply
Categories: Accounting
Google "invisible supply" and you get a lot of self-help stuff. Tapping into your invisible supply of spiritual strength and so forth. This kind of invisible supply is different.
The financial version of invisible supply involves the amount of stuff in the world that hasn't yet been acquired, sorted, and counted.
Think of it like "potential supply." Like...we need ice cream for the milkshake party we're hosting this weekend. We don't exactly know where we're going to get it from, but finding ice cream shouldn't be a problem. Someone will have it. You don't have a specific supply in mind, but it's out there somewhere.
Financial example time. You need some barrels of oil for your oil refinery. Your oil supplier has a bunch of oil measured and packaged in barrels on its loading dock, ready to send to you. That's a visible supply.
The invisible supply includes the oil in a tanker on its way from Saudi Arabia, the oil running through pipelines in Alaska, the oil still in the ground, the oil in the ground on planets in distant galaxies that we haven't discovered yet, etc.
The concept comes up when it's time to settle a futures contract. If a trader decides to physically settle the contract (deliver the commodity), they can theoretically tap into the invisible supply to get the process done.