Merged Silver Over 40.00 / Real and fake prices

mhaze said:
ETFS can on ocassion create an excess of supply, which lowers price (assuming that the consumer believes the ETF is roughly equal in value to the physical metal or other alternatives and they do, largely)
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How's that? Don't just say it. Explain it.
 
Francesca R said:
How's that? Don't just say it. Explain it.
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Using gold and GLD as an example, because I am more familiar with them.

http://www.goldsheetlinks.com/production2.htm

Total world production of gold last year was $132B. As GLD moved from a few billion to $50B in capitalization, it becomes...obviously....a factor in gold price. If their capitalization was only $5B, not true.

GLD capitalization can expand indefinitely, and could become a multiple of actual supply. To the extent that consumers consider GLD and physical metal equally attractive and similar investments, and to the extent to which instruments such as GLD have a significant market share, they distort price.
 
michaelsuede said:
Silver broke 46 today.

40 to 46 in 12 days.
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Thus in despotic wrongness you reside fat, wealthy, happy and content, as they who deride lie miserable and poor in their fantasy of righteousness.

Now...how them tbills doin?
 
mhaze said:
Using gold and GLD as an example, because I am more familiar with them.

http://www.goldsheetlinks.com/production2.htm

Total world production of gold last year was $132B. As GLD moved from a few billion to $50B in capitalization, it becomes...obviously....a factor in gold price. If their capitalization was only $5B, not true.
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A factor? You said it distorts the gold price. But actually you mean no more than changing demand "distorts" price. Way to climb down.

GLD capitalization can expand indefinitely
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Nonsense. Despite the info in this thread you fail to understand ETFs.

and could become a multiple of actual supply
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Incorrect. Prove it. Also you appear to be contradicting yourself. Answer your own question please: "Look at the capitalization of GLD. Where did the money go?"

To the extent that consumers consider GLD and physical metal equally attractive and similar investments, and to the extent to which instruments such as GLD have a significant market share, they distort price.
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Erm, they are similar instruments. The price of GLD tracks the price of gold bullion. Show the forum any time when this was not the case. It has traded for more than 6 years so you have a lot to choose from. We'll wait . . .
 
SLV (and GLD) are not standard ETFs.

SLV actually owns the underlying commodity and is redeemable.

http://us.ishares.com/product_info/fund/overview/SLV.htm

SLV issues shares based on the silver held in trust.

If SLV actually has less silver than they claim (which is what I am claiming), then investors are being deceived about the amount of total silver bullion in existence.

SLV acts exactly like a gold standard bank did prior to the creation of the Fed, and is engaging in the same kind of inflationary fraud as those banks did by issuing paper above their real holdings of silver.
 
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Francesca R said:
If you think that iShares/Blackrock are lying on this page, you can blow the whistle. I will assume your suspicion is groundless until I hear about it in the press.
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That's fine. You can chose to believe me or not, doesn't really matter to me.

However, you are claiming my arguments about what such a fraud would do to the silver market are incorrect.

Obviously they are not.

My arguments are completely correct, and as we shall see, will be played out exactly as I have illustrated in this thread.
 
If you were correct that BlackRock was not holding silver and falsely reporting that they did, that would for sure be a federal crime and would risk a run on the trust. It would likely generate sudden demand for silver as well, since the ETF operator would be liable to cover its liability.

However, since you are speculating about a crime of which there is no evidence your claims of market abuse can be disregarded. (And if you had any evidence I can assure you that the SEC would like to know. You can contact them here: http://www.sec.gov/complaint/tipscomplaint.shtml )

I understood your objection to ETFs to be the existence of synthetic longs and shorts, and that you claimed that these somehow manipulated the (spot/future/both) price down. It seems not, in which case as far as I am concerned, you're not making a case that the silver price is manipulated by ETFs at all.

(You still should oppose any and all synthetic derivative positions on principle though, assuming you are opposed to fractional bank reserves)
 
Francesca R said:
If you were correct that BlackRock was not holding silver and falsely reporting that they did, that would for sure be a federal crime and would risk a run on the trust. It would likely generate sudden demand for silver as well, since the ETF operator would be liable to cover its liability.

However, since you are speculating about a crime of which there is no evidence your claims of market abuse can be disregarded. (And if you had any evidence I can assure you that the SEC would like to know. You can contact them here: http://www.sec.gov/complaint/tipscomplaint.shtml )

I understood your objection to ETFs to be the existence of synthetic longs and shorts, and that you claimed that these somehow manipulated the (spot/future/both) price down. It seems not, in which case as far as I am concerned, you're not making a case that the silver price is manipulated by ETFs at all.

(You still should oppose any and all synthetic derivative positions on principle though, assuming you are opposed to fractional bank reserves)
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No, my objection to ETFs was specifically directed at SLV and GLD. I'm sorry I wasn't clear about that.

Since SLV and GLD are not standard ETFs I could see why you would be confused with my statement.

I have no objection to ETFs (even the nonstandard ones like SLV), I have a problem with the way specific ETFs like SLV are being managed.

And yes, I am speculating that there is fraud taking place without solid proof. Whether you believe me or not is inconsequential to my arguments about how the silver market should react if the fraud is indeed occuring.
 
michaelsuede said:
It DOES distort the spot price of silver if they are claiming that they are holding more silver than they actually are!

Which is what they are doing!
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I haven't seen any evidence that there isn't the silver they claim, they have been audited so it would be necessary to trust the auditors (I, like you, don't). However, I think the more relevant question is whether the silver that they claim to own is truly unencumbered. There are reports that physical silver is encumbered by anywhere from 45 to 100 ounces per physical ounce, and as far as I know iShares nor their auditors make this distinction. There are also apparently some potential problems with thier prospectus, which is one reason I think why Eric Sprott's fund PSLV trades at a premium to SLV.

SLV does remained locked to silver's spot, but the actions of SLV are directly manipulating the spot price of silver for the entire silver market.
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To the extent that the silver iShares claims to own doesn't exist, or is not fully unencumbered, it would represent a manipulation of the spot price in that it represents demand for silver which is not satisfied by the real metal.

I have a portfolio of Perth mint certificates that I'm in the process of converting from unallocated to allocated, and I have to confess that I'm even worried about the status of the "allocated" silver. If I took delivery from Australia I would have to pay shipping for the equivalent of a Brink's truck worth of silver bars. So it isn't only iShares that people are skeptical of. There was a segment on CNBC recently where a precious metals investor tried to take delivery of 5000 ounces and was refused for some reason, and he promptly liquidated. If these types of fears are documented on CNBC of all places, then it's probably safe to say they are in the public consciousness. I'm not sure I would short SLV at this point, but I definately prefer the real thing.
 
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Yeah, that's basically my claim given in a more precise manner.

The effects are the same.
 
RULE OF SILVER:

For every idiotic thing said by Geithner or Obaby, another dollar to the price is added.
 
I'm so stupid. I hate myself for putting all my money into silver when it was $14. I'm such a sucker. :(

I can't help myself either, since I will soon be buying more.
 
UWdude said:
I'm so stupid. I hate myself for putting all my money into silver when it was $14. I'm such a sucker. :(

I can't help myself either, since I will soon be buying more.
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BWAHAHAHAHAAHA!

Why, o why is the disintegration of the world of buffoons of the almighty dollar, so hilarious?

Like holy water, it twer holy paper, it twer, it twer....
 
mhaze said:
BWAHAHAHAHAAHA!

Why, o why is the disintegration of the world of buffoons of the almighty dollar, so hilarious?

Like holy water, it twer holy paper, it twer, it twer....
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Yeah, but where is he getting out?

I'm glad that those who make the right trades make money, but it's all hot air and opinion until the trade is closed out and the money is in your hands (irrespective of what you do with that liquidity next).
 
djpar said:
Yeah, but where is he getting out?

I'm glad that those who make the right trades make money, but it's all hot air and opinion until the trade is closed out and the money is in your hands (irrespective of what you do with that liquidity next).
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Well...now...that depends on what you make the future out to be, and what the purpose of those investments were.

But yes, you've got the right general idea there. But I'd mention one thing, namely that the problems we have now with the USD and the monetary inflation....sheeeshh....they were obvious two years ago with tarp and stimulus.

So there really shouldn't be any surprise at this point about the movement of metals or commodities.
 
djpar said:
Yeah, but where is he getting out?
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either

1: when the government stops being retarded

or

2: I need the cash to survive.



I bet 2 will come first. And I am confident, when it comes, the price will be much higher than it is now, because 1 will never happen. ;)
 
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