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Old 20th April 2011, 11:15 AM   #121
michaelsuede
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Originally Posted by Francesca R View Post
How do you reconcile "junk high risk products" containing "fraud" with "silver just broke 45 today."?

Since SLV is pegged to the physical price (check it), how can one (the price) be fine with you if the other (the ETF price) is not? And if the ETF price is fine too, what's exactly wrong with it?

Bear in mind that people long of it hardly want the physical metal; they want a price gain.
I thought I explained my position on the SLV trust quite clearly.

Claiming SLV is the same as physical silver is a joke.

By the way, silver is in backwardation with immediate physical delivery commanding as much as 10 dollars an ounce over spot.

Why might that be hmmm?

Possibly because more people are waking up to the fact that the ETFs are full of **** on their holdings?

Last edited by michaelsuede; 20th April 2011 at 11:17 AM.
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Old 20th April 2011, 11:23 AM   #122
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Nope, you didn't.

SLV is pegged to the silver price. If you think it has not been, at any point in its life, prove it. (PS: the existence of backwardation isn't proof of it).

So if you think the SLV price is dodgy, you think the silver price is as well. Except you apparently don't.

So try again.
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Old 20th April 2011, 11:25 AM   #123
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Originally Posted by lomiller View Post
Why would anyone assume anything in their investing?
Because the government tells them they are safe.

The government tells people not to worry about what their bank is investing in because they are protected by the FDIC.

The government tells people not to worry about bank runs because the Fed is there to bail out banks.

The government tells people not to worry about banks lending over their reserves because the collateral is good as gold (lol).

The government tells people not to worry about securities fraud because the SEC is on the job.

This is all what economists call "moral hazard".
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Old 20th April 2011, 11:28 AM   #124
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Originally Posted by Francesca R View Post
Nope, you didn't.

SLV is pegged to the silver price. If you think it has not been, at any point in its life, prove it. (PS: the existence of backwardation isn't proof of it).

So if you think the SLV price is dodgy, you think the silver price is as well. Except you apparently don't.

So try again.
Ok, I'll rewind and slow this down for you since you can't grasp simple concepts like:

1. the SLV is not redeemable for silver in an emergency

2. the SLV may be shut down for a variety of arbitrary reasons and investors may be paid in fiat instead of physical silver

3. no one is responsible for monitoring the quality/content of the SLV trust's silver holdings.

4. The SLV trust's inventory accounting is sketchy at best

Thus, my beef with SLV has NOTHING TO DO WITH THE PRICE OF SLV and everything to do with how it is managed.
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Old 20th April 2011, 11:35 AM   #125
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Right--so it can be all of those things, and yet fail to distort the spot price of silver, in any way?

And its price still won't diverge from the price of silver?

(And most people would be indifferent to getting money rather than silver, as long as the price is true. Indeed, that's what "silver just broke $45" means--that marginal investors--those redeeming or buying SLV for instance--are indifferent* between $45 and an ounce of silver)

*Strictly, they're indifferent if the price is only just at the right level to stop them trading, but hopefully you get the idea

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Old 20th April 2011, 11:46 AM   #126
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Originally Posted by Francesca R View Post
Right--so it can be all of those things, and yet fail to distort the spot price of silver, in any way?

And its price still won't diverge from the price of silver?

(And most people would be indifferent to getting money rather than silver, as long as the price is true. Indeed, that's what "silver just broke $45" means--that marginal investors--those redeeming or buying SLV for instance--are indifferent* between $45 and an ounce of silver)

*Strictly, they're indifferent if the price is only just at the right level to stop them trading, but hopefully you get the idea

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!

This is why immediate physical delivery is commanding such a huge margin over spot. Some investors are catching on that SLV and others like it are full of crap.

But that price difference from the naked shorting of JPM and the accounting fraud of SLV is uniform across the entire silver market.

Thus their manipulations will not display as a price difference just in SLV, it will show up as a difference between immediate physical delivery and the futures price of silver itself.

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.

And no, people will not be indifferent to fiat over silver if fiat doesn't buy you a loaf of bread. - holding silver as a hedge against inflation is done for the very reason that people fear fiat will no longer be worth anything! The real money is the metal, not the paper.

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Old 20th April 2011, 12:02 PM   #127
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Originally Posted by michaelsuede View Post
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.
Then why did you start a thread celebrating the dollar price of silver?

Why do you own it if its price is manipulated (by fraud and ponzi schemes). After all--those are the reasons you won't buy (or sell) Treasuries and presumably try not to hold cash.

You seem to have unleashed your conspiracy theories on yourself. Congratulations!

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Old 20th April 2011, 12:05 PM   #128
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Originally Posted by Francesca R View Post
Then why did you start a thread celebrating the dollar price of silver?

Why do you own it if its price is manipulated (by fraud and ponzi schemes). After all--those are the reasons you won't buy Treasuries and presumably try not to hold cash.

You seem to have unleashed your conspiracy theories on yourself. Congratulations!
Because the price of silver is going up and I hold silver?

We'll see just who gets the last laugh here.

Not all conspiracy theories are false, and there is a lot of evidence to back my position.

When SLV is shut down for fraud and the price of silver explodes, I'll be LOLing all the way to the bank.

Silver has no where to go but up - into the stratosphere.

The price is being manipulated, in the DOWNWARD direction. Which means I stand to make a lot of money when the fraud finally comes to an end.

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Old 20th April 2011, 12:09 PM   #129
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But it's going up because it's manipulated (according to you)

Or do you think that it is being manipulated down? That isn't very congruent with your backwardation observation

In effect you are saying "Fraudsters are pushing up the $ price of silver. I'm in that trade and I'm laughing!".

I am trying to work out the difference between your actions and the actions of those you rail against. Not coming up with anything so far . . . .
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Old 20th April 2011, 12:10 PM   #130
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Originally Posted by Francesca R View Post
But it's going up because it's manipulated (according to you)

Or do you think that it is being manipulated down? That isn't very congruent with your backwardation observation

In effect you are saying "Fraudsters are pushing up the $ price of silver. I'm in that trade and I'm laughing!".

I am trying to work out the difference between your actions and the actions of those you rail against. Not coming up with anything so far . . . .
It is being manipulated in the DOWNWARD direction.

It is extremely congruent with backwardation, in fact backwardation is an indicator that the futures price is being suppressed.

My position should be blatantly obvious given that I'm claiming SLV is holding less silver than they say they are.

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Old 20th April 2011, 12:13 PM   #131
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And its in backwardation?

OK never mind . . . . I think you're flailing a bit and I have to sign off. (ETA: I guess not quite!)

Last edited by Francesca R; 20th April 2011 at 12:36 PM.
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Old 20th April 2011, 12:14 PM   #132
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Originally Posted by Francesca R View Post
And its in backwardation?

OK never mind . . . . I think you're flailing a bit and I have to sign off.
If you don't understand why immediate physical is going to command a higher price if the futures market is being fraudulently suppressed I can't help you understand things any further anyways.
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Old 20th April 2011, 12:17 PM   #133
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Here's a nice article on silver backwardation, why it matters, and why it is entirely congruent with every claim I have made:

http://seekingalpha.com/article/2527...dation-matters
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Old 20th April 2011, 12:36 PM   #134
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Originally Posted by michaelsuede View Post
It DOES distort the spot price of silver [ . . . ]
Originally Posted by michaelsuede View Post
the actions of SLV are directly manipulating the spot price of silver for the entire silver market.
Originally Posted by michaelsuede View Post
the futures price is being suppressed.
Originally Posted by michaelsuede View Post
the futures market is being fraudulently suppressed
Make your mind up . . . (And how can an ETF "suppress the futures price"??) . . .

Like I said--flailing. . . .

I think you should just concentrate on this chart:


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Old 20th April 2011, 01:49 PM   #135
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Originally Posted by Francesca R View Post
Make your mind up . . . (And how can an ETF "suppress the futures price"??) . . .
SLV claims they have x holdings of silver

SLV actually has x-(some amount) of silver

As investors invest in SLV thinking they are getting an asset fully backed in silver, while they may be getting worthless paper.

The addition of the worthless paper to the silver market drives down the spot and futures price of silver itself because investors falsely believe there is more physical silver in existence than there actually is.

As investors discover that SLV may not be able to cover all of its paper issue with actual silver, they start demanding physical delivery.

This drives up the immediate physical delivery price of silver leading to backwardation.

JPM jumps in by naked shorting the futures markets, driving down futures prices. JPM has also sold off epic tons of silver over the past few years, which has kept the overall price low. JPM is now out of silver.

The total amount of silver in existence is going to have an impact on present as well as futures prices.

This is a classic "bank run" scenario in the making.

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Old 20th April 2011, 02:00 PM   #136
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Also, if you believe your own chart:

Originally Posted by Francesca R View Post
Then you must believe inflation is spiraling out of control at a rate of nearly 10% a week.
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Old 21st April 2011, 05:42 AM   #137
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Originally Posted by michaelsuede View Post
SLV claims they have x holdings of silver

SLV actually has x-(some amount) of silver
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.

Quote:
As investors invest in SLV thinking they are getting an asset fully backed in silver, while they may be getting worthless paper.
It has been explained (post 90) that if investors think that they are wrong. You don't buy ETFs from the operator of the trust, as the "E" in the name suggests you buy them on an exchange. That is, you buy them from other market participants who are selling. Other participants may have borrowed the ETF to go short, and if they have borrowed it then someone else who is long has lent it out (or authorised their broker to do so). And if they have lent it, they can't redeem it before they call it back.

ETFs are derivatives. Calling foul on them because all the long positions in the market (which is quite different from all the shares in issue) are not being backed by underlying is complaining that they are not something that they never said they were.

Quote:
The addition of the worthless paper to the silver market drives down the spot and futures price of silver itself because investors falsely believe there is more physical silver in existence than there actually is
If by "worthless paper" you mean synthetic long positions (longs where the ETF has been lent out) and synthetic short positions (where it has been borrowed and sold), then (i) there is nothing worthless about them because they are synthetic [Recall you said: "There is nothing inherently wrong with private debt products or shares of ownership." in post 114], and (ii) there is--funnily enough--always an equal value of synthetic longs and shorts. There cannot not be. Therefore you have not justified why this would depress the price, spot or forward. Market sentiment is what lifts and depresses prices. I have a hard time believing that sentiment is pessimistic.

Quote:
As investors discover that SLV may not be able to cover all of its paper issue with actual silver, they start demanding physical delivery.
Investors who are long SLV but who have lent it out (or allowed their broker to do so) can't do that anyway.

Beyond this, your assertion that the $ silver price is some kind of artificially depressed "inverse bubble", which is what I understand you to be saying, seems to veer into extraordinary claim territory.

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Old 21st April 2011, 05:44 AM   #138
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Originally Posted by michaelsuede View Post
Also, if you believe your own chart:

Then you must believe inflation is spiraling out of control at a rate of nearly 10% a week.
Why? The chart says that the price of an ounce of silver (in ounces of silver) is still 1.00. If the value is in the metal, rather than the $ price, ["The real money is the metal, not the paper."] then that's about all you have to say.
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Old 21st April 2011, 05:59 AM   #139
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Originally Posted by Francesca R View Post
Why? The chart says that the price of an ounce of silver (in ounces of silver) is still 1.00. If the value is in the metal, rather than the $ price, ["The real money is the metal, not the paper."] then that's about all you have to say.
Now now, don't mock his glee at getting all of this worthless fiat money. It's going to be worth a fortune someday!
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Old 21st April 2011, 06:39 AM   #140
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Originally Posted by Francesca R View Post
Make your mind up . . . (And how can an ETF "suppress the futures price"??) . . .
The point michaelsuede is making is terribly simple, so if you cannot understand it, go back to kindegarden. We'll wait.

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).

Thus, ETFs can distort a commodity price.

If ETF such as SLV was shut down, then the propaganda by numerous interests aligned with the US government would be (A) those precious metals are risky! (B) put yer money in safe tried and tested treasuries. If people believed that, that would be a factor calculated to move metals interest and prices down....eg "pop the bubble".

But the move into metals is a reaction to distrust of government policy, so that ain't going to happen. As a side note the UT college system just put $1B which is about 5% of their investment into physical gold bullion. Precious metals, as a result of bad US government fiscal policy, have became a mainstream, accepted investment.

Eliminating SLF would lower the quantity of "silver like" investments, thus driving the price UP. But that does not happen in isolation, alternatives intervene. For example these people trying to grab that silver likely would say "Hey gold isn't looking too bad, let's do that instead". As Julian Simons noted, alternatives always come into play when something gets expensive.

Silver is unreasonably high right now because it was being touted about 6 months ago as an alternative to gold which was being said to be overpriced.
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Old 21st April 2011, 06:41 AM   #141
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Originally Posted by mhaze View Post
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)
How's that? Don't just say it. Explain it.
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Old 21st April 2011, 06:52 AM   #142
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Originally Posted by Francesca R View Post
How's that? Don't just say it. Explain it.
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.
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Old 21st April 2011, 08:10 AM   #143
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Silver broke 46 today.

40 to 46 in 12 days.
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Old 21st April 2011, 08:21 AM   #144
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Originally Posted by michaelsuede View Post
Silver broke 46 today.

40 to 46 in 12 days.
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?
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Old 21st April 2011, 09:13 AM   #145
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Originally Posted by mhaze View Post
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.
A factor? You said it distorts the gold price. But actually you mean no more than changing demand "distorts" price. Way to climb down.

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

Quote:
and could become a multiple of actual supply
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?"

Quote:
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.
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 . . .
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Old 21st April 2011, 09:38 AM   #146
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SLV (and GLD) are not standard ETFs.

SLV actually owns the underlying commodity and is redeemable.

http://us.ishares.com/product_info/f...erview/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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Old 21st April 2011, 09:45 AM   #147
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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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Old 21st April 2011, 09:49 AM   #148
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Originally Posted by Francesca R View Post
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.
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.
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Old 21st April 2011, 10:00 AM   #149
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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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Old 21st April 2011, 10:05 AM   #150
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Originally Posted by Francesca R View Post
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)
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.
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Old 21st April 2011, 12:13 PM   #151
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Originally Posted by michaelsuede View Post
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!
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.

Quote:

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.
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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Old 21st April 2011, 12:18 PM   #152
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Yeah, that's basically my claim given in a more precise manner.

The effects are the same.
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Old 21st April 2011, 05:04 PM   #153
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Mod InfoDiscussion on fractional reserve credit split to new thread.
Posted By:Gaspode
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Old 22nd April 2011, 07:44 AM   #154
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Silver explodes through 47 on a holiday

http://www.zerohedge.com/article/hol...ver-still-buck

Quote:
Not content with rising by a dollar day during regular work days, silver is now up a buck on a holiday. Doesn't make much sense, but we'll take it.
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Old 22nd April 2011, 08:09 AM   #155
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RULE OF SILVER:

For every idiotic thing said by Geithner or Obaby, another dollar to the price is added.
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Old 24th April 2011, 08:53 PM   #156
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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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Old 26th April 2011, 05:34 PM   #157
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Originally Posted by UWdude View Post
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.
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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Old 26th April 2011, 06:34 PM   #158
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Originally Posted by mhaze View Post
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....
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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Old 26th April 2011, 07:45 PM   #159
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Originally Posted by djpar View Post
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).
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.
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Old 26th April 2011, 11:46 PM   #160
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Originally Posted by djpar View Post
Yeah, but where is he getting out?
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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