from Harvey Organ http://harveyorgan.blogspot.com/ "There have been rumours that certain hedge funds and sovereign wealth funds are willing to take possession of all gold and silver. In gold it is the February month and in silver it is March. If this is true, the game is over as there will be a default at the comex which will bring on defaults at the SLV and GLD, and then a default at the Bank of England, and then all the banking system in the USA. I will be watching this closely." I would be interesting to hear StellaConcepts take on this....
Well given the rate at which the Perth Mint is cranking out gold kilo bars for OS delivery... to the point where they have to shut down silver kilo production to meet demand for gold... I'd be listening.
How many times have we heard about these supposed defaults at the Comex being imminent over the last few years now? I'll believe it when I see it.
Yeah the March settlement has been talked about for a bit now simply because of the volume of contracts out there. There also (apparently) some big players thinking they can buy up contracts en masse and then demand their physical hoping the COMEX will cough up 20% premiums to settle in cash ie make 20% return for about 3 months. Be interesting to see how it plays out.
One thing that I have been wondering about for while now pertaining to all the claims of paper silver and gold in these ETF's... Why would people actually buy paper silver if they knew it wasn't backed by real silver? The fact that the rumor has made it to me means that those buying must be aware.....unless of course their is actually enough silver and gold backing the paper of course. If there truly isn't any physical backing all the paper, then I would suspect the price would really plummet when everyone tries to sell but no one wants to buy...does this theory (that I just made up) make sense?
From my research of this whole situation the way i have understood how it works is this (if im mistaken correct me) ... Shorts come from many different places, when people say JP morgan has shorted silver, in many cases it shorts it for someone. So, if a mining company wants to sell silver in future it will sell the paper version of it (it does this on the comex as the comex is a futures market) Say my companys name is SS-Silver, if i just found a mine that has *potentially* 1,000,000 ounces of silver then what i do is calculate what the cost of getting that into bars is and calculate how much profit i need to make. Based on that, to keep my profits at a guaranteed rate i sell it before i have it on the comex .. (the futures market) so that when it is bought i am guaranteed a profit if i can already sell the paper. This selling on the comex is done VIA banks such as JPmorgan... so in essance JP morgan has shorted silver on the comex (sold silver at a certain price) based on what my company SS-Silver has required. Nothing really illegal or corrupt about this right, its actually a good way for companies to hedge .... So if you where to buy this paper silver there is nothing wrong with it, silver is there just not now, it will be there when it says it will be on the paper. Now people trade this paper without taking physical delivery and if any of us has read the history of the goldsmiths and what they used to do you would know that human greed and opportunity is tempting combination for money making. Of the contracts that come from legit miners there could be some fudged ones and unless anyone decides to take full delivery no one would every know. Just like how the goldsmiths back in the day got away with selling more IOU gold paper then the real gold that their customers had deposited in the safes. If people trade paper silver and their goal is to make MONEY, why in the hell would they want to take physical, remember folks, FIAT still has value, we use it to eat, we use it to buy drinks, we use it everyday & we even base our PM's against fiat pricing. So if you can make a 20% gain on Fiat in 3 months why in the hell would you wait till the whole system collapses. Im sure the people who were trading in paper never wanted to get silver anyway and just wanted to end up in more Fiat, so thats a legit reason why people would just go for SLV/ETF's. If you think about what we are banking on its the following - inflation: we are hedging ourselves against inflation when fiat becomes worthless (worthy cause i reckon) - comex default: I never got this (as far as i understood, comex is a market to sell paper or futures contracts how could this default) if anything it would be the seller of the paper no ?! - Crashing JPM: Yeh maybe, but with JPM shorting for customers how would we ever be able to get all the silver that the producers will produce, its akain to saying we can crash X bank if we withdraw all our money. We cant, not as far as i can see, the bank will just work out another way of screwing the system. Aussies dont save so the aussie banks borrow from overseas cause our savings arnt big enough to use for collatoral. With silver unless all the silver is bought right now at the same time and the buyer actually wants physical to build a silver castle thats 10 storys high i dont see it happening. If a 50% premium was offered im sure whoever the buyer is will cave For me, its really point 1, the others i never really got but thats cause i have a certain understanding of paper vs physical. If i am wrong in any of this please let me know ...
I think it works like this... at some point if you buy a silver paper contract for 1 oz for $20 in 6 mo and in 6 mo you say "please give me my 1 oz and I am going to be so happy now the physical price is $40." Now essentially who you brought it from has your $20 and has to purchase the silver with another $20 thus losing $20 dollars. Now if people buy physical enough this drives demand which drives price which is bad for shorters... thus if I and enough ppl buy, when the shorts come around whoever is holding them loses (say JPM) will be impossible to cover and thus bailout>QE3>more shorting
I'm at the point now where I understand the fundamentals of the investment. I seek new buy opportunities where I can, stay in physical only and not bother watching spot. I know at some point the COMEX will default. I know at some point the silver/gold paper market will return to it's intrinsic value. I know at some point the above ground silver supply will well and truly dry out. I know at some point people will demand physical or nothing. So I have pretty much switched off to the noise, the charts, the fluxuations and the dips. I buy when I can and just put aside and get on with life. Just look at the last 10 year's worth of metal movement. It's obvious where the market is headed, but who can honestly predict when? It'll be like the GFC. Certain people KNOW it's coming, but picking the actual date/time is impossible. Wake me up when we're at $100+ silver.
Zero. It's not even worth the digital paper it's not printed on IMHO. I've never ever bought, nor ever will buy, a precious metal ETF. I'm an intrinsic value guy. I don't like my wealth being in the hands of 3rd parties to exploit and rip off and for my mind, the ETF market is just one big gulag casino.
OH! Lol! Hey you know me hobo, I absolutely worship the physical. It's real money baby! How do you value that against fiat? For my mind? Infinity! I am holding a 100 trillion dollar zim note as we speak which won't even buy a 1/2 ounce silver round, even on it's collectable value... not even considering it's intrinsic (ie near zero) value! Kinda puts things into perspective. It's also why I plan on being a net BUYER of silver in the future no matter what the cost, as long as I can afford it. I made the paradigm shift to measuring value of commodities vs commodities, rather than against ever depreciating fiat currency. It really helps your perspective on value. For the record, I think Gold is WAY under valued at the moment against fiat. You consider how much physical gold is out there and how much fiat is circulating, I reckon Gold is still well off the mark by a fair amount. Don't even get me started on Silver... that my friend, I deem the most undervalued commodity in modern history. We are getting it at prices today that's almost equivalent to daylight robbery for my mind, but I aint complaining because the value of our collective labour in the current market is also near reduced to worthlessness thanks to the massive expansion in global credit!
You can buy in and get out in a second with stockmarket efts. With physical its a hassle.Dealers give low prices . If you think its about to go up you can buy.If it does and you want get out you can this minute.In an hour,if the news changes,you can buy again. You can make money with it going up and down with cfd's(contracts for difference) With physical,if there is a collapse,you may find no buyers and even then it may be too late.Who wants to buy hourly falling PMs. If it looks like a general economic collapse you just get out of EFTs,into cash. When the stock market crashed in 08,gold went with it. You could buy physical then.It was available. You can't get physical at spot(rarely) You do with EFTs. Efts have disadvantges too,but very useful. The idea the Pm's must win is foolish. Yes I have physical as well.
I think you're forgetting about the demand side of the equation. Demand for silver has been going down slightly in industry and supply has clearly ramped up as investment demand has grown (not enough to adequately fill it though). Widepsread solar technology is a pipe dream. Once investment demand falls away for silver, the demand will return to relatively low levels, but supply levels will be much higher than they need to be and there will be a silver crash. There's no way silver will maintain high prices in the long run imo. This is a short-term phenomenon only.
Buying etfs is - eating like a peacock and shitting like an elephant - True, the etf is soo much less hassle and soo many advantages over the physical delivery - peacock bit but when shtf happens your principal amount invested is goneee. - elephant bit
ETFs for speculation. Physical for accumulation. ETF's require trust in the market. Too much insider and manipulation for my taste.
Yes Julie, spot on ! ETFs is like playing the 'futures'... You are betting on the price of Gold or Silver, that's all ! All the rest, about allocation etc, is purely cosmetic.
Is was reading something awhile back that focused on RFID chips which use silver. There are alternatives for silver in some instances but silver would have to go to a least 50 to 60 for these _possible_ alternatives to silver in RFID chips start to look viable. So I think silver would have to quite a bit higher before industrial demand starts to wane.
You're missing the point. Mine supply will ramp up to meet the demand just as it has for investment. It's just that investment demand(monetary demand I should say) overwhelms it temporarily. There may be a higher price than now at some point after investment(monetary) demand fades but don't expect too much. Personally, I'll have moved on by then looking for better opportunities.
