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Do physical silver premiums. . .

derrybderryb Posts: 36,022 ✭✭✭✭✭
edited July 27, 2021 8:15AM in Precious Metals

accurately reflect the 243:1 leverage of paper futures to physical supply? ASEs are a bargain over gutter paper.

The decline from democracy to tyranny is both a natural and inevitable one.

Comments

  • MsMorrisineMsMorrisine Posts: 32,039 ✭✭✭✭✭

    If an ipo trades more than the float, it just means lots of traders were flipping in and out of the stock

    what it does not mean is there is some improper leverage of more than 1:1

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • blitzdudeblitzdude Posts: 5,294 ✭✭✭✭✭

    Well the problem is a large chunk of that 30,060 tonnes of annual silver production doesn't get consumed and simply moves around from bunker to bunker. So if you accurately calculated total available above ground physical investment silver your 243:1 leverage becomes more fantasyland fuzzy math.

    The whole worlds off its rocker, buy Gold™.

  • MsMorrisineMsMorrisine Posts: 32,039 ✭✭✭✭✭
    edited July 27, 2021 9:49AM

    very true.

    their math clearly indicates their 30+k number is 1 year's production, not total on the market

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 36,022 ✭✭✭✭✭

    @MsMorrisine said:
    very true.

    their math clearly indicates their 30+k number is 1 year's production, not total on the market

    and it indicates that the paper traded is also one year's volume. Thus, as the chart correctly states, silver paper in one year trades at a volume that is 243 times the annual supply of silver.

    @blitzdude said:
    Well the problem is a large chunk of that 30,060 tonnes of annual silver production doesn't get consumed and simply moves around from bunker to bunker. So if you accurately calculated total available above ground physical investment silver your 243:1 leverage becomes more fantasyland fuzzy math.

    You need to learn to read almost as bad as you need to learn to trade. The chart clearly compares paper traded in one year to silver mined in one year. You should have learned from your twin that twisting words does not change them.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • MsMorrisineMsMorrisine Posts: 32,039 ✭✭✭✭✭

    @derryb said:
    the annual supply of silver.

    that number is not the supply of silver that year, just the production of new silver. big difference

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 36,022 ✭✭✭✭✭
    edited July 27, 2021 11:42AM

    like I said, "the chart clearly compares paper traded in one year to silver mined in one year."
    Nothing changes the fact that the futures market is selling 243 times the amount of actual silver being mined. This does not even consider the amount being leased over and over again, very likely to multiple parties at the same time.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • blitzdudeblitzdude Posts: 5,294 ✭✭✭✭✭

    More physical silver traded in a year than what is mined in a year. Hence your implication that 243 ounces of paper silver is traded for every ounce of physical silver is false. Put down the hash pipe.

    Oh btw, lol

    The whole worlds off its rocker, buy Gold™.

  • MsMorrisineMsMorrisine Posts: 32,039 ✭✭✭✭✭
    edited July 27, 2021 12:04PM

    if there were global stocks 250x the 1 year production, then the futures market would be about 1:1 vs supply.

    who cares about what is mined.

    it is the "float," a/k/a supply, that needs to be compared, not how many shares were issued in a secondary offering in one year.

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 36,022 ✭✭✭✭✭

    @blitzdude said:
    More physical silver traded in a year than what is mined in a year. Hence your implication that 243 ounces of paper silver is traded for every ounce of physical silver is false. Put down the hash pipe.

    The statement of fact was that 243 ounces of paper silver is traded for every ounce of physical silver mined in a year.

    When you and your twin gonna learn that changing words does not change facts. lol.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • BaleyBaley Posts: 22,658 ✭✭✭✭✭

    Golly!

    Liberty: Parent of Science & Industry

  • blitzdudeblitzdude Posts: 5,294 ✭✭✭✭✭

    3,700 dingleberries were traded for every dingleberry harvested yesterday. Who cares, what's the point? There's an excess of above ground physical silver on planet earth. Much more supply then demand. Hence why the spot price is tanking. You could of cleared out the bunker @ $38 instead you'll be trading in 6 months at $18. Welcome to the gutter.

    The whole worlds off its rocker, buy Gold™.

  • derrybderryb Posts: 36,022 ✭✭✭✭✭
    edited July 27, 2021 4:22PM

    @blitzdude said:
    3,700 dingleberries were traded for every dingleberry harvested yesterday. Who cares, what's the point?

    Speaking of dingleberries. . .

    There's an excess of above ground physical silver on planet earth. Much more supply then demand.

    guess that explains record premiums for physical silver. lol

    You continue to clarify why you lose money with silver. You should stick with dingleberries.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • derrybderryb Posts: 36,022 ✭✭✭✭✭

    Silver/S&P 500 Ratio Reversal Will Be Shocking

    "When the silver/S&P 500 ratio begins to reverse, stock losses will mount and silver’s gains will grow. Based on history the moves will probably be substantial for both sets of investors."

    The decline from democracy to tyranny is both a natural and inevitable one.

  • blitzdudeblitzdude Posts: 5,294 ✭✭✭✭✭

    Ah yes the great S&P500/gutter metal ratio. It's what I and all those in the know base our entire investment portfolios on. :roll

    The whole worlds off its rocker, buy Gold™.

  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭

    @derryb said:

    The statement of fact was that 243 ounces of paper silver is traded for every ounce of physical silver mined in a year.

    This "fact" has zero relevance other than investors prefer paper over physical.

    You yourself have mentioned many times that youve traded paper silver, so i would ask you to look into your own activity and ask yourself what multiple of paper to physical did you trade?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭

    @derryb said:
    Silver/S&P 500 Ratio Reversal Will Be Shocking

    "When the silver/S&P 500 ratio begins to reverse, stock losses will mount and silver’s gains will grow. Based on history the moves will probably be substantial for both sets of investors."

    Glad to see you are looking at relative valuations. Congrats. You are learning. You might also notice that the ratio is about the same as it was in 2019 or 2003. Both assets did well following. Historically this is a low ratio and probably why some are more positive on silver than they were 10 years ago. It in no shape or form indicates that disaster is in the offing.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • MsMorrisineMsMorrisine Posts: 32,039 ✭✭✭✭✭

    https://www.ft.com/content/ff5131d0-1332-4242-96b4-21d59cff9ba6

    Oh No!

    Is Nasdaq Or Robinhood Going To Collapse?

    Robinhood, which sold 55m shares, had set a range between $38 and $42 a share.

    More than 100m shares worth some $3.7bn changed hands during the trading day.

    ~110M is ~2x of 55M

    2x Leverage?

    No.

    lots of people traded in and out during the day.


    billions of contracts could trade on COMEX for silver. that does not mean more paper is sold than silver exists.

    it is just turnover and turnover and more turnover.

    trading... just like in robinhood today, one day's comparison.

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 36,022 ✭✭✭✭✭
    edited July 29, 2021 3:28PM

    R/H (HOOD) stock trading involves trading a limited number physical shares, regardless of how many times each gets sold in a day.
    COMEX involves selling unlimited promises with no regard to the limited supply of the actual underlying asset.

    One is highly leveraged, the other involves no leverage on actual stock trades. You're comparing apples to watermelons.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭

    @derryb said:
    R/H (HOOD) stock trading involves trading a limited number physical shares, regardless of how many times each gets sold in a day.
    COMEX involves selling unlimited promises with no regard to the limited supply of the actual underlying asset.

    Why should there be any "regard" to the actual supply of the underlying asset?

    And whats wrong with trading a promise?

    But to get to your OP.....you seem to be saying that physical deserves to have a premium. However, one could easily surmize that physical should actually trade at a discount because it is less liquid, has lower demand, and is more cumbersome to accumulate and trade than paper.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,022 ✭✭✭✭✭
    edited July 29, 2021 7:00PM

    @cohodk said:

    @derryb said:
    R/H (HOOD) stock trading involves trading a limited number physical shares, regardless of how many times each gets sold in a day.
    COMEX involves selling unlimited promises with no regard to the limited supply of the actual underlying asset.

    Why should there be any "regard" to the actual supply of the underlying asset?

    Because as I stated, that supply is limited. Limited supply affects price.

    And whats wrong with trading a promise?

    Nothing as long as one understands that there is no limit to the number of promises and that the promise may not be kept. That in itself discounts them to trading a limited supply of the actual underlying physical asset that one can actually take possession of.

    But to get to your OP.....you seem to be saying that physical deserves to have a premium. However, one could easily surmize that physical should actually trade at a discount because it is less liquid, has lower demand, and is more cumbersome to accumulate and trade than paper.

    Yet the real world tells us your assumption is wrong. Physical supply is limited, paper supply is not. You can buy as many futures contracts as you so desire. Supply and demand determine price equilibrium. An item with less/limited supply than the unlimited promises to deliver it does deserve a premium over the promises. While promises may be more liquid and less cumbersome they remain promises.

    You need to repeat econ 101. You either missed something or simply forgot it. Class dismissed.

    Direct all future question to Blitzy, I'm done schooling your hard head and argumentative outlook.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • MsMorrisineMsMorrisine Posts: 32,039 ✭✭✭✭✭

    @derryb said:
    R/H (HOOD) stock trading involves trading a limited number physical shares, regardless of how many times each gets sold in a day.
    COMEX involves selling unlimited promises with no regard to the limited supply of the actual underlying asset.

    One is highly leveraged, the other involves no leverage on actual stock trades. You're comparing apples to watermelons.

    The COMEX numbers thrown around are not talking about how many ounces are spoken for via contracts.

    The numbers are thrown off trade volumes

    Apples to apples

    As an addition, no one is selling unlimited anything on COMEX, a simple look at the open interest shows that.

    If one wants to complain that it is theoretically possible, I remind it is also possible to buy unlimited anything.

    To take this deeper down the rabbit hole, for this grand conspiracy to work, no player of any size could be excluded. (and there would be no Edward Snowdens) if I were to take 342 or even just 234 leverage… who has the power to do that? Only the big boys? Then why isn’t silver at $5 and gold at $425? Keeping Up Appearances?

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 36,022 ✭✭✭✭✭
    edited July 29, 2021 7:24PM

    @MsMorrisine said:

    @derryb said:
    R/H (HOOD) stock trading involves trading a limited number physical shares, regardless of how many times each gets sold in a day.
    COMEX involves selling unlimited promises with no regard to the limited supply of the actual underlying asset.

    One is highly leveraged, the other involves no leverage on actual stock trades. You're comparing apples to watermelons.

    The COMEX numbers thrown around are not talking about how many ounces are spoken for via contracts.

    Exactly the point of over leveraged. The COMEX numbers have no backing. No different than the money created out of thin air in the fractional banking system where one dollar in deposits creates 10 dollars in loans. The only difference is that COMEX is creating imaginary metal out of thin air that it knows it cannot and will not have to deliver because in most cases it simply does not exist.

    Leverage is the poison in our financial system. The housing blow up in 2008 showed us just as did the recent $20B Archegos hedge fund blowup that leverage is nothing more than high risk unsecured debt. When it gets challenged, financial institutions face ruin and economies (taxpayers) face hardship.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • MsMorrisineMsMorrisine Posts: 32,039 ✭✭✭✭✭

    @derryb said:

    Because as I stated, that supply is limited. Limited supply affects price.

    .
    Ok. Fixed amount of silver.
    .

    Nothing as long as one understands that there is no limit to the number of promises and that the promise may not be kept

    Selling unlimited…. What happens when there is massive selling? Oil went to -$40 once.

    If this unlimited selling works, more selling would theoretically make a futures prices go to negative infinity.

    Since that’s not happening, someone is buying.

    So much for everyone is part of the conspiracy.

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 36,022 ✭✭✭✭✭
    edited July 29, 2021 7:28PM

    @MsMorrisine said:

    @derryb said:

    Since that’s not happening, someone is buying.

    last time I checked it took a buyer to complete a trade. In the case of COMEX it is primarily bullion banks swapping the paper among themselves while speculators try to profit on the price movement.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • MsMorrisineMsMorrisine Posts: 32,039 ✭✭✭✭✭

    @derryb said:

    last time I checked it took a buyer to complete a trade.

    When selling keeps pounding the bid, the bid falls.

    Why? If some idiot wants to sell unlimited amounts of stuff, why pay up? 10 Billion Contracts? How about half a cent each? See the oil example. Selling was so feverish and buying was so fearful, buys were happening at -$40!

    Current maintainer of Stone's Master List of Favorite Websites // My BST transactions
  • derrybderryb Posts: 36,022 ✭✭✭✭✭

    @MsMorrisine said:

    If some idiot wants to sell unlimited amounts of stuff, why pay up? 10 Billion Contracts? How about half a cent each? See the oil example. Selling was so feverish and buying was so fearful, buys were happening at -$40!

    The difference is that the precious metal futures participants are primarily bullion banks who have been found guilty numerous times colluding to set/control prices. Go ahead, try getting -$40 silver or better yet $100 silver past them.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭

    @derryb said:

    @cohodk said:

    @derryb said:
    R/H (HOOD) stock trading involves trading a limited number physical shares, regardless of how many times each gets sold in a day.
    COMEX involves selling unlimited promises with no regard to the limited supply of the actual underlying asset.

    Why should there be any "regard" to the actual supply of the underlying asset?

    Because as I stated, that supply is limited. Limited supply affects price.

    There is no limited supply of silver, just limited supply of silver trinkets. Should price be based off a liquid market with billions of dollars behind it, or an illiquid one with just millions behind it? We've been over this dozens of times already, yet you willfully refuse to understand.

    Yet the real world tells us your assumption is wrong. Physical supply is limited, paper supply is not. You can buy as many futures contracts as you so desire. Supply and demand determine price equilibrium. An item with less/limited supply than the unlimited promises to deliver it does deserve a premium over the promises.

    No it doesnt. Supply of physical is irrelevant. Demand of physical is the key. And demand for physical has fallen short of supply for a decade. Folk would rather have paper, just a you yourself trade a greater dollar volume of paper over physical. You disprove your own argument.

    You can go to recess now.

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭
    edited July 30, 2021 3:32AM

    @derryb said:

    The COMEX numbers thrown around are not talking about how many ounces are spoken for via contracts.

    Exactly the point of over leveraged. The COMEX numbers have no backing. No different than the money created out of thin air in the fractional banking system where one dollar in deposits creates 10 dollars in loans. The only difference is that COMEX is creating imaginary metal out of thin air that it knows it cannot and will not have to deliver because in most cases it simply does not exist.

    It doesnt need to exist. No one is looking to take possession of physical. They WANT TO TRADE PROMISES, not physical.

    Leverage is the poison in our financial system. The housing blow up in 2008 showed us just as did the recent $20B Archegos hedge fund blowup that leverage is nothing more than high risk unsecured debt. When it gets challenged, financial institutions face ruin and economies (taxpayers) face hardship.

    Leverage in your examples was used to buy assets--stocks and real estate. Leverage in the futures market is used to buy promises. You yourself have said promises are not the same as assets so why do you keep trying to equate them?

    Are the lights still on?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • streeterstreeter Posts: 4,312 ✭✭✭✭✭

    ' What's wrong with trading a promise?'

    Best line I've heard in awhile.

    Should really be, ' what's wrong with trading thin air?'

    Have a nice day
  • derrybderryb Posts: 36,022 ✭✭✭✭✭

    @cohodk said:

    There is no limited supply of silver

    The decline from democracy to tyranny is both a natural and inevitable one.

  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭

    @derryb said:

    @cohodk said:

    There is no limited supply of silver

    Silly derryb. Cant prove his point so likes to discredit others with silly memes or cartoons.

    There was plenty of silver in 2020 but not in the right 'form' for investors - Metals Focus | Kitco News
    https://www.kitco.com/news/2021-04-26/There-was-plenty-of-silver-in-2020-but-not-in-the-right-form-for-investors-Metals-Focus.html

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭

    @streeter said:
    ' What's wrong with trading a promise?'

    Best line I've heard in awhile.

    Should really be, ' what's wrong with trading thin air?'

    Im sure youve traded thousands of promises in your lifetime. Do you typically renege?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • derrybderryb Posts: 36,022 ✭✭✭✭✭
    edited July 31, 2021 5:39AM

    @cohodk said:

    Im sure youve traded thousands of promises in your lifetime. Do you typically renege?

    Ask Tulving the same thing. . . if you can get in touch with them.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • dcarrdcarr Posts: 7,890 ✭✭✭✭✭
    edited July 31, 2021 8:45AM

    @cohodk said:
    ... and whats wrong with trading a promise?

    A lot, actually.

    When the music stops, the last one holding the promise has no chair to sit in.

    There are too many people "trading promises" and not enough people producing things.

    See all the pretty hotels in Las Vegas ? Who paid for that ? The "stupid" losers.
    See all the fancy buildings on Wall Street ? Who paid for that ? The "smart" losers.

  • BaleyBaley Posts: 22,658 ✭✭✭✭✭

    The solar system is awash with most elements, including silver. But yes, blanks for 2021 ASEs were on back- order for a few weeks. This caused hoarding of other years. Same thing happened with toilet paper and surgical masks most of last year. Now there's plenty of both.

    Liberty: Parent of Science & Industry

  • streeterstreeter Posts: 4,312 ✭✭✭✭✭
    edited August 1, 2021 8:38AM

    @cohodk said:

    @streeter said:
    ' What's wrong with trading a promise?'

    Best line I've heard in awhile.

    Should really be, ' what's wrong with trading thin air?'

    Im sure youve traded thousands of promises in your lifetime. Do you typically renege?

    It's happened. BTW, when did you stop beating your........

    Coho, did you just say that I typically renege on transactions?

    Have a nice day
  • jmski52jmski52 Posts: 22,266 ✭✭✭✭✭

    Supply of physical is irrelevant. Demand of physical is the key.

    Gosh, it's good to know that we have a contributor who can school us on the "new economics".

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭
    edited August 9, 2021 3:02PM

    @jmski52 said:
    Supply of physical is irrelevant. Demand of physical is the key.

    Gosh, it's good to know that we have a contributor who can school us on the "new economics".

    Wanna buy my pillow?

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,266 ✭✭✭✭✭

    Wanna buy my pillow?

    And this comment is relevant, how?

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • cohodkcohodk Posts: 18,498 ✭✭✭✭✭

    @jmski52 said:
    Wanna buy my pillow?

    And this comment is relevant, how?

    I just thought you would value my opinion more if i had a pillow to sell you. I know how much you value pillow salesmen.

    What tidbit of knowledge have you contributed to this theead? Ooops, thats a question. Sorry. Lol

    Excuses are tools of the ignorant

    Knowledge is the enemy of fear

  • jmski52jmski52 Posts: 22,266 ✭✭✭✭✭

    What tidbit of knowledge have you contributed to this theead?

    Supply of physical is irrelevant.

    The fact that I call into question your statement that "supply of physical metal is irrelevant."

    It's only irrelevant if you are pushing paper products with no real assets to back them up. I don't expect that you will ever admit the fraud around precious metals supply & demand.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
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