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Hold on Tight to your Silver Coins and keep your eye on the prize
MrKelso
Posts: 2,907 ✭✭✭
Is Anybody Home?
By: David Bond
-- Posted 30 September, 2006
The Wallace Street Journal
By DAVID BOND, Editor
Silver Valley Mining Journal
Wallace, Idaho – Barclay’s iShares told the Thought Police, in the form of a Securities and Exchange Commission S-1 filing, that it’s going to “Texas hedge” the silver ETF with the issuance of another 16,822,727 shares in its silver trust, representing, at 10 ounces per, another 168 million ounces of silver.
One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that will not be available or eligible for delivery on the Comex. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that will not be available to dick with honest spot traders. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that . . . well, we just had to type that great big number again.
One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver is, quite conveniently, half an entire century’s silver output of the Sunshine Mine. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver is one-tenth of the entire output of the Coeur d’Alene Mining District since the 1880s. Which is greater than Potosi’s half-millennium’s production to date. Which is, to say, one great big bunch of silver.
Besides, just typing, “One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver” feels so-o-o-o-o good. Especially if you imagine yourself squirreling around in a pile of one hundred sixty-eight million, two hundred and twenty-seven thousand and twenty-seven ounces of silver, each in 1-ounce rounds. What a delicious feast. That would be 11,525,000 pounds, or 5,232,452 kilos, of the stuff. Dessert, anyone?
What’s curious to this normally astute silver bug is that we learned of iShares’ Wednesday filing via email from the apparently more astute Peter Spina of GoldSeek, who heard about it from the apparently even more astute Ted “Fast Eddy” Butler of Investment Rarities. Kitco missed it, so perhaps we feel in good company. Yet there it is, a public filing and all, and you’d think this information would have oozed from the Mainstream Gold and Silver Hoarding Paranoiac Media faster than it has and into the rants of the fiat unfaithful.
(And we may be in better company that the metals bugs. A friend of ours, visiting from Old Blighty for the Silver Summit, wondered if, after watching American TV, the Iraq war must be over with, because there was not mention of that bloodbath, either, on CBS, NBC, ABC, Disney, Fox or the Soap Opera channels.)
What this Texas hedge on Barclay’s part, this doubling of the bet, means is that the Barclay’s people who are smart enough to understand derivates are gambling on a huge new mob of retail silver investors. Already more than 100 million ounces of silver have been scooped off the market by the iShares initial offering. Our same friend advised that silver in any quantity was nowhere to be found in London. It’s damned scarce here in Wallace, too, and we mine the stuff. Our regular source of silver, awash in the stuff 6 months ago, has one, count ’em, ONE 1,000-ounce hallmark-grade silver bar left for sale.
Will we buy into the new Silver ETF issue? No. It’s still paper until we’ve seen the physical stuff. Will we buy bullion immediately? Yes, if it’s not too late. Face it folks, the silver’s gone. Not true, you ask? Well, ask the poor saps who tried buying nickel off the LME last month. They found out that paper can, in the end, only buy more paper. Conspiracy? We dunno. Shortage? Damnright. Hello. Is anybody home?
By: David Bond
-- Posted 30 September, 2006
The Wallace Street Journal
By DAVID BOND, Editor
Silver Valley Mining Journal
Wallace, Idaho – Barclay’s iShares told the Thought Police, in the form of a Securities and Exchange Commission S-1 filing, that it’s going to “Texas hedge” the silver ETF with the issuance of another 16,822,727 shares in its silver trust, representing, at 10 ounces per, another 168 million ounces of silver.
One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that will not be available or eligible for delivery on the Comex. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that will not be available to dick with honest spot traders. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that . . . well, we just had to type that great big number again.
One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver is, quite conveniently, half an entire century’s silver output of the Sunshine Mine. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver is one-tenth of the entire output of the Coeur d’Alene Mining District since the 1880s. Which is greater than Potosi’s half-millennium’s production to date. Which is, to say, one great big bunch of silver.
Besides, just typing, “One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver” feels so-o-o-o-o good. Especially if you imagine yourself squirreling around in a pile of one hundred sixty-eight million, two hundred and twenty-seven thousand and twenty-seven ounces of silver, each in 1-ounce rounds. What a delicious feast. That would be 11,525,000 pounds, or 5,232,452 kilos, of the stuff. Dessert, anyone?
What’s curious to this normally astute silver bug is that we learned of iShares’ Wednesday filing via email from the apparently more astute Peter Spina of GoldSeek, who heard about it from the apparently even more astute Ted “Fast Eddy” Butler of Investment Rarities. Kitco missed it, so perhaps we feel in good company. Yet there it is, a public filing and all, and you’d think this information would have oozed from the Mainstream Gold and Silver Hoarding Paranoiac Media faster than it has and into the rants of the fiat unfaithful.
(And we may be in better company that the metals bugs. A friend of ours, visiting from Old Blighty for the Silver Summit, wondered if, after watching American TV, the Iraq war must be over with, because there was not mention of that bloodbath, either, on CBS, NBC, ABC, Disney, Fox or the Soap Opera channels.)
What this Texas hedge on Barclay’s part, this doubling of the bet, means is that the Barclay’s people who are smart enough to understand derivates are gambling on a huge new mob of retail silver investors. Already more than 100 million ounces of silver have been scooped off the market by the iShares initial offering. Our same friend advised that silver in any quantity was nowhere to be found in London. It’s damned scarce here in Wallace, too, and we mine the stuff. Our regular source of silver, awash in the stuff 6 months ago, has one, count ’em, ONE 1,000-ounce hallmark-grade silver bar left for sale.
Will we buy into the new Silver ETF issue? No. It’s still paper until we’ve seen the physical stuff. Will we buy bullion immediately? Yes, if it’s not too late. Face it folks, the silver’s gone. Not true, you ask? Well, ask the poor saps who tried buying nickel off the LME last month. They found out that paper can, in the end, only buy more paper. Conspiracy? We dunno. Shortage? Damnright. Hello. Is anybody home?
"The silver is mine and the gold is mine,' declares the LORD GOD Almighty."
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Comments
Makes me curious as to the recent drop in price. Was it in order to allow SLV to load up? Noooo, that would mean the markets are manipulated, and we know that's not the case...
When the music stops someone will be missing their physical "shares." It won't be me. Good old physical in one's possession is preferable.
roadrunner
<< <i>In the end, those ETF's will have paper for some of their assets.
When the music stops someone will be missing their physical "shares." It won't be me. Good old physical in one's possession is preferable.
roadrunner >>
ditto
<< <i>In the end, those ETF's will have paper for some of their assets.
When the music stops someone will be missing their physical "shares." It won't be me. Good old physical in one's possession is preferable.
roadrunner >>
The key is looking at the margin requirements (percentages) with respect to overall available market volume of physical silver. Once these EFTs grow to the point where they can satisfy the marrgin requirement but cross into the danger zone where their net paper margin is close to the available market, they are majorly screwed. If it is managed like that, it could be a disaster for the EFT and its shareholders. Any bump in the road could skyrocket silver and render them insolvent.
Hold physical silver and you are also holding the EFT's b***s.
NSDR - Life Member
SSDC - Life Member
ANA - Pay As I Go Member
<< <i>In the end, those ETF's will have paper for some of their assets.
When the music stops someone will be missing their physical "shares." It won't be me. Good old physical in one's possession is preferable.
roadrunner >>
"The silver is mine and the gold is mine,' declares the LORD GOD Almighty."
The world simply won't function without either metal but nickel exists in huge quantities and can be
shuffled around to the most important uses until it all blows up. This is more difficult with silver be-
cause there's no one you can call for a large amount as need arises. The only stockpiles are small
and backing financial instruments. If these are consumed it will put off the inevitable only briefly.
Perhaps the world is enterring a slowdown due to oil constraints but this slowdown will have relatively
little impact on metal demand and a huge impact on the ability to mine new metal to satisfy that de-
mand. This will be especially true for both nickel and silver. (as well as aluminum) Nickel production
can increase with legislative action but silver simply isn't out there or its location hasn't been found.
The Chinese have an old curse which reads "May you live in interesting times." It looks as though there
will be less boredom for a while now. The future is never set in stone and is being constantly rewritten.
behind the paper. In no time at all, the silver is gone and just
the paper remains. Physical ownership of your silver in your own hands
is the only way to be sure its there.
Camelot
<< <i>YOu guys are really making me think that its time to sell my SLV shares. If only silver wasn't so hard to store. >>
Just keep in mind that there are no garauntees that silver will even do as well
as gold. There are many scenarios where gold could do well while silver languishes.
But gold is quite undervalued compared to inflation and silver is very grossly under-
valued compared to gold. Some day silver will rapidly play catch up to gold and it
might come at any time or it might be decades away. Much does depend on investor
attitudes and at what price they are willing to sell but there are many components of
attitude. Another thing to keep in mind is that if every silver long in the world today
had physical silver there would not be enough silver to satisfy this demand. In the
event of a default most of these longs will not be able to collect on the resulting run
in price.
If you're in these markets to make money on typical market patterns then paper silver
is great and doesn't require the effort and cost to store. But if you agree that decreas-
ing phsical silver coupled with increasing industrial demand and increasing investor de-
mand is a prescription for far higher prices then there is simply no alternative to having
at least some physical silver.