My opinions: the approval of the silver ETF will certainly give the metal a nice goose up. Probably enough juice to get it through $10 to $12. Once the ETF starts trading, silver may initially dip back towards $10. The reason for this is that the ETF has to start buying the silver well before they offer the shares.
Longer term it may signal a change in the way silver trades. A lot of investors and mutual funds, will be able to easily get in and out of silver without having to set up a futures account. This additonal demand could drive silver much, much higher in the years to come.
I believe the most reasonable estimates say there are approximately 150 to 180 million ounces known to exist on the planet. That includes all forms, not just refined silver.
Much of that is locked away in foreign bank vaults and so there is no way that any group of individuals could compile 130 million ounces under any conditions.
Refined .999 silver probably comprises less than 50% of that number with less than half of that of ever being available for trade. When Warren Buffet took physical delivery on 6 million ounces, the price immediately shot up about 15% overnight.
"Lenin is certainly right. There is no subtler or more severe means of overturning the existing basis of society(destroy capitalism) than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and it does it in a manner which not one man in a million is able to diagnose." John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i> I believe the most reasonable estimates say there are approximately 150 to 180 million ounces known to exist on the planet. That includes all forms, not just refined silver. ... >>
Huh? Are your numbers for gold?
Warren Buffet himself bought about that amount, 130 million ounces of physical silver in 1997/98. Silver ran up about 40% from about $5 to $7 (I know, I bought a few bullion coins at that top) then dropped back down back below $5. With the spotlight already on silver, I see a similar price move of $2, though a smaller percentage move. The Buffett buy came out of left field, the ETF has been out there for a long time and the futures markets have already put some ETF premium into current pricing. from http://www.berkshirehathaway.com/news/feb03981.htmlLink "The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998."
These two are from silver related sources, so if anything I would tend to think they downplay any supply numbers: from http://www.silverinstitute.org/supply/index.phpLink [Silver] Supply Overall mine production registered a 4-percent increase, to 634.4 Moz. In 2004, silver generated at primary mines increased by 9 percent, to reach 188.5 Moz, representing 30 percent of global silver production. The higher output at primary mines accounts for the overall mine production increase in 2004. Mexico, Peru, Australia, China and Poland were the top five silver mining countries in 2004 (see chart below).
from http://www.gold-eagle.com/editorials_01/morgan052101.htmlLink Total world silver supply last year was estimated at 300 million to 500 million ounces. Does a total supply of 300 million to 500 million ounces seem bigger or smaller than the 2 billion ounces of total silver supplies in 1980 - when the price went above $40 per ounce?
<< <i>I believe the most reasonable estimates say there are approximately 150 to 180 million ounces known to exist on the planet. That includes all forms, not just refined silver. >>
Well they struck over 500 million morgan dollars and peace dollars each with .77 oz of eilver in them, that's 385 million oz and early in the twentieth century the Treasury dept had over 2 BILLION oz of silver reserves by itself and that was all refined silver. Plus all the silver held by the public and other countries stc. I would suspect that there are over 3 BILLION oz of refined silver above ground, plus who knows how much still below ground.
i've been into ted butler for quite some time and he was the one that brought the information that led me to load up on a large amount of physical metal back in early 2003 at 4.50 to 5 per ounce.
Indeed this news has me excited, not only because it will take physical out of the markets, but if the economy ever collapse in a hyperinflationary sort of scenerio, I can just buy shares in this fund as a good hedge. Unfortunately, I think we see deflationary collapse first.
one thing about silver, all that's left is in smaller hands, there are no huge government stockpiles.. and silver is an industrial commodity that has no good substitutes besides gold... even if there is a large amount of silver above ground in various form, it will take a much higher price to get it to market.
another thing... there are some doomsday people that say gold will go north of a thousand dollars an ounce... if that happens, silver will surely be above $15.. there is just no way to be so bullish on gold yet think silver will go nowhere... there are BILLIONS of ounces of gold above ground, that don't get consumed by industry, they just sit there in vaults.
Most silver has been consumed along the way via industry. There are no real stock piles. China is currently supplying a large amount of the shortfall each year. That will eventually slow or stop altogether whether due to politics or economics. Silver derives mostly from the by-product of other base-metal mining mining. During an economic downturn, the demand for base industrial metals will slow, and therefore so will silver.
The silver ETF could become a trading vehicle for further price manipulation since it will trade paper contracts. When the silver balloon finally goes up, people will scramble for physical silver but many or most will be left empty-handed. The silver ETF will be no different. Most people should have relative close access to their physical silver or there is no reason to really have it.
While I'm all for a silver ETF fund to boost the demand, I would never subscribe to such a fund.
If the central banks still "own" the 30,000 tons of gold that they claim to (unlikely since much has been leased and sold into the market) that would equate to 1 billion ounces of gold. Considering that up to half of that may have been sold to keep the price of gold down over the past 10 years, then the CB's may have 1/2 billion ounces at their disposal. And they aren't giving it away any more either. Considering that the world's gold supply might be worth $1.5 Trillion or so, it is nothing compared to total world debt.
The US claims to have 8,000 tons of gold (at one time we held about 80% of the world's CB supply). Roughly 1 oz per person. Considering that our total future obligated debt is $35-75 trillion, $150 Billion in gold stocks (if still owned by the US) is not much to leverage against. Even our current national debt of $8.2 Trillion pales against $150 billion in gold.
Gold to silver ratio is currently about 57 to 1. It has cycled to as low as 16 to 1 during commodity peaks. And 16:1 was the historic ratio used for many years when both prices were fixed. History has shown that the ratio should continue to drop and make silver the better long term play.
My GOD! Do mine eyes deceive me? Someone is paying ATTENTION. Instead of mouthing the popular claptrap about "inflation." INFLATION only hurts the wealthy. DEFLATION lets them pick up everything for nearly nothing. Which do you think the current Fed is concerned about?
And I'm not necessarily talking about the AMERICAN wealthy.
"Inflation" isn't when energy and food go up. It's when ASSETS appreciate. The current PRICE RISE in "necessities" is the real sign of "stagflation."
Houses are already falling. In a few months we'll see the FULL effect of an auto industry COLLAPSE! Already they are bringing back the zero percent interest auto loans.
Wait until this SPRING ..... doesn't...... bring out any homebuyers. They are simply priced to capacity already. The only thing not yet done is the liquidations.
Seems inflation would be a big bonus for a government over $ 8 trillion in debt. Each point in inflation devalues the principal owed by about 1% less each year. Therefore it seems that uncle sam would be trying to keep inflation rates high (while keeping the perception of inflation down). It is basically taking money from anyone holding dollars as a hidden tax. This is a very efficient way to tax people and other countries, don't you think?
Frequently Asked Questions About Exchange-Traded Funds
What is an exchange-traded fund? An exchange-traded fund (ETF) is an investment company with shares that trade intraday on stock exchanges at market-determined prices. Investors may buy or sell ETF shares through a broker or in a brokerage account, just as they would the shares of any publicly traded company.
What are the structural differences between ETFs and mutual funds? While exchange-traded funds are registered with the Securities and Exchange Commission as investment companies - either as an open-end fund or a unit investment trust - they differ from traditional mutual funds both in how their shares are issued and redeemed and in how their shares or units are traded. Unlike traditional mutual funds or unit investment trusts, ETF shares are created by an institutional investor depositing a specified block of securities with the ETF. In return for this deposit, the institutional investor receives a fixed amount of ETF shares, some or all of which may then be sold on a stock exchange. The institutional investor may obtain its deposited securities by redeeming the same number of ETF shares it received from the ETF. Retail investors can only buy and sell the ETF shares once they are listed on an exchange, much as they can buy or sell any listed equity security. Unlike an institutional investor, a retail investor cannot purchase or redeem shares directly from the ETF, as with a traditional mutual fund or unit investment trust.
Comments
Longer term it may signal a change in the way silver trades. A lot of investors and mutual funds, will be able to easily get in and out of silver without having to set up a futures account. This additonal demand could drive silver much, much higher in the years to come.
<< <i>If the SEC approves the fund, 130 million ounces req'd for it to be liquid.......anyone care to comment on what that'll do to the price....
(Hint: Since there is not 130 million ounces physical to go around?)
Read HereText >>
I believe the most reasonable estimates say there are approximately 150 to 180 million ounces known to exist on the planet. That includes all forms, not just refined silver.
Much of that is locked away in foreign bank vaults and so there is no way that any group of individuals could compile 130 million ounces under any conditions.
Refined .999 silver probably comprises less than 50% of that number with less than half of that of ever being available for trade. When Warren Buffet took physical delivery on 6 million ounces, the price immediately shot up about 15% overnight.
John Marnard Keynes, The Economic Consequences of the Peace, 1920, page 235ff
<< <i>
I believe the most reasonable estimates say there are approximately 150 to 180 million ounces known to exist on the planet. That includes all forms, not just refined silver.
...
>>
Huh? Are your numbers for gold?
Warren Buffet himself bought about that amount, 130 million ounces of physical silver in 1997/98. Silver ran up about 40% from about $5 to $7 (I know, I bought a few bullion coins at that top) then dropped back down back below $5. With the spotlight already on silver, I see a similar price move of $2, though a smaller percentage move. The Buffett buy came out of left field, the ETF has been out there for a long time and the futures markets have already put some ETF premium into current pricing.
from http://www.berkshirehathaway.com/news/feb03981.html Link
"The company owns 129,710,000 ounces of silver. Its first purchase was made on July 25, 1997 and its most recent purchase was made on January 12, 1998."
These two are from silver related sources, so if anything I would tend to think they downplay any supply numbers:
from http://www.silverinstitute.org/supply/index.php Link
[Silver] Supply
Overall mine production registered a 4-percent increase, to 634.4 Moz. In 2004, silver generated at primary mines increased by 9 percent, to reach 188.5 Moz, representing 30 percent of global silver production. The higher output at primary mines accounts for the overall mine production increase in 2004. Mexico, Peru, Australia, China and Poland were the top five silver mining countries in 2004 (see chart below).
from http://www.gold-eagle.com/editorials_01/morgan052101.html Link
Total world silver supply last year was estimated at 300 million to 500 million ounces. Does a total supply of 300 million to 500 million ounces seem bigger or smaller than the 2 billion ounces of total silver supplies in 1980 - when the price went above $40 per ounce?
<< <i>I believe the most reasonable estimates say there are approximately 150 to 180 million ounces known to exist on the planet. That includes all forms, not just refined silver. >>
Well they struck over 500 million morgan dollars and peace dollars each with .77 oz of eilver in them, that's 385 million oz and early in the twentieth century the Treasury dept had over 2 BILLION oz of silver reserves by itself and that was all refined silver. Plus all the silver held by the public and other countries stc. I would suspect that there are over 3 BILLION oz of refined silver above ground, plus who knows how much still below ground.
Indeed this news has me excited, not only because it will take physical out of the markets, but if the economy ever collapse in a hyperinflationary sort of scenerio, I can just buy shares in this fund as a good hedge. Unfortunately, I think we see deflationary collapse first.
one thing about silver, all that's left is in smaller hands, there are no huge government stockpiles.. and silver is an industrial commodity that has no good substitutes besides gold... even if there is a large amount of silver above ground in various form, it will take a much higher price to get it to market.
another thing... there are some doomsday people that say gold will go north of a thousand dollars an ounce... if that happens, silver will surely be above $15.. there is just no way to be so bullish on gold yet think silver will go nowhere... there are BILLIONS of ounces of gold above ground, that don't get consumed by industry, they just sit there in vaults.
The silver ETF could become a trading vehicle for further price manipulation since it will trade paper contracts. When the silver balloon finally goes up, people will scramble for physical silver but many or most will be left empty-handed. The silver ETF will be no different. Most people should have relative close access to their physical silver or there is no reason to really have it.
While I'm all for a silver ETF fund to boost the demand, I would never subscribe to such a fund.
roadrunner
Considering that up to half of that may have been sold to keep the price of gold down over the past 10 years, then the CB's may have 1/2 billion ounces at their disposal. And they aren't giving it away any more either. Considering that the world's gold supply might be worth $1.5 Trillion or so, it is nothing compared to total world debt.
The US claims to have 8,000 tons of gold (at one time we held about 80% of the world's CB supply). Roughly 1 oz per person. Considering that our total future obligated debt is $35-75 trillion,
$150 Billion in gold stocks (if still owned by the US) is not much to leverage against. Even our current national debt of $8.2 Trillion
pales against $150 billion in gold.
Gold to silver ratio is currently about 57 to 1. It has cycled to as low as 16 to 1 during commodity peaks. And 16:1 was the historic ratio used for many years when both prices were fixed. History has shown that the ratio should continue to drop and make silver the better long term play.
Gold supply charts / graphs
roadrunner
The name is LEE!
<< <i>Please excuse my stupidity but what is ETF? >>
Exchange Traded Funds. Usually closed-end funds.
<< <i>Exchange Traded Funds. Usually closed-end funds. >>
Thanks.
The name is LEE!
<< <i>we see deflationary collapse first >>
My GOD! Do mine eyes deceive me? Someone is paying ATTENTION. Instead of mouthing the popular claptrap about "inflation." INFLATION only hurts the wealthy. DEFLATION lets them pick up everything for nearly nothing. Which do you think the current Fed is concerned about?
And I'm not necessarily talking about the AMERICAN wealthy.
"Inflation" isn't when energy and food go up. It's when ASSETS appreciate. The current PRICE RISE in "necessities" is the real sign of "stagflation."
Houses are already falling. In a few months we'll see the FULL effect of an auto industry COLLAPSE!
Already they are bringing back the zero percent interest auto loans.
Wait until this SPRING ..... doesn't...... bring out any homebuyers. They are simply priced to capacity already. The only thing not yet done is the liquidations.
Sorry, but them's the facts.
Each point in inflation devalues the principal owed by about 1% less each year.
Therefore it seems that uncle sam would be trying to keep inflation rates
high (while keeping the perception of inflation down).
It is basically taking money from anyone holding dollars as a hidden tax.
This is a very efficient way to tax people and other countries, don't you think?
<< <i>
<< <i>Please excuse my stupidity but what is ETF? >>
Exchange Traded Funds. Usually closed-end funds. >>
from http://www.ici.org/funds/abt/faqs_etfs.html link
Frequently Asked Questions About Exchange-Traded Funds
What is an exchange-traded fund?
An exchange-traded fund (ETF) is an investment company with shares that trade intraday on stock exchanges at market-determined prices. Investors may buy or sell ETF shares through a broker or in a brokerage account, just as they would the shares of any publicly traded company.
What are the structural differences between ETFs and mutual funds?
While exchange-traded funds are registered with the Securities and Exchange Commission as investment companies - either as an open-end fund or a unit investment trust - they differ from traditional mutual funds both in how their shares are issued and redeemed and in how their shares or units are traded. Unlike traditional mutual funds or unit investment trusts, ETF shares are created by an institutional investor depositing a specified block of securities with the ETF. In return for this deposit, the institutional investor receives a fixed amount of ETF shares, some or all of which may then be sold on a stock exchange. The institutional investor may obtain its deposited securities by redeeming the same number of ETF shares it received from the ETF. Retail investors can only buy and sell the ETF shares once they are listed on an exchange, much as they can buy or sell any listed equity security. Unlike an institutional investor, a retail investor cannot purchase or redeem shares directly from the ETF, as with a traditional mutual fund or unit investment trust.