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akak
16th February 2010, 19:16
I'm curious to hear what others here think regarding the silver ETF SLV, and more generally the precious metals ETFs, as regards their holdings of actual, physical metals being what they claim they are. These two commentaries cast doubts on those claims:

http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=263:bullion-etfs-a-multi-purpose-scam&catid=53:featured&Itemid=102

http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=528%3Asilver-market-fundamentals-distorted-by-bullion-etfs&catid=49%3Asilver-commentary&Itemid=130&limitstart=1

AgShaman
16th February 2010, 19:34
I thought I would have more fun with SLV than I've had thus far. Mainly because I was trying to pass the time and guess the bottom of this latest pullback and at the same time capitalize on what I thought would be wild back and forth volatility. I'm currently giving careful consideration to selling my 300 shares and looking for some good junior miners to involve myself with instead.

As a side note: A NIA co-founder just took a huge position in a SLV futures play, which.....I can't understand why they would do this, but then again....to each their own i guess. Myself, it turned out to be way more boring than i had originally anticipated.

Curiosity will not kill the C/Kats of SS Nation!

skijake
16th February 2010, 19:51
I think Ben Stein and Cramer just gave SLV a big thumbs up.
RUN!
I will admit to having had this pig in my 401K for a while.
It looks alot better in 100 oz bars in my possession.;)

Sakata
16th February 2010, 19:55
I bought SLV fairly soon after it came out. I read about it in Howard Ruff's little book, where he recommended it. But over the next couple of years, the more I read the more concerned I got. Finally, last year, I sold my holdings in SLV and GLD and replaced them with CEF and GTU. Both of there have much better reputations.

fullsafe
16th February 2010, 20:12
Who cares ? If you want to play with paper silver and FRN's it's just one of many options . Put in a stop and sell order at the same time and forget about it. It's the cheapest way to try and time the silver market once you have a comfortable physical holding although there are probably better commodities to play.

If you keep your exposure reasonable and a stop under the price , you'll get sold out and get your proceeds even if they discover the warehouse is full rocky mountain oysters instead of silver bars.

RDJ
16th February 2010, 21:13
I'm holding SIVR. You can play the volitility with the ETFs. Just don't plan to average in and hold long term.

-RJ.

akak
17th February 2010, 14:59
I bought SLV fairly soon after it came out. I read about it in Howard Ruff's little book, where he recommended it. But over the next couple of years, the more I read the more concerned I got. Finally, last year, I sold my holdings in SLV and GLD and replaced them with CEF and GTU. Both of there have much better reputations.

My history with SLV is just about identical to yours, aside from having gotten into CEF, which I have not done. I have seen just enough 'red flags' raised about the integrity of SLV (and its custodians) that I am much more comfortable being uninvolved with any precious metals ETFs. Most just seem to have "fractional reserve backing" written all over them.

argent_pur
17th February 2010, 18:30
The only way an investor can redeem shares for physical silver with SLV is in 50,000-share units called baskets. That basically assures them that only a few big fish would be able to redeem if they so chose. Fractional reserve is a perfect term for SLV, akak, because silver is sold off periodically to pay the fund's expenses, which means the price of silver has to go up enough to make up for the loss of physical. If the price doesn't keep up, you will lose money. So, over time, each share is represented by less and less silver--which sounds like an admission of fractional reserve backing to me.

akak
17th February 2010, 18:55
The only way an investor can redeem shares for physical silver with SLV is in 50,000-share units called baskets. That basically assures them that only a few big fish would be able to redeem if they so chose. Fractional reserve is a perfect term for SLV, akak, because silver is sold off periodically to pay the fund's expenses, which means the price of silver has to go up enough to make up for the loss of physical. If the price doesn't keep up, you will lose money. So, over time, each share is represented by less and less silver--which sounds like an admission of fractional reserve backing to me.

Well, to be fair, the selling of silver from the fund to pay for its expenses (on the order of 0.4% per year) is clearly laid out in the prospectus, and I was fully aware of that fact going in. It was not to which I was referring when I used the phrase "fractional reserve backing" to the precious metal ETFs, but the suspicions raised by many that those ETFs may very well only have a fraction of the total metal needed to back all their outstanding shares. Maybe I am more cynical with every passing year, but my gut tells me that this is very likely precisely how those ETFs operate.

Jake
17th February 2010, 18:57
I'm curious to hear what others here think regarding the silver ETF SLV, and more generally the precious metals ETFs, as regards their holdings of actual, physical metals being what they claim they are. These two commentaries cast doubts on those claims:

http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=263:bullion-etfs-a-multi-purpose-scam&catid=53:featured&Itemid=102

http://www.bullionbullscanada.com/index.php?option=com_content&view=article&id=528%3Asilver-market-fundamentals-distorted-by-bullion-etfs&catid=49%3Asilver-commentary&Itemid=130&limitstart=1

My assessment is that not one person in this forum can truthfully say he/she is making money trading these paper silver fraudulent contracts.

skijake
17th February 2010, 19:32
My assessment is that not one person in this forum can truthfully say he/she is making money trading these paper silver fraudulent contracts.

Hang on just a minute.
I bought 25k worth of GLD and 25K worth of SLV a couple of years ago.
I lived through the ups and downs for 18 months and cashed out with 22K worth of SLV and 29K worth of GLD for a grand total of 51K.
2% for 18 months ain't bad, huh? :confused:
Probably pretty envious right about now.:p

fullsafe
17th February 2010, 20:04
My assessment is that not one person in this forum can truthfully say he/she is making money trading these paper silver fraudulent contracts.

Your assessment would be as incorrect as the IRS. I've steadily increased the digits in my account using SLV and AGQ. The key is to not buy until it goes 10 to 20% lower than you initially think it will go and you have to put in a pig killing sell signal as soon as you get a trade confirmation and then LEAVE it alone.

I started buying a little a couple weeks ago at 14.88 and expect to cost average down to 14. If not , I'll sell at 18.25 by Labor Day. How many shares? Wouldn't you like to know!

argent_pur
17th February 2010, 20:42
Well, to be fair, the selling of silver from the fund to pay for its expenses (on the order of 0.4% per year) is clearly laid out in the prospectus, and I was fully aware of that fact going in. It was not to which I was referring when I used the phrase "fractional reserve backing" to the precious metal ETFs, but the suspicions raised by many that those ETFs may very well only have a fraction of the total metal needed to back all their outstanding shares. Maybe I am more cynical with every passing year, but my gut tells me that this is very likely precisely how those ETFs operate.

I know you know this already, but for the folks at home who don't:

"The amount of silver represented by the iShares will decrease over the life of the trust due to the sales necessary to pay the sponsor's fee and trust expenses. Without increases in the price of silver sufficient to compensate for that decrease, the price of the iShares will also decline and you will lose money on your investment in iShares."

-From SLV prospectus, bold type theirs.

Yes, to be fair, they spell it out in their prospectus that each iShare will be represented by less and less silver over time. If your bank posted signs that only 10% of your deposits are held at the bank at any given time, they would still be a fractional-reserve institution. Obviously they don't, but SLV is basically admitting the reserves (if, indeed they have any, which is the point you alluded to) are only a fraction of the total shares outstanding. And the fraction gets smaller with time.

buffalo3
17th February 2010, 22:17
My assessment is that not one person in this forum can truthfully say he/she is making money trading these paper silver fraudulent contracts.

You are totally right. CAPS LOCK WARNING" ONLY THE CROOKS MAKE MONEY TRADING PAPER SILVER, GOLD, OIL. I DONT KNOW WHO THAT IS, BUT I GUESS THEY HAVE STOLEN A LOT OF MONEY FROM US. MY GUESS IS THE ONLY WAY YOU CAN FIX IT "CAP LOCKOFF" Buy 1,000,000 bushels of grain, buy real bins, not paper, real natural gas to dry the grain, real diesel to take the grain to market, real railroads to take it to the port. Real ships to export it to other country's that want and need our food. Jake this not a bad thing against you, you woke me up, Let me see, so far WALL STREET CAN sell Paper grain, paper gas, paper oil and paper metals. So now we need to build the ships they can buy and own. CLW, THE NEXT BIG OPPURITUNIY IS SELLING PAPER BARGES THAT TRANSPORT THE PAPER OIL, GRAIN, METAL. PERSONALLY, I HAVE TO FEEL SORRY FOR THESE PEOPLE THAT HAVE NOT SPENT A DAY IN THE REAL WORLD.

Sakata
17th February 2010, 22:21
So guess all we have left to try is to buy futures contracts on the output of paper mills. Then we will have paper paper.

buffalo3
17th February 2010, 22:34
So guess all we have left to try is to buy futures contracts on the output of paper mills. Then we will have paper paper.

OR WE SELL PAPER SHIPPING CONTRACTS?

buffalo3
17th February 2010, 22:41
My assessment is that not one person in this forum can truthfully say he/she is making money trading these paper silver fraudulent contracts.

You are totally right. CAPS LOCK WARNING" ONLY THE CROOKS MAKE MONEY TRADING PAPER SILVER, GOLD, OIL. I DONT KNOW WHO THAT IS, BUT I GUESS THEY HAVE STOLEN A LOT OF MONEY FROM US. MY GUESS IS THE ONLY WAY YOU CAN FIX IT "CAP LOCKOFF" Buy 1,000,000 bushels of grain, buy real bins, not paper, real natural gas to dry the grain, real diesel to take the grain to market, real railroads to take it to the port. Real ships to export it to other country's that want and need our food. Jake this not a bad thing against you, you woke me up, Let me see, so far WALL STREET CAN sell Paper grain, paper gas, paper oil and paper metals. So now we need to build the ships they can buy and own. CLW, THE NEXT BIG OPPURITUNIY IS SELLING PAPER BARGES THAT TRANSPORT THE PAPER OIL, GRAIN, METAL. PERSONALLY, I HAVE TO FEEL SORRY FOR THESE PEOPLE THAT HAVE NOT SPENT A DAY IN THE REAL WORLD.