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paper_no_more
21st January 2011, 06:37
http://ftalphaville.ft.com/blog/2011/01/21/465546/silver-backwardation-is-here/?ftcamp=crm/email/2011121/nbe/AlphavilleNewYork/product


Silver backwardation is here
Posted by Izabella Kaminska on Jan 21 09:35.

Something is definitely up with silver.

Earlier this week we reported that rumours of physical silver shortages were doing the rounds in Europe.

On Friday, something stranger has taken place.

The silver forward rate known as SIFO and published daily by the London Bullion Market Association did something very unusual over the course of Wednesday and Thursday.

It plunged into negativity...

read more at the link above...

Edmund Law
21st January 2011, 07:08
Any sustained 'proper' backwardation in silver (i.e. across all the forward delivery months with highest prices for the immediate delivery month and declining thereafter) read a physical shortage and game over for the naked short selling followed by collusive bid pulling by a few large players that rigs the market today. Roger fyi backwardation in silver would certainly be a sufficient trigger for your long-awaited explosion. Be careful what you wish for unless your 'stash' is real.

crashjp
21st January 2011, 09:44
Hehe the river is riseing and soon all the trash on the banks will be washed out to sea, what a great time to be a silver bug.

Matthew Shelley
21st January 2011, 10:07
Any sustained 'proper' backwardation in silver (i.e. across all the forward delivery months with highest prices for the immediate delivery month and declining thereafter) read a physical shortage and game over for the naked short selling followed by collusive bid pulling by a few large players that rigs the market today. Roger fyi backwardation in silver would certainly be a sufficient trigger for your long-awaited explosion. Be careful what you wish for unless your 'stash' is real.

To all the 'backwardation' wizards in the metals markets. I hate to inform you(not that you would listen anyway), forward metals trading is an interest rate driven market and will continue to be so unless or until the current financial structure vanishes completely. With current interest rates, forward vs physical might, and only might, have blips of a penny or so in regard to Silver deliveries. That would not be considered anything as a sign of anything in the markets other than a headache for some of the arbitrageurs who deal in very large amounts to squeak out very tiny percentages.

If you don't believe me(which I'm sure you won't), get out that handy dandy calculator and calculate the Silver price ladder of futures price settlements vs the broker loan rate. You may be absolutely astonished to find out that for some odd reason, the prices match.

Welcome to the real world.

Matthew C. Shelley
Commodity Broker

As always: Trading in futures and options is very high risk investing. You can lose all or more of the money you invest. Only risk capital should be used.