Think of it this way: when shorting a stock, you borrow a share with a requirement to return an actual share back at a later date.
At the beginning of this week, they dropped 2.1 PAPER ounces of silver on the market. These are promises to give actual silver at a later date.
The problem is, these paper shares never get called for delivery. Instead, they get passed around as an IOU/investment. Then, when they want to manipulate the price again, they drop another bundle of paper silver on the market.
You can basically think of these as naked shorts. If someone decided to demand physical delivery for their paper, they would have to go get real silver - at there is an actual disconnect coming between physical and paper price.
RIGHT NOW, providentmetals.com has a $50 difference between 10 oz buy/sell. 272 vs 322. That's unheard of! 18%. Normally this is closer to 5%.
The problem is the buy price is still being pegged off the COMEX paper price, but the SELL price is based on how much it cost them to actually get silver in stock.
THAT'S essentially the start of a squeeze right there.
Exactly, disaster insurance is the best way to look at it, for me it beats saving at a bank and also removes the temptation of squandering my money on useless stuff. Certainly not a get rich quick play, more of a buy young and sell when you're old or leave to the kids play.
I see paper silver used as a way to manipulate the price of actual silver but I still see no short. Just the opposite. They want to push the price higher so their paper silver can be sold for a profit. As they buy more and more paper silver, the price goes up, not down. Am I not understanding something?
No - releasing new paper silver is a dilution event. All dilution events tend to depress prices.
But paper silver works almost exactly like a short, because like a short position, a paper silver position has a promise to deliver something in the future. Specifically, physical silver. I could hold a paper silver position for months, but if the holder demands physical delivery, they have to go get ACTUAL silver at whatever the current price is. Just like when you have to cover a short.
The thing is, they release paper silver all the time. It represents future delivery of physical silver, but instead of people taking physical delivery, they trade the paper like a commodity. Then they release MORE paper on top of that. So the amount of paper far exceeds the amount of silver that can be physically delivered right now.
It's a MASSIVE naked short. These paper notes actually represent a LOSS for the holders when physical delivery is demanded. Then they have to cover. Sure - they can sell them at market price, but - eventually - if enough people start demanding physical silver, people won't WANT the paper because they'll buy for $X, but have to pay $(X + Y) to actually deliver the promised silver.
Buuuuut...
Since there is way more paper than physical silver, the underlying commodity gets more and more expensive. Paper holders rush to buy physical, and - certainly - no one wants to buy paper until the price more closely matches the actual physical price.
In the end, price spirals out of control and the whole thing collapse as people realize they have billions in paper silver promises that can't be filled, and physical silver becomes king.
Physical silver is never a bad investment.
Stocks or physical? I get monthly physical gold and silver thru a subscription.
THIS is the real "short" in silver.
Think of it this way: when shorting a stock, you borrow a share with a requirement to return an actual share back at a later date.
At the beginning of this week, they dropped 2.1 PAPER ounces of silver on the market. These are promises to give actual silver at a later date.
The problem is, these paper shares never get called for delivery. Instead, they get passed around as an IOU/investment. Then, when they want to manipulate the price again, they drop another bundle of paper silver on the market.
You can basically think of these as naked shorts. If someone decided to demand physical delivery for their paper, they would have to go get real silver - at there is an actual disconnect coming between physical and paper price.
RIGHT NOW, providentmetals.com has a $50 difference between 10 oz buy/sell. 272 vs 322. That's unheard of! 18%. Normally this is closer to 5%.
The problem is the buy price is still being pegged off the COMEX paper price, but the SELL price is based on how much it cost them to actually get silver in stock.
THAT'S essentially the start of a squeeze right there.
Exactly, disaster insurance is the best way to look at it, for me it beats saving at a bank and also removes the temptation of squandering my money on useless stuff. Certainly not a get rich quick play, more of a buy young and sell when you're old or leave to the kids play.
7% is basically, no one.
See my reply above about how the paper silver surplus to physical silver is the real "short" position.
It's a HUGE unfunded liability - a naked short of epic proportions.
I see paper silver used as a way to manipulate the price of actual silver but I still see no short. Just the opposite. They want to push the price higher so their paper silver can be sold for a profit. As they buy more and more paper silver, the price goes up, not down. Am I not understanding something?
No - releasing new paper silver is a dilution event. All dilution events tend to depress prices.
But paper silver works almost exactly like a short, because like a short position, a paper silver position has a promise to deliver something in the future. Specifically, physical silver. I could hold a paper silver position for months, but if the holder demands physical delivery, they have to go get ACTUAL silver at whatever the current price is. Just like when you have to cover a short.
The thing is, they release paper silver all the time. It represents future delivery of physical silver, but instead of people taking physical delivery, they trade the paper like a commodity. Then they release MORE paper on top of that. So the amount of paper far exceeds the amount of silver that can be physically delivered right now.
It's a MASSIVE naked short. These paper notes actually represent a LOSS for the holders when physical delivery is demanded. Then they have to cover. Sure - they can sell them at market price, but - eventually - if enough people start demanding physical silver, people won't WANT the paper because they'll buy for $X, but have to pay $(X + Y) to actually deliver the promised silver.
Buuuuut...
Since there is way more paper than physical silver, the underlying commodity gets more and more expensive. Paper holders rush to buy physical, and - certainly - no one wants to buy paper until the price more closely matches the actual physical price.
In the end, price spirals out of control and the whole thing collapse as people realize they have billions in paper silver promises that can't be filled, and physical silver becomes king.
Paper silver isn't like a short. You can hold that paper forever. If everyone calls in for physical silver, and it exceeds the supply, what happens?
This right here is the lie.
Post some proof that hedge funds have any kind of appreciable investment in silver that would save them from billions in exposure from a naked short.
If you post that ONE misread figure for $130MM... don't make me laugh. Less than 1% of AUM doesn't cut it.