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BlackRock Issues Refutation Of SLV Fraud Allegations; Is It Time To Panic For SLV Holders?

Tyler Durden's picture


That over the past few years there has been a substantial push to expose some of the chicanery at the SLV iShares silver ETF, especially among the non-indoctrinated blogosphere, is no surprise. After all fear of a massive paper silver wipe out is not only the reason for success of Eric Sprott's physical silver ETF, but for the massive and consistently record premium over NAV of the PSLV. Yet up until now, we were not all that concerned about such allegations (despite having written about this ourselves on several occasions). After all, the one thing that would essentially validate such, at time exorbitant, allegations, was missing: a formal refutation. That is, until now. Kevin Feldman, a Managing Director in the iShares unit of BlackRock, has just blasted out the following email which we were lucky enough to become privy to. Basically, we now have the one and only thing we were missing: an official denial of all the "rumors." It may now be time to abandon the SS SLV, because if this letter is the best defense iShares can muster, then SLV holders may be in trouble. But better confirmation than. And leaving the content of the letter aside, its existence, and that BlackRock itself is willing to engage the tinfoil hat clad blogosphere, is the biggest red flag so far...

What’s in the iShares Silver ETF?  Silver.
By Kevin Feldman

Leased silver?  Derivatives?  Phantom silver?

No, no and no.

I’ve seen a lot of comments like the one following this Seeking Alpha post, speculating on the various ways that iShares Silver Trust (SLV) investors could find themselves holding something other than the silver bullion they’d expect.

Every investor interested in buying SLV should first read its prospectus, particularly the Risk Factors section on pages 7-11.  You will see the risks involved with an investment in SLV, including the potential for losses and liquidity risks.

What you won’t see are risk factors around SLV holding derivatives, i.e. silver futures, BlackRock or the trust custodian leasing SLV’s silver(the trustee is authorized to sell silver in the smallest amounts required in order to pay expenses), or SLV not holding sufficient silver to correspond to all shares outstanding, all of which SLV is not permitted to do under its prospectus or current legal structure. 

At BlackRock, we take the responsibility of protecting shareholder interests very seriously and spend a lot of time constructing our iShares products to help ensure they meet investor expectations.  In the case of SLV there are multiple safeguards in place.  For one, it’s structured as a grantor trust, which means the trust (on behalf of its shareholders) has the legal right of ownership to the silver it holds.  JPMorgan Chase Bank, N.A., London branch, provides custodial services for storing the silver, but has no legal rights to SLV’s silver holdings.  Investors can see the serial numbers of all the silver bars in the trust here and can review an independent audit of the trust’s silver here.  (See chart showing total shares outstanding vs. total ounces of silver in the trust below).

Source: BlackRock 4/28/06 (launch date) – 4/1/2011

Another concern revolves around ETF creation and redemption.  I’ve gathered from many posts and comments that there is a misunderstanding about the role of Authorized Participants who facilitate trading in SLV through the creation of new shares when demand is high.  Creating new shares does not expose existing SLV shareholders to some new mysterious risk.  During the creation process, the AP exchanges physical silver for new shares, which are issued by Bank of New York Mellon (SLV’s trustee) on behalf of BlackRock Asset Management International Inc. (the trust’s sponsor).  SLV’s trustee and custodian ensure proper receipt of the silver before new SLV shares are released.

I recognize we live in a skeptical time, especially following the events of 2008, and it’s smart to question whether your investments are doing what you think they should be doing.  One of our key tenets here at iShares is transparency, which means we make every effort to educate potential investors on how each ETF works and what it holds.  In the case of SLV, it’s a very straightforward answer: silver.

iShares Silver Trust (the “Silver Trust”) has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus and other documents the Silver Trust has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting or EDGAR on the SEC website at Alternatively, the Silver Trust will arrange to send you the prospectus if you request it by calling toll-free 1-800-474-2737.

Investing involves risk, including possible loss of principal. The iShares Silver Trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act.  Shares of the Silver Trust are not subject to the same regulatory requirements as mutual funds. Because shares of the iShares Silver Trust are expected to reflect the price of the silver held by the Silver Trust, the market price of the shares will be as unpredictable as the price of silver has historically been.  Additionally, shares of the Silver Trust are bought and sold at market price (not NAV). Brokerage commissions will reduce returns.

Shares of the Silver Trust are created to reflect, at any given time, the market price of silver owned by the trust at that time less the trust’s expenses and liabilities. The price received upon the sale of shares of the Silver Trust, which trade at market price, may be more or less than the value of the silver represented by them. If an investor sells the shares at a time when no active market for them exists, such lack of an active market will most likely adversely affect the price received for the shares. For a more complete discussion of risk factors relative to the Silver Trust, carefully read the prospectus.

Following an investment in the iShares Silver Trust, several factors may have the effect of causing a decline in the prices of silver and a corresponding decline in the price of the shares. Among them: (i) A change in economic conditions, such as a recession, can adversely affect the price of silver. Silver is used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the shares. (ii) A significant change in the attitude of speculators and investors towards silver. Should the speculative community take a negative view towards silver, a decline in world silver prices could occur, negatively impacting the price of the shares. (iii) A significant increase in silver price hedging activity by silver producers. Traditionally, silver producers have not hedged to the same extent as other producers of precious metals (gold, for example) do. Should there be an increase in the level of hedge activity of silver producing companies, it could cause a decline in world silver prices, adversely affecting the price of the shares.

The amount of silver represented by shares of the iShares Silver Trust will decrease over the life of the trust due to sales necessary to pay the sponsor’s fee and trust expenses. Without increase in the price of silver sufficient to compensate for that decrease, the price of the shares will also decline, and investors will lose money on their investment. The Silver Trust will have limited duration. The liquidation of the trust may occur at a time when the disposition of the trust’s silver will result in losses to investors.

Although market makers will generally take advantage of differences between the NAV and the trading price of Silver Trust shares through arbitrage opportunities, there is no guarantee that they will do so. There is no guarantee an active trading market for the shares, which may result in losses on your investment at the time of disposition of your shares. The value of the shares of the Silver Trust will be adversely affected if silver owned by the trust is lost or damaged in circumstances in which the Silver Trust is not in a position to recover the corresponding loss. The Silver Trust is a passive investment vehicle. This means that the value of your shares may be adversely affected by trust losses that, if the trust had been actively managed, might have been possible to avoid.

Shares of the iShares Silver Trust are not deposits or other obligations of or guaranteed by BlackRock, Inc., and its affiliates, and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency.

BlackRock Asset Management International Inc. (“BAMII”) is the sponsor of the Silver Trust. BlackRock Fund Distribution Company (“BFDC”), a subsidiary of BAMII, assists in the promotion of the Silver Trust. BAMII is an affiliate of BlackRock, Inc.

Although shares of the iShares Silver Trust may be bought or sold on the exchange through any brokerage account, shares are not redeemable except in large aggregated units called Baskets.

When comparing commodities and the iShares Silver Trust, it should be remembered that the sponsor’s fee associated with the Trust is not borne by investors in individual commodities. Buying and selling shares of the iShares Silver Trust will result in brokerage commissions. Because the expenses involved in an investment in physical silver will be dispersed among all holders of shares of the Silver Trust, an investment in the Silver Trust may represent a cost-efficient alternative to investments in silver for investors not otherwise able to participate directly in the market for physical silver.


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Thu, 04/21/2011 - 17:10 | 1194098 MaxVernon
MaxVernon's picture

oh well, everything is perfect then!

Thu, 04/21/2011 - 17:10 | 1194103 MaxVernon
MaxVernon's picture

hey, at least I didn't say "silver bitches".


D'oh, I just did!

Thu, 04/21/2011 - 17:21 | 1194158 tekhneek
tekhneek's picture

If you're the first person to post, make it worth the keystrokes god damn it.

SILVER, BITCHES!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Thu, 04/21/2011 - 17:33 | 1194211 justbuygold
justbuygold's picture

I thought JP Morgan's vaults were full 8-12 months ago.  They ran out of vault space. I think its limit was 400 tons.  So exactly where is all excess silver being stored .

Of course its true that JP Morgan may not as custodian have any " legal rights " to the silver ( just like they had no legal rights to issue fraudulent mortgage documents).  However that doesn't and won't stop them from using all that inventory as an excuse with Comex that they are just hedging inventory/positions .

Funny how this story suddenly comes out when silver is up over $2 today.  You would think they would publish this story at a time when silver was crashing and there were rampant negative rumours . At that point they would want to protect their SLV franchise.

Yes, this looks like an extremely desperate attempt to stop what is an uncontrollable short squeeze on an massive uncovered short position.






Thu, 04/21/2011 - 17:59 | 1194351 Careless Whisper
Careless Whisper's picture

JPMorgan Chase Bank, N.A., London branch, provides custodial services for storing the silver


best belly laugh i had all day.

Thu, 04/21/2011 - 18:38 | 1194481 What does it al...
What does it all mean's picture

Well, here is a well written retort on all this Silver is scarce argument, yet people don't believe it.  It's like showing you an autopsy report and yet you are still claiming murder.  In that case, there really isn't any fact or proof necessary.  

All the silver bull's foundation is based on rumors and mass hysteria.  BNY/Ishares are trying to pop the bubble before it is too late....  

It is too late.  Good luck to all. 

Thu, 04/21/2011 - 18:55 | 1194540 outamyeffinway
outamyeffinway's picture

The "report" said JFK was shot with one bullet.

The "report" said that building 7 was on fire and collapsed due to the "fire", according to "the report".

Thu, 04/21/2011 - 19:37 | 1194651 spastic colon
spastic colon's picture

I like that! I think a good way to go by is to do the exact opposite of what the globalists and banksters spout off. I am riding this bull for awhile. Bought 3 more ounces today at 47.25 each. Silver bitchez!

Thu, 04/21/2011 - 19:49 | 1194696 Careless Whisper
Careless Whisper's picture

Are you talking about the "report" that he links to from Inspectorate International Ltd. ?  Ya think they're opinion is as good as a AAA from Moody's?

Fri, 04/22/2011 - 00:10 | 1195264 Slewburger
Slewburger's picture

I prefer this classic:

The inspectorate is clearly a rubber stamp.

Fri, 04/22/2011 - 06:30 | 1195574 Bendromeda Strain
Bendromeda Strain's picture

Thank you for that. I hope all is well with PM.

Thu, 04/21/2011 - 18:53 | 1194541 akak
akak's picture


All the silver bull's foundation is based on rumors and mass hysteria.

Again, ??????????

Fri, 04/22/2011 - 00:52 | 1195352 RockyRacoon
RockyRacoon's picture

Hey, akak, found this article on the Hunt Bros. that I think you'll like:

How the Hunt Brothers Capped Gold…Yes, Gold
April 18, 2011 - By Michael Maloney
I’ve studied the Hunt Brothers, and I have a different take on what happened. Because of the way they flaunted wealth, because of ties to the Middle East, and because they invested heavily in silver, the Hunt brothers were perfect scapegoats.

Fri, 04/22/2011 - 01:02 | 1195364 akak
akak's picture

Thanks Rocky!  Read that one already, lol.

Interesting premise, though.  I have always bristled at the glib (and incorrect) assertion by so-called mainstream analysts that the Hunts were evil speculators, and got what was coming to them.  I am STILL learning the vile extent of the criminal actions taken against them by the US government by changing the rules in the middle of the game, and wildly tilting the table against them to defend our POS fiat currency.

Fri, 04/22/2011 - 07:42 | 1195612 Pegasus Muse
Pegasus Muse's picture

Someone suggested this documentary yesterday:

The Money Masters:  How the Bankers run the United States and the World  

I've watched a third of it so far.  Highly recommended.  Does a great job showing how evil banksters insinuate themselves into governments, encourage wars (gov't indebtedness), and take out opponents (assassinations, etc).  The Rothschild family covered in depth.  The sordid history of the central banking in the US discussed. 

Thu, 04/21/2011 - 19:09 | 1194586 SWRichmond
SWRichmond's picture

It's like showing you an autopsy report and yet you are still claiming murder.

Not quite.  What it's really like is when you react with a great deal of skepticism when a proven liar tells you that they haven't lied, and they aren't lying to you now.  Putting the lies in writing doesn't make them any more crdible.  Hell, in 2011 America, swearing to lies in court and submitting "evidence" you know to be false doesn't even get you prosecuted if you're a bankster or a bankster attorney and the person you're cheating is one of the unwashed.

Thu, 04/21/2011 - 19:40 | 1194661 knukles
knukles's picture

Was the person dead when the autopsy was performed?

Thu, 04/21/2011 - 19:14 | 1194598 tmosley
tmosley's picture

Yeah, except we saw the body, and it was full of bullet holes, and chopped up into little bits.

The silver bull market is based on fundamentals.  Fundamentals like, I don't know, 5000 year lows in silver inventories, burgeoning industrial uses, and dollar debasement.

But hey, you just hold onto your precious paper.  I'm sure it will make fine kindling for a night's fire.

Thu, 04/21/2011 - 19:20 | 1194606 Cognitive Dissonance
Cognitive Dissonance's picture

Well, here is a well written retort on all this Silver is scarce argument, yet people don't believe it.

Well written retort? Are you referring to the Blackrock "retort" above? Really? Because after reading it twice, then reading it a third time just to make sure I didn't somehow miss something, I don't see where this "well written retort" refutes much of anything.

It's basically a recital of the prospectus including direct quotes pulled from the prospectus. It doesn't respond to the most serious allegations made by the so called "silver bull's foundation". Blackrock's argument is standard boiler point rhetoric and mostly doesn't even acknowledge the specific allegations other than to say here are the serial numbers and here is the Seeking Alpha article and we are telling the truth. Oh and by the way, we guarantee nothing.

Try again.

Thu, 04/21/2011 - 19:46 | 1194690 DaddyO
DaddyO's picture



CD, you must have read the same post that I read! It says "nothing", absolutely nothing to refute anything regarding the fraud being perpetrated by SLV.


Thu, 04/21/2011 - 19:49 | 1194701 knukles
knukles's picture

The elegant retort, indeed proof positive, would simply entail shifting all of said silver, said to be physically present against which there are no encumbrances, currently held as unallocated LBMA good delivery bullion, to....

....a formal allocated, unencumbered status...

....which should be of no consequence as the bullion held is said to be physically present but simply unallocated and unencumbered.

Right, Knukles!

Listen up Larry, I'm tryin' to help ya' here.

Thu, 04/21/2011 - 19:56 | 1194725 knukles
knukles's picture

Moreover, if BlackRock were actually administering this pool in it's shareholder's best interests, they would immediately shift the holdings to a fully allocated unencumbered status so as to immediately capture a significant premium to spot similar to that enjoyed by Sprott Physical Silver Trust holders.


Fri, 04/22/2011 - 10:12 | 1195875 RockyRacoon
RockyRacoon's picture

CD, let's just acknowledge that it's a "feel good piece" written for those already neck-deep in the trade.   They can skim the thing and feel secure.   Ain't it all about cognitive bias anyhow?

Thu, 04/21/2011 - 21:04 | 1194881 Al Gorerhythm
Al Gorerhythm's picture

Show me the body.

Thu, 04/21/2011 - 22:32 | 1195092 Piranhanoia
Piranhanoia's picture

No, really. It was breathing and everything before we started. We checked!

Thu, 04/21/2011 - 21:30 | 1194959 MrBoompi
MrBoompi's picture

I might believe the prospectus if I hadn't read it. It's got more holes than a ton of swiss cheese. None of the three parties seem to be responsible for anything except making sure enough silver is sold to cover the trust's expenses. If you can't see buying metal is safer than iShares you're pretty supid really.

Thu, 04/21/2011 - 23:32 | 1195204 Big Ben
Big Ben's picture

It's like showing you an autopsy report and yet you are still claiming murder.

It is like seeing an autopsy report written by the person suspected of the murder.

Thu, 04/21/2011 - 19:10 | 1194590 Re-Discovery
Re-Discovery's picture

Have fun with silver stocks.  Take 'em out, spend some money on 'em, pretend to love them for a few hours.  But never, never marry them!

Always come home to physical.  That's who you'll build your future with.

Mon, 04/25/2011 - 19:18 | 1205692 tomster0126
tomster0126's picture

Exactly, the more fiat your holdings are the more they're bogus for the future.  i'm keeping gold and silver physical for as long as I can.

Thu, 04/21/2011 - 20:08 | 1194759 SRSrocco
SRSrocco's picture


SLV NAV = -2.43%

PSLV NAV = +22.29%

There is almost a 25% difference in the premium in Net Asset Value when you compare Sprotts Silver ETf to iShares SLV ETF.  Time to get into bullion and out of paper

Thu, 04/21/2011 - 20:40 | 1194818 tiger7905
tiger7905's picture

Funny how SLV has never complained about how hard it is to get silver for their trust like Sprott has. I guess Sprott just doesn't know where to buy it. :-)

Thu, 04/21/2011 - 20:41 | 1194825 SWRichmond
SWRichmond's picture

Now that's some funny shit right there!

Thu, 04/21/2011 - 21:34 | 1194964 Hephasteus
Hephasteus's picture

I don't care who you are. That shit'll give you the hysterical giggles right there.

Thu, 04/21/2011 - 20:54 | 1194858 akak
akak's picture

When you consider the irony of your statement, it is truly comical that anyone gives ANY credence to the claims of integrity of the SLV.

Thu, 04/21/2011 - 21:50 | 1194991 Hephasteus
Hephasteus's picture

They got a line on a really good downhill willy supplier.

Running a business on a mountaintop is hard. We got no phone. The only way to get here is by plane so we got no walk in business.

Thu, 04/21/2011 - 22:29 | 1195073 SWCroaker
SWCroaker's picture

It was a funny comment, but misses the fact that the two funds have different share creation systems.  PSLV sells shares en masse and uses proceeds to place orders for bullion.  Then PSLV has to wait for counterparties to deliever.  SLV is *supposed* to exchange a block of shares when an AP shows up with bullion essentially in hand.  So SLV would never "have difficulty" obtaining the bullion, since they aren't supposed to issue new shares in exchange for a promise of bullion.


The utter lack of transparency about the share creation process of SLV, and the associated irregularities in bullion quantity are one of the main points of concern by the bloggers. 

Thu, 04/21/2011 - 23:19 | 1195181 Big Ben
Big Ben's picture

If I had some silver bullion, why would I exchange it for SLV shares? PSLV is selling at a large premium to NAV, so wouldn't they be able to pay me more for it than I would get from selling the SLV shares?

Thu, 04/21/2011 - 23:19 | 1195188 Vendetta
Vendetta's picture

Sprott was just trying to get 25 million ozs right?  A billion dollars worth at todays prices.

Thu, 04/21/2011 - 18:37 | 1194469 Manzilla
Manzilla's picture

It would be funnier if Kevin Feldman said that!

Fri, 04/22/2011 - 07:16 | 1195594 Pegasus Muse
Pegasus Muse's picture

"Investors can see the serial numbers of all the silver bars in the trust here and can review an independent audit of the trust’s silver here."

I was able to open the Bar List.  The Audit file (.pdf) didn't open.  The error message says it is corrupted.

Anyone else having any luck viewing it?

Fri, 04/22/2011 - 15:24 | 1197165 D1eeeeeNAHHHHH
D1eeeeeNAHHHHH's picture

Does anyone have suggestions on what could replace calls on SLV that tracks silver that may be a safer underline security?

Thu, 04/21/2011 - 17:09 | 1194105 Calculated_Risk
Calculated_Risk's picture

blah blah blah

Thu, 04/21/2011 - 17:54 | 1194301 Sancho Ponzi
Sancho Ponzi's picture

Do you think it is a coincidence that this email was released just a few days after UT takes delivery of $1 billion in gold bullion? 

Me think not.

Thu, 04/21/2011 - 19:06 | 1194581 Cow
Thu, 04/21/2011 - 22:37 | 1195099 Piranhanoia
Piranhanoia's picture

In NY, was it at a TBTF?

Thu, 04/21/2011 - 17:09 | 1194107 Xibalba
Xibalba's picture

oh sheet.

Thu, 04/21/2011 - 17:12 | 1194108 Bastiat
Bastiat's picture

Great info as usual, TD.

Thu, 04/21/2011 - 17:13 | 1194113 Lazane
Lazane's picture

un huh

Thu, 04/21/2011 - 17:11 | 1194116 slaughterer
slaughterer's picture

 JPMorgan Chase Bank, N.A., London branch, provides custodial services for storing the silver..


Thu, 04/21/2011 - 17:32 | 1194195 4xaddict
4xaddict's picture

Just dotting their I's and crossing their T's to show that "they had no idea of JPM's horrible fraud" when it all goes tits up in a ditch

Thu, 04/21/2011 - 17:42 | 1194246 Zero Govt
Zero Govt's picture


Thu, 04/21/2011 - 18:29 | 1194453 XitSam
XitSam's picture


Thu, 04/21/2011 - 17:47 | 1194285 iinthesky
iinthesky's picture

Yeah JPM is most likely listing all that silver as theirs and leasing it out to others.

Thu, 04/21/2011 - 17:12 | 1194117 DoChenRollingBearing
DoChenRollingBearing's picture

All of them should be OFFERING themselves to be audited by credible outsiders!  Pictures and random spot bullion testing and all.

Ft. Knox.  The Fed's stash in NYC.  GLD.  SLV.

What's so hard about that?  It would kill off the conspiracy theories in a flash.  Why don't they do it?  Would not cost much...

Thu, 04/21/2011 - 17:27 | 1194184 akak
akak's picture

Yes, it is notable how they manage to evade such a simple maneuver as a third-party audit that could put all questions and suspicions to rest.

But then again, they could go ahead with such an audit using the likes of an Arthur Anderson.  So who is going to audit the auditor?

Thu, 04/21/2011 - 17:54 | 1194312 New_Meat
New_Meat's picture

Quis custodiet ipsos custodes?

- Ned

{that's my dose of cultcha' for the weekend.}

Thu, 04/21/2011 - 23:14 | 1195175 DoChenRollingBearing
DoChenRollingBearing's picture

Awright!  I have learned more Latin here at ZH than in two years at prep school, hahaha!

Fed delenda est (and) In pace requiescat from mick_richfield

And now Quis custodiet ipsos custodes from Ned!

My contribution (via

Res pubblica mortuus est.  Vivat imperium.


Fri, 04/22/2011 - 00:35 | 1195331 akak
akak's picture

I have another one for you, DoChen:

Tu ne cede malis

Leo obviously never took this one to heart.

Fri, 04/22/2011 - 04:45 | 1195520 nmewn
nmewn's picture

Tu ne cede malis...sed contra audentior ito ;-)

Fri, 04/22/2011 - 06:17 | 1195564 Ricky Bobby
Ricky Bobby's picture

Res publica mortuus est, vivat imperium

Fri, 04/22/2011 - 07:59 | 1195636 mick_richfield
mick_richfield's picture


I want to make sure you know the history of that phrase.  Cato the Elder ended every speech with the phrase "Carthago delenda est" (or something close) no matter what he was speaking about -- because he knew that Carthage was an existential threat to Rome.  Finally Rome did indeed defeat Carthage utterly, and sold the population of the city into slavery.

Governors of the Federal Reserve, please take note.


And ... Fed delenda est.    :-)

Thu, 04/21/2011 - 20:00 | 1194739 Arthor Bearing
Arthor Bearing's picture

The email links to an audit report by Inspectorate. As far as who audits the auditor, well, at some point everything is taken on faith

Sat, 04/23/2011 - 17:08 | 1199700 ZeroPower
ZeroPower's picture

Go Habs Go

Thu, 04/21/2011 - 20:39 | 1194815 turfmac
turfmac's picture


Thu, 04/21/2011 - 20:58 | 1194868 Yits and the Yimrum
Yits and the Yimrum's picture

these auditor's for the TBF's and ETF's would make a Louisiana politician blush; they are a whore's whore and are very good at what they do

2 sets of books at the auditors; under lock and key

Thu, 04/21/2011 - 21:05 | 1194884 Barb Dwire
Barb Dwire's picture

Auditing the auditors lol...


Jus' saying. Audits aren't worth shit.

Thu, 04/21/2011 - 22:19 | 1195058 Al Gorerhythm
Al Gorerhythm's picture

The auditor, audits the end of quarter statements as being in compliance with reporting standards (whatever they are). Their role is NOT to audit the physical existence (per prospectus) of the numbered bars, which, I have read on this site, have been shown the bar list to be open to accusation of double entry on the credit side.

Show me the money.

Thu, 04/21/2011 - 23:22 | 1195179 DoChenRollingBearing
DoChenRollingBearing's picture

@ akak

I'll do it!  

Allow me to pick a team and give me a budget and some reporters and we're good to go!

Thu, 04/21/2011 - 17:59 | 1194344 billhilly
billhilly's picture

There is a reason why vaults are deep underground, where the light of day and truth are inaccessible.  Complexity, dark pools, shadow inventory, off balance sheet, state secrets, national security, and plenty more, are all terms for not letting the truth be known. 

There is reason for the creatures of the night to hide when the dawn appears.

Fri, 04/22/2011 - 10:28 | 1195952 mick_richfield
mick_richfield's picture

And that's not what America is about.  America has been invaded from within, and is just now starting to wake up.

America will outlive the United States.

Thu, 04/21/2011 - 19:15 | 1194602 Re-Discovery
Re-Discovery's picture

Time for precious metal stress tests for the TBTF?

This is exactly the same BS we heard from Lehman.


Thu, 04/21/2011 - 22:59 | 1195136 Dave
Dave's picture


Thu, 04/21/2011 - 22:59 | 1195145 Dave
Dave's picture

You know damn well why they don't audit. I just wish the shit would hit the fan so we could see how this plays out. Surely it won't be good but I'm getting tired of watching and waiting.

Fri, 04/22/2011 - 10:31 | 1195956 mick_richfield
mick_richfield's picture

I'm tired too.  But don't call me Shirley.

Thu, 04/21/2011 - 17:12 | 1194118 dracos_ghost
dracos_ghost's picture

I wonder why the SLV/SI spread is increasing on a daily basis.

Thu, 04/21/2011 - 18:03 | 1194326 depression
depression's picture

I started accumulating physical silver back when silver was stuck in a lifeless trading range  at $6.50-$7.00 per ounce, perhaps some of you remember that time. PM bugs were anathama, I was telling folks that asked my advice to accumulate physical metal because silver was going to $50, well at that time folks listened politely but no one I spoke with then acted on my advice.

When the price of silver finally shot up out of that trading range to $19.00, that was the first time I noticed difficulty buying physical silver, until then there never was any deliver delay or shortages. Since then it has become steadily harder and harder to acquire physical silver. Even when (paper) SLV collapsed back from $20 to $9, the spread widened but the difficulty in acquiring physical silver remained, delays lengthened even more as the paper price collapsed, yet the demand for physical held firm. Now we see price trending steadily higher, delays are lengthening even more, the US Mint stopped delivery altogether, and the spread between paper and physical is again widening. This is a demand driven secular bull market.

So the one simple point of this rambling... Given the extreme demand driven shortages in the physical market that have been happening for several years now I seriously doubt the validity of the graph showing the steady accumulation of physical silver. There is just no way JPM has that much physical silver sitting in a vault. ANYONE can generate a nice pretty graph to reassure "owners" of the paper ETF, that in NO WAY proves they have the physical silver they are claiming in this graph. I simply do not believe it, common sense demands that conclusion. So my reply to this con-man at Blackrock is simply: PROVE IT, back up your graph with an independent audit, otherwise this is pure JPM induced smoke and mirrors propoganda.

Thu, 04/21/2011 - 19:44 | 1194672 spastic colon
spastic colon's picture

congrats to you. The ones who invested early must be licking their chops now. Awesome.

Fri, 04/22/2011 - 00:15 | 1195278 Klaus Daimler
Klaus Daimler's picture

True - one would imagine that B. Madoff printed very attractive graphs on his clients' quarterly statements as well.

Fri, 04/22/2011 - 00:47 | 1195346 Rick64
Rick64's picture

 Investors can see the serial numbers of all the silver bars in the trust here and can review an independent audit of the trust’s silver here.

 I checked all the serial numbers and its all accounted for, just click on the link for reassurance. It must be legit its written on paper.

Fri, 04/22/2011 - 01:15 | 1195380 Manthong
Manthong's picture

It exists alright.

But for security reasons it has to be kept in a secret place.

It's all right next to the 8,000 tons of Fort Knox gold and the presidential birth certificate.


Thu, 04/21/2011 - 17:13 | 1194122 Matxeu
Matxeu's picture

holy shiite, the JPmorgue at work

Thu, 04/21/2011 - 18:05 | 1194349 Zero Govt
Zero Govt's picture

despite Gold being the same price when i bought and sold it, the ProShares ETF (JP Morgan are 'partners' to ProShares) lost 7% in the 3 months i held it!

Who needs fraud in the back office when the price movement is a scam already?

ETF = Exchange Traded Fraud 

Thu, 04/21/2011 - 23:32 | 1195206 Matxeu
Matxeu's picture

derivatives are only as good as the counterparty, in this case fiduciary

Thu, 04/21/2011 - 17:16 | 1194127 Sudden Debt
Sudden Debt's picture

GIve it 3 to 6 more month before it starts to totally disconnect from the spot price.


Thu, 04/21/2011 - 17:17 | 1194130 Ergo
Ergo's picture

"In the case of SLV there are multiple safeguards in place.  For one, ... JPMorgan ... provides custodial services for storing the silver"

Do I laugh or cry - or both? 

Thu, 04/21/2011 - 17:24 | 1194160 buzzsaw99
buzzsaw99's picture

SLV shareholders thought they were sticking it to JPM.



Thu, 04/21/2011 - 18:41 | 1194495 What does it al...
What does it all mean's picture


What a joke, there is no way that JPM traders is that dumb and went massive short Silver.  Maybe Glencore is trying to corner the market and make GS eat dirt...  But hey, it is all possible.

Thu, 04/21/2011 - 22:36 | 1195096 zaknick
zaknick's picture

Troll alert.

He's too clever for his own good. Glencore and the vampire squid are part of same mafia.

Duh, everybody knows that, biatch!

Fri, 04/22/2011 - 00:47 | 1195349 Rick64
Rick64's picture

I guess they will be able to cover those shorts.

Thu, 04/21/2011 - 17:54 | 1194327 Id fight Gandhi
Id fight Gandhi's picture

What's the likely outcome for us physical holders if the slv goes bust on some funny accounting, bad derivatives trading or such? Does the value of physical rise then or does level the whole market? Help me understand this because I understand what silver the metal is, not all the bullshit complex bets they make up out of thin air.

Thu, 04/21/2011 - 18:39 | 1194482 NotApplicable
NotApplicable's picture

SLV goes to zero, and a bunch of mad investors start bidding for physical (or PSLV, after realizing the insurance value of the high premium) while singing, "We won't get fooled again!"

Thu, 04/21/2011 - 19:11 | 1194591 Strider52
Strider52's picture

This is like Winnie the Pooh guarding the 'Hunny'.

Fri, 04/22/2011 - 00:57 | 1195358 longorshort
longorshort's picture

Do we have a moderator to ban this idiot?

Thu, 04/21/2011 - 17:19 | 1194139 GNandGL
GNandGL's picture

The (gentleman) doth protest too much methinks.

Thu, 04/21/2011 - 17:17 | 1194141 NOTW777
NOTW777's picture

even funnier - fast $ guys getting long silver for the first time

and doug "short PMs" kass touting obamamotors

Thu, 04/21/2011 - 17:22 | 1194149 mrcybermac
mrcybermac's picture

SLV prospectus discussed here... sounds like a house of cards that does not leave shareholders protected at all:

Thu, 04/21/2011 - 17:22 | 1194151 tekhneek
tekhneek's picture

Goddamn ponzi's.

Thu, 04/21/2011 - 20:17 | 1194777 espirit
espirit's picture

Leveraged a hundred to one - at least.

Come and collect, buhahahahah!

Physical Silver, Bitchezzz!

Thu, 04/21/2011 - 17:20 | 1194154 Seasmoke
Seasmoke's picture

you just know there is BIG fraud out there somewhere thats going to be exposed soon

Thu, 04/21/2011 - 17:41 | 1194259 vote_libertaria...
vote_libertarian_party's picture

Ameritrade just sent me a notice that their prospectus on options has changed.  I can't read legal documents with out going into a coma so I'm not sure what it says.


Thu, 04/21/2011 - 17:21 | 1194156 velobabe
velobabe's picture

privy, bitchez†

Thu, 04/21/2011 - 17:25 | 1194164 unwashedmass
unwashedmass's picture


they don't have any silver, do they?  hmmmmm

Thu, 04/21/2011 - 17:24 | 1194168 Bastiat
Bastiat's picture

SLV prospectus tells the truth if you read it--it's full of holes.  A reasonable person with some experience in the world can only assume they were put in there for good reason. 

Wasn't JPM just ultra fast-tracked to become a Comex custodian too?  Gosh, what's the hurry?

Thu, 04/21/2011 - 18:09 | 1194385 NotApplicable
NotApplicable's picture

Which makes it very entertaining (or depressing, depending on your PoV) watching these "refuters" tap-dance around each and every hole, while pretending to expose their lack of holeyness. The opening line is a gem:

Leased silver?  Derivatives?  Phantom silver?

Leased silver? Well, just because you own a bar in a JPM warehouse by no means proves that it wasn't originally leased from someone who believes they still own it. I wonder, do silver leases include bar numbers?

Derivatives? Duh! I wouldn't expect to find "the tail that wags the dog" being passed off as the dog. They are in a different world for a reason. Only an idiot would believe they would try to pass off side-bets as the actual asset. Oh, wait, the author termed derivatives to be "i.e. futures." I'm no trader, but aren't these two distinctly different things, or are Comex futures held for delivery considered to be a derivative?

Phantom silver? Note that this is the only time in the article that the term is used. So, he makes the claim that there is something in the vault. Question is, is there anything other than Comex futures for delivery (which can be supplied by tendering SLV shares completing a circle)?

Nice try, buddy! You win the Sophist of the Day award.

Thu, 04/21/2011 - 18:32 | 1194455 nkktwotwozero
nkktwotwozero's picture

>Comex futures held for delivery considered to be a derivative?



Thu, 04/21/2011 - 18:42 | 1194492 NotApplicable
NotApplicable's picture

Well then, Mr. Feldman lied outright, didn't he? It's been a while since I read the prospectus, but I'm quite sure Comex futures are allowed to be tendered for a basket of shares.

Thu, 04/21/2011 - 18:44 | 1194508 What does it al...
What does it all mean's picture

SI futures are physically delivered and settled.  What this paper is saying that they will also take delivery and convert that into silver and make it reg way silver.  

Thu, 04/21/2011 - 21:01 | 1194869 Bringin It
Bringin It's picture

I'm so happy you are here to explain everything away.  Does your job come with roller skates?  Why would a mere mortal huff and puff so much to back up JPM?

Thu, 04/21/2011 - 18:46 | 1194510 nkktwotwozero
nkktwotwozero's picture

> Comex futures

I think registered silver can be, not the futures itself.

Futures expire and basically you can then either cash to roll or get a slip registered.

That slip is physically backed by a bar in Comex.

If I understand it, that slip can be traded in for SLV, but not the future itself.



Thu, 04/21/2011 - 22:00 | 1195011 MrBoompi
MrBoompi's picture

After JPM was given a fasttracked vault license, the price finally shot up above $36. This seemed to be some sort of method to launder the shorts that were inevitable.

Thu, 04/21/2011 - 17:24 | 1194171 unwashedmass
unwashedmass's picture

whether they have any silver or not is irrelevant. like all the rest of the financial elite, they have the regulators in their pockets......i'm sure they can get the CTFC, the SEC and the Comex stooges to come out with press releases about how they have all the silver they need, and that they've even seen it.

Thu, 04/21/2011 - 17:27 | 1194172 Trundle
Trundle's picture

Said the spider to the fly.

Thu, 04/21/2011 - 17:29 | 1194183 Magnix
Magnix's picture


Thu, 04/21/2011 - 17:27 | 1194185 dbTX
dbTX's picture

Think I'll provide my own custodial service, thank you.

Thu, 04/21/2011 - 17:31 | 1194190 akak
akak's picture

I'm surprised that they didn't include a reassurance by Jon Nadler that "All is well, go back to sleep, there's nothing to see here, these aren't the Ponzi schemes you're looking for."

Thu, 04/21/2011 - 17:45 | 1194276 Miles Kendig
Miles Kendig's picture

Never believe anything in politics until it has been officially denied - Bismark

Since he didn't specifically mention silver we're ok,  LOOOOL

Thu, 04/21/2011 - 17:30 | 1194197 moofph
moofph's picture i laugh now or after i read it?


Thu, 04/21/2011 - 17:33 | 1194199 gordengeko
gordengeko's picture

 “BlackRock today is one of, if not the, most influential financial institutions in the world.” granted source is wiki but still.

Enough said...

With the exception of, since the biggest financial institution on this spinning (black) rock has now taken an interest in whats going on with silver, one would think we gots their  they want to control the masses with fiat, now with the attention silver is getting from their own controlled media, silver is now attracting the dumb money of the masses!LOL  Oh the sweet irony.

Thu, 04/21/2011 - 17:34 | 1194203 DonutBoy
DonutBoy's picture

What's the upside for Blackrock to do anything besides exactly what they say they're doing?  I'm as skeptical as anyone.  I don't believe the Fed, the BLS, the Treasury Dept, or a single bank.  If Blackrock had a penny to gain by lieing to me I'm sure they would, but what would they gain?  The bar numbers are publshed and the position is audited. 

Thu, 04/21/2011 - 17:53 | 1194282 Zero Govt
Zero Govt's picture

the bar numbers are publshed and the position is audited

so was Enron

and so was JP Morgan all the way up to their 2008 bankruptcy (and after their books are still being cooked)

Thu, 04/21/2011 - 18:50 | 1194521 What does it al...
What does it all mean's picture

so is this Silver long is hurting JPM bit.  Buy Silver if you want to make money if you think silver is going up, it has nothing to do with JPM's welfare...

Thu, 04/21/2011 - 17:52 | 1194314 NidStyles
NidStyles's picture

Probably has something to do with them being a CIA front group.

Thu, 04/21/2011 - 18:17 | 1194414 NotApplicable
NotApplicable's picture

Does the report "there are no more shares of SLV that can found to borrow for shorting" answer your question?

Step 1) Setup fake silver etf (with enough real silver to pass sniff-test)

Step 2) Short it to no end once silver rises, while swapping out physical with Comex futures

Step 3) Comex defaults, SLV goes no bid as it is discovered to be all paper.

Step 4) Profit like a mofo

Thu, 04/21/2011 - 18:44 | 1194501 InconvenientCou...
InconvenientCounterParty's picture

At least with SLV and GLD, fools are separated from their money the old fashioned way. None of this shameful Fed welfare shit.

Thu, 04/21/2011 - 17:34 | 1194204 The_Euro_Sucks
The_Euro_Sucks's picture

All I have to add to this is 'every bar has an owner' which is true, but every contract certainly does not have a bar

Fri, 04/22/2011 - 00:23 | 1195304 Klaus Daimler
Klaus Daimler's picture

It would not surprise me to find that each physical bar has dozens of owners...

Thu, 04/21/2011 - 17:35 | 1194207 cossack55
cossack55's picture

Let me get this straight. If I take a peice of paper and using a ball point pen, or even crayon, and write the word SILVER on the paper, that means that the paper is physical silver. Right?

Thu, 04/21/2011 - 17:35 | 1194218 Moe Howard
Moe Howard's picture

Linda Green has to sign it too.

Thu, 04/21/2011 - 18:36 | 1194475 nmewn
nmewn's picture

"If I take a peice of paper and using a ball point pen, or even crayon, and write the word SILVER on the paper, that means that the paper is physical silver. Right?"


In fact, it's even easier than's all been digitized for their ponzi building pleasure...saves paper that way ;-)

Fri, 04/22/2011 - 00:26 | 1195311 Klaus Daimler
Klaus Daimler's picture

Smeared feces is required in these instances.  It legally refutes the accusation that an SLV holder "doesn't have shit".

BLS uses crayon for the birth-death model, though.


Thu, 04/21/2011 - 17:33 | 1194208 Bansters-in-my-...
Bansters-in-my- feces's picture

Another article showing there is probably not enough chairs for everyone when the music stops.

Good work as always TD. :o)

Thu, 04/21/2011 - 17:33 | 1194212 Lone Mad Minute...
Lone Mad Minute Medic's picture

It's like the Birth Certificate. All they have to do is show the silver!

Thu, 04/21/2011 - 17:36 | 1194213 Moe Howard
Moe Howard's picture

You will see the inventory of the physical gold at Fort Knox right after you see Obama's long form birth certificate, passport file, health records, University transcripts and real SSN number.

Thu, 04/21/2011 - 18:41 | 1194490 FeralSerf
FeralSerf's picture

And a real independent investigation of 9-11, and indictment, conviction and execution of the perps.

Meanwhile the proles stand in the TSA queues waiting for their balls to be fondled and their ionizing radiation exposure to be increased.  Never can tell when or where those nasty underwear and shoe bombers will strike again.

Thu, 04/21/2011 - 17:35 | 1194221 Henry Chinaski
Henry Chinaski's picture

That reads like the prospectus that I didn't read.  I dabble in SLV and GLD with the idea that I can unload it on a greater fool before something goes haywire.  This is great stuff ZH!

Thu, 04/21/2011 - 17:36 | 1194227 Tunga
Tunga's picture

 "... iShares Silver Trust may be bought or sold on the exchange through any brokerage account, shares are not redeemable..." The fine print.


Except,, except if you have the right coloured basket. Todays basket is pink. Anyone got a pink basket? NO? Sorry then. Better luck next time. 


Bitchez. (Sorry, had to do that at least once.) :)

Thu, 04/21/2011 - 17:39 | 1194229 swanpoint
swanpoint's picture

I dumped my SLV and GLD for CEF a few months back. Fewer doubts and better tax treatment with CEF. CEF has a 40 year history, too. I got a little gloomy for second when I bought more at the all time high a couple weeks ago. I guess I will have to buy at a the all time again. I have 45% of my capital in CEF.

Thu, 04/21/2011 - 18:44 | 1194500 FeralSerf
FeralSerf's picture

Compared to the gold and silver prices today, CEF was refukingdiculous today.  I couldn't stanbd it anymore.

Thu, 04/21/2011 - 17:40 | 1194234 NidStyles
NidStyles's picture

Duh, BlackRock is a CIA front group responsible for the Halliburton operation during the '70's up until now.

Thu, 04/21/2011 - 17:40 | 1194235 nkktwotwozero
nkktwotwozero's picture

Actually seems like a pretty robust defense.

If it's true.


If it is; SLV basically is a share in trust that owns a bunch of silver.

I dont see the problem?


Physical is an insurance policy against chatastrofuck. Not an investment.

Thu, 04/21/2011 - 18:28 | 1194443 NotApplicable
NotApplicable's picture

See how much this "robust defense" talked about Comex paper?


If pigs had wings...

Thu, 04/21/2011 - 18:30 | 1194458 nkktwotwozero
nkktwotwozero's picture

>"robust defense" talked about Comex paper?

Which they dont own.

Again, if you take them at their word, then SLV is a share in a trust that owns a lot of silver.



Thu, 04/21/2011 - 18:58 | 1194549 NotApplicable
NotApplicable's picture

It all depends on how one defines physical, doesn't it?

Notice that the prospectus states that the trust doesn't trade Comex futures. It says nothing about share baskets created out of "physical" that is really a future standing for delivery. Which, if the Comex wasn't a fractional-reserve operation, then it wouldn't matter. But since it can go bust if too many holders stand for delivery, then there is no guarantee that a paper future is as good as physical. Especially since backwardation has set in again.

Now Tom Szabo ( will tell you that the Exchange for Physicals loophole is not a loophole, since EFP is a legitimate part of the market. But then again, he also says SLV is good to go, because KPMG says so (Ft. Knox too!).

In other words, it could ge legit, but with so many escape clauses for the trust, why would it be?

*adjusts tin-foil hat*

Thu, 04/21/2011 - 19:13 | 1194576 nkktwotwozero
nkktwotwozero's picture

Adjust it better.

The trust does not hold or trade in commodity futures contracts regulated by the Commodity Exchange Act

(CEA), as administered by the Commodity Futures Trading Commission (CFTC).

-- From the prospectus.


Look. I'm all for physical holding of silver.

That's not to say that SLV is a fraud or anything of the sort however.

Risks exist to both.

SLV is massively more liquid than silver coins.

Does it have risks? Sure.

But you have to weigh them against what your objectives are.

If it's to have something WTSHTF; physical is the way to go.

If it's to have a trading vehichle for one of the most spectacular runups we have ever seen.

SLV might be it.


Fri, 04/22/2011 - 00:34 | 1195325 Klaus Daimler
Klaus Daimler's picture

Might they not "...hold or trade in commodity futures contracts not regulated by the Commodity Exchange Act...", like a JPM pinky promise to bring a bunch of silver bars back next week, in a big covered wagon pulled by unicorns?

Thu, 04/21/2011 - 22:13 | 1195044 MrBoompi
MrBoompi's picture

Again, if you take them at their word, then SLV is a share in a trust that owns a lot of silver.

Taking them at their word is meaningless when the contract is full of meaningless holes. Wasn't this trust set up to sell silver that it doesn't own? It's the selling of paper silver that sets the physical price, not vice versa. The phantom selling can make the price drop to satisfy the shorts in the system. There is a limit to how long this can go on in a commodity like silver which is in backwardation.

Thu, 04/21/2011 - 17:40 | 1194248 TN Jed
TN Jed's picture

Good to see Baghdad Bob found a new job.

Thu, 04/21/2011 - 17:42 | 1194253 medicalstudent
medicalstudent's picture


Thu, 04/21/2011 - 18:03 | 1194357 mark mchugh
mark mchugh's picture

How about phantom shares??????

There are only 368m shares of SLV

Today 89M traded

Yesterday 89M traded....360M in the last 5 trading days.  Although ZH reported it was "hard to borrow yesterday,"  doesn't anybody else think that the number of shares being traded indicates more shares in existence than stated?

Ever here of the SLV being "sold out"?

If you allow more shares to trade than exist, then they ain't back by silver.

Another question - SLV trades options (lots of them).  If people option into the stock, aren't they obligated to create more shares?  Which means buy more silver, which will drive the price even higher....

The thing is wired to blow.

Thu, 04/21/2011 - 18:14 | 1194394 SilverRhino
SilverRhino's picture

>> The thing is wired to blow.

Like a fucking suspension bridge with 120kg of C-4 in the right places.

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