ScotiaMocatta Sells Out Of Silver Bars

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Fri, 12/31/2010 - 16:23 | 840267 midtowng
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Maybe they should buy more from JPM. I heard they own lots of "silver".

Fri, 12/31/2010 - 17:37 | 840443 Bearster
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Let's not confuse the manufacturing capacity to make retail bars like 100oz with the idea of a bullion bank "running out" of silver.  When the latter actually happens, there will be a backwardation that will be obvious from outer space.

Don't get me wrong, I am very bullish about the monetary metals, and wouldn't be surprised to see silver +100% in 2011 (or +15%) but to say they are running out now is misleading.  Strong demand, absolutely.  Bullish yes, of course.  But let's not hyperbolize.

Fri, 12/31/2010 - 17:56 | 840493 Monetary Lapse ...
Monetary Lapse of Reason's picture

This is not hyperbole... it is really happening.  You have not been watching closely enough.  I have;

It appears that we will hit backwardation in even 12 mo. forwards soon;

Today, the Sprott Silver Trust, PSLV, hit it's highest premium to NAV ever, over 15% - this is a very strong indicator to me since PSLV is pretty much the only means right now to INSTANTLY get your hands on (via your brokerage acct) allocated, audited, London Good Delivery Silver bars in a vault in Canada.  Or you can try your luck with getting Comex delivery.  PSLV is actually going to become a more meaningful price discovery mechanism than Comex if Comex does not either reform or go bust.     

There is no question in my mind that Silver is dramatically undervalued, and that the extent of the supply vs demand imbalance has been covered up by the likes of JPM and their paper ponzi SLV. 


Fri, 12/31/2010 - 18:06 | 840521 Bay of Pigs
Bay of Pigs's picture

"it's not a shortage, just a delay"

Calling Johnny Nadler....

Fri, 12/31/2010 - 22:35 | 840941 Al Gorerhythm
Al Gorerhythm's picture

That's Nadless to you, sonny. See his latest post on Kitco. It's a fizzer, again.

Fri, 12/31/2010 - 23:19 | 841020 dlmaniac
dlmaniac's picture

Here is the report GATA picked up on what happens when you try to take the physical silver Scotia Bank is supposed to "have it in store" for you. Organic take silver / crash banksters movement, I'd say.


Scotiabank gives long abuse to cancer victim trying to reclaim her silver

Sat, 01/01/2011 - 11:15 | 841458 longontents
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I wasn't feeling suicidal enough today, so I read the article.  I liked the closing line: "If she wanted to buy crack cocaine with that silver, or sleep with it at her side, that's her call, because it belongs to her, not the bank. The bully-boy functionaries might want to find a comfort level around that notion."


Sat, 01/01/2011 - 13:58 | 841580 Sean7k
Sean7k's picture

Thank you for the link. I have bought scotiabank metals in the past, but no more. While I always take possession, it is necessary for people to understand that bankers are criminals- plain and simple. 

Sun, 01/02/2011 - 20:28 | 843167 JonNadler
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You took the words right out of my mouth BAy

We got plenty of silver, mucha, but the guy in the mail room quit so we have nobody to mail it out, and we haven't been able to replace him with a new mail room clerk. And then they say we have an unemployment problem in this country, yeah

Fri, 12/31/2010 - 18:12 | 840526 BrianOFlanagan
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that 15% premium for PSLV also means Sprott is about to do a massive follow-on offering!  For some reason, stupid investors never learn - see PHYS.

Fri, 12/31/2010 - 19:18 | 840669 Bearster
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Sprott may be a great way for a lot of people who can only by stock exchange listed securities and want metal.  But it is not the only way.

Sprott has a brilliant model, I bet they can make a LOT more money letting the premium rise and then selling more units than they can from managing the assets.

Fri, 12/31/2010 - 20:33 | 840795 Freddie
Freddie's picture

"Sprott may be a great way for a lot of people who can only by stock exchange listed securities and want metal.  But it is not the only way."

What are some of the other ways?  Thanks.

Fri, 12/31/2010 - 23:26 | 841028 Freddie
Freddie's picture

Anyone have any feedback about's gold closed-end fund GTU or Central Gold Trust.  It is a companion fund to CEF or Central Fund of Canada.   It looks like they hold physical gold in trust in Canada.  Thanks.

Sat, 01/01/2011 - 02:32 | 841225 jeff montanye
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you might check jesse's cafe's archives for precious metals funds.  he's an astute observer and chart reader.

Sat, 01/01/2011 - 14:36 | 841632 Mr Lennon Hendrix
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Easily one of the best blogs.

Jesse's Cafe Americain:

Fri, 12/31/2010 - 22:06 | 840901 Captain Benny
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Have you even bothered to read the prospectus?   Basically its _very_ unlikely they'll ever be able to do an offering because they can not undercut existing shares.  Please do not comment on what you do not understand.

Fri, 12/31/2010 - 21:55 | 840896 SWRichmond
SWRichmond's picture

PSLV is actually going to become a more meaningful price discovery mechanism than Comex if Comex does not either reform or go bust.    

That might have been one of its intended purposes....

Sat, 01/01/2011 - 08:42 | 841360 ConfederateH
ConfederateH's picture

Can PSLV, or any PM etf for that matter, be considered "allocated"?   It seems like they have the bars, but you don't have any one of these bars specifically "allocated" to you.  That would make it unallocated.

Sat, 01/01/2011 - 13:34 | 841559 DosZap
DosZap's picture

Allocated IF you can foot the bill for the 400oz requirements,.(PSLV) and the HIT on the Prem if you want to take delivery( I believe BV is 20% of your total value).

Perth is the only one I know that has allocated, and unallocated.And is owned by the Western Govt of Austrailia.

Rather expensive for Allocated yearly fees,outside them, I know of no other I would even start to trust.

If you do not have possession,you do not own it.(IMHO)

Because it is subject to seizure any time, and that time is likely less than 24 mos away.(again,IMHO)

Fri, 12/31/2010 - 18:29 | 840574 BeeTee
BeeTee's picture

Thanks for adding some sanity to this discussion.

My dealer (Metalor, Switzerland) has plenty of kilo bars for sale.

Fri, 12/31/2010 - 19:48 | 840718 Millivanilli
Millivanilli's picture

Apmex and bullion direct are running out of REAL silver as well.

Fri, 12/31/2010 - 16:30 | 840279 10044
10044's picture

how can they run out of paper silver?! lol

Fri, 12/31/2010 - 21:46 | 840882 Imminent Crucible
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Since paper silver is primarily a byproduct of mining paper copper and paper gold, any cutback in mining of those paper metals could easily lead to a shortage of paper silver.

Or it might be discovered that SLV doesn't have the paper silver it claims to hold.

Sat, 01/01/2011 - 02:34 | 841227 jeff montanye
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well done.

Sat, 01/01/2011 - 09:16 | 841374 technovelist
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Since paper silver is primarily a byproduct of mining paper copper and paper gold, any cutback in mining of those paper metals could easily lead to a shortage of paper silver.

Or even paper cuts. Ow!

Fri, 12/31/2010 - 16:38 | 840292 RacerX
RacerX's picture

I heard paper silver was better.

Fri, 12/31/2010 - 17:05 | 840341 EscapeKey
EscapeKey's picture

Oh yeah, they just discovered yet another hugely prosperous paper silver mine, though its hard to get to, as it's mixed in with paper copper and paper tungsten.

Fri, 12/31/2010 - 17:17 | 840384 RacerX
RacerX's picture

yep. the "JPM Organ" has their mitts in lots of paper natural resources.

Fri, 12/31/2010 - 16:38 | 840294 Jason T
Jason T's picture

next up: SLV runs out of silver.  :)  


I have both SLV and CEF and a little SSRI.

I got killed in fall of 2008 owning SSRI.  fool me once.. so my fingers are crossed.

Fri, 12/31/2010 - 17:15 | 840380 geminiRX
geminiRX's picture

I hope you mean PSLV......SLV isn't audited and I seriously doubt they have the silver to back their paper. Be careful with SLV....


PS: CEF is an excellent choice.

Fri, 12/31/2010 - 18:03 | 840510 ChanceIs
ChanceIs's picture

Silly, silly boy.

SLV doesn't need to be audited.  The JP Morgue is the custodian.  You know...what do they call them...Oh that's SRO...Self Regulating Organization.

It isn't as if they don't keep accounts.  Every time the JJP Morgue wants to drive down the market price a little, it accurately records a debit against the bullion "borrowed" from the SLV vault and sold into the market.

If you look in the SLV prospectus, you will probably find that they can "fractioanally-reserve-out"...say...99% of the bullion. 



Fri, 12/31/2010 - 18:20 | 840540 mberry8870
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From the SLV prospective:


"Funds that invest primarily in equity securities and non-equity-related instruments of the precious metals market. This can include investments in the mining, exploration, or distribution of gold and other precious metals. Funds may also hold bullion."


The physical is clearly an afterthought. You are exposed to price exposures, the the physical itself.

Fri, 12/31/2010 - 18:51 | 840615 ouchtouch
ouchtouch's picture

I don't know what prospectus you are looking at but it is not the current prospectus of SLV.  SLV's prospectus makes it clear that it only owns silver bullion, not equity securities or other instruments.


Fri, 12/31/2010 - 20:35 | 840798 JLee2027
JLee2027's picture

Yes, and also has a clause that you can settled in cash and not silver. Because they use fractional not everyone gets their silver.  What was the admitted ratio? 100 claims to 1 ounce of real silver.

Sat, 01/01/2011 - 11:15 | 841456 ouchtouch
ouchtouch's picture

Well, if anyone bought SLV in the belief that in the event of Armageddon a silver fairy would show up at their house with the metal then they bought the wrong asset.  The part about fractional reserves and 100 to 1 ratio is fiction, you made it up.  There is no credible evidence that SLV owns anything other than 100% of the silver its financial statements say it owns.

Sat, 01/01/2011 - 20:46 | 842021 JLee2027
JLee2027's picture

Nope. The 100 - 1 ratio was testimony at the CFTC hearings in March, 2010.  It was reported here on Zero Hedge:

 Using the testimony of a clueless Jeffrey Christian, formerly a staffer at the Commodities Research Group in the Goldman Sachs Investment Research Department and now head and founder of theCPM Group, Douglas confirms that the "LBMA trades over 100 times the amount of gold it actually has to back the trades."


Bankers have used fractional reserves for centuries...and always go under when the bank run occurs. It'll happen here too. (And they said Gold, but it applies to Silver as well).

Fri, 12/31/2010 - 22:00 | 840897 Imminent Crucible
Imminent Crucible's picture


The terms of that prospectus are terrifying: "assets are primarily silver" without specifying what "primarily" means or what the balance consists of.

"If certain events occur [what events?] at any time, the trustee will have to terminate the trust."  "Upon termination of the trust, the trustee will sell silver in the amount necessary to cover all expenses of liquidation, and to pay any outstanding liabilities of the trust.  The remaining silver will be distributed among investors surrendering iShares."  

"There may be situations where an Authorized Participant is unable to redeem a basket of shares."  No kidding?  Like what?  This is not my idea of a way to hedge the Bernanke Put with silver.


Sat, 01/01/2011 - 02:40 | 841229 jeff montanye
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Sat, 01/01/2011 - 13:49 | 841569 DosZap
DosZap's picture

I suggest you read the FINE print on ALL the will likely decide to NOT put your FRN's there.

Everything is geared to their advantage.NOT the customers.


"The terms of that prospectus are terrifying:"


Fri, 12/31/2010 - 16:39 | 840295 Yits and the Yimrum
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power to the people Bitchez!

Fri, 12/31/2010 - 16:42 | 840298 Turd Ferguson
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Wow. Wow. Wow. Strange, amazing days, indeed.

We are on the cusp of another big UP leg in the pms. I've been all over it for about a week now. Sorry I don't get to post here as frequently as I used to. The tf blog is taking a lot of time. To all here at ZH, the #1, hands down, best financial site on the web, Happy New Year!!!

Fri, 12/31/2010 - 17:11 | 840368 yabyum
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It is a great day in America when a kid named Turd gets his own blog, hny to all the Turds if the world any to ALL the ZH'ers even liberal sodomy!!

Fri, 12/31/2010 - 17:15 | 840377 bernorange
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I've been reading your blog daily for the last week or so.  Never posted a comment (don't want to register for any of the options you list), but am enjoying your posts.

Fri, 12/31/2010 - 17:39 | 840448 PhattyBuoy
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Turd - enjoying your site. Keep up the good work ... like those charts!

Fri, 12/31/2010 - 18:01 | 840509 Temporalist
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Hey TF thanks for everything...this is for you and anyone that doesn't have a clue yet:

Sat, 01/01/2011 - 18:03 | 841820 RockyRacoon
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Burt never looked so good!  Thanks for the walk down memory lane.

Fri, 12/31/2010 - 18:19 | 840538 Cyrano de Bivouac
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TF. Happy New Year and congratulations on the success of your new site. I was wondering if you could devote some time to answering readers questions? Tentative name of column "Ask Turd".

Fri, 12/31/2010 - 18:23 | 840549 Temporalist
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Turd Droppings

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