SLV ETF Adds Massive 523 Tonnes Of Silver In Current Week

Tyler Durden's picture

There were some very odd occurrences in the world's largest silver ETF, the iShares SLV. After the exponential increase of the price of silver in the spot market, almost hitting $30/share on November 9, the SLV ETF, which like GLD purports to holding the underlying precious metal, saw a massive basket creation demand, amounting to a whopping 523 tonnes of actual silver added to the fund's holdings (equivalent to 16.8 million ounces, at a cost of about $456 million) for the week ending November 12, currently at a record 10,718 tonnes. While we don't purport to knowing how much free silver is available in the open market, the possibility that any one entity could have manged to purchase such a massive amount of actual silver, of which 352 tonnes was supposedly acquired on November 10, without completely destabilizing the actual supply and demand mechanics, and creating a vicious loop where basket creation leads to a further surge in prices, is just slightly mind boggling. As we have speculated earlier, we expect comparable activity in the GLD ETF to follow suit. Additionally, we will shortly look at this week's CFTC COT data to determine just how massively JPM's silver short has impacted the firm's P&L.

P.S. for those who may be wondering, the custodian, i.e., entity in charge of vaulting the "silver", is good ole RICO-lawsuit embroiled HSBC. (full SLV prospectus link)

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tmosley's picture

Don't let the numbskulls talk you out of your silver.  Just keep buying.  Its the only move that makes sense.

Dollars are poison.  Stocks are lava.  Paper PM vehicles are time bombs.  Have nothing to do with any of them.

-1Delta's picture

Sentiment... sentiment. How many silver bears and dollar bulls do you know?



tmosley's picture

I know an equal number of silver bulls and bears, and I know an equal number of dollar bulls and bears.

The silver bears have been out in force on ZH the last few days, if you haven't noticed.  And 99+% of the US population is bullish on dollars, in that they continue to use them and hold them.  

These are unusual times, where the whole world is being sucked into absolute participation in FX wars.  You can't just account for traders when you talk about the fiat currencies that we all use and get paid in on a daily basis.  The risk has shifted away from the risk takers, and has been placed solely on the backs of those who use and hold fiat currency.

I do appreciate your sentiment, but now is the time to think a bit deeper than the standard trader.  The things that are happening now are much bigger than you are used to.  Previously, you were playing hide and seek.  It was fun, and perhaps profitable.  Now you are playing hide and seek in a burning building.  You might think that the old rules apply, but they really don't, or at least they are superseded by the new rules.

Shameful's picture

Most people I know have basically no holdings in PMs or inherited a position from their parents.  One of my friends holds some, but he got them from his dad who made him swear to never sell except in cash of emergency.  But most are still in dollars, but as Americans we will be the lat out of the dollar, we live in a totally dollar centric world after all.  Even the talk of a gulf oil currency flew under almost every one's radar.  And that bad boy would either kill the dollar or force the US to go on yet another campaign to keep the petrodollar going.

I cannot expect the dollar to last indefinitely when the world basically recoiled in shock and horror to QE2.  Not everyone is retarded, they know that Zimbabwe Ben has no intention of ever stopping it.  He can't, if he stops it the Treasury might find itself in a funding issue and the markets might have to acknowledge gravity.  This game can go on for years, but all good things come to an end.  Really for a fiat currency the dollar has had one hell of a run.

VegasBD's picture

Its been a short run. ~40 years

LowProfile's picture

That is the average lifespan of a pure fiat currency.

Right on fucking schedule, bitches!

Shameful's picture

Have to respectfully disagree.  40 years as the reserve currency and being totally fiat is pretty damn good.  Not sure that feat has been equaled in recorded history.  Fiat currencies are inherently unstable due to the ability to wizard it out of thin air and they usually don't make more then 40 without some revaluation or change.

tmosley's picture

40 years is indeed the longest any paper currency has ever gone without a revaluation/hyperinflationary episode.  We are now tied with Yuan China (ie Mongol China).  They managed to maintain a paper currency for a total of some 80 years, IIRC, with the longest stretch without a collapse being 40 years.  They had two more in that time period, before their empire crumbled.

People should look to Yuan China for the future, as in all of history, their situation was the most like our own.  They had the (known) world reserve fiat currency, were a military hegemon, technologically advanced, populous, and had a complex bureaucracy, just like us.  

hpprinter000's picture

We should implement the same system that the romans did, use cheap bronze coins and silver, but not gold as it can be too easily controlled.

tmosley's picture

The Romans did use gold.  In fact, it was the only coin type that was never debased in their history.

Mostly because it was used in trade with India (foreigners wouldn'

t stand for debasement, more than likely), and the Romans made very little that the Indians wanted except for gold.  Eventually, all of the gold left the Roman empire, forcing them to use only silver and bronze.

doolittlegeorge's picture

more like "warlock" in our case.  damn peacenicks.

puckles's picture

"You might think that the old rules apply, but they really don't, or at least they are superseded by the new rules."

I find that a scary variant of "it's different this time."  The Hunt brothers thought so, too.

You might be interested to know that Prechter came out with a special warning on Wednesday (specifically about gold, but since the two trade generally in tandem, it applies here as well.)  We dumped our gold, and grains, on that call, and kept the recently instituted shorts.  Damned good call.

Arius's picture

keep listening to him...pretty soon you will lose your capital forget about earnings...

this time is not different...all fiat ends the same prechter or not...its just a matter of time.  if you choose to pick pennies under the buldozer, its your choice but one of these days the pennies you gathered wont matter because the buldozer will run you over...when? ask chuck prince 

israhole's picture

LOL, but Chuck Prince was dancing in the streets the last time I heard.

Arius's picture


with all due respect, i think he left Citi in a hole which will become their grave - there is no way out for Citi.

about him personally, if he is as "smart" as his quotes and actions led you to believe...i wont be suprised couple of years from now, to hear about him being on the street crying over his pile of worthless paper...

Hook Line and Sphincter's picture

Better than ending up like Freddy Prince.

tmosley's picture

Old rules: the market ruled.

New rules: the Fed makes the rules.

You really think this is not the case?  "This time is different" because we have completed the transition from a market based economy to a fully centrally planned one.  The rules are the same as they were in the USSR now.

Congratulations on saving 5%.  What are you going to do next?  What if silver opens up 25% on Monday? What do you do if China severs its dollar peg totally?  That particular decision will be made by approximately three people who have a thought process that is mostly unknown here in the west.  Are you going to depend on them maintaining their current course even as it brings them 15+% inflation?

When you get out of a burning building, you don't go back in to loot it.  Why try to time the actions of a madman who has set his own house ablaze?  It's madness.  Pure gambling.

A Nanny Moose's picture

It's always been about the golden rule Tmos. He who makes the gold...

alexdg's picture

Watch out! I never trade on any of EWI tips or warnings. When I bought into Silver, it was at 17$ and EWI was saying that is was going into a new phase and drop like a rock... good thing I unsubscribed their newsletter services! They keep calling for tops and a new "other shoe falls off" downturn/crash in the market. I'm sure after 2 or 3 years talking about "P5" everyday they will eventually get it right...

mark mchugh's picture

The Elliot Wave folks, like all chart watchers, base their interperations of the same flaw - they don't understand the difference between variables and constants.  They treat the dollar like a constant (think for just a second how funny that is).

Treason Season's picture

Pretcher + Yale = Skull + Bones

minus dog's picture

" And 99+% of the US population is bullish on dollars, in that they continue to use them and hold them.  "

And how many of that 99% can even explain what those little green paper rectangles are, or where they come from, other than telling you the denomination printed on the front and looking at you like you're an idiot?

And even if they can tell you, a very solid percentage of that 99% is paid in dollars, and they have little or no real disposable income.  When you have no wealth, you don't sit around thinking about how you should store your lack of wealth.  They aren't "bullish" dollars - they aren't "bullish" anything.

tmosley's picture

So you are making the claim that no one has any money in the bank, or in savings accounts of any type?

That sounds a little off base to me. 

Further, if 90% of those with savings invest their savings in the stock market, does that make stocks a bubble?  If they pull their money out of the stock market and park them in cash accounts, does that make it a bubble?  Isn't the fact that they do things without thinking make that dumb money by definition?  So  you want to be doing the same thing that the dumb money is?  The same people getting fleeced on every front?

Monetary Lapse of Reason's picture

I agree with Minus... and I think you misread him Mosley.  I have read your comments before (Mosley) and consider you a valuable contributor.

Most people do not understand what money is, and most people.. let's say 85%, don't have enough investable net worth to really get too worried about it.  I am the flipside of the equation.. I only came to my monetary self-education because, after years of saving, and being told that I would not afterall have a pension (your know those Corporations) my net worth crossed into seven figures, and I decided that I had better figure out this investing stuff

Most people will get caught with their pants down when TSHTF


Thanatos's picture


I agree that you are a valuable contributor to this board, I have read and agreed with lots of your posts.

I think you might be a little off on premise that people have money in the bank. I am a worker drone in a hive full of drones, they are all professionals and many hold advanced degrees. Their salaries are probably average for Professionals across the US.

Less than 10% of these people have ANY investment outside of a mandatory pension and their home. Many people in the office have already borrowed against their pensions just to keep the ball rolling. They have to keep up appearances.

Out of 96 people, one buys PM's... Me.

It might be different where you live. Where I am, the people I mention ARE the well off ones...

So, I would have to say that most people I encounter don't have anything but debt to their name, no savings, no hope.


DoctoRx's picture

TM:  Perhaps the building's wiring is shot and can go bad at any time.  (Or perhaps the fire is indeed smoldering.)  Taleb has in the past recounted that in 2000 (if my memory is correct, but the exact yr is unimportant), he was shown a balance sheet analysis of FNM/FRE, and he concluded they will collapse, he just didn't know when.  In his BB interview linked to earlier today by TD, he used the analogy of shaking a ketchup bottle.  The ketchup won't flow and nothing happens despite repeated shakes.  Then on one shake- unpredictable which time- it splatters all over.

He also said something more imp. in that interview.  He said that at the onset of the Lebanese civil war, he was assured that the money printing was temporary.  Hyperinflation ensued over the long war.  He said that he is getting the same jittery feeling about the US as he had re the Lebanese event.

Anyone who could afford to be protected w PM from something worse than the 2008 events and doesn't do so is making a very large mistake.  IMHO

Iam Rich's picture

Just an aside but...

I don't think anyone under the age of 15 or 20 has even seen a ketchup bottle you need to "shake".  They are all squeeze bottles now and would look at you like you are nuts.

Something analogous to those that look at you dumbfounded about a new GD.  They have no experience with it and simply can't see it.

strannick's picture

I know plenty, except they are all from silver bull sites. Everyone else looks at me like im a barbarous relic

israhole's picture


Good luck with that $USD long play.  I hear it's a great hold for the long term, and a great way to preserve wealth.  

ATG's picture

Don't let the numbskulls talk you out of your silver...Dollars are poison

Silver may have shot its wad at $29 for some time

$USD on the other hand, targeting 115 from 70.70 March 2008 low

tmosley's picture

You just bet the farm on that one.  Zimbabwe Ben will surely do whatever it is you think he is going to do to make the dollar all better.

EscapeKey's picture

DXY 36,000!!!1!eleventyone

Somehow I disagree that a fiat currency out of a country which admits to monetizing their deficit is a really great investment.

Why don't you buy some CA municipal bonds to square your risk?

Shameful's picture

So can we get a time on the 115 USDX call?  Would love for my dollars to buy more.  Still get paid in them after all.

Bill Lumbergh's picture

As bullish as I am on precious metals, there is the possibility of the dollar going higher despite Benny and his insane actions.  I reason that the dollar like every other currency has flaws and is being manipulated lower in some manner.  Assuming the dollar is currently forming a base then we have three higher lows forming a large symmetrical triangle.  Since the dollar is the "safe haven" due to its liquidity, any European melt-down that Benny and the boys cannot manage could create a repeat of 2008.  I am trying to keep an open mind on this as everyone is bearish on the dollar and sentiment in addition to fundamentals drives the markets.

High Plains Drifter's picture

Of course, anything is possible. Let us not forget. Dollars are a commodity. They do correct  like any commodity.

strannick's picture

'I reason that the dollar like every other currency has flaws and is being manipulated lower in some manner'

Charlie Manson had his flaws too.

High Plains Drifter's picture

May we examine the product please?  Not that I would think they are lying out their asses to me. 

tmosley's picture

The bars are counted annually, and I think they are spot checked for purity.

The problem is that they are also for sale.  Why are these bars that are supposed to be held for investors for sale?  Someone could come along and buy all of the gold and silver out of these warehouses and GLD and SLV would be left with nothing.

It is quite likely that the gold and silver that are in the vault doesn't belong to GLD and SLV, but has been leased, sold, and traded a hundred times, such that there are a hundred claims on each bar there.

This will be quite the scandal.

High Plains Drifter's picture

How can they sell someone else's gold or silver, or lease it for that matter? Weird stuff if you ask me? They also have stated that in the case that they do not have product available they can pay someone off in dollars. Whoopie!!!

Shameful's picture


A long "proud" tradition in history of lending things that aren't yours and giving out certificates for more then you have in stock.  It's the fractional reserve way!  Just goes to show that the old tricks still work, even back from the middle ages.

tmosley's picture

Exactly.  They are practicing fractional reserve banking, even though they are claiming to be a vault.

A vault is a very different service from a bank.  It makes sense that this is the case, because if the warehousers weren't making money from leasing the gold and silver, they would have to charge a lot more than they are charging.  The fees on GLD and SLV are ridiculously low for what they are supposedly doing.

Arius's picture


"supposedly" is the key word...

Ckierst1's picture

If memory serves (and it serves less) I think that at least some currencies got started essentially as warehouse receipts:

There was a segue from commodity money to increasingly tenuous "representative" money (a form of secular religion since it is faith based? - this becomes oxymoronic - but there it is).  The metals ETFs are transcendant?

i-dog's picture

"The fees on GLD and SLV are ridiculously low"

That says it all. Fake Rolex watches are cheap, too.

DoctoRx's picture

There's all the stuff w sub-custodians and stuff.  And the prospectus tells you the sponsor is held harmless if those guys "lose" the stuff.  So except for the audit, who knows where the physical gold goes?

hamurobby's picture

I have to say, the leveraged paper made me a lot of silver these past few weeks. I made 20 rolls of junk silver quarters shorting the sp just today ;-)

and yes I continuously buy physical silver, however on ebay aparently everyone has found rolls of junk silver and have now created a heck of a premium at the moment :-(

israhole's picture

" Just keep buying.  Its the only move that makes sense.

Dollars are poison.  Stocks are lava.  Paper PM vehicles are time bombs.  Have nothing to do with any of them."-tmosely


You got that right!  In addition to knowing where the silver is, you help yourself by taking physical out of the market.  Choke the fuckers!

cossack55's picture

And this while Sprott is looking for the same amount to purchase.  HHHHMMMMMMM......? And what about those Asian PM vigilantes and the LBMA. WTF?

High Plains Drifter's picture

They give Sprott hell, about buying large quantities of product because he wants delivery to his possession of said product ,completely assayed for quality.