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Sprott Comments On Liquidity Disconnects Between Paper And Physical Silver Market
For all who need another confirmation that the silver physical market is increasingly more illiquid, at least compared to its infinitely dilutable and utterly mangled paper cousin, here is PSLV manager Eric Sprott himself: "Frankly, we are concerned about the illiquidity in the physical silver market," said Eric Sprott, Chief Investment Officer of Sprott Asset Management. "We believe the delays involved in the delivery of physical silver to the Trust highlight the disconnect that exists between the paper and physical markets for silver." Curiously, this has occurred even as the US Mint reports that sales of silver in December was the lowest in 2010, at just 1,772,000 ounces. It is unclear if this number was this low due to an actual supply shortage at the mint. Perhaps the fact that 2,221,000 silver ounces were sold in just the first week of January, a number which if run-rated would be an absolutely all time monthly record, should provide some clarity on this issue.
From Sprott Asset Management:
TORONTO, Jan. 10 /CNW/ - Sprott Asset Management LP is pleased to
provide investors with an update on the delivery status of silver
bullion purchased by the Sprott Physical Silver Trust (NYSE ARCA: PSLV,
TSX: PHS.U) ("Trust").
As of November 10, 2010, the Trust had contracted to purchase a total of
22,298,525 ounces of silver bullion. As of December 31, 2010 a total of
20,919,022 ounces of silver bullion had been delivered to the Trust.
The Trust expects to take delivery of the final 1,379,503 ounces of
silver bullion by January 12, 2011 and will subsequently publish the
serial numbers of all bars held by the Trust on its website: www.sprottphysicalsilver.com.
"Frankly, we are concerned about the illiquidity in the physical silver
market," said Eric Sprott, Chief Investment Officer of Sprott Asset
Management. "We believe the delays involved in the delivery of physical
silver to the Trust highlight the disconnect that exists between the
paper and physical markets for silver."
h/t Robert
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Physical Maple's Bitchez!
Physical *anything*, my "bitchez".
Maples are as good as any other.
here is SLV manager Eric Sprott
*PSLV
You beat me to it.
boricua, soy de guaynabo!
Muy bien. Por fin veo a otro boricua en este blog. Llevo mirando este sitio desde que era blogspot hace ya mas de un año. El mejor sitio financiero!
.
yo lo llevo mirando desde hace mucho ya, pero solo hace varios meses que se convirtio en algo diario para mirar.
Oye muchachos, es este sitio de repente ahora en espanol?!
Plata putas!
"Plata putas!"
I got that bit!
Plata y oro culeros!
Y no se olvide la platina y el paladio tambien!
Plata putazz.
Siete su boca tu putazzz!
yo, yep. i got the math question wrong. it fucking asked 19 * -17 = ??? I wrot ein the answer and it gave me some shit about answer couldn't be more than 2 character sor some such shit?
Another diversion to keep the robots at bay.
bro, that's incorrect. Eric Sprott manages PSLV, not SLV. PSLV is a closed fund. SLV is an open fund. Different funds. I'm doubting that he's running two different funds for different companies of the same precious metal. Conflict of interest and all.
I dumped SLV for PSLV last week. If you notice the charts, SLV doesn't trade as accurately versus the spot price.
Sprott trades with greater premium on the upside in comparison to SLV.
Actually, most of the silver bullion sites sited that due to the holidays, deliveries where suspended untill january.
sites sited
sites cited
A keen-sighted reader saw "sited" where "cited" should have been seen...
Most excellent, my first morning laugh.
we cite you with this citation for your oversight of this site.
Wow you guys are on a roll!
Cites sighted.
Yeah, right, and November 11, when they ordered that silver, was the last working day before Christmas.
It would be nice to trust the Sprott folks, given what they do for a living and knowing there is a genuine phys shortage looming (supply concerns here in India, especially on big run-up days and their immediate aftermath), this seems like the wrong source. It is in their interest to spread such news (vague of course) to stampede a small prt of the herd their way.
Silver positive of course and maybe that is all that really matters.
ORI
http://aadivaahan.wordpress.com/2010/11/13/wisdom-for-warriors-4/
the dealer i use has had problems suppling bars. when i order it takes less than 5 business days to deliver. for sprott to buy 22mm ozs and for delivery to take over 2 months tells me that there was a supply problem. it could be armoured trucks are too busy but it seems to be a common problem and has been like it for a year or two.
Same thing here breezer. Caveat Emptor is all.
ORI
The mint I use is running hard but cannot keep up. Huge orders (numbers & size) in Nov/Dec. Delivery time has doubled. Used to be 4-6 weeks now its taking 8-12 weeks.
They buy and sell Ag & Au. They're selling a lot more than they are buying.
Sure Sprott talks his book but IMO is a straight shooter. I am investing in a handful of cos of his and they are second to none when it comes to getting it right. His team(including the recent addition of Rick Rule) is about the best in the business. I see no advantage for him to mislead people about the market except for short term gains which, following him over the last decade he is anything but looking for short term gains.
Eric Sprott and John Embry think it's hittin' $50 this year...
Good to hear first-hand dogn. Thanks.
ORI
SLV was born in April 2006, with just 21m ounces of silver held in trust for its shareholders. As expected, it opened up a huge new conduit for traditional stock-market capital to flow into silver bullion. The more stock investors who buy SLV, the more silver this ETF’s custodians have to purchase to shunt this excess buying pressure directly into the underlying physical metal itself. Last month, SLV’s holdings hit a new record high approaching 353m ounces!
To put this into perspective, global silver production in 2009 ran about 700m ounces. Stock investors’ vast capital has already absorbed half a year’s worth of global silver production in the primary US silver ETF alone! This new source of capital has accelerated this silver bull while making it much more consistent than the 1970s one, because the dollar inflows are more constant
Main custodian of SLV is JP Morgue with conflict of interest by shorting silver at COMEX.
So please anyone stop writing that SLV "has silver", it is one of many fractional reserve scams embedded deeply into a system. BIS and its "gold" certificates is probably the second one, but a little bigger :-)
Harvey notes how the SLV redemptions, presumably by authorized participants grabbing physical, almost identically matches huge withdrawls from the Comex.
http://harveyorgan.blogspot.com/
Bullionbulls has an account of double counting SLV in physical inventories.
Physical silver in your possesion puts one beyond the reach of such terms as 'unallocated' 'authorized participants' and 'double counted'
And to put that inpersepctive, JPM has 3.9 billion shares outstanding.
@SuddenDebt
Giving Adam Hamilton credit for his words would go a long way toward enhancing perception of your own integrity.
There are cheaper and more anonymous outlets than buying directly from the US mint: aka Joe Blow who needs some dough to feed the family.
I'm on a waiting list.. well, been on a waiting list for physical silver from my local dealer. Some 50 deep but am waiting.. shit, since silver was 14 in the summer.
No one should be waiting that long. What exactly are you looking for?
http://silvergoldbull.com/s/
expectation of a $45 to $60 silver price before summer 2011:
http://www.marketoracle.co.uk/images/2010/Dec/silver-14-1.jpg
QE ready to be unleashed to stick-save the likes of BBVA?
uhhhh, curious what that has to do with the subject matter of the thread?...other than QE ultimately raising PM's further.
Not looking good with that "world record volume"...
LOL
Robot, what are those cryptic abbreviations on the x-axis of that chart --- "Jan", "Jun", "Sept"? You ought to know by now that it is only HOURS that matter to a real trader like yourself --- nothing beyond a 24 hour time frame! It's all short-term, baby, SHORT TERM!
been Cdaded
Why did Harvey Organ's blog used PHYS when it quotes the price of this Sprott Silver Trust ?
Read it again it first uses GLD and SLV and immediately following that uses Sprott Silver and Gold.
The mainstream media(MSM) is working diligently turning the US into a nation of pussified sissies with their social engineering. They spin every tragedy into human interest stories and makes every issue about personalities. A good example of this is they will focus on 9 year old that died in Arizona, drolling on endlessly about it and making everyone all weepy over it. TV reporters are mandated to do this by their corporate overlords, and if they don't, they get fired just like they fired Alex Jones in his early days. It's a form of mind control.
The Internet is reversing decades of social engineering in a matter of years. Thanks should be given to Ron Paul and his movement that started the Tea Parties also, for helping to make us more aware. That is why our corporate overlords hate the Internet so much. The Internet helps us understand this problem by letting us articulate the truth, thus reversing the mind control.
Americans are not designed to be socially engineered. When will they get it?
Shit happens. Get over it. Move on. You still have a better chance of being killed by your bath tub.
The Press and mortuaries grow rich on tragedies. What a business model.
" Curiously, this has occurred even as the US Mint reports that sales of silver in December was the lowest in 2010"
Tyler,
The US Mint stopped making 2010 Silver Eagles around November so it makes sense that December would show the lowest sales: they didn't have much to sell.
physical in short supply and yet the producers of the same silver getting pounded?
Gold. Gold will be CRUSHED ..Silver? Eh, not so much.
You remember the rumble in the jungle? Unless a viewer was highly observent, one would have thought Ali was getting beat up. It wasn't the case. Foreman tired himself out throwing haymakers. Fiat vs gold is the same fight. Paper is tired, and gold is about to light it on fire.
Also, if gold did go down significantly, it would ruin every Central Bank balance sheet in the world. With Fraudclosuregate, and tax revenue problems, the banks need those ledgers to be at least somewhat balanced.
If you're riding the paper tiger, can you ever get off?
You get paper cuts.
I'll try to keep your comments in mind while the gold bull-train steams full speed up your ass as it passes the 1500, 1600, and $2000 marks...
So feel free to stay bent over on the tracks - I need tool bags like you to take the other side of my trades.
Cheers! Choooooo Chooooooooooooooooo
Sincerely Yours,
Nathan Wind
http://lhmarketwatch.blogspot.com/2011/01/price-of-physical-precious-met...
Yes, that's right. The premium is more than 30% now.
just to point out the obvious - Sprott has just positively admitted that PSLV owns some paper silver, and has owned such paper silver since Nov 20th... the irony is especially sizzling, considering the hysteria that would have resulted if SLV were revealed to be holding "contracts" to purchase silver bullion.
How did zero hedge not run with the headline "SPROTT ADMITS THAT PSLV OWNS PAPER SILVER, NOT PHYSICAL SILVER BULLION" ????
Because it's not true.
Waiting for delivery of paid for silver equals holding paper silver?
when you've already sold the shares backed by that bullion, in a fund called the Sprott Physical Silver Trust, which was created because people had exactly these fears about SLV? absolutely!
So you suggest Sprott to buy the silver out of pocket and then issue shares? SLV is nothing like his fund. It is not properly audited and people are worried about it being a total sham and fraud (little to no silver backing). Calling them the same is not accurate at all.
A silver positive form cnbc. Must be getting serious:-)
'Not Owning Gold is a Form of Insanity': Chartisthttp://www.cnbc.com/id/40997445
Now you have made me worry........
Gold, along with other metals such as copper, has been making new all time highs, which is a strong buying signal, according to Griffiths.
Funny....no mention of "silver"???
I think gold is going to take a big fall and silver shoot to the moon.
Just my personal opinion...gold serves no real purpose in our lives, silver is in everything.
Gold=optional - yes, it's pretty...
Let's hope parity silver = gold. LOL.
Per HR 6162 (already signed by the big O), the language "the Secretary shall mint and issue, in quantities sufficient to meet public demand" has been changed to "the Secretary shall mint and issue, in qualities and quantities that the Secretary determines are sufficient to meet public demand".
My read of this is that Tim Geithner will be able to set coin production volume and purity, specifically Silver Eagle production, at whatever level he sees fit. That in turn means upwards of 40MM ounces of US silver supply will not be sponged by the mint to satiate a panic stricken J6P at big premiums but could instead act as a new supply for banks who are short on the COMEX.
If you note the date this passed ... and compared that to Dec US Mint volume ... which historically is the biggest volume month of the year ...
Cooter
Buy Maples
and Libertads!
deleted
Wow, you are absolutely right... not sure how I'm just now becoming aware of this... We might be looking at 2012 zinc American Silver (plated) Eagles - for the sheeple.
Good catch Cooter. Thanks.
Hey guys, if you want to invest in silver do you need to buy physical or would investing in a silver mining company be enough? I assume etfs aren't worth the paper they're written on
Miners will turn profit, but they pay out in paper. There will be a point when paper is worth the ink on it and nothing more. There will be a disconnect between the spot price and paper price when COMEX runs out of bullion to deliver. It is best to hold the metal.
FurQ nice bush†
"Georgia" Bush.
Eric Sprott could eat no fiat, while Max could eat no lien.
(from the fairy tale titled "bang, bang, Maxwell's silver rattle came down on J. P.'s head)
For the 7 fables of counterparty silver, click here: http://tradewithdave.com/?p=4712
My bet is that the CFTC will vote to pass position limit sizes. It's all about incentives, the CFTC regulators will, at the end of the day, try to save their reputations before the paper market crashes the COMEX and the commodities exhange loses all integrity.
Sprott starting a real, no-shit backed trust with Silver was genious. His "Double-Barrel" piece was genious, re: for any hedge funds that want to make some waves and shred some markets for serious gains, all you have to do is go very long.
It's happening. The Silver market will end the year north of 60 and Blythe can suck my toes. How many times in a lifetime does one get to pummel one o f the largest and crooked trading desks in the world?
Indeed. But this leads me to china. Even if the Chinese are, in fact, the culprits behind the artificial manipulation of silver--which is being aided and abetted by JPM--and are using the low price to absord as much real physical silver as possible, which is a real possibility given their manufactoring needs with Silver, one still exposes JPM is a big way: letting China get another huge edge on the U.S. will be sure sign of JPM anti-American initiatives even to the sheeple. With all the Silver, we'll never be the manufactores of all things shiny: solar, batteries, etc.
If this is so, it'll be fireworks time, boys. This will be seen a the first real, large scale ecoconic nuke sent to us courtesy of our "trading partners."
And what will follow will likely be real bombs, and wholly due chaos. Stay in the bunker, gentleman, and remain out of sight, but don't give up ground. The fight is well underway.
wouldn't surprise me if JPMorgue has set up a dummy company to which it is "selling" its comex short positions and once those positions are all out of Morgue's books, silver rockets and dummy company goes bankrupt.
I am going to give Eric Sprott a mega-DUH.
The reason paper and electronic markets exist is because of the horrible illiquidity of physical markets. If I have to ship a gold bar to Hong Kong to complete a transaction instead of updating a screen and warehouse transaction is recorded, I am going to opt for the warehouse transaction.
The key is that the warehouse needs to be trusted. Trust is the basis of liquidity. When trust breaks down, liquidity breaks down.
Lot of silver for January, a lot.
Tyler,
Check out some valid criticism of Sprott's PSLV:
http://fridayinvegas.blogspot.com/2011/01/silver-irony-pslv-slv.html
This weekend, BullionVault issued a warning to customers over delays with silver deliveries (incoming silver supply). Currently it's just a delay, but this is new for them.
http://www.bullionvault.com/help/?liquidity_warning_20110107.html
Delays to Sprott, GoldMoney and BV were my litmus test for true shortages. Still watching.
"It's not a shortage, just a delay".
Jon Nadler
"The US Banks are not bankrupt, just insolvent."
"The subprime crisis will be contained, and will not spread to the broader economy."
"Japan has never been conquered by a foreign nation".
"Britannia rules the waves."
"Rome is forever."
Keep stackin'
http://www.youtube.com/user/BrotherJohnF
Morgans bitchezz!
Real American history pre-Federal Reserve.
Morgan Silver dollars, yup that's what I sell. Thanks for the pump!
www.JackLeeCoins.com
Junk silver FTW. Premium charged right now is fridiculously low.
Force Majeure, has not been talked about.
If you go back in time folks,...to I believe mid 70-'s, there was an interesting case, involving Mr. Simplot, and the potato market and the futures contracts.
(I was a commodity broker shortly after the event took place, and it made a lasting impact on me as to how the big boys play the game. It has serious implications for the current market in silver and may be used again.)
It was a huge default (for the time), which ended the Maine and other contracts. Many people were screwed. Big guys walked away. Now, how they were able to get a Force Majeure ruling is the key question.
The fine they had to pay was a pittance.
Silver market is more public, so the screaming would be quite loud in many places (I would guess Hunt Brothers x10 level).
I'm sure they'll try to get away with as little as possible though.
You want to see our Bullion? http://atlasshrugs2000.typepad.com/atlas_shrugs/images/stinking_badges_1.jpg
I am trying not to leave a crumb of Silver behind for the investment bankers to find. Help with our cause and scoop up all of the Argent available at a retail level in Portland Oregon. Fire for effect.