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Physical Silver Surges To Record 30% Premium Over Spot, In Backwardation

Tyler Durden's picture


One of the main reasons why we have been not so focused on paper representations of real currencies (i.e., gold and silver) is that ever since the MF Global debacle, in which it became all too clear that if physical gold can be "hypothecated" via conflicting ownership, then there is no way that paper versions of precious metals are viable and indeed credible. After all, the only real owner at the end of the day is the certificate holder, which as we have explained before, is none other than DTCC's Cede & Co. Good luck collecting when the daisy chain of counterparties starts falling. Which leaves physical. And for a good sense of what the "real" price of the metal is, not one determined by institutions whose interest it is to preserve the hegemony of paper, one can either try to procure gold and silver at a retail merchant, or one can look to the premium of a dedicated physical ETF over spot. Such as Eric Sprott's PSLV which as of today is trading at an all time high premium of 30%! In other words, someone is willing to pay up to 30% over spot for the right to be closer to the physical metal than merely have a paper claim on a paper claim (pre hyper rehypothecation and what not). Incidentally the last NAV premium over spot record was back in April 2011 just as silver went parabolic and the entire commodity complex experienced the infamous May 1 takedown when it collapsed by $8 dollars in milliseconds on glaringly obvious coordinated intervention. Said otherwise, like back then, so now there is an actual shortage, manifesting itself in the premium. And while last time its was the price plunge which eased supply needs, we are not so sure how one will be able to spin a collapse of the current, far lower paper silver price.

But wait, there's more: As Keith Weiner explains below, silver also happens to be in backwardation. While we have covered the topic before, here is Keith with his explanation of what this means, although for those who like the punchline here it is, as above: shortage.

The Arbitrageur: Silver In Backwardation

March silver has been flirting with backwardation since the end of 2011, and today it has moved more firmly into backwardated territory.  This is extremely bullish for silver, and let me explain why.

Backwardation means (and I am oversimplifying a bit here) that a futures contract is cheaper than buying the physical good in the cash market.  To understand the meaning of this, the first question is this: Is it possible to warehouse the good?  If not, then the futures market is simply the market’s opinion of what the price is likely to be on the contract expiration. 

Silver, unlike interest rate futures for example, can be warehoused.  This means it is possible to simultaneously buy physical silver in the spot market and sell a future in the futures market.  One has no net exposure to the price.  One is exposed only to the spread.  This is a simple arbitrage.  One can “carry” a good (buy spot, sell future).

The possibility of this and other arbitrages in a good that can be warehoused changes the whole structure of the futures market.  One cannot look at the price of March silver as a prediction of the March price.  Absent a shortage or other anomaly, the March price should be close to the spot price + the cost of carry (interest rate and storage).  March silver should be at a slight premium to spot silver.  This condition is normal, and it is called “contango“.

But that is not the case for March silver (or Jul 2013 and beyond).  Those contracts are priced too low for anyone to make any money carrying silver. Instead, it would be profitable to de-carry silver.  See the graph for a picture of the basis (the annualized profit one would make to carry) and the cobasis (the profit to de-carry).  The basis is negative and falling; the cobasis is positive and rising.

A de-carry is the inverse of a carry.  One simultaneously sells silver, and buys a future against it.  Silver (and gold) are unlike all other commodities in that the above-ground inventories are massive, compared to annual mine production.  Whereas in wheat, for example, there is a genuine shortage before the harvest.  If one wants to buy wheat two weeks prior, one must pay a large premium compared to the first contract settled after the harvest.

In a normal commodity, backwardation means shortage.  The backwardation develops because no one has any of the physical good.  So they cannot decarry it, and thus the spot-future spread can go deeper and deeper into backwardation.

But in gold and silver it means something else entirely.  People have the metal.  But for whatever reason(s), they choose not to take this free money.  In the silver market right now, trust is in short supply.  In the past (think fall 2010 through spring 2011), this has been resolved by sharply rising prices which coax fresh metal out of hiding.

Originally appearing at The Daily Capitalist


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Fri, 01/06/2012 - 16:16 | Link to Comment dereksatkinson
dereksatkinson's picture

Took you long enough.. Getting slow with age.  ;)

Fri, 01/06/2012 - 16:27 | Link to Comment nope-1004
nope-1004's picture

No other investment is more obvious at this time.

Physical silver MUST be bought.


Fri, 01/06/2012 - 16:28 | Link to Comment tmosley
tmosley's picture

At the same time, everyone should note tht PSLV is NOT physical.  Sprott is a good person so far as I can tell, but one angel isn't much help when you dive headfirst into a sea of paper controlled by demons.

It is probably good for those who can't get their money out of the system, though.

Fri, 01/06/2012 - 16:35 | Link to Comment bernorange
bernorange's picture

I've been watching the inventory of 100ozt silver bars at apmex fall to very low levels over the last few weeks.  Tulving is also reporting a very low inventory (for them at any rate) of silver.  It feels like February 2011 all over again.

Fri, 01/06/2012 - 16:38 | Link to Comment tmosley
tmosley's picture

It's been a long time since I saw any 1000oz silver bars for sale ANYWHERE.  I wonder why that is? ;)

Fri, 01/06/2012 - 16:53 | Link to Comment XitSam
XitSam's picture

So when or how does this premium over spot show up in the price of silver eagles or 5 and 10 oz bars?

Fri, 01/06/2012 - 16:58 | Link to Comment trav7777
trav7777's picture

bullshit article by Tyler; PSLV is paper, not silver.

Real silver is not 30% over spot. 

Fri, 01/06/2012 - 17:00 | Link to Comment fuu
fuu's picture

Right on schedule.

Fri, 01/06/2012 - 17:11 | Link to Comment BaBaBouy
BaBaBouy's picture

Remember Gringos, The Cabale controls the Dollar Price of PM's.


So no matter the REAL PRICE should be AU $25,000 and AG $200., the paper price is what Matters.


Mr. Ben Shalom has UNLIMITED PAPER FIATS to keep this SHIT going. Until he doesn't...

Fri, 01/06/2012 - 17:20 | Link to Comment francis_sawyer
francis_sawyer's picture

125-1 ratio???

Fri, 01/06/2012 - 17:31 | Link to Comment BaBaBouy
BaBaBouy's picture

Well just sayin'...


If they eventually try backing a good portion of the paper fiats out there right now with PM's, it could be $55,000, AU and $650. AG.


Watch that 10K Chain on your neck...

Fri, 01/06/2012 - 17:37 | Link to Comment BaBaBouy
BaBaBouy's picture


The Hedge Funds and CB's of the future will be trading Van Gogh paintings and Gold, instead of the Worthless Paper Promisses of today...

Fri, 01/06/2012 - 18:00 | Link to Comment Stax Edwards
Stax Edwards's picture

Silver Nuts:

TD is providing you with actionable advice that you could use to get more of your precious silver by simply selling what you have now and buying a futures contract for delivery later.  I am baffled by your reactions.  You are a fickle bunch with a penchant for losing money and poor reading comprehension skills is all I can figure.  Try reading the damn article you clowns!

Fri, 01/06/2012 - 18:02 | Link to Comment tmosley
tmosley's picture

Pfft, yeah, then we can get MF Global'd.  No thanks.

Fri, 01/06/2012 - 18:07 | Link to Comment francis_sawyer
francis_sawyer's picture

TD is providing you with actionable advice that you could use to get more of your precious silver by simply selling what you have now and buying a futures contract for delivery later...

Tell you what... Why don't you just sell me all your physical now (paper spot), and then you can go buy all the future contracts you want with the "bride of MF Global" or whoever & we'll call it a day...

Fri, 01/06/2012 - 20:15 | Link to Comment Pants McPants
Pants McPants's picture

Well said, sir.

Fri, 01/06/2012 - 21:30 | Link to Comment clymer
clymer's picture

Hey Trav (sevensevensevenseven):

I was going to respond with a snide retort, but your aggressive looking image caused me pause..


Fri, 01/06/2012 - 19:00 | Link to Comment NotApplicable
NotApplicable's picture

Yet no one with any sense will do so. Not even those on the street, who never turn down "risk-free" money. 

If you're not trolling, go read Prof. Fekete's "Last Contango in Washington." It might help you understand where the risk really lies.

Fri, 01/06/2012 - 22:03 | Link to Comment Ponzi Unit
Ponzi Unit's picture

Did Stax forget "sarc off"?

Fri, 01/06/2012 - 17:22 | Link to Comment you enjoy myself
you enjoy myself's picture

until June that is....

Fri, 01/06/2012 - 17:34 | Link to Comment lunaticfringe
lunaticfringe's picture

Nothing lasts forever. Not even this.

Sat, 01/07/2012 - 00:17 | Link to Comment Marigold
Marigold's picture

Your Gold / Silver ratio is a bit out, I would suggest you recalculate to reflect reality.

Fri, 01/06/2012 - 19:25 | Link to Comment trav7777
trav7777's picture

you have some problem with the truth, fuu?

Real silver is NOT 30% premium to spot.  The headline is a lie.

Fri, 01/06/2012 - 20:13 | Link to Comment fuu
fuu's picture

I'm fine with the truth. I also agree that physical silver can be had for under a 30% premium.


Isn't PSLV Physical Silver Trust? "So Physical Silver Surges to record 30% premium to spot." See it was a clever bit.


Bonus round: Does the spot in the title refer to physical spot price in the retail market or the spot price of the silver owned by the Trust per share?

Fri, 01/06/2012 - 21:22 | Link to Comment Manthong
Manthong's picture

Spot price reflects risky counterparty paper in a rigged exchange that is levered to the moon and undependably convertible to physical silver (ask anyone long silver in the COMEX in May of last year).

In that sense spot price is discounted to the real thing and represents a continuous buying opportunity at retail today.

Paper that is unlevered and dependably convertible to physical silver (within the terms of the PSLV trust program) carries a 30% premium.

I submit that the premium will go much higher and is a reflection of the both the real price and decoupling of the commodity from the derivative.

Fri, 01/06/2012 - 17:07 | Link to Comment TradingTroll
TradingTroll's picture


Just like in '08 when the boyz in the theatre were crying wolf over shortages, here in Vancouver Canada it was-and still is- all you can eat for 7% over spot. Check yourself:

Fri, 01/06/2012 - 17:13 | Link to Comment tmosley
tmosley's picture

Spam site.

Fri, 01/06/2012 - 17:50 | Link to Comment TradingTroll
TradingTroll's picture

Fuck you tmosley. I have watched your inane postings the past year, and I would rather have a discussion with a can of spam. I hope you have to pay 100% premiums. Thankfully I have many more brain cells than you and in 2003, when 1USD bought $1.50 Canadian, made the correct decision to move from Seattle to Vancouver, because at least in Vancouver we have something called an economy (I know, quaint) and a middle class (I know, old fashioned) and I can't get my neighbor infinitely detained because his dog crapped on my lawn.

The little house I bought in Vancouver in 2003 for $450,000 is worth $1.3m today. I just got the mail from BC assessment.

You are just an early example of the cesspool the US will become. By 2016 the President of the US won't represent the status quo, which might be important to you because you aren't the President. So unlike when your crack-whore girlfriend, or your AA buddy, or the guy behind you at the payday loan center, calls you a loser, in my case when I call you a loser it is 100% true. Youy can take it to the bank. Where they will remind you it must be a Canadian bank.


Fri, 01/06/2012 - 17:53 | Link to Comment tmosley
tmosley's picture

Fuck me?  You are the one posting a spam site that goes no-where while making nonsensical claims.  I was a buyer of silver in 2008.  You lie when you say that it was easily available.  It wasn't.  The largest sellers had a turnaround that was four times longer than normal.

And enjoy your real estate crash, you idiot.  "It could never happen here".  Herp.

Fri, 01/06/2012 - 19:05 | Link to Comment NotApplicable
NotApplicable's picture

Wow, looks like you found his launch button.

In other news, there's still someone left who brags of home price appreciation. How quaint. Of course, it's that tax-man that did the appreciating, so I'm getting a kick out of it.

Fri, 01/06/2012 - 19:18 | Link to Comment Hephasteus
Hephasteus's picture

I did chuckle. But I gave him 2 points for being smart enough to get the fuck out of seattle.

Tue, 01/10/2012 - 14:39 | Link to Comment wkwillis
wkwillis's picture

greaterfool is the website for the Canadian real estate market. Funny, but repetitive.

Fri, 01/06/2012 - 19:21 | Link to Comment oddjob
oddjob's picture

I think he might of meant , which strangely enough is where I Buy my Maples.

B.C. property assessments came out yesterday, everything down except Vancouver.

Fri, 01/06/2012 - 20:13 | Link to Comment TradingTroll
TradingTroll's picture

My house is up 7% over last year. North Vancouver.

I will take the tax hit thanks.

Tony Ma runs VBCE. Lineup everyday. More mining guys in there buying PMs than any other PM dealer in N. America. Never an Ag or Au shortage. Quartermain (SSRI, PVG.TO and Giustra (Lions Gate etc) and Beatty (PAAS) are clients

But Mosley can't find the PM quotes on the website!!!

Someone as dumb as him should be paying 50% over spot. Edit: should not be allowed to buy PMs

Fri, 01/06/2012 - 20:19 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Why aren't you doing the smart thing and selling your overpriced home and buying undervalued PM's?


Fri, 01/06/2012 - 20:41 | Link to Comment akak
akak's picture

Because he is in Canadia now, where the follow-the-herd mentality is, if anything, even stronger than in the USA --- particulary in British Columbia, the capital of smug conformity, hyper-political-correctness and statist central-planning fantasies.

Fri, 01/06/2012 - 21:46 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

I used to live there in that overpriced scam of wanna be rich people who masqurade as homeless people. I remember 10 years ago when we would be demolishing 1950's era houses on quiet streets and little lots in the city because the new owner wanted to put up a 3-story McMansion on the lot. The property alone without a house on it was $500k. Property taxes were unreal, even then.

We tore down many beautiful old houses, and literally transformed 1940-1950 era neighborhoods into some of the most stunning pieces of modern architectural SHIT you've ever seen. It was like erasing history. And nobody gave a shit. And everyone lived happily ever after saving the whales and hugging trees as history was destroyed in their pursuit of their own ambitions and wannabe status as they try to blend in with the truly rich... but can't quite cut it. They've got million dollar properties and can't even afford to pay cash for their morning Starbucks as they shuffle off to work pretending to be what they are not.

Fri, 01/06/2012 - 22:24 | Link to Comment WonderDawg
WonderDawg's picture

Well said, uh... dude. A clearly painted picture of the "zeitgeist" of that society, and an accurate microcosm of what has transpired in cities across the US as well.

Sat, 01/07/2012 - 01:54 | Link to Comment Dave Thomas
Dave Thomas's picture

I've gotta give creedance to his story though. The same thing happened in my neigborhood down south. Little 1950s ranch homes demolished for big McMansions. It's only a matter of time till the Jumbo loans stop, and the madness stops too. Just to the north of us is the largest community of low income folks in the region. It will look just like Detroit when the taxpayers leave. It was pretty heddy for a while there, when the boom was going it was the next Shangi La. Now it's only bidding time. That quick commute will give way to the fact that pesky home invasions are on the uptick. And then it's game over.


Fri, 01/06/2012 - 23:06 | Link to Comment Sockeye
Sockeye's picture

Up arrow for you.

Sat, 01/07/2012 - 10:25 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

Bay of Pigs posed a sensible question when asking:

Why aren't you doing the smart thing and selling your overpriced home and buying undervalued PM's?

Because the only person that thinks TradingTroll's "investment" is worth 1.3 million CAD is the tax assessor, whose motivation is to assess homes' values as high as he can get away with.

If TradingTroll were to sell today, he'd realize a profit over his 2003 purchase price of 450,000 CAD, but I don't believe he'd get over 1 million CAD. If he's smart, as the deflating real estate bubble in BC spreads to Vancouver, he'll sell for any reasonable offer, because he who panics first panics best. If not, any profit gained on his "investment" of 450,000 vintage 2003 Canadian Dollars will be nominal only.


Fri, 01/06/2012 - 20:56 | Link to Comment tmosley
tmosley's picture

Click on the link you posted, idiot.  It is an unregistered domain that goes to a spam site.

I wonder why you are so tremendously defensive?  It speaks volumes to your insecurities.

Fri, 01/06/2012 - 21:54 | Link to Comment vamoose1
vamoose1's picture

you fucking horses ass.  you  probably  buy  a  couple  rounds at  a time,   try  buying  ten  million  dollars  worth asswipe

Fri, 01/06/2012 - 17:54 | Link to Comment JPM Hater001
JPM Hater001's picture

I have 3 cases of spam and would be happy to arrange a meeting for a fee.  Or if you would like I can line them up on chairs and you can present to them as a group.  There is a group discount.

Fri, 01/06/2012 - 19:34 | Link to Comment TruthInSunshine
TruthInSunshine's picture

It's a great time to buy a house in Canada (or Australia - or anywhere, bitchez)!

The guy who is chock full of confidence because of what his local Pound of Flesh assessor's office claims "his house" is now worth is hilarious. Don't mind what the assessing offices in Clark County, NV, Glencoe, Il, or Malibu, CA were telling homeowners their homes were worth in 2006.

And Canadian banks are very well capitalized, amidst a cheery Canadian Economic Backdrop, too.

*Brought to you buy RE/MAX Canada & The Canadian ASSociation of Realtors, proud sponsors of The 2012 Curling Championship @ The Devonshire Mall Lanes.

**p.s. - There actually are a very few places left where acquiring real estate right now may pay off, but these areas are few and far between, you're going to be up against those running OPM in competing with them to acquire it, and it's no skin off their sack if those investments actually end badly, also, as they have none of their skin on the table.

Fri, 01/06/2012 - 20:55 | Link to Comment Prometheus418
Prometheus418's picture

I don't know that I agree with that.

It's a matter of what you intend to do with the houses- while it's true that it's a fool's game to take on maintainence and property tax on empty homes with the hopes that the market will recover right now, I would imagine that a guy who put the time in to learn how to purchase foreclosed properties and reinvented them as rentals could do pretty well.

Even though people lost the homes they "owned," they still need a place to live, and someone who previously held a mortgage is more likely to want a house to live in than readapting to apartement complex life.

I don't like it better than PMs, but it is a reasonable play right now.  Shelter is one of the most basic human needs, and while the property itself may not appreciate- or even continue to depreciate- it does still have the potential to generate a monthly income for the deed holder. 


Fri, 01/06/2012 - 21:20 | Link to Comment Hephasteus
Hephasteus's picture

Or we could stop pretending for one second that we do not have a horrible fucking problem with the state which makes the though of buying property a stupid ass move until it's fucking evicted from your life.

Sat, 01/07/2012 - 11:19 | Link to Comment DosZap
DosZap's picture


Two good friends have both done that, and are making good rents, on good homes.And, in a basically NON depressed area.

Fri, 01/06/2012 - 22:58 | Link to Comment blunderdog
blunderdog's picture

The catch is going to be how to finance it all.  You have to be in good enough shape to have a downpayment and eligibility for the loan.  The folks who are in that kind of financial shape often aren't interested in becoming landlords.  Landlording is just another fuckin' job.

Fri, 01/06/2012 - 23:11 | Link to Comment TruthInSunshine
TruthInSunshine's picture

There will be many catches.

Speaking from experience, one of those "catches" will be competing with Uncle Sam, and as just one example of what you're competing with in terms of a owner-rentor experience, Freddie Mac announced today that those who are unemployed get one year's of mortgage payment forebearance, bitchez!

Free Markets, Dolla' Dolla' Bill, Y'all!

Freddie Mac Is Going To Give The Unemployed A Break On Mortgage Payments For Up To A Year
Sat, 01/07/2012 - 00:36 | Link to Comment Prometheus418
Prometheus418's picture

Fair call from the previous poster who said that being a landlord is just another job- it is.  I'm not afraid of work, but even so, I do better engineering than I would renting out property- it was just an observation that housing is only useless if you intend to flip it.  I don't imagine we'll see new McMansions again anytime too soon, but that doesn't mean everyone is going to move into tent cities.

As far as the mortgage forebearance goes, that doesn't mean much to a landlord, as it is directed at mortgage holders, not renters.  I did meet a guy about 10 years ago who was essentially a slum lord- he rented crappy places out without credit checks and didn't charge much.  His favorite renters were housing assistance slobs, because even though they rarely came up with their $30-40 portion of the monthly rent, he always got the checks the state made out for them.

It's like anything else, all in how you play it.

Sat, 01/07/2012 - 02:15 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Mortgage forebearance by Freddie Mac/Banks (pressured by Uncle Sam) directly impacts private developers/owners of rentals, as those dispossessed of housing 'owned' on mortgages would have no alternative but to find alternative rental housing (or, in a highly unlikely scenario, given their recent dispossession on 'ownership,' a newly purchased home), which would fill more now empty (or semi-rented) rentals and drive rents higher.

Paying a mortgage on 'owned' property vs paying rent really doesn't amount to much of a difference over the short term, discounting for what used to be known as a slowly building equity value (timely acquired in the form of an alternative means of savings - even if alternative investments using the money allocated towards the mortgage+taxes+maintenance+expense would have yielded greater returns).

When people get to live in homes free of mortgage payments for long stretches of time, and when the MAC DADDY (pun intended) that is Freddie Mac now agrees to another year of mortgage payment forebearance (i.e. free rent), it directly impacts rental rates and occupancy rates for landlord competitors in the private sector.

Fri, 01/06/2012 - 17:28 | Link to Comment Bay of Pigs
Bay of Pigs's picture

Bullshit. I called several dealers then in the Vancouver/Victoria area. Nobody had any physical for a few weeks.

Fri, 01/06/2012 - 20:21 | Link to Comment TradingTroll
TradingTroll's picture

4:15pm Pacific
Called VBCE spoke to Edmund at head office
10x 100oz Ag bars 7% over spot

Other VBCE locations have stock for larger orders

Fri, 01/06/2012 - 20:39 | Link to Comment Bay of Pigs
Bay of Pigs's picture

In 2008. Not now.

Fri, 01/06/2012 - 20:56 | Link to Comment tmosley
tmosley's picture

He really is a child, isn't he?

Fri, 01/06/2012 - 22:10 | Link to Comment vamoose1
vamoose1's picture

thats complimentary, a psychotic bank clerk  without 2  nickels that ever met

Fri, 01/06/2012 - 17:21 | Link to Comment francis_sawyer
francis_sawyer's picture

I've heard it costs 30% more to dig paper silver out of the ground...

Fri, 01/06/2012 - 17:31 | Link to Comment akak
akak's picture

But it's still only $5 regardless.

The Mathematics of Methman:

$5 + 30% = $5

Fri, 01/06/2012 - 17:39 | Link to Comment francis_sawyer
francis_sawyer's picture

The Mathematics of francis_sawyer:

$5 [of worthless fiat = 0] + 30% = $0

Fri, 01/06/2012 - 18:12 | Link to Comment dugorama
dugorama's picture

extraction costs are unrelated to balancing supply and demand (which is the role of the price mechanism in a (quasi) free marketplace.  The Saudis (or their errand boy American oilmen) can bring crude to the pier for less than $1/bbl FOB.  That has almost no relationship with the daily fluctuations in the price. 

Fri, 01/06/2012 - 20:14 | Link to Comment Hohum
Hohum's picture

Post a link.  Because I think you are full of **it.

Fri, 01/06/2012 - 21:40 | Link to Comment mick_richfield
mick_richfield's picture

What's that shit at the end of your post?

Fri, 01/06/2012 - 20:55 | Link to Comment SILVERGEDDON

No - it costs 30 percent more to scrape the paper silver out of the butt crack it has been rammed up previously, clean it off, and re-insert it up your own asshole. Manually. At a FUCKING PREMIUM ! Brilliant investment, fun seekers.

Fri, 01/06/2012 - 17:32 | Link to Comment lunaticfringe
lunaticfringe's picture

People are missing the point. There is going to be a decoupling of paper from physical silver. This is how it starts. I fail to understand why people think this is so odd. Be thankful dealers are willing to sell it at 30% below its actual worth. They haven't caught on. They will.

Fri, 01/06/2012 - 20:35 | Link to Comment Max Fischer
Max Fischer's picture



Be thankful dealers are willing to sell it at 30% below its actual worth. They haven't caught on. They will.....

Wait a minute...

You actually think the NAV premium of PSLV is the REAL price of spot silver, and only the shareholders of PSLV understand the true value of silver?

Sorry to be blunt, but this is EXACTLY why the silver community is INFAMOUS for being the most ignorant, dis/misinformed segment of investors anywhere. It's amazing.  I truly wish I was a coin dealer just to experience what it's like to have an ENTIRE customer base of paranoid, gullible extremely passionate idiots foaming at the mouth with conspiracy and bad information, and more than willing to get totally ripped off.  That must be the most desirable group of consumers for any retailer, anywhere! 

Price doesn't matter!  "If you buy this silver coin for 30% more than it's worth, JP Morgue will be bankrupt before summer!  Here, just watch this cartoon....."  


Fri, 01/06/2012 - 23:09 | Link to Comment Quinvarius
Quinvarius's picture

Why did you short something 30% under the price people are willing to pay?  That is the real question.  You'll probably get MF Globaled with forced by in around 120 because your broker was stupid enough to lend you the money to do it.  It goes both ways.

Fri, 01/06/2012 - 17:33 | Link to Comment Poor Grogman
Poor Grogman's picture

I almost agreed with you for a second, amazing..

If you want to get a feel for freely traded physical precious metal prices just watch eBay..

Fri, 01/06/2012 - 18:39 | Link to Comment XitSam
XitSam's picture

I quit dealing on ebay over 10 years ago after almost getting ripped off for some gold. Just looked again, ridiculous prices for ASEs with no bids. LCS and APMEX may not be cheapest but way better than that.

Fri, 01/06/2012 - 18:48 | Link to Comment mortiis
mortiis's picture

I bought most of my physical from ebay in '08 and early '09.  It was usually near spot back then and MSFT was also paying 8% CASH back ( promotion) and ebay 2%.  It was a fantastic deal!  MSFT stopped their program in July of '10? and ebay no longer gives 2% on bullion (since Nov '11).  That and the prices have exploded to way over spot...  twas good while it lasted.

The MSFT deal was awesome because if you purchased enough (which I did) you got the cash IMMEDIATELY and I would turn around and use it to buy more.

Fri, 01/06/2012 - 21:51 | Link to Comment Angus McHugepenis
Angus McHugepenis's picture

I've been a computer geek long before AlGore invented the intertubes and eBay. I have never, nor will I ever, use that scam called eBay. If you like watching your profits vanish into a pit of eBay fees then by all means go ahead and use their service. I won't even start harping on PayPal. Craigslist is also a piece of shit, but at least it's free. I stopped using Craigshit a couple years ago when it seemed every ad I placed was getting deleted due to their ambiguous TOS rules. Not sure how power tools and other harmless gear made it to their flag list but it did. Fuck, I could have listed baby clothing for sale and it still would have been flagged and deleted. Meanwhile you can scan the list of ads for deviants who will fuck your pet turtle and goldfish for a price, but I can't sell good quality used tools without getting flagged and deleted? WTF?

Fri, 01/06/2012 - 22:19 | Link to Comment AgShaman
AgShaman's picture

You seem angry

Might I suggest buying some's very relaxing

....and it helps you sleep at night knowing there's a bunch a folks workin' their asses off to dig it outta the ground

....while there's a bunch more trying to convince us it only takes $5 bucks to get it above surface and on it's way to market

Fri, 01/06/2012 - 17:47 | Link to Comment Haddock
Haddock's picture

Tyler is comparing one form of paper over another. Non-story.

Fri, 01/06/2012 - 17:57 | Link to Comment jesusfreakinco
jesusfreakinco's picture



What is your point?  The fact that PSLV is 30% over spot is indicative of what?  Worship of Sprott?  Check out Apmex - some silver coins like the Pandas are running at significant premiums.  Check it out if you are not convinced. 

Fri, 01/06/2012 - 19:29 | Link to Comment trav7777
trav7777's picture

My point is thet REAL SILVER IS NOT 30% OVER SPOT?

Was I NOT fucking clear enough when I said "real silver is not 30% over spot"?  Do you need me to fucking say it again before you get the plain language?  Do I need to swear more?  WTF is it going to take? 

PSLV, who cares; it's a fucking ETF that people ARE OVERPAYING FOR.

Fri, 01/06/2012 - 19:54 | Link to Comment tmosley
tmosley's picture

SO you would say that paper is behaving in an irrational way, perhaps... schizophrenically?


Fri, 01/06/2012 - 21:47 | Link to Comment jesusfreakinco
jesusfreakinco's picture

OK Trav - to be fair - ASE's on Apmex are selling for 15% over spot

Spot 28.78 - 1oz = 32.97

However, you can't deny the PSLV premium (which may equate to safety / physically backed and abiltiy to cover a large purchase and that is trading at 30% premium.  What are buyers of size buying physical for today - we don't know because BOS aren't buying through the Comex any longer because of the MF Global fiasco.  Tyler's comments I think are fair.

Fri, 01/06/2012 - 22:00 | Link to Comment vamoose1
vamoose1's picture

jesus,  whan asshole what looks  back at you in the  mirror  you psychotic  cunt

Fri, 01/06/2012 - 22:25 | Link to Comment WonderDawg
WonderDawg's picture

WTF? I'm usually pretty good at translating non-sense posts, but you lost me, brah.

Fri, 01/06/2012 - 20:04 | Link to Comment DosZap
DosZap's picture


Travs POINT is there is NO 30% over physical spot being sold, unless idiots are buying it, or it's overseas.

As for Specialty Coins like Pandas, leave them out of the debate.We are talking SPOT price and what 1 OUNCE of .999 bulk silver cost's you over that price.

You can buy it all over the NET for as little as $0.79 per ounce,or less, or your DUE diligence.

Or, you can get screwed and pay whatever some shysters are willing to STEAL from you.

Fri, 01/06/2012 - 21:41 | Link to Comment Prometheus418
Prometheus418's picture

That is both true and not true.

While you might be able to get something like a vial of silver shot at or even below spot, the question really needs to address what kind of silver we're talking about.  Recognised coinage from gov't mints brings an almost automatic premium- while these coins may not any real advantage in terms of actual purity or appearance, they do have the tangible advantage of being consistant and easily identified.

It depends on your strategy, but I only buy US coinage for general stacking purposes.  That includes both 90% silver and ASEs- though I did buy some Philharmonics recently just because I liked the look of them.

What I've been seeing is that Peace and Morgan dollars are holding their value the best when the price drops, but ASEs are still showing a high premium- between 10% and 30%.  Smaller 90% coins such as dimes and quarters are following spot more closely- I bought a roll of mercs a couple of days ago for an 8% premium, and so are generic rounds and bars.

The problem with generics is resale.  I look at it this way- even though I am a buyer of silver, if you bring me something along the lines of (for example) a 1 oz. coin with a star on it that says "Don't mess with Texas" and .999 fine silver stamped on it, I'm not going to buy it from you at spot, and I may not buy it at all.  Because quite simply, I have no idea if it's silver or not.  I might give you 10% of spot for it, just on a lark, but your generic round or bar is useless to me.The point here is that we may be comparing apples to oranges.  

While you may fancy generic rounds and/or bars because you can get them for a low premium, there's no situation in which those generic lumps of silver will sell for as much as an ASE or a Morgan dollar.  You might buy them cheap, but you'll sell them cheap, too.  Unless you've got an industrial application lined up, I'd stay away from them, low premiums or not.

Fri, 01/06/2012 - 21:59 | Link to Comment DosZap
DosZap's picture


  You might buy them cheap, but you'll sell them cheap, too.  Unless you've got an industrial application lined up, I'd stay away from them, low premiums or not

Buy the recognized Rounds, and your cool.

Also there are tests to determine real silver.

Easy, and fast, and cheap.Look around the net, nearly EVERY dealer I have seen sells the Buffalo rounds. Matter of fact I haven't seen one who did not.

TO each his own, I trust my Dealers to only sell REAL Generic silver .999(think they buy off a wagon?).

When I go to sell them to other dealers, I never have a hassle.With ANY pure ,marked bullion round.

Sat, 01/07/2012 - 01:14 | Link to Comment Prometheus418
Prometheus418's picture

It's a matter of strategy.  I buy from dealers, but don't sell back to them.  Selling to a dealer is a good way to take a hit in the wallet- if you can find a private buyer or trade for a good or service directly, it's a much better deal for you.  In that case, my preference is for coins with US mint markings- it's an easier sell to someone who is somewhat knowledgable about silver, but is not savvy enough to be able to recognize generic rounds on sight.

I know there are tests, but again- you run into a situation where someone who does not know how to perform them is still just taking your word for it.  The idea is to have the biggest possible potential resale market- or at least, that's how I play it.  For all the bitching about sheeple, it's still the case that the majority of people fall into that category, and will trust the markings from the US Mint, where they would balk at a shiny coin from a place they have not heard of.  Everyone has an uncle or grandpa who had some old mercs and walking liberties laid away somewhere, and there's not only a recognition, but also a nostalgia premium built into them- especially in bad times.

If you watch it, you'll see that pre-'64 silver dollars have the "stickiest" prices.  Most people recognize them, and many equate them with an oz, even though they are closer to 3/4oz.  In fact, most people I meet tend to round silver content to even numbers, assuming that 90% starts at an oz./dollar, and then divide accordingly- it skews what they think it is worth in relation to spot price.  The ironic thing is that the price tends to stay there even if you point out the weight difference- I think of it as the honesty bonus.  Admitting that what you have is worth less than they think goes a hell of a long way towards building trust.

I did think about the buffalo rounds, but they just don't have the recognition value in the general public- if and when that changes, I'll pick some up.  If they don't start minting more Eagles at a brisk pace, that may come sooner rather than later.

This isn't entirely speculation- while I've only been buying precious metals for a couple of years, I have held other metals as low-grade investments in the past, and I found that it was really hard to sell metals like copper when the market started to turn.  Taught me to think about the counterparty before buying or storing anything, and I discovered that the counterparty always likes to have proof of some kind that your materials are what you claim they are.  Generic copper slugs and chips (leftovers from machining) don't give a crap about the spot price of copper, it's all about whether or not the scrap purchaser believes that they are what you say they are, and takes the purity on faith.  Mint marks take that out of the equation.  It's the same with aluminum- aircraft grade 6061 gets half the scrap price of cans, because scrappers recognize cans at a glance, while chips could be any number of things.

Fri, 01/06/2012 - 22:03 | Link to Comment vamoose1
vamoose1's picture

are you  idiots  retarded? Go make some money,  and then  try to buy silver in size, Thats SIZE,  not your size fuckspittle

Fri, 01/06/2012 - 18:39 | Link to Comment sullymandias
sullymandias's picture


Real silver is not 30% over spot.

If you want one ounce pieces it is..

Fri, 01/06/2012 - 19:32 | Link to Comment trav7777
trav7777's picture

Who gives a FLYING FUCK what a bunch of MORONS on EBAY are charging!??!?!

If you buy from them, YOU ALSO are a moron!  I can give you half a dozen retail sites that will sell to you for less.

Tell you idiots what, I will put up an auction on ebay where I set my reserve price at fucking TRIPLE the price of silver and you can use ME as a data point to make your bullshit claims of "decoupling!!!!!!11"  I mean, LOOK, silver is "selling" for THREE TIMES SPOT!!!!!!1

People are still selling platinum on ebay as if it is worth more than gold, selling Platypus coins as if they are RARE and shit and trying to charge fucking 2 grand for them.

Fri, 01/06/2012 - 20:05 | Link to Comment The Limerick King
The Limerick King's picture



Our Trav is an obvious Shill

A hot-head who should take a pill

Japan: He was wrong

PMs: Same old song

Click green to give Trav a big thrill!!!

Fri, 01/06/2012 - 20:17 | Link to Comment akak
akak's picture

And now a travku --


Hate, lies run amock
dumpster-diving of the mind:
Trav on ZeroHedge.

Fri, 01/06/2012 - 21:46 | Link to Comment fuu
fuu's picture

I feel obligated. 

Trav's Theme

Fri, 01/06/2012 - 22:27 | Link to Comment MsCreant
MsCreant's picture

Wow! Trav should be flattered by that.

Fri, 01/06/2012 - 22:46 | Link to Comment fuu
fuu's picture


There's one for Robo in there as well.

Fri, 01/06/2012 - 21:20 | Link to Comment israhole
israhole's picture

I have to agree with trav on this one, ebay is for retards.   Nobody that counts has time to dance around that flea market.

Fri, 01/06/2012 - 21:53 | Link to Comment bigerny
bigerny's picture

I think I'll side with Trav here.I just looked up the three brokers I deal with,and the prices with commission runs between .75 to 1.65 an oz over spot for a 100 oz J&M bar.

Fri, 01/06/2012 - 22:10 | Link to Comment Prometheus418
Prometheus418's picture

Grand.  We'll mark you down as "elite."  What size noose will you be requiring?

Seriously, there are plenty of 1000 oz and better lots on there.  That's hardly penny-ante.  While actual, real people do not "count" to you, I assure you that we count for ourselves and the other 99,9% of the people around us.  While it doesn't get anyone else real excited, I am pretty damn pleased when I can budget well enough to buy 10 or 20 oz. on a payday.

Fri, 01/06/2012 - 22:29 | Link to Comment MsCreant
MsCreant's picture

Damn straight.

Sat, 01/07/2012 - 00:39 | Link to Comment IndicaTive
IndicaTive's picture

+1 and I know how to shop for my measly 10 oz. a week.

Sat, 01/07/2012 - 12:21 | Link to Comment bigerny
bigerny's picture

P148 -I said nothing about "1000 oz and better lots".Learn to read,or at least stop misrepresenting what others have to say.It makes you look ignorant,or at the least,disingenuous.


100 oz is not "elite".

Fri, 01/06/2012 - 20:58 | Link to Comment tmosley
tmosley's picture


Fri, 01/06/2012 - 20:53 | Link to Comment Max Fischer
Max Fischer's picture



Most of the idiotic silver prices on eBay are posted by small town COIN DEALERS who show their gullible redneck customers these RETARDED eBay prices, and claim that it's the "REAL MARKET."  So then, when the coin dealer offers them the same thing for slightly less, the dumb GULLIBLE customer thinks he got a deal.

Keep in mind, these are toothless, country hicks who haven't the slightest clue about anything.  Seriously, who in their right mind would actually OVERPAY by such huge margins?  It's all BULLSHIT, meant to take advantage of fools who don't know better.



Fri, 01/06/2012 - 21:01 | Link to Comment tmosley
tmosley's picture

Little judgemental there, I see.  As is standard for you, I suppose.  

Never mind that there are many ways to get discounts from Ebay, or the fact that there are many promotions where you get money to spend on one portal or the other (ie Amazon, Ebay, etc), and this can be used as a method to turn those promotions into cash.

But hey, you keep on being a butthurt little baby.

Fri, 01/06/2012 - 21:08 | Link to Comment slyhill
slyhill's picture

JPMorgue, is that you? {clutches hands together, tears in eyes}

Sat, 01/07/2012 - 15:25 | Link to Comment Rampage
Rampage's picture

You ought to give a phuck what eBay is doing if you own physical or in any way distrust the paper market. 

Right now there are 25,000+ auctions for ASEs.  Unorganized, grabastic pieces of floating amphibian shit, whatever and whoever they are they are buying it and have been for many months now.  It's a form of the Joe-Sixpack VIX if you track it too.  Too bad they dont sell 5.56 and 7.62 coz THAT would be interesting too.

I am an occ. seller there, but it's writing on the wall and you ought to read it now and then. 

Fri, 01/06/2012 - 18:41 | Link to Comment Citxmech
Citxmech's picture

Ag is $27.75/oz.  1.30 x 27.75 = $36.08.  After a cursory search, NWTM is listing smaller purchases of Silver Maples at $37.75 - so somebody is purchasing real physical at +30%.  Granted, if you can buy >75oz you can reduce the premium substantially.

Fri, 01/06/2012 - 22:52 | Link to Comment Vendetta
Vendetta's picture

watch out for the delivery times from NWTM.  I waited 2.5 months for delivery for 2 seperate large orders.

Fri, 01/06/2012 - 18:42 | Link to Comment SilverDoctors
SilverDoctors's picture

Real silver is flying off the shelves like hot cakes though.
The US Mint reported 3.2 MILLION SILVER EAGLES Sold in the first business day of 2012!!

That's more than the COMBINED sales totals of November and December!! Looks like the mint just waited to report the 2nd half of December's sales to keep the 2011 numbers just under 40 million ounces.

Fri, 01/06/2012 - 19:39 | Link to Comment DosZap
DosZap's picture


This is what changed their previous stance on having a LOT left over, and were not releasing 2012's till '11's were gone.

Said same thing on AGE's.

Fri, 01/06/2012 - 18:50 | Link to Comment yabyum
yabyum's picture

Drop your paper statement on a tile floor ffom a height of five feet, now drop a silver eagle from the same height. Any questions?

Fri, 01/06/2012 - 19:06 | Link to Comment NotApplicable
NotApplicable's picture

Where'd that paper blow off to?

Fri, 01/06/2012 - 19:38 | Link to Comment thatthingcanfly
thatthingcanfly's picture

Hey, but Newton said...

Fri, 01/06/2012 - 21:45 | Link to Comment Rakshas
Rakshas's picture

In a vacuum, dammit .....a vacuum ...... oh wait, just read some of the posts.... yeah it's ok now Vacuum detected drop away....


and if you like shiny shit.... 

Sat, 01/07/2012 - 15:48 | Link to Comment Uchtdorf
Uchtdorf's picture

Better yet:

No affiliation.

Fri, 01/06/2012 - 22:27 | Link to Comment palmereldritch
palmereldritch's picture

SLV’s theme song...perhaps GLD or FRN’s for that matter...


Fri, 01/06/2012 - 20:03 | Link to Comment CPL
CPL's picture

Get your credit card out.


And spend 30% over spot.  The paper and the physical market seperated from each other months ago.  Now the limitations of finding silver is becoming a challenge, physical silver.  Not some pencil dick in a NYC boiler room. 

If you want to buy a silver bar of any reasonable presentation of value starts at 100oz bars.

Fri, 01/06/2012 - 20:15 | Link to Comment Turd Ferguson
Turd Ferguson's picture

Yes it is, trav.

Try taking delivery of a couple million dollars of it and you'll quickly find out that 30% over spot is cheap.

Fri, 01/06/2012 - 21:11 | Link to Comment Max Fischer
Max Fischer's picture




NONE of these huge buyers are paying 30% over spot.  Only the dumbest, most gullible retail goons pay those sort of premiums.  Six months ago, you guys said the exact same thing..... SILVER SHORTAGE!  THE HUGE PREMIUMS ARE JUSTIFIED!  PAPER PRICES MEAN NOTHING!  Then Sprott, who buys millions and millions, admitted in an interview (perhaps inadvertently) that he bought all his silver at, or near, spot.

And now recently - a week or two ago - Bron Suchecki, manager of the Perth Mint, said that buyers of size are buying AT SPOT!  ..... as they ALWAYS DO.


Fri, 01/06/2012 - 21:32 | Link to Comment tmosley
tmosley's picture

I see, so there can't be such a thing as an intermitent silver shortage?  Things can only go one way?  People are either always right or always wrong?

It's like talking to a four year old with the attitude of a 14 year old.

Fri, 01/06/2012 - 21:48 | Link to Comment mick_richfield
mick_richfield's picture

He must have a point.  Look at all those uppercase letters!

He must be a FUCKING GENIUS.

Where do these critters come from?  I can't take it anymore.  Must have more bourbon.

Nunc dimwittis, Domine.

Fri, 01/06/2012 - 23:34 | Link to Comment Swarmee
Swarmee's picture

So your whole point is if one has a $million or more to park in silver then you get a bulk discount. Ok, that sounds reasonable. Now how many people here are buying $1M at a time? Are you also upset that you have to pay full price for cars because you are only buying one car at a time and not the same number as the dealership?

Even when I ask for quotes on 100 oz from local dealers I am getting asks of 10% or more over spot. Realistically most folks are not buying more than a few hundred oz at a time, max.

Fri, 01/06/2012 - 21:19 | Link to Comment Bansters-in-my-...
Bansters-in-my- feces's picture

Kitco is showing about 13% over spot on some silver bullion
and up to 15 % on AGE's...
And who knows how long to get it.
Ps...Fuck You Jon N

Fri, 01/06/2012 - 21:54 | Link to Comment Rakshas
Rakshas's picture

Nadlers latest commentary......

or a reasonable interpretation...



Sat, 01/07/2012 - 01:33 | Link to Comment akak
akak's picture

Actually, that song and video demonstrated a great deal more talent than that snake Nadler will ever have.

I have heard people say that while they disagree with Nadler's dishonest, disingenuous, anti-gold-biased daily diatribes on, they at least find his little screeds amusing and witty.  However, I have to say that I have never found him anything of the sort --- he is the epitome of the arrogant, formulaic, hackneyed, agenda-peddling pro-status-quo shill.  I can spot such people from a mile away within seconds, and utterly despise such craven, malicious, spineless bootlickers and cowards. 

I have repeatedly considered attending one of the Cambridge House Investment conferences, not solely but primarily just to finally confront that atrociously lying bastard face to face --- and I wouldn't be surprised if a certain Transylvanian-born Canadian receives a punch in the face in the process.

Sat, 01/07/2012 - 05:46 | Link to Comment Transformer
Transformer's picture

Nadler's commentary is for one type of reader.  that is the person who has silver in various forms, silver ware, whatever, and is thinking of selling it.  The average person who knows nothing and decides to do a little research will end up at kitco sooner or later.  Nadler who looks like a regular collumnist says that things have been up but they are going down soon.  Just the bit of knowledge that guy needs to be convinced to sell his silver.  I'm convinced that this portion of the market is where Kitco makes the most profit.  Talk about a 30% premium.  recycled silver can make 20-50% profit for a company like Kitco.

So, no point in getting mad at him.  He ain't talkin' to you.  Not unless you are down and out and thinking of selling whatever silver/gold you might have in the house.

Fri, 01/06/2012 - 22:53 | Link to Comment 15horses1donkey
15horses1donkey's picture

Trav7777 - You are wrong again. It isn't paper. Paper silver for the most part doesn't exist. It is electronic silver. Or perhaps even more accurately, digital silver. Call it what it is.

Fri, 01/06/2012 - 23:37 | Link to Comment Swarmee
Swarmee's picture

Mostly true, however inquiries yesterday with coin dealers in my area found their asking is now at roughly 20% over spot whereas 10% over spot was the norm just two weeks ago.

I should clarify, this is for small purchases of a few oz, quotes for 100 oz still price better, duh.

Fri, 01/06/2012 - 17:13 | Link to Comment tmosley
tmosley's picture

When the industrial users of silver realize what has happened, and understand that they can no longer trust the futures system, and buy up months or years of supply from mines in advance, leaving none left for the minters and then none for retail.  At that point, premiums explode so that silver flows back out of retail into the hands of the industrial users.  This will not be a short process, though there will certainly be a brief exponential blow-off, which you will wnat to sell into (trade silver for gold only).  I can see silver priced at much higher levels in terms of gold for ten to twenty years (though the blow off will be in the first five of the move).  I expect the blow off to take silver to anywhere from parity to ten times parity (it will be exceptionally dangerous to wait for these levels, as it will be followed by a massive crash once industrial demand is sated for some months or years going forward).  That said, there could easily bee a secondary bubble as retail gets involved in the rising prices.  It might even be big enough to presere much of the premium of the first blow off.  I don't know, I plan to have moved to gold long before that time, with only a small amount of silver remaining in my vault for speculation and diversification.

Fri, 01/06/2012 - 17:35 | Link to Comment LowProfile
LowProfile's picture

You had me going until "ten times parity".

Fri, 01/06/2012 - 17:54 | Link to Comment tmosley
tmosley's picture

You've never seen a blow off top before, I take it.

Fri, 01/06/2012 - 18:21 | Link to Comment akak
akak's picture

If you want to see a top getting blown off, just go find Trav in the nearest adult video arcade.

Hint: look for the scrawny, disheveled white guy tapping his foot under the door of the booth with the big buck nigger.

Fri, 01/06/2012 - 18:27 | Link to Comment tmosley
tmosley's picture

Actually, I think I would go look for him after he realizes what a cunt of a husband and father he was, and how he is worthless in every respect.

It'll give a whole new meaning to "blow your face off rally".

Fri, 01/06/2012 - 19:42 | Link to Comment trav7777
trav7777's picture

this is the best you can do?

Nobody is going to forget how much of a loser you are, cliff, how many times you've fallen flat on your face and made predictions which came up laughably false.

You are a chump in every sense of the word; I find your descent into this type of madness amusing.  You and akock are the most disgustingly passive/aggressive BITCHES on this entire forum.

Fri, 01/06/2012 - 20:03 | Link to Comment akak
akak's picture

You need to kill yourself, now.

Eugenics: it's not just for Nazis anymore.

Fri, 01/06/2012 - 20:30 | Link to Comment Pants McPants
Pants McPants's picture

Care to demonstrate WHY tmosely is wrong?  Or would you rather sit on the fence and call names?

Fri, 01/06/2012 - 21:52 | Link to Comment mick_richfield
mick_richfield's picture

Go away, Trav.  Disguise your voice and call your grandkids or something.

You're a pollutant here.

Fri, 01/06/2012 - 17:54 | Link to Comment Haddock
Haddock's picture

10 times parity. HA! You're kidding, right? Or drunk? Or desperate? I notice you are putting a decade timeframe to this prediction, so I guess we'll have to stick around to see...

Don't you think the major industrial users just negotiate prices directly with producers already. My google research suggests less than 15% of annual production "trades" through the COMEX.

Fri, 01/06/2012 - 17:59 | Link to Comment tmosley
tmosley's picture

Uh-huh, and how much do you think is hedged there?

100% of hedges are on the COMEX, as it is the one and only futures exchange that trades silver.

Further, prices are set at the margin.  Even if it was only 15% of industrial users HEDGED there, those 15% buying their next years silver all at once, and finding there wasn't that much available, would detonate the market, which is already a time bomb.  

But hey, you guys make fun of my opinions all you like.  The path to oligarchy is not an easy one, and many fools will call you names, but in the end, you will be poor, and I will be rich.

Fri, 01/06/2012 - 18:13 | Link to Comment Haddock
Haddock's picture

"100% of hedges are on the COMEX" - just because you aren't aware of other hedging activity, doesn't mean there is none..

"15% of industrial users buying their silver all at once" - I don't think you really grasp the concept that industrial producers and buyers may Negotiate directly on price. So BHP Billington can't get the price they want from Samsung, you think they say "fuck it" we'll drop 10 tonnes of silver on the doomers and see what we can get for it. No. They negotiate.

Fri, 01/06/2012 - 18:25 | Link to Comment tmosley
tmosley's picture

Ok, hot shot, show me some hedging activity off of the COMEX.  You can't, because there aren't any other futures exchanges with a silver contract.

15% of supply disappears overnight, and you think that the rest of the market can just absorb that?  You're nuts.  

Fri, 01/06/2012 - 18:40 | Link to Comment Haddock
Haddock's picture

Perhaps 'buyers of size' lock in long term delivery contracts with major producers, with fixed pricing or a pricing mechanism, so they don't hedge.

I would guess that most of the activity on the blessed COMEX is pure speculation, not hedging by industrial users.

Fri, 01/06/2012 - 18:42 | Link to Comment tmosley
tmosley's picture

Right, we'll all ignore the evidence and go with your gut feeling.

Fri, 01/06/2012 - 18:57 | Link to Comment Haddock
Haddock's picture

It's called business. It's what happens in the real World.

Fri, 01/06/2012 - 19:39 | Link to Comment trav7777
trav7777's picture

you idiotic FUCK, hedging is SUPPOSED TO BE CASH SETTLED.

Is there a fucking thing you can get RIGHT?

Fri, 01/06/2012 - 19:59 | Link to Comment tmosley
tmosley's picture

Uh, no.  Hedging means selling forward at a known price or buying forward at a known price.  Idiot.

Fri, 01/06/2012 - 18:28 | Link to Comment akak
akak's picture

Yet commodity panic peaks have happened repeatedly, and continue to happen --- silver in 1980, palladium in 2001, nickel in 2007.  Negotiation can only do so much when the fundamentals of a market are seriously distorted.

Fri, 01/06/2012 - 18:42 | Link to Comment Haddock
Haddock's picture

So you are playing for the next "panic peak"

Good luck with that.

Fri, 01/06/2012 - 18:55 | Link to Comment tmosley
tmosley's picture

You see one coming maybe once in a lifetime.  Most of them just happen with very, VERY few who are able to play it.  Ignore it if you want to.

Fri, 01/06/2012 - 22:26 | Link to Comment vamoose1
vamoose1's picture

yup, once in a lifetime  and  this is  it.   when sprott did the  500 million  PSLV a year ago silver jumped from  17  to  24 instantly. isnt  that  uh  40  percent? absent  junior  jerk  pikers buying  rounds  with  mummys grocery money   the  worlds silver is  gone. 

Fri, 01/06/2012 - 18:59 | Link to Comment akak
akak's picture

I am not playing for anything --- merely pointing out a market and historical fact.  With aboveground stockpiles of silver lower today than they have been for, oh, probably over a thousand years, and with strong industrial demand for silver that essentially did not exist even 150 years ago, and was a tiny fraction of what it is today even 80 years ago, the potential for such a market disruption in silver is objectively rather high.

Fri, 01/06/2012 - 19:13 | Link to Comment Haddock
Haddock's picture

There is 1 true disconnect in the silver market - between the COMEX / coin shop world we spend so long agonizing over, and the direct industrial producer to user market.

The first is a speculative market, the latter a fundamentals market - but none of us are playing it.

Fri, 01/06/2012 - 19:44 | Link to Comment trav7777
trav7777's picture

yah and refresh our memory what happened with nickel you fucking piece of shit pumper?

Did it rise 10000%?  mosely-claven is telling you that silver is going to go from $30 an ounce to $16000.  And here you are cheerleading his shit?  Get your mouth off his dick, you fuckin hooker.

Fri, 01/06/2012 - 20:01 | Link to Comment akak
akak's picture

Kill yourself, now.

Consider it well deserved self-eugenics.

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