• Steve H. Hanke
    05/04/2016 - 08:00
    Authored by Steve H. Hanke of The Johns Hopkins University. Follow him on Twitter @Steve_Hanke. A few weeks ago, the Monetary Authority of Singapore (MAS) sprang a surprise. It announced that a...

Silver Price Update From James Turk And Eric Sprott

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Fri, 08/05/2011 - 16:18 | 1528128 LoneStarHog
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But...but...insufficient physical silver to back the contracts would be ILLEGAL

Fri, 08/05/2011 - 16:23 | 1528144 Xibalba
Xibalba's picture

"Illegal" can be fixed....

Fri, 08/05/2011 - 16:37 | 1528186 Mesquite
Mesquite's picture

Seems to be a lot of that 'fixin' going on around the planet...

Fri, 08/05/2011 - 17:03 | 1528251 66Sexy
66Sexy's picture

short silver to protect a long physical silver position.

Fri, 08/05/2011 - 22:34 | 1529203 SumSUN
SumSUN's picture

-11 ?snake eyes.  

SHORT 66 sexy TO HEDGE YOUR..... what?



Fri, 08/05/2011 - 16:43 | 1528199 WiretapWilly
WiretapWilly's picture

Miners can't agree to sell future production? 

Fri, 08/05/2011 - 17:23 | 1528311 Popo
Popo's picture

Shh.  The entire argument rests on a fixed supply of silver.  

Fri, 08/05/2011 - 20:41 | 1528721 Buckaroo Banzai
Buckaroo Banzai's picture

You dont understand the silver market. Most silver is produced as by-product of base metal mining. By-products dont get sold forward.

Fri, 08/05/2011 - 17:05 | 1528252 Libertarians fo...
Libertarians for Prosperity's picture

But...but...insufficient physical silver to back the contracts would be ILLEGAL.....

In an interview last week, when asked why some billion dollar hedge fund doesn't try to bust the COMEX, Sprott admitted that COMEX contracts can be settled with SLV paper, which is the reason why you don't see the raid.

Also, quite pecularily, he said that stock in pm miners would out-perform the metal, which makes no sense to me - at all.  


Fri, 08/05/2011 - 17:16 | 1528292 narapoiddyslexia
narapoiddyslexia's picture

Maybe its the mathematices arising from the fact that miners are depressed below where they should be and they will outperform while they catch up? Just a theory.

Sat, 08/06/2011 - 10:34 | 1530264 dehdhed
dehdhed's picture

the problem i have with miners is they are largely valued for their reserves

as they dig it up and exchange it for fiat, their value doesn't necessarily go up

if they double production in a year, the life expectancy of their reserves would be halved.  how does this add value to the company?

if a major were thinking of purchasing a junior, the value would be based on reserves.  and if before the deal went through, the junior miraculously harvest 30% of their reserves, how would it become more valuable to the major? ... or china ... or saudi arabia

miners might be better to just leave the metal in the ground.  it can't be stolen that way.  it would encourage price increases on the metal and thus on their reserves.

instead of issuing dividends, a miner might be better to continue production but use cash reserves to fund themselves and put production in a vault.  reserves would remain unchanged as both in-ground and above-ground reserves would be included.

for me, i'll just stick with the metal.  it's the only thing i'm dead certain will never lose it's AAA rating


Sat, 08/06/2011 - 10:59 | 1530306 dehdhed
dehdhed's picture

i'm not too into the conspiracy of things, but it would seem the case being made for the 'undervalued' miners might be part of the manipulation argument.

please don't buy the metal, we need that in the future ... let us have it.  don't you see how undervalued we have made the miners for you.  please go buy shares in diminishing reserves and leave the precious production for us to buy.

i'm surprised sprott and others don't question this more

Fri, 08/05/2011 - 17:23 | 1528310 fuu
fuu's picture

Hi JohnnyWangerTexasBravoSlinger!

Fri, 08/05/2011 - 19:23 | 1528487 Whatta
Whatta's picture

Also, quite pecularily, he said that stock in pm miners would out-perform the metal, which makes no sense to me - at all.

If you will recall, last year (or maybe it was earlier this year) he sold a bunch of PSLV shares and people freaked for a day or so about silver topping. But, he revealed that he thought that the miners were underperforming in the market in comparison to physical and was merely reallocating to the miners...not getting out of the silver trade.

Here is a chart that illustrates that the miners are still underperforming physical...its Yahoo, but it works


Fri, 08/05/2011 - 16:16 | 1528130 drivenZ
drivenZ's picture

of course Sprott thinks that "silver will be the investment of this decade". He is talking up his own book. 


not that i think he's completely wrong but he does have a huge vested interest in people buying silver. 

Fri, 08/05/2011 - 16:23 | 1528149 Whalley World
Whalley World's picture

You are right, much better when fund managers promote toxic investments to the sheeple.  That's the ticket.  If a Billionaire sees the potential of silver, why would he not promote his investment of choice?

Fri, 08/05/2011 - 16:29 | 1528168 caerus
Fri, 08/05/2011 - 16:26 | 1528158 CH1
CH1's picture

Having a vested interest does NOT make someone an automatic liar.

Slogans substitute poorly for thoght.

Fri, 08/05/2011 - 16:45 | 1528206 drivenZ
drivenZ's picture

certainly did not call him a liar. I think he's a smart guy and he's been spot on and I beleive what he's saying. But if the building starts burning down and Sprott smells smoke....you'll be the last to know. 


this is the same for most professional commentary but Sprott has a pretty narrow investment focus. 

Fri, 08/05/2011 - 17:10 | 1528265 smlbizman
smlbizman's picture

your understanding of the metals appears to be somewhat limited.....us physical holders do not worry about price, just how much more we can get. to infer that eric has the same charactor as saint warren buffet i feel is a mistake. so if eric decides that after 6,000 years the metals or no longer relevant i will still have mine...and politley disagree with him...

Fri, 08/05/2011 - 17:17 | 1528297 Financial Newbie
Financial Newbie's picture

I hold physical and if I was broke, jobless, destitute with no way of feeding myself I think I can admit I'd worry about the price.

Deflation is a bitch, yo.



Fri, 08/05/2011 - 17:19 | 1528300 drivenZ
drivenZ's picture

"us physical holders do not worry about price, just how much more we can get." 

...of course you worry about price. for anyone on this board i doubt there's a shortage of silver. you can go out and buy basically as much as you want,unless some of you are closeted billionaires. 

Fri, 08/05/2011 - 17:25 | 1528320 caerus
caerus's picture

right...but priced in what terms?  any asset must necessarily be valued in terms of at least one other asset...many hold physical silver because they do not have faith in the present or future value of the USD...or any other fiat currency for that matter

Fri, 08/05/2011 - 16:29 | 1528165 Goofy Bastard
Goofy Bastard's picture

Don't really see the problem in a guy committing himself to a partuclar plan and then selling that same plan to others.  Sounds like a guy who believes in what he's doing.

Fri, 08/05/2011 - 16:30 | 1528170 mayhem_korner
mayhem_korner's picture

A starfish uses suction to overpower the tiring muscles of a clam.  It just takes time.

The vested interest that has kept silver from already clearing at $65+ is the Morgue's/Crimex's huge short, which I believe is the true driver of some of these misdirection raids.  Anyway, the Morgue is the clam, physical is the starfish.  It just takes time.

Fri, 08/05/2011 - 16:59 | 1528244 Snidley Whipsnae
Snidley Whipsnae's picture

excellent analogy mayhem

Fri, 08/05/2011 - 17:16 | 1528291 bigdumbnugly
bigdumbnugly's picture

at one point or another in our lives all us guys have been that starfish trying to wear down and finally open the clam, no?

Fri, 08/05/2011 - 17:28 | 1528325 Critical Path
Critical Path's picture

What ya getting at there? Oh...

Fri, 08/05/2011 - 17:32 | 1528336 bigdumbnugly
bigdumbnugly's picture


you know, even the use of suction part fits...

great analogy is right.

Fri, 08/05/2011 - 21:07 | 1528868 Rottenclam
Rottenclam's picture

Oh yes.  And when that clam is opened, the payoff is always in Silver Dollars.

Fri, 08/05/2011 - 17:10 | 1528268 fuu
fuu's picture

JPM:AG was under 1 all week.

Fri, 08/05/2011 - 21:44 | 1529073 Stares straight...
Stares straight ahead's picture

need better analogy: you can't eat a starfish...


Fri, 08/05/2011 - 23:57 | 1529511 Hulk
Hulk's picture

The tides out Bitchez, time to start picking up the starfish...

Fri, 08/05/2011 - 16:36 | 1528179 malek
malek's picture

Yes, I only buy things of which all advisors I trust have short positions on! /sarc

Being a contrarian just for the sake of it isn't really that convincing...

Fri, 08/05/2011 - 16:37 | 1528182 MsCreant
MsCreant's picture

Yes, he should be like Goldman:

  • Tell clients to sell, when you want to buy something low.
  • Tell clients to buy, when you want to sell it off because you know insider information that says it is going to lose value shortly.
Fri, 08/05/2011 - 16:49 | 1528220 Troll Magnet
Troll Magnet's picture

i don't know why so many junked you because you're essentially right.  

personally i am deeply invested in PMs and hope that Sprott is right but when you look closely, everyone who touts anything has something to sell or is invested in the said product.  i mean, everyone from mike maloney to peter schiff touts PMs while selling PMs.  

Fri, 08/05/2011 - 17:07 | 1528259 kito
kito's picture

funny how you can't win with your logic. if hes invested, hes got an angle, if hes not invested, hes a hypocrite for not backing his statement. 

Fri, 08/05/2011 - 19:48 | 1528555 Rynak
Rynak's picture

The whole argument is totally pointless anyways: That someone is invested in what he is talking about, just means that he is affected by what he is talking about.

That could result in:

1. He being biased AND yet being right.

2. He being biased yet NOT being right.

3. Him pushing something because of a personal agenda.

4. Him pushing something because of being convinced of it.

Him being invested in it could mean all kinds of different things - good, bad and irrelevant ones - and it isn't possible to know which of those is the case, without looking at the details and history of this relationship.

It's like: Let's say two people are married - does that imply that the guy is a wifebeater? Does it imply that the wife is a manipulative bitch? Does it mean that they fit together greatly? Does it mean that there will be lots of crisis because they don't match? Does it mean that they will be bored with each other quickly? Does it mean that they will find each other fascinating for a longterm, because else they wouldn't have married? WHAT does the mere fact of them being married imply? Uh, nothing... just that they're married... the rest depends on the details of the "how".

Fri, 08/05/2011 - 19:21 | 1528481 SamuelMaverick
SamuelMaverick's picture

Yeah, he has only been talking about the bull market in PM's for years and years, and backs everything he says with facts and numbers.    Wake up ding dong. 

Fri, 08/05/2011 - 19:42 | 1528545 smlbizman
smlbizman's picture

and one more thing driven, it seems kinda easy in this day to seperate the agenda driven pundits and the few that are just honest....and being honest does not mean those few are right all the time....to not believe in eric sprott would be similar to not believing in the tylers.  

and why is it that people  have to go to such an extreme to discredit a point...of course price  matters to a degree, but i would guess that most physical holders are hoping they never HAVE to sell..but the worse of all are the grammer nazis....and you know who you are, were a point can't possibly be correct because of a missed spelled word or the improper use of a word....or did i just define what it is to be a troll....

Fri, 08/05/2011 - 20:12 | 1528616 spdrdr
spdrdr's picture

It's "grammar", not "grammer", you dolt!

Fri, 08/05/2011 - 21:26 | 1528984 smlbizman
smlbizman's picture

with it being the one and only draft, not giving a shit if i miss a key and not proofed, not bad by todays standards, ya tink?

Fri, 08/05/2011 - 21:30 | 1528998 spdrdr
spdrdr's picture

Ha! Only stirring the possum!

Peace - and keep your powder dry!


Fri, 08/05/2011 - 23:02 | 1529329 smlbizman
smlbizman's picture

i get jokes!..

Sat, 08/06/2011 - 00:52 | 1529656 caerus
caerus's picture

jokes are funny...

Sat, 08/06/2011 - 10:37 | 1530259 Nostradumbass
Nostradumbass's picture

"..but the worse of all are the grammer nazis....and you know who you are, were a point can't possibly be correct because of a missed spelled word or the improper use of a word...."

and then this:

"with it being the one and only draft, not giving a shit if i miss a key and not proofed, not bad by todays standards, ya tink?"


A bit more than a missed key there amigo...

Fri, 08/05/2011 - 16:26 | 1528157 caerus
caerus's picture

silver is the new...uh...silver...

Fri, 08/05/2011 - 16:27 | 1528160 Jonathan Toews
Jonathan Toews's picture

"And with 3 out of 5 central banks having just embarked on monetization, and two more imminents"

Am I missing something? What does that mean?  Which CBs are emarking on monetization?

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