Im a little unclear on how the ETF buys its silver.
The more demand there is for shares (how do they gauge this?) the more shares they sell? Is there a set schedule of issuing more shares? What causes the ETF to buy more silver?
I'm trying to get the link, but in the application for the Silver ETF, it says iShares can use paper to back sales. Futures contracts can be used, leases.
It has been hard to imagine the quantities involved being delivered to a storage place, but the storage fees would be enormous, too, and much more than the margin from spot to an ETF share, especially if shares were kept beyond a couple of months.
Semi-numismatic silver coins, like Liberty silver dolars (usually about 75 yrs. or older) have a collectable value of 15%, and are therefore not reportable upon selling. They also have the advantage of costing less than full numismatics, well still maintaining some collectable value. A little more expensive than junk silver, but no one will ever know except you, your dealer, and god! Buy em' by the 770 oz. bag, or 1/2 bag. Morgan, Peace,et. al.
I buy Silver at any fair dealer I can buy from or any one that is looking to off load and thinks the price is high. I like the silver in my hand. Is there any benefits to buying VF, XF,AU, or the Ms's silver dollars? I don't like to seat and argue MS numbers.
That is my point, it's paper unless there is transparency, and it's hard to hide the quantities involved here, if they do exist. So yes, more proof of silver on deposit is needed, otherwise Enron looks good.
Your 92 wasn't bad after fighting bears in the woods the week before. Remember when Tiger shot 81 at Muirfield?
of course Turk would say that, he sells a competing product (a good one I might add).
all this wrist wringing about the ETF's is silly. There is nothing wrong with them as trading/investing instruments. you will not experience a default here any sooner than you will experience it across the board, in other words all that money you made in the metals bull gets taken away from you as your broker declares bankruptcy because there is a massive global economic collapse going on, and the insurance covering that very possibility defauts because they have no way of making good on the entire universe of losses.
better just get gold and hide it under the mattress, head for the hills, get out the shotgun Johnny cause they're coming to siphon the little remaining gas in the old jalopy.
or just quit being silly and calm down a little:)
I'm glad you brought up that question because it ties in with an unanswered question I posted about 10 days ago.
Any chance the "leased" / missing Arab silver and Barclay's are the same?
Wouldn't that cause a real stir?!!
I know, I know... Tom go sit on your stool in front of the class and put on your conical hat.
link doesnt work for me....
thanks for the discussion everyone, but I still am unclear on how and why the ETF issues more shares. Does barclays just decide when they want to issue more shares? do they only do this if they feel there is demand, or do they sell shares on a regular schedule?
Then there's the argument that the silver ETF itself has artificially inflated silver prices. Before the new ETF launched its creator, Barclays Global Investors, needed to buy 1.5 million ounces of silver to put on deposit, essentially taking that supply off the market. Since more ETF shares can be issued quickly to meet demand, even more silver bullion could exit the open market. After just three days of trading, the iShares Silver Trust held 32 million ounces. According to UBS, by the end of May 100 million ounces of silver could be out of circulation and on deposit because of the new ETF. CPM Group, a New York commodities research and consulting firm, puts the total demand for silver this year at about 814 million ounces.
It's hard for me to envision several dozen big trucks dropping off 100M ozs. of silver in a day's notice. Also, it's hard to understand how the enormous storage fees are being paid. If I buy 100 shares, 10 oz. per share, I have 1000 ozs. How can the ETF afford to store 1000 ozs. for pennies? Do the delivery trucks line up in the street waiting to deliver? Somehow, it doesn't make sense. The vault must be one engineering piece of glory, too. All hard to believe.