are the biggest institutional owners of slv with bac being the largest at 3%. why do they buy slv? because they know the counterparty are big enough... ie jpm and hsbc. even if the vault is empty... it mades no difference. but then if pslv is empty... you are in big trouble. just like gs bet subprime with aig... because they know the counter party is big enough (or they know ahead that aig will get fed bailout).
it's a disaster for jpm and hsbc. slv is like a cds for silver written by jpm and hsbc. you lay claims to the counterparty. look at who owns slv... bac, morgan stanley, blackrock and RBC. look at GS and their cds with Aig. GS got 100% on their bet on subprime against aig. jpm and hsbc are both on the too big to fail list... so your actual counterparty is the fed.