The Online Money Show: 4 Reasons the Silver Bubble Should Continue to Deflate

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 |  About: iShares Silver Trust ETF (SLV), Includes: AGQ, ZSL
by: David Oldenburg

Over the weekend on the Online Money Radio Show, I interviewed Andrew Jarman, a Seeking Alpha contributor who writes under the name The Sane Investor, about his recent article "4 Reasons Silver Will Continue to Deflate."

Below is a summary of the first 5 minutes of the interview. The entire interview is 20 minutes long in total and covers the article's 4 points in much greater detail than appeared in the original article. The show also discusses 3 key silver ETFs: SLV, AGQ and ZSL. To listen to the entire interview, please go to www.OnlineMoneyShow.com.

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David Oldenburg (host): Andrew, why has silver been so volatile and risen as much as 200% over the last 12 months?

Andrew Jarman (SA Contributor): I believe it is fueled by QE1, QE2 and monetary easing. In addition, coming out of the most recent great recession, silver and precious metals have been viewed as an asset with less risk.

David: So, you believe that much of the recent parabolic rise, as it has been called, is because of QE2?
Andrew: Yes. More specifically, silver has been in bubble territory and the large rise fueled others to want to get in as they saw how fast it was rising.
David: Tell us more about the 1970s and the Hunt Brothers attempt to corner the Silver market?
Andrew: This was a situation where someone was trying to buy all silver and corner the market. When it became unsuccessful, there was a dramatic drop in silver. I do not believe that kind of manipulation is happening today. However, I believe investors have been too exuberant with Silver.
David: I have heard that the smaller size of the silver market has a lot to do with why it can go up or down so quickly?
Andrew: When you have a hike in margin requirements and then a 13% drop in silver, this says a lot about the speculation in the silver market and the lack of fundamentals. Bigger money is in sold and silver is a little more for retail investors and speculators.
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The rest of the show goes into greater detail and gives 4 specific reasons why Andrew is a silver bear and then briefly discusses 3 silver ETFs. If you would like to receive email alerts of all Seeking Alpha contributor interviews, register for free email alerts at www.OnlineMoneyShow.com
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.