Jason Hamlin

Short Squeeze in Silver - How to Profit

Mike L,

Thanks for the link and I was wrong, they do publish a bar list via JPMorgan, for what its worth. That still does not guarantee that the metal itself is not leased out or otherwise encumbered. Correct?

This is something that sets CEF apart from the competition. The stated investment policy of the Board of Directors requires Central Fund to maintain a minimum of 90% of its net assets in gold and silver bullion of which at least 85% must be in physical form. On July 31, 2008, 97.6% of Central Fund’s net assets were invested in gold and silver bullion. Of this bullion, 99.3% was in physical form and 0.7% was in certificate form.

Central Fund’s bullion is stored on an allocated and fully segregated basis in the underground vaults of the Canadian Imperial Bank of Commerce. Bullion holdings and bank vault security are inspected twice annually by directors and/or officers of Central Fund. On every occasion, inspections are required to be performed in the presence of both Central Fund’s external auditors and bank personnel. Central Fund’s chief executive comments:

“Our bullion is stored in separate cages, with the name of the owner printed on the cage, and on top of each pallet of bullion it states Central Fund or Central Gold-Trust. This disables the bank from using the asset from any of their purposes. We also pay Lloyds of London for coverage of any possible loss.”

Clearly you can view CEF as a safer investment than SLV based on these differences, right? That was my entire point when bringing up SLV in my article.

In regards to your last point, since you are so disgusted by people throwing around claims that can't be factually verified, can you provide factual evidence that Ted Butler or Jason Hommel are "PAID to make these kinds of claims by IRI, a physical bullion dealer, trying to capture investment money away from the ETF," or are you propagating the same type of wild speculation that you criticize? These guys are both independently wealthy, so I find it hard to believe that they would put their reputation on the line for some payment from a bullion dealer. I've met them both and that assertion doesn't pass the sniff test or make much sense. But if you have some proof, I would be happy to be enlightened.

Lastly, both Butler and Hommel have an extremely wide reach and are constantly providing reasons that silver is a great investment. They have influenced countless investors to get out of paper instruments and into silver, so I don't quite follow your claim that "they are no friends to silver investors."

Respectfully,
Jason


On Mar 20 03:36 PM Mike L wrote:

> Jason,
>
> re your comment;
>
> ".. I can't find any physical count of the metal, nor any recording
> of serial numbers. If you can point us to this "full inventory list"
> of physical bars, with weights and serial numbers, I would be happy
> to retract my statement..."
>
> OK, if you take the few seconds it takes to pull up the SLV ETF's
> website front page, and click on the link on the left there that
> says 'Silver bar list', you will find the inventory.
>
> us.ishares.com/product...
>
> This is the problem I have with folks who follow Butler/Hommel et
> all's 'conspiracy theory' based school of investment strategy. There
> just seems to be not the tiniest bit of factual research involved
> before all kinds of inferences, allusions, accusations, skepticism,
> etc is lobbed at the ETF, without even a minutes worth of actual
> valid research, or established FACT involved.
>
> Butler's endless accusations for example about silver loans and such
> are completely 'fact free'. An analyst should write articles based
> on verifiable data, not baseless meandering speculative accusations.
>
>
> Ditto the situation with silver industrial 'supply/demand' fundamentals.
> All these 'analysts' who have NO IDEA what the supply demand actual
> numbers are, are constantly making statements about there being a
> fundamental silver deficit 'shortage', when in fact there has been
> a surplus for years. They use the very deceptive and invalid technique
> as I stated before, of counting annual mine production, and ignoring
> annual reclamation production. So they for example, count an industrial
> silver demand of 100 million ounces for photography as a full demand
> number of 'used up' and gone silver, and ignore that 75% of that
> silver will be reclaimed/recycled and added back to supply! You
> can't trust ANYTHING that comes from an 'analyst' who uses such a
> fraudulently invalid methodology.
>
> Here is a handy and well referenced summary of said fundamentals
> for silver.
>
> www.virtualmetals.co.u...
>
> Though the Fortis report is far from perfect or complete due to the
> nature of the silver market itself, I have been searching for years
> and have not found a better web based, more thorough, more comprehensive
> snapshot summary, and incidentally, it also agrees in the 'main'
> with the 'Silver Institute', 'CPM group' etc. as to deficit vs surplus
> silver.
>
> I think investors should be very cautious about ever accepting any
> premise by 'analysts' as Ted Butler.
>
> When a guy like Butler for example states that 'above ground' gold
> is far more plentiful then silver..and then you find out his methodology
> is grossly deceptive, and you see this kind of fraudulent thinking
> and methodology routinely from him, (i.e. he counts all the estimated
> GOLD jewelry and artifacts as 'above ground' gold, but FAILS to count
> all the SILVER jewelry, silverware, artifacts, et al .....which numbers
> in the BILLIONS of ounces.....in his above ground silver number!)..then
> you can count Butler and his offshoots out completely as to having
> any genuine credibility.
>
> Again, we don't know what the total above ground numbers are, but
> rather than just lying to people as Ted Butler does, there are those
> who have actually done some research on the topic, like this silver
> bull here below, who at least has done some good research and used
> some data from which to draw inferences.
>
> www.gold-eagle.com/edi...
>
> www.safehaven.com/arti...
>
> www.financialsense.com...
>
> I don't mean to be harshly critical. But making false and spurious
> skeptic claims about the single most important new demand segment
> of the entire silver market, i.e. the SLV ETF, is destructive to
> silver investors. Butler and his ilk do so because he is PAID to
> make these kinds of claims by IRI, a physical bullion dealer, trying
> to capture investment money away from the ETF. Yet most of the important
> ETF demand, comes from investors unlikely to buy substantive physical
> bullion in any other form.
>
> I am a silver LONG and will be for years to come,.... I own physical
> bullion in several forms (bars, Eagles, Numismatic), and I own SLV
> ETF, SLW, CDE, and SSRI. But I really hate to see the parroting
> of fraudulent nonsense by guys like Butler who give a black eye to
> the entire silver analysis and silver investment sector.
>
> They are no friends to silver investors.
>
>
>
>
>

Short Squeeze in Silver - How to Profit

Another concern regarding SLW is that they will lose their silver "production" as the base metal miners that provide them silver begin to shut down. I image base metals will correct to some extent, but a prolonged recession or depression doesn't bode well for industrial commodities. Any thoughts on what this will do to SLW stock price?

Short Squeeze in Silver - How to Profit

Mike L,

PricewaterhouseCoopers audits the financial statements, not their inventory. I can't find any physical count of the metal, nor any recording of serial numbers. If you can point us to this "full inventory list" of physical bars, with weights and serial numbers, I would be happy to retract my statement.

Even if a bar list is produced, the bigger issue is whether SLV really owns them free and clear or are they encumbered, leased out or otherwise compromised.

Trace,
Thanks for the correction regarding the extent of the backwardation. I enjoyed your speech at the Cambridge House conference.

Gold and Silver: Is the Correction Over?

Poet1,

The miners typically offer leverage to any increase the metal realizes. This hasn't happened in the past few years, but historically speaking, returns are 2-4X greater if you own the miners vs. owning the metal.

You can get additional leverage by picking up warrants on SLW (TSX:SLW.WT.A)

Subscribe to my free email alerts at goldstockbull.com to get periodic updates.

Gold and Silver: Is the Correction Over?

Yeah, there are always brave posters that attack and criticize everyone else's views without offering any substantive argument and without writing their own articles. Some of these same people have left negative comments on a number of articles. I think they get some sense of superiority out of attacking others' views anonymously. Pretty weak.

But to respond... yes CDE is an obvious choice for a silver miner moron. They are the world's largest primary silver producer. What isn't obvious about that? I was including some silver stocks to give new investors a place to start researching.

And the 10 predictions were running contrary to what most in the investment world believed at the time they were released. So I appreciate your prediction that the sun will rise, but that really isn't comparable.

I suggest setting tight stops on solar because I am not convinced that they have bottomed or will be able to rally in the face of a recession. So while the solar sector is explosive and looks to have bottomed, setting stops will protect from a deeper plunge in prices. Matt Callow - I think their bubble has already burst, as many companies have lost over 50% of their market cap in the past 3 months. Solar stocks could always continue lower, but I think the "bursting" has already happened to a large degree.

Peace & prosperity to everyone during these increasingly chaotic times.