Jeffrey Lewis

Jeffrey Lewis
Contributor since: 2012
Charles,
Open interest in silver has continued to rise, despite the opposite in gold, and the continued short bias of the (silver) spec funds.
Someone is entering here.
Also...While we don't have specific numbers, we know that new physical exchanges have opened in Asia, along with the shift in policy perception.
Yes, the Chinese government appears to be encouraging it's citizens to invest in precious metals -- the actual flow of metal has reversed. As you know, China is a net importer of silver - where for years they were a net exporter.
In the end, that may not be specific enough since we don't know the identities of the new longs entering silver futures. Of course we can easily know who has taken the other side of those long bets...
If short terms rate started to really move, we would have big problems...selling could morph into panic, resulting in the bursting of the biggest bubble of them all.
Which is why the FED will do (and is doing) everything to maintain control over short rates.
When investors 'see it', it will be for the momentum - not necessarily the fundamentals. They will exit at the first sign of a meaningful pull-back, which for silver can manifest itself overnight during a holiday weekend. The ETF is easy. Not necessarily 'good'. And as you point out..Ultimately, it's like anything else paper-denominated and subject to third party promise. Long term value investors do the math and deal with the 'issues' of physical.