Quick note: was just linked in Sprott Money’s twitter and facebook. Also wanted to give a quick shout out to the guys at wallstreetsilver for getting me some exposure. Be sure to check them out as I think they might be looking to pick up some steam and get in on some silver buying!!
Worldwide silver shortage. Bullion stores sold out for weeks, if not months. No one selling their product to them for spot price. Bullion priced $10-$13 over spot. Silver deficit of mine supply of 350 million ounces.
And of course, you expect to wake up at silver $2 less than a day before. Actually – I did, many of you did not. The price is actually in “contango”, where the futures price the last time I checked is wayyyyy above spot. I know how they play this game. At issue here is the disconnect between the REAL physical price and the “paper” price.
When you see a contango like this, you can, in essence, sell a futures contract, then go to the spot market and buy silver. You can then deliver the product on the futures contract. This contango was $.75 a few minutes ago, per ounce. For a contract of $5,000 ounces, that is $3,750 you can pocket on this deal. Of issue, NO ONE will do this, because anyone trying to buy on the spot market may get months of delays to get product.
Yet, prices are falling because we obviously have all of this supply!!!
Watch Andrew Maguire – he walks you through everything.
But this supply – it’s falling off the rafters!! Just yesterday, did you know they put on sale 2 BILLION ounces of PHYSICAL SILVER? Yeah. No. They didn’t. But they did write pieces of paper to sell 2 billion ounces.
Let me explain what you are seeing: you are seeing institutions conjure up fake metal to sell in the futures market. The metal does not exist. Some of these banks say, “look, I have metal!”. It is LEASED. They count it on their books so they can then sell it. The lessor counts it on their books so they can sell it. And, the metal that IS there is:
- Allocated – assigned to a group or person and not for sale – at this price.
- Unallocated – this is a pool of silver which is a fractional reserve, which they sell over, and over, and over. It is thought there are perhaps 250-500 paper claims on each one of these bars in vaults.
What is in progress, and has been for some time, is a good old fashioned bank run, of sorts. There are two strategies here:
- Take unallocated “in to your possession” and get the unallocated titled to you in their vaults. No one seems to trust this actually happens. They just shuffle paper around
- Take unallocated “in to your possession” by removing it from the vaults and putting them in your own vaults.
The main issue with the COMEX is that, on average, they allow sales of 200x daily production almost every day. The COMEX was setup to allow hedging of production. You know, you are a wheat farmer and you want to hedge your production. Well, for most commodities, this is 125% daily production. Yesterday, you saw price go up $2, then smacked down $2 on approximately NINE HUNDRED DAYS PRODUCTION “UP FOR SALE” IN A DAY.
People – this is dangerous. This is how empires fall. Mike Maloney forecasted a lot of this with his brilliant series “The Hidden Secrets of Money”. Check episode 9, which we are living now. Things to look for in the last stages:
- Loss of trust in government institutions. Vote recently? How about silver manipulation with the governments’ blessing of allowing these guys to continue ripping us off?
- Loss of faith in money. Money is defined in our constitution as GOLD AND SILVER.
They first start with the coin…This was money:
They then write pieces of paper pegging that fiat paper to the coin, to make it more portable
Then they eliminate the tie to the coin, only printing paper out of thin air. This is what causes the end of all civilizations.
The hunt brothers
In 1980, the Hunt Brothers were accused of “cornering the market”. They were patsies. Demonized. Estimates had them moving the price of silver like $.50. Bigger picture is they were terrified of inflation and wanted to get as much of their shitty currency put into real money. And for this, they paid a steep price with the government.
Right now, we made a strong dent. And those of you who actually watch the news for news, have been disappointed over the last decade as corporate interests now feed you what they want you to know. I’ve heard the below on news clips:
- The Reddit crowd is trying to do what the Hunt brothers did. No, they are not. Some on reddit are helping, perhaps many. But this movement was with the silver bugs for decades, we just now found an ally who has mobilized correctly to centralize forces. No one is trying to corner the market. In fact, we are trying to force the bank cabals from continuing to corner the market – they are 400 million ounces short. This makes the GME play look like a popsicle stand. There was 1.5 million WSB folks. Now it’s 8.2 million.
- They can’t win. Those saying this come from the camps of trying to keep anyone from trying this, and others trying to tell you the manipulation is so far gone that the banks can continue to conjure up whatever they want.
- They are losing steam. In the futures market, that is their battleground. The futures market has a lot to do with spot prices, but you are literally going up against the same banks who see where you put your stops and provide you the margin to make silver “bets” on futures. The truth is, losing this battle hurts from a perspective of those just joining the battle and only looking at spot price as a current win/loss. The truth is there’s no real physical for sale in the world, any quantity
- “oversupplied”. This guy I really wanted a few rounds with. While there are 3 billion ounces in vaults, you have to understand….”at what price”. This is where they wave their magic wand and want you convince you that the owners of the 3 billion ounces are just pouncing to sell their bars or run to the coin shop at $27. No. The supply at $27 is non-existent, worldwide. Only paper trading “bets” are telling you this is the case. Nice jedi mind trick. Apparently, the big banks have been playing this game the last decade to convince you silver is worthless so they could then accumulate it themselves. JPM now has over 300 million ounces and is the custodian of SLV, who has 600 million ounces. And – they were recently fined almost a billion dollars for…metals manipulation and were called a criminal enterprise by our government. Yet they accumulated a billion ounces to control.
- “Manufacturers have ample supply”. LIAR!! As of this moment, futures prices are $27.75 and spot is $27.02. This is a massive contango. Most of the time the difference between spot and futures is $.15. This exists because the market is telling you there is NO SUPPLY at that price. For example, let’s say a hedge fund wanted to arbitrage that difference – free money, right? Sell 1,000,000 futures contracts. Buy 1,000,000 spot contracts. When you take SPOT delivery, turn around and use that metal to service your futures contracts. That’s a $3 billion free money exchange!! Problem is this – no one believes the metal is there at the spot market to be delivered within 7 weeks, which is when the futures contract is up and they would have to deliver. So – that genius you got to talk about ample supply? That expert? He doesn’t understand contango and some idiot like me does? Expert?? Anyone ever hear of “just in time delivery?”. If your company uses a million ounces of silver a year, are you really buying a years’ supply? No. Prices can fluctuate a lot. You have storage costs. Hedging costs. And 2 months from now, silver could drop 80%, so why not buy more then cheaper? Andrew Maguire is a wholesaler, and he’s been pounding the table for a year that no one can get bars of size from the refineries or spot market. This is why the COMEX is now delivering 17,000+ contracts in their delivery months. They have become the supplier of last demand. And, Maguire states that anyone trying to take metals off of the COMEX are being outright threatened, and being advised to settle for cash to go away, roll over to the next delivery month, or pushed to LBMA contracts through “exchange for physical” which isn’t actually exchanging for physical – it is giving you an LBMA contract in a London vault because they don’t have it…at that price. And…they cannot get it at that price. But…they SOLD it to you at that price. That is the green circle from yesterday. And these guys…good luck then pulling it from London.
How this can end
In any “war” there has to be defined goals, in order to win.
Here are the goals of the “good guys”:
- Allow silver to be freely traded
- Eliminate naked shorting by banks, allow for more transparency
- Use COMEX for hedging. 2.5x yearly mine worldwide mine supply in a day is NOT hedging, it’s open price suppression
- Use the CFTC and SEC to properly regulate. Separate bullion banks from trading, so they do not get intel on where stops are.
- Force reserve requirements of 85% in order to make a sale. If you don’t have it, you cannot sell it. Banks are “selling” it based off of leased inventory, not owned inventory. Have higher reserves for purchase. No need to have that volume in a day. Only true hedging and futures supply should be traded. And, these contracts should be actually executed more than 1 in 500, which we currently see.
- Eliminate concentrated short positions. Hunt brothers were made public enemy number 1 for amassing 100 million ounces. Buffett was said to have 125 million ounces in late 1990s. JPM today is reported to have over 300 million ounces. Where is the consistency?
From above, you eliminate 95% of the bullshit trading every month. Weak hands are not speculating in futures, and big banks cannot just conjure up contracts to squash them like bugs and use them as an ATM.
Here are the goals of the bad guys:
- Reduce/eliminate anyone trying to challenge their control on this market, by any means, including media disinformation
- Amass as much physical supply as possible, so I can conjure up as many contracts as possible
- Do as much spoofing as possible to watch people come in, run up price, and whack price down to use them as a piggy bank, hundreds of thousands of times in a decade
- Discourage anyone buying metals, as the stronger a metals price gets, the less confidence in a worthless paper fiat system there is. The more metals are suppressed, the easier it is to hide REAL inflation and keep interest rates down and cheap money floating around
Now that the goals are established, there are several battlefields this will be fought on, and one savior I believe will take down Boss Tweed.
- Physical market. As of now, you are seeing $40 for silver and cannot keep it on the shelves. This higher premium reflects supply/demand and has a more clear indicator of “real” price. The price of something is not what you ask, it’s what someone is willing to pay. And we just had worldwide inventories drained at $43 per ounce. Unfortunately, it takes awhile to reload these supplies. Why? Because not one soul is calling up Apmex to sell at spot price at $27. The dealers simply run out of inventory because spot price does not rise for them to refill inventories. Now, you see the dissonance with the paper/physical price. The continued pressure on the physical market may then have mints ordering more from refineries. Those with 1,000 ounce bars may mint their own rounds to sell at $43 per ounce. This also further tightens industrial supply, who may have zero problems paying $50 per ounce from a refinery, who in turn will not sell that supply to a US mint for spot price. Which starves the people of supply. This is indicative of a rigged market. Clearly, spot price should reflect the REAL price, so those selling it can re-stock supply. But…there IS NO PHYSICAL SUPPLY AT $27 DOLLARS. THAT IS THE PROBLEM THEY DISTRACT YOU FROM.
2. ETFs. There’s two real ways of playing this. We all demonize SLV, but many of us have bought call options at OTM at SLV. Lots of us. Lots of call options – which will put pressure on the trust. The idea is they need to then buy silver, or futures, or something thereof. Supposedly, they got 37 million ounces on Friday and 20 million ounces Monday delivered to SLV. That’s why no one believes it. It’s logistically impossible. Someone just pointed at a pile of silver in a vault and said, “yeah, we can use that pile again” as it is suspected by many on the internets that SLV is not running a clean shop. Because, its custodian is….
With the ETFS – I also am involved with PSLV. More on this below, but this has physical silver and you cannot buy call options because they are legit and do not do derivatives. It’s a closed trust, which means they aren’t just creating shares daily and putting on a show of moving 37 million ounces into their vault daily. You are buying shares, and at some point the trust can purchase more. And that’s where I think this is going. Again, more on that below.
3. Futures. While I think this is somewhat of a failed area, I believe holding the line here can buy time for what the final battle is. See, many of you do not realize that this whole goddamn thing was going up in flames before all of this with reddit. While many there now are trying to claim there’s no silver play there, I had read a bunch of posts there that were deleted by mods because they wanted focus to stay on Game stop. Anyway – this whole system was going belly up, soon. They had continued to kick the can down the road. All of us fighting this battle for years were hoping for an assist from WSB to buy physical, PSLV, and SLV call options.
At issue is this. There’s no worldwide supply, really, at $27 silver. Yes, some miners will sell because they need to keep the lights on. But remember, we ran a 350 million ounce deficit in 2020 and during this time, the COMEX said, “come here, we have it”. Well, they don’t. They have bullion, but not at $27. It’s an illusion. They may stand there with a big pile of metal in the background, but it sure as hell isn’t for sale at $27.
The last two delivery months were very large – about 80-85 million in a month. The last one, December, it took until the absolute last day to make deliveries. What happens is a lot of these guys sell that 85 million ounces, and the first few days, those with metal, hand it over. Great. Then, you find that half of the contracts don’t have the metal, and they have to source it in the open market. They then have to lease it to hand over, or provide ammunition for a smash down, to then buy it on spot cheaper, then hand it over. So you have a contract you sold for $26. Price is $27. You have no metal. No problem. You just conjure up a billion ounces out of thin air, drop it on the COMEX, watch all of your customer stops get hit, then buy the physical metal for $24 and hand over.
But the pressure on the physical market, along with consistently rising futures prices, makes it harder to source this and make it require more energy in fake contracts to keep price in check. 2.5x worldwide mine supply dumped on “paper” market. No physical metal worldwide at $27. Yet, here we are at $27.
4. BASEL 3. This is the final nail, most likely, by Jun 28th. Apparently, many banks have been trying to amass metals ahead of this. This says, “hey, if you’re going to sell something, you need 85% reserve”. The idea of this is to protect the banking system from a “run on the bank”. Right now, they dump unlimited quantities. Let me explain. There’s thought to be 2-3 billion of “investment” grade silver above earth. Yesterday, the entire worldwide supply was sold. No, it wasn’t. The same “bars” were sold 800 times, and these “bars” do not even belong to them. Bank runs happened during the great depression. One problem the fractional reserve system has is when there’s TOO MUCH leverage. And, there is. This leverage makes rich people much richer. On the flip side, those poor people in third world countries mining this supply at the lowest wage possible just to not go out of business is on the other end of that leverage. By eliminating or reducing that leverage, you will see prices of commodities rise to reflect the true nature of inflation going on around us. Maybe silver hits $50 per ounce. Maybe miners go from an AISC from $15 to $25 by being able to pay their workers a better wage. This improves the lives of millions in third world countries and they buy good and services. This improves middle classes everywhere who provide those services.
5. The endgame
I’m a huge fan of Eric Sprott. However, I don’t know a ton about him. I listened to him on his weekly radio show with Craig Hemke. Seems like a good guy. Silverbug. Loves his silver miners. Over the last few years, he has amassed a portfolio of over 150 miners, usually with less than 20% stake in any for regulatory purposes. One of the miners he has, that I love as well, is Discovery Metals. It was a low grade silver project that would be a great project over $20 silver. Problem is, silver has been depressed in price for a decade and because of this, new mines cannot come online. Taj Singh, the CEO, decided that he’d take the project to make it 600 million ounces of high grade. If Sprott owns 20% of this company, that’s essentially 200 million ounces of low grade silver or 125 million ounces of high grade silver in the ground he owns. And that’s 1 of 150 miners.
Sprott also owns PSLV. Or, he used to. I don’t know. He’s semi retired, and one of his companies I believe Rick Rule bought and runs. But PSLV did something interesting a few months ago. They are a closed trust, but put out an alert that they could make a buy order of $1.6 billion. Edit: I had an outdated link from 2011. The one for Oct 2020 is here.
His closed trust essentially said, “we have the right down the road to buy $1.6 billion in silver”. This article also shows he was selling his PSLV most of the year. If I had to guess, it was to untangle a shit storm that’s about to happen and show he did not directly cause what’s about to happen. Getting his hands clean, and allowing his trust to just do what they need to do.
Follow me here….
Most people do not realize how small the silver market is. At $25 silver, and 3 billion ounces above ground in vaults, coins, bars, and silverware, you are looking at about a $75 billion industry. That is, to say, Apple could buy every ounce of silver on earth, 10 times over, and still have enough cash to buy every primary silver miner on the planet.
If you look at the numbers, I believe the physical sale of coins/bars/PSLV in the amount of roughly $4 billion in a short time would be enough to push price to $35. That’s 5.3% of the PHYSICAL market in a short time (2 weeks) should be enough to push price towards $35.
The media wants you to believe this is a MASSIVE market at $1.5 T. It’s not. That’s counting the silver in TVs, band aids, iPhones, solar panels, and every electronic device over the last 40 years in dumps, as well as all of the derivatives of silver.
So the idiot talking heads are not walking to their local dump, finding a TV from 1985, spending hundreds of dollars to then separate out all of the boards, and then chemically separating lead from silver. No one is going to the salvage yard to get the one ounce of silver out of a car in 56 different parts, in trace amounts. The silver is there, but until we are talking $500 per ounce, that “supply” they talk about is not economical to “mine”. There’s a difference between:
- total supply
- economically mineable supply
- supply available at a price point
- economically recyclable supply
So my hypothesis is this….
- With a few billion in physical purchasing and PSLV purchasing, this will take price over $30.
- More media attention, FOMO sets in, and more people head to coin shops and online bullion dealers
- Around $35, shorts need to start covering as losses are mounting
- Very quickly, price runs to about $50. I believe here you will get a lot of physical selling, and much of the shorts can get unwound.
- March delivery month hits Feb 24th, and not only is the normal 85 million ounces standing for delivery, but Eric Sprott’s PSLV dropped an additional 50 million ounce order on the COMEX and additional demand puts COMEX around 150-200 million for March delivery. They all want to take out of vaults. An “official” run on the bank starts
- Miners get more attention in February as Q4 2020 numbers come in and people realize they are making stupid profits. They see metals prices going up and realize they are about to make more profits
- March moves on, and silver supplies are coming loose at $75 and $100. End of March price anywhere from $65-$200 for silver. From what I THOUGHT I saw, Keith Neumeyer of First Majestic may hold sales for a month. I believe some other silver suppliers may follow suit to further starve the physical markets. Don’t quote me on the KN thing, I can’t find the article right now. He did hold back silver at $12 silver.
- Eric Sprott’s 150 miners start to go ballistic, some making 10x.
- Most anyone bought into miners before Feb 2021 are retiring in Q2.
And that folks – is the endgame as I see it. PSLV I believe is there as the check and balance to the paper game. It WILL take 50 million ounces from the COMEX in March. It will be there, forever, as the great check and balance to the system and I believe other trusts like his will be set up to do the exact same thing. SLV will eventually do to dust, as people lose faith in the institutions running it and if the silver is actually there or not.
With Sprott’s trust, if you have 5,000 ounces or more, you can take it out and get delivery to your home anytime you want. With SLV, you have to be one of 20 special participants, and no one else can take silver off.
I once played an 8 hour chess tournament game in the World Open in 1991 at the age of 15. I have a knack for trying to see the board, the players, the tactics, and the strategies involved. And…what I see is this…
- years of putting together PSLV
- years of buying up miners under the radar
- Marketing PSLV and miners on weekly podcast
- Removing any personal stake in PSLV
- PSLV allowing the purchase of up to $1.5 billion in silver (about 50 million ounces in today’s prices)
- Buying key stakes in miners like First Majestic who will benefit dozens of multiples on a massive run up in silver
- Waiting until silver runs, which was inevitable. Be patient
- At the right time, unleash PSLV to buy 50 million ounces and take physical possession
- Watch all miners explode in price
- Watch the COMEX grind to a halt as they try and source 150 million ounces in March
Special thanks to Chris Markus at Arcadia Economics. He has no idea who I am, so I’m not friends with him nor is he paying me to promote his book. I’ve been listening to his show for over a year now and his research/interviews in the book “The Big Silver Short” helped educate me on a lot of what has been going on. Your guests have done the world a service in letting everyone know what’s been going on. What many think and dismiss as a “tin foil hat” conspiracy is….actually all true. The day this book was first available on audio I bought from him and listened to the interviews as I walked my dog each day for a few days. I couldn’t get enough. And…I’m now a silverbug for life. Check it out at amazon, and check his show out at Arcadia Economics on YouTube. Please re-share this story to get the word out.
Edit: I had made mention of a PSLV dropping an order of 40 million or so on the COMEX at the last minute. I wanted to clarify – as much fun as that would be to watch, there are position limits. I had errantly thought this was 7,000 contracts. It is 1,500. I wrote this on February second, and you learn new things every day in this field. The principle is the same – but the mechanisms somewhat different. Each day it seems that Sprott is buying .5-1 million ounces and notifying everyone of their purchases. If this continues for the next 2-6 weeks, buying in the spot market, buying from wholesalers, refineries, from within their vaults with unallocated, along with the several million they recently purchased, could reach a substantial amount by mid-March If a larger purchase is made in March, who they purchase from could in theory go to the futures to source to replenish stock. Additionally, PSLV could continue 1 million ounce purchases indefinitely, as long as interest in PSLV is there. The net result by the end of March could be the 30+ million ounces suggested – but bought by different means. This continued removal of 1,000 oz bars by them would have the same net effect of one large purchase on the COMEX, that could not be done.
Edit 2: Correction – yet again. SD Bullion reported yesterday in their video that limits are now 3,000 and not 1,500. What I try and do is source the best I can from the internet – and my 7,000 was based off of a former futures trader that may not have been up to the times on limits. The 1,500 I just wrote above was because someone who felt authoritative on the subject on twitter yesterday laid out a scathing rant on someone (not me) educating them about the COMEX and mentioned 1500 contracts. Just hours later, SD Bullion pointed out it’s 3000. I want everyone here to understand that the information we get from YouTube videos is IMPERFECT. What I try and do, when writing, is to source information the best I can. As you can see – information gets outdated quickly when different sources quote different things. CHECK OUR WORK. You do not have to be a jerk about correcting someone like me – I WANT correct information, and I will attribute YOU as the updated source. I think the lesson here is listen to people like me in so much as to understand where the cruise liner MAY be going – and understand our general direction is guided by imperfect information. Most of the time, the semantics or details in information like 1500, 7000, or 3000 do NOT change the direction of the cruise liner, however, they may slightly alter the path the cruise liner goes to get to the ultimate destination. I am NOT a primary source – but someone who collects primary sources to try and provide the reader a general direction of where all of this is going based on BEST AVAILABLE information.
Unfortunately, these industries do not have readily available data. As Keith Neumeyer points out, they don’t want you to know how much silver they use because they are terrified of being front run. The ETFs (with exception) use obscurity to PERHAPS falsely claim ounces THEY OWN are in vaults. It has been suggested that many of these bars have many owner claims to them – perhaps up to 500 owners for each ounce of silver – and there are discussions about leasing, swaps, borrowing. The futures market is also rather opaque, in that they do provide numbers and reports – but only some, and their rules are also somewhat muddy. That being said, as someone who has completed 2 graduate degrees – there is not the scholarly journal or double blind studies type of information that anyone can use to create evidence that you could use to convict. This information not available to the public, at large. A seeking alpha article recently came out and suggested that banks NEED to suppress silver prices to protect the values of their bonds. This explains WHY a bank might short. What we CAN provide is evidence that many of these banks have committed serious levels of fraud – as evidenced by their massive fines over the last few years. What had been thought of as a tin-foil hat conspiracy, is actually factually true. With that – the trust has eroded in the free market system and when you piece together available information, from the best possible sources – you start to see a lot of things developing over the next 2-6 weeks.
Someone like me may hear 20 hours of video per week on all of these interviews. I can tell you the second I heard the 7,000 contract limit. I know what mailbox in my development I was standing at when I heard it. I know who said it. Problem is, I can’t go back and search 200 videos of the guy and find the timestamp to reference. That is IMPERFECT information relayed by me. Please – due your own due diligence and research – and correct me if I’m wrong. But please – use this as an opportunity to dig in further to all of the claims you hear.
February 2, 2021 at 6:05 pm
I can’t thank you enough for this article, incredible, sharing with everyone I know! What is your opinion on SILJ and SIVR, will they also in trouble regarding lack of actual physical metal like SVR will be?
February 2, 2021 at 6:41 pm
What an awesome read. thanks so much!
February 2, 2021 at 6:48 pm
All hats down for you, great stuff.
February 2, 2021 at 6:56 pm
Author of the article here: I’m not an analyst, nor a financial advisor, so do not listen to anything I say and talk to a financial advisor. That being said, I personally am heavily in on SILJ. Miners are profitable, essentially on the price they sell minus the cost of mining it. Simple, I know. You have miners like First Majestic that may have an AISC of $15 and are profitable at $18. When silver price goes to $21, it doubles their profits. $24? Triples profits. $27? 4x. This is not precise as when the spot price goes up they may mine less valuable pay to leave the valuable pay for when price goes back down. Point is – whether price is $26 or $29, the underlying miner is stupid profitable. Someone like Impact silver who has a higher production cost may have a 10x at $30 silver where FM might have a 4x at $30 silver. So the SILJ really isn’t “junior” silver miners as much as it is those that are not major metals producers that have silver as a byproduct. I love SILJ – you may get better results with individual miners, but unless you spend 30 hours a month researching these things, many just use the index to capture the moves of a First Majestic, etc.
So – I love SILJ. I watch a LOT of people – and some suggest SILJ in this next leg up could hit $30 or $32. With all kinds of miners profits coming out the next few weeks, it’s going to be hard for Wall Street to continue to ignore a sector that is making great profits at reasonable PE ratios where you have Tesla at somewhere like 1750 P/E ratio last time I checked. Newmont is literally printing so much cash they do not know what to do with it and are profitable with a dividend payout at $1200 gold. I believe there may be a move by some of the big ones to have a serious dividend increase. Just my hunch, no rumors or gossip. This will get the dividend players involved, and look to get massive funds to invest. This will be the same with GDX, GDXJ, SIL, and SILJ. Once you got investors driving stock up and P/E ratios are at 30ish – THEN you look to expand and replenish mine supply. From what I read, big investors are scared of coming in and Newmont or Barrick (or First Majestic) buying up tons of bad projects at high prices and they are stuck holding the bag again. What I see is a lot of projects with PEAs at $1250 gold that are very profitable. Point is – you get dividends to give the profits back, big investors come, sends up PE ratios, then expansion.
I read about SIVR last year and I didn’t get into it. I preferred the physical over ETFs. I also used OneGold for silver when it hit $12 and you could not get it for less than $25. So if price drops (on paper) to $21, and you cannot find any physical for less than $35 – this is a route to play for yourself. OneGold is also owned by Sprott and has metals backing it. I prefer PSLV because I trust there is metal there and as the article suggest, I feel every dollar I contribute to that trust is one step closer to them dropping the hammer on a certain exchange in March.
February 2, 2021 at 7:43 pm
How do you see the asset price of PSLV evolve? $9,91 at this very moment.
February 2, 2021 at 8:11 pm
Truth is – the money I put in to that I don’t care about price. The point of putting it there I feel, for ME, is an indirect investment. IF I put money in PSLV, it could cause delivery issues with the COMEX in March, send prices sky high, and help my 28 miners go 10x. So whether it is $9 or $10, I don’t care. 2 days before March contracts, I want a 50 million ounce purchase made. Stand for delivery. PSLV and SLV and all of those other work essentially at the same rate of return as silver, minus management fees. So if silver goes up 5%, those will go up 5%. From what I understand, PSLV is a closed trust so they are structured differently than SLV, and I’m not sure of performance.
So I think most of the ETFs will mimic rise/fall price in silver – but each has their own management fees and pros/cons.
LikeLiked by 1 person
February 3, 2021 at 5:40 am
Interesting read,, Have held PSLV & CEF for years, Have not received any notifications of expansion of the PSLV fund, nor see mention within the website.. By all appearance, I believe the articles you reference are from 2011! Not sure how that may affect your overall hypothesis.
February 3, 2021 at 11:14 am
Amallulla – you are correct. I updated the article with the Oct 2020 article. I don’t have first hand knowledge of ANY impending purchase. But, the Sprott trust made this announcement in October. It was not a purchase THEN of $1.2 billion. It was an announcement at some time they CAN buy $1.2 billion to add to the trust. My hypothesis with this is if this is correctly timed, it can reveal the COMEX as not having the metal they say – at that price. Assume you buy a contract today for 5,000 ounces at $27. When March rolls around, you want to take delivery. If they have it in the vaults, and send to you, COOL! But it’s musical chairs, leased metals, and smoke and mirrors. So maybe there are 20,000 of those contracts bought at $27. The first few days, the metals in the vault go out – of what they have. What follows is 25 days of 50% of the sellers scrambling to find silver at $27. Sometimes price smashes loosen some supply. At issue, the orders for 100-200 million ounces may overwhelm them – as we are simply asking them to deliver metal they say they had in the possession.
February 2, 2021 at 6:59 pm
That took quite some time and investigation to work out. Thank you very much for sharing this. Very well documented and explained, impressive!
February 2, 2021 at 7:24 pm
Brilliant piece stating where we are, why we’re here and where we’re going.
Again, brilliant. Thnx for that !
LikeLiked by 1 person
February 2, 2021 at 7:28 pm
I can’t thank you enough, invaluable! Thank you for sharing your opinions (I understand this is not financial advice) 🙏
LikeLiked by 1 person
February 2, 2021 at 7:58 pm
thank you for the information, and if possible, please help to share this information with the world, so that those who profit off the uninformed and brainwash the rest of us, I am one of those who trust and believe life is good and fair and to trust everyone, there are a few bad apples, but they do not spoil the barrel. The information presented in your article is so overwhelming and disheartening, they have been taking my money for years and then blaming me for not being smart, or investing at the wrong time, or being of the herd mentality. Well they have created the herd mentality as evidenced by the recent information published for the public consumption, they have created the wrong time so that they can profit and they have considered me a pawn to be played and controlled in their game. Well spread the news, I quit playing their game today, and I am not stupid needing their guidance and direction, I am no longer fearful of their regulations and commissions with all their delegated power, this is a new world order, power to the people!
February 3, 2021 at 11:16 am
I got 30,000 reads on this. What also helps is if people like yourself share this out. The rabbit hole is deep. Many do not want to go all the way down it. This article may at least give them the 50,000 ft view and the chess players involved.
February 2, 2021 at 9:14 pm
This is the best long-read I’ve ever read about silver. Thanks so much for sharing this priceless information.
February 2, 2021 at 9:43 pm
I’m one of the new people that purchased silver for the first time over the weekend. Do you know where one could go for more information about investing in silver mining companies – for dummies? Even just a name of who talks about that topic would be helpful.
Thanks for the great article!
February 2, 2021 at 9:57 pm
Haha. Nevermind. Just found the article you put out a couple days on that topic. I’ll start there!
February 3, 2021 at 11:17 am
I have several articles here about miners – dig in!
February 2, 2021 at 10:04 pm
Interesting read,, Have held PSLV & CEF for years, Have not received any notifications of expansion of the PSLV fund, nor see mention within the website.. By all appearance, I believe the articles you reference are from 2011! Not sure how that may affect your overall hypothesis.
February 3, 2021 at 12:42 am
This is the best up to date summary about the #silversqueeze I have read in the last 10 years. Your writing style is precise. The thesis as presented is very easy to share with brand new silver investors. Can I interview you for my YouTube channel to spread the word? Cheers. YouTube 1stmil.com
LikeLiked by 1 person
February 3, 2021 at 11:19 am
Unfortunately, due to the nature of my job I can’t really do interviews or be a face of any media. I’m a researcher at heart who loves to learn. I have done the legwork of possibly 3-5 hours a day for 16 months of listening to interviews, reading books, reading financial articles. I have mentioned my source material in some of my articles – but I think one that lays out all source material could be great for anyone hitting this the first time.
February 3, 2021 at 2:45 am
Insightful. Thank you for taking the time to do this
LikeLiked by 1 person
February 3, 2021 at 3:04 am
This is excellent. Didn’t read such an insightful article anywhere else on this ongoing drama. Thank you SO MUCH!
LikeLiked by 1 person
February 3, 2021 at 9:56 pm
100000 shares (hundred thousand) minimum trade size for Sprott funds IF u wish to exchange for physical.
I had a personal conversation with the company in Canada.
Plus delivery by Brinks ( or equivalent – no personal pick up allowed) plus fees – insurance etc. For you and I, that means we don’t get to touch the AG physical stuff on the elemental chart.
Thanks for sharing on this forum
February 4, 2021 at 5:32 am
Thanx for promptly explaining,& updating your documentation, it keeps things, well Truthfull!
And well,well ,well what have we here today, on the twatter…..(sorry for my incompetent encoding)
$PSLV 1,200,000 ounces of physical silver added to the
Sprott Physical Silver Trust today!
A new milestone at 100,806,762 total ounces of physical silver held by $PSLV!
Like your premises,,…
Any thoughts about the depressed premium/ to NAV values that have been largely Negative for the last few complacent years (vs last Ag squeeze, with Peaks of almost 30% ???
Thoughts of how this addition of funds/Ag may affect that in the near term?
February 4, 2021 at 10:08 am
Amallula. I have gone a few rounds with Taylor Dart at Seeking Alpha over First Majestic. He is pretty gifted with his writing and mining analysis, although we disagree strongly on AG. He is looking strictly at the numbers, and compares them the Wheaton Precious Metals and Pan American in his analysis – which I claim is like comparing Tesla to a model T in that they are both cars, but very different kinds of cars that run on different energy. First Majestic is a PRIMARY silver producer, with 60-65% of its revenue from silver, PAAS is an EXTREMELY well run company by a mining legend – but is a byproduct producer of silver with only 23% of silver. WPM is a streaming company. So you cannot compare the operations of these or the upside of them. So I felt to frame them all as the same type of company was misleading – despite his excellent analysis of the underlying fundamentals which is far beyond my ability.
For ME, I LOVE FM. I will always own them, in some way. I do a lot of the long call options with them, so a disclaimer here I do own them.
With FM, you get mining counterparty risks like with all miners. With them, I’m betting on the horse. Some can say, “they are overvalued to their peers”. I can say, “the peers are undervalued because I have no idea who their CEO is and FM CEO is all over YouTube doing his damn job and selling silver and his company”. So they trade at a premium to some miners, but I’m paying for the horse here I believe in. He also withheld product when silver was $12 and many of us LOVED IT. He maximized shareholder value by waiting a month, then selling at higher prices.
The company has had issues. Tax issue from a mine they bought in 2016 from issues in 2013 – not getting into that here, but long story short is it is probably holding the shares back $2-4 dollars, and part of this is where I’d account for the short position.
They did have share dilution, which is a symptom of the silver market, and not KN’s abilities. Silver smashed down, and they had a higher cost to get the product out of the ground. The heavily invested in tech with HIG mills to reduce costs while improving the recovery rates. This required debt. Silver prices dipped to $13, and share dilution happened along the way. If there was no manipulation, and if silver was trading at $40 per ounce, you do not need share dilution or debt. PAAS didn’t have those problems because silver was a byproduct of other operations. WPM didn’t have mines to run, they were streamers.
There’s a saying with mining investment which is particularly true – bet on the jockey, then the horse. Big fan of KN and I’ll weather the storm with the company because I’d like to be a long time shareholder that sees the company do amazing things over the next decade. There will be good months and bad months, but I have confidence the captain is navigating the choppy seas the best way possible. Will there be unforced errors? Perhaps, but not as many with a person with his experience.
For ME – I’d like to see AG grow organically over the next 7 years. Perhaps eye things like Silvercrest, Discovery Metals, and see what a billion ounces look like to their share price at $300 silver in 2026 with their tech (HIG mills) and leading industry CEO that will sell his company’s story to the world. That’s a company I want to be a part of, and I’d love to see the share price under those conditions. Yes – all silver miners will rise, but those with the highest percent of silver will get the best torque. FM has about the same as Endeavor silver and Impact has 90%.
February 5, 2021 at 7:26 am
A very well written article in a eloquent manner, hopefully this life changing event can get out to many average joe’s. Thank you very much.
February 5, 2021 at 7:48 am
What are you thoughts on buying Sprott itself?
February 5, 2021 at 10:40 am
I stay in my swimlane of miners and resource investment. Their reputation amongst everyone is excellent. I believe the big windfall will be Mr. Sprott’s “personal” account as I believe he bought the 150 miners with his own piggy bank. Rick Rule is also involved with one of the Sprott companies as well, and is all over youtube. Everyone loves Rick Rule. But I would pontificate silver going to $50 or $100 would have more of an effect on anyone who owns miners – myself included. I have not reviewed what Sprott invests in, so I can’t comment on the assets nor their valuation. I do like the adage of betting on the jockeys and then the horses, and their reputation amongst everyone I have seen in 16 months of research has been nothing but top notch.
February 5, 2021 at 3:22 pm
I’m not sure about the dealers running out of physical. Just out of curiosity I ordered a 500g bar the other day. It did say on the website that deliveries may take 2-3 weeks, however the bar was delivered in less than 48 hours.
February 5, 2021 at 6:14 pm
‘Mostly’ out. Ceo from JM bullion was on CNBC and mentioned the entire industry was mostly cleaned out. Did they have some on the way? Maybe. Some coming a few weeks from now? Maybe. High premiums like that and most major bullion dealers’ websites showing scarce to zero inventories was mostly what I was referring to.
What most people don’t realize is the orders of the mint are not just spun up and delivered next week. It’s a trickle they allow the mints to even get by law. The real big game is the 1,000 ounce bars. Start with physical. If you do not want to pay $8 premium – go to pslv and buy. They will buy 1,000 oz bars to put more pressure on the market.
February 13, 2021 at 4:41 am
I think the only piece that is missing in your analysis is and has been the comex’s way to bring price down is to raise the margin requirements on the longs and they get flushed out. This happened with the Hunt Brothers and many times since.
February 13, 2021 at 3:37 pm
I wasn’t too concerned about the price raise. To be honest, many of them were home users speculating in a pool of sharks, and they gladly took their money. The main point of the article was to show:
1) that the squeeze can happen via retail/etf which puts pressure on industry users
2) a whale like a Sprott Or pslv buying would all that would be needed to take price up enough to force shorts to cover
I’m not a comex expert by any stretch . And figure the physical drain will take care of any comex paper games, period. The problem they are facing now is 450 million ounces of open interest with 8 trading days left and for all anyone knows – all 450 million of those ounces will want to stand for delivery. Record was 85m in a month. Figure 125m could be the magic number. We’ll see where this ends up. But pslv right now is buying 5-6m oz per week now. Ronan manly reported on Monday that 85% of lbma was tapped by etfs. Many reporting high premiums on 1,000oz bars. Seems to me like march is the month. Could be never.
February 14, 2021 at 1:51 pm
May the Ides of March once again signal a new year with celebrations & rejoicing as the Comex fails.
LikeLiked by 1 person
February 17, 2021 at 10:14 am
I had spent about 100-200 hours two years ago studying silver, so far less than you but I get the gist of all the comments above so far. After already having obtained enough physical, does a 50/50 split between holding SILJ and FM make sense approximately, in your mind? Not asking for investment advice, just wondering if it approximates a reasonable allocation for the leverage one seeks. Didn’t know how to react after March 2020 when the Fed started bloating its balance sheet given the unknown course of the pandemic. You’ve never sounded the alarm like you are this month, am I correct? [seeking verification of facts, not advice, thanks]