Some people invest in silver and think they are a contract for delivery (if they request it) of physical silver (silver bullion).
What many are actually trading are silver futures, which are contracts not for physical silver but paper “deeds” to silver, but the physical silver does not actually exist.
Something to bear in mind is that some investment portfolios are invested in gold and silver and the people who are investing in these also think that if the equities markets, the mutual funds, the bond and treasuries markets and the dollar itself plummet and crash that they at least have the gold and silver in their investment portfolio.
This is a fallacy. They do not. They have been trading the same as what this article is talking about, ETF’s, which is really just trading on the future price of a commodity (in this case silver). As such, it is merely speculation on the near trend for people who want to buy and sell and get out with a quick profit (in dollars).
Silver is really going up in cost. Whether it will drop back down and, if so, when, remains to be seen.
But you can bet it will be very difficult for it to drop back down under $20 an ounce, because so many people are in tune with what is happening with these communists running our country and the banking system and how pathetic is the fiat currency they are using.
When/if the cost of silver begins to drop for other reasons, the strong demand will keep the cost high.
Silver is a decent investment, not, as most people falsely assume, because if you buy a thousand dollars with today in a couple of years you’ll be able to sell it for $2000, but because it, like gold, retains its purchasing value.
If today $1000 can buy $1000 loaves of bread and if the government prints itself into an inflationary spike, that $1000 may only buy 500 loaves of bread in a few years. However, if you took that $1000 and bought $1000 worth of gold or silver and held on to it, in a few years when that $1000 of fiat currency is only worth $500 in purchasing power (500 loaves of bread) you’ll be able to sell that $1000 worth of silver for $2000 dollars and with that $2000 you can buy the same 1000 loaves. This is why it is a good investment, to maintain purchasing power when a fiat currency is losing its value due to inflation.
By the way, I have no position in anything. I’ve been studying monetary science and monetary policy and economics from the Austrian-school perspective. So, take my information with a grain of salt and verify all of it.
I remember an ad that Colt had in the mid 1970’s, it went something like this: In 1873 you could by a new colt Peacemaker with a 20 dollar gold piece, today you still can.
WRONG! The silver ETF, SLV is *NOT* a futures based ETF. The prospectus is quite clear that they buy and hold actual silver.
One of the reasons the silver futures market is so tight is that the silver ETF has a huge amount of physical silver in their vaults.
Now, SLV *could* be lying, but it would be an amazingly bold faced lie. For instance, they have the serial number of the silver bars that they claim to have in inventory available on a weekly basis listed on their site.
I don't *think* you are claiming that they are running a completely fake Maddoff style Ponzi scheme, I think you really just don't know what you are talking about.
But if you do have some secret information that SLV is a ponzi scheme please share it with us.
Otherwise, please stop making wild unsubstantiated false statements.