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Thread: So if everyone takes delivery, is there enough silver to cover?

  1. #21

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    Quote Originally Posted by KILOFINAL7 View Post
    "Unbacked paper" is what physical gold/silver is valued in.
    Yes but it seems SLV is actually just unbacked paper ,betting on the results of the unbacked paper... A bet on a bet.

    Seems terribly risky, I will just stick to my cap and Ray silvers haha
    "Compulsory altruism is none too altruistic." - me

    "All of us necessarily hold many casual opinions that are ludicrously wrong simply because life is far too short for us to think through even a small fraction of the topics that we come across." -- Julian Simon

  2. #22

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    Quote Originally Posted by windweaver77 View Post
    Yes but it seems SLV is actually just unbacked paper ,betting on the results of the unbacked paper... A bet on a bet.
    Sooo unfair!

  3. #23

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    Quote Originally Posted by KILOFINAL7 View Post
    "Unbacked paper" is what physical gold/silver is valued in.
    Sooo foolish!

  4. #24

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    Quote Originally Posted by Count Stacula View Post
    That may be a better question for another thread. I was talking about the price movement of a paper ETF called SLV. Nobody takes delivery of anything. The ETF buys and sells "baskets" of silver based on the buying and selling of shares. When x many shares of SLV are sold they sell physical silver and when x many shares of SLV are bought they buy physical silver. The holder of the SLV shares will never see an ounce of silver and the shares cannot be redeemed for physical silver. The purpose of the ETF is to try to reflect the current value of silver. But it never can be 100% because some silver has to be sold off to pay for the management of the ETF. That's why there is a gap between spot and the price of SLV. That price difference has already been eaten up by management costs. Theoretically SLV will go to zero if silver prices continue to fall and then level off for years. The expenses will continue to erode the ETF until it is all gone. That's why SLV is typically used as a short term hedge to be bought and sold not a long term investment to buy and hold forever.
    SLV is basically buying a certificate that is tied to specific metals held in a trust. Obviously this is a gross simplification, but that is the general design. You are right there are management costs as you effectively outsource storage for a super cheap price. SLV is a perfectly fine long term investment, you just pay a fee like any other ETF or mutual fund. It is no different. When you buy SLV you technically buy a partial stake in the trusts net assets. As a result, they can price the ETF however they want, so I dont think you can 100% attribute the price difference to specific fees.
    The answers are in the data

  5. #25

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    Quote Originally Posted by windweaver77 View Post
    Yes but it seems SLV is actually just unbacked paper ,betting on the results of the unbacked paper... A bet on a bet.

    Seems terribly risky, I will just stick to my cap and Ray silvers haha
    The trust holds physical silver. It isn't unbacked paper. There have been conspiracy theories about SLV and COMEX being defunct since I joined these boards and they continue and will continue to persist, despite no one ever losing money due to counter-party risk or underfunded assets. If the world collapses, then I suppose someone may end up losing, but at that point we are all screwed, but I wouldn't hold my breath or plan my life around such an unlikely event.
    The answers are in the data

  6. #26

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    Quote Originally Posted by Ryanferr View Post
    The trust holds physical silver. It isn't unbacked paper. There have been conspiracy theories about SLV and COMEX being defunct since I joined these boards and they continue and will continue to persist, despite no one ever losing money due to counter-party risk or underfunded assets. If the world collapses, then I suppose someone may end up losing, but at that point we are all screwed, but I wouldn't hold my breath or plan my life around such an unlikely event.
    The conspiracy nuts said the same thing about the U.S. Dollar. And in spite of it losing its promised convertibility into silver, and then all fractions of its 'fractional reserve', it's still alive and kicking as a symbol that the public recognizes and trusts.

    I'm sure that long after all the silver is stolen from SLV and withdrawn from Comex, you will still be able to redeem your investment in 'dollars'.

    Glad you're still here, Ryanferr!

  7. #27

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    Quote Originally Posted by AnotherDave View Post
    The conspiracy nuts said the same thing about the U.S. Dollar. And in spite of it losing its promised convertibility into silver, and then all fractions of its 'fractional reserve', it's still alive and kicking as a symbol that the public recognizes and trusts.

    I'm sure that long after all the silver is stolen from SLV and withdrawn from Comex, you will still be able to redeem your investment in 'dollars'.

    Glad you're still here, Ryanferr!
    Well, for whatever it is worth, the dollar and US is still alive and kicking, so maybe we shouldn't be too worried . Who knows though.

    And I am still here. Work blocked Kitco forums recently, so I am barred from commenting in my downtime during the day. I go to class at night and this semester's courses are pretty dry, so I will check in every now and then during class. As a result, I will likely be a bit behind in responding to comments and threads.
    The answers are in the data

  8. #28

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    Just so we are clear, you guys are essentially saying . "move along, nothing to see here?" Just because the dollar is losing the race to the bottom does not mean it is in the clear. Last time I checked stocks are flat ( a sign of a top) here in the states and the Chinese market shat forth 30% in the span of a month. ( contagion anybody?)
    Just saying, it is not all smiles and sunshine out there. The national debt did not go away, did it?

    How high do you think those interest rates can go if stagflation kicks on? Deflation seems more likely, and what are we going to do to get out of that with one hand tied behind our backs?

    Nope, sorry it is not all just fine in any direction I look, even the political scene is less stable than it has ever been in my lifetime. But sure, yeah all is good.

    Now as far as taking delivery. One person says "no you cannot call for delivering SLV." And another person says " you can." Which is it?
    "Compulsory altruism is none too altruistic." - me

    "All of us necessarily hold many casual opinions that are ludicrously wrong simply because life is far too short for us to think through even a small fraction of the topics that we come across." -- Julian Simon

  9. #29

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    Quote Originally Posted by windweaver77 View Post
    Just so we are clear, you guys are essentially saying . "move along, nothing to see here?" Just because the dollar is losing the race to the bottom does not mean it is in the clear. Last time I checked stocks are flat ( a sign of a top) here in the states and the Chinese market shat forth 30% in the span of a month. ( contagion anybody?)
    Just saying, it is not all smiles and sunshine out there. The national debt did not go away, did it?

    How high do you think those interest rates can go if stagflation kicks on? Deflation seems more likely, and what are we going to do to get out of that with one hand tied behind our backs?

    Nope, sorry it is not all just fine in any direction I look, even the political scene is less stable than it has ever been in my lifetime. But sure, yeah all is good.

    Now as far as taking delivery. One person says "no you cannot call for delivering SLV." And another person says " you can." Which is it?
    Stocks are up ~3% YTD before dividends 7 months in. Not great, but not bad. Up tremendously since 2008. Also up tremendously relative to silver, unfortunately. As for delivery, I would just read the prospectus. Pretty sure you can't take delivery as a regular investor. Here is what the prospectus says:

    Redemption of Baskets;*Withdrawal*of*Silver
    Authorized Participants, acting on authority of the registered holder of Shares, may surrender Baskets of Shares in exchange for the corresponding Basket Silver Amount announced by the Trustee. Upon the surrender of such Shares and the payment of the Trustee’s applicable fee and of any expenses, taxes or charges (such as stamp taxes or stock transfer taxes or fees), the Trustee will deliver to the order of the redeeming Authorized Participant the amount of silver corresponding to the redeemed Baskets. Shares can only be surrendered for redemption in Baskets of 50,000 Shares each. Before surrendering Baskets of Shares for redemption, an Authorized Participant must deliver to the Trustee a written request indicating the number of Baskets it intends to redeem and the location where it would like to take delivery of the silver represented by such Baskets. The date the Trustee receives that order determines the Basket Silver Amount to be received in exchange. However, orders received by the Trustee after 3:59 p.m. (New York time) on a business day are treated as received on the next following business day. The Custodian may make the silver available for collection at its office or at the office of a sub-custodian if the silver is being held by a sub-custodian. Silver is delivered at the locations designated by the Trustee, in consultation with the Custodian. All taxes incurred in connection with the delivery of silver to an Authorized Participant in exchange for Baskets of Shares (including any applicable value added tax) will be the sole responsibility of the Authorized Participant taking such delivery. Unless otherwise agreed to by the Custodian, silver is delivered to the redeeming Authorized Participants in the form of physical bars only (except that any amount of less than 1100 ounces may be transferred to an unallocated account of or as ordered by, the redeeming Authorized Participant). Redemptions may be suspended only (i) during any period in which regular trading on NYSE Arca is suspended or restricted or the exchange is closed (other than scheduled holiday or weekend closings), or (ii) during an emergency as a result of which delivery, disposal or evaluation of silver is not
    reasonably practicable.
    One the first page it talks about who can buy the baskets...basically who the SLV trust buys and sells silver with:
    Only registered broker-dealers that become authorized participants by entering into a contract with the Sponsor and the Trustee may purchase or redeem Baskets. The*Trust*creates*and*redeems*Shares*on*a*continuo us*basis*but*only*in*Baskets*of*50,000*Shares
    I havn't read the whole thing, so I may be missing a clause. If so, please feel free to correct me.

    http://www.ishares.com/us/products/2...ver-trust-fund
    Last edited by Ryanferr; 07-21-2015 at 07:59 PM.
    The answers are in the data

  10. #30

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    Quote Originally Posted by windweaver77 View Post
    Now as far as taking delivery. One person says "no you cannot call for delivering SLV." And another person says " you can." Which is it?
    If you are authorized participant and deal in 50,000 share blocks you can.
    Last edited by SilverShareHolder; 07-21-2015 at 08:01 PM.

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