help me understand

[Treetop]

Im curious everyones opinions on those paper silver markets. ETFs and such. Ive heard that they sell a higher amount of silver then they actually hold.

If these people try to pull their silver out of these funds, which I believe they can, Ive heard the thought it would raise the price of physical silver.

so if that is true, doesnt this mean the market is all ready being held down by these things? It would seem to me there is more money in silver then it appears, because if these people were forced to invest into only actual held silver, but still invested as much, the price of silver would be correspondingly higher.....

So what am I missing here?

[Thogey]

You are missing nothing. Sounds like you have it nailed.

Except for this. When the Russian millionare sends his guys to LME to pick up his silver..he's going to get his silver,or someone's loosing fingers.

When you go to cash out, it may or may not be available. The Russian is going to drive up the price, you are not.

[Lemon Thrower]

paper silver markets are like fractional reserve banking. ultimately there are many more paper claims than what is in the vault. it works so long as everybody doesn't withdraw at the same time.

there are a few products that claim to own 100% physical like Sprotts fund and CEF and its sister funds. but why buy those when its easy to buy physical.

[argent_pur]

These are great questions to be posing as (I presume) you are new to PM investing

The world's largest silver ETF, SLV, is not redeemable in physical silver unless you own 50,000 shares of the fund. That pretty much precludes all but very wealthy investors from getting at the trust's silver, if it does exist. Take the advice of others here and buy physical. It's the safest form of silver you can buy.

[Sheikh_yer_Bu'Tay]

Im curious everyones opinions on those paper silver markets. ETFs and such. Ive heard that they sell a higher amount of silver then they actually hold.

If these people try to pull their silver out of these funds, which I believe they can, Ive heard the thought it would raise the price of physical silver.

so if that is true, doesnt this mean the market is all ready being held down by these things? It would seem to me there is more money in silver then it appears, because if these people were forced to invest into only actual held silver, but still invested as much, the price of silver would be correspondingly higher.....

So what am I missing here?

Ding, ding, ding, ding!!!!......... We have a winner!

Yes, it does appear that paper futures, and paper shares on silver held in someone else's vault, are holding down the price. If there is ever a run on silver, just like a run on the bank, many people will be left holding only paper in their hands and nothing more. By the time the smoke clears from all the lawyers fighting for pennies on the dollar... the physical stuff will be long gone.

There is sooo much good advice on this forum! Listen to what the old timers have to say: Buy physical silver, and don't let anybody else hold your money.

Cheers!

[Treetop]

Well obviously Im not an expert, but Im not exactly new to silver. Ive had some a few years, and know enough to know if your investing in silver unless your a day trader, it should be in your hands.

I was just wondering how much the paper silver market might be holding down the physical market. Also how likely it is in other peoples minds, that the pyramid scheme will fall. It seems inevitable to me.

[Sheikh_yer_Bu'Tay]

Well obviously Im not an expert, but Im not exactly new to silver. Ive had some a few years, and know enough to know if your investing in silver unless your a day trader, it should be in your hands.

I was just wondering how much the paper silver market might be holding down the physical market. Also how likely it is in other peoples minds, that the pyramid scheme will fall. It seems inevitable to me.

That is a very important question. The answer to too complicated for me, Treetop. In fact, some maverick economist proclaim there is no manipulation at all. The silver market is valued at exactly where is should be. These mavericks state that all commodities rise and fall on "the basis", and a good savvy trader can make a profit on a basis move no matter if it goes up of down. To them, there is no naked short selling going on, just good old hard nosed business being conducted. Well, that is over my head, so , I hope someone else here jumps in and gives you a definitive answer.

If you believe silver is artificially suppressed... then you should be seeing good buying signals...

IMHO silver is undervalued right now. I believe silver shall rise to gold/silver ratio of 30:1. But I have been waiting for that move for maybe five years now. So, don't take my word for it!