Silver - $27 going to Zero! Call your boss..beg for job back

[Thogey]

Question for JFF.

What percentages of silver buyers in your business actually need the silver for their business, manufacturing, or other necessity?

To be honest, my silver really has zero value to me. I'm just betting it has value to someone.

[sambo]

Was wondering what the premium on 1,000 oz. bars would need to be to get the paper price to move towards physical. Like if 1,000 oz. bars have a $2.00 premium would people take delivery to make a profit on the spread?

[mflugher]

unless comex default occurs I don't think the 1k oz bars will ever have much of a phys premium over paper.

Most people who want to own phys want to be able to carry the individual units without a hand truck

[Corsair]

I called my wife just now and she said it's ok if I use Rodebaugh's bottom. She agreed that $18 was a very low bottom.

I wish I could find an $18 bottom...and dammit, I live in a college town!

[sambo]

I would think the only way there could be a comex default is if there is a premium on 1,000 oz. bars. I don't mean the only way, it would just happen alot faster.

[mflugher]

I would think the only way there could be a comex default is if there is a premium on 1,000 oz. bars. I don't mean the only way, it would just happen alot faster.

Suppose that's a chicken/egg scenario.

Rising physical demand, be it industrial, jewelry or investor interest in small .999 rounds causes Comex stocks to go down, possibly eventually hitting default. That rise in phys demand might eventually cause premiums to go up, but only if Comex market pricing did not cooperate and go up.

Even at todays "low" price a comex bar is ~$23000.

I personally wouldn't want more than 10% of my stack ever to be represented by a single piece, too hard to sell how much you want to sell at a time. I'm assuming any reasonable stacker wouldn't either. Therefore at today's price an investors Phys silver holdings would have to be aprox. a quarter million. Obviously this person is a millionaire or multi milionaire, and I'm not talking about the cheater millionaires who's only real asset is a house in California. Your field of persons reasonably willing and able to hold such items is rather small I would have to believe.

Leave it to say increasing the premium more than 10% over the actual costs of delivery would be unlikely.

On the other hand it only takes 1 or 2 billionaires to buyout the comex completely except they have rules to prevent that since the Hunts...

[Rodebaugh]

The anti-gold rhetoric being spewed on the television is growing. Gold is no longer a safe haven against inflation (Disregard the fact that it has been playing this role since the first nugget traded hands). Time to get your money out of physical and sell your paper metal ETFs as this sell off is just a sign that the economy is getting stronger. You want to bet on the right horse right? Stocks are back! You don’t want left behind do you? So go ahead and lock in that 20% loss that happened over two days and switch lanes into something more profitable. I, for one, am not buying it.

My advise:
Buy a little physical at price levels as we pass through them.
Buy a little ETFs with defined trailing stop loss.

[angel2004]

I don't understand the advise to dump either unless the powers that be want the price low so they can purchase low and have a lot. I just know that stocks can go to zero, basically gold / silver cannot. And if they do, our economy is so wonderful that lower pm prices won't hurt us. Just my thoughts of course

[Engineer]

I'm a bit surprised at how stable prices were at the Sydney and HK open.

[Country]

In the GREEN - BOTH GOLD AND SILVER!!! GOLD should lead.... UP $10 so far...

[Engineer]

In the GREEN - BOTH GOLD AND SILVER!!! GOLD should lead.... UP $10 so far...

There's the volatility I was looking for!

[Rodebaugh]

Most shops out of cheap Phyz and still no Real price bump from Makers taking delivery?

Look for $22-21 by weeks end IMO.

[68Camaro]

Paper vs physical ... yawn

[Rodebaugh]

Paper vs physical ... yawn

fresh Phyz comes from paper.

[68Camaro]

This little burp has devastated the supply chain for weeks. If this isn't the burp prior to the market crash it's certainly an example of what to expect when the last one comes. If paper drops further what does it mean? I think soon the comex would soon be strippped bare so bring it on.

[mbailey1234]

First I want to say I am NOT willing to do this .... yet anyway.... BUT.... at what premium would you all be willing to start selling some of your silver and replacing it with paper, waiting it out until the price rebounds and closing out the paper to replace your physical?

I understand the risks involved but if spot was $22 and I could sell ASE's for like $30 I think I would do it and buy some SLV.

So $8 over on ASE's and $6 over on 90% is my answer for 10% of my stack. The higher the premium got the more I would let go up to 30% of what I've accumulated.

[wolvesdad]

If you are in it for the long haul you probably wouldn't do it at all--me.

If you are a gambler and big profit seeker, then your listed premiums would motivate some to try the risk on up to 80% of their holdings.

[barrytrot]

Hm:

- Sell your physical at the current high premiums.
- Buy a corresponding amount of "fake silver" at zero premium.
- Once silver goes back up and premiums reduce sell fake silver and buy back physical at lesser premium.


I am definitely NOT going to do that, but I can see the benefits

[mbailey1234]

I think it could work but someday I admit you could be left holding a bag of paper. Everything I see doesn't point to a supply shortage (yet). Since demand has been so good the mints can only stamp out so many units and they haven't been able to keep up. I would be willing to play that spread on a small portion of my stack if the gap got wide enough.

The fact is I do own my physical and if I want to play this spread that is fine. What I don't like is if I have my silver stored somewhere and that warehouse is using my physical to loan out to try and make a buck on this. I'm sure this is happening to some degree and when everyone shows up the same day to pick their's up that is when it could get ugly. Don't we all agree that's why it's taking us 7 years to return Germany's gold?

If we ever do test the $18 area like some are expecting I think the gap will get big enough that I will be looking to do this.

[scyther]

I noticed Provident had a lot more in stock last night than they did last week. I think the supply is coming back to a significant degree...

[fb101]

never trade metal for paper.

[Rodebaugh]

never trade metal for paper.

and be left holding the bag.

Until then.......Jive on.

[wolvesdad]

I hadn't thought of it till now, but could the whole German Gold repatriation have been the motivating force in manipulating the metals market recently??

Could the pinch have been on because of the repatriation and so they sunk the market to get their noose a little looser?

Or is that just conspiracy speculation??
Has anyone already said that??

[TwoAndAHalfCents]

The German Gold repatriation angle sounds interesting. I haven't heard that idea until just now.

[beauanderos]

ICould the pinch have been on because of the repatriation and so they sunk the market to get their noose a little looser?

They are all parts of the puzzle.