A paper question

[Catfish4u]

I am not sure of the answer? What if most of those that own paper silver figured out 'that physical silver is not there' and they all basically 'wanted out at the same time'? Would silver quickly drop and where would it end?

[barrytrot]

Yes it would drop.

"end" - initially who knows. Long term probably higher as there is only so much "real silver" but there is infinite "fake silver". So the people wanting silver would be chasing a smaller "supply" therefore price would increase.

[barrytrot]

But people aren't going to realize there is no physical backing it. People don't realize things like that People are ignorant and like it that way!

[JerrySpringer]

I am not sure of the answer? What if most of those that own paper silver figured out 'that physical silver is not there' and they all basically 'wanted out at the same time'? Would silver quickly drop and where would it end?

Didn't some game-changer like that happen with the Hunt brothers? In their case, rules were changed that left them holding the bag. Similar results perhaps today though. If the market does what market usually does, it will hit it and quit it with PMs for the time being. Does that mean spot silver prices will be worthless metrics? I don't know. Maybe less attention to confiscation talk will ensue though from this episode. Maybe not unlike bitcoin practice, people will consider silver real money and wouldn't it be an effin' great thing if silver finally hits some semblance of price stability or stays in a nice channel and people can legitimately trade it without being concerned about the speculative nature of it.

[zoomzoom71]

I'm thinking I should have sold those 90, or so, shares of USLV back when it hit $40. LOL

[Catfish4u]

But people aren't going to realize there is no physical backing it. People don't realize things like that People are ignorant and like it that way!

Maybe the 'people' are the ones left holding the worthless pieces of paper? Meanwhile, the 'big banks and institutional investors' have pulled out? IMHO it is just a 'big paper play' and the underlying physical shortage is still there. I think it is past time for a total disconnect between physical and paper silver.

I think silver is valuable because it has many industrial and medical usages. I think gold is 'more like fiat' in that its value is in 'perceived value'. In my opinion silver is more like 'real money'. Of course that is JMHO.

[barrytrot]

The people generally aren't even lucky enough to hold the worthless paper

They will all panic like the "people" they are and sell now that silver is 20% down in 2 days.

Then the smart money will be holding the paper and all the "people" will have to show for their trouble is a huge loss.


It's the centuries old game of moving money out of the hands of the ignorant.

[JerrySpringer]

But people aren't going to realize there is no physical backing it. People don't realize things like that People are ignorant and like it that way!

Maybe the 'people' are the ones left holding the worthless pieces of paper? Meanwhile, the 'big banks and institutional investors' have pulled out? IMHO it is just a 'big paper play' and the underlying physical shortage is still there. I think it is past time for a total disconnect between physical and paper silver.

I think silver is valuable because it has many industrial and medical usages. I think gold is 'more like fiat' in that its value is in 'perceived value'. In my opinion silver is more like 'real money'. Of course that is JMHO.

Anything that shies people away from PMs right now is probably A-OK. The short-term thinking that happens all the time has people expecting everything to keep going to the moon and since so and so on the radio endorses something, then that means they are looking out for your welfare and they wouldn't let you down. Maybe they will maintain that talk, even PM prices drop a heckuva lot more. Key is to have a long-term plan and not care anymore whether an asteroid or zombies are coming.

[TwoPenniesEarned]

I am not sure of the answer? What if most of those that own paper silver figured out 'that physical silver is not there' and they all basically 'wanted out at the same time'? Would silver quickly drop and where would it end?

Didn't some game-changer like that happen with the Hunt brothers? In their case, rules were changed that left them holding the bag. Similar results perhaps today though. If the market does what market usually does, it will hit it and quit it with PMs for the time being. Does that mean spot silver prices will be worthless metrics? I don't know. Maybe less attention to confiscation talk will ensue though from this episode. Maybe not unlike bitcoin practice, people will consider silver real money and wouldn't it be an effin' great thing if silver finally hits some semblance of price stability or stays in a nice channel and people can legitimately trade it without being concerned about the speculative nature of it.

In this case the rules will be changed to saddle small investors with the TBTF's paper silver short sale losses. We are seeing it all over the place. "These white shoe bankers made bad bets. They need to be made whole so we will be "bailing them in" with your deposits." Same thing will happen in some form with silver. Perhaps they will raid the ETF's and leave anyone owning them with nothing. That would be consistent with prior behaviour. Like MF Global.