Silver just broke 45 an ounce today as it continues its parabolic climb northwards due to JP Morgan running out of silver to manipulate the markets with.
Speaking of fraud in the silver markets, the Weekly Telegraph explains why owning shares of the SLV ETF is like playing with fire:
A few points of note:
1. The SLV ETF may not be redeemable in an “emergency” (such as a currency crisis, market crash, terrorist attack).
2. NO ONE IS RESPONSIBLE for the quality/purity of the silver held by the trust.
3. If someone owns 75% of SLV, they can terminate the trust (if government or a hedge fund bought up the SLV they could terminate it).
4. If the SEC determines the trust is an investment company, they can terminate the trust.
5. If the CFTC determines the SLV is a commodity pool, they can terminate the trust.
6. If you want to get your physical silver out of the trust, they can require you to first pay taxes on your holdings before you can get your physical silver out of the trust. So this means if you made a tremendous profit, you have to cough up the tax dough on your own, without being able to sell the silver to get money to pay the taxes.
Further, reports indicate that the SLV’s inventory accounting is very sketchy.
Jeff Nielson further explains in this article:
Instead of buying the ounce of silver directly, our foolish investor chooses to purchase a unit of SLV. Essentially, he is designating SLV as his “agent” to buy and store the bullion on his behalf. So, SLV buys the ounce of silver, and it is then subtracted from inventories (like any other purchase). However, immediately after purchase, SLV takes the investor’s ounce of silver and dumps it back into the silver inventory – where anyone else in the world can buy that ounce of silver.
Obviously, SLV has turned this into a sham-transaction. If the investor buys the ounce of silver directly, it is permanently removed from inventories (unless/until that investor chooses to sell it). However, with the SLV shell-game, since every ounce of silver “bought” by SLV is immediately added-back into inventories, what this means is that every unit of SLV could (theoretically) simply be the same ounce of silver purchased and re-purchased hundreds of millions of times by SLV unit-holders.
Of course, on a practical basis this isn’t the case. Since many SLV unit-holders hold large numbers of “silver” units, the entire SLV scam could not be conducted with just one ounce of silver. However, it clearly only takes a minute fraction of the total number of units of silver sold in order to operate this scam – much less than 1% of the total size of the fund.
The second aspect of SLV fraud is that the supposed “custodian” of all that SLV silver is JP Morgan. JP Morgan has a massive short position which is never audited that is always almost roughly the same size as the (supposed) holdings of SLV (an amazing coincidence!). Thus, even with the supposed “audits” of SLV, JP Morgan has never shown that is has more than half as much silver as it needs to cover both the short position and the custodian agreement.
Since JP Morgan could suffer potentially infinite losses on that short position (which it has leveraged by somewhere around 100:1), obviously whatever silver JP Morgan holds would be used to cover its own short position, and if there was anything left over, that would go to SLV unit-holders. Clearly, if JP Morgan was only leveraging its silver by 2:1, that alone could mean that SLV is 100% paper. Since we know (from “Loose-Lips” Christian) that these bullion-banks are leveraged by closer to 100:1, the odds of this fund being even partially backed with silver are very slim.
Take physical delivery of your silver and bury it where the sun doesn’t shine if you want to be safe from fraud and government theft.