A special April Fools Day gift for Silver bulls...
April Fools
April 1, 2013
Four things silver bulls have wrong Silver bulls: “Silver is a commodity, it is a store of value, same as Gold” Correct answer: Silver is a commodity. Silver is a commodity. Silver is a commodity. Consider the following:
Prior to 2009 less than 3% of the annual Silver supply went to investment. Since 2002 only 7.9% of the entire Silver supply has been off taken for investment. Even in the peak investment demand year of 2011 (the year the suckers were really reeled in), only 11.4% of total Silver supply went toward investment. The entire demand of Silver for coinage and investment is met – no, it is exceeded – by scrap recovery. Prior to 2003 the “investor” actually was a net dis-investor of Silver. This will occur again someday.
Factor LLC 2 North Cascade Avenue ● Suite 720 ● Colorado Springs, CO 80903 Telephone: (719) 648-4160 ● Email:
[email protected]
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Silver bulls: “Silver should be at approximately 1/15 the price of Gold”
Correct answer: The relationship between the price of Gold and Silver is not based on the beliefs of some Spanish king 500 years ago. Sorry, but Ferdinand is no longer the dictator of the precious metals market.
Supply and demand determines the ratio – the ratio during the past several decades is shown below.
Silver bulls: “The CME/COMEX Silver exchange is a fraud. The exchange only trades ‘paper’ Silver. If you want to be invested in ‘real’ Silver, the only way is through bullion purchases or selected EFS (such as SIVR).” This is one of the favorite arguments of the Silver bulls, to which I say …”REALLY? I mean REALLY?” I will admit that the Comex pulled a fast one on the Hunt brothers in the early 1980s. The actions of the exchange are well documented. But this “paper Silver” argument is b bunch of bull. In fact, you have it 180 degrees wrong. Silver delivery takes place every monthly. On this point, Silver bulls need to get their facts straight, and they need to put their money where they mouth is. Silver bulls, here is what you: Factor LLC 2 North Cascade Avenue ● Suite 720 ● Colorado Springs, CO 80903 Telephone: (719) 648-4160 ● Email:
[email protected]
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Buy a contract of May Silver Do not liquidate your position Take delivery – you will need to pay the full contract value Arrange to have a Brinks truck pick up your Silver
Silver bulls: “The world will soon run out of Silver” Correct answer: Sorry, your “peak Silver” story is as tarnished as your long position from $48 per oz. It is kind of like “peak oil.” I have repeatedly challenged Silver bulls with the following: Provide me with sound research from the Silver industry or a credible academic source to support your “running out of Silver” argument. I am not interested in your opinion or some scam data from the blog of another Silver bull. I want solid research. I have appealed to Silver bulls with this request for three years – and I have three years of silence. ###
Factor LLC 2 North Cascade Avenue ● Suite 720 ● Colorado Springs, CO 80903 Telephone: (719) 648-4160 ● Email:
[email protected]
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