$35+ an ounce! $50+ soon??

Please forgive me, but I have no confidence in the FDA. They allow pharmaceutical companies to provide their own trial results on drugs that they then turn around and allow people to use as 'safe' because they trust the company turning a profit to be honest. Not to mention that 6 months is an adequate amount of time for testing, so if it kills you after a year, they'll find out 6 months after it's released to the public.

I am not talking about colloidal silver. I'm talking about nano-silver used in socks, counter tops, deoderant, pretty much anything anybody might want to be antibacterial.

Also, producer dehedging is such a small amount of supply/demand it's almost not worth considering. Investment/Jewelry is a big one, but even those plus producer dehedging is still less than industrial demand: http://media.chrismartenson.com/images/silver-supply-demand-table.jpg

If demand for silver is based on speculation, why are above ground available physical supplies at the lowest level in over 700 years? The demand you are referring to is the paper market which I've already stated dominates the physical market by overwhelming factors and is not a true representation. The paper market can do anything and can't be used as a valid source for anything other than paper IMO. Maybe the paper denominated price is overvalued, but the physical price is far undervalued based on the physical market supply/demand dynamics. The fact that these 2 things are tied to each other is ludicrous.

I agree that gold is over priced in terms of silver, but in my view both gold and silver are undervalued in terms of fiat currency. I am also toning down my expectations for silver in the short term, but not for the same reasons. Merely because the price is probably not going to break above $50 until the paper market no longer dominates the physical price. The CME has plenty of room to raise margin requirements, and they've shown that they will do so without hesitation.

 

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Talk about unfair, the leverage required for a silver contract is 43 times greater than for bonds. When has the CME ever lowered margin requirements for silver? If they have, it's been a while. Nothing on the entire exchange has margins anywhere close to where silver is on a percentage basis. You are correct that longs are also speculating the market in the same manner as the shorts. Margins should be abolished altogether. I haven't purported that the CME is biased against buyers, merely that they are skewing the price action to the point of a non-real market taking precedence over and controlling the real market. As for why the industry sells there, I don't know because I am not one of them. I could guess maybe because there aren't many alternatives.

 

5,000 oz of silver is indeed a lot to carry around. My remedy for this would be to get some gold. I would argue that silver is quite liquid however, because of the small denominations. It's much easier to exchange a ~$30 coin than one that's going for ~$1700. Paper contracts are more liquid, but you're not going to get cash in hand for them as quickly as you can for physical.

The potential downside of investing in SLV or GLD is that they don't have the physical to back up their paper contracts. They don't even make any bones about the fact that they don't. You can't demand physical unless you have something like $50,000 in worth anyway. It's fine and well if you want to speculate in the market, but if you are stacking I would consider this move to be in the wrong direction. The upside with paper is that you don't lose out on the buy/sell premium spread. The only paper contracts that are fully backed by physical silver are with Eric Sprott's PSLV fund.

 

Germany would never do this. Sure, they might want to see some change in the Anglo-Saxon dominated banking system, but they would never ever consider turning currency control over the the Communists in China.

 

GFMS provided both your table and my chart... why the VAST difference in data?

http://www.silverinstitute.org/supply_demand.php#demand

 

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Everyone is in it for their own greed. This article might interest you. It is easily backed up by the SEC filings. Investors pay almost 20% upfront for the privilege of holding the shares. No wonder he is bailing out of his own fund. IMO.


http://kiddynamitesworld.com/eric-s...e-of-his-pslv-shares-for-his-for-profit-funds

 

I'm a bit confused. Your link has the exact same chart image that I posted a link to. So I'm not sure what vast difference you're referring to. Admittedly I don't know what GFMS stands for.

I do think very highly of Kid Dynamite after his recent clarification on the initial margin changes resulting from the MF Global situation that ZeroHedge understandably misunderstood due to the language of the release, causing quite a frenzy a couple weekends ago. He is a sharp guy. However, this particular article shows that Sprott is selling his funds and 'investing in other silver instruments' which are not specified. I wouldn't fault the guy at all for dumping his funds in order to get more physical silver. That would be a prudent thing to do at this stage. Now if he's turning around and investing in something else then that would be a different story, but it doesn't specify.

 

The chart shows the bottom gray shaded area as being dehedging by producers.

 

I'm assuming you are referring to the first chart on your link. The 4th chart on your link is the one that's the same as the link I posted.

It appears that the Silver Institute labelled the first chart in an ill-advised manner. The grey area you're referring to is actually "Industrial Applications". The darker grey "Producer De-Hedging" (which is lighter than the still darker grey "Coins") is only visible as a tiny sliver at the top of the 2nd and 3rd bars.

Basically the legend is only used for the small items. The larger ones have the label in the actual area.