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<p>[QUOTE=&quot;InfleXion, post: 1644881, member: 29012&quot;]This is true of paper silver. Obviously it was overvalued because the price fell off. However, this does not speak to whether physical silver was overvalued because paper silver is only 2% backed by physical. It is not giving an accurate picture of the physical market, and while you are correct we will never know what the physical value should be so long as there are proxies diverting and skewing demand. </p><p><br /></p><p>With only 2% physical backing the paper that means that there are about 50 times as many contracts in the supply pool as there should be, 50 times as many places for demand to go, and thus the paper price <u>could be</u> 50 times lower than it should be. Using that example, something 50 times undervalued being overvalued by around 60% is still 30 times undervalued. </p><p><br /></p><p>Of course I am rounding and this is not intended to be used for valuation as it is not nearly so cut and dry in reality, but simply to illustrate what is truly being measured and to put it in context.[/QUOTE]</p><p><br /></p>

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