There'll be some fireworks coming in silver, ETF or no ETF!
Editor's note: The following exchange took place between Minyan Ted Cirillo, Mr. Ira Shapiro of Barclay's and our metal maven Prof. Laurie McGuirk.
Dear Mr. Shapiro,
I am very interested in investing in the forthcoming Barclay's Silver ETF and am disappointed after reading the following article. Your name appears on the I-Shares Silver Trust filing. The following link is an article that states that there is very little probablity of Barclays actually putting this together because of the availability of silver to fund the trust.
Why would you (Barclays) even consider offering this if it were not possible? Why does each share represent 10oz of silver. If each share were to represent only one ounce of silver then you would only have to obtain 13 million ounces of silver instead of 130 million ounces.
Mr. Cirillo -
Thank you for your interest in our proposed Silver ETF product. Because we have filed a proposed disclosure document with the SEC that the SEC has not yet processed, applicable legal restrictions require us to not comment on the product and how it would work. That being said, you can be assured that we would not have filed the documents with the SEC unless we were committed to bringing out a product that we believe will work from investors' perspective. I do not know the author of the article you attach or wish to engage in a debate, but I will add that some of the article's conclusions seem to me to be based on misunderstandings of the product's mechanics.
It is interesting, isn't it?
Ted Butler has done more work than most on the silver market. He speaks his mind frankly, conveys principles and ideas simply and concisely and I do take notice of his insights (especially his knowledge of the physical and futures dynamics in silver).
There are lots of views on silver and I expect we will hear plenty more in the next few years as things get a little more exciting in price terms and movement.
Regarding my thoughts on the ETF, I see them as another paper form of metal. One still only has an IOU or paper claim over some silver, stored somewhere by someone else. Physical silver in numbered and stamped bars, stored privately, better still in one's own possession, is what I call OWNING silver.
I haven't had time to look closely at the ETF and so I can't really comment from the racetrack here in Grafton, NSW. But - it is a lot of silver that Barclay's will be after, and one does wonder where or from what source it's gonna come from. My expectation is that there'll be some fireworks coming in silver, ETF or no ETF. Never advice.
Back fulltime on Wednesday....
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