Subscriber ‘EZ’ had a few questions, hence a Q&A on silver veered into editorial opinion
EZ provided me with a lot of background on her trading methods and tools. She is confident in her ability to manage that end of the silver market. The “price” end. But she asked my opinion on other areas:
Can I expect SLV to continue tracking price levels in the physical market? It is a derivative. It does own some physical silver, but it’s unclear how much.
I manage the macro and am not an authority on manipulations and grift that may be going on inside a paper/derivative market. That said, I have used PSLV instead of SLV because while you’ll never get your hands on Sprott’s metal, it’s there at least. Also, it often can be bought at a discount to the NAV of its silver holdings.
The United States has declared that silver is a critical mineral. I own physical silver stored in a reliable vault. I see a clip on YouTube that says “Silver is Banned.” Could the government take away physical silver that I own? I recall that in 1933 the government required people to hand in their gold and gave them paper money in return.
I would have more such concern about gold than silver. Let’s not over-rate silver. It’s utility is increasingly industrial. There is a ton of it above ground and at a certain price grandmas all over this nation will be disgorging their dinnerware to be reprocessed for industrial use. The advantage silver has over copper, platinum, REE, etc. is that it is also thought of as gold’s little monetary brother.
YouTube exists to make headlines that grab your eyeballs so the Algo can keep feeding you what you want. Content producers know this and so they feed the Algo what it wants. While there are some good people out there promoting their views, almost all of them put up bullshit headlines in order to get your attention. Frankly, and on the whole, I’d take YT content dorks with a large chunk of salt. They have come for your eyeballs, primarily. That’s the job of YT. Within that, you’ll find good content and really bad content.
The government is not confiscating your silver any time soon and likely, never. With one caveat: Trump, a wildcard who does as he pleases as long as he holds his office.
…when it comes to these big general questions about investing in paper derivatives on the one hand, or investing in physical silver and gold on the other hand, I would really appreciate knowing your thoughts and any information you could share.
With either gold or silver, of course physical is a whole other league than the paper markets, including “unencumbered”, fully allocated holders like Sprott, and others of its kind.
But with Trump as president, anything is possible. He just took over Venezuela because he could. He made a big deal about auditing Fort Knox, and then suddenly STFU about it, never to utter anything about it again (that I know of). He is slapping his name on institutions he has nothing to do with, sanitizing American history and basically turning the country – and some other parts of the world – into Trump World.
Until he is stopped by his own base, that is. We have a president, along with a made-for-TV cabinet, doing as he pleases. He has jumped the tracks from most of MAGA’s most closely held ideologies.
We now live in a country where anything is possible; sort of like Wonderland.
None of this is normal. America – for the time being – has a Dear Leader who does as he pleases, while he is allowed to do as he pleases. I would not put it past him to confiscate all the gold in America and shove it in White House’s basement (if it has one). He is a man who takes. He is a man who wins. Duh. I am riffing and using some hyperbole here, so please work with me.
So, pending Trump’s ability to remain in office, you tell me how this plays out. Anything is possible. But all I can do is be the simple guy I am and say physical is physical (as long as you’ve got it kept safe somewhere, even outside the country) and the other crap, SLV, futures, and to a lesser degree, PSLV, are something much different and dependent on data servers for you to even have proof that you supposedly “own” it.
It’s best to view SLV and PSLV (and the leveraged derivatives spun off of them) as components of the stock market that follow the price of silver… until maybe they don’t if something breaks. In that event, PSLV, actually accounted for in vaults, would stand a better chance of reflecting actual silver prices in my opinion. I have no argument about whether SLV actually holds the bullion it is supposed to have because I really don’t care. It’s a price vehicle as long as it works well as one, not an investment.
But again, I do not make my living telling spy mysteries to transfixed gold and silver bugs, sleuthing the seedy underworld of digital/paper/futures trading. I do not put stupid titles on YouTube videos to grab eyeballs as a primary function. I just follow gold and silver, among many other markets, and analyze those markets from the perspective of actual metal and the miners (and royalties, explorers) of those metals.
Physical is for real value. Trading the derivatives is for making paper gains as long as the market functions normally. As a side note and as we know, CME Group is already attempting to modify the market’s “normal” function with increasing margin requirements. But what came first, the “physical demand” horse or the futures/”derivatives trading” cart where the current silver price is concerned?
As with gold, most physical metal holders stack and hold and hence don’t have to worry about the market-influenced price during any given phase.
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