Why the silver longs, and Eric Sprott, can defeat the silver shorts – an education in 4D chess
Quick note: was just linked in Sprott Money’s twitter and facebook. Also wanted to give a quick shout out to the guys at wallstreetsilver for getting me some exposure. Be sure to check them out as I think they might be looking to pick up some steam and get in on some silver buying!!
Worldwide silver shortage. Bullion stores sold out for weeks, if not months. No one selling their product to them for spot price. Bullion priced $10-$13 over spot. Silver deficit of mine supply of 350 million ounces.
And of course, you expect to wake up at silver $2 less than a day before. Actually — I did, many of you did not. The price is actually in “contango”, where the futures price the last time I checked is wayyyyy above spot. I know how they play this game. At issue here is the disconnect between the REAL physical price and the “paper” price.
When you see a contango like this, you can, in essence, sell a futures contract, then go to the spot market and buy silver. You can then deliver the product on the futures contract. This contango was $.75 a few minutes ago, per ounce. For a contract of $5,000 ounces, that is $3,750 you can pocket on this deal. Of issue, NO ONE will do this, because anyone trying to buy on the spot market may get months of delays to get product.
Yet, prices are falling because we obviously have all of this supply!!!
Watch Andrew Maguire — he walks you through everything.
But this supply — it’s falling off the rafters!! Just yesterday, did you know they put on sale 2 BILLION ounces of PHYSICAL SILVER? Yeah. No. They didn’t. But they did write pieces of paper to sell 2 billion ounces.