Rhetorical Question For Silverbugs

This post is to address one specific argument that I hear made all the time by Silverbugs:  the argument is that there is a severe shortage of “real” “physical” silver.   Well, last night, Hero of the Silverbugs, Eric Sprott, announced another secondary offering for his $PSLV (no positions) silver trust.    PSLV (like $SLV – no positions) owns fully allocated silver bullion bars that are London Good Delivery standard).

Here’s a chart of silver, with the approximate time of the PSLV Secondary announcement marked with a white arrow:

So the question is this:

If there is such a vast shortage of physical silver, and everyone now knows that Sprott is about to go out and buy a few hundred million dollars worth of real physical silver, then why didn’t the price of silver move on the announcement?   Do you really believe that those people who are going to sell Sprott this impossible-to-get silver are unaware that there is no silver to actually deliver?

Or, perhaps, could the answer be that the “there is no silver” myth is just that – a myth… Dammit – I answered my own rhetorical question.

related:  My entire “silver” category


postscript – note that nowhere in this post do I indicate a bearish view on silver.  I have no bearish positions in silver.  I also don’t think silver is screamingly cheap right now.  I am on the sidelines.   I am bearish on nonsense and misinformation in the previous metals markets, and I will continue to slay the myths put forth by those who a) have no idea what they are talking about and b) are willing to deceive you in order to sell you something (usually the very metals that they are claiming are in vastly short supply!).   Yes – we all know that silver is a very “small” market, and that one can move this market without needing hundreds of billions of dollars.  My point here is simply that we have not yet reached the point in time where silver is in dire scarcity and that NO – no matter how much you want to believe it, bulk silver purchases are NOT impossible to do at the “paper” price.

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