Is SLV real, physical Silver

[Glenn Black]

SLV_00.jpg

After hearing numerous opinions with few facts, I decided to do my own analysis of iShares SLV prospective, available here http://us.ishares.com/product_info/f...erview/SLV.htm collected on April 26, 2011.

To do the analysis, I assumed that the sponsors, trustees, and others didn't want to go to jail for fraud, so they had to have something similar to silver.

I assumed, until the prospectus expressly and specifically said otherwise, that the silver they had and intended was comprised of:

• A 1 lb. bag of dirt (ie. semi-spent tailings from an 1860's abandoned silver mine) which still had a few 9999 flakes of silver in the dirt due to crude mining techniques of the 1860's;
• A silver filling that was pried out of a cadaver's mouth by some rogue undertaker or dentist.
• Possibly one silver bar that would pass for a London Good Delivery bar.

I search for the words "physical" as in "physical silver", as well as "bar" as in "London Good Delivery Bar".

I note that prospectus defines many terms, but never defines "silver". Could this prospectus be all about clouds, as in the silver lining? What kind of silver are they speaking about? No one knows for sure.

The prospectus speaks a lot about how the London Exchange works, how OTC occurs, and everything else that is somehow related to silver and the stock exchange, but spends little or no time speaking about just how many silver bars they have and how their trust works, and the guaranteed minimums.

The prospectus tells us what they might do, or how it may work, but never get around to setting the guarantees that must be done.

They talk about how people want to have and hold physical, but SLV isn't that, but it's kinga sorta something like that, but they never quite say exactly how SLV is kinda sorta like having, owning, or looking at, or standing next to somebody who kinda sorta has physical silver of LGD bars, but isn't an owner of SLV.

Owners of units are not shareholders, can't vote except in very limited circumstances, and all the parties who get paid by SLV are said to not be responsible for this and that, but it never says exactly who is responsible for ensuring unit holders are treated fairly, and get what they pay for.

After carefully reading the prospectus, I conclude that there is a high probability that SLV has at least one London Good Delivery ("LGD") silver bars somewhere inside SLV.

If I were you, I'd assume the worse case, which is SLV has exactly one (1) LGD bar, plus the 1 lb. bag of silver mine tailings, and the used silver tooth filling. If the stupid sheep in the marketplace assume more than this paultry amount of silver and mysteriously price SLV as if they actually have a lot more silver (the only promise and purpose this trust has), well that's the stupid sheep you need to blame, it wasn't SLV nor anybody you could sue who said that.

If there is more silver than that, you're lucky to have caught them on an off-day. Good luck collecting physical silver, as the prospectus never quite says there will be more than that.

Here are the key tidbits from the prospective, with the page numbers so you can check it out yourself.

Conclusion: Buyer beware of SLV. You could be buying a pig in a poke, a big bag of nothing.

SLV_16.jpgSLV_23B.jpgSLV_30.jpgSLV_19B.jpgSLV_18.jpgSLV_19A.jpgSLV_00.jpgSLV_03.jpgSLV_23A.jpg

[Starving Steve]

Re: Is SLV real, physical Silver

Sometimes an investor in silver wants SILVER; not CC silver dollars, not mint-state 65 silver dollars, not cased silver dollars, not silver-mine stox, not rare dates of silver coinage, not silver certificates, not cameo-finish silver dollars, not silver grain, not silver film, not silver-plate, not "genuine U.S. mint" anything, not "special-edition" anything......... Sometimes an investor wants real SILVER, as in "London good delivery bars".<-------period.... One counts the troy ounces and multiplies by 0.999. Simple!

Same idea with gold: No more collectors' premium or surcharge, but just the gold in good delivery bars. <----period.... Then, it's weight in troy ounces) times (the fineness) times (the gold price in London). Simple!

In other words, as the price of these metals goes higher, these metals become money; not artwork, not rarities, not stock opportunities, and not articles of faith in flags and governments. This is what is new here.

The risks of accepting payment in bars of silver or gold: a.) tungsten counterfeits; b.) possession of stolen bar numbers in the title search; c.) robbery.

The costs and risks of dealing in bars of silver or gold: a.) buy and sell spreads at the point of good delivery; b.) assay charges to verify the bars; c.) shipping costs, also known as "forwarding fees"; d.) storage costs; e.) market risk for the bullion price; f.) robbery risk; g.) risk of tungsten counterfeits; h.) bar charges, also known as bar-fabrication fees; i.) unknowingly money-laundering for racketeers; j.) possible sales taxes owed to the jurisdiction; k.) the buy and sell spread for the U.S. dollars that the bullion is valued-in to the beaver bucks (or whatever your local currency is) that you want payment in; i.) the basic transaction charge for the service of brokerage, nominally $5 or $10 U.S. per transaction.

Years ago, it was common for the Bank of Nova Scotia to charge long distance phone call fees for the phone call to Toronto to buy or sell bullion on your behalf. Those charges would be a few dollars, too. They usually clipped you for parking outside the bank, too. They did not charge for their certified cheque for payment, but then they told you that they were doing you a favour not to charge you for their certified cheque for payment.

[Glenn Black]

Re: Is SLV real, physical Silver

yea, everybody gets their piece of the action. iSilver is no different. Is it not enough to expect the prospectus to clearly define what they're doing, rather than legal mumbo-jumbo?

[Jay]

Re: Is SLV real, physical Silver

yea, everybody gets their piece of the action. iSilver is no different. Is it not enough to expect the prospectus to clearly define what they're doing, rather than legal mumbo-jumbo?

The silver ended up with the MERS documents.

[globaleconomicollaps]

Re: Is SLV real, physical Silver

did you see this?
http://www.zerohedge.com/article/bla...ic-slv-holders

What’s in the iShares Silver ETF? Silver.
By Kevin Feldman

Leased silver? Derivatives? Phantom silver?

No, no and no.

I’ve seen a lot of comments like the one following this Seeking Alpha post, speculating on the various ways that iShares Silver Trust (SLV) investors could find themselves holding something other than the silver bullion they’d expect.

Every investor interested in buying SLV should first read its prospectus, particularly the Risk Factors section on pages 7-11. You will see the risks involved with an investment in SLV, including the potential for losses and liquidity risks.

What you won’t see are risk factors around SLV holding derivatives, i.e. silver futures, BlackRock or the trust custodian leasing SLV’s silver(the trustee is authorized to sell silver in the smallest amounts required in order to pay expenses), or SLV not holding sufficient silver to correspond to all shares outstanding, all of which SLV is not permitted to do under its prospectus or current legal structure.

At BlackRock, we take the responsibility of protecting shareholder interests very seriously and spend a lot of time constructing our iShares products to help ensure they meet investor expectations. In the case of SLV there are multiple safeguards in place. For one, it’s structured as a grantor trust, which means the trust (on behalf of its shareholders) has the legal right of ownership to the silver it holds. JPMorgan Chase Bank, N.A., London branch, provides custodial services for storing the silver, but has no legal rights to SLV’s silver holdings. Investors can see the serial numbers of all the silver bars in the trust here and can review an independent audit of the trust’s silver here. (See chart showing total shares outstanding vs. total ounces of silver in the trust below).

[dbarberic]

Re: Is SLV real, physical Silver

IMHO, the metal ETFs were designed as funnel to mop up metal demand without it actually driving up the metal price in a significant way and to keep dollars from moving out of the paper market. Consequently the ETFs were never intented to be fully backed by the actual metal.

When the sheep start running for the exits, why not give them a false exit to run towards.

Ever notice how most of the mainstream financial press push the metal ETFs over physical. The articles often first say gold and silver are a terrible investment, but continue on with saying if you must invest, invest only a small dollar amount and go with an ETF instead of physical. The article usually lists a series of reasons why an ETF is superior to holding the physical metal. Why... because FIRE wants to keep your dollars in the paper market where they can control it. Dollars exiting the entire system and flowing into physical metals is the last thing they want.

[Southernguy]

Re: Is SLV real, physical Silver

If I buy silver bars, dollars exit from my bank account and go; presumably, to some other guy's bank account. There is no net dollar flow from bank´s controlls. If I buy silver through SLV, dollas in my bank account go to SLV´S bank account which, in turn, (supposedly) buys physicall. Dollars go from SLV´S to the fore oner of physical. The only way to substract money from banksters is keeping it in a vault in real notes. Then, I presume you´re lending it to the US Gov. at 0 interest rate.