silver exposure: bullion or shares, page-7

re: silver exposubullion or shares yttrium.

I would certainly like to ponder a little on your post:

Your comment: "Once the short side manipulation runs out of dumpable silver the price rally will be
pretty spectacular, perhaps exceeding 50 USD per ozt".

I find this commment confusing because as far as I am aware the forecast silver squeeze is based on the supply-demand of physical silver stocks, rather than any futures related long-short situation, any manipulation theory, or any dumping (from where?) . Industry journals suggest that there is an annual shortfall of 150 million ounces per annum based on trends for the various sources of supply and uses of the metal.

This apparent supply shortfall needs to weighted against the fact that for the past 12 to 24 months comex silver stocks have actually stablised then RISEN. I have not found any specific reason for this (considering there was supposed to be a shortfall) other than comments that it may be due to silver scrap coming out of hoarding, etc. However the fact is that Comex silver stocks are rising and not falling, and whilst this is the case the forecast of any timing for a rise in silver price will be suspect.

Your comment : "the factor of increased mine supply
will take a few years. It may be noted that many mining companies have mining operations that are ready to start for want of higher silver prices."

This comment is also suspect in my view as most of the worlds silver supply comes from mining operations as a by-product from either base metals or gold mining operations. Consequently silver is considered price inelastic. Meaning that supply is not likely to change to a great degree even if the price does go up dramatically. Contrary to your comment, I believe in Aust there are only a small number of silver projects that could start operations quickly even if the price tripled tommorrow, and believe this is also the case around the world. Your point about 'many' operations being ready to start up if the price rises in my view is hard to support.

With respect to buying silver bullion versus a share like MMN, it is a good question. As it stands MMN appear to have about a three year mine life. No doubt if it starts operations whilst the silver price goes ballistic, it will be exciting for MMN shareholders. However the party will be short if MMN do not have further exploration success.

In the meantime, MMN are not rushing into production. It would appear the directors are caught between giving shareholders value for their money by getting a mine into production, and waiting for the silver price explosion that everyone says will happen. Its a tough call for them.

In the meantime the silver price is not behaving like it is going to go through the roof. Considering gold has gone up over $100US an ounce, silver has barely barely raised a squeak. It is actually behaving as it should when silver stocks are rising.

I too watch the silver story with interest.

acturtle