Hi,
i am growing a little tired of the lack of knowledge as to how the bullion market works. I spent 30 years of my career with banks and refiners in that market.
The major banks that are short Comex silver are long physical silver, ie actual silver, or silver on account in London. They are effectively borrowing silver at a negative interest rate ( money, USD, costs them sweet f.a., let’s face it!] and their bullion desk can buy spot, sell the futures, borrow money from their US$ depo traders, then when the futures come near to delivery, they roll it over to the next contract month, which is usually at a discount, so they are happily borrowing silver at a negative interest rate.
They are not naked shorts.
No right minded credit committee in a bank would allow such huge open positions, no way do they have any position anywhere like what you all think.
What do they do with the silver they have? Well, lend it of course, to refiners, manufacturers, jewellers, and of course “the market”. The loco London (LBMA) market is very efficient, and remember that at this level silver, like gold, is just another currency, and see how fluid and liquid trade is in “proper” currencies.
I am bullish for silver, and of course for Silver Mines, but please realise that there is no great “short” in silver, as there was in US mortgages, that there is plenty of physical silver, despite short term squeezes on liquidity and the production of small bars and coins as a result of the laws of physics, which say that it takes n days to refine, n days to manufacture, n days to ship from A to B to C.
Please let’s just concentrate on how SVL is doing at finding it, mining it, and eventually selling it!
By the way, probably the best thing they could do is to borrow silver from the big bad banks, sell it for cash, use that cash to fund their mining, then dig it up to repay the silver loans, in silver, and pay us all a big fat dividend. That’s what all precious metal miners should be doing, to hell with share dilution to raise funds for mining!!!!
Does anyone know if the MD or BOD reads these boards?
best to all,
dyor of course
Mikey
Expand
(20min delay)