Silver ETF Launches to Success on Day One
As some of you may or may not know that the Silver ETF was just approved and began trading on Friday. There is a great article on resourceinvestor.com that sums everything up quite nicely.
The thing that I find quite puzzling is how little Silver Barclays has bought. If they plan on buying as many ounces as they originally planned, they are going to be scrambling to get it. Supply is very tight already and with the Barclays beast trying to buy even more, we could see a push to $20 sooner than you'd think.
Ironically, I was talking to Eric Coffin at the Calgary Resource Conference and he suggested that Silver might go down after the announcement of the Silver ETF because he didn't think Barclays was "stupid enough to not have bought enough silver already." Well I guess Barclays isn't as smart as we give them credit for being because to me it looks like they're caught with their pants down.
Well with Barclays needing to still buy another 128.5 million ounces of Silver, the only way I see the price of Silver going is up.
Another great article that I read was by Ted Butler and Israel Friedman on investment rarities. Although you can read the full article here, I will highlight some of the comments made by Mr. Friedman that I think are quite interesting:
Many people have asked me where we are in the silver baseball game. I say to them that we are in the middle of the first inning and the first inning is going to end when silver prices will be at 23 to 25.
Crazy Izzy thinks that they minimum value of silver today is $600. Why $600? The answer is very simple – if the market can pay $600 for an ounce of gold when world stocks are close to 5 billion ounces, why the value of silver should be less with world stocks of half a billion ounces?
Remember today’s real value is $600; tomorrow can be only higher, never lower. Why? Every day we have less stockpile on earth and less reserves in the ground.
You are going to ask a legitimate question – who is going to pay $600 for one ounce of silver? The answer is that the industrial user and new demand will come by the world jewelry stores who are going to start to sell silver as the main article because of big public demand.
Taking everything into consideration I can see silver as a commodity in short supply for years to come and prices higher and higher.
I’m a crazy thinker and don’t copy me – only after you have made your homework.
With higher silver prices, silver will take on a new respectability. It will no longer be the poor man’s gold. People will desire and wear silver jewelry with pride precisely because silver costs more. People will buy and use sterling silver flatware and display silver objects of art because it is made from an expensive material that is in the news.