The iShares Silver ‘Trust’ Is Likely A Fraud $SLV
The comments below are an edited and abridged synopsis of an article by Investment Research Dynamics
The legal loopholes embedded in the legalese for GLD and SLV are enormous.
It’s suspected that each Trust was set up as a mechanism to divert institutional cash flows into the respective Trusts that might otherwise flow in actual physical gold and silver.
They are nothing more than gold and silver derivatives, embedded with the same risks as investing in futures and options. Most investors in GLD and SLV will end up losing most, if not all, of their investment in these fraud-riddled securities.
The SLV prospectus contains language that acknowledges that the shares were not fully backed by silver bars.
Notwithstanding other issues with this disclosure, and the setup of the Trust generally, that particular disclosure reveals the extent to which SLV is not an investment in silver, or an investment in a security that indexes the price movement of silver. Rather, SLV is a nest of fraud and deception, a covert tool used in the central banking and bullion banking effort to control the silver price (just like GLD).
SLV is disingenuous in its effort to manage SLV properly. If Black Rock were to issue an offer-wanted-in-comp for the amount of silver bars that it needs to back the new shares created, at a high enough price it would be able to purchase enough silver. This is how price discovery is supposed to work. SLV’s failure to embark on this price discovery exercise reveals that the Trust is a fraud.
Eventually, the price containment of gold and silver will fail. The law of supply and demand dictates that imbalances can be fixed by price, so silver needs to rise to a level that balances out the supply and demand for SLV shares—if SLV is truly a physical silver Trust. As such, SLV should be soliciting large offers-in-comp. That would reveal that the market price of silver is too low, and that demand exceeds supply by a considerable amount.
The solution is for SLV to bid up the silver price to a level that solicits enough offers to fulfill the obligation of the Trust to back the share baskets with the appropriate amount of silver bars. Anything else reveals SLV as a fraud. SLV’s investors have been led to believe that it is an investment in silver. Now we know that SLV is an investment in paper securities fractionally backed by silver bars. Technically, SLV is a derivative, and a fraudulent one at that.