SLV About to Skyrocket, and That’s Why You Should Buy Physical Silver Instead
The comments below are an edited and abridged synopsis of an article by Austrolib
- On February 3, the iShares Silver ETF (SLV) amended its prospectus to warn of the risk of restricting the issuance of new shares due to a lack of physical silver.
- If this happens, a premium on SLV relative to the Comex silver futures contract it tracks would form, risking an SLV squeeze, as detailed explicitly in the prospectus amendment.
- Premiums on physical silver would go even higher, and the three silver markets—physical, ETF and Comex futures—would chase one another in a spiral.
- This would constitute an existential threat to the US dollar as a monetary reserve.
- Since retail investors cannot redeem SLV for physical silver, they would be left with dollars that aren’t worth much anymore.
- Conclusion—buy physical silver, not SLV.
Up for discussion: If SLV runs out of silver, the ETF skyrockets; what happens if a premium of SLV forms over silver futures; there’s no way to close the gap; avoid SLV precisely because it will rocket higher; conclusion—time to get physical.