PSLV announced what with overallotment will amount to a $349 Million add on offering! Notice the "exclamation point"? Yes I for one am excited for several reasons. One being that the physical market will be "tested" as to real supply. How long will it take this time for Mr. Sprott to receive his metal? Will it take 4 months like last year? Surely it should take less time now because supply (you know, the actual real metal) should be in abundance since the price is down nearly 40% from the May 2011 peak? Surely mining companies came in with massive new supply because the price was so high? Surely investors ran down to their local dealers with heavy bags full of Silver to "cash in" on their gains and "flushed" the physical markets? Right?
Well… this is not what happened. Actually mining supply moved up less than 5% and it was physical demand that skyrocketed, NOT supply! Yet the price is down 30-40%? The only new supply that hit the market were new and freshly (printed) offered paper contracts with even less backing than the existing fraudulent contracts. THESE hit the market like a sledge hammer! Please keep in mind that this offering is only about 10 million ounces and with what Jeff Christian and Jon Nadler tell us should be less of a problem than a pimple on an elephant's ass. My next thought is this, what if it doesn't take less time to fill the order? What if it takes even more than 4 months for the metal to be delivered?
Please remember that Mr. Sprott "filed" for a total of $1.5 Billion which I for one believe is not even doable in todays physical market. Is he just "testing" the market? Does he not want to be "the one" who craters the whole system by unmasking just how TIGHT this market really is? Another question (comical as it may be) is "where" will this order be placed? The COMEX? This size order would deplete their deliverable inventory (if it really exists) by 25-30% and still not make much of a dent in the total $1.5 Billion filing. If the total filing were used and placed as an order on the COMEX, it could not be filled…hmmm?
I applaud Mr. Sprott's "guts" here, I know he is only doing a small (VERY small order in the scheme of "paper" things) order but risks exposing the whole "fractional metal" scheme. This should in a "perfect world" not even be a topic to write about or discuss but the truth is…we haven't been told the truth for a long time and this is a perfectly legal and logical way to get at it. We will find out just "how tight" the Silver market really is and very soon would be my guess. As a side note and I usually don't discuss much in the way of politics, I really question just how well Ron Paul's heart would hold out were he to actually take an obvious lead in even the most crooked polls? Do you see where I'm going with this…? Hopefully the guardian angel union up there in Canada doesn't offer vacation days to its employees.
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Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
Nothing in this article is, or should be construed as, investment advice.
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