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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: maceng2 who wrote (168539)

2/14/2021 6:33:50 PM

From: TobagoJack

Read Replies (2) | Respond to of 218877

Re <<

A guy called Chris Duane has recently said ... goes on to spread rumours of many highly speculative claims about silver.

I would not let any young or naive silverbugs listen to his interview as it's almost pornographic material as far as silver bugs are concerned.>>

:0) your note featured some key trigger words.

As there are no young and naive here on the thread, we are safe from porn of all sorts, including those meant for silver bugs.

Just received in in-tray, and merits some attention given source, at least for my take ...

On 15 Feb 2021, at 1:29 AM, G wrote:

If the allegations are as this guy represents and are true, that is either a massive breach of contract claim against JPMorgan (as custodian of the Trust's silver) or breach of fiduciary duty and securities fraud by BNYM (as Trustee) and iShares (as Sponsor, and together with BNYM as issuer). I've written the disclosure documents, Trust agreements and allocated account custody agreements for a number of precious metals trusts. It is sacrosanct that you cannot encumber or hypothecate the metals held for the benefit of these trusts, which collectively hold $100s of billions of precious metals. In the case of SLV, the applicable provisions regarding segregation and non-encumberment are in Article 7, including 7.2 (segregation) and 7.6 (liens) sec.gov

However, I think what Jeff Currie is saying is that the AP arbitrage mechanism is designed to be a riskless profit transaction for the APs. When an AP creates Shares or redeems Shares, they will immediately hedge away exposure to the price of silver during the T+3 settlement period. The reason for this is you have a 3 day period for settlement. Currie clearly says "The ETF does..." but he must have meant "The APs do...". So when Currie says the shorts are the ETFs, what he is saying is that the AP places a creation order and has three days to deliver. When it creates that order, it will seek to hedge its position pending delivery. Upon delivery of the physical and sale of the shares into the market, it will close the hedge. (I do think Currie is a little full of it when he says you can't see a short squeeze in the silver market).

Another point, this guy thinks that any shareholder can take immediate redemption from SLV. The only major ETP (at least last time I checked) that allows for retail redemption is the Sprott fund. And even then it's still typically T+3 and the shareholder has to arrange for delivery (i.e., gotta pay brinks or open an account with the custodian). So as a base premise, retail shareholders cannot create or redeem shares, only the APs can. The AP price arbitrage function is a core function of all ETPs and was the key element that got them comfortable with the exemptive relief granted to SPY (i.e., that APs would be incentivized to keep the NAV and share trading prices aligned through riskless arbitrage).

Also, these trusts cannot have any investment activities. Beyond the limitations of their trust agreement and custodial arrangements, any management of the portfolio would blow the grantor trust status. In addition, just as a note, the commentator assumes that the CFTC has oversight of these trusts, which they do not. GLD, SIVR, SLV, PPLT, etc are all "true commodity funds", which are not regulated under the CEA or the 1940 Act. The trust itself is not opening up any positions.

As for the risk factors, I've written all of that before. It's not going to what he's saying it's going toward. First, the price dislocations caused by are always possible because these trusts are so large (which actually presents a Section 6(b)(5) issue for the listing exchanges -- the principal reason we don't have a Bitcoin ETF is that the SEC has finally started to pay attention to that). But one has to understand the operation of the AP price arbitrage mechanism to understand what's being said by Currie and the prospectus, and I'm not sure this guy does. And, for what it's worth, all of these prospectuses have disclosure regarding short squeezes of the shares and volatility in the commodity prices.

On Sun, Feb 14, 2021 at 11:27 AM W wrote:
Subject: SILVER ALERT! Goldman Sachs Commodity Chief Admits Silver Naked Short Conspiracy! (B)

WOW!

Our friend Chris Marcus posted a video of Goldman Sachs' Jeff Currie admitting that the Silver in the iShares ETF is used to Short the Price on the COMEX and suppress the price!

100% illegal and, if TRUE, then Blackrock, JP Morgan, Goldman Sachs, Virtu Financial and the rest of the Authorized Participants are involved in a "Conspiracy to Commit Fraud" and are subject to RICO Charges...AGAIN!

SILVER ALERT! Goldman Sachs Commodity Chief Admits Silver Naked Short Conspiracy!

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