“The demand for silver may temporarily exceed available supply that is acceptable for delivery.”
By Roman Manly and cross-posted from Bullion Star.
Just over a week ago, we showed you how, following the #SilverSqueeze triggered surge in demand for physical silver, the 14 ETFs which claim to hold silver in LBMA vaults in London between them accounted for over 28,000 tonnes or 85% of all the silver said to be in those London vaults. And that the biggest of these ETFs, the infamous Blackrock managed iShares Silver Trust (SLV), which has JP Morgan London as custodian, accounted for over 70% of this total.
And just a few days ago we showed you how, following the #SilverSqueeze induced surge in SLV trading from 29 January to 02 February on NYSE Arca, the very same SLV had quietly and without fanfare amended its Prospectus on 03 February conceding that there may not be enough silver bars available in London or elsewhere to add to the Trust, when it stated in its filing to the SEC that:
“The demand for silver may temporarily exceed available supply that is acceptable for delivery to the Trust, which may adversely affect an investment in the Shares.
To the extent that demand for silver exceeds the available supply at that time, Authorized Participants may not be able to readily acquire sufficient amounts of silver necessary for the creation of a Basket.
It is possible that Authorized Participants may be unable to acquire sufficient silver that is acceptable for delivery to the Trust for the issuance of new Baskets due to a limited then-available supply coupled with a surge in demand for the Shares.
…In such circumstances, the Trust may suspend or restrict the issuance of Baskets.”
But as it turns out, as was to be expected, SLV was not the silver ETF to move to panic stations the week before last, for at the exact same time on 02 February, the Aberdeen Standard Physical Silver Shares ETF (SIVR), also using JP Morgan London as metal custodian and also traded on NYSE Arca, quietly amended it’s Prospectus to both sinister and comical effect, and in stealthy fashion uploaded a new version of it’s Prospectus to the SEC website, inserting the following wording on page 6:
“As of the date of this prospectus, an online campaign intended to harm hedge funds and large banks is encouraging retail investors to purchase silver and shares of Silver ETPs to intentionally increase prices. This activity may result in temporarily high prices of silver.”
Let the above sink in. You may need to read it a couple of times. For apart from showing panic about the effectiveness of the Reddit #SilverSqueeze forums such as r/WallStreetSilver, we would wager that never in the history of Wall Street has the author of a Prospectus shown it’s true colors more than the above…