Silver prices have, since 2008, regularly flirted with a state of backwardation, which can be a sign of growing physical shortages.
Author: Dr. Jeffrey Lewis
Posted: Monday , 25 Feb 2013
Silver-coin-investor.com -
The price of silver futures contracts have been regularly flirting with a state of backwardation ever since the 2008 Financial Crisis, which is a sign of a growing physical silver shortage.
A state of backwardation occurs when the front month silver futures contract commands a price premium to the subsequent months’ contracts.
On one hand, this situation could actually provide larger traders who own the physical silver with an opportunity to simultaneously sell it and purchase futures contracts to recover their metal holdings for a net profit.
Paper and Physical Silver Price Backwardation
A backwardation also tends to indicate that industrial and personal silver consumers need the metal more now, rather than later.
When a backwardation in the silver market is driven by perception on The Street, this phenomenon would actually reveal the true fate of larger traders with insufficient physical silver supplies available to profit from this apparently easy money.
Nevertheless, the silver futures market ceased being a physical market years ago when the overall short position became dominated by just a few bullion banks. Whether these players control 25% or 50% of the net shorts, this concentration influences the paper price. -
excerpt from : http://www.mineweb.com/mineweb/content/en/mineweb-independent-viewpoint?oid=179258&sn=Detail
MAKE SURE YOU GET PHYSICAL SILVER IN YOUR OWN POSSESSION. Don't Buy SLV, or Futures or Pooled Accounts or any other BS paper silver product .Remember anything on paper is worth the paper it is written on. Go Long Stay long the bull market have even started yet
