Each bar of silver that backs paper traded funds such as EFT’s is most assuredly without question registered to more than one owner, The fact is a lot of insiders claim there are many owners registered to each individual bar, that is being used to back all the paper traded securities being sold to investors.
Here is one example of how market giants can manipulate prices. To get into this manipulation game actually requires ten contracts that allow you to become a market maker. Let’s just say I acquired 50 one-thousand ounce bars and they are actually mine. Then I managed to get ten contracts, this will now qualify me to be a market maker. Now I will go ahead and lease my actual 50,000 ounces of silver to a friend of mine that I know from New Jersey who just happens to be a hedge fund manager. I have all my silver boxed up and make all the shipping arrangements then have my 50 one-thousand ounce bars shipped out to her. Next my friend will take physical possession of the entire 50,000 ounces that I leased to her.
Here is where things get really interesting; next she swaps my silver with someone at the SLV. From here the SLV takes physical possession of my 50 bars. Next, the person from the SLV makes another swap with my 50 bars showing it as part of a deal on the exchange. From this point we have what is called a ‘lease and swap’ arrangement. And now you’re going to have two or three claims on my original 50,000 ounces. This type of insider price manipulation goes on all the time. And there is not limit, law or regulation as to how many leases and swaps can be made on the original 50 bars I loaned out to begin with.
Therefore it is in your best interest to stay completely away from paper investments. There will come a time when you the investor will want to cash out of your paper traded funds or other paper instruments. The sad reality that you need to understand here is that in all likelihood you’re going to come up empty-handed. Especially if you’re selling your paper assets at the same time that everyone else is. Because the chances are very high that the metal which was used to back your specific securities is already gone, therefore nothing is left to pay you.
The best way for protecting yourself from this type of investment situation is to always purchase only physical precious metals. If you own physical gold or silver you will be able to sell it at any time no matter the economic conditions for its true value thus being assured you will get paid in full value.