Sprott shelf filing for PSLV to buy more silver

[escobar]

i really feel this is a fed engineered step toward deflation. Rubino from Dollarcollapse.com talks about this. The fed does not have the political cover anymore to do another big QE so they need to wait until its obvious we are heading into a deflationary spiral. so they say they wont do anything(yesterday's FOMC release), let mkts crash for a month or 2 and then when all panic is in they will announce the biggest MBS monetization yet. but they need to wait til commodities are knocked down some so when they rally they are coming off a lower base.

He said this 6 months ago in a podcast w chris martenson. I think this is how its playing out.

the whole stock mkt has become a big game the fed plays with. you can see the volitility last 5 yrs has been insane.

[DCFusor]

Yup escobar. "Politics is the art of the possible".

You can't make this stuff up. Yup, our lovely government is really doing this. Too bad the board shortens this link so you can't see the title, so I'll paste it in non-link too.

Darpa seeks to master propaganda narrative networks:
http://www.physorg.com/news/2011-10-...-networks.html

[PMBug]

... so they say they wont do anything(yesterday's FOMC release), let mkts crash for a month or 2 and then when all panic is in they will announce the biggest MBS monetization yet. but they need to wait til commodities are knocked down some so when they rally they are coming off a lower base.

He said this 6 months ago in a podcast w chris martenson. I think this is how its playing out.
...

It's the same game plan that Martenson warned was possible back in March when the metals were screaming and QE II was due to end in June:

There's a scenario that could play out between May and September in which commodities (including my beloved silver) and the stock and bond markets could all sell off between 20% and 40%. The trigger will be the cessation of QE II and a multi-month pause before QE III.
...

http://www.chrismartenson.com/blog/coming-rout/53869

[PMBug]

It's on like Donkey Kong:

TORONTO, ONTARIO--(Marketwire - Jan. 17, 2012) - Sprott Physical Silver Trust (the "Trust") (TSX:PHS.U)(NYSE:PSLV), a trust created to invest and hold substantially all of its assets in physical silver bullion and managed by Sprott Asset Management LP, announced today that it has launched a follow-on offering (the "Offering") of transferable, redeemable units of the Trust ("Units").

The Trust will use the net proceeds of the Offering to acquire physical silver bullion in accordance with the Trust's objective and subject to the Trust's investment and operating restrictions described in the prospectus related to the Offering. Under the trust agreement governing the Trust, the net proceeds of the Offering per Unit must be not less than 100% of the most recently calculated net asset value per Unit of the Trust prior to, or upon determination of, pricing of the Offering.
...

http://www.marketwire.com/press-rele....u-1607842.htm

[swissaustrian]

Oh YES

[dereksatkinson]

Anyone called sprott to see how much they are doing on this shelf offering?

[PMBug]

IIRC, he could buy up to $1.5B (or roughly 50MM ounces of silver at $30/ozt).

[dereksatkinson]

IIRC, he could buy up to $1.5B (or roughly 50MM ounces of silver at $30/ozt).

yep.. I just wonder how much they raised today because that's definitely not how much they just raised. They had about a 30% premium and lost about 10% of that.

[dereksatkinson]

looks like $300 million worth. So i'd expect about 10 million ounces to be off the market in no time.

[ancona]

I can't believe Sprott doesn't have more people wanting in. A billion dollars is a rounding error these days after all.

[escobar]

yeah i think he could raise more but he seems to want to maintain this premium for some reason which does not make sense to me. if he raised a billion then the premium would shrink even more.

[dereksatkinson]

yeah i think he could raise more but he seems to want to maintain this premium for some reason which does not make sense to me. if he raised a billion then the premium would shrink even more.

There has to buyers in order for him to raise a billion. $300 million cut it in half so logic would dictate he could potentially raise another $300 without trading at a discount.

[swissaustrian]

looks like $300 million worth. So i'd expect about 10 million ounces to be off the market in no time.

Where do you get the 300 mill. from?

[dereksatkinson]

Where do you get the 300 mill. from?

http://finance.yahoo.com/news/Physic...60601.html?x=0

[swissaustrian]

http://finance.yahoo.com/news/Physic...60601.html?x=0

The kicker is the disclosure below the article:

Full disclosure: Tom Lydon’s clients own GLD and SLV. John Spence owns ZSL.

[KMS]

So they drove his PSLV price down over night (and truthfully ever since they knew he would announce) to help mitigate the amounts he could take delivery on..?

[PMBug]

...
Of course, one of the technical factors that will drive silver higher for awhile is the money raised by Sprott to buy 10,000,000 ounces silver. Although they have already accounted for the silver on their NAV website, it will be interesting to see how long it takes for the silver to actually be delivered. Ted Butler has issued a comment in which he thinks that this time around delivery will made quickly, as Sprott and Embry were quite vocal about how long it took to get delivery last time around. Based on everything I see, hear, read and experience as a trader with regard to the silver market and readily available supply, I respectfully disagree with Mr. Butler.

The United States produces about 35 million ounces of silver per year. Already U.S. Mint silver eagle sales are running at a 60 million ounce run-rate. This will undoubtedly slow down, but I think it's safe to say that silver eagle investment demand alone will easily exceed the 40 million ounces sold in 2011 and thus the mining supply from this country in 2012. Add on to that the 10 million ounces Sprott is contracting to purchase and those two buying entities alone create a big supply deficit in this country. Of course, silver is mined globally and, based on reports out of London, the international demand for actual, delivered physical silver is enormous and waiting times for delivery are stretched.

There's one of other factor the I'm surprised has not been mentioned in silver market commentary. Hecla Mining, one of the largest pure silver miners in the world, had to shutter one of its mines in order to comply with safety regulations and clean out the access shaft. Although this is a temporary situation - Hecla managment has said that this will reduce its silver production from 9 million ounces in 2012 to 7 million ounces. So the mined output of silver in the U.S. will be around 33 million instead of 35 million ounces.

It would be a big mistake to assume that this 2 million ounces taken of the market this year will not affect the supply/demand situation, reducing supply and therefore adding to the demand forces that will force the price of silver higher this year. A lot higher...

http://truthingold.blogspot.com/2012...that-will.html

[swissaustrian]

When asked about his latest PSLV offering, Sprott stated, “We closed on $349 million. The underwriters did exercise the over-allotment in rather short order. We have committed to purchase it (silver). I think the deal was very successful. Obviously the premium has come down here (on PSLV), but it’s typically traded at a 16% premium and right now it’s at 8%. It takes a little while to digest the stock that was issued, but I’m hopeful we will get back to where we were.
There’s been a big move since we did the issue....
“We’ve all heard the reports that it’s pretty tight (in terms of supply). Every data point I see suggests people and institutions want to buy silver in the same dollar amount as they are buying gold.
We see the US Mint has sold 5.6 million ounces so far in January and I’m sure they will have a record high month. We’re selling as many dollars of silver coins as we are gold coins by the mint, which means we are selling 50 times more physical volume of silver. The availability (of silver to gold) is 7 to 1 in physical, but people are buying it at like 50 to 1. So something has to give there.
I would love to share with your viewers I was speaking with a company, this is a gold company, who is trying to organize a dividend payment being made in gold or silver and/or cash. Apparently 60% of the people (asked) were opting for the precious metal and half of those agreed to take it in silver. Again, another confirmation of silver buying. Our last tranche (in PSLV) we raised $349 million. Our last tranche in gold we raised $312 million. Again, one to one buying, so I’m pretty upbeat about where silver should be going.
As you know I always thought we would go back to the 16 to 1 ratio to gold, which means based on today’s prices silver should be $100. I really do believe silver was going to blow through $50 back in April/May when, all of the sudden, margin rate increases came through and one billion ounces of paper silver was sold that day.
I’m of the feeling that it will go back through $50 this year. Once it goes through $50 I think it could take on a whole new life and really energize itself. Longer-term my target is 16 to 1 to gold and I’m very upbeat on gold. I’m sure gold is going north of $2,000 this year, so obviously silver can get up to $150 in due course.”

http://kingworldnews.com/kingworldne...old_Price.html

[dereksatkinson]

$75 by year end is a real possibility..

[KMS]

10 million ounces of silver.