-- Posted 30 September, 2006 | |

The Wallace Street Journal

By DAVID BOND, Editor

Silver Valley Mining Journal

Wallace, Idaho – Barclay’s iShares told the Thought Police, in the form of a Securities and Exchange Commission S-1 filing, that it’s going to “Texas hedge” the silver ETF with the issuance of another 16,822,727 shares in its silver trust, representing, at 10 ounces per, another 168 million ounces of silver.

One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that will not be available or eligible for delivery on the Comex. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that will not be available to dick with honest spot traders. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver that . . . well, we just had to type that great big number again.

One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver is, quite conveniently, half an entire century’s silver output of the Sunshine Mine. One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver is one-tenth of the entire output of the Coeur d’Alene Mining District since the 1880s. Which is greater than Potosi’s half-millennium’s production to date. Which is, to say, one great big bunch of silver.

Besides, just typing, “One hundred sixty-eight million, two hundred and twenty-seven thousand, and twenty-seven ounces of silver” feels so-o-o-o-o good. Especially if you imagine yourself squirreling around in a pile of one hundred sixty-eight million, two hundred and twenty-seven thousand and twenty-seven ounces of silver, each in 1-ounce rounds. What a delicious feast. That would be 11,525,000 pounds, or 5,232,452 kilos, of the stuff. Dessert, anyone?

What’s curious to this normally astute silver bug is that we learned of iShares’ Wednesday filing via email from the apparently more astute Peter Spina of GoldSeek, who heard about it from the apparently even more astute Ted Butler of Investment Rarities. Yet there it is, a public filing and all, and you’d think this information would have oozed from the Mainstream Gold and Silver Hoarding Paranoiac Media faster than it has and into the rants of the fiat unfaithful.

(And we may be in better company that the metals bugs. A friend of ours, visiting from Old Blighty for the Silver Summit, wondered if, after watching American TV for three days, the Iraq war must be over with, because there was not mention of that bloodbath, either, on CBS, NBC, ABC, Disney, Fox or the Soap Opera channels.)

What this Texas hedge on Barclay’s part, this doubling of the bet, means is that the Barclay’s people who are smart enough to understand derivates are gambling on a huge new mob of retail silver investors. Already more than 100 million ounces of silver have been scooped off the market by the iShares initial offering. Our same friend advised that silver in any quantity was nowhere to be found in London. It’s damned scarce here in Wallace, too, and we mine the stuff. Our regular source of silver, awash in the stuff 6 months ago, has one, count ’em, ONE 1,000-ounce hallmark-grade silver bar left for sale.

Will we buy into the new Silver ETF issue? No. It’s still paper until we’ve seen the physical stuff. Will we buy bullion immediately? Yes, if it’s not too late. Face it folks, the silver’s gone. Not true, you ask? Well, ask the poor saps who tried buying nickel off the LME last month. They found out that paper can, in the end, only buy more paper. Conspiracy? We dunno. Shortage? Damnright. Hello. Is anybody home?