Thursday, April 21, 2011

Silver vaults past $46.00 per oz/gold surpasses the $1500.00 mark.

Good evening Ladies and Gentlemen:

Gold surpassed the $1500 line in the sand with ease, finishing the comex session at $1503.20 up $4.90 from yesterday.  Silver continues to rocket higher on a daily basis.  Today it finished the comex session at $46.06 up a huge $1.58.  At 5 pm est, the price of gold in the access market is $1506.80 and silver resumed its stratospheric rise and is now trading at $46.61.

Before beginning, I would like to emphasize the massive losses that have been inflicted on JPMorgan.
I do not know how they are getting away from reporting these mark to mark losses on their off balance sheet derivative trading. I would also like to inform you that gold lease rates have now turned positive.  They have been negative for many months and now the  silver lease rates have  bumped up again and this should bring silver into complete backwardation again.



The total comex gold open interest fell by 179 contracts from 537,946 to 537,767.  Gold had a great day yesterday so some of the bankers covered  their shorts.  As I mentioned above, their losses in both gold and silver are staggering.  The front delivery month of April saw the OI decline from 785 to 600 for a loss of 185 contracts.  We had 81 deliveries yesterday so I am sorry to say, we lost 104 contracts to Blythe Masters' huge cash settlements at the gold comex delivery desk .  Judging from the action in both gold and silver the premium had to be immense.  The estimated volume at the gold comex today was rather light at 112,906.  The confirmed volume yesterday was excellent at 155,385 with hardly any switches.

And now for our star of the show, silver:

The total silver comex OI fell by 680 contracts to 144,301 from 144,981.  Silver had a stellar day yesterday so we definitely lost a few more banker shorts jumping out of windows in a desperate plea to end their misery. Get a load of this next data piece: mysteriously the front options expiry month of April saw its OI rise from 26 to 51 for a gain of  25 contracts.  We had 8 deliveries yesterday so we again gained in silver oz standing for delivery and we lost zero to cash settlements.  We are getting closer and closer to first day notice which I believe is the day after the Easter holidays (Tuesday April 26.2011). The front month of May saw its OI fall by only 3653 contracts despite the fast advancing first day notice. It's reading tonight is 46,863 versus 50,516 on Wednesday.  The estimated volume at the silver comex was breathtaking today.  It came it at 163,464 contracts (822 million oz of silver or 117% of annual silver production). The confirmed volume yesterday was absolutely remarkable at 170,342.  Silver is on a tear and the bankers are besides themselves as they just do not know how to extricate themselves from their mess.


Here is the chart for 4/21/2011 regarding deliveries and inventory changes at the comex.




Silver
Ounces
Withdrawals from Dealers Inventory
34,822 (Brinks)
Withdrawals from Customer Inventor
481,384 (Brinks & Delaware) 
Deposits to the Dealer Inventory
zero 
Deposits to the Customer Inventor
34,822 Scotia
No of oz served (contracts)  today
 10,000  (2)
No of oz to be served  (notices)
245,000  (49)
Total monthly oz silver served (contracts) so far this month
725,000  (145)
Total accumulative withdrawal of silver from the Dealers inventory this month
736,222
Total accumulative withdrawal of silver from the Customer Inventory this month.
2,718,793





Gold
Ounces
Withdrawals from Dealers Inventory
 32,099 Brinks
Withdrawals fromCustomer Inventory
 64
Deposits to the Dealer Inventory
 zero
Deposits to the Customer Inventory
 8,038  HSBC
No of oz served (contracts)  today
 100  (1)
No of oz to be served  (notices)
 59900 (599)
Total monthly oz gold served (contracts) so far this month
328300 (3283) 
Total accumulative withdrawal of gold from the Dealers inventory this month
 173,480 oz
Total acculumulative withdrawal of gold from the Customer inventory this month
 271 593

Let us start with gold.I would first like to state that there was an adjustment of 107,248 oz (gold leaving a dealer to a customer).  This is exactly the same as yesterday, including the same vaults.  I believe the CME forgot to remove the adjustment for today's report. Thus the CME's figures will be off somewhat.
Today, a customer received a deposit of 8038 oz into the HSBC vault.  For two straight days there have been massive withdrawals from the Brinks dealer vault.
Today we received confirmation that 32,099 oz of gold was withdrawn from the dealer and it was from the Brinks vault. A customer removed 64 oz from Manfra.

The comex folk notified us that we received a biggy 1 delivery notice for 100 oz of gold.  The total number of gold notices filed so far this month total 3283 for a total of 328,300 oz of gold. To obtain what is left to be served upon, I take the OI remaining (600) and subtract out today's deliveries  (1) which leaves me with 599 notices or 59900 oz left to be served upon.
Thus the total number of gold oz standing in this delivery month is as follows:
328300 oz (served)  +  59,900 (to be served)  =   388,200 oz or 12.07 tonnes.
Yesterday we had: 398,600 oz so we lost  10,400 oz to cash settlements.
This is the lowest amount of gold ounces standing in many years. With gold at record levels, the only explanation for this is of course, cash settlements.

Let us now explore silver.

I would like to highlight a transaction for you as this is what I would like to see in the delivery process. Today, the comex folk notified us that 34,822 oz of silver was deposited into the Scotia vault and at the same time, we were told  that 34,822 oz of silver was withdrawn from Brinks.  This is the proper settling process whereby the dealer provides the necessary silver and this silver is deposited into a customer vault.  The customer can then decide to keep it there or remove it.  The Comex also notified us that there were two withdrawals of silver:

1. 480,398 oz  (Brinks)
2. 986 oz (Manfra)

Since the customer at Scotia did not record any withdrawals of silver, the 34,822 oz stayed in their vault. If you are trying to keep score, then 7 contracts were served  and settled upon and this occurred yesterday and recorded today.

The total number of notices for delivery filed today totalled 2 for a grand total of 10,000 oz. The total number of notices filed so far this month totalled 145 for 725,000 oz of silver.
To obtain what is left to be served upon, I take the OI standing (which mysteriously grew)
for April ( 51 contract) and subtract out the deliveries for today (2) which leaves me with 49 notices left to be served upon (245,000 oz)

Thus the total number of silver oz standing in this non delivery month is as follows:
725,000 oz (served)  +  245,000 oz (to be served)  =  970,000 oz.
Yesterday we had 815,000 so we gained a huge 155,000 oz.
I promised you at the beginning of the month we would reach 1 million oz and it looks like I have fulfilled my promise to you despite some cash settlements.

end.

Monex silver has now passed 50 dollars per oz:
(courtesy zero hedge) and author;  Tyler Durden:


Monex Silver American Eagles Pass $50/Ounce

Tyler Durden's picture




No commentary necessary.
But it could be worse. One could be trying to buy American Eagles in Latvia, where the dealer bid/ask is 45.91x....72.81!
4.923075


Now let us head over to see how our non physical ETF's fared today.
The two ETF's that I follow are the GLD and SLV.  These two funds have no metal behind them and you should steer away from these fraudulent vehicles.

First GLD inventory changes:

Total Gold in Trust: april 21:2011


Tonnes: 1,229.64
Ounces:39,534,241.22
Value US$:
59,443,939,262.66.


the GLD: April 20.2011:


Tonnes: 1,230.25
Ounces:39,553,739.93
Value US$:
59,355,255,880.70


Thus we lost .61 tonnes of gold.  This gold left the LBMA and probably has their destinations in foreign jurisdictions like Russia (see below) or China.

How about the SLV?


April 21.2011:

Ounces of Silver in Trust358,490,482.700
Tonnes of Silver in Trust


April 20.2011: Tonnes of Silver in Trust
11,150.30

Ounces of Silver in Trust359,563,836.300
Tonnes of Silver in Trust


we thus lost:  1.073 million oz.Tonnes of Silver in Trust
It makes no sense at all with the huge demand in silver that we lost 1.07 million oz instead of gaining inventory oz.
11,183.69
Let us head over to our closed physical funds that we follow: the Central Fund of Canada and Sprott's gold and silver funds:

1. Central Fund of Canada:  Premium to NAV 2.0% in Usa funds and 2.1% in Canadian funds.
2. Sprott silver fund  (PSLV):  Premium to NAV remains high at 22.29%
3. Sprott gold fund (PHYS): premium to NAV rises to 4.66%


In other physical news, Russia announced late in the afternoon of the 20th of April that it has added 600,000 oz of gold to its reserves or 18.66 tonnes of gold.

Here is the Russian website:

Here are the last 4 months of data that we have on Russia:

March 20.2011:   addition to reserves...600,000 oz
February 20.2011:  addition to reserves 100,000 oz
January 20.2011:     zero addition to reserves.
December 20.2010    200,000 oz.

 If you will recall last year this central bank was adding approximately 19 tonnes of gold per month to its reserves but late in the year they tailed off their purchases.  It seems  that Russia has resumed their gold purchases and they are shedding much of their USA dollar reserves.

China announced briefly their silver imports at 401 tonnes last month.  When I get the complete data I will discuss this with you.  

end

Eric Sprott has delivered another great piece today on silver.
I know you will enjoy it:  (courtesy Sprott Asset Management..authors: Eric Sprott and Andrew Morris)

Follow the Money


By: Eric Sprott & Andrew Morris
You know silver’s doing well when the commentators start giving it the ‘gold’ treatment. Silver’s recent rise has been so spectacular that it’s caught many investors off guard. It’s natural to be sceptical when you don’t know the fundamentals driving strong performance, and many pundits and commentators have been quick to downplay it as a result - much like they do towards gold when it enjoys a run. Silver is also an awkward metal for them to categorize. Is it a commodity, a monetary metal, or both? And which side is driving demand? If it’s industrial demand, that’s ok, because that’s bullish. But if it’s investment demand for silver as ‘money’, well then that’s sort of bearish, isn’t it? The fact remains that most commentators have failed to grasp the monetary shifts that silver is signaling today, and in doing so they’ve failed to appreciate just how high it could actually go.
The financial media’s failure to grasp the benefits of precious metals ownership continues to perplex us, and it’s not just the commentators who are prone to perpetual disbelief. The sell side analysts are equally as irresolute. According to Bloomberg, the ‘expert’ consensus silver price forecast for 2011 is $29.50, representing a 31% discount from the current spot price. This same group of analysts also predicts prices will decline another 25% in 2012 and a further 9% in 2013 to $20 an ounce. When you consider that the silver price has appreciated by over 21% annually over the past 10 years, these forecasts suggest a very dramatic change in the long-term trend. Will this reversal come true? Probably not. These were the same analysts who predicted that spot silver prices would average $18.65 this year - so they’ve missed the mark by over 100% thus far.
We don’t mean to bash the silver analyst community, and there are several whom we highly respect, but it is important for silver investors to appreciate that these price forecasts are being plugged into financial models that dictate equity valuations. These models are used by traders, bankers, analysts, and portfolio managers to derive valuations for silver stocks and create asset allocations for portfolios. To anyone questioning current silver equity valuations, we would ask: what price assumptions are you using? Of course we as allocators of capital are thankful for this phenomenon, as it allows us to buy our favourite silver stocks on the cheap, knowing full well that the herd will be following behind in due course as those backward-looking forecasts get ratcheted higher.
How can we be so confident that the price of silver will continue on its upward trajectory? Our thesis is premised on the most rudimentary of economic principles – supply and demand.
One of the key indicators that we’ve been monitoring is the gold/silver ratio. Much has been written about the ratio of late, and we won’t go into great detail on the subject, other than to note that the last time money was synonymous with defined amounts of gold and silver, the ratio was set at 16-to-one. In fact, for most of the past millennium, one ounce of gold would have been convertible to somewhere between 10 and 16 ounces of silver - an amount roughly in line with the relative occurrence of each mineral within the earth’s crust.1 For the better part of the past century, due to the world’s abandonment of bimetallism and then the gold standard, the gold/silver ratio has fluctuated widely, twice reaching lows near the 15-to-one mark and a high of 100-to-one back in the early 1990’s. The most recent high reached in the latter part of 2009 was nearly 80-to-one. Since then the ratio has been tumbling to where it stands now at 35-to-one – which reflects the incredible outperformance of silver over that time period. In our opinion, this ratio will continue to move lower, driven by nothing more than basic supply/demand fundamentals.
The US Mint, which is the world’s largest silver and gold coin manufacturer, recently reported that it had sold 13 million ounces of silver coins and 370 thousand ounces of gold coins on a year-to-date basis.2 This means that the US Mint is now selling roughly equal amounts of silver and gold in dollars so far this year. Furthermore, bullion dealers like Sprott Money and GoldMoney have confirmed with us that they are now selling more silver than gold in dollar terms. For additional confirmation of this investment trend, just look at the flows for the two largest gold and silver ETFs. Investors have withdrawn approximately $3 billion from the GLD so far this year while the SLV has seen net inflows of $370 million over the same period. Dollar for dollar, investors are allocating as much if not more money to silver than to gold. And why shouldn’t they? Silver is much more of a "precious" metal than the current ratio of 35-to-one would suggest.
To explain, we must first address mine supply. In 2010, the world mined approximately 736 million ounces of silver and 85 million ounces of gold.3The world also produced an additional 215 million ounces of silver and 53 million ounces of gold from recycled scrap.4 Adding both together brings us 951 million ounces of silver and 139 million ounces of gold supply, for a ratio of nine ounces of silver to one ounce of gold.
Interestingly, this 9-to-one ratio is very similar to the ratio of available in-situ silver and gold reserves. The U.S. Geological Survey estimates that there are current in-situ reserves of approximately 16.4 billion ounces of silver versus 1.6 billion ounces for gold, or about a 10-to-one ratio.5
The case for silver is even more compelling when one considers the ramifications of its dual role as both an investment and industrial metal. Last year, non-investment demand for silver (which includes industrial, photographic, and silverware demand) totaled approximately 610 million ounces.6 This represents approximately 64% of primary supply, leaving approximately 341 million ounces to satisfy investment demand.7 On the gold side, industrial usage totaled 13 million ounces, or about 10% of primary supply, leaving approximately 125 million ounces left over for investment demand.8 So, after netting out the industrial usage the primary supply left over for investment demand is about 2.7 times that for gold. However, if we convert those ounces to dollars at current prices, we’re left with $15 billion worth of silver available for investment versus $186 billion worth of gold, or a one-to-13 ratio of silver to gold! This means that in terms of primary supply, silver only has 8% of the capacity for investment that gold does despite having equal if not more dollars flowing into it.
Now, it’s true that another potential source of supply is the very silver that investors already own - and at the right silver price these inventories of silver and gold bullion may be sold into the market to supplement any supply shortfalls. As we’ve noted previously, however, due to decades of underinvestment, the amount of silver bullion inventories are actually extremely small, even compared to those of gold.9 Recent estimates suggest that reported silver bullion inventories stand at roughly 1.2 billion ounces versus 2.2 billion ounces of gold bullion, or roughly a 0.5-to-one ratio.10 To put that amount in perspective, consider that at present there is only $52 billion worth of silver bullion/coins and over $3.3 trillion worth of gold in inventory which could potentially be recirculated into the market. Converting this to a ratio, you get a one-to-63 ratio of silver to gold inventories. So how is silver still priced at 35-to-one?!
All indications lead us to believe that there is now roughly an equal amount of investment flowing into silver and gold on a dollar-for-dollar basis. And although the price ratio of silver to gold has fallen substantially since the highs of 2009, our analysis strongly suggests that this ratio must move lower to restore a fundamental balance between supply and demand. Only time will tell how much lower it will go, but we would not be surprised to see it hit single digits before settling into a more sustainable equilibrium.
What the so-called silver ‘experts’ neglect to account for in their models and projections is that the fiat money experiment has failed. And in this context, we believe the Market has assigned world reserve currency status to gold - not USD, not EUR, and not JPY. In our opinion, gold’s continued appreciation vis-à-vis every currency is assured because the great flight from fiat has only just begun. Like gold, silver also has a long monetary history, and as such, investors are now also buying silver as protection from the ravages of fiat currency debasement. Yet, when compared to gold, it is silver that offers the most attractive value proposition by virtue of the gross mispricing of its scarcity, which, we might add, has existed for many years. Thus, in our opinion, as this new bimetallic standard takes root, silver investors will continue to be justly rewarded with marked outperformance. We truly believe that this is the investment opportunity of a lifetime, and increasingly so, others are taking heed. What is clear to us is that with equal investment dollars now flowing into silver and gold, the current 35-to-one ratio is unsustainable and has only one direction to go: lower.
-END-

Let us now see the major stories of today.

This is a big story where Jim Grant of the Interest Rate Observer states categorically that QEIII will commence right after QEII.  Here is this commentary courtesy of zero hedge:

Jim Grant Explains Why QE3 Is Coming

Tyler Durden's picture




Once again we are reminded why we like Jim Grant so much. From his latest Grant's Interest Rate Observer(which, trust us, is worth the subscription): "Almost 30% of the respondents to a poll conducted by UBS a few weeks back said they anticipate a third round of so-called quantitative easing... We count ourselves among the expectant 30%. To its congressional directed dual mandate the Bernanke Fed has unilaterally added a third. It has undertaken to make the markets rise. The chairman himself has more than once taken credit for the post-2008 bull market (on one such occasion in January, he reminded the CNBC audience how far the Russell 2000 had come under Fed ministrations). Could he therefore stand idly by in the face of a new bear market. Byron Wien, vice chairman of Blackstone Advisory Services, went on record the other day predicting a summer swoon in stocks following the scheduled winding down of QE2 in June. Let us say that Wien is right, and that, furthermore, drooping stocks are accompanied by sagging house prices and a weakening labor market. Bernanke was hard put to explain why he chose to let Lehman go while acting to save Bear Stearns. He would be harder put to explain why he chose to implement QE1 and QE2 but, in another hour of need, refused to launch QE3." And "Sooner or later, gravity turns speculative markets into investment markets. When this transformation occurs, the Fed will confront the need to bail out the innocents it had previously bailed in. Hence, QE3." And therein lies the rub. Simple, sweet, and, for the US dollar, suicidal.

end.

When the SLV started to trade in 2006, I thought that it was a fraud.  At the beginning I had no company as it was unthinkable that a fraud of this magnitude could be perpetrated upon 
all investors.  Now it is mainstream, that many believe that this vehicle has no silver behind it. Now we see BlackRock refute fraud allegations.  You must read carefully this zero hedge commentary: 

BlackRock Issues Refutation Of SLV Fraud Allegations; Is It Time To Panic For SLV Holders?

Tyler Durden's picture




That over the past few years there has been a substantial push to expose some of the chicanery at the SLV iShares silver ETF, especially among the non-indoctrinated blogosphere, is no surprise. After all fear of a massive paper silver wipe out is not only the reason for success of Eric Sprott's physical silver ETF, but for the massive and consistently record premium over NAV of the PSLV. Yet up until now, we were not all that concerned about such allegations (despite having written about this ourselves on several occasions). After all, the one thing that would essentially validate such, at time exorbitant, allegations, was missing: a formal refutation. That is, until now. Kevin Feldman, a Managing Director in the iShares unit of BlackRock, has just blasted out the following email which we were lucky enough to become privy to. Basically, we now have the one and only thing we were missing: an official denial of all the "rumors." It may now be time to abandon the SS SLV, because if this letter is the best defense iShares can muster, then SLV holders may be in trouble. But better confirmation than. And leaving the content of the letter aside, its existence, and that BlackRock itself is willing to engage the tinfoil hat clad blogosphere, is the biggest red flag so far...
What’s in the iShares Silver ETF?  Silver.
By Kevin Feldman

Leased silver?  Derivatives?  Phantom silver?

No, no and no.

I’ve seen a lot of comments like the one following this Seeking Alpha post, speculating on the various ways that iShares Silver Trust (SLV) investors could find themselves holding something other than the silver bullion they’d expect.

Every investor interested in buying SLV should first read its prospectus, particularly the Risk Factors section on pages 7-11.  You will see the risks involved with an investment in SLV, including the potential for losses and liquidity risks.

What you won’t see are risk factors around SLV holding derivatives, i.e. silver futures, BlackRock or the trust custodian leasing SLV’s silver(the trustee is authorized to sell silver in the smallest amounts required in order to pay expenses), or SLV not holding sufficient silver to correspond to all shares outstanding, all of which SLV is not permitted to do under its prospectus or current legal structure. 

At BlackRock, we take the responsibility of protecting shareholder interests very seriously and spend a lot of time constructing our iShares products to help ensure they meet investor expectations.  In the case of SLV there are multiple safeguards in place.  For one, it’s structured as a grantor trust, which means the trust (on behalf of its shareholders) has the legal right of ownership to the silver it holds.  JPMorgan Chase Bank, N.A., London branch, provides custodial services for storing the silver, but has no legal rights to SLV’s silver holdings.  Investors can see the serial numbers of all the silver bars in the trust here and can review an independent audit of the trust’s silver here.  (See chart showing total shares outstanding vs. total ounces of silver in the trust below).
Source: BlackRock 4/28/06 (launch date) – 4/1/2011

Another concern revolves around ETF creation and redemption.  I’ve gathered from many posts and comments that there is a misunderstanding about the role of Authorized Participants who facilitate trading in SLV through the creation of new shares when demand is high.  Creating new shares does not expose existing SLV shareholders to some new mysterious risk.  During the creation process, the AP exchanges physical silver for new shares, which are issued by Bank of New York Mellon (SLV’s trustee) on behalf of BlackRock Asset Management International Inc. (the trust’s sponsor).  SLV’s trustee and custodian ensure proper receipt of the silver before new SLV shares are released.

I recognize we live in a skeptical time, especially following the events of 2008, and it’s smart to question whether your investments are doing what you think they should be doing.  One of our key tenets here at iShares is transparency, which means we make every effort to educate potential investors on how each ETF works and what it holds.  In the case of SLV, it’s a very straightforward answer: silver.

iShares Silver Trust (the “Silver Trust”) has filed a registration statement (including a prospectus) with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus and other documents the Silver Trust has filed with the SEC for more complete information about the issuer and this offering. You may get these documents for free by visiting www.iShares.com or EDGAR on the SEC website at www.sec.gov. Alternatively, the Silver Trust will arrange to send you the prospectus if you request it by calling toll-free             1-800-474-2737      .

Investing involves risk, including possible loss of principal. The iShares Silver Trust is not an investment company registered under the Investment Company Act of 1940 or a commodity pool for purposes of the Commodity Exchange Act.  Shares of the Silver Trust are not subject to the same regulatory requirements as mutual funds. Because shares of the iShares Silver Trust are expected to reflect the price of the silver held by the Silver Trust, the market price of the shares will be as unpredictable as the price of silver has historically been.  Additionally, shares of the Silver Trust are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. 


Shares of the Silver Trust are created to reflect, at any given time, the market price of silver owned by the trust at that time less the trust’s expenses and liabilities. The price received upon the sale of shares of the Silver Trust, which trade at market price, may be more or less than the value of the silver represented by them. If an investor sells the shares at a time when no active market for them exists, such lack of an active market will most likely adversely affect the price received for the shares.For a more complete discussion of risk factors relative to the Silver Trust, carefully read the prospectus.

Following an investment in the iShares Silver Trust, several factors may have the effect of causing a decline in the prices of silver and a corresponding decline in the price of the shares. Among them: (i) A change in economic conditions, such as a recession, can adversely affect the price of silver. Silver is used in a wide range of industrial applications, and an economic downturn could have a negative impact on its demand and, consequently, its price and the price of the shares. (ii) A significant change in the attitude of speculators and investors towards silver. Should the speculative community take a negative view towards silver, a decline in world silver prices could occur, negatively impacting the price of the shares. (iii) A significant increase in silver price hedging activity by silver producers. Traditionally, silver producers have not hedged to the same extent as other producers of precious metals (gold, for example) do. Should there be an increase in the level of hedge activity of silver producing companies, it could cause a decline in world silver prices, adversely affecting the price of the shares.

The amount of silver represented by shares of the iShares Silver Trust will decrease over the life of the trust due to sales necessary to pay the sponsor’s fee and trust expenses. Without increase in the price of silver sufficient to compensate for that decrease, the price of the shares will also decline, and investors will lose money on their investment. The Silver Trust will have limited duration. The liquidation of the trust may occur at a time when the disposition of the trust’s silver will result in losses to investors.

Although market makers will generally take advantage of differences between the NAV and the trading price of Silver Trust shares through arbitrage opportunities, there is no guarantee that they will do so. There is no guarantee an active trading market for the shares, which may result in losses on your investment at the time of disposition of your shares. The value of the shares of the Silver Trust will be adversely affected if silver owned by the trust is lost or damaged in circumstances in which the Silver Trust is not in a position to recover the corresponding loss. The Silver Trust is a passive investment vehicle. This means that the value of your shares may be adversely affected by trust losses that, if the trust had been actively managed, might have been possible to avoid.

Shares of the iShares Silver Trust are not deposits or other obligations of or guaranteed by BlackRock, Inc., and its affiliates, and are not insured by the Federal Deposit Insurance Corporation or any other governmental agency. 


BlackRock Asset Management International Inc. (“BAMII”) is the sponsor of the Silver Trust. BlackRock Fund Distribution Company (“BFDC”), a subsidiary of BAMII, assists in the promotion of the Silver Trust. BAMII is an affiliate of BlackRock, Inc.

Although shares of the iShares Silver Trust may be bought or sold on the exchange through any brokerage account, shares are not redeemable except in large aggregated units called Baskets.

When comparing commodities and the iShares Silver Trust, it should be remembered that the sponsor’s fee associated with the Trust is not borne by investors in individual commodities. Buying and selling shares of the iShares Silver Trust will result in brokerage commissions. Because the expenses involved in an investment in physical silver will be dispersed among all holders of shares of the Silver Trust, an investment in the Silver Trust may represent a cost-efficient alternative to investments in silver for investors not otherwise able to participate directly in the market for physical silver.
5
end.

Let us now head over to Greece and see how their bonds are behaving.
In a nutshell, not good:

Greek 30 Year Bond Cash Price: 50 Cents

Tyler Durden's picture




For a stunning reminder of just how much of a haircut the market is expecting on Greek debt in actual cash terms, look no further than the country's 30 Year bonds. These are now trading just above 50 cents on the euro. That's a "50% off" blue light special and roughly comparable to the recovery the market is expecting on the paper. Alternatively any "liability management exercise" price on these notably above 50 will result in a Greek revolution.

5



Greek bondholders are going to receive a massive haircut!!

end.

At home today we got two important releases:

First the Philly Fed Factory report and this index dropped badly in April:


Philly Fed factory activity index drops in April

NEW YORK, April 21 (Reuters) - The pace of factory activity in the U.S. Mid-Atlantic region fell far more than expected in April, after expanding at its fastest pace in 27 years the month before, a survey showed on Thursday.
The Philadelphia Federal Reserve Bank said its business activity index fell to 18.5 in April from 43.4 the month before.
Economists had expected a reading of 37.0, based on the results of a Reuters poll, which ranged from 28.0 to 45.0. Any reading above zero indicates expansion in the region's manufacturing.
The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.
-END-

The second news, was the release of the jobless report and this number remains in the 400,000's:



Jobless claims fall to 403,000 last week


WASHINGTON (Reuters) - New U.S. claims for unemployment benefits fell last week, but held above the key 400,000 level, according to government report on Thursday.
Initial claims for state unemployment benefits fell 13,000 to a seasonally adjusted 403,000, the Labor Department said, unwinding some of the prior week's quarter-end jump.
Economists polled by Reuters had forecast claims slipping to 392,000. The prior week's figure was revised up to 416,000 from the previously reported 412,000.
The four-week moving average of unemployment claims, a better measure of underlying trends, rose 2,250 to 399,000.
The claims data covered the survey period for April's nonfarm payroll report, which will be released in early May. Employers added 216,000 jobs in March, the most in 10 months, with the unemployment rate slipping to a two-year low of 8.8 percent from 8.9 percent.
Jobless claims below the 400,000 mark are usually associated with steady job growth. Despite the increase last week, the four-week average has now been below that level for an eighth straight week.
A Labor Department official said three states - Pennsylvania, Virginia and Alaska -- had been estimated for last week's data, raising the possibility for large revisions next week.
The number of people still receiving benefits under regular state programs after an initial week of aid fell 7,000 to 3.70 million in the week ended April 9, the lowest level since September 2008. Economists had expected so-called continuing claims to slip to 3.67 million from a previously reported 3.68 million.
The number of people on emergency unemployment benefits dropped 23,693 to 3.53 million in the week ended April 2, the latest week for which data is available. A total of 8.30 million people were claiming unemployment benefits during that period under all programs.
-END-



It looks like Obama did not want S and P to release the downgrade of the USA debt as reported in the Washington Post:
Obama Officials Privately Asked S&P Not To Lower U.S. Credit Outlook: Report




In the weeks before Standard & Poor's officially lowered its outlook on U.S. credit, Obama administration officials repeatedly attempted to convince the credit rating agency not to make the switch, The Washington Post reported on Wednesday.
Fearing the move could jeopardize the country's current AAA credit rating -- the highest rating possible -- Treasury officials attempted to convince S&P analysts that the ratings firm had underestimated the capabilities of Washington politicians to lower the federal deficit, an unnamed Treasury official told the Post. Officials also reportedly said a deal had already been put in place to solve the currently looming debt ceiling issue.
The behind-the-scenes news come two days after S&P lowered the U.S. credit outlook to negative from stable on fears that Congress might not be able to reach a long-term deal to slash the soaring federal budget deficit. S&P put policymakers on notice, reporting there to be "at least a one-in-three" chance that the U.S. government could lose its its AAA credit rating.
If the U.S. credit rating does eventually get downgraded, government debt would become significantly less appealing to investors like China and Japan, who would be less certain to get a return. In turn, that fear would make it harder for the Treasury to borrow additional money, causing a spike in mortgage rates and a tightening in credit conditions across the economy. Altogether, that could potentially derail the national economic recovery.
The move by analysts at S&P increased pressure on the Obama administration and Congress to come up with an aggressive long-term plan to reduce the currently $1.5 trillion budget deficit, roughly equivalent to 9.8 percent of U.S. economic output. Last week, the Obama administration proposed a plan that would trim $4 trillion from the budget deficit over the next 12 years, mostly through spending cuts and tax hikes on the rich.
In the Republican-controlled House of Representatives on Friday, a differing deal was approved, this one reducing deficits by $4 trillion over the next 10 years while also extending President George W. Bush's tax cuts at all income levels and repealing Obama's health care law.
The two factions must strike a deal before the country reaches its $14.3 trillion debt ceiling -- the maximum amount it can borrow under law -- which the Treasury Department estimates the country will hit by May 16. Already, there are signs the White House's proposed deficit negotiations are unraveling.
-END-


end.

I think that I have given you the best stories of the day.
I will report as usual on Saturday.

I would like to wish everyone a wonderful Easter holiday weekend.
all the best
Harvey

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