Sounds like ridiculous overkill for 5k of silver.. a .jpg every month or so with hot chicks in bikini's would be more then sufficient
Well, the idea would be that I'd provide the service to be completely above-board and transparent. The more reliable the service, the more likely people would use it, and if it did get popular we'd issue more shares and buy more silver.
Will you also offer a short ETF?
No, I absolutely would not, sorry if you were interested in this. I disagree with this practice when it is done with SLV and other commodity ETFs in the US stock exchanges.
In fact, the seed money used to start this fund will probably come from my sale of my SLV stock which I believe I am finally done with due to their short-selling. Selling what you do not have is deriving value where there is none and is an affront to good sensibility. I cannot imagine loaning stock in silver to someone who I am not certain can pay me back tomorrow, especially if the price were to double or triple. Worse still, even if I were do this of my own accord, this still puts a financial obligation on my own name and net worth, one which I may not be able to fulfill.
The housing crisis has shown us the irrationality of the market. There is something that the Black-Scholes equation does not properly account for called Kurtosis risk, or, if you have heard of it, the "Black Swan" effect. If you do not know what that is, I'll try to explain it here.
Basically, tomorrow everyone could decide to go to their local coin dealer and buy every single silver coin and the price of silver would go from $30 to possibly some unbelievably high number, like $3000/ounce. It is VERY unlikely such a thing would ever happen, but it *could* happen, and that is what Kurtosis risk is, the idea that not only could something go outside of reasonable risk levels, but that it could do so in a major way and in a very short period of time.
One of the examples that I like to use of Kurtosis risk is an experiment in which they asked several professional gamblers to imagine they go into a casino and sit down at a roulette table. They each witness, before their very eyes, the ball land on 0 ten times in a row, meaning neither red nor black bets get paid. Now a rational and logical person, knowing all the odds of the game should never say that 0 on an 11th spin is more likely than the 1 in 37 chance, but every professional gambler said the likelihood was higher than 1 in 37. When asked why, the answer these professional gamblers gave came down to, "How do they know the system isn't rigged, or maybe something is wrong with the wheel that makes it land on 0 more often?" In other words, the circumstances around the situation were so extreme, that it was now likely
all logical and rational analysis is risky.
The "Black Swan" reference comes from a book that explains Western Europeans used to have a phrase very similar to "when pigs fly" called "like a black swan". The problem was that around 1790 they did end up finding black swans in Australia. This went to show that there are "known knowns", such that there are species of pig we've identified. There are "known unknowns", such that there may be species of pigs that we may have not yet identified. And finally, there are "unknown unknowns", such that there may be species of pigs that we know so little about, we can't really say with any degree of certainty that "pigs cannot fly".
Sorry I spent so much time on this post, but I wanted to be thorough in explanation. I'm sorry if not providing a short silver ETF upsets anyone, but I cannot make short sale predictions due to Kurtosis risk.
I don't know if I can own my own stock on GLSBE, but if so, I might actually do this on my own so that any increase in the value of silver from here on up doesn't get hit with as big of a cap gains tax. I'm already looking at a tax on the %167 increase I have in SLV right now and I'm not really looking forward to it.
