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James Turk: Extraordinary stress in the silver market

Section: Daily Dispatches

9:05p ET Sunday, March 15, 2009

Dear Friend of GATA and Gold (and Silver):

GoldMoney founder James Turk, editor of the Freemarket Gold & Money Report and consultant to GATA, reports tonight that the silver market has been in backwardation for 38 days, which he believes is unprecedented and signifies enormous stress in the market -- a serious shortage.

Backwardation is when material for immediate delivery is priced higher than material for later delivery, often because buyers doubt that the material can be delivered later.

Turk writes: "Rumors abound in London in particular about the shorts being late in meeting deliveries. So the present backwardation is not surprising. It is in effect a confirmation of these rumors, but it also shows that promises to deliver are being increasingly doubted. In other words, people who hold physical silver are not willing to exchange their metal for some paper promise, nor should you. Hold real physical silver; do not accept any paper substitutes like certificates, pool accounts and ETFs."

Turk's analysis is headlined "Extraordinary Stress in the Silver Market" and you can find it at the GoldMoney site here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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