jim willie had a lot to say about etf's and the difference between paper silver and physical silver. here are a few paragraphs:

The flight to safety lately has been mainly into physical gold by foreigners in Arab nations, China, and Russia. It is the story not told. They are increasingly shunning USTBonds on new trade surplus investments, and might soon unload large quantities of USTBonds held in reserves, turning instead in favor of gold. The early stages of this movement have contributed to the shortages of gold & silver. Expect those precious metal shortages to worsen. The trigger for a resumed decline in the USDollar might be a retest of the 140 level in crude oil. The USDollar is still tied at the hip with oil. Meanwhile, the physical realities, together with dealer hedging, will continue to apply pressure on gold & silver futures contracts. A friend called me this morning from overseas. He wondered if the Arabs, Chinese, and Russians are sufficiently angry at the whacking to the gold & silver prices for the large savings they hold in reserves in precious metals, enough to force the physical metals prices higher. My answer was simple: ONLY IF THEY ATTACK WITH GOLD & SILVER PAPER. Namely, if they attack with gold & silver futures contracts. They are increasingly likely, given their disgust with both Wall Street and USMilitary actions, to sell some of their vast USTreasury Bond holdings (paper) and purchase large amounts of gold & silver futures contracts (paper).

The USMint has announced shortages of gold and silver coins. Major precious metals dealers have announced shortages of gold and silver in various forms, like ingots of bullion. UBS has announced shortages of gold across all of Europe, strong demand from India, Turkey, and the Middle East, and the “substantial liquidation has occurred in the COMEX, TOCOM, and OTC markets, although the ETF holders remain broadly resolute.” The COMEX refers to the Commodity Exchange in Chicago. The TOCOM refers to the Tokyo Commodity Exchange. Consider that the Exchange Traded Funds like the corrupt GLD gold fund managed by JPMorgan, and the corrupt SLV silver fund managed by Barclays might not have sold off gold & silver stored metal bullion respectively during the recent price decline, but rather THEY REDUCED THEIR NAKED SHORT POSITIONS. The South Africans just ran out of gold Kruggerands, due to a large Swiss order. Bear in mind that Arabs are extremely resentful of European bullion bankers, who ‘LOST’ their gold. Only paper certificates on Arab gold bullion accounts remain. Thus motivation for the rise of the Dubai and Abu Dhabi gold centers in the Middle East, where corrupt Westerners do not hold control. Curiously, popular (but very real markets) EBay and Craigslist show that silver is available, but closer to $17 per ounce than $13. Two markets exist, a corrupt paper one and more realistic physical one.

The proliferation of Exchange Traded Funds enables price controls, and leaves investors exposed to Wall Street corruption. If you invested in the Goldman Sachs Commodity Index in the summer of 2006, you lost big, from GoldSax manipulation of the unleaded gasoline price, and the coordinated sale of crude oil by the USMilitary, all before the November 2006 national election. Reports are strong that Barclays has not been buying silver with newly invested money. They are selling silver naked short illegally, in all likelihood. Reports are strong that GoldSux is selling short gold & silver mining stocks in a large scale effort by suppressing the GDX exchange traded fund under their management. There is the USO (oil ETFund) and numerous others, including a water ETFund. They are marketed by a stress of their convenience as an investor. Your convenience has a flipside open door to Wall Street corruption.

http://news.goldseek.com/GoldenJacka...