Letter RE: The Silver ETF and Uranium

Jim,
I am a professional financial planner and portfolio manager and I share your feeling that the price of silver is going up. However, I do not believe that the Silver Exchange Traded Fund (ETF) will be approved in the near future. The problem is that there is not enough physical silver readily available to be able to fund it at any reasonable level. In other words, approval of the ETF would be way too disruptive to the market at the current time and I think the regulators realize this. I got the impression from reading your post today that the ETF is a done deal, but I give this a maybe 10% chance of happening in 2006. I do predict that silver is headed into the $12-$15 range in the next 12 to 18 months (I just saw a report that [silver] futures contracts are being sold at $12 [per troy ounce] now.) Perhaps by then the short sellers will have been weeded out of the market and new production will step in to fill the void.

On a side note, check out the price on uranium – the spot price is up almost 500% in the last four years and is in a screaming up trend. Obviously you can’t buy a 100 ounce bar and stick in your safe, but you can buy the shares of a couple of the major producers and leverage the gains. I’m a firm believer that future power generation will have to be nuclear – there is no other viable, economic choice. - D.S.