Sprott's Embry warns investors to make sure ETFs backed by precious metals - September 09
There is much more paper silver in existence (both long and short positions) than there is physical silver. The main message of the article is that an investor ought to either buy the real thing or purchase paper silver that is fully backed by stored physical silver (Allocated and not leased out) and audited by third parties. In most cases paper silver is backed only by a silver future contract whose conversion to actual Silver is constrained by conversion limitation and the the fact that silver stockpiles cover only a small portion of future contracts.
Interview by author Dorothy Kosich, she quoted Sprott Asset Management Chief Investment Strategist John Embry who urged investors to make sure:
"your exposure to gold and silver is what it is represented to be..." and
“Investors should confine their exposure to actual physical metal or only to paper products with regular audits that support precious metals backing.”
Here’s the link to the article for your perusal.