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Here's a deeper look at The Elliott Wave Financial Forecast's interpretation of a crushing demand for the iShares Silver Trust when it first appeared last spring:
At this point, silver sentiment, the red hot speculative tip of the latest surge, hit a peak reading of 98% bulls on April 19, a level that analyst Paul Montgomery aptly described as “cartoonish.” On a 10-day basis, Market Vane’s Bullish Consensus peaked with 95% of investors convinced of further highs in silver. This white metal is definitely the focal point of the frenzy as even long-time gold bugs are expressing a preference for it: “Silver will not be just twice as profitable as gold in the next few years, but many times more profitable—maybe ten times more profitable,” said one famous gold bug. Just as the pension funds were rewriting their by-laws to get more fully invested in stocks in the late 1990s, funds and university endowments are making a big push into commodities.

A plethora of new exchange-traded commodity funds are also coming on line to satiate current demand. Much of the bullish sentiment in silver focuses on a new Barclays silver ETF that was approved yesterday and starts trading today. “I don’t think I could have dreamed up anything more potentially bullish than the Barclays ETF,” said one silver analyst. The word on the street is that billions of dollars in new silver interest cannot “flow smoothly into the silver market. It’s like trying to stuff ten pounds of ice cream into a one-pound container. This is the reason why I was sure the regulators would reject the silver ETF. By the time this silver story plays out, the $50 Hunt Brothers episode will merely be a footnote in silver history.”  Rather than observing the unfortunate result of similar pension fund commitments to the stock market in the late 1990s, the fund movement into commodities is almost universally viewed as proof positive that commodities will continue still higher. “The main buyers are new investors like pension funds starting from scratch in commodities, and for them the actual price level is not relevant. Nothing can stop it,” said one hedge fund manager. The first sentence is true; the second one isn’t.

The analyst quoted above was right, Barclays new silver ETF proved to be a big moment in silver’s price history; but it marked a top rather the anticipated blast off. Now the ETF boom is moving in on the commodities markets as a whole, and subscribers know what that means. The article fits perfectly with the discussion in the Special Section of the latest issue, which just went out. It’s one more “financial innovation” with critical implications for the underlying assets in which it's supposed to generate so much demand. Since it marks an equitization of the very asset class that finance displaced at the start of the bull market in 1981, the same implications almost certainly extend to the global financial markets as a whole. I mean is there anything left to be turned into financial paper? Not on this planet. The liquidity bubble is flush out of speculative conduits.