Finally, we should have brought this to everyone’s

attention earlier, but we find it interesting that the term

structure of the silver futures on the COMEX is very

nearly “flat.” Silver futures, like gold, should always be

rather perfectly in contango, for what is more easily

stored than is gold, or silver, or platinum or palladium.

The deferred futures for all should almost always be a

perfect reflection of the prime borrowing rate, and the

one year future for gold, or silver, or the other two

“precious metals” should be at a contango to the spot

rate by that borrowing cost. In gold this is true, but in

silver, the May’’09/May’10 spread has May ’10 silver at

a mere 0.7% premium. The three month carry for

palladium works out to 0.44%, or 1.76% for one

year…far below the borrowing cost. In other words,

supplies of silver and palladium are inordinately tight,

and the markets appear poised to move to

backwardation… a very real rarity in the world of

precious metals.