Some of this is repetitive from what I posted a while back, but just an update. With SLV trading at $32.33, almost double its 200 week moving average of $16.36, it is reasonable to think the silver mining equities would be trading above the 200 week moving average of their share price divided by SLV. This is reasonable because of the leverage these companies should have to the price of silver.

If SSRI, ECU.TO and MVG were trading at the 200 week moving average of their share price divided by SLV, they would be at the following levels:

SSRI - $50.22

ECU.TO - $2.59

MVG - $18.14

With SLV trading at $32.33, over 7% above where it closed at on December 31, 2010, ($30.18), it is reasonable to think the silver mining equities would be trading above the ratio of their share price divided by SLV at December 31, 2010. This is reasonable because of the leverage these companies should have to the price of silver.

If SSRI, ECU.TO and MVG were trading at the ratio of their share price divided by SLV at December 31, 2010, they would be at the following levels:

SSRI - $30.33

ECU.TO - $1.44

MVG - $13.36

So, we see on a long term and on a short term basis the silver mining equities are underperforming the metal prices. It is beyond frustrating.

I strongly believe a large part of the blame relates to the metal ETF's. GLD's net assets equal $52,340,000,000, wheras SLV's net assets equal $9,300,000,000

This nearly $62 billion dollars worth of capital is only the amount in these two Etf's. As we know, there are others.

In the old days, most of this capital would have been invested in mining equities.

The question I have, is when if ever is some of this etf money going to flow out of these instruments into mining equities that appear to be vastly undervalued?