Hi Folks:

Ultimately I believe that our future SP is tied to the fortunes of Ag. I provide this abreviated article from Kitco. I think this is huge and would love to hear the perspective of Eric Sprott or Ted Butler. If you find their comments please post or PM me. Highlights below are mine.

FWIW

Aafab

China's SHFE silver futures contracts expected to have impact on global market

The Shanghai Futures Exchange's silver futures contracts, the first of their type to be offered in China, give Chinese investors a new way to bet on the precious metal.

Author: Shivom Seth
Posted: Monday , 28 May 2012

In a move that will make the silver market more liquid, the Shanghai Futures (SHFE) has begun trading in silver contracts. The contracts are expected to be bullish for silver prices, with traders stating that it could make market manipulation more difficult.

Although the country is a main producer and consumer of silver, it has remained on the sidelines in silver trading. By initiating silver futures, traders say China clearly wants more control over the precious metal's pricing policy.

Chinese investors have been showing an increasing interest in the white metal amidst surging inflation and the sluggish performance of the stock and property markets. In March, about 134 billion yuan ($21 billion) in silver contracts were traded, more than 15 times the amount traded two years ago. More than gold, many retail investors prefer silver because the minimum requirement for investing in it is much lower in China.

The white metal is imbedded in the Chinese psyche. For long, it has been the basis of China's currency. In 1935, the Shanghai-based biweekly Finance and Commerce reported personal hoards of the precious metal at 1.27 billion ounces.

With the Shanghai Futures Exchange gaining approval to begin trading silver futures, traders insist a significant shift appears to be in the making.