What will silver look like next week?

ZSL keeps falling. The price of silver keeps rising. If there is a true silver shortage, the ultrashort silver etf is probably exacerbating the situation.


http://finance.yahoo.com/q/pr?s=ZSL

Prospectus

ProShares UltraShort Silver (the Fund) seeks daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of silver bullion as measured by the United States dollar fixing price for delivery in London.
The Fund will not directly or physically hold the underlying silver, but instead will seek exposure to silver through the use of financial instruments, whose value is based on the underlying price of silver to pursue their investment objective. The benchmark price of silver will be the United States dollar price of silver bullion as measured by the London fixing price per troy ounce of unallocated silver bullion for delivery in London through a member of the London Bullion Market Association (LBMA) authorized to effect such delivery.

10K filing

I have a moral duty to worry, so I will throw out some questions for anybody who will listen. I never realized that this is a family of etf funds. In the prospectus it says the following: "Failure of [Future Commissions Merchant ] FCM to segregate assets may increase losses in the Funds." "In the event of a bankruptcy or insolvency of any exchange or a clearing house, a Fund could experience a loss of the funds deposited through its FCM as margin with the exchange or clearing house, a loss of any profits on its open positions on the exchange, and the loss of unrealized profits on its closed positions on the exchange." In other words, if something dramatic happens to the gold etf, it could affect the silver fund.   Who is the counter-party to these silver shares. The etf doesn't actually posses this silver. Is the etf really solvent? What if there was a real silver shortage? How do they produce these "shares". Sounds like a fiat currency, doesn't it, except instead of the government, the etf decrees it... Goldman Sachs and UBS are involved in the silver futures contracts and silver forward agreements. When the fund reconciles it's NAV price on a daily basis, these fiat shares could create a short squeeze themselves. In fact, there is an interesting link on JP Morgan and their silver conundrum.
Will JP Morgan Now Make and Take 'Delivery' of Its Own Silver Shorts? - Seeking Alpha http://bit.ly/gJy74W                         This fund seeks daily investment results that correspond to twice (200%) the inverse (opposite) of the daily performance of silver bullion as measured by the United States dollar fixing price for delivery in London.  When would London prices be different than U.S. prices? Back to the prospectus:
 "the presence of “backwardation” in the market prices of benchmark commodity futures contracts will generally adversely affect the value of Short and UltraShort Funds."wiki link   Silver and gold are usually not in "backwardation" but its the daily rolling of futures that will harm you.  The month-end closing process for the front month futures contract is coming next week. Let's see if a lot of adjustment are about to happen.