Huge Fan. Keep It Up!!!
I like your analysis but I would argue with your contention that paper doesn't have to respond to physical demand. The paper markets at their root are designed for end users and investors to acquire material and producers to hedge forward production. If there is a shortage of physical, which anecdotal reports indicate is the case to some degree, then there are only so many places people can go to obtain physical. It's only natural that those who want physical would use the Comex as one source by buying paper and standing for delivery. There are only a couple cases where there would be a huge divergence between paper and physical prices. One would be if the majority of market participants conclude that the paper markets can't be relied upon to produce physical on delivery day which lessens demand for paper. The other would be if certain entities decide to sell massive amounts of paper in order to intentionally drive down the price which is always a possibility, but seems unlikely at this point in time given the reduction in open interest that has been occurring while prices continue to rise.