Kashan is correct. Rug was made around 20 - 30 years ago. It is wool with silk highlights. It is in rather poor condition for its age, pile in the middle of the rug is almost gome to foundation - this is where the white dots come from on the pictures. Personally I think you payed to much if you bought it in this condition.

There is no wear... I was told the white threads were silk highlights... I brought this to a very reputable dealer this week in Louisiana, and he cleaned and officially appraised it at $6,500... Is this really out of line? I have no idea?

I marked the areas that show the white dots. This is usually a sign of worn pile.

If you make a rug, you first set the loom by attaching the warp - in this rugs case a fine cotton warp. The warp material is not endless, when the string ends it must be tied toghether with the next.

After the warp was attached to the loom, usually there is a kilim border made to stabalize the warps. On your rug this is the woven part that has no fringes.

After that the knotting starts. After one row of knots the weft (s) will be addad to the construction. In your rug there are 2 wefts in opposed direction worked into the rug. One is a thin blue cotton weft, one is a thick white cotton weft.

If the string ends, it is knotted togehter with the next. At the place where the thick white weft it tied together, there is no space for a wool knot. As long as the rug is new or in high pile condition, you will not see these white cotton knots since they are covered by wool. If the rug looses pile, it will show these cotton knots. This is not a problem of only your rug, it is very common on most rugs.

And from what I see on the pictures you posted this is the only senseful explenation I can give you about these white knots. If the pile would be ok, the knots would not show.