Silver market exploding, might bring down banks and currencies

Silver market exploding, might bring down banks and currencies.

The operative word is “might,” because the system is fairly resilient. However, there are very significant financial rumblings. Industrial demand for silver from solar panels and battery manufacturers has been quickly pushing up the price of silver over the last month.

For monetary reasons, for the last two decades several big banks (four in the US, another four internationally, all too-big-to-fail, probably at the behest of the central banks) have been suppressing the price of silver by selling “paper silver” via future contracts. But with silver’s big price rise since Christmas, the big banks have given up trying to suppress the price of silver — they have capitulated. Why? Because they are so far underwater.

Another unnaturally straight rise, of 10%, yesterday

Those big banks have accumulated huge short positions, of all that paper silver, all those promises of silver that they can only now fulfill by buying silver and delivering it to the contracted parties. To fulfill their contracts they must buy silver on the open market, which sends the price even higher — a short squeeze. Yesterday, the US Federal Reserve bailed them out with US$17 billion. But the silver price rose another 10% yesterday, so more bailing out will be required. The money printing by the Fed fuels fears of inflation, which tends to increase the silver price (though it is mainly driven by industrial demand, investment demand is significant still). And so on.

This video is very well produced, and mostly correct AFAIK (and I’ve been following this topic closely for years, waiting for something like this). It’s slightly technical, but the explanations for beginners are pretty good.

The paper money system is in real trouble. Bailouts and bank failures would be real possibilities, except the central banks will prevent them by printing money as required, so instead there will be inflation.

Our society uses money to signal what is worth doing and how much is done, i.e. to synchronize production and ration consumption. It might come under severe pressure due to decades of mismanagement and elite cheating, which is now coming to a head . If the paper money system busts, normal politics will take a back seat because we have a deep crisis that will take months or years to sort out.