Silver goes ballistic and shakes the financial system

Aeneas

Aeneas

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We have a thread or two about gold, and given the recent developments perhaps silver deserves a dedicated thread. Below is some of the things I have gleaned from reading various inputs about it.

Silver has gone ballistic this year and particularly the last month and the main real reason is that the suppression of silver prices through paper silver contracts no longer can be sustained. The need for physical silver has been greater than what comes on to the market for the last 4 years, which has emptied inventories. China which has 70% of the world's silver refining capacity and also a great need for silver announced on Christmas eve that it will place export limits from the 1st of January. Export will now require licences and will likely be quite restrictive.

There is a Shanghai precious metals exchange and then there is the Western run precious metals exchanges. Normally there is not much of a gap, but on Friday, that gap widened dramatically. The Chinese metals exchange sets the price based on physical silver while the Western run ones like COMEX is widely priced on paper or digital silver. Now the demand for physical silver outstrips the supply and the fictional silver castle is coming crashing down in real time. Silver went up 11% on the day and is now the 3rd top global asset as the following chart shows:

2025 12 28 - Market cap top assets.png

It had ramifications and the TBTF (too big to fail) banks late on Friday got $17 billion from the NY Fed to cover their exposure. Unlike previous run on silver, this run is not speculative but rather due to ever increasing industrial demands which outstrip annual supply from mining and recycling. Silver is used in solar panels, electronics, electrical vehicles batteries and much more. Contrary to what I thought, then much doesn't get recycled as it is too expensive. For electronics and other things, silver is made into silverpaste and spread thin, making it hard and costly to recycle. In one thread the price of $200/ounce for recycling it, making it too expensive and thus much end up in landfills.

Here are a few posts on X about silver and views about what is likely happening.
https://twitter.com/x/status/2003969666574647635
https://twitter.com/x/status/2004676690430292410
https://twitter.com/x/status/2004960837044503035

This one was interesting as a guy queried AI to come up with some options of how the financial system will react. There might though be more options than AI came up with.
https://twitter.com/x/status/2004923362729230570
This one is the one who talks about how silver is hard to recycle and how only 20% in total is recycled.
https://twitter.com/x/status/2004953931248529724
 
I've been stacking since 2007....my ship is finally coming in. :lol: I knew I wasn't crazy...or I hoped I wasn't.

Gold is seemingly too expensive for general public buys, that will stay with the rich, elite, large corp and entities....but silver is the people's metal. And when your paper is worth less every day, and you start feeling it, the urge to protect what you have left will become overwhelming. You buy assets that hold value. When you have enough cigarettes, alcohol and toilet paper....silver is the wise move.

There is no equal substitute for silver used in weapons, solar panels, electric cars. Industrial demand will continue to deplete inventories, along with a growing number of individual buys to protect wealth...silver still has a long way to go. If you have any, do not sell...and if you don't have any, better get some.

$80 now, but going well over $100 soon, and probably $200 in 2026.
 
The short of it from my view is this. The physical silver market in Shanghai (China) is breaking the fraudulent paper price of the West, the CME and LBMA. China had been buying and securing silver aggressively for years. Other countries and their people, such as India, have also been massive buyers. In the last 5 years of so there has been a significant silver deficit as compared to global annual mine supply. All the technology out there needs silver - from solar panels, to cell phones and computers, to the new very fast charging, longer charge solid state electric battery that was announced recently from Samsung that will come out in 2027, to the massive data centers being built for AI (copper will also move big because of this...), medical tech, war stuff, to the robot army Musk is going to introduce in the US... you name it, it needs silver in increasingly larger amounts. Countries, like China, have been securing their supply.

With this in mind we also have a major shift in focus in terms of the US's geopolitical focus to Latin America and its own back yard. VBL Ghost and silver friend contend (see below) that securing silver, amongst other commodities, is one of the reasons for the shift of focus. And getting China out of the US's local sphere of influency. China had been using Latin America as a major source of silver as it vacuumed it up from the world for tech and industry and to have a stockpile. No longer with the US making its geopolitical move. And it could be seen the US is looking after securing their supply. I won't reproduce the article posted on ZeroHedge and VBL Ghost's tweets (link below).

So we have a pretty historic move for silver of late. Smart guy Ed Dowd gives some perspective on the last day of trading:

https://twitter.com/x/status/2004668590990188756

Technically, silver is breaking out of one of the biggest 'cup and handle' bullish formations you will ever see... "but wait, there's more!". It isn't just a 50 or so year pattern... it looks like it is also a 163 year 'cup and handle' pattern.

https://twitter.com/x/status/1998999531774419201

I found this tweet worth the time to read to try to see what is going on.

https://twitter.com/x/status/2003969666574647635

VBL Ghost on twitter/X - is one of the most knowledgeable people I've found in terms of silver commentary. I also follow him on substack, but not as a paid subscriber. May do that here soon:


He and another guy are featured in this article in terms of their thoughts on the situation and well worth the short read - Silver: China and US in a Metal-War Now | ZeroHedge
 
The thing about silver is that opening up new mines is not so easy as silver is a by-product from mining copper, tin and lead. So as long as prices in those more base metals don't go up, not much more silver is likely to be mined. The world's annual mine production is about 800-900 million ounces.
Here are the top silver producing countries with data from the last four years.
2025 12 28 Silver producers.png


It is interesting to see the above with the grouping of BRICS in mind. Bear in mind as mentioned in the above videos, China stands for 70% of the silver refining capacity.

I didn't quite understand the paper silver idea, but it is basically from what I gather that a company or investor buys a silver contract for future delivery. No physical silver is moved. In case of the company who does it because they actually use silver, the reason for doing it, is to lock in the price so that when they need it x months later, they can ask for delivery of it. One of the main 'institutions' for these contracts is COMEX. (COMEX is far more than a futures exchange — it is the global price-setting mechanism for precious metals and used for decades to suppress the price of silver. In other words just another racket.). So when a company asks for delivery of the physical silver then COMEX goes out to buy it if they don't have it in their vaults. For decades that scheme worked well. As the use of silver the last 4 years has outstripped supply, it has lead to emptying of the stored silver vaults around the world

The real problem arises when everybody come at once, wanting physical delivery of silver. As it is, COMEX had 150 million of physical ounces of silver until the 1st of December 2025, but it had paper contracts for 750 million ounces. In the first 4 days of December 60% of the physical ounces had to be delivered, leaving very little left to settle the remaining contracts. So if they can't hand over physical ounces, they might be forced to pay cash. Yet for those in the real world needing physical silver a cash payout instead of physical silver is not helpful and they are forced to go elsewhere and pay a premium to get their hands on physical silver. Without it they will have to close factories.

In one solar panel there is approximately 20 grams or 2/3 of an ounce of silver. I asked AI how many solar panels is estimated to be installed in the US in 2025 and the answer is 111 million panels, which would be 71million ounces of silver. That is only for the solar panels in the US. For 2026, the number of panels projected in the US according to AI is 131 million and for 2027, 148 million panels, equally 84 and 95 million ounces respectively.

Massive silver shortage and repricing could likely put the whole renewable energy and the globalists Net zero schemes on the backburner if not the trash heap.

It might be framed as China attacking the West with these silver restrictions, but I don't think that is quite true. The fact is that China produces most of the electronic stuff, electric vehicles, solar panels etc for most of the world, especially the Western world and thus depend on having physical silver in order for the manufacturing industry to deliver the goods. Ironically the US Silver Purchase Act of 1934 hurt China greatly, but that will be for a later post.
 
I was thinking about taking a short position via inverse ETFs, etc in silver some time in Jan/Feb 2026.

I've decided against this.

I do think silver will have some kind of correction for a time (maybe a couple months) at some point. And it may be pretty big and fast resulting from one or more government actions and/or edicts...

Here is some history on how the US has acted the last two times silver started to 'moon' in price. Martin Armstrong has also had commentary on this topic (and silver in general) on this paid private blog. For me it was worth paying to read.
vblgoldfix.substack.com

How The Silver Rally Might End

"CME could, on any day, terminate the leverage."
vblgoldfix.substack.com vblgoldfix.substack.com

What I'm personally going to do instead of trying to trade silver (short and long positions via ETFs etc) is build up cash designated to purchase physical silver on any big corrections in 2026.

Imo, what we are seeing in the silver market and the big move it has had thus far is the start of something that will likely take a few years (maybe 5 or 6 years) to play out where the silver price is much higher and being able to buy silver with cash (fiat money) is hard to do/can't be done. Where not much physical silver will be available to be purchased for a period(s) or long stretches and only becomes available for purchase at what would only seem like absurd prices, even as compared to the price now after this big move.

Another thing to consider is that in places like the US it is likely that at some point they make owning silver illegal for reasons of national security. Sure, they will buy it, but just be prepared mentally for the inevitability.
 
I've been reluctant to discuss money/gold/silver here because its not that kind of forum...but now that the dollar is clearly falling from grace and will likely be replaced as the worlds primary reserve currency. This is a very important topic that will affect everyone here. While I think it is wise to buy silver/gold, it is more important to take whatever dollars you have sitting around in a bank and buy something that will hold or increase in value. Prepare for a storm, or imagine the electric grid going down, what will you need? There is still time to get the things you will need. But not a lot of time. I would estimate we have less than 2 years of moderate inflation before hyperinflation kicks in.
 
Aeneas said:
Ironically the US Silver Purchase Act of 1934 hurt China greatly, but that will be for a later post.
Click to expand...
I found the video which discussed this and it is interesting. Back in the early thirties, the US were reeling from the effects of the depression and looking for solutions. They decided to pass the Silver Purchase Act of 1934 which tripled the price of silver. Unlike the US, the Chinese currency was backed by silver, not gold. The tripling of silver made US banks buy up Chinese coins which were melted down and shipped to the US, where the US government was actively buying silver. The effect was swift and the Chinese economy crashed, many businesses went bankrupt, farmers suffered as they couldn't get credit and there was big inflation. Until then China had not suffered much from the great Depression, exactly because their economy was based on silver.

Anyway, now it is the other way around, as commodities including silver go East. China probably learned the hard lesson by studying history and knew the day would come where they had to have resilience against a volatile financial market. It might not be intentional just as the US Act of 1934 might not have been intentional. Back in 1935, when China pleaded with the US to stop, the US ignored the pleas. That is also likely to be China's response if it gets to the point where the US pleads for China to help.

Here is the video, where the first 7 minutes talks about the Silver Purchase Act of 1934.
https://twitter.com/x/status/2004802236224766009
 
The government enforced EOs 6102 and 6814 by threatening a $10,000 fine or up to 10 years in prison. A list of silver hoarders was created, identifying the largest holder of bullion prior to the executive order, and efforts were made to ensure those owners complied.
...
Today, investors and collectors wonder if gold and silver confiscation would be necessary now. Although one can only speculate, the situation today is quite different than it was in 1933 and 1934. During that time, gold was pegged to the dollar, whereas today’s currency is fiat — not pegged to anything. In addition, the severity of the recession spurred the need for gold and silver due to their use as currency — something that isn’t the case today.
Click to expand...

If the rest of the world is going non-fiat or quasi non-fiat, then the US gov't, to trade with these nations, will be forced to reverse the course noted above and some PM backing of its currency established. Confiscation from private holders might very well be a strategy employed to do that.
 
dennis said:
Confiscation from private holders might very well be a strategy employed to do that.
Click to expand...


Yes, It seems to me that this whole situation with silver may be planned and used to seize private silver reserves, as well as gold held in duty-free warehouses and bank vaults,(Private silver reserves are estimated to be around 2,000,000–2,500,000 tonnes) which is possible in the case of scenarios involving national security, economic collapse, or resource shortages.

Under the US Constitution's Takings Clause (5th Amendment), the government can seize private property for public use with "just compensation," but in crises, this has been interpreted flexibly (e.g., via executive orders or acts like the Defense Production Act). Eminent domain or national security laws could justify targeting strategic resources like silver, which has industrial uses in electronics, solar panels, and defense tech

So if you don't have something at hand, it's as if you didn't have it at all.

This is an option that should also be considered.
 
FM258 said:
I've been stacking since 2007....my ship is finally coming in. :lol: I knew I wasn't crazy...or I hoped I wasn't.

Gold is seemingly too expensive for general public buys, that will stay with the rich, elite, large corp and entities....but silver is the people's metal. And when your paper is worth less every day, and you start feeling it, the urge to protect what you have left will become overwhelming. You buy assets that hold value. When you have enough cigarettes, alcohol and toilet paper....silver is the wise move.

There is no equal substitute for silver used in weapons, solar panels, electric cars. Industrial demand will continue to deplete inventories, along with a growing number of individual buys to protect wealth...silver still has a long way to go. If you have any, do not sell...and if you don't have any, better get some.

$80 now, but going well over $100 soon, and probably $200 in 2026.
Click to expand...
I did also, I bought a big chunk in 2008. Kind of interesting but as an investment I actually have done better on stocks of Xero, A2 milk. It doesn’t appear to be a store of wealth like gold and not really that great as an investment compared to good companies.
It a strange market and I have not fully grasped why, I’m guessing it will reach the price it costs to recycle it.
 
FDR went full dictator mode to quench opposition to his moves and a divided Supreme Court narrowly upheld them. Silver would likely be treated like gold in a legal sense, but the cases were about the amount of compensation given in the taking, not the right to take in the first place. The legal theory was based on the 1917 Trading with the Enemy Act.

The Gold Clause Cases were a series of actions brought before the Supreme Court of the United States, in which the court narrowly upheld the Roosevelt administration's adjustment of the gold standard in response to the Great Depression.
en.wikipedia.org

Gold Clause Cases - Wikipedia

en.wikipedia.org en.wikipedia.org
 
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