Silver Shortages Are Real — Silver Market Outlook

Silver Shortages Are Real — Silver Market Outlook

I recall the relatively recent frenzy in GameStop shares led by instant gurus like Dave Portnoy of Barstool Sports and thousands of Bros (the mostly male, mostly millennial day traders) using government handouts, Robinhood apps, and leveraged call options to send their chosen ‘stonks’ to the Moon. Eventually, GameStop came back down to Earth and many Bros who stayed at the party too long lost their COVID cheques even as hedge funds who initially shorted the stock lost tens of billions of dollars.

A splendid time was had by all. The only winner was GameStop itself, which managed to sell a secondary offering at a relatively high price and use the proceeds to keep its business alive a while longer.

Speculation immediately turned to the next target for Bro enthusiasm. If you could figure that out (perhaps from a Reddit message board) and legally front-run the Bros, you could make a fortune on the way up (just don’t forget to exit on cue). Many observers focused on silver bullion and the main silver ETF (ticker: SLV) as the next GameStop. There was a mini rally about a month ago, but it didn’t last. It’s hard to run a short squeeze when not that many traders are short.

Unusual price and trading activity, and significant upside potential

The Bros discovered that silver was indeed scarce, and the trading community was long ETFs and derivatives and buying bullion as fast as they could. The short interest that existed in GameStop could not be found in silver. The Bros moved on. Still, according to this article, there is unusual price and trading activity in silver, and significant upside potential.

The article reports that silver ETF holdings reached a record high in late February. ETFs want to sell more shares (which means buying more silver), but ETF sponsors have been warned that London silver vaults are running low on ‘good delivery’ bars of silver. A good delivery bar is a 1,000-ounce ingot equal in weight to about 60 pounds. I’ve lifted a few in Swiss vaults; they’re as heavy as they sound.

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A serious shortage in physical silver

The article goes on to recite a long list of statistics, regulatory disclosures, and trade association warnings that all point in the direction of a serious shortage in physical silver as soon as retail participation in silver ETFs picks up again.

Things are quiet on the silver front at the moment. The February price spike has faded, and the Bros have moved on. Still, the supply situation is no better. Even a small spike in ETF demand could cause a crack-up in the delivery system and possible suspension of trading in silver ETFs. This may be an attractive entry point for silver investors. It would take very little to push silver past US$30 per ounce from the current level. And there’s a long list of catalysts that could do just that.

Meanwhile, there’s another issue I’d like to draw your attention to…

The media lies to you every day about almost everything

Mainstream media bias is nothing new. It has been around since the 1960s and consists of giving the news a liberal tilt. Basically, liberal voices are amplified, conservative voices are marginalised, and supposedly objective news reporting is slanted to favour the liberal side. We all know it and we’re used to it.

Yet in the past 10 years, the US media has gone far beyond just a liberal tilt. Progressive radicals have replaced moderate liberals. The progressive line is not just amplified; you get a steady diet of it. The conservative view is not just marginalised; it is eliminated entirely. The media has become a progressive sandbox with no one else allowed.

Now, the media has hit rock bottom

It’s not just a matter of a progressive tilt; the media outright lie about the news, make things up, squash the truth, and act more like a neo-fascist propaganda organ than anything remotely connected to news. That’s not just an opinion. This article (which includes an embedded video) shows it’s a fact.

The validation comes straight from the mouth of a technical director at CNN. This CNN staffer let his guard down when speaking with a Tinder date who was actually a reporter for Project Veritas wearing a wire. The CNN staffer admitted that ‘Our focus was to get Trump out of office.’ He admits that they invented health scares about Trump and covered up genuine health issues about Biden. He said they had video loops of Biden running to a podium that they played endlessly to give the impression of a ‘healthy Biden’ when in fact Biden has been unsteady on his feet and falling down in public lately.

The point is that the fake news and broadcast lies are not rumour or inference anymore. Now we have smoking gun evidence that the news is rigged, coming straight from the horse’s mouth. Although in CNN’s case, the ‘news’ comes straight from the posterior part of a horse’s anatomy.

Regards,

Jim Rickards Signature

Jim Rickards,
Strategist, The Daily Reckoning Australia

PS: This content was originally published by Strategic Intelligence Australia, a financial advisory newsletter designed to help you protect your wealth and potentially profit from unseen world events. Learn more here.