It is claimed that the silver market is one of the most manipulated markets in the world. It’s also claimed that there’s a drastic shortfall between how much of the precious metal is above the ground versus how much of it has been sold in paper contracts.
But could this be the year that sends the silver price to the moon and gives the so-called silver stackers their long awaited moment in the sun?
Host, Ross Ashcroft, met up with Economist and Writer, David Morgan and Wall Street Silver founder, Ivan Bayoukhi, to discuss.
In the relatively small world of silver, the name, David Morgan stands out. Founder of The Morgan Report and author of The Silver Manifesto, Morgan is widely recognized as an expert in the field. Recently, the term, ‘silver squeeze’ has become a hot topic on social media, sparking the interest in silver as a potential investment opportunity.
But in the absence of understanding the meaning of the term, lay investors are not necessarily in a position to make informed investment decisions. “A squeeze occurs”, says Morgan, “when the buying pressure overpowers the selling pressure, and/or the availability of the product and is usually equated to commodities markets and futures”.
Morgan cites an example of a huge squeeze that he was involved in with the Hunt brothers during the 1970s and 1980s:
“By January 1979, the Hunt’s had accumulated a great deal of physical silver and futures contracts. The price went from six dollars in 1979 to fifty dollars a year later. So it was a huge move in the silver market in a short amount of time”, says Morgan.
The silver market is based on commercial weighted bars which are used, not only for industry, but also for investment purposes when broken down into coins and other forms at mints. Currently, there is three times as much paper silver as there is physical silver in circulation in the exchanges. The three-to-one ratio is reflected in the level of contracts available on the derivative exchanges when compared with the ability of investors to buy and sell physical silver.
In terms of establishing credibility for paper silver, this presents a problem since, in effect, paper silver can be viewed as little more than a set of promissory notes. In other words, the amount of cash money used to purchase paper silver might not necessarily fulfill equivalent inventory requests for actual physical silver at any given moment in time.
As Morgan points out, the request for physical silver might be subject to certain contractual conditions that place a limit on the amounts to be exchanged, due for example, to there being a run on the banks.
In March, Perth Mint’s Chief Executive Officer, Richard Hayes, claimed that keyboard warriors started the squeeze on silver. It’s an assertion that Morgan rejects out of hand claiming that the Guggenheim’s Chief Investment Officer, Scott Minerd, had been pushing for silver which he knew was undervalued as early as January 2020. Morgan says that 300 million ounces was put into the Electronic Fund Transfers (EFTs) as a form of Bait and Switch in order to create institutional demand within the system.
Because the market is financialized, the power brokers make far more on opaque paper silver derivatives through manipulating the system than they do from physical silver. Morgan says that it’s not just the paper silver market that’s manipulated but every market. The entire financial system is based on money assets embodied in currencies that have interest rates attached to them.
Housing, transportation, communications, commodities, stocks and everything else is based on the control or flow of a money system that’s prone to manipulation. Morgan argues that of all the markets, silver is the most manipulated because it has the longest cover of any commodity, meaning that it has a longer or greater short position than any of the futures.
Morgan’s rationale for promoting exposure to the silver market is a reflection of both its historical success rate and the fact that the commodity sector is the only part of the system that’s undervalued. On the flip side, centralized banks are looking at a digital currency to address the debt crisis against a backdrop in which fiat currencies are doomed to fail.
Unlike fiat, gold and silver have never failed in five thousand years. The reason for this, as ‘silver stacker’, Ivan Bayoukhi notes, is because these commodities are based on sound money.
“Looking five thousand years into the future, there’s always going to be physical silver which is used in almost everything from solar panels to electric vehicles. The public don’t understand that the paper money in your pocket sooner or later will go away. Almost 90 or 99 percent of fiat currencies, which is a dollar backed by nothing, has been completely gone in history”, says Bayoukhi.
Silver and gold also compare favourably to Bitcoin and other crypto currencies because they are tangible commodities that can be held physically and are used as a hedge against inflation. For Bayoukhi, if you can’t hold something physically, you don’t own it.
The corporate ‘mainstream’ media have depicted ‘silver stackers’ like Bayoukhi in a bad light because they represent the kind of values corporations are inherently opposed to. These corporations benefit from suppressing the truth that the public who own silver have real value in their hands. They also help ensure that the existing fiat-based Ponzi scheme system, backed by nothing but interest, is kept going.
Bayoukhi raised over 100,000 dollars in two weeks from a Go Fund Me campaign for billboards in an attempt to change pre-conceived ideas about silver and to raise public awareness of the issues. The main goal of the campaign is not just to ramp up the undervalued silver price, but to wake the masses up to real sound money they can hold in a context where the US and Canadian dollar are imploding.
Bayoukhi says that those attempting to keep the lid on silver through suppression, can only do so indefinitely. It’s only a matter of time before the dam bursts and when it does the bullion banks will collapse. This will then usher in The Great Reset which Bayoukhi argues will be comprised of two facets. The first will be the creation of a digital dollar and mass tracking system. The second will involve the formation of a new complete currency backed by silver and gold.
Bayoukhi argues when that happens, the price of silver and gold will skyrocket reflecting their real values. With fiat money backed by mountains of private and public debt ultimately doomed to oblivion in the context of a stock market that has to be manipulated in order to maintain the illusion of value, it won’t be long before the wider public awake to the reality that it’s the precious metals and other commodity markets that hold real value within the system.
Chris Williamson and Michael Hudson, share their views on what we can look out for in 2021.
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