Silver is still on with the squeeze. It never stopped. Updated the silver squeeze metrics here to show you all is VERY well.
I got hate mail. “Nate, you said x. It didn’t happen.”
I’m extremely careful with my wording. The events I forecasted are all still in motion. However, if you read my writings and listen to what I say, I talk of this as a series of events that are to happen. I also made the caveats of what COULD go wrong. I mentioned things like “they can change the rules of the COMEX” and I mentioned how the 10yr could come up – but that will just delay it as Yield Curve Control will need to be implemented.
I also said, “IF this does happen, here’s how I am playing it”. I bought SLV lottery tickets for end of March. Didn’t happen. I’m also very careful to ensure my lottery tickets are bought with winnings from options plays, and are a VERY small portion of my portfolio.
I think this is also why people don’t usually put timelines on things. It saves them all of the hate mail.
That being said, my article outlined 4 phases. I believe we are now starting the 4th phase.
I recently had a discussion with a YouTube host in which we had discussed the 800m oz short position, and my opinion was this..
- Of the 400m short by the commercial shorts (on the COMEX), no one is insinuating these are naked shorts.
- Of the other 400m short, I couldn’t tell you what percent of that is naked. Could be .5%, could be 50%. Don’t know.
- I felt that the first to cover will be the naked shorts
- The mounting pressure with the compliance/risk divisions of the big banks will force them to cover. I felt this is what happened when Goldman covered 15m in March by liquidating SLV holdings. I felt when SLV changed their prospectus, a risk analyst at Goldman said “get your silver out of there, now”.
However, a new wrinkle here is that apparently Bank of America borrowed (leased) 300m oz from JPM and sold it, with the promise of replacing it someday – according to Ted Butler.
“If silver goes down in price or stays the same, no big deal for BankAmerica, provided it can buy the physical silver back on the open market whenever it decides to. However, if silver prices rise sharply and it’s not so easy to buy back 300 million physical ounces, then BankAmerica has a problem. Twenty years ago, Barrick Gold and AngloGold had the same problem with gold leases and lost $10 billion each. If BankAmerica did borrow and sell the metal to the silver ETFs, as appears to be the case, it is now short 300 million ounces of physical silver, which is a heck of lot worse than being short 60,000 contracts of COMEX futures. It has to be that JPMorgan bamboozled BankAmerica in this transaction.”
IF this is true, then it’s also possible that a BoA could be dealing with the shorting of the COMEX futures to then buy back some of this silver below $26.50 to then give back. This is wild speculating on my part, and all of you who read the reports can see if BoA is taking from the COMEX – but I’d suggest it would be a layer removed, perhaps. If you are shorting with spoofing, you can buy those positions back within a week, but your influence on spot price could then have you buy this physical at $23.50 in the spot market.
With the 10yr popping up, it created headwinds for silver, due to the real yields being near zero – if you took the 10yr and subtracted the CPI.
Some developments the past few weeks that has me now thinking we are in phase 4.
- moves from unallocated to allocated. While I have been tracking John Adams’ quest to uncover every possible nook and cranny of unallocated out there – even a very small move from unallocated to allocated could really lock down any stores of metal at this point, in an already tight market.
- Bob Coleman recently had been reporting premiums on wholesalers rising. I don’t recall if he gave a premium in this video, but Bob was sort of a hawk on this movement a month or so ago and it seems he might be seeing some downstream effects of this now in his business.
- In my video, I had hoped that PSLV would take 50m off the market by end of March. They took about 70 million. At the same time, we are seeing the COMEX inventories drain.
- Pretty much every mint in the world now is facing massive shortages
- Tons of the unallocated products appear not to be able to deliver metal in a timely fashion.
That all being said, we are approaching the end of April and despite all measures telling us silver should go up, we have May deliveries around the corner and what this means is super smashes are coming to reduce COMEX open interest to force cash settles or rollovers. Looks like 83,000 contracts as of now, but my guess is this is taken down to 9-12k contracts. I’d say anything north of this would really have my interest!
Markets looking “toppy”
I have been hearing people like Patrick Karim calling for 40,000 Dow, David Hunter calling for 37,000 recently. This implies they would be calling a top somewhere in these areas. I don’t disagree. Some others think this could perpetuate itself into infinity based on MMT. Jim Rogers calls this “more money today”.
A reader sent me this….
What I remember reading last year in May or June was that there was $4-5 trillion sitting on the sidelines, waiting to get back in. Well, it looks like it did.
What many people aren’t seeing is that the three asset classes I use are all WAY up
- commodities – most are up 20-40% in the last year. Lumber is off the charts
- equities – all time highs every day
- Real estate – up 15% YoY
What this is telling me is this is the crack up boom many talk about.
My friend told me that fundamentals don’t matter in this market. He’s been chasing penny stocks from pump and dumpers. He was in on Doge coin. Essentially, he calls me an idiot for being invested in silver with the price not going anywhere and my “old ideas” of fundamentals are dead.
This one is going to hurt a lot of people.
There’s that saying that if the taxi driver is talking to you about stocks, it’s time to get out. Well, what I’m dealing with now is a mob of people laughing at me because I’m in precious metals and “gold is dead”.
Well, I can tell you I’d be no other place right now than where I am. In my metrics, I’m showing that silver is about to really go nuts. On a physical squeeze level, not on the COMEX fake price level.
What I can also tell you is that when this goes down, and it will, it’s going to take everything down with it. I personally believe those short are waiting for that D-Day to cover. They will wait for a bottom like JPM did last year, and that’s when they will make attempts to buy back.
Additionally, the east is buying gold hand over fist, and with real rates now -1%, and inflation stories starting to pop up all over the news, I feel like I’m in the right thing.
Now – just to time it.
How I’m playing this is trying to ride up my options to max out value of these. If Hunter is correct and top is end of Q2, and I’m looking at a top of 37,000-40,000 – it means there’s some room yet to let the options cook. Maybe. Head on a swivel. I have most of my options at Jan 21 2022 long term in the money options, and at some point perhaps by end of Q2 or mid Q3, I will get into cash. Most of my other stuff is junior miners I got at good prices, and I might take some profits from these as I will be over 1 year hold with a lot of them.
Watch the epic bust/collapse happen, and be in cash. This will be deflationary, for a VERY short period, as those who got out early I believe will rush back in again at a bottom. This is not my idea, rather I’m building on the Rickards/Dents/Hunters of the world.
What will be the trigger?
I believe FRAUD is the trigger of the everything bust. And the FRAUD is what leads to people getting out of derivatives. And THIS is the collapse. This is also where having companies with strong fundamentals may be your life boat if you are caught in an epic move down.
Which leads me to…..
Deso and crypto on Rob’s channel
I’ve been watching Deso for the last 6 months or so since he was on Palisades Radio. There was something he said in the interview which went something like, “game over…bitches!” in his accent. Literally spit my coffee out when I heard it. I am a skeptic of a lot of things I hear on the internet – so I try and dig in myself. I found a few things to suggest he may be right with how authorities may get involved here.
I had seen some of his writings where he has been on a warpath against Tether. I’m not a crypto guy – and my background is very similar to Rob’s – except he was in a policy role (auditing/compliance) and I’m in a technology role (setting the tech he would be auditing). His type of people ensured problems were fixed and compliant. My background is fixing the problems. But – I also have a very, very, very strong background in all of this. Anyway – I digress.
Deso has been pointing out the issues with tether, and brought to my attention how there have been issues with tether and New York courts. Essentially, Tether is supposed to be backed 1:1 with USD, and it appears this really wasn’t happening.
In the interview – he posits something that I think could be something of interest here. He discusses how governments for the most part have sort of let all of this go. And, if there’s a massive problem with fraud discovered, this can then CALL for authorities to step in and regulate. If the US now were to go in and try and just make things illegal, you would have a serious problem on your hands. On the flip side, if you have a situation where billions are lost in fraud, this may then welcome the regulation.
It’s pretty sinister, but it’s also pretty insightful. This is the 4D chess of the crypto world. How does a government force themselves in? Let fraud occur and make the people demand it.
Then, this came across my phone…
Now – I dug in to this tweet, and read all of the comments – and while the above is NOT TRUE, it did look like insiders sold about 10%. Years of developing a product for little or no pay, then you can make a couple billion? Cool. So I don’t really have an issue with this. I’m wondering though about who might be getting out of what. But…I then saw…
And it turns out…there were fears of prosecution of an unnamed crypto?
So what if Deso is right, and tether (or something like it) is prosecuted for corruption?
What if this system was fraudulent and much of this was used to buy bitcoin? Meaning, tethers are printed out of thin air, then used to buy BTC?
What if a lot (or some) of these 9200 cryptos that are out there have similar issues?
My question for you is….what would regulation of these do to their prices? People say it’s great that crypto removes the banking portion of this, but the banking system is regulated to protect people. One can argue how terrible that is going, but the point is – cryptos are the wild west right now, and if you think massive governments are going to relinquish their monopoly on currency, I just don’t think you are evaluating all of the risks, or severely discounting those risks.
But you cannot control the crypto! Well, with India and Turkey, they are banning in. With India, they essentially said you can’t connect this to our banking system or we will black hole your ass. Turkey just recently banned it.
The question I have, is what to make of a $2 trillion market cap for crypto if:
- widespread fraud found
- Regulation to begin
- More countries outlaw
When I did my palisades interview, there was a method behind what’s going to happen to the silver world. These steps will happen. None of that has changed.
What I see below is what can be the catalysts for what triggers the bad stuff. There may be no trigger at all. Hell, maybe they keep this going another 10 years?
I just think all of this huffing and puffing and blowing this balloon up has to come to an end, and sometime soon.
I believe silver, gold, and cryptos are going to be what begins the take down.
I believe FRAUD is the start of this. The crypto fraud is part of this, but so is a lot of these gold and silver vehicles that don’t actually have gold or silver. What we will see over the next few months will be fraud discovered in the crypto world as well as in the metals world. People who thought they had products will want to get them, and they cannot. This will be due to increasing inflation and asset rates – things will get “frothy” and people will want to hedge against this by taking possession of metals. What is overlooked here is the hedging aspect. The greater this bubble inflates, the higher the portfolio grows. If you went from $1m to $2m , and you want .5% of your portfolio in gold, you may then have to double your gold holdings.
John Adams is on a crusade at the moment to make everyone aware of unallocated, but he’s currently kind of a bull in a china shop. Well intentioned, for sure. But perhaps casting a net a bit too big. I am a Sprott OneGold holder. I know what it is. I know why I have it. I know how to redeem it. It’s just a small portion of my holdings, as I have a very diverse set of holdings in metals. Where he is good with this is getting awareness out of understanding what unallocated is. I think that should be where this is focused and leave it at that.
2. Derivatives to get hit
I have heard many say “silver is the achilles heel of the banking system” and they may be right. I didn’t coin the phrase. What Jeff Christian pointed out a decade ago was that paper gold existed 100:1 with physical gold. All of these people that hold futures or some ETFs or unallocated, or whatever – don’t actually hold gold when they think they do. At issue, I believe, is the bigger this bubble gets, the bigger amount of froth leads to the hedgers then trying to take possession of the metals. As this is going on, the DXY is going down, which provides fear that the dollar might go to zero. That may be years away from happening, but with dinner table inflation massive – the narrative will start to build to take metals into your own possession. I believe when the derivative bomb finally DOES hit, this is the ultimate catalyst for the future David Hunter and them discuss. I am writing a piece about how this whole financial system will be re-done at the end of this. I believe most people are missing one element of this, and how these rules of nature will correct itself. I have a 60 slide deck done on this and am going to be putting a summary out later this week. This is huge.
3. Down goes the ship.
In 2008, what did it here was massive amounts of fraud in the housing markets, and it was a game of musical chairs to get out of shitty debt. This time, it’s going to be a race to get out of shitty anything. So before you crypto people go crazy, it’s entirely possible that your hive will feel bitcoin in the best and 9100 cryptos collapse to zero and you get their market share. What I’m saying is the worst of the worst will be culled. 38% of S&P 500 are zombie companies? Well, not everyone can be saved like in 2009 with $900 billion in TARP. This will affect just about everything. This is where fundamentals matter. While many people can play the momentum game these days with hot stocks, when the ship goes down, the best companies are sticking around.
And my piece will center around what the hell went wrong from the beginning. And how it can be fixed for good.
Launching YouTube channel
I’m floating the idea right now of starting a YouTube channel with a partner. I have been in some preliminary talks about ideas, formats, etc. I feel there’s a market out there for what ideas I have with this, and closer to the time, I’ll give out some details. I am going after a specific niche here which will blanket just about everyone who got this far in the post. I am going to be launching this piece I’m working on to go out in the next few weeks and hope to launch on the back of that.
Now, I’m also not trying to put myself out there as an industry expert. God no. If anyone has ever listened to sports radio or watched ESPN, you can have entertainers who comment on what they are seeing. Many of these guys are columnists and not professional players. This is going to be part in parcel with a lot of my writing on metals. I’m partnering with someone who is a bit more camera friendly and has experience in front of the camera.
Anyone have any input on software to use to film so I could talk and flip back and forth to my computer screen? In my 8 seconds of looking, some appear to film both at the same time and then you have to edit.
April 18, 2021 at 5:00 pm
Hi Nate – Once again a great read thank you. When I read that the East is buying gold hand over fist I had to think of an article by Jan Nieuwenhuijs about the West-East ebb and flood of gold. Just in case you missed it.
April 19, 2021 at 3:50 am
A YouTube channel would be great!
April 20, 2021 at 10:49 am
Great read! Would love to see a Youtube channel with your style of information!! Also, you commented on taking profits from mining stocks. My question is, Do you see mining stocks crashing as hard as other stocks if/when the silver squeeze has taken place and folks are scrambling for allocated metals? I feel when this crash happens everything will take a hit but I imagine the mining stocks to rebound quickly as people put their money where the real value is.
April 22, 2021 at 3:55 pm
,,,,,Salut,,,,,are WE thinking,,,talking,,,, about DESOGAME here,????????????????