The setup
“Silver is HALF of what it was in 1980!” Well, given the recent smashes, it’s actually closer to 40%. The last time I checked, silver was the only commodity to hold this distinction. Yet, we saw a $50 move in 2011 as well before the paper brigade came to town.
One could ask a legitimate question. Who the hell was shorting this, THAT much? Chris Marcus even did a book on it – I listened to the audio version of it like the week it came out walking my dog. There’s a lot of mention of a certain big bank taking the price down. Chris did a ton of research with this and talked to a lot of industry people for it. It’s hard NOT to see this as a leading theory out there.
But what happened? Really? As price rises, many of you are going to do what – you are going to sell silver into it. Right? Last I heard, there’s 5b oz in bullion/bars/coins/rounds. I’m not super convinced anymore about that number. I think 2011 could have taken a good portion of excess bullion above ground and went for sale. I think AT THAT time in 2011, you had some people from 1980 who were bag holders at $45-$50 and wanted to just break even. It’s possible you had tea sets and the like.
But what I BELIEVE many saw was….how the market kind of functions. It starts to run into hiccups, and price rises. People who bought at $4 run to the coin shop with glee at $35 silver, making a 9x. The coin shops turn around and sell to all of the people are are late to this party – and these are destined to be bag holders for the next draw down.
I think the paper games see the mass supply hitting the market from retail, and then with this – front run the parabolic move down coming. As this was happening in 2011, you would have silver primary ramp up whatever silver they could find to then get it to market. Many were forward selling at certain prices, knowing they could make silver at $12 and sell at $45 for a contract 4 months out.
So I get where Marcus is coming from – but it wasn’t ALL the banks. I believe their role here is knowing where stops are. When you are near a set of stops, go ahead and sell 500 contracts at one moment – which trips a lot of stops and machines are then selling at these stops to push the price down $.50, then buy back those 500 immediately. This isn’t spoofing – spoofing is creating fake orders. No, these guys who know where the stops are don’t have to fake the order, the idea is to buy it back. At the end of the day, they are holding 500 contracts. They let price go up $.25, watch the poor bastards put on stops, and rug them all over again by selling those 500 contracts. This is kind of what a lot of those collusion messages were about between traders at different banks. Maybe bank A had 500, bank B would have 300, and bank C would have 900. They would coordinate a time and place the orders at the same time, smashing all stops, then buying back cheaper. To me, these are a lot of the V’s you see.
Today’s reality
In 1980 dollars, that $50 silver I have seen may have been worth perhaps $300 to $600 in today’s dollars. So in reality, silver isn’t “half the value” from 1980 highs, it’s like maybe 5-10% of its highs. As much as we hate paper silver, that paper silver also contributed significantly to both of those previous $50 highs. Those same evil bankers who are shorting to oblivion can perhaps then switch directions rather quickly to blow shorts out of the water and go long. They are our enemy, today, but our very good friends when silver is gaining $1 a day.
I would contend that banks are agnostic to the silver industry. They do, however, know this is a tiny industry that can get pushed around. They have the power to be market makers and push a price $.50-$1 by just blowing on an ember of weak trading that can have stops turn into an avalanche of selling pressure down. I would also contend that there is no banker twirling his mustache at the idea of breaking silver. There’s evidence for the paper shenanigans – but what you can see is that it’s more about making money bi-directionally, more than anything. Having been part of the futures game for a month now, I’m making money both long and short – anytime Eric was calling for Mr. Slammy is when all of us at the same time would have a spidey sense of a smack down coming. Play it short. Get $500 for a micro, cash out and buy back. It’s an ATM. Unless you do what I did and were up big, then bought at $21.16 with two micros and watched the price recede $1 over the course of a day with no stops.
But the REALITY here is that the paper game in silver is an ATM for serious futures players. That’s all it is to them. If you look at it through that lens, a lot more of the price action makes sense. Technical trading does have some merits – as it is a back drops for a lot of the psychology in this market – when something is at 75 RSI, there’s a high probability of some sort of down movement. An RSI of 25 would indicate the reverse. The rest of the “chop” appears to be banks getting suckers in, both long and short, and then rugging them, over, and over, and over.
When I first started researching this stuff, I wondered why banks were holding silver in vaults. Apparently, there’s an exception to the position limits if you are hedging your legitimate silver. Some needs to fact check me on this and put notes in the comments or on my tweet. I had heard this is the case – think about a miner forward selling 20m oz of silver. It’s hedging future production. If JPM has 100m in their vaults of THEIR silver – perhaps they need to hedge. Consider this could be an easy source or “flywheel” for SLV. Rather than at the end of the day they are scouring the earth for 20m oz on a big up day, they simply change the title of the pile from JPM to SLV. The “silver squeeze” issue, I believe, had them change their prospectus, I believe, because the demand far exceeded whatever they had in the spare pile. All of us were counting on one or more of these people to then have to go into the open market to source 50m oz, which would have driven up price – a LOT. Instead, they appeared to change their prospectus during this to indicate that “all of the silver might not be there”. Meaning – you can’t use ETFs to squeeze because they will refuse to go into the open market and buy. I think the rationale here from a stacker side sees “THAT’S A SCAM!” but from their perspective, they could see 100m oz in buying on one day, and 100m selling the next day in a parabolic move because they knew the paper brigade would come in.
Also in 1980, if you wanted silver, you’d have to stand in lines around the block. One could reasonably argue that retail wasn’t able support that kind of supply and demand. In 2011, you at least had SLV to then absorb some demand. Today, you can make a convincing argument that there may be about 700-800m oz in ETFS across the world, including those in the LBMA and PSLV in Canada. This has taken a significant amount of interest and converted it to 1,000 oz bars. One could also see that the amount of Constitutional silver in existence is less than 10% of what was minted – a figure I have seen many times. It is also reasonable to conclude that in 1980 and 2011, a lot of people sold grandmom’s silver candles and tea sets.
You could also see the “rise of the silver primary miners” in 2011. What 99.9% of stackers don’t understand is that silver primary miners have gone the way of the DoDo. Steve St. Angelo has some pretty charts which correlate gold price to the production cost of gold, but the same is not true of silver. Why? Because, today, less than 5% of worldwide silver is coming from “silver primary producers”. My research has found FIVE primary producers with over a $100m market cap that have the primary source of their metal to be silver. Some are borderline with now maybe 40% silver – but their secondary metals may be gold at 35% and base metals at 25%. So “technically” it is a silver primary, but the majority of their revenues is not silver, just the leading pool of metals. One, in that case, can say they have 60% non-silver revenues.

What this means is that there is no floor on silver prices, despite Steve’s chart. I believe that to be the case for gold, and would support him on that, because less than 10% of gold mined is for industrial, and you can probably guess a majority of that is jewelry. With silver, you have a majority of it made for industrial, and it is consumed.
Today’s reality is that solar panels and EVs may be recession-resistant. Meaning – look around at the tax incentives around purchasing these things. I got an $81,000 solar and battery system that has a 30% tax credit on. I financed this system for 20 years. Cheap credit. People all around are buying EVs with the same concept.
At the exact same time, you have people like you and me who see the defensive posture in gold and silver as a hedge against the type of doom from the dotcom and global financial crisis. Aaron posted this yesterday.

This indicates that today, it may set up the worst recession of my life. Aaron has mentioned that when silver does go up, he’s on the first plane ticket off the island. Well, perhaps that’s smart. I won’t be accused of being smart with silver, and may buy those bags from him.
The reality of today is that the Fed injected too much liquidity into the system and the inflation monster has taken effect. The only real way to slay this is to perhaps suck all of the money out of the system that was put in during COVID.

One could see that the Fed would need to probably reduce their balance sheet by as much as $4T today, or perhaps $2-3T over the next 3-5 years to get this train back on the tracks.
For those of you not understanding this – this money is not just printed and given away. It is borrowed into existence, perhaps with cheap credit. As these bonds mature, the Fed just chooses not to buy them. This might lead to something like this…

We could see a situation where our treasuries get much higher in interest rates, especially as the government needs to continue to fund their runaway spending. Of course, you have banks and pension funds which will buy, but how much? If they know the asset is a degrading asset, why would they buy?
What about the housing market? I have like a 2.75% 30 year. I am NEVER selling this house until I’m like 75-80. Over HALF of the people in the US now have this sort of setup. WHY would they sell, to buy a house at 7% rates?
Then you have Amy Dixon, who has been spot on with the AirBNBust – essentially, a lot of people who now own a lot of homes that were anticipating a lot of revenue from short term rentals are experiencing a cliff drop in bookings. Many of these houses will:
- Be sold into the market and significantly drop housing prices in the bubble areas they are
- Be converted into long term rentals, which will flood these local markets with more rentals available
- Be foreclosed on due to lack of revenues and they do not have liquidity to pay the mortgage. This will also flood markets
What has RECENTLY happened was that the COVID era protections now ended. So you now see things like this.

I had predicted this starting the summer of 2020, but no one could see how the COVID protections would have punted this 2.5 years down the road. My belief is with all of the work from home/TW, you will start to see companies start to bail on their office holdings. My belief is that this is precisely why we are not seeing massive layoffs – YET. In the traditional sense, you’d start to carve off employees from your overhead. Now, thanks to Zoom – you can actually let leases expire on EXTREMELY expensive offices and no longer have to pay all of those utilities. With a tight labor market, supposedly, this would make letting go of hard to find cheap talent a last resort and getting rid of facility overhead the first priority.
Layoffs next, as they are raising rates into dead markets. The inflation information they are seeing YoY has a grenade fuse – things they did a year ago took inflation from 9% to 6.4%, and things they do TODAY will have the effect from 6% to 3% perhaps by next year. But this is no soft landing. Aaron’s chart is setting up a depression-level type of cleansing.
Think about zombie companies. I once heard a stat that 38% of the S&P 500 companies are zombies. I don’t know if that exact number is true, but when you start to look at a lot of those companies, you start to see good amounts of debt. They need not only to keep higher revenues coming in to break even, but they also need cheap paper to roll the debt over with. These aren’t profitable companies in anything other than a VERY much risk on environment coupled WITH cheap paper. Both of those environments are now gone. My expectation is that the pin was pulled on these companies 9-12 months ago, and you will start seeing a lot more of this.

Lastly – due to the crazy investment demand along with the PV and EV, we are seeing significant deficits. Where are they sourcing deficits from?

Of course – you have massive deficits and less silver being mined at lower grades – of COURSE the price goes down. Yeah. About that.
Where all of this take us today
In 1980, you had the Hunt brothers playing with “cornering the market”. 1999 you had Buffet and his 100m oz pile that became SLV. 2011, you had expectations of inflation that never panned out, so people ANTICIPATED inflation, which drove up the price the last 1-2 years or so of that move. Gold had moved since 2000, but a lot of 2011 moves were quashed by QE, THEN QT.
This cycle then created problems which then led to 0% interest again. There’s conversations I heard on video where 2018 was nearly a crisis and it was averted at the last minute with rate reduction. 2019 you had the repo crisis. Then COVID fire hose of cash.
What I BELIEVE to be the path here is the Fed IS serious about higher rates, for longer. This QT-type of environment is what crushed gold and silver to dust in the mid 2010s. However, that was also in the backdrop of an economy that was now raging in expansion. It made a LOT of sense in 2011 to take your gold that went up 10x and rotate it to cheap stocks and depressed housing. LOTS.
We are now seeing the inverse of that. Housing is dead. Employment surrounding these industries, is dead. Stocks are about to get taken to the woodshed. They just don’t know it yet. Treasuries were usually the “safe bet”, but if the Fed is indeed not joking around here, they will not be buyers of this paper. At 5% 10 years, you could see a lot of people and companies wanting in on that action. But the lever here is the US government spending – which will continue to provide an endless supply of debt that needs to be bought. Meaning, you are a buyer at 5%, but next month it is 6%. The next month 7%. You are guaranteed to lose value on these.
Meanwhile, we have bifurcating supply chains. AND due to crushing commodities PAPER prices, the supplies of these stocks are at disastrous lows. A common observation here is that if you were anticipating a depression coming – you might want to dial back the supplies. That may make sense for steel. But you have to remember the crazed tree huggers we have making policy. IF you start to see really bad stuff with the economy, which is inevitable, but not imminent, you start to imagine the Biden presidency announcing more and more spending to support solar and EVs as a form of “stimulus”.
At the same time, you could see the “dollar” get stronger, which may also have short term pressure on gold and silver.
But…..the depression is coming.
As stocks are getting sold while the getting is good, and houses are sold now at 7% at higher prices, all of the fun is crawling to a halt in 2023, and my belief is that cash is king – but with 6.5% inflation STILL around, I also see the common person getting into the gold and silver story. Why?
At some point this year, the freeze on rate hikes will happen. This is when unemployment jumps stupid high suddenly. This is after you see a month of headlines of bankruptcies coming. I believe every day we will be fed these headlines, probably by hedge funds shorting indexes anticipating moves down. I believe many of these firms will be targeted by short attacks, as this may be 2023’s way for a lot of these firms to make a shitload of money.
But…..the depression is coming.
This is not necessarily massive deflation, but the M2 money stock may contract by as much as 20% in the next 3 years. This is demand destruction through much, much higher rates that choke off expansion, home buying, and people starting new businesses. This will have asset values dropping.
How to preserve wealth now starts to be a talking point. If everything is dropping, where does one go? If we STILL have 5-6% inflation the next 3 years as credit is contracting, how does one anticipate preserving this wealth?
And this is where gold catches the bid. Central banks have been buying up a storm. The GSR is now 90.
The paper games
I have been watching the COMEX closely, with the registered and eligible. Many see “The comex will fail”. It can’t, in reality, due to the seller simply cashing out the buyer if they have no metals. What DOES happen is that the COMEX, like the LME, will start to lose credibility in the markets. We saw this with retail premiums really high. But on an industrial level, at some point this is when the big players are trying to get 1,000 oz bars from the spot market and spot is higher than futures prices. And premiums are on top of this. A serious backwardation occurs.
To me, this is where the paper guys understand there is a problem.
What then starts to happen is that instead of the game to rinse people out $.50 and buy back, they see elevated silver prices and many specs are short – and they rinse shorts by buying large contract numbers, then selling back cheaper. My expectation is that we may start to see inverse Vs when this happens.

This is this past Friday. I was long two micro contracts and did not have stops set, as I was anticipating this type of thing. They rinse, then buy back. I believe this is about to be reversed, at some point. When you see a trend line up, and then a massive spike up and down, that may be a signal that the paper brigade as switched sides.
Now….in that backdrop, we could get to $35 pretty quickly. The shorts will get smashed. But it will be the banks smashing the spec shorts.
At $35, you now have a lot of these “silver primary” companies getting mines off of care and maintenance. However, you might then assume worldwide float at $30 silver might be 200m oz. IF 2023 has a 200m oz deficit projected, you can reasonably see that many like Aaron may sell at $30 to keep the price here for a bit.
However, it’s the T-1000 problem, now.

You will have a relentless amount of buying. Why? Because premiums on 1,000 oz bars are high and you cannot get the silver from the COMEX, as people who WANT to buy and remove are cashed out. I am now watching the registered and eligible daily, thanks to Mike – but much of this eligible (as much as 200m) might actually be part of SLV. Some suggest 100m of it.
But how many of these oz are long term holders? Just because it is there, doesn’t mean it’s available, at that price. That is indeed registered, but we are seeing how JPM just added 7m from eligible to cover their recent sales.
For me, 2023 is about the “first movers” getting a position. As you start to hear about the doom and gloom, and unemployment STARTS to creep up, you will have the Elizabeth Warrens of the world screaming about “why do you need to kill 2m jobs to get to 3%”. Others have said we may see 10% unemployment to get to 3%. I agree with Warren, to an extent, but she has to realize that those 2m are only employed due to the cheap 0% money and COVID programs to keep this thing afloat.
The ripping off of the band aid is happening, now. However, the rip started a year ago with QT.
Remember, in 2012-2013, people were selling over-valued PMs into the market to rotate into cheap housing and stocks. Today, the inverse is true. They also got out of PMs due to inflation fears not being founded. However, we are now at the worst inflation in 40 years and the supply chain problems cannot be solved with demand destruction.
The “strong dollar” is a great idea, until you realize half the world is trying to get out of the dollars they do have and into gold or other currencies. Debt they have will get paid in USD, but it is also possible that new debt issued may be in other currencies or simply borrowing against their commodities.
I believe the G7+ groups can produce a good amount of food to sell in USD, but I also believe they are reliant on a ton of energy and metals that are produced by non-G7 countries. This lever here is what is the equalizer many haven’t seen in their lifetimes. Many were dependent on USD to buy energy. No longer needed for many. As USD inflation continues higher, and gold and silver are cheaper – it makes sense that many high rollers convert at least a portion of their depleting purchasing power into PMs. And, to an extent, rotate it into undervalued commodities.
Like the rotation out of PMs and commodities in 2012-2013 to stocks and RE, one can see the “Great Rotation” here coming to PMs and other commodities.
While $30 is a relatively easy target, you can also see a 200m oz deficit becoming a 300-400m oz deficit with the lack of silver coming from the mines as well as the investment demand and PV/EV demand. As Aaron is selling his silver at $30, my friends are being greedy and hopping on the train there. They are seeing PMs on the news.
$50 was a limit in 2011 due to not having a deficit like we do now. Even as miners up production from 800m to perhaps 900m over 2-3 years, that still leaves massive deficits. And, there’s no pile to get it from. This projects a move quickly to $50, at which many of the Aarons who bought at $50 in 2011 exit.
But……there’s STILL a deficit. And those who used to pile into SLV no longer go there, but they buy PSLV who is sucking up the 1,000 oz bars.
The ONLY solution out of this is at $100 silver, they have to start shutting down and liquidating ETFs. That’s the ONLY way to then source the metals. However, it might be a situation where they are banned from buying more silver – and the shares go up as industrial are buying shares from these owners. The mechanics of this may be fuzzy right now – but imagine there’s a 600m pile of metals and there’s a ban on adding more to these, but large players can buy 50,000 shares or so and then take the metal out. This could actually be a very interesting scenario in which buyers of PSLV today could make 5x type oy money in 3-5 years. Again – all of this is fuzzy at this point, but the actuality is most paper players today have little understanding of how bad the silver mining situation has become, and this is a krakatoa in the making.
Would people like me sell a little at $30? Not likely. $50? Actually, not really. I’d sell my mining stocks around $50 silver, but not my silver. What you do is up to you and your financial advisor but I’m hunting much bigger game for 2030-2040 where the USD looks like the Zimbabwe $100 trillion piece of paper and in reality, an oz of silver could feed my family for a week in that environment.
I’m ALSO of the opinion that the gold to silver ratio may see a 10:1 print at some point in my lifetime due to the industrial usage of silver, the high cost to recycle it, and the lack of mining setup for it at this point. Some estimates have 20 years of silver left in the ground. This, to me, has an explosive potential where I can buy silver today at 90:1, and 10-20 years from now if we hit 10:1, get 9x the amount of gold than if I were to buy gold today. THAT is what I would consider a generational wealth type of scenario.
I’m hunting much bigger game than many of you.
$20 silver today may be frustrating, but to me, it’s a way to keep accumulation vault silver and paper contracts – until we can’t anymore. One that that switch is going to be flipped. And those with 5,000-10,000 or even 50,000 oz of vaulted silver will live like kings for the rest of their lives. Those that understand the mining problems completely understand why they are shit now, and why buying at cheap prices is good for 5 years out.
Could we ALL be wrong? Possibly. I spent 3 years understanding the nuances of this industry. While I have 2 graduate degrees (one an MBA) – neither of these are in “silver”. There is no graduate degree to be a silver investor. However, when you have guys like me, Forsythe, and other grad-level people who have all researched this independently and came to the same conclusions – with zero communication with each other, it’s hard to ignore that there is a strong THESIS here (theory being the operative word) that can play out. Will it? I don’t know. But as days go by, the evidence is stronger to support the thesis WHILE the price is going down, which is counter to the thesis.
Can the price go DOWN with a deflationary impulse like March 2020? ABSOLUTELY. Which is why you should also potentially have some cash available to you. On the $11.75 silver day in March 2020, OneGold MAY have had a LOT of orders then. But what silver miner on the planet can support an $11.75 silver price? None. So you BUY anticipating a V. In my world, I’m finding ways to get greedy on prices declining, and finding trades to buy low and sell higher. One of these days, the price is going to run. My PHYSICAL in vaults will allow that to run to 20:1 or 10:1 GSR, and that is the generational wealth. Perhaps I move my silver to gold at 10:1, and gold is at $10,000? Would it not make sense to sell a portion of that gold at that price to buy depressed blue chip stocks and rentals that can get me yield with FCF? Hell yeah.
The problem is, most of you have the patience of a few weeks for a trade. Not years. You didn’t hear Rick Rule talk about his uranium trade he nailed in a month. He talks about a 5 year wait of PAIN. We all saw The Big Short, and Burry getting hammered for THREE YEARS prior to making a massive score on shorting the housing market.
I’m patient. I don’t care about your impatience. I made my position based on MY thesis and the overwhelming evidence. Please do your own research and speak to YOUR financial advisor.
March 9, 2023 at 7:03 pm
For a believer in the “silver thesis” like myself, this was probably one of your best articles Nate. It articulates very well many of my own thoughts, but also includes some new ideas to consider. Its been a thesis-gamble for me since 2016, but I’m all in because all of the evidence and the math to the upside is very high probability. Reality will eventual prevail and the silver thesis believers will get our Big Short Burry or Rick Rule uranium time in the sun–meantime it’s a waiting game.
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