Evidence of how this situation will unfold similar to silver gold platinum and other Commodities Palladium is a relatively small Market that has been subject to management and manipulation for years the concentrated short positions in Palladium were among the largest relative to the market size however over time the physical demand
For Palladium grew so much that it eventually overpowered the paper shorts in 2017 to 2018 there was a situation with paper shorts where physical delivery of Palladium was not possible at the contracted price causing the Palladium price to Skyrocket the shorts eventually reduce their position and the Palladium price
Returned to relatively normal levels between 2017 and 2020 the price of Palladium increased by 4X due to a shift in the car industry towards hybrid vehicles which require Palladium for their exhaust systems this caused the market squeeze as more Palladium was needed than Platinum resulting in a significant shift in the market
While the details may be technical this situation had a substantial impact on the industry three years ago before the onset of the coronavirus pandemic there was a situation where the shortest had a problem due to a physical squeeze this serves as an excellent example and playbook for what could happen to Silver
As central banks are unable to print silver like they can with Palladium making it an unresolved issue while many people believe that a Metals pricing mechanism is determined by physical supply and demand the truth is that physical trading only accounts for a small percentage one or two percent of the overall trade
The majority of trading is conducted on the Futures Market the sale of paper is what is causing the drop in silver prices by selling enough silver on paper the price can be manipulated this has recently occurred again the SLV along with other ETFs such as the Sprott ETFs and pslv need to acquire
Their metal sources it has been historically evident that it could take several months to obtain enough silver for delivery as pointed out by an average spot however within the SLV it seems that some deceptive practices are taking place as it would be nearly impossible to acquire the required amount of silver
In a short time frame there are various leasing Arrangements in the market that I am not privy to the technicalities of but I am concerned that this unsustainable practice cannot continue much longer despite being managed for decades the Palladium scenario is now unfolding which poses significant risks to the
Entire Financial system as Palladium does not play a role in it silver also does not have a significant role but if its value drops it could trigger a domino effect with a manipulation of Gold’s value could also be affected leading to a crisis within the international monetary system
This in turn could put the dollar system at risk unfortunately purchasing silver in large or small quantities is becoming increasingly difficult as it is scarce in the market to worsen matters sellers are pushing prices down by selling paper silver thereby increasing the number of short positions as the price continues to decrease the
Physical amount of silver available will only decrease further the issue at hand is that the recent sale was likely a ploy to manipulate the market orchestrated by a powerful group of banks that have acted as a cartel for many years this is because gold and silver are seen
As direct competitors to the US dollar which used to be backed by gold until President Nixon ended that practice in 1971. since then the U.S has been Keen to maintain the dollar as the dominant currency and allowing gold and silver to rise in value would pose a significant threat to that goal
The covid-19 pandemic has led to a massive increase in money printing with over a quarter of all dollars created in the last 12 months alone as a result more people are beginning to realize the flaws in The Current financial system and the need for a new anchor to replace the dollar
This sentiment was echoed by Mark Carney former governor of the bank of England in his 2019 speech at Jackson Hole where he called for a new Financial anchor and debt restructuring the market forces as seen in the case of silver where demand surpasses Supply or the central Bankers may decide to
Revalue gold at a much higher rate may lead to a re-evaluation of gold such a move can potentially address a crisis around the dollar this happened in the 1930s where gold was revalued to solve price-related issues we are currently witnessing a similar process with silver and it is possible
That gold will be reintroduced into the financial system it is unlikely that we will return to a full gold standard but it is evident that Central Bankers are working towards establishing a new anchor for the international monetary system the bank of England Governor proposed this during his 2019 speech to avoid a
Potential dollar collapse and it is imperative that Central Bankers Take the Lead the U.S appears to understand the significance of this move the IMF and the U.S May jointly propose to transition to the next phase of the international monetary system without a gold backing as all paper currencies in history have eventually failed
With over 250 currencies throughout history that were not backed by gold silver or any intrinsic asset we have seen their eventual demise currently Global currencies are being debased which has led to a surge in Investments such as Bitcoin art vintage cars real estate and other assets that cannot be printed by governments
Eventually the pressure will become too great and Central Bankers who are well versed in the history of Fiat money will take the initiative to revalue gold or undertake other measures to save the system before a complete collapse of paper currencies occurs
