Silver is a chemical element with the symbol Ag and atomic number 47. It is a transition metal known for its lustrous, white, and shiny appearance. Silver has long been known as poor man’s gold. Silver is a relatively soft metal, and it possesses the highest electrical conductivity, thermal conductivity, and reflectivity of any metal. These properties make it valuable for various industrial applications, including electronics, photography, and mirrors. Silver is the second most used industrial commodity only behind oil. With so many industrial applications, how on earth could silver be half the price of its high point in the 1980s?
In addition to its industrial uses, silver has a long history of being used as a precious metal for currency, jewelry, and ornamental purposes. It has been used for coinage in various civilizations throughout history and continues to be a popular choice for making jewelry. The first silver coins are believed to have appeared in the ancient kingdom of Lydia, located in present-day western Turkey, around the 7th century BCE. The Lydians are credited with introducing standardized coinage, and it’s thought that their coins were made of a naturally occurring alloy of gold and silver called electrum.
The global silver industrial demand forecast will reach a new high in 2023
Silver is often found in nature as a native metal or in various minerals, typically in association with other metals like copper, lead, and zinc. It can also be extracted as a byproduct during the refining of other metals. Due to its antibacterial properties, silver has been used for medical purposes, such as in silver-coated dressings for wound care. However, the primary uses and demand for silver are usually tied to its industrial and decorative applications. According to the Silver Institute, the global silver industrial demand forecast reached a new high last year. This was led by electronic and solar demand for silver.
The price of silver today versus 40 years ago makes no sense
The price of silver has experienced significant fluctuations throughout history, influenced by various economic, geopolitical, and industrial factors. Before the 19th century, the price of silver was relatively stable, reflecting its use in coinage and as a store of value. The discovery of large silver deposits in the Americas around 1859, particularly in the United States led to increased silver production. The Comstock Lode discovery led to a silver decline in value relative to gold. The adoption of the gold standard in many countries further impacted the silver market. The demonetization of silver in several countries, such as the United States with the Coinage Act of 1873 contributed to a decline in silver prices. Even with the discovery of more silver, the price today of under $25 makes absolutely no sense. It has to be something else holding it down! What could these forces be that don’t want the price of silver and gold to be traded freely based on supply and demand?
The Hunt Brothers cornered the silver market in the late 1970s
In the late 1970s and early 1980s, the Hunt brothers attempted to corner the silver market, leading to a sharp increase in prices. The Hunt brothers knew the silver market was being manipulated by the paper markets so they decided to take delivery of much of the physical market inventories which caused a panic squeeze. Silver rallied significantly as some paper traders were on the wrong side. Paper traders you say were on the wrong side of silver which is a tangible asset? That’s very interesting.
The price of silver went from $5 to $50 from 1978 to 1980
The price of silver went from $5 to $50 in a very short period of time from 1978 to 1980. However, this was followed by a significant crash in 1980 as the government stepped in and put a stop to that in one way or another. On January 7, 1980, in response to the Hunts’ accumulation, the exchange rules regarding leverage were changed; COMEX adopted Silver Rule 7, which placed heavy restrictions on the purchase of commodities on margin. The Hunt brothers had borrowed heavily to finance their purchases, and, as the price began to fall again, dropping over 50% in just four days, they were unable to meet their obligations, causing panic in the markets. If we are supposed to have a free market, why would the government step in to change the leverage laws? Why aren’t the banks today subject to the same restrictions when it comes to derivatives? We will get to that a little later.
The price of silver has always been volatile but other forces are at work here
If we focus on the price of silver since 1975, it has always been volatile. Silver was about $5 in 1975 and rallied to $50 in 1980. Silver fell to $5 again in 1982 and rallied to $15 in 1983. Silver then basically hovered between $5 and $7 from 1985 to 2003. The War on Terror by the Bush Administration triggered new life into silver and gold in 2003 as serious debt expansion started to fester. Silver like gold has always been seen as a store of value and as a way to own a tangible asset. Silver rallied from $5 in 2003 to $50 in 2011. Silver was stuck between $15 and $20 from 2016 to 2019. Silver has basically traded between $25 and $20 the last few years. The price of silver seems awfully controlled to me since there are so many more industrial applications today for silver versus decades ago. Many other markets and equities have been allowed to go into bubble territory over the last few decades. Why has silver not been able to form a price bubble?
JP Morgan was fined $920 million in 2020 for manipulating markets
Traders and investors around the world buy and sell silver contracts on commodity exchanges, such as the COMEX (Commodity Exchange, Inc.), to speculate on price movements or hedge against risks. Banks and investment firms are active participants in commodity markets, including the silver market. These institutions may engage in trading, investment, and other activities related to silver and other precious metals. Some large financial institutions may have significant influence due to the scale of their trading activities. JPMorgan Chase & Co. agreed to pay $920 million in connection with schemes to defraud precious metals and US Treasuries Markets in 2020. Could it be that the silver market has never been able to trade as a free market? Could paper market manipulation and suppression be a reason that silver today is half of the price it was at its high point in 1980 and 2011? It would seem based on the charge above to JP Morgan Chase that market manipulation means big cash flow that continues to be allowed and ignored by certain government agencies. Please tell me if that is an inaccurate statement.
ETFs are another way to control the price of some commodity markets
An ETF, or Exchange-Traded Fund, is a type of investment fund that is traded on stock exchanges, much like individual stocks. ETFs are designed to track the performance of a specific index, commodity, bond, or a basket of assets, and they offer investors exposure to a diversified portfolio. The silver ETF is called the SLV. The iShares Silver Trust (SLV) is an exchange traded fund (ETF) that tracks the price performance of the underlying holdings in the LMBA Silver Price as of August 2014. Prior, SLV used the London Silver Fix Price as their underlying benchmark. It has been a long known fact that physical commodity ETFs may not have all of the physical metal they are required to have to back all ETF shares.
It’s a realistic assumption that commercial banks are allowed to trade trillions of dollars of financial derivatives to manipulate and control certain markets. Could it be that commercial banks coordinate with certain ETFs to rig the price of certain markets to keep other markets or other currencies the focus? Could there be coordinated efforts by the banking system to keep customer funds in the banking system versus having customers holding their own wealth outside of the banking system in physical precious metals? The central bank and fiat system does not work if people hold their wealth in tangible assets.
Commercial bank derivatives were a major cause of the 2008 mortgage crisis
The 2008 financial crisis was a complex event with multiple contributing factors, and derivatives played a role in the crisis, particularly in relation to mortgage-backed securities (MBS) and collateralized debt obligations (CDOs). Derivatives such as credit default swaps (CDS) were used to hedge against the risk of default on mortgage-backed securities. These financial instruments allowed investors to buy insurance against the default of mortgage-related assets. While the intention was to manage risk, the widespread use of derivatives also created a complex web of interconnected financial obligations.
Financial derivatives today are far larger than they were in 2008. This just speaks to the fact that these derivative time bombs will eventually go off no matter how long the commercial banks think they can rig certain markets for control and profit. Eventually the beach ball that is held under water will pop out of the water. Silver should be one of those beach balls that have been held under water for decades.
Solar capacity is exploding and silver is an important factor in that
Silver plays a crucial role in the manufacturing of solar panels. Solar photovoltaic (PV) cells, the building blocks of solar panels, often utilize silver for conductivity, durability, reflectivity, soldering, and reducing resistive losses. China’s installed solar capacity will double to 1,000 gigawatts (GW) by the end of 2026 as the world’s second-largest economy continues to ramp up investment in renewables, energy research firm Rystad Energy wrote in a note published on Monday.
The United Nations Climate Change Conference has recently announced to triple green energy expectations over the next decade. With all of the increased demand for silver and basically a flat silver supply the last 10 years, where is all of the physical silver coming from with all of this increased industrial demand? The price of silver today versus where it has been in the past makes no rational sense when you consider all of the increased demand and a basically flat supply.
The price of silver today versus 40 years ago is the opportunity
It is safe to say that the price of silver is perplexing considering the increased demand on the industrial side. On the investment side people are diversifying from fiat money and paper currency. The Federal Reserve Notes we have are losing their appeal because of continued lost buying power. The continued suppression of the silver price is where the opportunity comes from. Eventually commercial banks will be called out for market manipulation and they will be unable to continue with their cash cow rigging. Banks will have enough on their plate when the entire banking system is in shambles. We all know we can’t trust the banks. They will be forced to stop by means of natural market forces. We all see how our monetary system is falling apart with a currency and debt crisis fast approaching.
If you haven’t noticed our government has a slight spending and debt problem. Our entire system depends on creating more debt. One of the reasons you own physical silver is to have purchasing power outside of the banking system and financial markets. Your banking system money may not be accessible when we need it as the system falls apart. We all know our paper currency is losing tremendous purchasing power every year. Market manipulation of our currency can’t hide the fact of what our Federal Reserve Notes buy at the grocery store. Costs are soaring, stocks have soared to a bubble, real estate has soared, but physical silver is half the price it was in 1980.
The commercial Wall Street banks will not be able to cover-up the paper recklessness and leverage of the banking system and our irresponsible government politicians forever. The manipulation of the futures markets and paper markets for commodities and other debt instruments is obvious. This can be the only reason that silver is priced today versus where it has been 40 years ago. Even the manipulated gold market is three times its high point of the 1980s. Get your physical silver, sit back and enjoy the show as the manipulation of markets and the implosion of the debt markets play out right in front of our very eyes.