A historic turning point is unfolding before our eyes. Its impact will be massive, yet very few people are paying attention to it right now. This is dangerous, as they face nothing less than the loss of all their savings due to another banking crisis.
The truth can be suppressed for a while, but sooner or later, it comes to light. Such a situation currently characterizes the silver market. For years, it was considered a playground by the major banks, where they could freely indulge and push down the price as they pleased. This was possible because the silver market is so small and tight, and regulators preferred not to look too closely.
The damage was borne by silver producers and countries like Mexico, Peru, and China, who received significantly less for the silver they mined than was actually justified. However, the silver market is heading towards a turning point, and there are serious voices suggesting that this turning point has already been passed with the rise in the silver price above the 35 US dollar per troy ounce mark.
Structural Deficit in the Silver Market Reaches Critical Mass
At its peak, the silver price already rose above 37 US dollars. Although it has since pulled back somewhat, the major banks have not yet managed to make this breakout appear as a clear false breakout, because behind this price jump lies a revolutionary market dynamic. It stems from a structural scarcity and an exploding industrial demand for silver.
Since 2021, the silver market has been continuously in a deficit. Annual demand has risen to 1.2 to 1.3 billion ounces, while the silver supply, consisting of mine production and recycled silver, remains at about one billion ounces. This results in an annual deficit of 200 to 250 million ounces of silver.
This deficit represents a ticking time bomb that is about to explode, because in the years before 2021, the silver market was largely balanced. Not much silver was put into storage, and these inventories have been depleting at a rapid pace for five years.
JP Morgan, HSBC, and UBS are Running out of Time with Silver.
Over the past ten years, the share of industrial demand in mine silver production has steadily increased. In 2014 and 2015, it was still 51 percent. By 2024, it has risen to 83 percent, and a very high share of 81 percent is expected again for 2025. The reason for this rapid increase is China.
In the Middle Kingdom, silver imports rose by 80 percent in the first quarter of 2025, as the photovoltaic industry’s demand for silver quadrupled. In the years between 2015 and 2024, it increased from 5.6 to 19 percent of total silver demand, and this trend is not yet over. On the contrary: it is accelerating further.
For several major banks, this could mean that they will soon find themselves in an existential crisis. Given the experiences of 2008, it should be clear to everyone that massive imbalances at individual major banks can quickly bring the entire financial system to the brink of collapse.
The End of Paper Market Manipulation is Nearing
The situation is dangerous because significantly more paper silver than real silver is traded on the futures exchanges. For every ounce of physically available silver, there are currently another 374 ounces of paper silver, which are used solely to speculate on the movement of the silver price.
The problem is that major banks, particularly JP Morgan, HSBC, and the Swiss UBS Bank, are sitting on large net short positions. This means they have sold more silver on futures than they have simultaneously bought. It is currently estimated that these major banks have collectively sold 211 million ounces of silver that they do not even own. This corresponds to about a quarter of the annual mine production.
With every dollar the silver price has risen in recent weeks, these major banks have incurred a loss of 211 million US dollars. At the same time, COMEX deliveries reached new record levels, because more and more buyers, whether investors or industrial purchasers, no longer want a cash settlement but demand the delivery of the purchased silver.
You can decide for yourself at this point whether this constellation is sustainable or not. Should you conclude that it is not sustainable, the question immediately arises whether it makes sense to buy silver yourself, as long as the price has not completely exploded yet and silver is still available for investment purposes.
