Industrial, and base Metals globally, at all the different major hubs
are all at their lowest levels.
Combined lowest levels that we've seen in over a decade, if not
forever.
Yeah, copper and zinc and nickel and lead and aluminum, and, and
silver.
And so, and again, not just in New York or London, but in Shanghai and
some of the other major centers as well.
So this is going to be a big story in 2023.
Well, it's the fourth short squeeze of the speculators on comex really
in the past 90 days.
And I'm frustrated cuz I didn't catch a single one.
They've been Dynamic this most recent one, probably the most
frustrating that I missed because we're heading into the December
contract Explorations and a lot of that large.
Back in hedge fund short position and komak silver was in the December
contract was not like they've got metal, they can deliver.
And so you know I guess was predictable that they'd have to cover and
then here they got squeezed it was three dollars and ten cents or
three dollars and twenty cents at about six days.
It was a rather a dramatic short squeeze and it's like I said the
fourth one that we've had.
So it's now run its course but the best part about it that's usually
how these things turn, you know, Elijah?
I know we've talked in the past
Past and and precious metals, investors know this, you know, a lot of
times you take the, the stair steps up and then the escal are the
elevator down, right?
And that's where you're getting hedge funds.
And speculators kind of accumulating long contracts and they all
rushed to liquidate at the same time.
Same thing has happened in Reverse.
Now, over the last six months, the hedge funds, and the speculators
have gotten short and short.
And there have been these periods where they all rush to.
And you get spikes, it's just the same thing in Reverse.
Now the good news is we have now put on another higher high price has
gotten above 21 and even gotten above 22.
So I am optimistic and have been optimistic for quite a few months
that things have turned that the lows were in silver, Leed gold and
the mining shares down beginning in April.
And May that still bottom fell out of silver faster than gold.
And so the thinking on my side has been for about the last six, eight
weeks at Silverwood.
Stabilizing lead things back up and that appears to be what's
happening.
Well, a couple of things one, it's not just silver industrial, and
base Metals globally, at all the different major hubs are all at their
lowest levels.
Combined lowest levels that we've seen in over a decade, if not
forever.
Yeah, copper and zinc, and nickel and lead, and aluminum, and, and
silver.
And so, and again, not just in New York.
London, but in Shanghai, and some of the other major centers as well.
So this is going to be a big story in 2023.
And we've recently seen some news out of the silver Institute, which
is not not necessarily my favorite research group.
But nonetheless, even they've come out projecting a massive, something
like 150 million ounce Supply deficit for silver next year and that's
even take, Not Just Mine Supply, that's taking in recycling and also
factoring in.
The kind of stable investment demand.
I mean it did that's 150 million ounces just based on some very
conservative assumptions of Demand on for investment and Industrial
use.
So this drawdown in silver that you're seeing, is reflective of that
the lbma bolts, what they go down, five percent in September alone.
And if you strip out the amount of silver held in the lbma bolts,
allegedly for the big ETS, like the SLV, then what they have left is
Maybe 350 million ounces, it's not very much.
And then obviously we there are some people on Twitter that follow the
draw downs and komak.
Now, again, the comex absolute levels are still about twice what they
were five or six years ago.
But in terms of what's called registered, which is readily available
to be delivered, has a warrant attached, all that kind of stuff that's
back down to the levels.
We haven't seen since 2016, so there's a lot going on in physical
metal, not just
Silver.
And that's going to be an important piece of the puzzle as the
calendar flips into next year, even the premiums for thousand, ounce
bars or silver grain shot whatever you want to call it.
That is all been creeping up and is reflective of this demand and not
just from, you know, the mints and the blank, you know, manufacturers.
But I mean, listen, people to make solar panels and all sorts of other
electronics, going to need that silver.
And don't want to take any chances of having, you know, some type of
supply.
Chain constraint by not being to get their hands on it.
It's thousand ounce bars aren't as high as what we're seeing for
Eagles or bars or you know rounds or whatever.
But you know, there's a difference between the two least you still got
to have the middleman in there.
That gets his hands on 1,000 ounce bar and is able to melt them down
or whatever, they do, turn them into blanks and then ship the blanks
off to the u.s.
mint or the in a Royal Canadian Mint or wherever to create the actual
Eagles or
Assorted other rounds.
And so that, that, that shortage of eagles will probably persist and
people want those and that's what drives that premium.
It's not that, you know, and I'm sure you can talk to Andy about this.
I mean, it's not like and he's buying them at $22 and selling them at
37 and making a 15 dollar profit.
No, he can't buy him for anything less than 30.
45.
And so it's, there's a shortage of them and any time you have a
shortage, that's
Get the private.
I mean, there's obviously, there's Great Value relatively speaking.
And just, you know, regular, you know, buffalo rounds and, you know,
and, and kind of generic bars and things like that.
There's probably an don't know if you want to call it an Arbitrage
opportunity, but if, you know, someone who's really aggressive about
it, they could probably sell their Eagles and a price up in the 30s
and then turn around and buy, you know, 25% more silver by buying more
generic stuff.
But that not withstanding.
It's reflective of a shortage of silver at both the wholesale and
Retail level that you can't take those bars or the shot and create
enough rounds that.
Then the rounds can be shipped to the mints and then enough Supply
created to meet demand and that's where the premium comes from, is
probably why the premium isn't going away.
This gets back to the, you know, what?
Actually drives price.
Okay.
Is it physical supply and demand?
Or is it the supply and the demand
The that digital derivative the Futures Contract.
You know what we just talked about earlier about the short squeeze did
suddenly the the the fundamental situation for silver changed in the
last two weeks, I did it change the last two months or the last two
years.
I but in the last two weeks price Rockets Higher by 15% is that a
driven by fundamentals or is that driven by a massive short position
in the Futures market?
So there is though there does have to be physical delivery at that.
Price.
That's derived by the trading of the derivatives.
You can't have all of this physical demand, and physical prices, that
are north of $30.
And a paper prices down closer to 20, that bifurcation of that market.
Casts, a massive shadow of a legitimacy on it and draws attention to
the legitimacy of it.
That isn't necessarily desired by those that profit from those
markets.
So eventually that physical
Flows through and impacts the paper price.
And now you couple that with what's going to happen next year.
And again, I want to Pro.
I've done a couple interviews this week and I have preface this every
single time because I myself am sensitive to it.
I don't want to have people come off in the trolls in the comments, I
really.
Okay, we predicts you, I've been waiting for next year now for 12
years and blah blah.
Right.
You'll recall.
Elijah we'd talked about my annual forecast, it comes out every
January.
We talked about a lot earlier this year, and I
Had figured that in 2018, the Fed was forced to Pivot when the 10-year
note got two, three and a quarter and the stock market fell twenty
percent.
And I figured well by summertime, that'll happen in the FED will be
forced to Pivot and we'll be rolling by the end of the year.
Well what has happened?
Well we blew right through three and a quarter percent of the 10-year
went to 440 and the stock market is still down close to twenty
percent.
At one point is down like twenty five, twenty eight percent and the
FED hasn't pivoted.
So my hair is just kind of thinking they'd move a little more quickly,
then then they, then they have, but they will, I mean, the economic
slowdown signs are overwhelming.
The, if you want to know for sure where it's going, the yield spread
between the two year note, and the 10-year note in the u.s.
is inverted by 68 basis points.
The most Steep and steeply inverted has been since 1979.
And I'm been around long enough, I was
13 in 1979 to remember their a terrible recession that followed from
80 to 82.
So, the FED is over tighten.
They will recognize that next year just like, they were slow to
recognize that inflation was in transitory and acted too late.
They'll be slow to act as they have been, they'll start cutting rates
next year, nominal yields will fall inflation, activity tations will
remain sticky will go to negative real rates.
Again, you come, you add on all this physical
A shortage stuff.
And we're going to have a pretty good year.
I'm confident of that.