xag

$XAG I’ve spent the last $BTR 12 hours digging into the silver market, and the deeper I went, the more alarming it became.
Let’s start with the raw numbers:
Global silver production: #River ~800 million ounces per year
Bank short exposure: 4.4 BILLION ounces
If silver continues higher,#xag the pressure on major U.S. banks becomes existential.
Here’s what most people missed:
Silver surged to $92, then suddenly dumped more than 6% within minutes, rebounded near $91, and rolled over again.
To the average trader, this looks like a routine pullback.
To me, after two decades in these markets, it looks like a manufactured trap.
At $90/oz, the collective short exposure translates to roughly $390 BILLION in liability.
That number alone exceeds the market capitalization of many global banks.
This isn’t about profit anymore — this is about survival.
Why was silver smashed to $86 overnight?
Because it had to be.
A clean break above $100 would have triggered cascading margin calls. Forced liquidations. Systemic damage.
So what did they do?
They dumped massive paper contracts during thin overnight liquidity to deliberately push price lower.
But here’s where it gets interesting…
The physical market tells a completely different story
While the paper price dropped $6:
Silver lease rates exploded higher
Borrowing physical metal became dramatically more expensive
We officially entered backwardation
That means spot prices are higher than futures.
In plain terms:
No one wants a paper promise six months from now — they want actual metal immediately.
The supply math is brutal
Shorts: 4.4 billion ounces
Annual mine supply: ~800 million ounces
Recycling supply dries up at higher prices as holders refuse to sell
Industrial demand (AI, solar, EVs, electronics) is non-negotiable
Factories don’t stop because silver is expensive.
They buy — at any price.
Banks like BofA and Citi aren’t just short silver —
they’re effectively short the next industrial cycle.
What comes next: Force majeure
I warned weeks ago about cash settlement.
It’s no longer theoretical.
In wholesale markets:
Large deliveries are being quoted as “unavailable”
Others are pushed out 4–6 weeks
Physical supply is tightening fast
When silver reclaims $92 — and it will — the move won’t pause at $100.
The next leg is a gap move.
$150 isn’t a target — it’s a consequence
when the first major short admits they can’t deliver.
Two markets now exist
Screen Price (~$88): Algorithmic, synthetic, paper-based
Real-World Price: Scarce, delayed, and increasingly unobtainable
This final shakeout is designed to scare holders into selling physical metal.
Don’t fall for it.
What we’re watching is the slow collapse of the paper derivatives illusion.
This is the opening act of the commodities supercycle.
I’ve been trading macro since 2003.
I’ve navigated multiple cycles, called major turns, and survived what most didn’t.
From here forward, I’ll be sharing my positioning and views openly.
Those who pay attention now will understand later.
Many won’t —
and they’ll wish they had acted sooner

$FHE