>>14330
There is a good reason to expect silver price to explode.
>When you ask yourself how silver could fall below $50 in this environment, you need to understand the bankers' incentives.
>The lower the price of silver, the cheaper it becomes to cash-settle outstanding contracts.
>There are 580 million ounces of open interest, backed by only 100 million ounces of physical silver.
>For every $1 they can drive silver lower, the aggregate cash-settlement value of that open interest declines by $580 million.
>If the bankers dumped, say, 50 million ounces of paper silver onto the market at once and triggered a $15 decline, the aggregate cash-settlement value of the 580 million ounces of open interest would fall by $8.7 billion.
>In a twisted way, this creates a perverse incentive for naked paper shorts to drive silver prices lower if the ultimate plan is to declare force majeure and cash-settle contracts rather than deliver physical metal.
>Following a force majeure declaration, physical silver would be violently repriced.
>The 580 million ounces of paper contracts could be cash-settled at $45 an ounce, representing $26.1 billion in aggregate settlement value, while the 100 million ounces of physical silver remaining in the vaults could be repriced to $500 an ounce, giving that inventory a new value of $50 billion.
>In this hypothetical scenario, the COMEX resolves its paper-market exposure, establishes itself as a Tier 1 global silver exchange, and sees the value of its physical silver inventory increase dramatically.
https://x.com/MBAeconomics1/status/2116164035645153381
