KEVIN BAMBROUGH: The Silver Squeeze - Market Manipulation and the Coming STORM!
The silver market has always fascinated me, particularly because of its dual role as both a precious and industrial metal. What many don't realize is that we're heading into what could be the most significant silver bull market in history - one that could make the 1970s look like a mere preview.
Let me tell you why, but first, let me share a revealing story from my time at Sprott that exposed just how fragile the silver market really is.
The Sprott Silver Saga
During my tenure at Sprott (2002-2013), we had accumulated a significant position in silver in the 2005-2007 period. This was done via top tier bullion bank certificates that promised 5-day delivery.
These weren't small positions - we're talking about substantial tonnage that was supposedly safely stored and readily available. What unfolded next exposed a troubling reality about the paper silver market and I believe led to the huge run in silver that followed as it ultimately ran to its all-time high in nominal terms.
When we decided to take delivery, what should have been a routine 5-day process turned into a nine-month odyssey of excuses and misdirection.
e had strategically contracted to store our silver in Canada's government mint refinery and storage facility - ironically, the same facility that had been emptied when Canada foolishly sold off all its gold and silver reserves. The vaults were empty, waiting for our silver.
At first, our counterparties claimed it was merely a logistical issue. Then the excuses began:
First, they said the silver would come from New York and weeks went by
When that didn't materialize, it was supposedly coming from Chicago and months passed
Then England became the source, with a "couple of more months" shipping estimate assurances
Finally, they claimed it would come from China, requiring cross-Canada rail transport as a way of explaining a few months of delay
When I demanded bar numbers for our inventory purposes, we were met with weeks of silence and more excuses. Our legal position was frustrating - our lawyers advised that we couldn't effectively sue because what damages could we claim? Missing out on "the enjoyment of looking at our silver bars" wasn't exactly a compelling legal argument. Meanwhile, silver prices kept climbing.
The truth became clear: our counterparties had taken our money and likely just bought futures contracts. They never had the physical silver. This situation likely trigger the 2006-2010 silver rally and foretells what will likely occur again soon.
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The reality is over many decades bullion banks have been caught repeatedly manipulating commodity markets. When squeezes start due to actual physical demand they engage in unethical conduct delaying their deliveries to buy themselves time.
They likely get aggressive in outer month futures contracts to cover their asses and probably even ultimately profit from the rise they expect they will be causing as they slow walk their promised deliveries of material. Along the way they rely on margin requirements to be increased and profit taking to occur by speculators that don't have the market insights the banks do. Finally, after they've positioned themselves net long via the futures market they let the price rip.
The Modern Silver Market
Today's silver market is facing unprecedented pressures. Beyond traditional industrial uses, we're seeing explosive growth in:
Medical applications leveraging silver's antimicrobial properties
High-tech electronics and semiconductor manufacturing
Solar panel production
Electric vehicle infrastructure
Emerging solid-state battery technology
But here's what makes this time different: we're on the cusp of a robotics revolution.
CONTINUED…
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