The Hidden Crisis In Silver

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Right now, there is a crisis brewing in one of the world's most important markets, and almost no one's talking about it. And I wasn't gonna make this video because I'm on holiday, I was working on some research, and I discovered something that I thought was so important that not just the institutional guys who do the research, we shall understand it, but that you deserve to understand the same level of information too. And if you agree with me that the fact that, well, Wall Street has an information edge over us, and it's a good thing that we level that out, um, write unfair in the comments down below, and I'll try to make more of this kind of content. And I will show you an indicator that we've just built that actually really crystallizes all the information here in how it ties in to the oil and Iran panic that we're seeing in markets. Because in the metals market, specifically the silver market, there are 356 ounces of paper silver backed by one ounce of real physical silver. And when the music stops, somebody isn't gonna get their silver. In fact, most people don't. And the people who understand what's happening, they're already positioning themselves for what could be a literal once-in-a-generation wealth transfer. So, over the next few minutes, I'm gonna break down exactly what's happening, why it matters to you as an investor, and most importantly, what you can actually do about it, how you can track it. So let's get into it. My name is Felix Preen. I'm an ex-investment banker. My research is usually done by my golden retriever who wasn't traveling with me today, so you just left with me. Oh dear. And I've learned from people in big Wall Street banks, I've learned from people who were market makers in the big metal exchanges. And I use that knowledge and that experience to now help everyday investors to understand what those guys already do. Because the truth is that the information gap between Wall Street and Main Street, you and me, is one of the biggest reasons regular people miss out on opportunities. And that's why me and my team at the GOAT Academy, my mentors, my Wall Street mentors, have been for the last six years teaching thousands and thousands of regular investors how the markets really work. And this isn't some fringe conspiracy theory. This is based on available data from COMEX, the Fed, major financial institutions like JP Morgan and Bank of America. And by the end of this video, you understand exactly what a silver squeeze is, why the conditions for one are stronger than they've been in decades, and how you can position yourself and understand what's going on here. Let me just show you our indicator. Literally, it's here, it's at 95 out of 100. But you need to understand why to be able to really do something with this information. So let's start with the basics, and then we'll tie it into Iran and oil and everything else. So you have a clear picture of how this actually works. You tell me the PhD faults. So let's start with the basics. What exactly is a silver skis? Well, imagine you're running a coat check at a fancy restaurant. You have a hundred coats in your closet, that's your physical inventory. But here's the problem: you've handed out 356 claim tickets. So as long as people don't all come to pick up their coats at once, everything is fine. I'm assuming everybody's wearing the same coat, some sort of weirdwellian world. But what happens when 200 people show up closing time and they all want their coats? Well, chaos, because some people aren't getting a coat, right? That's essentially what's happening in the silver market right now. The silver market operates in what's called a fractional reserve principle. So at Comex, which is the main exchange where silver is traded, there are two types of inventory. There is registered silver. That's silver that's actually that's available. And then so think of that as the coats actually hanging on the hanger. And then there is eligible silver. This is silver stored in the vaults, but it isn't available for delivery. It's like coats that belong to someone else that happen to be you in your closet. They're not yours, right? But you're pretending that they are. And if you look at the life comix data, and again, that's something we track in here, just top in our in our methods intel here, and you'll see that registered silver is at about 88 million ounces, right? It was a year ago 120 million. So where did 30% of the inventory go? But that isn't actually the most important part. The most important part is that there are about 570 million paper claims for that silver. So it's a leverage ratio of over 7 to 1 just on the COMEX. But when you zoom out to the entire silver market, including all the futures, the ETFs, and the derivative markets, analysts estimate the ratio may be as high as 356 to 1. So every one physical ounce, there are 356 claims. Now let me ask you, does that sound like a stable system to you? Drop a comment down below and let me know. And did you know the market, the silver market, worked like this before you watched this video? I'd love to understand how many of you already knew about this disconnect. If you knew about it, just write disconnect in it. If you if you're new to this, write write new. So what's actually happening here on the Comex side? Well, COMEX, which is the commodity exchange, is where the world's silver price is determined in the paper, sort of Fugazi world. And every day, billions of dollars or silver contracts trade. But most of these contracts are never settled in physical metal. They're sort of rolled over, settled in cash and paper. And the system works because most people don't ask for delivery. But something has changed. In January this year, which is typically a month where there is no delivery, something very unusual happened. The Comex received applications for 40 million ounces of silver delivery. Now, that's about 40 times more than normally gets delivered. And the numbers don't really add up because when you walk you through the mass, it's very simple but powerful. Registered inventory is about 70, 80 million ounces. Recent deliveries has taken out 26% of that inventory in one week. So at the current pace, silver could be exhausted in like 60 to 70 training days. So there is not enough physical metal to satisfy the claims. So what happens on the next delivery day? What happens if they can't deliver? Well, there are a few possibilities. They could just pay you the market price in cash, but it certainly would undermine trust in the system. They could declare an emergency and just change the rules. We've seen that happen before. Or as people realize physical silver is really running out, the price could dramatically rise and then bring some sellers into the market who want to take profits. Now, the market is showing some real stress here. And we've literally built in our Intel dashboard here, for which you guys can access, it's like$6 a week or something. You can cancel anytime. And one of the cool things, apart from silver, you see all the oil and silver infrastructure, all the oil and gas infrastructure in the Gulf. You see what is being affected, what isn't, who owns what, and so on, literally around the whole Gulf region, pretty much the whole world. You'll see the pipelines. So you can really see what's happening where you see the earthquakes near the major mines, you see walls, you see tropical storms, you see shipping lanes and everything else that's happening. In fact, you can see life, what's happening in the Strait of Hormuz to see who's actually going through there and what nations oil tankers are braving the straits of Hormuz and who's stuck in place and so on. But it also has a gold, silver, and copper squeeze indicator. And if I look at the silver one, it's just flashing at me, literally. And it's saying something, a word that nobody ever uses. If they have friends, it's called backwardation. And it means that current prices are higher than future prices. And it signals real urgent demand and a supply shortage. If you want to lease out your silver, which you can, you're getting about 8% now. That used to be 0.5%. It means people are paying a premium to borrow silver. And it's all screaming at us. There is a massive opportunity to potentially have a short squeeze. Now, do I know a short squeeze is coming? No, I don't. I can just look at the data points. Am I telling you to buy silver? No, I'm not. I'm not a registered anything. I'm not a registered financial advisor, that's for sure. Just sharing with you my research and my data, and you can then come to your own conclusions. I goal is to educate you, not to tell you what to do. But let me ask you this. If you own a silver ETF like SLV, do you actually own silver? Or do you own some paper claim on silver? And think about that distinction. We're going to come back to that in a second when we talk about how we actually could position ourselves here. Now, the comic situation, which you now understand, is very important. But we also have a war in Iran. So let's connect some dots that Wall Street's already watching. You've all seen oil prices are going through the roof, no matter what the government's trying to do about it, with like panic selling and so on. And again, we keep track of that here. Literally, we have a live Intel feed that updates every minute. There is the energy data that tells you precisely what's going on every minute of the year, military action, mining action, shipping action, everything is there. It's all live from over 150 data sources that I actually trust. And what's that telling us? Well, crude oil being at like$100 per barrel or thereabouts. Why does it matter for silver? Well, oil, inflation, and the Fed ties together. There's a connection here. Higher oil prices mean higher inflation. The rough estimate is that a$10 increase in oil adds about 0.1% to inflation. Sounds small, but when inflation is already above the Fed's target, every fraction really matters. And Bank of America has just come out with this. Their analysis says that if oil stays elevated, the Fed will delay rate cuts. They could even consider rate hikes. And traditionally precious metals, the shiny stuff, do really well when interest rates are falling, inflation is rising. So there's economic uncertainty. But the key inside is this silver actually benefits because it's both a precious metal and an industrial metal. So in my humble opinion, silver outperforms in this scenario because unlike gold, which is basically a monetary metal, right? Silver has massive industrial applications. 60% of silver demand comes from industrial users. Think of solar panels, electric vehicles, electronics, you know, missiles, that kind of stuff. So while gold benefits from chaos, silver benefits from chaos plus industrial demand. So you kind of have two engines instead of one. And then you have the deficit. For six years running, supply has been less than demand. The deficit for this year is about 67 million ounces. The deficit since 2021 is now 800 million ounces. And unlike oil, the producers can just ramp up production. I think just turn the tap back on. 75% of silver is a byproduct of other mining, think lead, zinc, copper. You can't just go, oh, let's dig up some silver. It doesn't work. And on top of that, we also have new this year, China's export licensing requirements, which means, which by the way, China controls about 60% of global silver refining. This essentially restricts who can export silver. So there is a heck of a lot less silver about because China is keeping it within China borders. They're treating it like a rare earth. So if you look at your phone, your laptop, your car, every single one of those has silver in it. Now imagine all the solar panels being installed worldwide, all the electric vehicles been manufactured, all the rockets being built. What do you think happens when there isn't enough? Now, before we go any further into the actionable team, I want to share something with you. And if you're watching this and thinking, this is a lot of information, how do I actually apply this to my situation? Well, that's exactly why my Wall Street mentors and I created a really comprehensive mentorship program. And Go to Academy, we break everything down to a level where everybody can understand this. So if you want to go deeper into this, completely for free, no strings attached, join me this weekend for a live training. And I will teach you how to spot these opportunities just as Wall Street is discovering. Because there are rules for this. There's three simple rules that Wall Street's been using for 50 years that don't get taught to you and me, you know, the unwashed masses usually, but will help you identify a trend as it's starting to happen. Think about the wave building. We want to be early-ish in on that. And that's a rule-based system, it's databased, and you can learn that very rapidly. If you join me on Saturday, I think it is FelixFriends.org slash training, grab yourself a free seat and make sure you show up on time because this life, it's on Zoom, you can ask me questions in that Zoom room. It does get full. It has a limit to it, and I don't want to disappoint you. Now we need to take a little. I'm a big believer that history rhymes. There are two silver squeezers in recent history that every investor should understand, whether you're into silver or not, or into gold or not, or anything else. And let's look at what happened there and why it happened, and most importantly, what we can actually learn from this. In April 2011, silver reached an all-time high,$49 in a bit, and another 74% higher over the previous year. Why? The Fed was in the middle of printing money like crazy people, and investors were worried about the dollar. Industrial demand, especially from sailor, was growing, and there was a lot of fail bite inflation, right? Because the government was printing so much money. But silver didn't stay at 50, it crashed. Within a week, it dropped 25%. What happened? The Fed stopped the money printer. The major metal exchanges increased margin requirements, and some large traders unwound their positions. We shan't mention who they might be Morgan. The lesson here is silver can move very violently. And you need to understand the catalysts both up and down. And then in 2021, second lesson here, we saw another attempt at a silver squeeze. And that came right after the GameStop short squeeze. Silver futures rose like 13% up in a day. Retail dealers had unprecedented demand, they couldn't fill the orders, which is precisely what we're seeing right now, but it fizzled out. Why did it fail? Because the community was divided. Many argued the silver thing was a distraction from the really important stuff like AMC and GameStop. And most of the buying was in paper silver, ETFs. So when you buy paper, you're not actually putting pressure on physical supply. Therefore, the squeeze didn't have any teeth. So why do I think the present setup is actually different? Well, a couple of factors. Physical delivery demands are surging. There's literally a shortage of stuff. You go and try and buy a fair amount of silver, and they'll tell you, fine, we will deliver in three to six months, and they're going to charge you a premium. COMEX inventories and critically low levels, 30% down. China has restricted exports. Industrial demand is just there. The military alone, Iran alone, that war will use up a lot of silver. And the deficit in supply is real. So this isn't some lunatic retail traders trying to coordinate a squeeze. This is a fundamental supply and demand pressure problem. So let's get physical. If you get that musical reference, put it in the comments down below. You understand the thesis, you see the opportunity, but you're still a bit fuzzy on how you could position yourself, right? So I'm going to break this down for different types of investors. And let me know at this stage, what's your current exposure to silver? Is it zero? Is it a little? Is it a lot? Put a comment down below and I will read them. I don't read all of them. Now, the most direct way to own silver is physical, right? So you own coins like American silver eagles or, you know, Canadian silver snow Mexicans and pass from reputable refiners. Now, there's no risk there other than that some lunatic might try and rob you. Nobody can really touch your ownership. But you have some storage and some security problems and maybe some insurance issues and a lot of ammunition you need to keep next to the bed. It's also a little harder to sell it. The transaction costs when you buy and sell it. So for most people, it makes sense to have some physical metals, but maybe not 100%. So option number 2 is what? Well, if you want silver exposure in a brokerage account, you have options. But not, and this is important. Please write this down. Please help spread this message. Because not all silver ETFs are equal. SLV, which is the largest and the most liquid silver ETF, 22 billion in that, but it's paper. You cannot redeem it for physical. The silver may be leased or hypothecated, whatever that means. And in the true crisis, paper claims, ah, well, they will diverge from the physical. And then you have another one which is called PSLV, stands for Splot Physical Silver Trust. And they hold fully allocated physical silver bars. They're stored at the Royal Canadian Mint. That may or may not be a good thing, depending on whether you trust the moose up north. And if you're a largish holder, you can redeem for physical silver. If you're only a dollar of it, obviously you can't. It trades at a bit of a premium or at a discount to the actual net asset value. You might want to look into that. It may also have some tax advantages. But the expense ratio is definitely higher. So my personal view is this if you're going to use an ETF, PSLV offers more direct exposure to something physical. The third option, best, is if you have a retirement account, you have options too. If you're in a self-directed IRA, you can roll over funds from a 401k or a traditional IRA, and then you could purchase IRS-approved silver. It must meet certain purity standards, it must be stored with an approved custodian, not at your home under the bed with all the ammunition. American Silver Eagles, Canadian maple leaves typically qualify. Now, most 401ks and IRAs can also hold silver ETFs, so I can check with your administrator overlord there. But it's the simplest way to get some silver exposure in your time account if that's what you're looking for. And I did warn you, this is a very, very volatile instrument, right? Now, if you want more risk in your life, because you're that way inclined, you could buy some mining stocks. Because when silver goes up, say 20%, a miner could go up 50 or 100%, and the other way around. I give you a few tickets here: P-A-A-S, AG, and HL, they're sort of the more reputable players out. But there is also a silver ETF, mining ETF, which is called S-I-L. You want to write that down too if you want more diversity. But mining stocks carry, well, operational risks. That physical silver doesn't have permits, labor issues, risk management. If you look on our little screen here, and if I just take off some of this good stuff and just show you the mining operations around the world, there are some risks blinking here around them because repeated community blockades, right? China owns the mine. What about this one? Peru political instability, community protests. You get the idea. So there are definitely some issues here, but I put all the major mines on the map. Um so you can you can check those out and you can see where the world's silver is coming from and what might impact that. Earthquakes, for example, do. Earthquakes are not a good thing. And look here, we had just some fairly big quakes here in just in recent um two days ago, for example, right? 22 kilometers south of somewhere. Uh so gives you all that data there, even including a link to more details. And that's all available as part of that$6 a week subscription that we have. So, how much silver should one own? Okay, I'm not a financial advisor. This is not personalized advice, but I can share what many sophisticated investors consider. Common framework is 5 to 15% of portfolio in precious metals. Some people say a smaller proportion of that should be silver, more of that should be gold. It really depends on your risk tolerance, your time horizon, uh, your Portfolio, what is it made up on, your income streams, and what risk and movements you are comfortable with. Now, I know a lot of videos and people on YouTube only talk about the bullish scenario because they're trying to, you know, pump something up. We don't do that is I'd be doing a disservice if I only talk about opportunity and not risk. So let me share with you the problems that could happen. Demand could get destroyed. If silver prices go too high, industrial users will find alternatives. We're already seeing that in solar panels. They're using less silver per cell. And this could accelerate if prices go extreme. Comex could declare false majeure or some sort of act of God. I thought that might be JP Morgan, but somebody corrected me on that one. They could just change the whole system and it's all just paper and cash based. So the squeeze may not happen. And there could be a government intervention. In the 80s, regulators changed rules, like halfway through the day, they could do that again. They can change margin requirements. They have a lot of shenanigans, sorry, um, rules to stabilize the market that they can implement. And then, of course, there are a few other things like timing and so and so on. So position sizing matters. You never want to be somebody who puts all his life savings on one idea because you can be wrong. So diversification is important. I think silver is a good part of a portfolio, but it is definitely not the portfolio. And you might disagree with me on that violently in the comments, go nuts. So let's wrap this up. What are your next steps? Educate yourself further. This video is a starting point. If you want to learn how to understand when to pick a trend like this or a trend on any stock or any industry, uh join me on Saturday and I'll teach you how to pick better stocks, better metal things, better miners, better anything, because the system is actually very much the same for all investments. And then decide your approach. Is it physical, is it ETFs, is it mining stocks, is it some combination? And definitely if you do want to start, start small. Don't ever go all in immediately. It is hard to do, and the prices will swing violently and you will feel like a you might feel unlucky or something. And it's good if you can sleep well at night and sleep soundly. And if you want to go deeper and you want to learn from me live and ask me questions live about gold and silver and tech stonks and inflation and the oil and the war and around and everything else, I'll show you how we can make sense of all of that with three simple Wall Street rules where we can follow the money, the big money. And I'll be teaching you that to you live on Saturday at feedxfrencer. And keep learning, my friends. And if you got some value out of this video, join me Saturday and forward it to somebody who might benefit from it. I wish you great success.