Latest observation about silver and gold

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It is increasingly evident that significant developments are occurring behind the scenes and are beginning to come to light. The situation currently concerns highly leveraged futures markets in which there is insufficient physical silver available for delivery.

For the first time in history, silver has exceeded $75 per ounce, reaching a record high of $75.83 today. However, it is essential to note that this may not be a stable price point. Concurrently, gold is experiencing significant gains, trading above $4,500 and, as of this writing, achieving a peak of $4,553 overnight. The key element of this rally is the potential crisis it suggests may be looming.

By the end of the month, new record highs in gold and silver continue to emerge daily. Investors are acquiring all available supplies because they understand that we are approaching the conclusion of the fiat currency experiment initiated on August 15, 1971, following President Nixon's removal of the dollar's gold backing. Indeed, fiat currencies are in a state of collapse.

Historically, in the 1980s, the Hunt brothers encountered major obstacles when they attempted to corner the silver market by purchasing paper silver contracts. The COMEX altered the rules during their strategy, which ultimately led to the collapse of their scheme. Although COMEX retains the authority to modify its rules at any time, this will not hold in the current environment, as global participants are progressively choosing cash transactions and physical metal. They are rejecting paper contracts.

This scenario presents simultaneously captivating and perilous implications. A critical question arises: what consequences will follow if the short sellers are unable to deliver the silver they have promised? Should such a situation occur, it would signal an existential threat to the financial system.

Silver catalyzes gold's value retention. If silver cannot be delivered, there would likely be an immediate rush towards COMEX gold, which may also be unable to fulfill demand. Once fraudulent practices are established in the silver market, they will likely permeate all derivative contracts, precipitating a meltdown. Demand for gold and silver persists because these two commodities are among the few currencies that cannot default.

What is currently unfolding in the gold and silver markets should not be mistaken for a peak; rather, it represents the initiation of a wider movement. The nature of these contracts functions within a zero-sum framework, meaning there is always one victor and one vanquished party. If the losing party defaults, the winning party may also incur losses due to non-payment. This situation accentuates a major worry. As delivery failures occur, gold and silver will be sold out rapidly, leaving them unavailable for purchase.

Such circumstances will induce a flight toward safety, as fear arises as a dominant emotion, often more powerful than greed. We are likely to witness a reverse bank run into gold and silver, as these assets present a non-defaulting alternative within an increasingly unstable fiat landscape. Thus, the developments we are observing signify an intense erosion of trust.

As trust diminishes, confidence fails, and credit is extended only in its presence. Once confidence erodes, credit markets will begin to constrict. The cessation of credit denotes a critical turning point, likely leading to the closure of markets, institutions, and retail establishments.

In conclusion, we are witnessing the culmination of a major financial reset. It is vital to realize that the world is undergoing a dramatic reset before our very eyes.

This article was printed from TradingSig.com

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