🌐 Silver Market Leverage Increasing Distress At Major Silver Exchanges

The global silver market is facing increasing strain due to extreme leverage and a growing disconnect between paper contracts and physical supply, according to analysis widely attributed to commentary from David Jensen. Historical changes in the way silver is traded, particularly the shift in London’s cash/spot market to systems dominated by promissory notes rather than actual metal ownership, have enabled large amounts of paper silver to circulate without there being corresponding physical silver available for delivery. This structural setup has allowed virtually unlimited promises of delivery that greatly exceed the amount of metal actually on hand, creating a highly leveraged “monstrosity” that is straining under rising demand for real silver.

As holders of these paper contracts increasingly seek physical delivery, this dynamic has accelerated pressures on global silver availability. Traders exiting London’s leveraged cash market and seeking actual metal elsewhere have been interpreted as a sign of acute physical tightness, contributing to price premiums in some markets and a sense of stress in supply chains. The implication is that the conventional pricing mechanism, driven largely by futures and paper positions, may be under strain as real physical demand grows relative to the stock of deliverable metal.

This situation dovetails with broader market developments, where registered silver inventories have hit low levels and delivery obligations represent a growing share of available physical stocks on major exchanges, heightening concerns about the resilience of traditional price discovery mechanisms. While the market hasn’t “broken,” these conditions suggest persistent stress and imbalances between leverage, physical supply, and delivery demand in the silver complex.

➡️ Remember, its not a breaking of the Comex, its a loss of CREDIBILITY and TRUST from the banks that hold those promissory notes. Once that TRUST loop is broke, the LMBA paper and pricing scheme is in danger of failing. Pricing mechanisms WILL move. Patience is the order of the day....

https://jensendavid.substack.com/p/silver-market-leverage-distressing?utm_campaign=post-expanded-share&utm_medium=web&triedRedirect=true