$100 Silver Likely As Manipulation Breaks | Ed Steer

Key Concepts

• Price Management Scheme: Decades-long alleged manipulation of precious metal prices, originating after the US left the gold standard in 1971.
• Comex: The Commodity Exchange, a major futures and options market for precious metals, often cited as a center of manipulation.
• Physical Demand vs. Paper Manipulation: The increasing importance of actual metal demand versus the influence of derivative trading on price.
• Short Covering Rally: A rapid increase in price driven by traders buying back previously sold short positions.
• Strategic Metal: Designation of silver as a critical material, potentially leading to government control or restrictions.
• SLV: iShares Silver Trust, a popular silver exchange-traded fund.
• Silj & 9point Silver Equities: Mutual funds focused on junior silver mining companies.
• Deep Fakes/AI Generated Content: The proliferation of fabricated information, particularly concerning market events.

The End of Price Management in Precious Metals & Shifting Global Dynamics

The interview with Ed Steer centers on the assertion that the long-standing price management scheme in precious metals, particularly silver, is nearing its end. This scheme, initiated after President Nixon removed the US from the gold exchange standard in 1971, has allegedly suppressed prices for over 50 years. Steer argues that the scheme is failing due to increasing physical demand, diminishing effectiveness of paper manipulation, and a shift in global economic power.

1. The Crumbling Price Management Scheme

Steer states that the scheme’s end is unfolding rapidly, “by the month, by the week, by the day, and by the hour.” He specifically points to a battle for control at the $71 level for silver, asserting that without intervention from large commercial traders (bullion banks), the price would already be above $100. He believes the metals are now being “allowed to regrettably reach their true values,” though he admits uncertainty about what those values will be. The mechanisms of manipulation – dumping paper contracts at vulnerable times – are becoming less effective.

2. The Rise of Physical Demand & Global Shifts

The interview highlights a significant shift from derivative-based price manipulation to overwhelming physical demand. Steer notes that the US’s dominance in the financial and military world has diminished since 1971, contributing to increased demand from other regions. He emphasizes that production hasn’t kept pace with growing global demand, creating a structural deficit. Phil Baker, former CEO of Heckler Mining, describes the demand for silver as “rapacious.”

Specifically, Steer points to:

• Increased demand in the East: China is a major producer and refiner of silver, and demand is increasingly originating from Eastern markets. While a 4% price differential exists between New York and Shanghai, the trend indicates a shift in price-setting power towards China. He predicts the Comex and LBMA will eventually lose relevance as Shanghai becomes the primary physical market.
• Spiking Lending Rates: Evidence suggests lending rates for silver are at unprecedented levels, indicating high demand and scarcity.
• Massive Inflows into SLV: 17 million ounces of silver flowed into the iShares Silver Trust (SLV) in a single day, representing approximately eight days of global silver production.

3. The Threat of Deep Fakes & Market Disinformation

The discussion addresses the growing problem of AI-generated deep fakes circulating on social media, designed to manipulate market sentiment. Examples cited include fabricated videos of Warren Buffett and warnings about silver being classified as a strategic material and subject to government seizure. Steer dismisses these as “total BS” and urges viewers to rely on credible sources and critical thinking. He cautions against gullibility and emphasizes the importance of verifying information through official channels like the CFTC and CME websites. He even jokingly referenced a deep fake of Abraham Lincoln advising against silver investment.

4. Potential Market Disruptions & CFTC Response

Steer acknowledges the possibility of the CFTC intervening if prices rise dramatically, but believes it may be ineffective. He argues that a cash settlement attempt would break the exchange, and that the structural supply deficit makes controlling the price increasingly difficult. He highlights that the US no longer holds significant silver reserves, unlike in the 1980s during the Hunt brothers’ silver speculation.

5. Silver as a Strategic Asset & Geopolitical Implications

A critical point raised is the designation of silver as a strategic metal and the implementation of export licenses from China starting January 1st. Steer suggests that silver could become a “weapon” in geopolitical conflicts, similar to rare earth elements, potentially leading to supply disruptions and further price increases.

6. Investment Strategies & Cautionary Advice

Steer advises individuals to:

• Buy Physical Metal: Acquire and hold physical silver while it remains available. He anticipates a future where silver becomes unobtanium due to industrial demand and limited supply.
• Invest in Junior Silver Miners: Consider mutual funds like Silj (US) and 9point Silver Equities (US/Canada) for exposure to silver mining companies.
• Be Prepared for Volatility: Acknowledge that the unfolding situation is likely to be volatile and potentially accompanied by external crises designed to distract from the underlying issues.

7. The CFTC & CME Group’s Dilemma

Steer believes the CFTC and CME Group are facing a difficult situation. He predicts that when the situation “blows skyhigh,” they will likely blame external factors rather than acknowledging their role in the decades-long price suppression scheme.

Notable Quotes:

• “Silver and gold are now being allowed to regrettably reach their true values.” – Ed Steer
• “The demand is especially in silver, especially in silver is what Phil Baker, the past CEO of Heckler Mining said, calls it rapacious. And that's exactly what it is.” – Ed Steer
• “Be careful what you wish for.” – Ed Steer, cautioning about the potential consequences of a free market in precious metals.
• “When this thing finally does blow, it's my opinion that it won't happen in a news vacuum.” – Ed Steer, anticipating a distraction event accompanying a market upheaval.

Technical Terms:

• Comex: Commodity Exchange, a major futures and options market.
• LBMA: London Bullion Market Association, a wholesale over-the-counter market for gold and silver.
• Spoofing: A manipulative trading practice involving placing orders with the intention of canceling them before execution.
• Short Covering Rally: A rapid price increase driven by traders buying back short positions.
• SLV: iShares Silver Trust, an ETF holding physical silver.
• Silj & 9point Silver Equities: Mutual funds focused on junior silver mining companies.
• Strategic Metal: A material deemed critical for national security or economic stability.

Logical Connections:

The interview follows a logical progression: identifying the end of the price management scheme, explaining the factors driving this change (physical demand, global shifts), warning about disinformation, discussing potential market disruptions, and offering investment advice. The discussion consistently links the historical context of price manipulation to the current situation and potential future outcomes.

Data & Statistics:

• Silver Price Differential: 4% price difference between New York and Shanghai.
• SLV Inflow: 17 million ounces of silver flowed into SLV in one day.
• Silver Production: Approximately 820 million ounces of silver produced annually.

Conclusion:

The interview paints a picture of a precious metals market undergoing a fundamental transformation. The decades-long price management scheme is allegedly collapsing under the weight of increasing physical demand, shifting global dynamics, and the diminishing effectiveness of manipulation. While the future remains uncertain, Steer suggests that investors should prioritize acquiring physical metal and considering exposure to silver mining companies, while remaining vigilant against disinformation and potential market disruptions. The overall message is one of cautious optimism, tempered by a recognition of the potential for volatility and geopolitical complications.