China Buying 'Huge Quantities' of SILVER - Will They Use It To Back the Yuan? Alasdair Macleod

Commodity Culture Interview with Alistair Mloud – January 29, 2026: Summary

Key Concepts: Silver standard, Dollar collapse, Geopolitical risk, Fiat currency, Physical vs. Paper markets, China’s monetary strategy, Precious metals demand, Monetary policy, US monetary policy, Inflation, Bretton Woods, Exchange Controls.

I. Silver Market Dynamics & China’s Role

The interview centers on the recent surge in silver prices (reaching approximately $112/ounce, having peaked near $118) and explores the potential drivers behind this rapid increase. Alistair Mloud attributes the price movement not solely to speculative trading, but primarily to a significant demand for physical silver, particularly originating from China. He notes a substantial premium for silver on the Shanghai Gold Exchange (around $135-$138/ounce) with limited arbitrage opportunities, indicating a strong domestic demand.

Mloud highlights a discrepancy between Western markets, where scrap silver is often unwanted due to refining capacity limitations and volatility, and Asia, where silver is historically viewed as “real money” – a perspective rooted in China’s past use of a silver standard (until 1935). He points to increased industrial demand (photovoltaics, electric vehicles, particularly in India) alongside this monetary demand. The low open interest in silver futures contracts suggests limited speculative activity, reinforcing the idea that the price increase is driven by fundamental demand rather than speculation. A temporary price dip observed during the recording (from $121 to $108, then rebounding to $112) is attributed to contract roll-overs and attempts by market participants to force liquidations.

II. Paper vs. Physical Silver & Market Manipulation

Mloud discusses the challenges within the paper silver market, suggesting that the “establishment” (bullion banks and swaps dealers) is short silver across both COMEX and London markets. He believes that the conversion of “synthetic” (paper) silver into physical silver is a key issue, creating a shortage of available physical supply. He notes that COMEX has a significant number of outstanding February contracts (38,672 as of the recording), suggesting potential for delivery requests.

He suggests that while the establishment may be net long in gold (through synthetic positions), they are likely short in silver. The lack of speculative interest makes it difficult to “shake the trees” and force short positions to cover, exacerbating the supply squeeze. He believes China is leading the demand for physical silver, while Western markets struggle with refining capacity and volatility.

III. The End of Fiat Currency & China’s Strategy

A central argument presented by Mloud is that the current rise in precious metals prices is a symptom of the impending collapse of the fiat dollar system. He argues that the purchasing power of the dollar is declining, and individuals are seeking safe haven assets like silver and gold. He emphasizes that the price increases are not necessarily about metals going up but about the dollar going down.

Mloud details China’s long-term strategy to prepare for a post-dollar world. This includes:

• Accumulation of Gold & Silver: Secretly accumulating gold since 1983, initially through mining, refining, and purchases in international markets. By 2002, he estimates China had accumulated around 25,000 tons of gold.
• Domestic Demand Stimulation: Encouraging domestic gold and silver purchases through advertising and accessible accounts. He estimates an additional 28,000 tons of silver has been delivered into public hands.
• Infrastructure Development: Establishing vaults in Hong Kong and Saudi Arabia, and strengthening the Shanghai International Precious Metals Exchange (SIPs).
• Trade Settlement: Developing a system for settling international trade in yuan, potentially backed by gold, mirroring the original Bretton Woods agreement.
• Potential Silver Standard for Domestic Yuan: Mloud proposes a scenario where China could implement a silver standard for its domestic currency, pegging the silver-gold ratio (potentially around 15:1) while maintaining exchange controls to isolate the domestic market.

He believes China aims to become the central currency for the Shanghai Cooperation Organization (SCO), BRICS (excluding Brazil), and the Global South.

IV. Geopolitical Implications & US Policy

Mloud critiques recent US foreign policy under the Trump administration (as of January 2026), including the abduction of Venezuelan President Maduro, threats against Greenland, and potential military action against Iran. He argues that these actions are not driven by monetary concerns but are a consequence of the US reverting to a Monroe Doctrine-style foreign policy – asserting dominance within its hemisphere.

He contends that this policy is backfiring, as other nations are increasingly seeking alternatives to the US dollar and aligning themselves with China. He believes the US is losing its ability to dictate global financial terms, leading to reduced demand for US Treasuries and a further decline in the dollar’s value. He predicts a significant increase in inflation as a result.

V. Key Quotes

• “This is the last day of the February contract. Do you need to know anymore?” – Alistair Mloud, commenting on a temporary price dip in silver.
• “The problem I think we have is not so much speculation it's more uh uh demand for physical.” – Alistair Mloud, emphasizing the fundamental driver of silver’s price increase.
• “Silver is money. And I remember as a young as a youngster… going to the Middle East and Maria Theresa silver dollars towers um were circulating as money.” – Alistair Mloud, highlighting the historical perception of silver as currency in Asia.
• “The end of the fiat dollar based currency system… unless someone actually steps in and recognizes this and does something about it, the purchasing power of the dollar is going to zero.” – Alistair Mloud, outlining his core thesis.
• “It’s not them going up so much though obviously with the volatility silver is actually recovering quite quickly as is copper incidentally. Um but it's more a question of the dollar going down.” – Alistair Mloud, reframing the price increases in terms of currency devaluation.

VI. Technical Terms & Concepts

• COMEX: The Commodity Exchange, a futures and options market.
• LBMA: London Bullion Market Association, a wholesale over-the-counter market for gold and silver.
• Bretton Woods: The post-World War II monetary system that established the US dollar as the world’s reserve currency.
• Eurodollar Market: US dollars held in banks outside the United States.
• Dore: Unrefined precious metal bullion.
• Open Interest: The total number of outstanding futures or options contracts.
• Synthetic Gold/Silver: Paper representations of gold or silver, such as futures contracts or ETFs.
• Monroe Doctrine: A US foreign policy principle opposing European colonialism in the Americas.
• SIPs: Shanghai International Precious Metals Exchange.
• Halford Mackinder’s World Island: A geopolitical theory positing that control of Eurasia is key to global dominance.

VII. Conclusion

The interview paints a picture of a rapidly changing monetary landscape, driven by China’s strategic preparations for a post-dollar world and a growing distrust in fiat currencies. Mloud argues that the surge in silver and gold prices is a symptom of this shift, fueled by both industrial demand and a flight to safe haven assets. He warns of significant economic disruption and emphasizes the importance of protecting oneself by reducing exposure to credit and embracing real assets like precious metals. He believes the US’s current geopolitical approach is exacerbating the situation, accelerating the decline of the dollar and paving the way for a multipolar world order.