MAJOR Central Bank LOADS UP on SILVER - 'This is a Heavy Hitter': Eric Yeung

Key Concepts

• Central Bank Silver Purchases: A major central bank has reportedly purchased over a billion ounces of physical silver, signaling a potential shift in central bank asset allocation.
• LBMA Silver Inventories: Silver inventories at the London Bullion Market Association (LBMA) are critically low, with reports of "zero free float" available for immediate delivery.
• BRICS De-dollarization: The BRICS nations are actively working to reduce their reliance on the US dollar and US Treasuries, accumulating gold and developing alternative payment systems.
• China's Yuan Payment System (CIPS): China's Cross-border Interbank Payment System (CIPS) is expanding globally, offering an alternative to SWIFT and facilitating yuan-denominated transactions.
• Gold and Silver as Collateral: There is a growing trend of using physical gold and silver as collateral in the global monetary system, moving away from US Treasuries.
• Resource Nationalization/Export Controls: Countries like Indonesia and China are implementing measures to control the export of raw materials, including gold and silver, to promote domestic refining and strategic asset management.
• Yen Carry Trade Unwinding: Rising interest rates in Japan are ending the yen carry trade, impacting global liquidity and potentially leading to a contraction in fiat currency availability.
• US Dollar Reserve Currency Status: The long-term viability of the US dollar as the world's reserve currency is being questioned, with a potential shift towards gold as a primary reserve asset.
• Geopolitical Influence on Markets: Geopolitical developments, particularly the actions of BRICS nations and the US-China relationship, are significantly influencing commodity markets, especially precious metals.

Major Central Bank Silver Purchase and Central Bank Stacking

A significant development reported by Eric Young's trusted sources indicates that a major, unnamed central bank has purchased over a billion ounces of physical silver. This purchase is seen as a strategic move, potentially for use as collateral alongside physical gold in a future global monetary system. This aligns with previous actions, such as the Saudi central bank's investment in the SLV ETF and Russia's accumulation of silver as a strategic asset. The speaker notes that while India is known for its silver accumulation, this new purchase comes from a "heavy hitter" with connections to Swiss bankers. The source who revealed this information has also accurately reported South Korea's purchase of approximately 50 metric tons of gold from the Shanghai Gold Exchange (SGE) and a similar purchase by Cambodia.

The rationale behind central banks considering silver as collateral is attributed to the global south countries' potential abundance in silver mining compared to gold. This strategy allows them to diversify their collateral base. India's increased silver buying, up 50% year-on-year, and its policy to allow citizens to use up to 10 kilograms of silver as collateral within its banking system are highlighted as significant steps towards reintroducing silver into the monetary system after nearly a century of its exclusion.

LBMA Silver Inventory Stress

Eric Young reiterates his previous assessment that silver inventories at the LBMA are under extreme pressure, describing them as "essentially empty" and scrambling to meet contract settlements. Recent efforts to replenish these stocks include shipments of approximately 50-75 metric tons of physical silver from COMEX. Additionally, the Industrial and Commercial Bank of China (ICBC), an LBMA member, reportedly leased around 15 metric tons of silver to other LBMA members, such as JP Morgan. However, it is noted that not all of this silver remained in London; an estimated 25 tons were directly shipped to India.

Overall, the LBMA may have received between 75 to 100 metric tons of silver in the past month. However, according to analysts like David Jensen, this silver is already "spoken for," meaning it is allocated to customers awaiting physical delivery. Consequently, the "free float" of silver at the LBMA is estimated to be zero, indicating a critical shortage of readily available physical silver to settle outstanding contracts.

BRICS De-dollarization and Gold/Silver Price Impact

The narrative that BRICS nations are incapable of creating an alternative system to the USD and US bonds, a view held by some analysts, is challenged. The speaker argues that BRICS countries' strategy of de-dollarization and accumulating physical gold as collateral to replace US Treasury bonds, bills, and notes has driven at least 75% of the price movement in gold and silver markets over the past two years. This perspective is supported by an anecdote from a dinner party where financial media professionals questioned the risk of using US debt as collateral given the US government's financial situation.

The historical context is emphasized: US Treasury bonds have served as collateral for approximately 100 years, whereas gold and silver have been used for 5,000 years. The speaker posits that the current shift is a return to a more historically normal practice of using physical gold and potentially silver as collateral due to their zero counterparty risk.

China's Yuan Payment System (CIPS) and Alternative Financial Infrastructure

Vince Lanci's report on the expansion of China's Cross-border Interbank Payment System (CIPS) to approximately 185 countries is discussed as a significant development, largely unreported by mainstream financial media. This initiative is seen as being in line with the Shanghai Gold Exchange's (SGE) efforts to establish offshore vaults for physical gold, and potentially silver, which would allow countries like Saudi Arabia, Russia, and India to withdraw physical gold from these vaults using warrants.

The CIPS system, along with the SGE's collateral infrastructure, is building the "currency link" and "collateral link" necessary for a new global financial system. This system aims to provide an alternative to the US dollar-based financial infrastructure, particularly for repo agreements where gold or gold contracts can serve as collateral for fiat currency access. The speaker believes this system will be open to all countries, not just BRICS members, and that access may require a tie-in with physical gold, referencing Judy Shelton's discussions on 50-year gold bonds. However, a concern is raised about the "deferred gold payment" nature of such bonds, suggesting that BRICS nations might prefer a more immediate access to gold.

Indonesia's Gold Export Controls and Resource Nationalization Trends

Reports of Indonesia imposing stringent taxes on unrefined gold leaving the country are interpreted as a move towards "soft nationalization." The intention is to encourage domestic refining and smelting operations within Indonesia. This strategy aims to tax raw gold exports, thereby incentivizing local processing and value addition.

This trend of resource control is also observed in China, which has announced export controls on physical silver effective January 1st. The US government's recent designation of silver as a "strategic mineral" by the USGS is also mentioned, suggesting the possibility of similar export controls for silver in the US. While gold export controls are considered less likely for the US due to the dollar's reserve currency status and its historical ties to gold, the speaker anticipates that silver export controls could be implemented soon, following China's lead.

China's Shanghai Gold and Silver Exchange Inventory Levels

Investors and stackers are advised to monitor the inventory levels at the Shanghai Gold Exchange (SGE) and Shanghai Futures Exchange (SHFE). The current silver vault numbers at these exchanges have fallen to approximately 1,400 metric tons, significantly below the usual combined total of 3,000 metric tons or more. This depletion suggests a potential drain on China's physical silver reserves, with less than a thousand metric tons of free float available. The speaker expresses doubt that China is currently assisting the LBMA with its inventory shortages.

COMEX Deliveries and December Contract Month

Attention is also drawn to the COMEX market as the December front-month delivery contract approaches. The speaker highlights the possibility of a spike in physical silver deliveries at the COMEX towards the end of November. This would raise questions about whether these deliveries are being retained within the US or shipped to London to alleviate LBMA inventory issues.

US-China Trade War and Geopolitical Tensions

The ongoing trade war between the US and China, and the potential for it to escalate into a kinetic conflict over Taiwan, is discussed. China's strategy is described as engaging with the US without being aggressive, aiming to establish alternative systems like CIPS and offshore SGE vaults as a contingency against potential US sanctions. The Chinese government's approach is characterized as dynamic and reactive to US actions.

The conversation touches upon the differing systems of governance, with Western democracies operating on short political cycles versus China's capacity for long-term strategic planning. China is perceived to have recognized the exploitative nature of the US treasury system, which recycles global trade surpluses back into US debt. The speaker points to the rapidly increasing US government debt, projected to reach $40 trillion by Q1 2026, as a sign of this unsustainable system.

Japan's Economic Situation and the Yen Carry Trade

The unwinding of the yen carry trade due to rising interest rates in Japan is identified as a critical factor. Japan's high debt-to-GDP ratio (over 250%) makes it vulnerable, and some believe it could be the "first domino to fall" in a global monetary or economic collapse. The end of cheap liquidity from the yen carry trade is seen as a significant event. The speaker predicts that the US government and the Federal Reserve will likely reinitiate quantitative easing (QE), possibly under a different name, to address a potential liquidity squeeze.

US Dollar Reserve Currency Status and Global Monetary Shift

The future of the US dollar's reserve currency status is questioned. While acknowledging that reserve currencies historically change hands, the speaker notes the absence of a clear successor like the Swiss Franc. The possibility of gold eventually assuming this role is considered. Henry Kissinger's quote, "to be an enemy of America is dangerous but to be a friend of America is fatal," is used to illustrate the US strategy of maximizing its advantage from allies before the dollar's decline. Countries not directly aligned with the US, like BRICS nations, are seen as actively seeking gold and silver as collateral alternatives to US Treasuries. Conversely, "friends of America" are perceived as being "stuck with US Treasuries." The speaker believes that US policymakers, constrained by short election cycles, tend to "kick the can down the road" rather than implementing long-term solutions.

Societal Implications of Fiat System Collapse and Civil Unrest

The potential for civil unrest due to massive government debt, deficits, and rising inflation is discussed. While acknowledging that societal breakdown and civil war are possibilities, the speaker suggests that measures like Universal Basic Income (UBI) are being used as "kicking the can down the road" tactics, potentially delaying such outcomes.

Canada's Zero Stated Gold Reserves and Political Ideology

Canada's lack of stated gold reserves is viewed as perplexing. The speaker contrasts the fiscal responsibility of former Prime Minister Stephen Harper, who left a surplus, with the subsequent Liberal government under Justin Trudeau. The speaker attributes Canada's current political and economic direction to a highly left-leaning populace, heavily influenced by media narratives, and a worship of environmentalism and abstract notions of equality. The speaker suggests that if push comes to shove, Canada might increase taxes on mining profits or mandate a portion of mined gold to go to the Bank of Canada. The significant influx of immigrants is also noted, with a hope that they are suited for outdoor work like mining, where future jobs may lie.

Eric Young's X Account

Eric Young shares his X (formerly Twitter) handle as @KingKong9888. He discusses gold, silver, miners, LBMA, COMEX, SGE, China, the US, and geopolitics, posting multiple times daily. He is recommended for his news breaking and in-depth analysis of the gold and silver markets.