SILVER ALERT: Are Silver Prices Being Manipulated Again? - Andy Schectman

Key Concepts

Precious Metals Market Dynamics (Gold & Silver)
Market Manipulation and Spoofing
Algorithmic Trading and Liquidity
Physical vs. Paper Markets
Central Bank and Sovereign Wealth Fund Activity
Morgan Stanley and Bank of America Investment Strategies
60/40 Investment Rule Evolution
COMEX Deliveries and Backwardation
US National Debt and Fiscal Irresponsibility
Dollar Devaluation and Reserve Currency Status
Reshoring and Manufacturing Revival
Stablecoin Act and Genius Act
Gold and Bitcoin as Assets
Habitual Saving and Compounding
Miles Franklin Services and Contact Information

Precious Metals Market Analysis: Correction and Underlying Strength

Andy Sheckman, CEO of Miles Franklin, discusses the recent price movements in gold and silver, acknowledging the mainstream narrative of an overbought market and a ripe correction after nine consecutive weeks of gains. He notes that prices had significantly exceeded moving averages (50-day and 200-day), validating the technical reasons for a pullback.

However, Sheckman argues that this mainstream explanation is incomplete and, by omission, invalidates much of its credibility. He highlights two key points that were largely ignored:

Off-Hours Selling and Lack of Liquidity: The initial significant price drops occurred during off-peak trading hours (middle of the night, between New York and Asia closing/opening), characterized by extremely low liquidity. Sheckman contends that no rational trader would dump billions of dollars worth of metal at such times, as it guarantees the worst possible settlement price and triggers algorithmic sell stops, artificially driving down the price. He describes this as a "drive-by shooting for an effect."
Rapid Price Rebound and Institutional Buying: On the second day of the significant price drop, silver prices quickly rebounded within minutes. Michael Lynch, an analyst Sheckman references, attributes this rebound to purchases by Bank of America and Morgan Stanley, with European commercial banks being the sellers. This is significant because, as Sheckman points out, both Morgan Stanley and Bank of America have recently recommended substantial allocations to gold in their investment strategies (Morgan Stanley suggesting a 60/20/20 split of stocks/bonds/gold, and Bank of America recommending 25% each in stocks, bonds, short-term treasuries, and gold). This suggests institutional buying interest counteracting the perceived sell-off.

Sheckman posits that these off-hours dumps were a "desperate attempt by some really caught commercial banks that are are massively short" to cover their positions and temporarily suppress prices, especially in light of rising interest rates and geopolitical events. He believes this manipulation is only temporary.

Fundamentals and Institutional Shift

Despite the price correction, Sheckman asserts that the fundamentals for precious metals remain exceptionally strong. He cites:

LBMA Bleeding Down: The London Bullion Market Association (LBMA) is experiencing a depletion of its metal reserves.
Reappearing Backwardation: Slight backwardation (where the physical price is higher than the futures price) is reappearing between London and the US, indicating physical demand is outpacing paper prices.
COMEX Deliveries: An unusual increase in physical deliveries from COMEX since 2020, with BRICS nations, Russia, China, India, and Saudi Arabia standing for delivery on commodities. Sheckman estimates that nearly 8,000 silver contracts (5,000 ounces each) have already stood for delivery in a non-delivery month, indicating significant physical demand.
Reshoring of Metal: He believes that what is being framed as tariffs is actually a "reshoring" of gold and silver by countries, draining global shelves.
Institutional Endorsement: The shift in investment strategies by major institutions like Morgan Stanley and Bank of America, advocating for significant gold allocations, signals a fundamental change in how these assets are viewed.

Market Manipulation and the Challenge to Spoofing

Sheckman acknowledges the long-standing issue of market manipulation and spoofing in precious metals, referencing the fines levied against JP Morgan traders. He believes it is becoming increasingly difficult to manipulate the market effectively due to:

Increased Physical Demand: The growing number of entities standing for physical delivery on COMEX challenges the ability to suppress prices indefinitely.
Sovereign and Institutional Involvement: The involvement of central banks, sovereign wealth funds, and a significant US-based entity actively taking physical delivery makes it harder to control the market through paper derivatives.
Bleeding the System: Sheckman suggests that the current strategy of standing for delivery is a slow bleed, designed to deplete the system over time, similar to how metal has been slowly off-taken from London, leading to its lowest float in recorded history.

US Economic Concerns and Potential Solutions

Sheckman expresses significant concern about the state of the US economy, citing:

Massive Debt: The US national debt exceeding $38 trillion, with over $1 trillion in annual interest payments, and a recent acceleration in debt accumulation (adding $1 trillion in 71 days).
Fiscal Irresponsibility: A lack of fiscal discipline and a growing inability of the population to manage basic financial needs.
Unfunded Liabilities: Over $100-150 trillion in unfunded liabilities for Medicare, Medicaid, Social Security, and government pensions.
Societal Issues: High illiteracy rates (60% of Americans unable to read past sixth grade), lack of college education, and a widening wealth gap.
AI Impact: The potential for AI to eliminate 50% of entry-level jobs in the next 3-5 years.

He suggests that President Trump's potential policies might aim to:

Debase the Dollar: Massively devalue the US dollar to bring back manufacturing.
Relinquish Reserve Currency Status: Move away from the dollar's global reserve currency status, which he argues prevents the US from having a manufacturing base and leads to trade imbalances.
Peg Gold to Treasury Market: Potentially peg gold to the back end of the Treasury market, allowing for the issuance of zero-coupon, long-term Treasuries redeemable in gold. This could eliminate upfront borrowing costs and incentivize manufacturing.

Sheckman also discusses the Stablecoin Act and Genius Act, suggesting that stablecoins backed by US Treasuries could generate interest that is then used to buy gold and potentially Bitcoin, further devaluing the dollar and driving up the price of these assets. He believes this is a strategy to bring back manufacturing and address the economic crisis.

He concludes that the US faces tough times ahead, with potential for inflation and shortages, but sees optimism if the country can successfully transition to a manufacturing-based economy and relinquish its reserve currency status. He emphasizes the importance of owning assets, not saving in depreciating currency.

The Importance of Habitual Saving and Asset Accumulation

Sheckman shares a profound piece of advice from his father: "Pay yourself first." This translates to consistently buying a piece of an asset, such as silver or gold, every two weeks, regardless of market conditions. He has followed this rule for 35 years, emphasizing that it's not about getting rich quickly but about building wealth through compounding and treating assets as savings.

He stresses that:

Time is a Factor: Life moves quickly, and the ability to benefit from compounding diminishes with age.
Habit is Key: Consistent, methodical saving, like regular exercise, yields long-term results.
Assets vs. Currency: Saving in depreciating currency is detrimental; saving in assets is beneficial.

This advice is presented as a life-changing principle for new investors in the precious metals market.

Miles Franklin Services and Contact

Miles Franklin offers services in precious metals. They can be contacted via:

Email: info@milesfranklin.com
YouTube Channel: Miles Franklin Media
Website: (Implied through email contact)

Sheckman highlights their commitment to competitive pricing, often matching or beating competitor prices, and their long-standing record of customer satisfaction (no customer complaints in nearly 36 years). They encourage inquiries on precious metals, economic, and geopolitical matters.