Summary
China’s silver price manipulation has likely ended, leading to a potential rise in silver prices as economic instability and declining dollar value prompt a shift towards gold and silver investments.
China’s Silver Market Manipulation
China has covertly accumulated silver since the 1980s, leveraging its position as a major refiner and miner to suppress global silver prices and build undeclared reserves.
The People’s Bank of China established the Shanghai Gold Exchange in 2002, allowing citizens to acquire gold while a separate program secretly amassed silver reserves.
Economic Implications
The largest credit bubble in history, accumulated since the 1980s, is breaking, with bond yields not rising and equity markets stalling as credit stops feeding into the market.
In a crisis, the Fed will prioritize defending banks over the dollar, potentially leading to a collapse in the dollar’s value and a surge in commodity prices.
Investment Strategies
The global mining industry is poised to be a worthwhile investment, with countries representing 70% of the world’s population industrializing rapidly and demanding raw materials.
To protect wealth in a crisis, it’s crucial to exit credit positions and invest in gold, silver, and mining stocks.
Future Outlook
Interest rates and bond yields may rise to 10-20% or more as the value of credit rapidly declines in a crisis.
The end of China’s silver price suppression is expected to allow silver prices to catch up with gold as currency values continue to decline.