On Friday, October 10, the almost criminal fraud that calls itself "paper silver" was so egregious, it had no historical parallel; and STILL the phony paper market could not hammer the price of silver down from it's $50 per ounce physical metal pricing.
130% of a YEAR’S global silver supply was dumped for sale in ONE DAY — and the price for physical metal silver is STILL above $50. On paper, a whole year's supply of the entire silver mine output for the whole world, - plus 30% more than the whole world produces -- was "offered for sale."
During the course of Friday, 220,082 futures contracts (paper silver) were hurled at the computer screen allegedly "for sale." Each futures contract equaled 5,000 oz. of silver. That meant **1.1 BILLION oz of synthetic (paper) silver** was put out for sale on the market.
Dumping 130% of a full year's silver MINING output from the entire world, STILL couldn't manipulate the price of actual silver metal, lower! ! ! !
This has now caused "Paper panic."
Physical buyers didn’t blink.
Almost Outright Fraud
"Paper silver" is often criticized as being a misleading and risky investment that lacks the fundamental security of holding physical silver bullion. Concerns arise from the vast number of paper claims for silver compared to the limited physical supply, which critics claim enables price manipulation by large financial institutions.
How paper silver functions
"Paper silver" is a catch-all term for various financial products that derive their value from silver without the investor owning the physical metal. The most common forms include:
Exchange-Traded Funds (ETFs): These funds trade on stock exchanges and are meant to track the price of silver. While some are backed by physical bullion, shareholders do not own or have the right to redeem the underlying metal.
Futures and options contracts: These derivatives allow traders to bet on the future price of silver without ever owning the physical asset. These are primarily traded on exchanges like the COMEX and are used for both speculation and hedging.
Unallocated accounts: With this arrangement, an investor owns a silver "credit" but not a specific bar or coin. The dealer or bank owns the physical metal and keeps it in a general stockpile. This gives the investor only a contractual claim on the silver, not direct ownership.
The criticism: Why it's seen as deceptive
The accusation that paper silver is a "fraud" stems from several key factors:
1. A huge imbalance between paper and physical silver
There is a massive disparity between the volume of paper silver claims and the actual amount of physical silver in existence. Some estimates place the paper-to-physical silver ratio at over 100:1. In the event of a market-wide rush for physical delivery, the system could fail, leaving paper silver holders with worthless contracts.
2. Risk of price manipulation
The market's high leverage and paper dominance allow large banks and financial institutions to influence prices. By selling huge amounts of paper silver, they can suppress the market price, creating an illusion of abundance even during periods of high physical demand. A high-profile case involving JPMorgan Chase found the bank guilty of illegally manipulating silver and gold prices.
3. No direct ownership or claim on the asset
Unlike physical bullion, which you own and control by holding it in your hand, paper silver leaves you with counterparty risk.
In the case of a futures contract, you are relying on the exchange and the other party in the transaction to actually HAVE the physical metal they are "selling" to you.
With unallocated accounts, you are essentially an unsecured creditor of the bank or dealer. If the institution faces a liquidity crisis, its creditors would have a higher claim on the bullion, and you may lose your investment.
ETFs expose you to tracking errors, management fees, and the risk that the fund's holdings may not fully cover all outstanding shares in a crisis.
4. A decoupling of paper and physical prices
During times of high physical demand, such as the "Silver Squeeze" events, the market price of paper silver can become disconnected from the price of physical coins and bars. Premiums on physical products can soar, revealing the artificial price suppression of the paper market. When the price of the physical metal is greater than the price of "paper silver" that's called "Backwardization" because the paper market is backwards from reality.
5. Lack of a "real" asset
Many investors buy precious metals to protect against economic instability and the erosion of fiat currency. From this perspective, paper silver fails to serve as a genuine safe-haven asset because it is just another financial product. As commentator Robert Kiyosaki warns, an ETF is "like having a picture of a gun for personal defense," not the real thing.
Which brings us back to yesterday, Friday October 10, 2025 . . .
"Paper Silver" holders hurled 220,082 silver futures at the computer screen trying to convince the market that there is a lot of physical silver available for sale and delivery.
At 5,000 oz of silver per contract, that’s ~1,100,410,000 oz of synthetic, (i.e. "paper) silver in one trading day session.
Yet the price for physical silver in the SPOT market - for people who want to buy silver and have the actual, physical, metal delivered to them immediately -- still sits around $50 p/oz.
Here is how the market went:
(HT Snide Remark: One year of the entire planet's silver supply in a day is clearly not enough. They should definitely do 10 years in 15 minutes on Sunday night. They might get it down to $45. Clearly the legal authorities are not interested in looking at this… weren’t ever interested in looking at it, either. After all, why would legal authorities go after people who are "selling" silver they don't actually have?)
But the real take away is that the paper market FAILED to bring the silver price down. So many people are buying physical metal and demanding immediate delivery, that not even massive manipulation using an entire year's worth of mine output plus 30%, couldn't crush the demand.
PHYSICAL DELIVERY FAILURE?
What's taking place with demand for physical delivery, is putting a lot of these "paper" silver companies in a squeeze. What happens when they run out of actual metal to ship to people who are demanding it?
Most of these "paper" silver contracts, have an escape clause: "In the event of shortage of metal, the claim can be settled in cash." So people who THINK they "own" silver which is simply being held by someone else, safely, in a vault, suddenly find out they don't "own" it at all and the "vault" . . . . . . is empty. Delivery doesn't come.
So they demand to be paid, and then the squeeze is REALLY "on" for those companies.
That is where things are heading as of Friday.
By most reasonable estimates, there are only about 3 Billion ounces of physical silver in the whole world right now. We're supposed to believe that 1.1 Billion of those ounces, were offered for sale yesterday. Sorry, no. Don't believe a word of it.
My local dealer informed me as of today (Saturday, October 11) the price fixing mechanism is now being set by COMEX, not Kitco. They want you to think the price you’re seeing is "Spot." It’s not, it’s Futures. Kitco sets Physical price, COMEX sets Futures.
When you see price listed as $47.51 understand you're seeing the futures backwardization price. Go to Kitco to see the physical price. LBMA kicked Kitco to the curb last week. Stopped them reporting the price.
Chinese return from vacation tomorrow. Expect Chinese refiners/buyers (dore’) to continue full force. Price manipulation should be close to an end.
A lot of very big names in the "paper" precious metals market, are heading into failure -- fast.
