What's up YouTube Silver dragons here I'm really excited to be talking once Again to Lee or Gantz the founder of Wealth research group how you doing leor I'm doing great done happy to be here Awesome yeah happy to have you back on The show hey today we're talking about Silver shortage uh let me just ask you Straight up is the world running out of Silver it's running low on trusted Sources for Um for available silver meaning uh that Uh up until uh what happened with uh Russia and the Ukraine last year Um there wasn't a government or an Institution or a real big buyer of Silver that had any issues sorcing Silver wouldn't need to do for projects For what we call hedging where uh for Example you have a big infrastructure Program and you need to make sure you Buy silver for the right price so you You use a hedge fund to do some hedging For the in the Futures Market or Derivatives market and these are you Know the The Sovereign wealth funds Etc There wasn't any problem with sourcing When you needed to throughout the past 50 years you've had episodes with the Hunt Brothers that's very famous uh in 19 in the 1970s late 1970s and the Government had to step in the early 80s And all the way to till the late 80s They were in you know in court
Proceedings To unwind their silver position because They got to a point where they Warehoused a third of global silver Those two brothers So Um and then in the 2000s it it became a Real problem because China went through This incredible boom but For the most part Um we haven't had issues now with what Happened with Um Russia and the Ukraine governments Are transitioning into a new world order In terms of Um who can they trust and Um how much are they willing to pay to Make sure that they don't have to outbid Countries that are not in their same Camp So we are deconstructing globalization And in this kind of world if you need Silver from a Latin American country and You're one of the Western countries and Uh China were a brick uh brics Nation or A brics Ally Nation wants that silver Then that Latin America country can be Threatened by both blocks as to who gets That silver and that becomes uh very Different than the world of Globalization where the United States Basically guaranteed that its allies uh Would get that silver and the rest of The world will also get it
Um but it will come at America's terms And we are deconstructing that world so That's why you're seeing um on the Comax And the LV May you're seeing uh Registered inventory running very low And Um I I would say that we're running low On last year's supply This year and what's going to come out In 2024 2025 it's a different story Um we're not just talking the silver Shortage or silver Um or a new silver market and the way it Will run but we're talking about other Commodities as well we are moving into a World where Um The markets for Commodities are going to Be closed when I say closed I mean that America will buy from one two three four Five sources China will buy from other Sources some sources will be uh for both Camps but there will be very strict Conditions on how and how much they can Sell and overall this means that we are In a Turf War for Commodities very Different 180 degrees different than the world we Lived in uh for the past 80 years Uh since the end of World War II and and Brenton Woods so I would say this is a Very interesting time uh um and surely You you will see disruptions in um in Commodities in the next few years as we
Reset this entire supply chain system Yeah it sounds scary I mean if we pull Up this chart here uh silver historical Stock of eligible and registered uh we Can see it's moving down quite rapidly It's around like 10 or something right Now from what I can gather eleven yeah Correct 11 can you can you explain What's going on in this chart yeah sure So what that means when right now it's Very low is either the comex has to Shore up and you know uh get those uh Registered levels up by buying up on the Open market more silver or the demand For physical we'll have to decline Something has to give because if if this Continues this way then you reach a Point where silver prices has to have to Rise dramatically so that people start To Source them not just from the comex And the LV main Um so it's either that or a structural Problem and either are both of them are Basically showing that silver prices are Headed up um if you look at the Q4 2022 The best performing asset in the world It was silver so there's definitely Um A lot that's happening right now because The dollar is just uh um underwent a uh A death cross on technical terms while The uh well gold has gone through a Golden cross in technical terms meaning That the 50-day moving average has just
Surpassed the 200-day that's on the Bullish side of gold and silver and the Flip side is true for Uh for the dollar and um and it has to Do with the China reopening it has to do With uh the Saudis meeting the Chinese To talk about Um Petro uh deals in Iran it has to do With many moving Parts but the at the End of the day we have uh Deglobalization happening and that puts A huge constraint on the prices uh that Miners have to pay for energy for labor And that all plays in to the bottom line Of how much uh silver would cost keep in Mind most silver is like is a byproduct It's not even a a direct Command that you mine so that is uh Really important to also understand that As the supply of other mines like copper Zinc and gold is is depleting that also Means that the supply of silver is Diminishing So it seems like there's an alarmingly Low registered amount of silver on the Kobex and lbma this is basically uh the Biggest deficit we've seen since what The early 2000s Correct so what would it mean if they Actually went to zero what if they ran Out would they ever let that happen it Hasn't happened Um and basically what what would start Happening if there would be some
Structural Um problem or squeeze a short squeeze Etc or a delivery squeeze Um and by the way Um it's been alleged that if Um if this actually happened Um this was this calculation was done About 10 years ago but I don't assume That much has changed if all the Futures Contracts are going to be executed There's about four months worth of Silver in the world right now So that means no more iPhones no more Computers no more laptops in four months No more 5 000 products that Um and and major industries that silver Goes into if all of the Futures Contracts were to be uh delivered uh so That is the is the risk there it is There just like if uh you've got older People in a nation to go to the ATM and Withdraw their savings they would Collapse the banking system in the same Way the comex will uh collapse as well Um so what would happen Um More realistically is that you would Have cftc and the trading company the Commodities training commission getting Involved you would have cash settlements Um they they have uh entire protocols That they've put in place since 2011 on What to do in these sort of scenarios Because that's when the last run up in
Silver happened and went to 50 almost to 50 bucks Um so they put a lot of uh things in Place but obviously no system is is Anti-fragile so Um essentially some would accept the Premium cash settlement Um others won't and there'll probably be Lawsuits but No government will let the global silver Market uh collapse on itself it will not Happen uh there will be some sort of Resolution but it will Expose and show How leverage it is and it will change Some of the uh the ways that that Business has done uh if that happens and And you know it's it's not uh it's not Unrealistic to think that something uh Like that could happen uh I want to ask You this leor we've seen a four-year Deficit in uh silver mining Supply and Essentially we've seen I believe the Comex and lbma slowly getting drained Right over the last four years is that Continuing in 2023 The the Demand right now for silver is Is uh very strong uh not just from the Bullion side uh or investment side but From Um from the industry side and that's Because China's opened up after three Years Um and not only that but because there Is a global resurgence
Um of onshoring And moving away from China and moving Away from relying on China And into uh moving into relying on other Sources and that means that if Factory a Was built in China now that the same Factory has to be uh built again in Other countries that it takes a lot of Silver uh that takes a lot of other Commodities as well so when you look at Um globalization and how Um a product that uh gets to you an IPhone and you know the same song Anything a computer it has to go through In our globalized world about a hundred Countries If you think about like all the Countries that are involved in Um all the components the technology uh The human resources in it uh the Shipping Etc and that's not the world We're transitioning into And so when you need to uh break all of This and reconstruct it That it takes a huge toll on commodities And I think that in the next few years You will see bottlenecks you will see More uh need to hedge On the comex which will actually Increase the pressure on the comex and That's why I think that the price of Commodities especially of silver a Commodity that trades for half of its All-time high and half of what it traded
40 years ago Um which uh to my knowledge out of the 29 major Commodities this is the only One that uh that has this characteristic Um then the the price Discovery here uh Is quite dramatic so if we look at Exter's Pyramid it basically shows how Small the silver market is compared to Everything else can you explain the size Of the silver market because some people Probably don't understand they think of Oil and other Commodities but when we Look at Silver there's not that much There right No silver is is um It's a very very small Market Um when you look at uh at Global Standards Um that you're talking about a couple of Billion ounces it's it's nothing Um so The the idea of the extras pyramid and In general the idea behind Um the silver market is that it's it's Prone to squeezes it's prone to Um Uh big moves in short periods of time And that's what silver is proven Um and on the flip side It does the same on on the downside so That's why in in my playbook in in my uh Trading mentality silver is way more of A vehicle that I trade With leverage when it has uh when it's
Rallying then a long-term Um buy and hold in other words I love to Accumulate more physical silver after Major major drops major drops would be 30 and uh and and over And on the flip side when it's rallying I love to use some sort of Leverage Bet On It options leverage ETFs mining Companies Etc and what I do is when I Exit those trades I convert that either Into buy and hold of gold or into other Sectors and divest out of precious Metals or keep just the the underline And take just the profit After tax and redeploy it so to me it's More of a tactical strategy I like the Volatility of silver Um and use it to my advantage Um I remember in uh 2009 for example the Price fell from uh 21 to nine because The bank that had a big uh position on It uh went bankrupt in 2009 Obviously and then the price from nine With the 49. if you remember Um it was incredible and on the upside There was so much leverage to be had Um the the the commodity went up uh uh Five times or fivefold but using options Leverage Um with ETFs with Um with the mining companies uh you know Uh some positions went up 15-fold 20-fold et cetera in two years that's Um basically the reason to always
Monitor Um silver and silver prices because if You are really an expert on Silver then When that when those moments arrive you Can make the type of returns that that The indices make in a decade in about Two three four months Um so the extra experiment what it Highlights basically is how small the Market is for silver compared to the Rest of the paper physical world of Bonds and stocks Etc with the premise That hey silver Apart from the 20th century And in the 21st century it used to be Money for thousands of years and as Money it needs to be uh revalued Uh much much higher some people have it As as a hundred and now 200 now is 300 Announced using all sorts of Um different uh characteristics like uh How much uh silver was a a middle class Worker paid the last two thousand years On average and you get to a point where You can talk about three and four Hundred dollar an ounce silver so Um I think that That's where this is coming from Um and if you actually look at the data In the 1950s the middle class family of Four so in other words two children two Parents Um were earning the equivalent of a Hundred and thirty thousand dollars
Today whereas we know that the middle Class family in the United States right Now earns about 56 000. so the uh the Standard of living in the United States Is more than halved in the past seven Years with globalization and with the Moving outside of uh the competitive Industries Um I think that that basically sums up How the price of silver reached where it Is it's been demonetized and been used In industry and therefore Um the bullion side of it is what Dictates the price if more people would Understand the need to hedge their Portfolio and savings with physical Silver And understand how accessible that Strategy is the price of silver will Probably be north of 50 North of 60 uh An ounce because it would re uh rate Itself as a form of savings and if Literally if every person would buy one Ounce of silver in the world you would Run out of silver That's that's incredible to think about Yes but it's true the available silver Supply is about two and a half billion If every person in the world I announced This over every person in the Western World by announces silver there would be No silver to be had Well I'm trying to buy uh as many ounces As I can so I I think I have more than
My fair share already yeah and I'm sure You do as well Um yes do you think we're headed into a Bull market for silver do you think We're going to see much higher prices Over the next few months or a few years Yeah we're definitely in a bull market Uh the price of of silver bottomed uh Twice at around 12 an ounce once in 2015 And another one in the March 2020 Panic Um were uh basically effectively we're We've doubled in more from that bottom Um and if you think about uh the yield Curve and how how many interest rate uh Rate hikes we've seen to uh basically Stop or curtail the uh the inflation Trend uh the next part of central bank's Uh policies will be to ease on the Interest rate hikes and potentially to Start cutting as we enter uh 2024 This means effectively that the price of Gold and silver right now are as Um unattractive as they will get because You have positive interest rates across The yield curve in real terms so Uh that tells me that the price is Silver and the price of gold could go Much higher Um when the central banks start to Normalize interest rates and even start To cut back down Um that to me is the biggest Catalyst For prices going uh moving forward Absolutely uh as we wrap up here lior uh
I just want to come full circle I know We covered a lot of topics but we Started off with silver shortage and I Want to get your final thoughts we're Probably not going to run out of silver This year not next year uh but Supply Might get very low uh correct that's Sort of what we're thinking between Everything Supply is probably going to be tight for A few years And the only remedy to that because I Don't see uh how uh demand will lower For silver the only way to get supply up Is for prices to rise so that more uh Entrepreneurs will enter the industry Um and and and bring more Supply online Um That is the cure to what we have and That means higher prices uh to Incentivize higher prices the price of Silver has to be north of 30 and Probably 35 to bring on uh new miners it Is true that the price of mining around The world right now is about uh 15 an Ounce but if you also factor in the Amount of time it takes to bring Construction online and interest rates Into the into the equation uh to fund Projects for new minds Um I I don't see any entrepreneur Calculating uh his prices and reaching Anywhere lower than 30 to 35 so to me That is the Baseline for where the price
Of silver should be and probably higher Awesome well hey thank you once again Lior for uh joining me and we'll be Happy to have you on again in the future Thank you very much
