Was the WallStreetBets Silver Short Squeeze a Failure? Physical Dealer Shortages Suggest it Wasn't

10:09 AM demand, shortages, silver, silver price, supply, wallstreetbets 2 Comments

At the beginning of February there was great anticipation that the Reddit group of retail investors was positioned to take on the monstrous silver short that has kept the price depressed for nearly a decade.  In fact the battle over the silver price has been so great that it is the ONLY asset that has failed to reach or surpass its high achieved 40 years ago in 1980.

• After oil, silver is the second most widely used commodity in the world
• Silver demand has outstripped production for many years
• The silver price reached an all-time high of $50 in 1980
• Silver is the only commodity in the world that is currently priced lower today than it was back in 1980

But sadly, the majority of the investing public has little understanding of what precious metals mean to the ongoing fiat currency system.  And as such, taking on Hedge Funds or Bullion Banks in the paper markets is a futile quest since not only they, but the Federal Reserve and Treasury as well, have a vested interest in ensuring the prices of gold and silver do not climb rapidly.

Yet this is not to say that retail investors, and especially those tied to WallStreetBets can't create havoc in this market.  And despite the fact that they are actually late to the precious metal game (since central bank and wealthy accumulation of the metals has been going on for about the last three years), their recent presence is putting massive pressure in the physical market as seen by the incredible rise in premiums on even just a single ounce of silver.

Current Spot Price:  $26.92

Golden Eagle Price for 1 - OZ  Random US American Eagle:  $36.34

SD Bullion Price for 1 - OZ  Random US American Eagle:  $37.15

Apmex Price for 1 - OZ  Random US American Eagle:  $39.15

Miles Franklin Price 1 - OZ  2021 US American Eagle:  $9.00 above Spot Price

In addition, most of these dealers are paying individuals upwards of a $4 or more in premiums above Spot for their silver, however the problem is that VERY FEW are selling.

Besides its power as a monetary metal and store of wealth, silver demand is expected to skyrocket in the near future as demand for alternative energy sources coupled with the rise of Artificial Intelligence will take an already stretched commodity and make it almost priceless.