The Silver Market Risk No One Talks About, and this is start

The Silver Market Risk No One Talks About, and this is starting to cause issues of a systemic nature in the US Banking sector.

Global silver production is around 800 million ounces per year.

According to widely discussed market estimates and analyst commentary, just two banks Bank of America and Citi are believed to hold massive short exposure, estimated at ~4.4 billion ounces combined (BofA ~1B, Citi ~3.4B).

To fully cover these positions, they would theoretically need to buy every ounce of silver produced globally for the next ~5.5 years.

That assumes:

No silver for jewellery
No silver for solar panels
No silver for electronics
No silver for coins or bars

Which is impossible.

Because ~60% of global silver supply is already consumed by industrial demand.

Free, investment-grade physical silver supply is extremely tight.

This raises a serious question: are these positions actually backed by physical silver or by paper promises?

The system allows this through:
Unallocated accounts
Leasing and rehypothecation
The same physical silver being sold 1020 times on paper

As long as investors are satisfied with paper silver, the system survives. Prices move slowly. Headlines come and go.

But the risk is simple and binary:

The day a large player demands physical delivery at scale, the system freezes.

History
The Hunt Brothers episode of the 1980s was small compared to what a modern institutional silver squeeze could look like.

In such a scenario:
Paper markets may shift to cash settlement
Futures prices and physical prices may decouple
Physical silver could reprice violently

One rule always applies in commodities:

If you dont hold it, you dont truly own it.