I am revisiting the subject of “What happens to the Silver Market with $300 Silver” in response to a recent interview with Andy Shectman from Miles Franklin, prompted by my YouTube video a few weeks ago.
Basically, Andy agrees with my analysis that the Wholesale Dealer Market was under severe stress earlier in the year, but he doesn’t see another problem if prices surge higher once again. I provide my analysis of why I disagree with Andy that another quick, large silver price surge this summer would be detrimental for the U.S. Retail Silver bullion market.
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Thank you Steve:
Excellent content. This highlights that precious metals (PMs) should be held as a long-term hedge against inflation and as a store of value. Stackers of PMs never want to be in a situation where they have to sell bullion quickly. You want to be able to sell only when you want to, and it’s beneficial to you.
The alternative is to invest in silver ETFs, like SLV, if you want to get in and out of PMs quickly, but this takes away one of the best attributes of physical PMs: you are outside the banking, brokerage, and electronic systems.
Steve
You know I’m communicating with a couple dealers; meeting with them in fact.
You are correct in your assessments.
Now my local dealer made record profits in 2025 because the wholesaler DG had the capital to buy from him when sellers to him outnumbered buyers by 10-12 per 1 buyer. But there were a few short duration cash flow crunches.
But if the wholesaler’s deep pockets run dry then he stops buying… and closes his door.
Or offers much lower buying rates.
Thanks Steve. What you’re saying is backed up by empirical evidence. Before this last runup in price, I don’t think Andy Schectman predicted that dealers wouldn’t buy at higher prices. For that matter, it was surprising that all these stackers wanted to sell everything that they had toiled to accumulate for all those years. I know times are tough and there is pressure to sell, but we didn’t see mass dumping of equities and every other asset.
Nonetheless, I remember you used to say that when we DO actually see clearly dropping energy supplies (e.g, the energy cliff), that’s when the fundamentals will kick in and people will run towards real value. Certainly in the next year, we’re going to experience energy constraints and probably price inflation for stuff like food that you just have to buy. The theory is that traditional stores of value, like treasury bonds, will not be so safe anymore. So would you not expect much higher demand for metals, let’s say a year from now, based on those fundamentals? What kind of lag time would you expect for those fundamentals to kick in, now that oil supplies actually will be dropping?