Silver Shock: Global Squeeze Ignites—Act Fast Before Physical Supplies Vanish and Prices Skyrocket!
With historic shortages hitting both the paper and physical markets, borrowing costs and demand are surging—experts warn this could be the last chance to secure silver.
by Niko Moretti
What if the next global financial crisis struck—and the world’s trusted pipelines of U.S. dollars suddenly froze? This is no longer a far-fetched scenario reserved for financial doomsday theorists. Quite the opposite: the Bank of England, together with key European supervisors, is now quietly pushing major banks to run tough new stress tests for exactly this kind of dollar funding shock. For decades, finance ministers and central bankers have operated under the assumption that, whatever else went wrong, the U.S. Federal Reserve would be ready to pump dollars into a panicking global system. But now, that bedrock of trust is cracking—not because of macroeconomic decay, but from the tremors of deepening geopolitical instability and the growing unpredictability of U.S. political leadership.
Why the sudden anxiety? In recent months, President Trump’s repeated public attacks on Federal Reserve Chair Jerome Powell, and even the swirling rumors that Powell could be fired, have sent shivers through the corridors of global finance. For nervous regulators in London, Frankfurt, and beyond, this isn’t just a story of personal grudges—it’s a sharp warning that the independence of America’s central bank, long viewed as an anchor of the global economy, might be weakening. If the Fed’s global role can be tossed around as a bargaining chip in Washington’s power games, can the rest of the world still depend on dollar liquidity when the pressure drops?
That brings us to one of the quiet but crucial questions being asked in Europe: What happens if the usual financial fire hoses—the Fed’s dollar swap lines—don’t turn on when disaster strikes? It’s not just a hypothetical. The last two decades have shown how easily global banking grinds to a halt when trust, and dollars, become scarce. European banks, which rely heavily on short-term dollar funding to keep cross-border business humming, now face direct scrutiny from regulators. The Bank of England’s Prudential Regulation Authority, for example, has ordered lenders to stress test a once-unthinkable scenario: not only restricted access, but a total freeze in dollar funding, even via those supposedly unbreakable emergency swap lines with the Fed.
Is this just more regulatory hyperbole, or a genuine turning point for global finance? Judging by the seriousness of the exercises, it’s the latter. Banks are being told to dig deep—scrutinize every dollar asset and liability, know exactly which activities hinge on easy access to U.S. currency, and consider how to protect themselves if that access dries up overnight. Traditional safety nets and liquidity reserves might not be enough if the familiar lifeline from the Fed fails to materialize. That’s a sobering shift from the old playbook, one that’s being adopted not out of ideology but out of a raw survival instinct.
But the implications go far beyond bank boardrooms and regulatory inboxes. What does it mean for a global financial system that’s built so much atop the dollar? Despite years of talk about “de-dollarization,” roughly a fifth of eurozone bank funding still depends on dollars, especially for clearing cross-border transactions and providing market liquidity. The Fed’s dollar swap lines have already twice prevented crises—during the 2008 meltdown and the initial wave of the COVID-19 pandemic. But now, simply planning for a world where those lifesaving mechanisms might not work sends a chilling message to markets, raising the risk—and cost—of securing dollars across the Atlantic.
Could this be the first crack in the dollar’s global dominance? If faith continues to falter in America’s stewardship and willingness to backstop the world, don’t be surprised if banks and even governments start searching a little more seriously for alternatives. For now, regulators aren’t betting on a sudden dethroning of the greenback. But by war-gaming what was once unthinkable, Europe’s financial guardians are signaling a profound shift: it’s no longer enough to trust in the old promises. In the age of political volatility, everyone is being forced to hedge their bets—even against the world’s reserve currency.
Who would have thought? In 2025, security no longer stems only from capital ratios and creditworthiness. Sometimes, it’s about asking the right questions before the next storm hits. And when the Bank of England quietly starts bracing for a dollar drought, it’s not about ideology anymore—it’s about mere survival.
Any Silver you can Get Under $40 is a Gift
the March to $50 will go like this, GRADUALLY THEN SUDDENLY
Lots of SilverNEWS to Discuss this Friday July 18
Today marks option expiration day on the NYSE, and one of the most closely watched situations is unfolding around SLV, the iShares Silver Trust ETF. There are still over 100,000 call option contracts open at the $35 strike, an unusually high concentration for an expiration day. This has created an environment ripe for volatility, as such a large amount of open interest at a single price point makes it more likely that any meaningful price movement toward or above $35 could spark a cascade of forced buying—a so-called “gamma squeeze”—as market makers or dealers are compelled to hedge their exposures.
Compounding the tension is the unprecedented scarcity of SLV shares available to borrow for short selling. Right now, there are effectively zero shares to borrow, and consequently, the cost to borrow (short interest rate) has soared into the double digits on an annualized basis. This situation is usually the result of sustained high demand to short the ETF coupled with shrinking availability of shares in circulation—often because some investors have redeemed ETF shares for physical silver, or because general market volatility is causing parties to hoard shares.
The stress in the paper market is mirrored by surging silver lease rates, which have recently spiked above 6%—levels not seen in years. This metric reflects the desperation of traders and institutions scrambling to source actual physical silver. For context, similar lease rate spikes in the platinum market preceded a dramatic 40% rally as physical shortages forced major players to cover their positions at any cost. Now, silver is exhibiting many of the same warning signs. ETF inventories are being depleted, particularly in London, to satisfy delivery demands, and the number of outstanding “paper” claims on exchanges like Comex far exceeds the available physical silver, raising doubt about the system’s ability to honor delivery if more investors demand it.
All these factors add up to the growing potential for a short squeeze in SLV. Short sellers, unable to find shares to borrow, may need to buy back their positions at increasingly higher prices, adding to upward momentum. If SLV’s price pushes above $35 today, dealers who wrote those calls will have to buy futures or shares to hedge, intensifying the price surge. On top of this, if a significant number of call holders “stand for delivery”—meaning they exercise their options to demand the underlying shares—it will further strain the already tight supply of SLV shares.
These stresses are not isolated to the ETF market. The physical silver market is also under pressure, with Western inventories steadily declining due to persistent deficits and elevated demand from both industrial and investment sectors. There is rising concern that if these dynamics persist, price discovery could migrate toward exchanges with more readily available metal, such as the Shanghai exchange, and that banks or other players holding large short positions could face severe financial strain if forced to cover at much higher prices.
