“If You Have Silver, Watch This Before Friday”: Alasdair Macleod | Silver Price 2026 Final

Added: 2026-05-23

[00:00:00]Understand the difference between money and credit.

[00:00:04]As the the great banker John Pierpont Morgan said way back in 1912, gold is money and all else is credit.

[00:00:15]He's dead right. It's that's the legal position despite what governments say. I mean, governments turned around after that sometime after that 20 what 20 years after that and said, you cannot own gold anymore. Um Um you know, you have to submit gold to to the US Treasury or or the Federal Reserve Bank or whatever.

[00:00:37]Um despite despite those sort of if you like rules that are introduced from time to time by desperate governments, the common law position is gold is money and all else is credit. And that incidentally includes currencies. And what we are seeing is a flight out of credit into real money without counterparty risk, which is gold and possibly also silver.

[00:01:03]I mean, the answer basically is that if you have a drain on your gold reserves, then you raise the interest rate. What that means is that your currency acting as a gold substitute, in other words, if it is as good as gold, then the higher interest rate will cause a flow of gold from other centers with lower interest rates. You know, if they're tied to gold. And of course, because none of them are tied to gold, basically, you know, what's the interest rate on gold?

[00:01:29]It's the lease rate, which is what, half a percent or 1% or something like that.

[00:01:33]All they need to do is have an interest rate at 3 or 4 or 5% in order to stop a run on on on their gold reserves. And I would also argue anyway, their gold reserves are absolutely enormous, I think. Um you know, you're looking I mean, you know, what's on the on balance sheet as it were in in the PBOC's official reserves is just a tiny part of the total.

[00:01:57]Uh they've been spiriting away gold since 1983.

[00:02:01]Um and uh had the opportunity to do it in huge, huge quantity.

[00:02:05]I estimate that uh by 2002, uh when they then permitted individuals to uh accumulate gold. I mean, they were banned from it before then.

[00:02:16]And the And the the Shanghai Gold Exchange was opened to facilitate um uh public participation in gold.

[00:02:23]By then, I reckon they'd accumulated something in the region of about 20,000 tons.

[00:02:28]And they haven't stopped accumulating.

[00:02:30]They rapidly became the largest um uh gold mining nation by far, overtaking South Africa, I think, in about 2007.

[00:02:40]Um this is a deliberate policy. They've been importing dore from abroad for refining because everybody else thinks that uh gold refining is such a dirty business, we can't possibly do it, which has just played into China's hands.

[00:02:54]Uh and uh particularly with silver. I mean, they've been importing um ores in a non-ferrous ores, which I think uh sort of represent or close to 70% of um China's silver output. And uh also, they've become a a major mining nation at the same time.

[00:03:13]Um I mean, I detected a long time ago that they were importing uh silver ores um from uh certainly Latin America, um round about there, for refining. Um and um I mean, the quantities are absolutely vast.

[00:03:30]And if you look at their policy for oil, I mean, they've got massive enormous oil reserves, strategic oil reserves.

[00:03:37]Everybody else has been depleting theirs, while she has managed to accumulate, I think, I mean, just huge quantities. Um so, yeah, I mean, she's prepared for this.

[00:03:48]She She has a sense of strategy, which sadly is lacking in the West. Under traditional monetary systems, countries defended their gold reserves by raising interest rates. Higher yields attracted capital inflows and reduced pressure on national reserves. Even though modern currencies are no longer directly tied to gold, the mechanism still influences financial markets today. Gold lease rates remain historically low, meaning central banks can stabilize currency demand with relatively modest rate increases. Supporters of this theory argue China possesses enormous hidden reserves capable of supporting its financial system during global instability. Meanwhile, Western economies increasingly depend on debt expansion and monetary stimulus. This contrast highlights two very different economic philosophies. One centered on strategic accumulation, the other on perpetual credit creation and financial engineering. It doesn't surprise. Um I mean I I've written about this a few times. Uh basically, it's very, very simple. And a portfolio manager, and we're looking at about um I mean portfolios in North America uh are reckoned to total about 160 trillion dollars worth.

[00:05:04]Now, um what's the safe haven for portfolio manager? Well, cash, obviously.

[00:05:10]Because he accounts in dollars, whether it's Canadian or American dollars. So, if if you know, if he if if he thinks there's an awful lot of risk around, he sells assets for cash.

[00:05:20]He doesn't sell it for gold, he sells it for cash.

[00:05:23]So, that's really why why um you know, you've seen uh you know, gold has been marked down, silver has been marked down, whenever oil goes up because oh, oil is going to go up, so this is uh bad news for inflation, it's bad news for this, that, and the other thing. So, therefore, gold is going to be sold. Um that's the view they take.

[00:05:42]Now, how much selling of gold is actually occurring is extremely low.

[00:05:46]You've only got to look at the open interest on COMEX for the silver contract in particular, but also gold to see that they're historically very low levels. I mean, silver has been down to levels not seen for 20 years.

[00:06:00]Uh gold um similarly has been extremely low, not not quite as low as silver, but I mean, it sort of bottomed out at something like 360,000 contracts. Um given um anything really below about 410,000 contracts open interest in that you know, in in the gold contract, uh you would say is an oversold market, one where basically speculation is absent.

[00:06:27]Um and um you know, there's a bit of a recovery going on there now, but the idea that anybody's really got much gold is is is is completely wrong. I mean, things get marked down because of the vested interest, if you like, of the shorts.

[00:06:42]You've got the the swaps and the market makers who are all short on COMEX. I mean, they may be long in London. I mean, some of the bullion banks will have long positions in London covering short positions on COMEX, but um the short positions on COMEX basically uh mean that um yeah, what do we want to do? We want to mark it down.

[00:07:03]Basically, shake out any loose stock that may still be around, but also on a valuation basis across North America and Europe, institutional portfolios remain overwhelmingly concentrated in technology stocks, debt instruments, and paper assets. Precious metals occupy only a tiny percentage of total allocations. For years, fund managers treated cash as the primary safe haven instead of physical gold. That mindset helped suppress demand even during periods of inflation and geopolitical uncertainty. However, market dynamics may now be shifting. Recently, oil and precious metals have begun rising together instead of moving in opposite directions.

[00:07:45]Some analysts interpret this as evidence that sellers in Western gold markets are disappearing. If confidence in overvalued equities weakens, trillions of dollars could rotate toward gold and silver, potentially triggering one of the largest asset reallocations in modern financial history.

[00:08:04]When it comes to the end of the month, end of the quarter, whatever, we can tell our bosses that uh the position has improved from last time.

[00:08:12]That's really what it's about, Anthony.

[00:08:14]Um nothing material. And I'll tell you something, this has now shown signs of changing because yesterday we had oil rise. I think oil rose something like 4%.

[00:08:28]Not huge in the scheme of this volatility, but nonetheless a very definite rise.

[00:08:34]And what happened to silver? Silver rose 8%.

[00:08:37]Recently it's been oil rise, precious metals down, and vice versa.

[00:08:43]Now it's changing. And I think what that means is that they've really run out of sellers of gold and silver in the West, in the G7 countries, particularly New York, London, um and Switzerland. So, yeah, um I think this is actually a very, very material change. And so, what we're going to see uh I I I think is very shortly we're going to see that 160 trillion dollars of portfolios begin to realize that it's it's exposure. I mean, if you look at the ETF exposure, it's 0.2%.

[00:09:23]They've got some mines and all the rest of it. There's probably an average exposure of ETFs and mining sector running at about 2% of that 160 trillion. Where's the rest? The rest is in tech stocks, in things which basically are in a bubble.

[00:09:40]So, that you're going to get um a very major shift, I think, in portfolio uh allocations, and they're not going to go into bonds, I can tell you.

[00:09:50]And it's interesting because Bank of America, um Morgan Stanley, and all the rest of it have been saying, you know, 20, 25%, whatever should go into gold.

[00:10:00]Um and they run trillions uh of of um uh discretionary funds, you know, for very high net worth individuals.

[00:10:11]Um and um have their investment managers got any gold? No, they have they have alice like. Yet, you know, the strategists in the banks are now saying, "Yeah, gold's going higher. You should have 20% of your portfolio in gold."

[00:10:26]They got virtually nothing. The conversation surrounding gold and silver increasingly focuses on futures exchanges such as COMEX.

[00:10:35]Open interest levels in silver contracts recently fell to historic lows, suggesting speculative participation has dried up significantly.

[00:10:44]Critics argue that large financial institutions maintain powerful short positions designed to suppress prices and protect broader financial markets.

[00:10:52]At the same time, physical demand from Asia continues growing steadily. China imports large volumes of silver-bearing ores from Latin America and dominates global refining capacity. This divergence between shrinking paper speculation and rising physical demand fuels concerns about future supply shortages. If investment demand accelerates suddenly, available physical inventories may struggle to satisfy global buyers. Turkey is um is, I think, a special case. Um I mean, I I was I've been in Istanbul once. And I had this discussion with some some uh commercial bankers.

[00:11:31]And it appears what happens is that uh the Turkish Central Bank uses gold very much as um a means of regulating its own currency.

[00:11:42]So, the reason that it sells gold basically is to buy its own currency to support its own currency in the markets.

[00:11:50]And then it buys it then it'll buy it back at a later time. So, that's it, you know, it's it's using gold quite dynamically in that sense.

[00:11:58]Um but when it sells sells its gold, its gold goes to commercial banks. It doesn't go into the market. The commercial banks actually have customers who want this gold.

[00:12:10]Um so, uh you know, there is the bit of the sort of ebb and flow between the commercial banks and also the central bank.

[00:12:18]So, I think to look at um you know, sometimes it's sort of come out and say, "Oh, last month they sold 60,000 si- you know, 60 tons of gold or whatever."

[00:12:27]Um take it with a pinch of salt. It really doesn't matter.

[00:12:31]>> [laughter] >> You know, they're not The Turks The Turks actually use gold quite sensibly in that sense. I mean, they're they're lousy at managing their currency, which which collapses and collapses and collapses, but uh they have got slightly some sort of message in terms of uh you know, here is a monetary asset which we can actually proactively use.

[00:12:52]And the commercial banks understand that as well. Unlike our commercial banks, our commercial banks don't want to touch bullion because um they're not in the business of bullion.

[00:13:01]They're not in the business of physical stuff. They're in the business of credit. Um you know, they will they will create credit um and uh they make money on the credit spread between what they create and what they have to pay to balance their their their books, which is a a lovely game. Don't disturb it.

[00:13:20]We're not going to do what the Turks do, I can assure you. Questions surrounding central bank gold ownership have intensified over the last decade.

[00:13:28]Countries including Germany and France pushed to repatriate gold stored abroad, especially from vaults in the United States.

[00:13:36]Critics viewed the delayed return schedules as a warning sign that Western custodians may have leased or rehypothecated foreign-owned bullion.

[00:13:45]Historical tensions over gold are not new. During the 1960s, Charles de Gaulle openly challenged America's dollar dominance by demanding physical settlement instead of paper promises.

[00:13:57]That pressure contributed to the collapse of the Bretton Woods system.

[00:14:02]Today, renewed interest in sovereign gold ownership reflects growing concerns about counterparty risk and long-term monetary stability.

[00:14:11]I think that was a brilliant move by the French. Um I really do. Um and I mean, if I was if I was um you know, a German central banker, I would do exactly the same.

[00:14:24]Because we know that um they have stolen that earmarked gold. America's taken that gold for its own uses.

[00:14:33]Uh and consequently, um you know, it's not there. I mean, we got this message very clearly when the Americans said, "Uh we will deliver to you, Bundesbank, was it 300 odd tons? But it's going to take us 7 years to do it." What?

[00:14:48]It's our property, and it's actually in your bank, earmarked as our property. We want it back.

[00:14:55]No, no, no, no, no, no, no. You know, so you had negotiations, if you like.

[00:15:00]The behind the scenes, it is absolutely clear that the Americans have not got that gold. They have taken other people's gold and stolen it and used it for their own purposes.

[00:15:12]I won't go into what those purposes are.

[00:15:14]That's not the point I'm making. The point I'm making is that um the Bundesbank should now turn around to uh the Federal Bank of New York and say right, um if you can't deliver our gold, then um uh you can sell it in the market and pay us.

[00:15:31]Of course, they won't sell it in the market, but they will create the dollars to pay off the Bundesbank. And then the Bundesbank just goes into the market and buys gold.

[00:15:40]I mean, that's got to be the sensible thing. The problem is that um the liquidity in the market, even uh we're talking about gold, um you know, with with a theoretical above-ground stock of about 200,000 tons, the market isn't that great in gold.

[00:15:57]I mean, there's just too many people demanding gold at the moment. Um so I would think the Bundesbank would be very frightened to do that, but they would have had the opportunity to do it.

[00:16:06]And well done France for doing it. I mean, really, the French actually have a pretty good record of understanding gold. I mean, go back to um to de Gaulle um back in the '60s.

[00:16:19]>> [laughter] >> Yeah.

[00:16:20]He's said, "No, we want our gold back.

[00:16:22]We don't want your dollars."

[00:16:24]Um and that was actually the thing that destabilized the London Gold Pool in the um mid-late '60s and um led eventually to the abandonment of this crazy Bretton Woods system which um America just abused. At the center of this debate lies a simple but powerful idea famously associated with J.P. Morgan.

[00:16:47]Gold is money while everything else represents credit.

[00:16:50]Modern banking systems function primarily through debt expansion, leverage, and confidence. As long as trust remains intact, currencies retain value. But during periods of crisis, investors historically migrate toward assets without counterparty risk. That explains the renewed global interest in physical gold and silver. Nations like Turkey even use gold dynamically to stabilize domestic markets during currency stress.

[00:17:16]As debt burdens rise worldwide and geopolitical tensions intensify, the competition between hard assets and paper-based financial systems may define the next era of global economics.

[00:17:28]Understand the difference between money and credit.

[00:17:32]As the the great um banker uh John Pierpont Morgan said way back in uh 1912, "Gold is money and all else is credit."

[00:17:44]He's dead right. It's That's the legal position, despite what governments say.

[00:17:50]I mean, governments turned around after that, sometime after that, 20 what, 20 years after that, and said, "You cannot own gold anymore." Um Um you know, you have to submit your gold to to um the US Treasury or the or the Federal Reserve Bank or whatever. Um despite the despite those um uh sort of, if you like, uh rules that are introduced from time to time by desperate governments, the common law position is gold is money and all else is credit. And that incidentally includes currencies. And what we are seeing is a flight out of credit into real money without counterparty risk, which is gold and possibly also silver.

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