The silver to gold ratio has held steady in the ancient world between 8 and 12 to 1 for almost two millenniums. It was lower for the Egyptian at 2.5 to 1, then stabilized during the Roman times around 8 to 1 before moving up again to 9.5 in the Middle Ages.
Gold was said to be the Money of the kings, Silver the money of the upper class and copper (bronze) the money of the people. In French, money is called "Argent" (silver) because the Celts were using it extensively. In Chinese and Japanese, a bank is where you deposit your silver (银行 and 銀行 respectively) and the mountain of wealth in Peru (now Bolivia), the Potola was in fact a huge silver mine.
Since silver has lost its luster. The Central Banks around the world kept their gold but sold their silver so much so that the ratio recently jumped to 100 to 1. This should not have been. If fact silver is rare and useful. Today, there are no silver mines left around the world. Silver has become a byproduct of the mining of other metals and over time this has resulted in a systematic deficit of production.
Markets should have reacted. The price of silver should have shot up. But it didn't. Slowly, during the 20th Century, actual metal deliveries were replaced by paper contracts on the Comex and other exchanges, so much so that eventually 98% of the market became virtual.
This didn't mater much during the good times. Silver is bulky. Who wants to receive 2 tons of silver, monthly? It cost money to move and to store.
But then new technologies emerged and suddenly once again people needed silver It is a very good electric conductor. Plus it was cheap and convenient.
It is only a few years ago that we started reading alarming reports: Where was the silver going to come from in a few years? Demand was exploding and no new mines were planned anywhere around the globe.
This leads us to the current market where suddenly, everyone is realizing that there is no silver left and consequently is asking for deliveries of actual metal. Normally when this happens, the price spikes (already the case as the ratio went from 100 to 50 in 2 years), reserves are found and the price comes down. Except that this time, it is truly different: There are no reserves available.
What happens then? Well, we are about to see, but nothing good. Markets are complex these days and deliveries have transportation, 30 day delays and other quirks baked in the cake. The market will not implode overnight. But if deliveries fail, the market will implode. Confidence will be lost and the panic could quickly spread to other goods. If the silver market is broken, what else?
Well, welcome to 2026!
by Greg Hunter’s USAWatchdog.com,
Financial writer and precious metals expert Bill Holter (aka Mr. Gold) has been sounding the alarm of the profound risk in the financial system.
At the beginning of December, Mr. Gold warned about the record setting silver prices and said, “It’s pretty clear and pretty obvious that something behind the scenes is breaking.”
What is “breaking” is the extremely leveraged futures markets with not enough physical silver to deliver.
Fast forward to the end of the month, and new record highs in gold and silver are happening every day. Mr. Gold says,
“They are gobbling up all the supply available because they understand this is the end of the fiat currency experiment that started August 15 of 1971. Fiats are collapsing.
This is the Hunt brothers on steroids because you have the entire world buying physical. The Hunt brothers got into trouble because they were buying paper contracts, and COMEX changed the rules. COMEX can change any rules they want . . . it won’t matter because the rest of the world is buying cash and carry . . . they will not accept paper contracts. They want real physical metal.”
Here is where it gets both interesting and dangerous. What happens if the short sellers cannot deliver the silver promised? Mr. Gold says,
“People say if they can’t deliver, and I am going to tell you at some point they will not be able to deliver, when that moment happens, it’s game over for the entire financial system. Silver, and I believe it will be silver that fails to deliver, silver is the blasting cap to the gold nuclear bomb. When silver fails to deliver, then immediately there will be a pile into COMEX gold, and they will not be able to deliver the gold. Once that happens, you have failures of contracts that are proven fraudulent. They are zeroed out and cannot perform. Then it spreads to cattle, pork bellies, grains and you name it. This is not to mention the financials of stocks and bonds. Once you prove fraud in silver, that’s going to spread to all the derivatives, and we will have a derivative meltdown. . .. The world wants gold and silver because those are the only two monies that cannot default.”
What you are seeing in the gold and silver markets now is far from a top. This is just getting started. Mr. Gold says,
“These contracts are a zero-sum game. There is a winner and a loser. If the loser loses so big that they go belly up, then the winner becomes a loser because they can’t get paid. That is the problem. . .. When this actually hits and there is a failure to deliver, gold and silver will be wiped off the shelves, and there will be none to be bought. . .. This will be a run for safety, and fear is the greatest emotion there is. Fear is a far greater emotion than greed. . .. This is going to turn into a reverse bank run into gold and into silver because they cannot default in a world that is defaulting. . .. What you are witnessing is the end of trust. When you have the end of trust, the confidence breaks and credit is forthcoming only when there is trust. Once confidence breaks, the credit markets will begin to seize up. . .. When credit stops, it’s game over. You will see markets, institutions and stores shutter.”
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