➡ The article discusses the concept of silver backwardation, which is a sign of a silver shortage and could indicate the end of the monetary system. It explains that settlement prices, which are volume-weighted, help calculate the margin a client needs to maintain their position. The article warns readers to be cautious and not to panic buy silver, as it’s not yet in backwardation. It also suggests keeping an eye on settlement prices and maintaining liquidity to avoid getting caught in a potentially dangerous game led by those with the power to manipulate the system.

Why is London Spot more expensive than New York Futures? Uh, it’s because the supply in New York is extremely high and it’s coming from London. 50,000! 50 going once, twice. 75,000. 100,000. 300,000. 500. A million. Two. Six. Fourteen. I’ll bid 23 million. One gillion dollars. Sir, that’s not a number. In that case, 50 million. Up to 50! Hey guys, Raf here from The Endgame Investor and this video is kind of important. So I’m going to clarify something that Silver Stackers should really know about, especially if you follow the silver markets and you’re kind of obsessed with the price.

As we all are at this point, it’s not good to be obsessed all the time, but I understand that when it crosses 50, things get a little bit intense. There is a lot of stuff being said about backwardation, silver and backwardation. I’m here to clarify what exactly that means. And my take is, and I will show you this with the evidence, that silver is not currently in backwardation. There is backwardation between London and New York prices. There is backwardation, therefore, in the spot market, which is London, and the futures prices, which is in New York.

But that is not exactly uncommon. I’ll show you the graphs why it’s not uncommon. It’s actually pretty common. It’s extreme right now because of a certain situation in London versus a different situation in New York. But silver is not really in backwardation, even though technically it is if you count London minus New York. But in New York itself, it’s not in backwardation. It’s still in cantango. And this is important because if you start getting obsessed with those silvers in backwardation, then you take all your dollars and you pour them into silver right now, thinking that it’s going to go straight to the moon.

Right now, I’m going to break right through 50, which it might happen. You have to be prepared for that. But I wouldn’t necessarily count on silver just climbing hundreds of dollars a day now because backwardation, the backwardation is not exactly happening. And here’s why. The simple proof of that is that you can still get silver at coin shops industry can still get silver if they need industry for manufacturing or whatever they’re manufacturing. They need silver. So what is actually going on when silver is really in backwardation? Then we could say that the end game is imminent and silver prices will keep jumping every single day without stopping.

And the dollar is dying in the monetary system is having its final painful, peaceful, whatever death. But not yet. In the meantime, you can still get silver at Miles Franklin because it’s not in shortage. You can still get it. Therefore, it’s not in backwardation. And you can take your silver and you can put it in a dirty man safe using code endgame10 at checkout. See the link in the description below. Endgame10 for 10% off the dirty man safe and get your silver, your junk silver now at Miles Franklin. Link in the description below.

And here are the slides. Okay, so this is actually pretty straightforward. First of all, the people that are saying that they’re back, there’s backwardation in the silver market. They are right that there is heavy interest in spot right now. This is the CME table for silver futures that start in October. Technically, October is spot because it’s delivery for immediate delivery, immediate delivery October. If you buy an October contract, you can get delivery immediately depending on what number is called if you own the contract. But you can see here that this is from yesterday, October 9th, which was my birthday.

By the way, the silver hit $50 on my birthday. Happy birthday to me. Woo hoo. And we have here October 2025 1344 contracts were added to the open interest here. Whereas 1471 were taken away were removed from the open interest were closed out in December. So there is a shrinkage of open interest in the futures contract for December, which is the currently active futures contract and an increase of almost the same amount in the October spot contract. So yes, there is heavy interest in the October spot contract in New York. But still, that does not mean there’s backwardation.

But you can also see here that there is heavy physical interest in deliveries in in the October contract. You can see here that 1427 deliveries were made on October 9th. That is more than any other day this month, excluding first notice day, which was September 29th when we had 2033. This isn’t an active silver contract. This is only it’s not a front month meeting, but there is. Yes, they’re right that there is heavy interest in physical delivery for the spot contract in New York. But while we see that silver is back over 50, we hit 50 over here to an all time high of a 51 something.

This is the London the spot contract. This is not New York. And we here hit 51 again. And now we fell back to 4840. And now we’re back over 50. Things are getting really, really volatile because the monetary system is being torn apart at the seams. But what is going on? It’s when we’re talking about backwardation in terms of New York minus London. And if it’s negative, that not it’s not exactly rare. You can see here if we look at this bottom graph in the in the gold charts or us graph here of the near month minus the spot spot means London near month means near month in New York.

You can see that very often it’s below zero. So technically, as they are counting, this is backwardation. Technically, you could call it that. But it happens very often. It’s almost a mirror image. It’s not rare. And it’s happening again. You have negative two spread between the London, which is more expensive in the New York, which is cheaper. So you’re saying, oh, the spot is more expensive than futures. Not OK, fine, but not a big deal. So what is causing this? And you can see here when we zoom in just for the last five years, you can see this happens not all the time.

Right. And this is pretty extreme. It is extreme. This is not nothing, but it’s still not backwardation. You can see the last time this happened was in 2023. It happened in 2024 also. And now it’s happening now the same extent as 2023. That spot silver in London is more expensive than the nearest future in New York. It happens, but it’s not rare. So why is this happening? Well, very simple explanation for that. Why is London spot more expensive than New York futures? It’s because the supply in New York is extremely high. And it’s coming from London and other places.

So you see here that the supply of eligible silver. This is eligible silver. It’s not for sale, but it is in storage. It’s at an all time high of 339.61 million ounces. And you have the registered silver, which is also right near an all time high. The all time high was 200 million ounces. Now it’s 186 million ounces. This is all time high of both eligible and registered silver for sale in New York. So the supplies of silver in New York are very, very high. And the ETFs are mostly not stored in New York. They are stored in London.

And that is what’s causing the shortage in London. You can see here, the number here is 790 million ounces. The total is not the float. And a lot of that is owned by SLV ETF and other ETFs that the silver sits there in London. And you can see last year, the float was higher. It was above 800 million ounces because this is thousands of ounces. It was above 800 million ounces. And now it’s below 800 million ounces. And the ETFs, even though they haven’t come anywhere close to where they were in terms of silver storage during silver squeeze, they are higher than they were last year.

So you have a severe shortage of silver specifically in London, which is where the spot price is more expensive in London and cheaper in New York. But this is not backwardation. What is backwardation? You see here, this is a Contango chart. These are silver prices just strictly in New York. October is here. And it’s at 46 from yesterday, two days ago. So the price is a little bit off. But you can see here, it goes to $52 from July 2030. And this is the cash price in London over here. So you can see this is a Contango chart.

What would backwardation look like? It would look like this. I just took the chart and I flipped it. You can see this is why the letters are backwards. But if everything was the same here and this is what the chart looked like and forget about this cash bar, this would be backwardation. We are not there yet. But this sometimes happens in the oil market. It sometimes happens in the gasoline market. It sometimes happens in wheat. Very rarely does it ever happen in silver. When it does, that’ll be the end game. We’re not there yet.

In a table, this is what it would look like backwardation. This is a settlement price. This is what I put the black rectangle around. So you can see the settlement price for October silver, November silver, December silver. Settlement price simply means that it’s a volume-weighted price. And these need to be calculated because it helps the CME calculate how much margin a client needs to have in his account to maintain his position. And that is based on a settlement price. It’s volume-weighted. So if most of the volume is around, let’s say, 47 and some volume, and a little bit of volume is around 42, 43, I’m just giving an example, then the volume-weighted average of the price for that day’s settlement would be whatever this is.

And these prices going up as the expiration gets older and older. Sorry, newer and newer, whatever. Into the future. More into the future and more into the future. You can see a $56.85 gets higher, $46.97, $47.15, $47.36. It gets higher as we go into the future. That is contango, not backwardation. When this flips, we’ll be in silver backwardation. That would be a sign of near-end game. So here we have a chart from Monetary Metals from Keith Wiener. He is the expert in gold and silver backwardation. His entire thesis is that permanent gold backwardation, which will also be permanent silver backwardation, will be the end of the monetary system.

So that means, by these charts, the co-basis. The co-basis is the amount of money you get to disgorge silver, which means that is backwardation. You should get money to hoard silver, which means there is an excess of silver. But if you get money to disgorge silver, that means there’s a silver shortage. And we can see here that this red line, it’s not above zero yet. It’s going higher. It’s getting closer to backwardation, but it’s still below the 0% mark over here. So when this red line goes above zero, that is a silver shortage.

That is silver backwardation. It happened in 1998. I think this was the Asian financial crisis or something. It happened in 2003. It happened very briefly in 2011 during the silver spike. But it has not happened yet. Now, it should be monitored, but the silver co-basis is still negative, which means you still get money to hoard silver and not disgorge it. So if we look at another chart, which is the same thing, but a different way of counting it, you can see here, this is the same chart from gold charts or us.

This is the silver co-basis. It’s not called that here, but that’s what it is. When it goes below zero, that is backwardation. So we had backwardation in what year is this? This is 1976, 1977, 1978. Yeah, early 1978, we had silver backwardation and that eventually led to the silver spike of 1982 years later. And we had brief backwardation here. You can see the 1998 backwardation during the Asian financial crisis. You can see very briefly in 2003, that’s the line we saw back here on this chart. If you look at 2003 and you zoom in a little bit, you can see that this is the spike.

This is the spike in 2003. This is the spike in 1998. And you can see those same spikes in the opposite direction because it’s the inverse in 1998 and 2003 over here. And it happened briefly in 2021. This is silver squeeze right here at the beginning of 2021, slight silver backwardation. But here, that’s not what’s happening now. So I know this is a lot of material taken very fast and I’m speaking fast because I don’t know why. It’s Shabbos Cholimo at Circus tonight, so I got to do this quickly.

And yeah, basically why I think this is important, why you got to be careful here is not to follow the hype of silvers and backwardation. We’ve got to buy all silver right now. Stay calm. Wall Street or whoever is in charge of the COMEX and all those other people that don’t want the monetary system to break down, they’re waiting for everyone to get in the wrong side or not necessarily the wrong side, but they’re all waiting for everyone to load up as much as they can in a panic before there actually is a panic.

And then they’re looking to fleece us. So just be careful. Don’t get too hyped up yet. I know silver’s past 50. Let’s see what it does now. Stay cautious. Have your silver but also have your liquidity so that you don’t get caught in this dangerous game that is still being led by banksters and all those other people that have a lot of dollars to manipulate the system. Just be careful here. Silver’s not in backwardation yet, but it’s going to be. When it does, I will report it. Look at the settlement prices in New York and get your silver at Miles Franklin.

Get your dirty man safe down below. Use code endgame10 at checkout and check out Keith Wiener and Monetary Metals if you want to earn interest in gold and silver terms on your gold and silver. Link in the description below. Check it all out there. [tr:trw].

See more of Rafi Farber on their Public Channel and the MPN Rafi Farber channel.