SPECIAL REPORT: Silver Price Explodes Above $50/oz -- Is It Too Late To Buy In? | Andy Schectman

**SPEAKER_1** (0:03)
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**Adam Taggart** (0:30)
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**Adam Taggart** (0:45)
All right, we should be live. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host. We're here for a special report this morning in this morning's live stream, folks. We're going to be talking about the explosion in price that's happened in Sober. And I can't think of anybody to discuss that who would be better than Andy Schectman, who's joining me now. Andy is joining us from outside the US. He is taking time from a trip abroad to do this live stream with us. So Andy, I can't thank you enough.

**Andy Schectman** (1:15)
Pleasure's mine, Adam. Glad I can be here. Thanks for having me, buddy.

**Adam Taggart** (1:18)
Thank you. Thank you. Well, it's sort of Murphy's Law, right? You hop on a plane to lead the country and then you have, you know, probably one of the most notable weeks in silver ever. Why don't we start with this? You have been in this business for a long time, Andy. What's your perspective on what we're seeing right now in the silver market?
Is there precedent for this or are we kind of in new territory here?

**Andy Schectman** (1:44)
I've never seen anything like this. This is the term that everyone keeps throwing around is the word backwardation. Backwardation is an environment that shows extreme delivery stress. It's unprecedented. This isn't just volatility in my mind. It's the market exposing the shortages of physical silver, the frailty of the paper promises.
This is something that I think is just beginning. And there's just far more demand for physical silver than there is the availability. And the paper system is beginning to show great strains. People have accepted paper promises for a very long time. And I think that's coming to an end. And look, this is decisively, decisively bullish for silver and other precious metals. But I think it's beginning to show that the paper promises that this whole western system has been based upon is starting to break.

**Adam Taggart** (2:45)
Okay, so paper promises. So we've heard the term over the years, those of us who have followed the precious metals sector, of rehypothecation, which is that there may be a silver bar there in a vault, but potentially it has been promised to more than one party. And it's fine if only one party at a time asks for it. But if you get multiple parties trying to exert their claim on it, all of a sudden people realize, hey, wait a minute, these bars have been promised to too many people. Is that the type of situation that we're discovering we're in right now?

**Andy Schectman** (3:23)
Yeah, like for example, in London, they have 140 million ounce float, yet they're trading 600 million ounces a day in contracts that technically are deliverable. What could possibly go wrong? There's over 2 billion ounces in paper claims out there on a float of 140 million ounces. So that's exactly what it is. It's a situation where the paper promises this rehypothecation is being called on the map. And you can see that. Look, for example, the lease rate in silver in London, when you lease silver in London, it would be something like you want to short a contract, you want to short the price of silver, but you don't have the metal. So you have to borrow metal through leasing it in order to deliver the metal to short drive down the price. Normally, that lease rate is somewhere in the neighborhood of a half a percent or one percent in in October. It's jumped up over 39 percent to over 39 percent. And at the same time, we've seen silver rise since August when the lease rate was at about one percent or so, up to $53 or so, you see the price rising, the lease rates rising. We're seeing the exact same thing in platinum. But but it's a situation where right now you have the spot market trading well above the futures price. In other words, buyers are very desperate for immediate delivery. And it's very rare to see this, Adam, in silver.