John Rubino is a former Wall Street financial analyst and author or co-author of five books, including The Money Bubble: What to Do Before It Pops and Clean Money: Picking Winners in the Green-Tech Boom. He founded the popular financial website DollarCollapse.com in 2004, sold it in 2022, and now publishes John Rubino’s Substack newsletter.
Silver is in the news lately, as it smashes old records and (apparently) wreaks havoc in metals exchanges.
But, as usual in global finance, many of the details range from technical to incomprehensible. So here’s an article from Katusa Research that explains some of silver’s recent action and why it’s every bit as bullish as it sounds.
If you tried to trade silver last Thursday night, you saw something terrifying.
Nothing.
For 11 agonizing hours, the CME Group (the world’s largest derivatives exchange) went dark. Gold, oil, Treasury bonds, and crucially, Silver… all frozen.
The “official” story will tell you it was a cooling system failure at the CyrusOne data center in Chicago.
Maybe that’s true.
But in my 20 years in this business, I’ve learned that there are no coincidences when money this big is on the line.
Because the moment the screens flickered back on Friday morning… Silver violently repriced to a new all-time high above $55.
The reaction was the story. The system blinked and when it opened its eyes, the truth was staring it in the face.
We are witnessing a market that is primed to break on contact. The paper market is glitching because the physical reality underneath is shifting tectonically.
Here is what’s happening.
The “China Drain” is Real
While Western traders were staring at blank screens in Chicago, the real alarm bells were ringing in Shanghai well before that.
For the last year, we have tracked a massive migration of physical metal from West to East. But that flow reached a critical breaking point.
Shanghai silver inventories have just collapsed to decade lows.
Look at this chart. It is arguably the most important graphic in the commodities market right now:
The supply squeeze in China keeps tightening. This is critical because China is the epicenter of industrial demand.
When their warehouses go empty, they don’t just stop buying. They bid. And they bid high.
Now, you might have seen a conflicting headline recently. The London Bullion Market Association (LBMA) reported that London silver vaults actually rose by 6.8% in October to 26,255 tonnes.
The bears cheered. “See?” they said. “There is plenty of silver.”
They’re wrong. That inflow isn’t new mining supply.
It’s a reversal of the “London Squeeze,” where earlier tightness forced metal onto COMEX to plug holes, creating distortions. That metal was shuffled around to give the market breathing room, but it is not relief.
It’s a shell game. And the shells are running out.
The “London Loophole” is Closing
While the computers were down in Chicago, the real panic was happening 4,000 miles away in London.
The London Bullion Market Association (LBMA) vaults, which is the physical backstop for the entire global silver trade, are running on fumes.
We are seeing reports that silver lease rates (the cost to borrow physical metal) have spiked.
It looked like a dead heartbeat through 2024, barely above zero. They finally twitched in early 2025, stayed under 2% until June, then erupted to ~35% in October.
The spike cooled, but the pulse is rising again and pushing back toward 6%.
In plain English? There’s no metal left.
The bullion banks are desperate. They are scrambling to find bars to deliver against paper contracts. And for the first time in history, the physical owners aren’t selling. They’re hoarding.
The Electro Dollar Age and the AI Energy Vortex
Why is the metal disappearing?
It’s not just coins and bullion stackers. It’s a new, voracious beast we call the “AI Energy Complex.”
You already know about the solar boom. But here is what the mainstream financial press missed: AI Servers use significantly more silver than traditional servers.
According to data circulating from the Silver Institute and SMM (Shanghai Metals Market),
AI servers require 2 to 3 times more silver than standard servers due to higher power density and complex cooling connectors.
Every time Big Tech builds a new data center, they are locking away millions of ounces of silver into circuit boards and high-performance connectors.
We are in the Fifth Consecutive Year of a structural deficit.
Demand: Exploding (Solar + AI + EVs)
Supply: Flat (Mine production is stagnant between 810M – 830M oz)
Inventory: Critical (London is empty)
Silver Can’t Bank on the Banks’ Forecast
Earlier this year, the biggest banks on Wall Street told you to stay away.
J.P. Morgan predicted silver would average just $36 in 2025.
And HSBC had to scramble in October to raise their forecast to $44.50 for 2026.
They missed the fundamental shift. They looked at silver as just a “monetary metal” that moves with interest rates. They forgot that it is the indispensable metal of the digital age.
You cannot have ChatGPT, solar farms, or EV batteries without silver.
That CME “glitch” was a warning shot. We smashed through the psychological $50 barrier. $55 is the new reality and the ceiling just became unlimited.
Not to mention, the technicals in this market are starting to look incredibly “sexy”.
The “glitch” was the system blinking. The data shows the plumbing is under maximum stress.
STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio
delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.
