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Market Lab Report - Thoughts on the Silver "Squeeze"

The Reddit/Robinhood crowd appears to have developed an extreme sense of omnipotence that in my view is terribly misguided. The idea that they are going to force a short-squeeze in silver by running the $SLV and silver miners is absurd on its face, simply because there is no massive short interest in the traditional sense. What exists in reality is the fact that paper derivatives of precious exceed the available physical supplies of these metals. If these paper derivatives, essentially promises or options on the metals prices themselves, all had to make good on their promises to deliver physical, then you would not have a short-squeeze, but rather a run on silver.

Also, I doubt whether these Reddit/Robinhood types are going to force short-squeezes in miners, whether of silver or gold. because there simply isn't short interest like there was, for examples in something like GameStop (GME). This is all quite fascinating, but demonstrates, in my view, how ignorant this group of retail investors is in spite of their ability to drive moves in less-liquid situations. Remain objective here, because so far I've just been hitting these miners short at the open and poof, they came in immediately.

I would also note that if in fact we saw a run on physical metals, whether silver or gold, then these essentially paper derivatives like GLD, SLV, futures, etc. would likely collapse because my suspicion is that they don't have the goods to back up their alleged holdings.

Just another Manic Monday.


Gil Morales
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