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The dollar goes up. Real cost of the debt goes up. Guess what they sell? They sell the n trillion dollars of treasuries. Yields go up. Dollar goes up. A ho. They got to sell more. Sell more treasuries. Yields go up. Yields go up. Global economy goes down. US receipts go down. US interest expense goes up.
US deficit goes up. US issuance goes up. US issuance goes up. US Treasury supply goes up, US rates go up. Wash, rinse, repeat. You'll get a dollar up, rates up, stocks down, housing down, US economy down, vicious cycle until either you get a US and Western and global economic collapse, or somebody comes in and injects dollar liquidity.
The last survivor would be gold, full stop. And if they let it go all the way down into the ground, so to speak, at 500 m per hour, it'll the people with gold will rebuild it and gold will be the collateral on the other side of it. So Gazluke Groman, an analyst who closely follows global markets and precious metals, sees silver facing an important test as prices struggle to move decisively higher.
Silver has been trading around the $60 level which has provided support while the broader demand zone between $55 and $60 remains an important area to watch. However, each rebound has so far reached a lower peak, suggesting that buyers have yet to establish strong upward momentum. For investors, the next move may depend heavily on interest rates.
Although US 10-year Treasury yields have eased from around five 35% to approximately five to 23% in the period discussed, silver may need a sustained dot daine in yields before it can build a stronger rally. Because silver does not generate interest income, higher rates can make it less attractive compared with yieldbearing investments, putting pressure on prices even when long-term demand remains encouraging.
The challenge for silver is that interest rates are being influenced by energy prices and ongoing uncertainty in the Middle East. Concerns about energy supplies can fuel inflation fears. potentially keeping borrowing costs elevated and limiting the recovery in precious metals. Groman's analysis highlights why investors should watch both the price chart and the broader economic picture rather than focusing on silver's industrial potential alone.
If yields continue moving lower, silver could gain room to recover and challenge higher price levels. However, if rates rise again and silver breaks below the $55 support area, the market could face renewed selling pressure. Let's now take a closer look at Groman's analysis and what these developments could mean for silver and the broader financial markets ahead.
If you're finding this video valuable, don't forget to like, subscribe, and stay tuned for more important market insights. Over the last past month or so, you've noted in your FFT reports you've been buying silver. This is the first time in years since you sold a heap of silver. Why are you saying that?
Had a couple questions around silver. Thank you for noticing. Uh number one, the price has come down a lot uh in the 60s. I think it's interesting. I think it traded below 60 today actually. Uh I've been reading a couple times in the last 6 to9 months about um EV, solar, other electric demand on silver and it seems to be very secularly bullish.
And then I think the thing that has really pushed me over the edge uh in terms of mentioning it in the reports and you always want to be careful with your own experience, but you also don't want to discount your own experience. Um is uh I just got new solar panels and new Sega energy batteries. Um and then a birectional charger uh for my EV.
And the solar panels are much more. All those things have silver in them much more. The solar panels are much more efficient than my old ones. Um so much so we just got our first month done. The batteries are really very much a gamecher. So the solar panels charge, they will fill the battery. They'll fill the car first.
They'll fill the battery second. Then the sun goes down. The batteries will run my house through the night. Sun comes back up. And if I haven't used the car, then automated solar be the solar panels, refill the batteries, wash, rinse, repeat. So, we get a much more efficient use. And I'm here in Cleveland, Ohio, right?
We're not in like the solar capital of the world uh in terms of latitude. So, uh in September, my solar panels generated thousand kilowatt hours in Cleveland, Ohio. All right. right now on my cost assuming a 12 to 14 cent kilowatt hour that's got like a 15 to 20% annualized return maybe more uh I've got to see through the rest of the year I'm making some assumptions assumptions I'm not going to get a lot of sun in February March and then I'm going to get a lot of sun March April through August so it's very pos but but 15 to 20% is uh probably pretty safe.
That's what I I That's a That's a real When you talk about an inflation hedge bond, that's just an inflation hedge bond. That's all it is. Because guess what? They're smacking all these data centers. N around me everywhere. My electricity costs are going up. They're going to continue to go up. So that return is going to go to continue to go up.
And so all of that stuff has silver in it. And so if I'm experiencing this math and I'm I'm blown away by like, holy cow, I put these solar panels up, put this battery in, I got an EV, I'm driving for free, and I'm getting a 15 to 20% return on the on the battery battery solar directional charger. I'm not going to be the only guy in the world doing it.
Especially you get into Southeast Asia and local that are much more conducive to generating much higher rates of return on the electricity. Uh I just think that without having done all the the the due diligence on it, whatever people are thinking for solar battery demand for silver, I'd probably take the over.
Uh and and in the meantime, silver's down from whatever 100 plus bucks down to 60. So that's that's the thought process. All right. From AB1 specific account on X keeps saying Bessant will weaponize the dollar causing it to strengthen and screw everyone. Firstly, is it plausible? Secondly, what would be the repercussions?
Thank you. Uh is it plausible? Of course, yes, it's very much plausible. Um, Bessant or Wars could certainly do that. Is it plausible? It would be the equivalent of Bessant giving himself a root canal with a shotgun. It would absolutely take care of the toothache. It would also be fatal and it would be fatal to the US and western and global economies and US markets.
uh anything that drives dollar above, I guess based on what we've seen in the last couple weeks above 101 on the Dixie, it's going to trigger a chaotic unwind of the US's net international investment position. Foreigners own $22 trillion net here. They have 13 to 14 trillion in dollar denominated debt.
The dollar goes up. Real cost of the debt goes up. Guess what they sell? They [snorts] sell the $9.5 trillion dollar of treasuries. Yields go up. Dollar goes up. Uh-oh. They got to sell more. Sell more treasuries. Yields go up. Yields go up. Global economy goes down. US receipts go down. US interest expense goes up.
US deficit goes up. US issuance goes up. US issuance goes up. US Treasury supply goes up. US rates go up. Wash, rinse, repeat. You will get a dollar up, rates up, stocks down, housing down, US economy down, vicious cycle until either you get a US and Western and global economic collapse or somebody comes in and injects dollar liquidity.
The last survivor would be gold. Full stop. And if they let it go all the way down into the ground, so to speak, at 500 miles an hour, it'll the the the people with gold will rebuild it and gold will be the collateral on the other side of it. So, the global balance of power is shifting and Luke Groman believes China's control over critical supply chains could give it significant leverage over the United States in future economic and geopolitical confrontations.
He draws a comparison with the historical trade relationship between China and Britain when Chinese exports such as tea, silk, and porcelain created demand for payment in silver. Today, however, China's influence extends far beyond trade in consumer goods with its position in rare earth materials and essential manufacturing components, creating strategic dependencies for Western economies.
This could make it far more difficult for Washington to confront Beijing without risking disruption to its own industries and defense capabilities. Groman also argues that the West should pay closer attention to the historical lessons China has drawn from its past, particularly when it comes to protecting domestic industries and reducing strategic vulnerabilities.
He contrasts China's efforts to strengthen its industrial position with challenges facing Western economies, including de-industrialization, dependence on foreign supply chains, and domestic social problems. If China continues using its position in critical materials and manufacturing to strengthen its negotiating power, the United States and its allies may face growing pressure to rebuild domestic potection and secure alternative sources of supply that China is doing to the US.
Gold for a real rare earth exports. what China did to the UK back then where China demanded that uh the UK pay in silver even some gold for tea porcelain other exports silk etc implies leverage for China yet China went through a century of humiliation not England why different this time I would say how did England do that uh real politic got China hooked on opium and then they militarily fe defeated the Chinese uh The Chinese, I think there's a phrase in China, you know, says something along the lines of, "We invented gunpowder uh and we used it for fireworks and the British and the West used it for for rifles and cannons.
It's for firearms." And that's how that happened uh to be flip and blunt and and you know smooth over something that was greatly unpleasant. How does that compare to today? Well, and why is it different this time? China now makes critical parts of the US military. The US military can't go to war without China.
Uh I strongly suspect that that historical experience has a lot to do with the reason why drug dealing is a capital offense in China and across most of Southeast Asia or much of Southeast Asia. Uh so they don't play around when it comes to that stuff. And I think the historical uh record is why China also does not have wide open borders.
Um and so when you sort of look at it on those measures now versus then, you know, who looks like much more susceptible to a century of humiliation, you know, where where are we seeing the opiate problems now? Where are we seeing the fentinel problems now? Where are we seeing the de-industrialization now?
Where are we seeing the wide open borders now? It's the west, isn't it? So, so, so Japan every year has a bunch more dollars coming in. We don't. Every year we need to find more creditors to finance more and more bond buyers to finance that year's consumption. Okay, that's reason number two. Reason number three, Japan's [snorts] net international investment position is positive 60% plus of GDP.
Ours is negative 80% plus of GDP. Plain speak, Japan has a giant offshore piggy bank that push comes to shove. They can sell US stocks, US bonds, etc. to finance their issues. America, there is no piggy bank. The piggy bank is the Fed's printing press. That's it. Reason number four, we provide and have historically provided a lot of Japan's defense costs.
They don't have to provide for it. We do. We have to provide our own too. That's also a big difference. And the reason number five, that is not a you know number one a lot of our military we we we we have substantial military presence in Japan. And so that is real politic that is a negotiating piece of leverage.
And then reason number six, the Japanese are very ethnically homogeneous and they have a culture that is thousands of years old that looks out for it's very unique. It's it's very beautiful. It looks out for the for the commons for the commons of the people for the commons of of of the of the country.
And to me perhaps the most uh um typical or best example of this is watch what happens at the end of a Japanese baseball game. You know baseball game in Japan. The people clean up the stadium after themselves. Can you imagine that happening in America? Go to an NFL game. You think any of those guys are going to clean up after themselves in the stands?
I would be shocked. I'd be shocked. not going to happen. US heterogeneous culture uh and a culture of you know looking out for number one of not worrying about the commons um before ourselves and that's just our culture and it's not a judgment it's just a fact. So uh that's those are five or six reasons why there is zero chance that the US can do what the Japanese did and kick the can for 10 years much less 30 years from JC.
There's no denying that silver could be approaching one of the most consequential turning points in its history. And the next major move might surprise even experienced investors. As global powers compete for control over critical resources, supply chains face growing uncertainty and demand for silver continues to be driven by solar energy, electric vehicles, and advanced electronics.
Pressure on the physical market could intensify. If industrial consumption continues to outpace available supply while investment demand begins rising, silver might experience a powerful rally that catches many investors offguard. But the road higher may not be smooth as a stronger US dollar, elevated interest rates, or a sudden slowdown in economic activity that could trigger sharp corrections along the way.
The bigger possibility is that silver could eventually outperform gold if tightening physical supply, expanding industrial demand, and renewed investor interests converge at the same time. Could this combination push silver toward prices that seem unimaginable today? Or will the market experience another major shakeout before its next sustained advance?
Share your thoughts in the comments. Make sure to like this video, subscribe to the channel, and let us know how you're positioning your investments for what could come next.
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