My Very IMPORTANT MESSAGE to Gold & Silver Investors in 2025 - Rafi Farber

Summary

In this insightful discussion, Rafi Farber explores the current state of silver and gold markets, emphasizing the dwindling physical supply of silver and the growing demand for precious metals. Farber explains how the shift from London to the U.S. in gold and silver reserves could signal an impending supply shortage, which may push prices to unprecedented levels. He highlights the potential for a future silver squeeze, driven by structural flaws in the monetary system and a loss of faith in fiat currencies. Farber also discusses the implications of the declining trust in the U.S. dollar and its impact on gold prices, projecting a possible rise to $50,000 per ounce.

Takeaways

• 😀 The silver market is experiencing historic lows, with only 722 million ounces remaining, raising concerns about potential shortages.
• 😀 Silver ETFs hold 522 million ounces, most of which are stored in London, with only 198 million ounces available outside of these ETFs.
• 😀 A potential 'silver squeeze' could be triggered by structural flaws in the monetary system, rising industrial demand, and a shrinking physical supply.
• 😀 The gold-to-silver ratio might shift to 15:1, a historic standard, driven by increased demand and the diminishing physical supply of silver.
• 😀 Gold is increasingly being moved from London to New York, indicating a shift in the gold market and a potential disruption in supply chains.
• 😀 The London Bullion Market Association (LBMA) acts as an exchange network for transferring gold titles, with physical fulfillment taking place in Switzerland.
• 😀 Farber predicts gold prices could rise to $40,000 to $50,000 per ounce due to waning confidence in the US dollar and increasing global dollarization.
• 😀 The physical presence of gold at Fort Knox is less important than the market’s trust in the US dollar, which is increasingly in question.
• 😀 Speculative bets on the presence of gold in Fort Knox are unpredictable and should not be relied upon as a primary investment strategy.
• 😀 Investors should be aware of the rapid depletion of silver reserves, as the LBMA's silver float continues to shrink, indicating potential supply issues.
• 😀 Farber emphasizes that a loss of trust in fiat currencies, particularly the US dollar, is a more significant factor influencing gold and silver prices than any potential Fort Knox revelations.

Q & A

What is the significance of the low silver float mentioned in the transcript?

The low silver float refers to a significant decrease in the amount of silver available in the market. As of the latest data, silver stocks are at a historic low of 722 million ounces. This low supply could potentially lead to a silver shortage, which may impact prices and the market dynamics.

What role do silver ETFs play in the current silver market according to the transcript?

Silver ETFs hold a substantial portion of the total silver supply, with 522 million ounces of silver stored, mostly in London. These ETFs affect the availability of silver for physical market transactions, contributing to the lower silver float and possible supply shortages.

What is the concept of a 'silver squeeze' and how might it happen?

A silver squeeze refers to a situation where demand for physical silver outpaces supply, potentially due to panic buying or a loss of confidence in fiat currencies. Rafi Farber predicts this could happen naturally due to structural flaws in the monetary system and increased industrial demand for silver.

Why does Rafi Farber believe silver might reach a 15:1 ratio with gold?

Rafi Farber believes that the gold-to-silver ratio could return to its historic 15:1 value due to the natural scarcity of silver in a world where gold derivatives are no longer functioning effectively. In such a scenario, silver would need to be used more widely, making its value more comparable to gold.

How did the events of 1980 influence the silver market?

In 1980, the Hunt Brothers' stockpiling of silver led to a massive price surge, peaking at $49.95 per ounce. This event serves as a historical example of how silver supply disruptions can cause significant price spikes. Farber draws a parallel to the current silver market, suggesting a similar situation could arise due to dwindling silver stocks.

What is the connection between gold and silver moving from London to the United States?

Farber mentions that gold and silver are increasingly being moved from London to the United States, reflecting a shift in the global gold and silver markets. This could be part of a broader trend where physical precious metals are being stockpiled in the U.S. in response to growing geopolitical tensions and decreasing confidence in London-based exchanges.

What impact does the declining trust in the US dollar have on gold prices?

As trust in the US dollar declines, gold is seen as a hedge against inflation and economic instability. Farber predicts that gold prices could rise significantly, potentially reaching $40,000 to $50,000 per ounce, as more countries and investors move away from the dollar and seek stable assets like gold.

What does Farber mean by 'gold derivatives' and why is their absence important?

Gold derivatives refer to financial instruments that represent ownership of gold without the actual physical asset being exchanged. Farber suggests that the absence of such derivatives in the past created a more direct relationship between gold and its real-world value. He believes that in the absence of gold derivatives, silver would naturally become more valuable, potentially reaching a 15:1 ratio with gold.

What does Farber say about Fort Knox and its role in gold prices?

Farber argues that whether or not gold exists at Fort Knox won't have a significant impact on gold prices. The true driver of rising gold prices is the decline in trust in the US dollar. Regardless of Fort Knox's gold reserves, the value of gold is likely to increase as the dollar loses its reputation.

Why does Farber caution against betting on specific events like a Fort Knox gold discovery?

Farber warns that betting on events like the discovery of gold at Fort Knox is highly speculative and unpredictable. He suggests that it’s not worth placing large bets on such events, as the value of gold is more likely to rise due to broader economic trends, such as the loss of confidence in the US dollar.