It's OFFICIAL: Russia & China Just Killed The LBMA

Summary

In a game-changing shift, the LBMA's 300-year reign over precious metals pricing is collapsing. Russia and China, through strategic acquisitions and the creation of the Moscow World Standard (MWS), have undermined the Western-dominated market, draining silver inventories and disrupting global pricing mechanisms. As silver demand skyrockets due to industrial uses, the LBMA faces a crisis with soaring lease rates and physical shortages. By 2026, the MWS is poised to dominate, potentially shifting the global financial landscape away from dollar hegemony and creating a new system based on gold-backed currencies and real metal trading.

Takeaways

• 😀 The LBMA (London Bullion Market Association) held the dominant position in the precious metals market for over 300 years but is now facing a collapse due to physical supply shortages of silver and gold.
• 😀 In October 2025, silver lease rates skyrocketed to over 100% annually, indicating a severe shortage of physical silver in London, which was further exacerbated by systemic withdrawals of silver.
• 😀 The physical silver inventory in London has plummeted by 50%, from over 300 million ounces in previous years to just 155 million ounces by September 2025, enough to cover only six weeks of global demand.
• 😀 China and Russia have executed a strategic economic plan over the last decade, draining London’s physical silver supply and establishing the Moscow World Standard (MWS), a new pricing mechanism that bypasses the Western-dominated LBMA system.
• 😀 In 2025, China’s silver demand surged due to their massive growth in solar panel production, electric vehicle manufacturing, and other industrial uses, creating a significant global supply shortage.
• 😀 The MWS system, backed by Russia and BRICS countries, trades only physical metal, which could destroy the LBMA’s leverage-based pricing system built on paper contracts and leverage, leading to a global shift in precious metals pricing.
• 😀 Russia and China’s strategic use of silver and gold, alongside their efforts to create a new financial system, could potentially lead to a massive devaluation of the US dollar and a shift toward commodities-based currencies within BRICS countries.
• 😀 Industrial demand for silver is exploding, with solar panels, electric vehicles, and 5G technologies driving this demand, but silver mining has not been able to keep up due to supply constraints and long development timelines for new mines.
• 😀 Silver ETFs and futures are increasingly under pressure, as paper contracts far exceed the physical silver supply, leading to potential market chaos if these ETFs fail to deliver physical metal, with major implications for investors holding unbacked contracts.
• 😀 The LBMA faces three dire options: defaulting on deliveries, switching to cash settlements (which would devalue its credibility), or allowing prices to skyrocket, further damaging industrial demand and triggering a shift to a two-tier market for silver and gold.
• 😀 By 2026, the LBMA is expected to collapse under pressure, with silver prices reaching $100 per ounce or more, and gold surpassing $5,000 per ounce as BRICS nations create an alternative global trading system that bypasses the US dollar.

Q & A

What triggered the crisis at the LBMA in late 2025?

The crisis was triggered by a combination of factors, including a massive physical silver shortage, exploding silver lease rates, and the draining of London’s precious metal inventories. This was exacerbated by increasing industrial demand from China and India, which strained the supply chain. Ultimately, the LBMA could not deliver physical metal to meet these demands, revealing cracks in the system.

Why did silver lease rates surge to 100% in October 2025?

The surge to 100% annualized lease rates was a result of severe physical metal shortages. Traders needed to borrow silver to settle their obligations, pushing the cost of borrowing silver to extreme levels. This spike was a signal of a market under stress, unable to provide the required physical delivery.

How does backwardation in the silver market indicate a crisis?

Backwardation occurs when the spot price for immediate delivery is higher than the futures price, signaling a shortage of available physical metal. This is often considered a sign of panic in markets, as buyers are willing to pay more for metal they can receive now, indicating a lack of trust in future deliveries.

What role did China and Russia play in the collapse of the LBMA's control over the precious metals market?

China and Russia played pivotal roles in the LBMA's downfall. China aggressively accumulated physical silver for its industrial needs, particularly in solar panels and electric vehicles, draining global inventories. Russia, in turn, backed a new trading system called the Moscow World Standard (MWS) to bypass the LBMA’s fractional reserve system and establish a new pricing mechanism for precious metals.

What is the Moscow World Standard (MWS) and how does it challenge the LBMA?

The MWS is a proposed new precious metals trading and pricing system, backed by Russia and its Eurasian allies, including the BRICS nations. Unlike the LBMA, which operates on fractional reserves (where more paper claims exist than actual physical metal), the MWS will only trade physical metal, with no leverage or paper contracts, thereby promoting true price discovery based on real supply and demand.

What impact does the decline of the LBMA have on the global financial system?

The decline of the LBMA marks a fundamental shift away from the dollar-based financial system that has existed since Bretton Woods in 1944. The LBMA’s fall represents the collapse of Western financial hegemony, with BRICS nations using precious metals to back an alternative financial system that could challenge the dominance of the US dollar in global trade.

What are the potential consequences if the LBMA defaults on its delivery obligations?

If the LBMA defaults on delivery, it would likely trigger a legal and financial crisis, with claims flooding in from clients and counterparties. It could lead to force majeure declarations, and potentially the suspension of the LBMA market itself, similar to the nickel market crisis in 2022. This would cause massive disruptions in the global precious metals market.

Why is silver considered more vulnerable than gold in this crisis?

Silver is more vulnerable than gold due to its high industrial demand, which accounts for 60% of total consumption. Unlike gold, which is mostly stored as an investment asset, silver is consumed in large quantities in industries like solar energy, electric vehicles, and electronics. With the supply of silver already constrained, the increasing industrial demand exacerbates the shortage.

What are the implications of the BRICS nations controlling 62% of the world’s precious metals production?

The control of 62% of the world’s precious metals production by BRICS nations places them in a dominant position to dictate global pricing, especially through the MWS. This concentration of production power gives them the ability to bypass the LBMA and Western financial systems, weakening the role of the dollar in international trade and potentially leading to a major shift in global economic dynamics.

What can investors do to protect themselves in light of these developments?

Investors should consider shifting away from paper claims like silver ETFs or futures contracts, which may not be backed by physical metal. Instead, converting to physical precious metals or allocated storage is recommended. With premiums for physical metal likely to rise, securing long-term supply contracts could be important for industries relying on silver.