JPM owns 100,000,000 ounces of silver
JPM has sold 5,000,000,000 ounces in paper silver
If the price of physical silver gets driven up lets say 10$.
That means JPM's physical holding is worth 1 billion.
OMG YOU RETARDS ARE MAKING JPM MONEY!!
STOP BUYING SILVER!!
Guess what smoothbrain?
Their 5b in paper ounces now makes JPM liable to pay out 50,000,000,000
Yes that 50 billion dollars now JPM has to pay out of people redeem their paper silver.
Now imagine the whole market. Think that there are 500billion ounces of PAPER silver.
If the prices goes up 10$ 50% of the banks owe more money in paper silver than they are worth
If prices hit 50$ EVERY SINGLE BANK IS INSOLVENT.
Edit This is by no means an instruction manual to crush everyones 401ks, pensions, the whole thing. This is by no means a way the people could pull the veil off the final system and see whats really under neath. My favorite flavor is Blue crayon. This is more a warning I guess. That people need to have physical assets on HAND. Because this is how FUCKED UP AND CORRUPT our market is.
Also I dont know JPM's current paper silver sales. Last I saw they have 110 million ounces.
In 2014 bloomberg reported that the banks had leveraged the paper silver 250:1 of physical.
So grandscale is that there are 500-750 billion ounces of paper silver.
Silver goes up 10$ who the fuck is covering the bill on paper silver?
No they don't. Buying up the physical silver will make it impossible for the banks to pay back the artificial (paper) capital they owe to their account holders. Inevitably, this will lead to the crash of the paper currency which is basically an I.O.U. for a specific quantity of silver.
So if you blow your cash on the paper I.O.U. you'll be SOL when there's not enough physical silver left to reimburse you and thus the paper effectively becomes useless. The physical silver you buy, however, will not only continue to hold value, but will INCREASE in value due to demand outpacing supply.
It's easier to understand if you think of a static quantity of silver (say, one ounce) being like a tangible, more digestible analogue for a share of company stock. Shares of stock are effectively an entitlement to a certain quantity (a percentage, in an ideal market) of a company's capital, kind of like how paper silver is a certificate entitling you to a specific quantity (a number of ounces) of silver.
The problem with JPM (and banks) is that there are more bills in circulation than there are ounces of silver in its coffers. Potentially 90% more bills than ounces. This is why you buy physical silver instead of paper; so that when the 10% of physical silver runs out, you arent screwed out of your money like the 90% of people who opted for paper instead.
Unfortunately that's not how paper silver works. Most of it out there cannot be redeemed for physical silver, it only trades at silver prices.
It can be redeemed for cash, though.. so if the price of physical is high and paper holders all cash out at the same time, then it's def a thing to be reckoned with. Banks will need to raise cash by closing long positions, selling bullion, or straight up default on the paper.
Defaulting on the paper is the direct concern that should dissuade you from buying it when you can purchase physical silver instead. The metal will retain value when the paper becomes worthless.