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Who's Buying All The Silver - Physical Market Dominating | Andy Schectman

Liberty and Finance Jan 13, 2026

Summary

COMEX silver deliveries hit a record 100 million ounces in five weeks, exposing a paper-versus-physical split Andy Schectman says is unprecedented.

Refiners are being margin-called as silver climbs, forcing them to stop buying 90% silver coinage and pushing junk-silver premiums to unusual lows.

Schectman expects depressed junk-silver premiums to snap back once refiners work through the supply glut, calling the dislocation a temporary gift.

Lease rates spiked from under 1% to as high as 30%, while Shanghai keeps pricing metals above Western spot, both signaling physical-market leadership.

He cites the CFTC Bank Participation Report: US banks net long, non-US banks net short ~206 million ounces — a 'time bomb' if shorts fail.

Judy Shelton's takeaways

  • Top takeaway Andy attributes to Judy the proposal to peg the back end of the Treasury market to gold, which would let the dollar devalue further while keeping long-term interest rates near zero — though he cautions it would effectively mean giving away US gold reserves over time.

Andy Schectman's takeaways

  • Top takeaway Andy argues the December 2025 COMEX deliveries — 3.7M oz gold and 64.7M oz silver, the largest December influx in Comex history — show that whoever is taking delivery is doing it deliberately, and that prices will go much higher, with volatility, until massive new supply arrives.
  • Andy describes record physical delivery demand continuing into the first days of January 2026 (roughly 35M oz of silver delivered in a non-delivery month) and warns that tight institutional-level availability will cascade into the retail market, where products become hard to source at reasonable premiums.
  • Andy explains that junk silver premiums collapsed because refiners got margin-called on hedge shorts as silver rallied, forcing them to stop accepting new material; he predicts premiums will 'slingshot' back up once the overhang clears and advises clients not to reposition out of junk silver.
  • Andy points to the Shanghai premium and silver lease rates of roughly 8–9% (versus historical fractions of 1%) as evidence that the East is doing real price discovery while the West still prices paper, arguing that when the two markets stop agreeing the physical market will 'overrule' the paper market in a disorderly move.
  • Andy cites the latest CFTC Bank Participation Report showing non-US banks net short 206M oz of silver (about 33% of open interest) with what he calls 'biblical' unrealized losses, while US banks flipped net long — a divergence he says could end in a UBS-style failure to deliver and broader systemic contagion.

Bill Holter's takeaways

  • Top takeaway Andy quotes Bill as saying that once the junk silver glut works its way through the refineries, 'things will be different on the other side,' which Andy uses to support his argument that clients should hold junk silver positions through the current overhang.

David Jensen's takeaways

  • Top takeaway Andy cites David as warning the LBMA is 'about this close to literally blowing apart' because roughly 2 billion ounces of outstanding contracts stand against a stated 140 million ounce float, implying roughly 15x rehypothecation of available metal.
  • Andy adds that David does not believe even the publicly stated 140M oz float actually exists, which would make the leverage ratio materially worse if a major bank such as UBS were to fail to deliver.

Tom Luongo's takeaways

  • Top takeaway Andy attributes to Tom the thesis that Trump is using tariffs as cover to pull metal back into the US, deliberately flipping European banks from net long to net short on the LBMA and engineering a failure-to-deliver that punishes European banks rather than US ones.
  • Andy says Tom argues Trump views European banks as tied to past 'election interference' and color revolutions, and that squeezing them through metal reshoring is part of a broader Trump policy aimed at breaking the European establishment.