As the partial shutdown of the United States Incorporated Municipal Government Shutdown (refer to the Money Daily post of Friday, October 3, 2025 for more detail.) enters Day 10, it should be apparent to just about anyone that whatever the cabal in the District of Columbia are up to, it isn't having much effect anywhere, except, possibly, in financial markets, which yesterday received a wake-up call courtesy of the price of gold, silver, mining stocks, and backwardation in silver futures versus spot price.
As far as can be discerned, spot silver spiked to an all-time high of $51.24 at 9:10 am ET on Thursday, October 9. Precisely at 9:30 am ET, when the opening bell sounded on Wall Street, the futures price, which was already -$1.60 in backwardation at $49.64, began to plummet, eventually reaching an intraday low of $47.22 by midnight, and then falling to as low as $47.09 at 12:30 am on October 10. Those lows coincided with spot prices just after midnight (October 9-10) at $48.99.
Thus, backwardation had not be corrected (the normal alignment is called contango, with futures prices higher than spot.) and actually extended to -$1.90. This condition should not persist, because futures are generally assumed to be a cost-plus proposition, with buyers willing to pay more for a commodity for future delivery. Time, storage, interest, etc. all go into calculating that future price, which is generally higher the longer out the contract is extended.
For instance, the futures chain for gold, which is relatively consistent, has spot gold around $3,994, with the nearest futures contract at $4,010.90. As the futures chain progresses further out, the price rises, so that March, 2026, is $4,050, and June, 2026, is $4,099. That is normal, orderly contango.
Silver futures are below spot all the way out to September 2026 and they are all over the map. February, 2026 futures are at a laughable $47.88. July futures are a tad more realistic at $48.97, but, still well below spot.
To put this into perspective, ask yourself, if you just bought a 10-ounce bar of silver for $500, and a friend (and not a very good one, at that) came by and offered to buy that very same bar for $478.80 and pay you in February, what would you do?
That is apparently the current condition in the silver market. Vince Lanci explained this in a video on Thursday, suggesting that London vaults have been running dry and the backwardation encourages U.S. vault custodians to sell to London at spot and pocket the arbitraged difference between the futures price and spot, which could be very lucrative at $1.20-$1.60 or more per ounce. If the arbitrage is $1.50 profit, 100 of standard 1000-ounce bars would net out $150,000. However, as Lanci explains, the bullion banks in the U.S. aren't biting. They're holding onto their silver.
It doesn't make any sense if the futures are saying your silver will be worth less in the futures, unless the real signal from silver backwardation is telling the world that a recession is imminent. Otherwise, it's just more manipulation by big money players, generally assumed to be agents of the Federal Reserve or the federal government, most likely at the Exchange Stabilization Fund (ESF), which is, according to information on their own website:
The Exchange Stabilization Fund (ESF) consists of three types of assets: U.S. dollars, foreign currencies, and Special Drawing Rights (SDRs), which is an international reserve asset created by the International Monetary Fund.
The ESF can be used to purchase or sell foreign currencies, to hold U.S. foreign exchange and Special Drawing Rights (SDR) assets, and to provide financing to foreign governments. All operations of the ESF require the explicit authorization of the Secretary of the Treasury ("the Secretary").The Secretary is responsible for the formulation and implementation of U.S. international monetary and financial policy, including exchange market intervention policy. The ESF helps the Secretary to carry out these responsibilities. By law, the Secretary has considerable discretion in the use of ESF resources.
The legal basis of the ESF is the Gold Reserve Act of 1934. As amended in the late 1970s, the Act provides in part that "the Department of the Treasury has a stabilization fund …Consistent with the obligations of the Government in the International Monetary Fund (IMF) on orderly exchange arrangements and an orderly system of exchange rates, the Secretary …, with the approval of the President, may deal in gold, foreign exchange, and other instruments of credit and securities.
Nobody would be the least bit surprised if "the Secretary", Scott Bessent, was instructing his minions at the ESF to do anything and everything they can to keep the price of silver below $50, which might include buying US$ to send the Dollar Index higher, which has an inverse effect on the prices of gold and silver.
Of course, that's just speculation. There could be any number of nefarious actors employed by Western central banks, the World Bank, IMF, etc. Central banks have generally favored gold over silver since 1873, when silver was essentially de-monetized via the Coinage Act of 1873, often referred to as "the Crime of '73".
In the larger scheme of things, bankers and big business interests love gold; individuals and small businesses prefer silver. This debate has been ongoing, behind the scenes, for decades, but, since the government caters to banks and big business (Wall Street), gold is the preferred standard, even though silver is plentiful and was used as currency (coins) as recently as 1964.
So, another question to ask yourself: If silver was MONEY back in 1964, why can't it be MONEY again in 2025?
Well, the obvious answer is because the government won't allow it. They want people to use PAPER in the form of Federal Reserve Notes, issued by the Fed, and basically unconstitutional, granted the power to create U.S. currency out of thin air by the U.S. congress.
But, upon further review, there is absolutely no reason why silver cannot be used as money, other than the government frowns upon the practice. It is going to happen, has already happened, and will continue to happen so long as the government and banking interests insist upon their fiat standards and perform magic tricks in financial markets like they do routinely with silver.
In a word, bankers HATE silver. Absolutely despise it, because it allows ordinary people to have and hold wealth without counter-party risk or obligation. Once an individual has silver in his or her hands, it is theirs and theirs alone and the government, which wants to track every human movement, especially those concerning financial transactions, can't track it.
Those are some of the reasons why silver isn't money. But, other than the government's insistence on keeping it an industrial metal only, there's no reason silver cannot be money. The United States may be a whole lot different than it was in 1964, but the people from 1964, compared to people in 2025, are essentially the same. They breathe air, eat food, walk, talk, and appreciate freedom, social, political, economic, and otherwise. Without silver in circulation as money - and the denial or partial stripping away of other basic rights - they're not economically free, which is why bitcoin has become so popular. Fair warning, however: the current administration, with the full support of congress, has accepted crypto-currency as "the future" of money, via the recently-passed GENIUS Act. The warning is that if the government supports something, it's probably not to your benefit.
There are many issues facing the United States these days, yet the federal government seems interested only in promoting foreign wars, strategically buying up shares of companies (essentially, fascism in real time), and keeping secrets from the American public, which, increasingly, is distrustful of its own government and seeks alternatives. It's not a good look.
The wild action in silver markets offer a sliver of the inner operations of the federal government, which has grown to gargantuan proportions, and today acts like it can do whatever it desires (despite being "shut down"), including imposing its will on states by sending in national guard troops, bailing out other countries, as it did Argentina this week, while prompting war with others, like Venezuela, all without the approval of the American public.
The public is just supposed to go to work, pay their bills and taxes and shut the hell up. Let the government, who knows better about everything, just do what it pleases. Sadly, that's the current attitude, but it's not what made the United States the greatest, most free country in the history of the world. People, not governments, nor presidents, nor bankers, made the United States a great country, and they will again, once silver exceeds $50 an ounce, and is freed from the constraints of government intervention, COMEX price suppression, and the LBMA. It's a tall order, but, those institutions appear to be creaking and cracking under pressure from the physical market and BRICS, especially China.
The physical market is best represented by eBay, which operates a vast open bazaar for bullion, coins, bars, and other valuables. Prices on ebay have fully disregarded the COMEX futures and are following spot prices, though, in reality, the market on eBay is becoming a price-setting mechanism that rivals anything else because it is a physical market with few constraints, those being the fees eBay collects on every transaction. It's a marvelous business. eBay is one of the best-performing stocks of this year, up 45%, despite being down 10% recently.
In effect, because of fees which can range from 10-15% or higher, prices paid on eBay actually support higher silver prices. The sellers have to pay those fees, so, at $50, the seller is only netting out $45 or less. It's the cost of doing business. It's doubtful any sellers, especially those which also operate their own online retail, like Scottsdale Mint, Bullion Exchanges, Apmex, Pinehurst, Ayden, Liberty, and many others, are losing money.
Dealers on eBay - and, on their own sites - are selling silver above $50 an ounce, often well above for quality items, and nowhere near the futures prices of $48 or $49. The COMEX stranglehold on gold and silver pricing is being broken by retailers, individual sellers, and buyers who understand value as opposed to price, and foreign exchanges outside of the London and the U.S..
In a nutshell, that's what ails America. The government wants control; the citizenry wants freedom. Logically, since the citizenry far outnumbers the government and supposedly elects the people who represent them in congress and the presidency, will vote with their wallets and purses, rejecting the slavery of debt-based currency in favor of honest money, gold and silver. The government will have no choice in the matter, though the possibility of confiscation, as they did in 1933 with gold, remains a final option for them.
Price suppression of gold and silver will no longer work.
This time is different.
Well, as if the government shutdown wasn't already a major boondoggle, Rep. Jennifer Kiggans (R-VA) introduced, on September 16 (two weeks before the shutdown) The Pay Our Troops Act of 2026, which guarantees pay and allowances for:
Active-duty servicemembers, including members of the Coast Guard and Reserve Components;
Civilian personnel at the Department of Defense and Department of Homeland Security (for the Coast Guard) who directly support servicemembers; and
Contractors providing mission-essential support to servicemembers.
This figures to be a contentious issue, unless members of the Senate realize that they will be demonized as anti-American if they don't support this measure and make sure all military personnel - uniformed and civilian - get their paychecks on October 15. This is yet another reminder that the "shutdown" is completely fake, contrived, and previously agreed-to by Democrats and Republicans alike. The real kicker here is that civilians will get paid if the bill is passed in its current form. That is likely to result in loud protests from the federal employee unions, and possibly trigger a mass walk-out by the 750,000 or so federal employees working without pay. Sir Walter Scott reminds us, "Oh what a tangled web we weave, when first we practice to deceive," (Marmion: A Tale of Flodden Field).
Whatever their purpose, all of institutional Washington D.C. is fully behind the shutdown and whatever results stem from it. In the meantime, the government apparently has enough money on hand to buy $20 billion worth of falling Argenitina pesos, ensuring that the hedge funds and billionaires who bought Argentina's bonds get paid. MAGA may now stand for "Make Argentina Grift Again.”
With the unusually buoyant stock markets set to open on Friday to close out the week, stock futures are higher (big surprise), bitcoin, gold, and silver are, for lack of a better term, "meh," and WTI crude is about to head down into the $50s, just before 9:00 am ET, at $60.12 and reeling.
While superficially - which is all the government and media have to offer - everything appears to be functioning normally, behind the scenes is chaos and rising levels of anxiety. The first ten days of the shutdown haven't caused any major disruptions. Next week, when federal employees don't get paid, things may begin to get more interesting.
Finally, and in as kindly a tone as possible, to all governments, just three words: "please go away."
At the Close, Thursday, October 9, 2025:Dow: 46,358.42, -243.36 (-0.52%)
NASDAQ: 23,024.62, -18.75 (-0.08%)
S&P 500: 6,735.11, -18.61 (-0.28%)
NYSE Composite: 21,548.26, -177.55 (-0.82%)
Posts
