The Aftershocks

"This is fine"

Markets closed Monday with barely a ripple. VIX started elevated at 20 but settled back around 16. Korea’s KOSPI down 5.26%. Bitcoin recovered from its liquidation cascade. General equity indices flat to slightly down. Business as usual, apparently.

Everything’s fine.

Except it’s not. Not even close. This is the part where everyone stops watching because the pyrotechnics are over. Friday’s 40% crash was the spectacle. The thing people will remember and talk about. But what’s happening now - in the days and weeks after - is where the real damage gets done.

Think Russian confiscation of foreign reserves. The initial announcement made the headlines. But the actual consequences? They’re still unfolding years later. Capital flows are rerouting. Trust got destroyed. Entire markets restructured around the realization that the rules don’t matter when someone important needs saving.

The dynamics of a bubble

Most people think Friday was the bull trap. The parabolic top that signals the end. I think they've got it exactly backwards. This is the bear trap. The violent reset designed to convince everyone it's over right before the real move begins.

Friday wasn’t “just” a price crash. It was a credibility implosion. And Monday’s calm is the market equivalent of standing in a house with cracks spreading through the foundation saying “looks solid to me”.

Silver peaked exactly at the LBMA benchmark settlement at noon London time, then got hammered from $84 all the way back down. Coincidence right? London bankers off to lunch, No1 to support the price. Right?

Let me let you in on a little secret: LBMA fixes its price at 12:00 London time (7:00 AM Eastern). That locks in the settlement price for all the OTC contracts in London. Then, six and a half hours later, COMEX settles at 13:24-13:25 Eastern based on that one-minute window. If you can let LBMA settle high, then systematically crush the COMEX price before its settlement, you pocket the spread on any contracts you hold across both venues. Let London lock in at $103. Hammer New York down to $78. Extract a billion dollars in a single afternoon.

Want to know what they really feared? Look at the futures spreads. Gold: $30 spread (<1%). Silver: $20 spread (20%, in backwardation).

They really needed to kill silver specifically.

Monday showed they were running the exact same scheme as Friday. LBMA fixes at a decent price. Then the selling resumes afterwards, driving it down before any COMEX-linked settlements occur. Same playbook. Different day.

They’re systematically attacking every paper silver vehicle to drain the physical metal backing them. SLV continues to see share redemptions. AGQ is being demolished by forced liquidation of its derivatives.

Why? Because they need that physical silver. When authorized participants redeem SLV shares, they can pull the physical bars out of the trust. When AGQ liquidates positions, it ultimately forces settlement somewhere in the chain. The paper crash serves a dual purpose: they make money on the timing spread, AND they force the physical metal loose from these vehicles.

The question isn’t whether they’re going after physical. They’re already doing it. The question is: where is all that physical going? Who needs it badly enough to engineer a 40% crash to shake it free?

And who has historically been the largest accumulator of physical precious metals when Western markets panic? China.

Back in October, when India placed a massive order that froze the London silver market and sent lease rates to 200% overnight, someone had to save the system. According to multiple sources, JPMorgan leased 4,000 tons of silver from ICBC - Industrial and Commercial Bank of China. Four thousand tons. Three-month lease term. Due back in January.

Now. What else happened in January? UK Prime Minister Keir Starmer made his first visit to China in eight years. January 28-30, 2026. First British PM to visit Beijing since 2018. He brought 60 business executives, HSBC’s chairman, signed cooperation agreements, talked about “resetting relations”.

And silver crashed 40% on January 30. The exact day Starmer wrapped up his meetings in Beijing.

Is that a coincidence? Maybe. But I start to ask questions.

Did China help engineer the crash to secure physical at a discount? Were those Beijing meetings about surrendering terms for that lease? Is this why Britain suddenly approved China’s controversial “mega embassy” in London just weeks before Starmer’s trip?

I’m speculating. I don’t have proof. But… Coincidences pile up.

What I do know for certain: Shanghai spot is limit-stopped at $102 right now. Western paper shows $79. India’s at $86. The East is still trading at a premium. To me, this is evidence that physical markets have stopped following paper. Yes, Shanghai was limited today (their circuit breakers - in contrary to COMEX - actually worked), which explains the elevated price. But India wasn’t limited. Which explains the price. But still at a premium.

The question I’m asking myself is what will happen to retail sentiment. Are people going to give up on precious metals entirely? Abandon the sector and swear off this manipulated casino forever?

Or are they going to do what I’m doing - which is recognize that paper markets just demonstrated they’re completely broken, and the only rational response is to shift into physical and long-dated positions that can weather this manipulation?

Because sentiment resets work both ways. Yes, you flush out weak hands. But you also clarify the battlefield. Physical versus paper. Real versus synthetic. And this whole episode convinced me that we're at the VERY start of a bull market in silver and commodities. Not the end. The start. When they need to inflict this much pain, when the manipulation becomes this obvious, it means they're losing control.

And once you see the game clearly. Once you watch them flaunt their own rules… You can’t unsee it.

This was painful. I’m not going to pretend otherwise. My portfolio took damage. Everyone who was long precious metals took damage. That was the point. Maximum pain. Maximum fear. Wipe out the believers before the real move happens.

But it was also clarifying. And in some twisted way, healthy. Because now we know exactly what we’re dealing with. We know the rules only apply when convenient. We know circuit breakers work selectively. We know settlement timing can be exploited for billion-dollar profits. We know that when someone important needs saving, everything else gets sacrificed.

So what do you do with that information?

If you’re smart, you don’t fight the paper market directly. You can’t. They have infinite ammunition. But you position for the inevitable moment when paper and physical diverge so dramatically that the whole structure collapses under its own contradictions.

That’s where we’re headed. Not today. Not tomorrow. But soon.

The physical shortage is real. Industrial demand is real. Supply deficits are real. You can’t solve any of that by manipulating settlement prices on futures contracts. All you can do is create enough chaos that people stop watching.

Which is exactly what Monday’s “calm” is designed to accomplish.

The VIX came back down. Bitcoin recovered. Korea closed 5% lower but hey, that’s Korea’s problem. Western equity markets barely noticed. See? Everything’s fine.

Except the aftershocks are just starting. Retail participation in mining stocks is probably destroyed for months. Risk appetite across commodity sectors is damaged. The psychological impact of watching a 40% crash in a “safe haven” asset will linger long after the price stabilizes.

And somewhere in the background, those 4,000 tons that China lent to JPMorgan are still sitting on someone’s books. Due back. Except how exactly do you return 4,000 tons of physical silver after you just crashed the paper price 40% and drained every available ounce from Western vaults?

You think that lease is going to be repaid in full? Or you think there’s going to be a very quiet renegotiation where London capitulates behind closed doors?

I’m betting on the second one.

The raid on SLV isn’t over. They’re still looking to drain physical from every ETF they can access. Why? Because that metal needs to go somewhere. And if I had to guess, it’s flowing East.

Meanwhile retail investors are supposed to look at Monday’s price action and conclude the crisis passed. Silver bounced around $80. Gold recovered to $4,900. Miners are stabilizing. Crisis averted.

Sure.

Just like Russian confiscation was a one-day story. Just like the LIBOR scandal was about some rogue traders. Just like 2008 was about some subprime mortgages.

The headline event is never the real story. The real story is what happens after. How capital flows shift. How trust erodes. How systems restructure around the new reality that the rules are mere suggestions.

We’re in the “after” now. This is where it gets interesting. Not because of volatility - volatility is easy to see. But because of the slow structural shifts that nobody notices until they’re irreversible.

Will retail give up on metals entirely? Some will. I don’t blame them. This volatility is not for everyone. Though, they’ll be the ones who’ll come back at $200 silver wondering how they missed it.

Or will they do what makes sense given what we just witnessed? Leave the paper casino. Accumulate physical. Go long miners or ETFs on longer time horizons. Stop trying to trade around manipulation and start positioning for the moment when manipulation stops working.

Because it will stop working. Eventually. When physical supply runs out completely. When Shanghai and India stop accepting COMEX pricing. When the spread between East and West becomes so absurd that arbitrage becomes impossible.

That’s the endgame. Not today’s price. Not Monday’s VIX reading. Not whether Bitcoin recovered from its liquidation event.

The endgame is when the paper market loses the ability to discover price entirely. And we just took a major step toward that outcome.

Despite everything looking calm right now. Markets barely moving. The initial panic subsiding. Life goes on.

But the foundation cracked. And every day that passes without addressing that crack makes the eventual collapse more certain.

Friday was the earthquake. Monday was everyone pretending it didn’t happen. The aftershocks will take months - maybe years - to fully unfold.

Just don’t expect CNBC to tell you about them.

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I trimmed 20% of my miners today. Put 8% into long-dated calls. I’m going to keep a 15% cash buffer going forward. Not because I’m bearish - because I know this volatility isn’t done. But I also know the direction. My prediction at year start was sideways between 100-150. I did not see a spike to 121 followed by a 40% crash. But I expect stabilization within a month, maybe two. Then the march resumes.