Is The Market Signaling A Coming Collapse Of Blackrock Inc (And Others) Due To A Global Silver Shortage?

He who sells what isn't his'n

Must buy it back or go to prison.

Daniel Drew

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During the 4 trading days in the week January 6 to 10, 2025, Blackrock Inc. ‘BLK-NY’ that manages the iShares Silver Trust ‘SLV-NY’ Exchange Traded Fund (ETF) saw two trading days where BLK shares dropped more than 3% in value each day losing a net 6.4% on the week.

Looking at the 1-year stock chart for BLK in Figure 1 below, an ugly looking pattern is starting to take shape.

Keep in mind that BLK is a $150 billion (B) market cap (its valuation) company and is the world’s largest asset manager managing $11.5 trillion (T) of assets for its clients.

If the share price develops further into a waterfall or cascade pattern it is going to have real meaning for the financial markets.

Figure 1 - Blackrock Inc. - ‘BLK’ - 12 Month Price Chart; source: StockCharts.com

A fundamental error in looking at chart data is to look at short-term trends and draw conclusions, however it will be interesting to see how the silver vs. BLK vs S&P500 Index short-term chart develops with time. See Figure 2 below.

Figure 2 - Blackrock Inc. stock price ‘BLK’ (red) vs silver price (silver) vs S&P500 Index (blue) Dec. 18 2024 to Jan. 10 2025; source: TradingView.com

Open Discussion Of Potential Silver Market Failure in London Hits Financial Media

Over the last few years, silver shortage problems have been smoldering in London however last week an analyst for TD Securities openly stated what this Substack has been repeatedly saying - the London silver market is moving toward “stock-out” or silver delivery default. Given the growing global physical silver shortage and an estimated 4B oz. to 6B oz. of cash or spot silver contracts standing in London this is no small matter.

Silver available for delivery from London vaults to my analysis may be as little as 10M to 50M oz. and is far less than estimated by TD. Remember, the London silver spot contract holders can demand immediate delivery.

Physical silver delivery default or stock-out in London will end the promissory note pricing system put in place in the City of London by the Bank of England (BoE) in 1987 by spurring other spot silver contract holders to demand metal delivery further advertising the failure of the cash/spot promissory note price-setting system in London.

The Potential Nexus Of London Silver To Blackrock and JPMorgan Chase Bank

We will know with time if last week’s BLK sharp share price drop is related to these public revelations regarding the potential for delivery failure in the City of London’s silver market.

Jeff Currie, Goldman Sachs’ Global Head of Commodities Research at the time, stated on CNBC in 2021 that silver ETFs purchased and vaulted silver and that the ETFs then immediately sold claims to 3rd parties against this vaulted metal, beneficially owned by ETF shareholders, into the market.

That is termed ‘rehypothecation’ and it is illegal if shareholders do not give informed consent to this beforehand.

The astounding potential impact of layered fraud between the regulators creating false price signals by creating a cash metal exchange, with available silver levered potentially 100s of times to what is actually available, combined with rehypothecation of shareholder assets by money managers is difficult to contemplate.

If Currie is correct and we now see silver move up perhaps $100s of dollars an ounce due to a physical market failure, the estimated 4B oz. to 6B oz. of spot/cash market claims sold into the London market are going to potentially generate many $100s of billions of liabilities on the balance sheet of these contract sellers leading to potential rupture of those entities.

Figure 3 - Blackrock Inc CEO Larry Fink

Blackrock operates SLV and SLV’s silver is vaulted for Blackrock by JPMorgan Chase.

Perhaps we will be seeing more photos of fund management and bank CEOs in the future.

Best regards,

David Jensen