But let's unpack this. It is Thursday, February
26th, 2026. And I want you to just imagine a
scene for a second. All right, set the stage.
You are a trader. You are sitting in front of
a massive six monitor setup. Maybe you're somewhere
in Chicago or London. You got your coffee and
your heart is absolutely racing because silver.
Boring reliable silver exactly boring old silver
is just tearing the roof off I mean it is hitting
$91 an ounce which historically speaking is just
nosebleed territory We haven't seen price action
like that in decades, right? So you were sitting
there watching this chart literally go vertical
you are about to click buy or sell or maybe you
are just trying to panic close a position because
you are losing your shirt on a short bet and
Then silence. Yes, the screen just freezes not
a sudden dip Not Spike, just nothing. For 90
agonizing minutes. And that is exactly what happened
just yesterday on February 25th, right around
lunchtime in the global silver markets. So today
we aren't just reporting the daily news. We're
going to completely tear apart the plumbing of
the comics to figure out why the machine just
stopped. It's a really great visual to start
with, and honestly, it is terrifying if you are
actually in that seat. For this deep dive, we
are drawing heavily on a fascinating breakdown
by Doug Young from the Gold IRA Company's Bulletin.
The article is titled, did comics just sidestep
a silver mess? And, uh, mess might be putting
it very lightly. very lightly. Yeah, when I read
sidestep a mess, I immediately thought, OK, did
they dodge a bullet or did they just hide the
gun? Because when a market halts like that, especially
one as old and established as the silver futures
market, it feels less like a simple computer
error and more like a total engine failure. That
is a very fair assessment. I mean, when these
quote unquote technical glitches happen exactly
when prices are testing critical resistance levels,
you have to start asking questions. It tells
us something fundamental about the pressure building
up inside the system. So that is our mission
today. I want to look past the scary headlines.
I want to understand how a market can just turn
off and why it happened yesterday, of all days,
and ultimately why this matters to you listening
right now, even if you have never traded a futures
contract. in your life. Oh, it definitely matters.
This is not just inside baseball for day traders.
This is really about a potential massive disconnect
between the paper price of silver, which is what
you see on your phone. Right. What you see on
your phone versus the actual physical metal sitting
in a vault somewhere. What happened yesterday
was effectively a real time stress test and the
results they were. Well, they were concerning.
Concerning is a loaded word coming from you.
I mean, usually you are the one telling me to
calm down and look at the moving averages. So
let's rewind to yesterday, Wednesday, February
25th. Walk us through the actual play by play.
What exactly went down? So let's look at the
timeline. It is around 12 .15 p .m. Central Time.
The market is incredibly hot. Silver spot prices
had risen nearly $2 .88, just leading up to this
moment. Yeah, they were testing major resistance
levels right around that $91 to $92 per ounce
mark. Which, just to be clear, is a massive move
for a single trading session. That is an insane
amount of volatility. It really is. The volume
was historically high. And then suddenly on the
CME Group's Globex platform. That's the electronic
trading hub, right? Exactly where all these digital
trades happen. Suddenly trading simply halts.
Just dead air. For silver and a few other metals,
yes. The halt lasted about 90 minutes. Trading
did not actually resume until 1 .45 p .m. Central.
Now, here is where it gets really messy for the
actual people involved. During that blackout
time, if you had an order sitting in the system
that was marked all day or good till day, it
was just canceled, poof, gone. Wait, hold on.
If I tried to buy silver at, say, 12 .30, and
I put in a standard day order... This isn't just
deleted. Deleted it, yes. Only the good till
canceled order stayed in the order book. Everything
else was completely wiped. Now the official reason
given by the exchange was just technical issues.
And look to be entirely fair, in high frequency
and high volatility environments, technical glitches
really do happen. Servers get overloaded with
order spam, algorithms conflict. Sure, yeah,
technical issues. That is the classic catch -all
excuse, right? It's the dog ate my homework of
Wall Street. But the timing just seems incredibly
suspicious, doesn't it? I mean, right as the
price is spiking to a historic high, the plug
gets pulled. It feels highly convenient. That
is exactly where it gets interesting. And that
is why Doug Young wrote this specific article.
You really have to look at the broader context
here. This wasn't just some boring Tuesday in
the middle of July with low volume. This halt
happened exactly two days before a critical deadline
in the futures market called First Notice Day.
Okay, I saw that phrase in our notes. First notice
day. It sounds like something out of a tense
legal drama. But before we get to the conspiracy
theories, we have to eat our vegetables here.
What does first notice day actually mean in plain
English? It is arguably the most important day
in the life cycle of a futures contract. But
to really understand this, we have to back up
and look at what the COMEX actually is. when
people are trading silver on the comics. They
aren't usually swapping physical boxes of coins
or heavy bars with each other. They are trading
contracts. Right, paper promises. Exactly. And
one single standard contract represents 5 ,000
troy ounces of silver. 5 ,000 ounces. OK, let's
just put that in perspective for you listening.
That is heavy. It is. It translates to about
340 pounds of physical metal. So if I am a hedge
fund manager in Manhattan or just a guy day trading
from his laptop in the suburbs. I definitely
do not want 340 pounds of silver bars suddenly
dropped on my front lawn. My homeowners association
would have an absolute fit. They definitely would
and you probably don't own a forklift anyway
so first notice day. Which by the way is tomorrow
right? February 27th at our current timeline.
Yes, tomorrow. First notice day is the absolute
deadline. It's the point where if you are still
holding a long position. Meaning you bought a
contract. Right. Meaning you bought a contract
and hold it. You have to formally tell the exchange
if you actually plan to take physical delivery
of the medal. Ah, OK. So it's the ultimate put
up or shut up moment. Precisely. If you do not
actually want the physical medal, you have to
get out of that contract before first notice
day hits. Traders usually do this by selling
their expiring contract and then buying a new
one for a future month. In the industry, we call
this the rollover. It's basically a giant game
of musical chairs. That is the perfect analogy,
actually. OK, so the music is playing and everyone
is walking around the chairs holding their paper
tickets. But in this specific case. The music
is getting faster and faster and much louder
because the price is spiking to $91. Exactly
right. You desperately need to jump from the
chair that says take delivery to the chair that
says keep playing. But yesterday, right in the
middle of that frantic scramble, the lights just
went out in the room. The halt. The trading stop
disrupted that crucial rollover process right
at the absolute most critical moment imaginable.
So people were effectively trapped in their positions.
Yes. For 90 entire minutes, you could not roll
your position. You could not get out. You were
stuck holding a contract that was rapidly approaching
a hard delivery deadline. Man, that sounds incredibly
stressful if you're a trader caught in the middle
of it. But let's look at what happened when the
lights finally came back on. Because the actual
data that Doug Young highlights in the article
is just mind blowing to me. It does not look
like people just... casually resumed their normal
trading? No, it doesn't. This is where the story
firmly shifts from technical glitch to bizarre
market anomaly. When trading finally resumed
at 1 .45 p .m., we saw a massive, almost instantaneous
change in the underlying numbers. Walk us through
it. What did the landscape actually look like
at 1 .46 p .m.? Okay, so... Before all the chaos,
if you look at the week of February 17th, the
open interest. That's the total number of active
contracts, right? Like active bets on the table?
Correct. The active bets on silver. It was sitting
around 131 ,496 contracts. Historically speaking,
that is a very high level of open interest. So
lots of people betting heavily on silver. Yes,
an overcrowded trade. But when the market reopened
and the dust finally settled on that specific
front -month contract, that open interest number
had plummeted down to 37 ,162. Whoa, wait. Just
pause there for a second. It went from over 130
,000 down to 37 ,000 in just a matter of minutes.
Well, looking specifically at the front month
contract where all the intense pressure was concentrated.
Yes, the drop was absolutely staggering. If you
do the math. Assuming five thousand ounces per
contract. Right. If you do the math, that drop
represents roughly one hundred and eighty six
million ounces of silver positions that effectively
vanished or rolled instantly. One hundred eighty
six million ounces. That is I mean, I can't even
visualize that much metal. That is more silver
than some entire country's mine in a whole year.
It is an enormous. amount of paper silver to
move that fast. But here is the specific number
that really caught my eye in Young's analysis.
Post -resumption, there was an absolute scramble
to settle. About 31 ,000 contracts settled rapidly.
Settled meaning they completely closed out. They
just took the loss or the gain and ran for the
hills. Yes, closed completely. That is roughly
159 million ounces in notional value, changing
hands in the blink of an eye. It strongly suggests
a desperate scramble to get out of positions
before that delivery deadline we just talked
about. It looks like a ton of traders, or maybe
just a few very large institutional ones, slammed
the eject button the second the market came back
online. It totally feels like being in a crowded
theater, someone yells fire, and every single
person hits the exit door at the exact same time.
That is a very good way to put it. And the real
question is, did they jump, or were they pushed
out the door? Pushed. You mean like forced out
their positions. We have to consider margin calls.
If the price spikes that hard, the exchange naturally
demands more cash in your account to keep your
bet open. If you don't have the cash handy, they
just liquidate you on the spot. But regardless
of why they left, the end result was a massive
flush of paper contracts out of the system. Okay,
so we have this massive flush of paper contracts.
But this brings us to the part of the article
that I found the most alarming, frankly. It is
the crunch. Because eventually some of these
paper contracts do turn into real physical metal.
Not every single person exits. Some people actually
want the silver delivered. Correct. And that
brings us to the multi -billion dollar question.
Does the COMEX actually have enough silver sitting
in their physical vaults to cover all the claims?
Right. If the musical chairs stop for good, are
there actually enough chairs in the room? The
data paints a very tight and tense picture. To
really understand this, we need to distinguish
between the two different types of inventory
held in the ComEx vaults. We have registered
and eligible. OK, break that down for us. What
is the actual difference between the two? Think
of eligible silver, like the money sitting in
your 401k retirement account. It is there. It
is in the bank. It technically belongs to someone.
But it is not currently in your wallet, and you
certainly can't spend it at the grocery store
today. It is physical metal stored in the COMEX
approved vaults, but it is not formally warranted
for immediate delivery against a futures contract.
Got it. So it is physically in the building,
but it is already spoken for. It is not currently
for sale to the open market. Exactly. And the
current amount of that eligible silver is hovering
around 206 to 278 million ounces. Now, registered
silver, on the other hand, is the actual cash
in your wallet. It is warranted, it is available,
and it is ready to be handed over today to anyone
who stands for physical delivery on a contract.
And how much of that cash in the wallet is there
right now? Only about 86 to 88 million ounces.
OK, so 88 million ounces ready to go. On the
surface, that still sounds like a whole lot of
metal. It definitely sounds like a lot until
you compare it to the massive mountain of paper
claims. That is exactly where the math gets genuinely
scary. If we calculate what is called the coverage
ratio, which is basically how much physical silver
is ready compared to the number. of paper claims
floating around. Right. If you do that math,
it is incredibly low. Hit us with the actual
number. If you look at just the registered silver,
the stuff ready to go against the total open
interest, the ratio is roughly 0 .14. 0 .14.
Yes, 0 .14. I just want to make absolutely sure
I understand this, and I want you listening to
really get this too. You are saying that for
every 100, Papal claims on silver every 100 contracts
right every 100 people holding a piece of paper
saying I own silver They're only about 14 actual
physical ounces ready to be handed over. That
is exactly the implication Yes, it means there
is massive unseen leverage baked into the system
the entire market basically operates on the sheer
assumption that roughly 86 % of people will never
actually ask for the physical metal They just
assume everyone will keep playing paper musical
chairs forever. That is just a fraction reserve
banking system on absolute steroids. But what
happens if the music actually stops? What if
people do want the physical metal delivered?
Then you have a severe systemic problem. Because
even if you count the total stocks adding all
that eligible stuff that isn't even technically
for sale, the coverage ratio is still only zero
point five six. So even if they raided every
dark corner of the vault and basically commandeered
the silver from private stashes, they could still
only cover about half of the paper claims. This
feels like we're playing a massive global game
of chicken with the silver supply. In many ways
we really are. And this isn't just some theoretical
academic exercise anymore. The article points
out clearly that 2025 was a record -breaking
year for physical deliveries. Yeah, I saw that
stat in the report and I circled it like three
times. 474 million ounces actually delivered
in 2025. Which is double the previous year. Double.
That is not a small incremental uptick. That
is a fundamental trend change. It really is.
And January of 2026 alone saw another 49 million
ounces delivered right out the door. So the demand
for actual physical metal is rapidly accelerating.
It's not just day traders swapping paper bets
anymore. Real people and major industries are
taking the silver out of the system. And that
completely connects to the real world, right?
Because silver isn't just money or fancy jewelry.
It is highly strategic. It is in solar panels.
It is in medical devices. It is in all our electronics.
Exactly. We are currently facing a structural
supply deficit. The entire green energy transition
is completely hungry for silver. Solar panels
absolutely need it. Electric vehicles need a
lot of it. So you have this violent collision
of two different worlds. The paper market, where
traders are betting on price action with massive
leverage. And the physical market, where actual
factories need the real metal to build physical
things. And the physical market is slowly draining
those volts dry. Slowly, but very surely, yes.
And when you have a chaotic day like yesterday,
a huge price spike, a sudden halt and a desperate
scramble, it just completely reveals the underlying
tension between those two worlds. It shows us
firsthand how fragile that balance really is.
I want to play devil's advocate for just a second
here, because we talked earlier about the halt
being suspicious or highly convenient for the
exchange. But isn't that just how the system
is literally supposed to work? I mean, aren't
there automated circuit breakers designed specifically
to stop a total panic? You are absolutely right,
and we should definitely be fair to the exchange
on this point. That is the exact counter argument
that mainstream market analysts would make. Exchanges
have strict rules. If volatility hits a certain
extreme level, they pause trading to let everyone
cool off and reassess. It is explicitly designed
to prevent a total systemic crash or a runaway
price spike that completely disconnects from
reality. So it's a built -in safety feature,
not a nefarious bug. Theoretically, yes, it is
a safety valve. Also, we really have to talk
about the margin requirements. The article notes
that margins for silver futures were recently
adjusted upward to around $25 ,000 per contract.
That is the cash entry fee just to sit at the
table and play the game. Essentially, yes. It
is the minimum cash you need to have sitting
in your brokerage account just to hold the position
open overnight. By raising that requirement to
$25 ,000, the exchange is making it significantly
more expensive to be a pure speculator. So they're
actively kicking out the little guy. Or at the
very least, the under -capitalized guys. High
margins violently force the weak hands to fold
their cards. It instantly reduces the overall
leverage in the system. When margins go up open,
interest almost always goes down because people
literally cannot afford to keep their speculative
bets open. So you could reasonably argue that
the exchange is just proactively managing the
risk to prevent a larger systemic failure. So
they see the car speeding dangerously toward
a cliff and they slam on the brakes by raising
margins and halting the trading altogether. That
is the most charitable interpretation. And the
cynical interpretation. The cynical interpretation
is that they're slamming on the brakes because
they know for a fact they do not have enough
physical silver to cover the deliveries if the
price goes too high and everyone suddenly demands
the actual metal. Right, because if the price
goes to, say, $150, maybe everyone suddenly says,
you know what, I will take the physical silver,
please, and the vault is just completely empty.
And that is the ultimate nightmare scenario for
any commodity exchange, a formal default. If
an exchange simply cannot deliver the physical
metal, it legally promised confidence in that
entire market evaporates instantly and permanently.
So what does this all mean for the person listening
to us right now? Maybe they have a few silver
coins locked into safe at home or maybe they
are just thinking about their broader retirement
account. Why should they care at all if the comex
halts creating for 90 minutes on a Wednesday?
It matters deeply because it perfectly exposes
the massive difference between price and value.
The spot price you see scrolling on CNBC or checking
on your phone that $91 number that is just the
price of the paper contract. It is the price
of a digital promise. But if the plumbing gets
completely clogged, if the circuit breakers trigger,
if the physical coverage ratio drops too low,
then that paper price might not reflect the actual
reality of getting your hands on the physical
metal. It is the exact difference between holding
a printed ticket to a sold -out concert and actually
sitting in the seat. If they wildly oversold
the stadium, your paper ticket might be completely
worthless when you get to the front gate. That
is exactly it. And for any serious investor,
this highlights the absolute importance of understanding
what you actually own. Do you own a flimsy paper
claim that relies on a complex, fragile system
of futures, margins, and automated circuit breakers?
Or do you own the tangible asset itself? Yesterday
clearly showed us that the paper system has severe
friction. It has hard stops. It has glitches.
Physical reality does... not have circuit breakers.
That is a really powerful distinction. The physical
reality does not halt. No it doesn't. Global
supply and demand in the real world just keep
moving. Solar panel manufacturers don't suddenly
stop needing silver just because the comic server
is down for an hour and a half. So looking ahead
then, tomorrow is First Notice Day, February
27th. What specifically are you watching for
when the bell rings? I am closely watching the
actual delivery notices. I want to see exactly
how many of those remaining contracts actually
stand for physical delivery. If that number stays
historically high, despite all the price volatility
and the margin hikes, it means the underlying
appetite for physical metal is much stronger
than the fear of market chaos. And of course,
I am obsessively watching the inventory levels
in the comics vaults. If those registered stocks
dip significantly below that 80 million mark...
Then the math gets even worse. could get very,
very interesting very quickly. It really feels
like we're watching a slow motion short squeeze
on the entire market. We very well might be.
The structural deficit isn't magically going
away. The industrial green energy demand isn't
going away. And as we clearly saw yesterday,
the paper markets ability to smoothly handle
the volatility is being severely tested right
now. Well, this has been a massive eye opener.
It is so easy to just look at a stock chart and
see a line going up or down. But when you really
dig into the why behind it, the sudden halts,
the changing margins, the critically low vault
levels, you realize there is this massive complex
machine underneath it all. And it is definitely
creaking a little bit under the strain. It is
definitely creaking loudly. And for anyone relying
on these traditional markets to protect their
wealth, it pays to listen very closely to those
creaks. Absolutely. So just to quickly recap
what we have thoroughly covered today, we saw
a massive historic price spike in silver yesterday,
followed immediately by a sudden 90 minute trading
halt. We saw a frantic scramble to settle contracts
before tomorrow's big delivery deadline, wiping
out over 100 million ounces of paper interest.
And we learned that the ratio of real silver
ready for delivery versus the paper claims is
sitting at a highly precarious 0 .14. a very,
very thin margin for error in a global market.
And that brings us to the biggest takeaway. The
spot price you see on your screen might not always
tell you the whole story. It is a constant tug
of war between the paper market, which could
be halted, regulated and managed by executives,
and the physical market, which is driven strictly
by raw. real world supply and demand. And as
we move deeper into 2026 with industrial demand
continuing to soar, that specific tug of war
is only going to get more intense. Here's a final
thought I want to leave you with today. And it
is something that has been really nagging at
me since we started looking at all these numbers.
If actual physical deliveries kept doubling like
they did in 2025, remember that 474 million ounces
figure and the coverage ratio is already this
insanely low stuff. What exactly happens the
next time the circuit breaker simply doesn't
work? What happens when the overwhelming demand
isn't just for a quick contract rollover, but
for the actual heavy metal itself and the registered
inventory finally hits zero? That is a scenario
the market is absolutely not priced for right
now. It is the scenario that completely changes
everything. It is the moment when true price
discovery violently moves from the computer screen
directly to the physical bullion dealer. If you
want to dive deeper into this specific analysis,
and I highly recommend you do because seeing
that cliff drop chart in open interest is just
wild. You really need to check out the original
source. Yes, the sheer detail on the open interest
shifts and the specific charts Doug Yum put together
are fantastic. It is essential reading if you
really want to understand the nuts and bolts
mechanics of what is happening under the hood.
You can find the full detailed breakdown at the
Gold IRA Company's Bulletin website. I'm going
to spell this out slowly because it is a very
specific URL. Go to goldiracompaniescompared
.com. That is goldiracompaniescompared .com.
We have also put a direct clickable link to this
exact information right in the episode notes,
so you can just click right there and read it
yourself. It is definitely worth a close look
today. Thanks for listening to this deep dive,
and we will catch you on the next one. Keep asking
the hard questions. Take curious.