Silver CRASH Was a Setup? Physical Market About to Break the System | David Morgan
Summary
Precious Metals: Guest remains strongly bullish on gold and silver, framing recent declines as corrections within a continuing uptrend driven by physical market dynamics.
Physical vs Paper: Emphasis on physical demand increasingly dictating price over paper markets, with offtake agreements and direct sourcing bypassing exchanges.
Central Bank Buying: Growing central bank gold accumulation and sanction risks support a trend toward greater gold monetization and potential moves toward a gold-linked framework.
Critical Minerals: Silver’s addition to critical minerals lists and potential U.S. stockpiling could tighten supply and shift price discovery toward the physical market.
Supply Chain Shifts: Samsung’s upstream offtake deals and reduced reliance on intermediaries highlight a broader trend of manufacturers securing direct silver supply.
Policy and Macro: Discussion of tariffs, interest rates, dollar dynamics, and bond yields as near-term volatility drivers, but secondary to the core physical-demand thesis.
Investor Access: Potential inclusion of gold and silver in retirement plans (401ks/defined benefit programs) could become a steady, incremental source of demand.
Transcript
We are living in very volatile times. Gold has corrected. Silver has crashed as per definition. But where are things headed? Uh we have lots on the agenda today for our conversation with David Morgan. We need to talk about the Fed. Are we going to see two rate cuts, three rate cuts? What does that mean? Is the dollar strength an issue? Is the bond market correcting? Meaning bond yields falling a problem for us precious metals investors? Lots to chew through here, of course. But before I switch over to the silver guru, hit that like and subscribe button. It helps us out tremendously reach our goal of 100,000 subscribers and we just appreciate it. Now David, it is a great pleasure to have you back on. Long overdue. We need to talk precious metals. Thanks for coming on. >> Yeah, my pleasure. Thank you, Kai. >> Yeah, really looking forward to the next 30 minutes here with you, David. Um, we got to start high level, of course, gold and silver, let's call it a correction, crash per definition, and silver, of course. But, uh, what what's upset the horse or what upset the card here, um, in the precious metals that we saw that correction? Well guys, you know, I think all of us really know any commodity stock that goes parabolic like silver did is going to correct. It has to. And of course, the futures markets across the board, be it the a softs, financials, or the metals, uh, going parabolic, you're going to see something. When it goes that strongly parabolic, then you know, the faster it rises, the faster it's going to come back down. So we saw a really great market 2025 140% up in silver and platinum and then uh what we saw in January something like a 70% move from like 70 to 124 I believe was the high and bang it got hit hard on the 30th of January and got smashed over 30% and that's a big gulp. It's really harmful to anybody uh physical owners especially people on leverage that got shaken out but that's how markets move. So was it the banks? Was it this combination of a lot of things but it was an overbought situation that needed to come back. So that's my take on it. Going a bit further is everyone not everyone but many said this is the biggest crash ever and blah blah blah. a huge crash, probably the biggest since 1980. But Silver Thursday in 1980 was a bigger crash. In 1980, on Silver Thursday, which is in March, I think it was March 27th, 1980. You can look it up and correct me. We went from roughly $20.60 to 1027. So, we had over a 50% crash. The important point I want to make about saying that again is this. After the 1980 crash to 1027, That was it. That ended the bull market in silver and then we drifted lower over the next few years and more years. Basically drifted down to roughly the $5 level and staying for almost two decades. I mean, you know, being a silver bull in those days was like kind of a dumb thing. You wanted to be in other assets. You wouldn't be in other asset classes. You really didn't want to touch a market that's moving sideways for that long. Having said that, the bigger the base, the bigger the bang. When you trend sideways for 20 years, you have built such a humongous base that once you start to rise, it's really going to roar a roar. And it has and we're seeing that now. So the final point is this guy. The 1980 crash of silver Thursday, that was that time. Now this crash this time it is not over. I think all indications are that yes it hurts. It's going to take a while to rebuild a base and go back up. But I am 99.99% convinced we will be going higher. It is not the end. It's just a pause that scares people out. Lastly, that's because a bull market shakes off as many participants as it possibly can. And it's really good at shaking off the people that never jumped on the bull's back before. And what I'm referring to are the Johnny come lately that are going to get rich quick and buy silver at 100 because it's going to 200. Watch it go to 120 and think they are the smartest guys on the planet only to wake up on Monday and get a margin call they can't meet. They're out of the market. So back to you. >> No, absolutely. Especially the margin plays. That's those are the ones that scare me and I feel bad for them. But it's a it's a game I don't like playing. It's too hot. I don't like playing with fire personally. Right. Um may maybe just staying on that topic like so you're saying maybe just to summarize as well the uptrend is still intact. Nothing has changed. Um we we need to talk about the macro backdrop of course because correct me if I'm wrong David but none of the reasons why gold and silver haven't moved to their levels have disappeared have they? >> No. Let's start with gold. Gold is the ultimate money. I know it. You know it. Our followers know it. And the banks know it. Now who else knows it? Well, Wall Street's probably known it for a great long time, but they've never stated it before. But what happened last year? You had stalwarts on Wall Street that used to kind of make fun of guys like you and I. And now they're saying you should be 20% of your portfolio, 10% of your portfolio. Institutions should be involved. Pension fund should be involved. 401ks defined benefit programs could add silver. Silver's uh silver and gold, excuse me, gold. And now you've got silver switching to silver in this critical minerals list. So there are so many factors and the last factor is what happened at the end of 2025 and it was a paradigm shift. What took place is something that Peter Schiff, myself and many others in our in our arena have said that once the physical metal took precedence over the paper paradigm, we would have a brand new market. We did and we had it for several months based primarily on commercial bars which are backed by paper being added to industry perhaps private hands both to take control of the price. So we had a price discovery going on for a very long time. But as that physical methodology did take control for quite some time, the paper paradigm kept building and building which you already addressed earlier in you know our first question out of the box. But nonetheless now we have a struggle. Who's going to win the battle? Well the physical market will win the battle. And that's why I'm so bullish that we still have not ended this. It's not a 1980s. Hunt brothers, you know, get brought up before Congress and have to testify and they're banned from never trading silver again the rest of their lives. And there was too much paper in that system. There's probably too much paper in this system. The problem this time different than the hunts is that the physical demand is so strong, unabating, and uh rules are changing in China as far as I understand it as far as how much leverage it can use to the downside. So there's a lot of factors this time that weren't around. And the last one is very obvious, but it remains to be stated. You had a Hunt brothers and some Saudis involved in the 1980 market. Today it's a global market. Solar, AI, EVs, all electronics are leading that market. It's a 60 65% demand and isn't going to go away. Whereas if you look back in 1980, I forget the exact number. I know that 1990 it was about 30% of the market. Now it's double that amount at least and the supply chain was about 500 million ounces annually and now it's about a billion ounces. So it's twice the demand on twice the amount produced. So that's a lot more metal that's demanded today than there was back 25 or back in 19. >> Yeah. Yeah. And the deficit is still 200 million ounces per year apparently according to the silver institute which uh it it was for the last 5 years. And uh I I still struggle with understanding how it works if you're constant in a in a in a deficit constantly that the price doesn't really react to it. Right. And uh maybe explain that to us. I know we've talked about this before, but uh >> I'd love to explain that. So [clears throat] a lot of people don't know this. Uh so I'm going to digress a little bit but it's important to understand and in fact there's a paper on the silverinstitute.org's 's website, you can find it. I forget the title of it, but it's some type in what you just said, Kai. You know, why did silver deficit not move the price? And I think it'll bring up the article. The article is probably three or four years old, my memory, but we had a physical deficit for 15 years in silver from 1980 to 2005. Those 15 years we had a structural deficit in silver of average of 100 million ounces a year. As you just said, this time it's 200 million ounces a year. But remember, we're mining about double what we used to back then. Regardless, 15-year deficit and the price hardly moved. So, what happened? Well, to make supply and demand equal, which they must, we had roughly two billion ounces in fine silver in the silver category, commercial bar market at the at the uh high in 1990 and we just drained it away. So, we ate up 1.5 billion ounces of silver under those 15 years and the price didn't hardly budge. Why? That's the big question. And the answer is because the paper paradigm worked so well. The banks had so much control and more importantly anytime the physical demand was made which obviously was made averaged 100 million ounces a year there was enough silver to supply the needs of the physical offtake from the comx London too but let's just say from the exchange and the LBMA to meet that demand. So even if it's the last car on the lot and you sell it, but there's no more demand until you can restock, you've met the demand and everything could be copacetic. So that's what happened this time around. The I won't say sharks, but let's say the more savvy, more aware, and more attuned to what's going on in the global financial system are looking at it and seeing the deficit. Now they're using it to their advantage, not their disadvantage. So really the structural deficit in both cases was very important. In one case it was ignored because people didn't know better or understand what was going on. This time even though the structural deficit is greater it's well understood and especially on the on the industry side because going back again 1980s there wasn't that much physical demand for industry. This time there's a lot. So as I've said in other interviews a lot of industry is not thinking in terms of price. Of course, they wanted to get a best price. That's why the whole silver users association was established was to make sure that industry got a fair price on silver. There the silver users association has gone bye-bye, but industry still wants to get a a good price, but pricemice, they're going to look at ounces. I need x amount of ounces. They're going to worry about price, but not as much as they're going to worry about ounces. How many ounces do we need at Samsung over the next three years to maintain our business business development and current business structure? That's the question they're going to ask. And if Samsung is asking that, you can bet Tesla's asking that, 3M is asking that, a lot of other you Apple computers asking that question. So, I see where this price smash, as bad as it looks right now, could be a a boon to the commercial users that say, "Hey, wait a minute. We paid $100 the ounce, you know, a month ago and we only got, you know, 70% of what we need. Let's finish up what we need, get their last 30%." And just make sure you don't go higher than, you know, 85 bucks or whatever to to bring it home. >> No, exactly. And you brought up Samsung. That's why I want to follow up on that component of the industry here because they are going upstream meaning they're going towards the source. They're supplying contracts. Um do you see that trend continue or do you think there will be another intermediary maybe coming in um that'll help out because usually we have traders like a traffic gury even um that that usually do the brokering for the for the producers or end end users. Do do you see that happening more often now? >> I do. First of all, a lot of people don't know that Samsung had an offtake agreement with Aino Gold and Silver years ago. And, you know, meter readers of the, you know, premium service, the paid service know that because we featured Aino in our list, uh, many times on and off, but now they've added another one. And then you've got other entities, small smaller mines that have been approached for their for offtake agreements. So I think the Tropagura, you know, Glen Core, all these intermediaries that really I won't say control, but certainly have access to the physical metal and they're sort of in the dark. I mean, most people don't know how that actually works between, you know, Dor or concentrate coming uh, you know, refined in China and that metal never hitting the exchange. It doesn't go to the LBMA. It doesn't go to COMX. it goes to a manufacturing concern or a uh somewhere else that needs the metal for industrial purposes. Why does it have to go on the shelf first? It doesn't. >> No, it doesn't. And uh we we'll see where it goes because I think Samsung recently signed another deal with another silver producer. I've given them credit. Thank >> I think it's it's irrelevant to the discussion as well. It's more showing the trend because we've seen that in the lithium space and other like important sectors. We'll we'll see it more in critical minerals of course, but silver is that critical mineral and maybe going on a tangent here a little bit on the critical mineral side. Do you see the US actually starting to stockpile silver? So far there has been no mention of it as far as I'm aware of. >> I do. I had uh Mike [clears throat] Dorenzo, the CEO of president of the silverist association on our mastermind about a week ago, maybe. Yeah, not quite a week ago. And I asked him that question. He kind of picked up his voice. you just yell at me, but he said there's nothing that says they have to stockpile it. You know, then it kind of calmed down and uh you know he I I believe that they will and he said yes that you know just because it doesn't say they have to. He thought that they would as well but the question becomes how soon and how much you know so are they going to grab you know 100 million ounces in a year's time or are they going to grab 30 million ounces in three years time? We don't know the answer to that. But I do think that they will certainly stockpile silver. I think that may lead to other nation state asking the same question. Well, if it's strategic to the US, is it strategic to us? So, there could be other nation states that are saying, "Hey, wait a minute. You know, we love gold for monetary purposes, but we need silver for strategic reasons. Maybe we should jump in [clears throat] there as well." Just for final uh statement on that whole idea, the strategic stockpile was 139 million ounces in 1985. They used that to make the silver eagle or coinage program and it was depleted over several years and then they had to go to the open market to buy silver to to make silver eagles from that point forward. I'm not saying that they're going to try and get 140 million ounces, but maybe they're going to try to get more. I don't know. I would say round numbers I would think at least 50 if not 100 million ounces. Now again house fast because they do it over 10 years it's really not going to put a lot of pressure on the market. It'll put some but if they're trying to get 50 million ounces per year for the next two or three years that may be enough. We just don't know. It's all markets move at the margin but the more demand there is the and for physical the more the price control goes back to the physical side. Last thing you didn't ask is that in the United States, I think it was February 1st, Kai, the defined benefits program, other words called 401ks in the United States can't add necessarily they will do it, but some will uh gold and silver as an option for the savings plan. So that is a big market. These are big uh corporations that have uh these pension programs for employees. I mean, we're talking like Ford Motor Company, General Motors, um, you know, 3M, DAO, I mean, all these big corpses that have lots of employees that have the wherewithal to do these type of things. So, that's a lot of pent up demand that someone that's worked there for 20 years, 30 years, five years, just entering the workforce says, "Wait a minute, my options, stocks, bonds, money market, or gold and silver. Hey, I want 10% of my program going into gold and silver." Well, multiply that times the amount of people that would be steadily consistently buying gold and silver month over month, year-over-year, and what that would add to the physical demand. I think it's important to to bring that to to the four. >> Oh, 100%. Uh, it's really important. Um I don't want to get too timely or ch like discuss like daily moves in gold and silver for example but just just looking at the bond yields of the 10-year it seems like there is a correlation between gold dipping and the bond yields dropping as well meaning more interest being generated of course in bonds um David do you see a correlation there over the last 10 days to two weeks um some of that gold money moved over >> I would just defer to you I'll just you know concur I mean one thing I will add to the the whole thing about you know Trump's one to the administration wanted to take the dollar lower and there's lots of reasons for that. trade trade advantage is the main one but the markets have a mind of their own and this is important to know that uh we or the administration let's say the Fed because that's who controls the interest rates does lower interest rates uh at the discount window federal funds rate it doesn't necessarily mean the 10ear is going to respond lower that's the thing that I think you know you've talked about and I'm I'm going to reiterate because the market may say I I don't care what your discount is for the banks. What I care about is how bad is the inflation rate and what rate of return do I want to even to buy the 10. And I think that's the question that more and more people are asking because the control of the interest rates is done. Uh but it's not as easy it used as it used to be. Rate control is definitely in the mix. I think that's the plan with the new uh incoming uh board with the with this [clears throat] new with Trump's administration as far as who's the head of the Fed. Nonetheless, it can only control it so much and the market again could override that. Uh the Fed does have a lot of control, but they don't have ultimate. >> No, it's a it's an interesting like development. The markets are so what do you call them? Fascinating. Fra I was going to say fragile first, but it's just fascinating what so so many microcurrens. It's it's really difficult to run a podcast and stay focused uh these days. So um what I want to come back to though is just the gold and silver price moves in general and the gold silver ratio. I know you look at it as well. We're back to 65. Uh we were at 45 um for a little bit. What what is healthy in your opinion? 104 obviously wasn't healthy either, but uh 45 seemed to a little too hot. I'm curious like is this idle territory 65 or should we be looking at the lower number perhaps? Yeah, it's real tough because you know being so bullish silver for so many years but you know more data more information you've got to do the late great An Ran you know check your premises you know one of my premises back 25 years ago and probably for the first 10 years was you know silver is a monetary level and it still is but less and less a mon so I put out a um guidance outline for my paid subscribers about silver point of 100 and what you could do to uh filter out at a profit and also on the gold silver ratio and I started that at 60 and I went to 50 and I went to 40 went all the way down to the possibility of maybe 20 but um the market knows more than anyone and and if you do the guidelines that I outlined a lot of not a lot but a fair amount of my premium members did swap they swapped gold in for their silver at the 50 to1 ratio. Well, they look like a genius today. Will they look like a genius a year from now? I don't know. But the way I set this up, uh, they could swap back to one or two. I mean, let's say the ratio got down to 80 to one again, or we could say up to 81, depending how you look at it. You might go, "Wait a minute. I made this much on my swap. I'm going to swap back gold to silver because I think David's right. I think it's going to get below 50 again." You know, I'm not trying to be a trader here, Kyle. I'm suggesting is that you have to have a plan. If you sit there and think that, you know, I'm going to catch the top on a whim because I'm emotionally attached to my investment. It feels like it's the top. Good luck, especially in this kind of a market. And the last thing I want to say because I think it's critical is that, and I have to take a deep breath. I'm [clears throat] not trying to be dramatic, but if we do go to a hyperinflationary environment, the last thing you want to do is sell your metal. It doesn't mean you got to hold it all all the way up. I mean, if you bought silver at 50 and went to 100 and you sold half and have a free trade, in other words, all the silver you're now holding is sitting there for quote unquote free because you made you got your original capital back, then why not, you know, be smart with it? So, there's lots of ways to approach markets as you know, but I think that uh again, you must have a plan. If you don't have a plan, you're going to get hung up in the the emotional wave, you know, because once silver hits, let's say, 150, there'll be people saying it's going to 300. And maybe they're right. And if it hits 200, there'll be people saying it's going to,000. I mean, there's people out there saying that now. And I'm not going to say they're wrong. I don't know. What I do know is in order to get to 300, it's got to get up 250 first. That I know. >> True. That's That's just math. And I can I can even follow that. So that makes a lot of sense. Um David, like we were at 120 like and you said emotions are, you know, really dangerous to um what do you call it? Emotions are dangerous when investing of course. And at 120 like how much of that was emotion versus fundamentally driven like if you were to make that distinction. >> It's hard. I mean they do have sentiment indicators. I didn't look at it because I look at my own based on you know my subscription rate. I mean, we went uh downhill for years and now we're starting to gain subscribers and you know, it starts to go real frothy. Uh that concerns me because that means, you know, the market is getting overbought. There's too much emotional enthusiasm in the market as far as where were we? We were high. How high Kayak really can't say. >> No. No. Fair enough. Um bit bit of a wild card. Just I wouldn't say switching topics, but I think it's it's a tangent. I I warned perhaps you just a little bit that I'll ask about it and it's it's something that I wouldn't say concerns me but something I keep an eye on because it feels like nobody's really talking about it and it's a Supreme Court decision on tariffs. Um it's a bit of a like something I've identified as I wouldn't say a black swan because we're talking about it of course but something that the market seems to ignore and is the chance that the Supreme Court rules negatively on the Trump tariffs and I'm questioning or what the possibility of the outcome is or not the possibility of the outcome but the possibility of the impact of the outcome is um how will it affect us here as precious metals investors and how will it affect markets and I'm curious what your take on that is David. >> Yeah I'm going to go through it and thank you and thanks for briefing me. We want to talk about it. First of all, let's talk about the pro the case for terrorists. First is it is used for negotiating pressure. Obviously, that's hardly needs to be said. But specifically, it's addressing IP theft. You know, intellectual property that's been taken by others. Uh forcing uh tech transfer and trade imbalances. I mean, if somebody steals your intellectual property, that's still theft. So, we could frame that as a national security issue. Some have industrial policy and do domestic manufacturing, steel and aluminum producers have benefited from the tariffs and it has encouraged reshoring and diversification of our supply chains. America has basically offshored almost everything that we do. The protection capacities mainly China and others but primarily China. That's not a good thing. You don't want to be in a situation where you can't produce your own. Bringing that back on shore. That's a pro for tariffs. Um, again, it's leverage revenue source. This is debatable, but as you said, the Supreme Courts looks like they're going in the favor of tariffs, but they generated tens of billion in federal revenue. Tens of billion sounds like a big number. It is relatively high. >> David, just to inter David, may I jump in real quick because I think they're going to rule against the tariffs. It's only 26% >> 26% chance in favor of the tariffs. So, I'm sorry. That's why I'm I'm concerned about the outcome and what it will do to the market. >> Thank you. Thank you. Okay. Um [clears throat] Okay. So, it's signaling a shift from, you know, globalization to coming back to n nationalization. Now, the case against it, uh importers pay the tariffs up front. Costs are often passed through consumers. Estimated price re increases affect all goods. Uh, China retaliated with tariffs on US soybeans and agriculture required large federal subsidies to offshore their losses. Bilateral deficit shifted, but overall US deficit still persists. Supply chains are rrooted through Vietnam and Mexico, for example. Increased market volatility and inflationary pressure. Small but measurable impact on good prices. If it doesn't pass, I think it will have an impact negatively to the medals for a while. But if it but I regardless if it passes or doesn't, and thank you for correcting, I think the impact will mitigate over time because the real reasons for the monetary metals is the disarray in the financial system. Tariffs are a new thing imposed by this administration to mitigate the trade imbalances and get more quote unquote fairness the way the United States sees it from that lens. But if it doesn't work and the Supreme Court says nope, can't do it, it will disrupt the markets in a substantial way, kind of a knee-jerk reaction initially, but I think it'll mitigate over time. No, like for us as precious metals investors, of course, we look at inflation for example and initial shock might be or shock meaning ruling might be disinflationary, but the US will have to print the money if it has to pay the money back, right? Right. Um so that is inflationary to me long term, midterm, mid to long term. >> I I think you know markets usually react to the downside when there's uncertain and that would be uncertain right now. We don't know the vote. Uh but if it says nope, you can't do it, then uh you know, again, I'm I'm making an educated guess. I don't know for sure, but what I do know is it will disrupt it one way or the other right away. And again, need knee-jerk reaction. But as you said, the printing press hasn't stopped. I mean, it just keeps going. And this is the main problem that all nation states face. And uh I forget who I was listening to this morning. I give you give them credit, but you know, if you'll really kind of stay objective, and I try to always, I can't, but I try. >> We're looking more and more like we're going to a gold standard. I mean just by the amount of central bank buying nation states wanting to buy more and more gold and people not trusting the US dollar especially after we the US made the biggest foo of all times by stealing really my word but I believe that's the correct word the Russian assets of 300 billion when they quote unquote sanctioned Russia. I mean, if that doesn't scare everybody understanding what that really means, because what happened from that point till now is other nations said, "Wait a minute. If the United States doesn't like our our politics, our trade policy, our tariff policy, what have you, they can uh hurt us. But if we own gold, we're exempt from that. We own gold, we're in a free market with no liability. If we own gold, we have mitigated that pressure that the United States could put on us." J whiz, you us guess what you just did. You made the strongest gate case for gold accumulation among nation states that's been made probably in the last dec last several decades 100%. I think we're seeing that play out. Besides Tether, the central banks are of course the biggest buyer mostly in the east. Besides Poland, they're all in the east, right? So they're far away from us. David, maybe last question here. like what is something you're most excited about or most concerned about over the next 12 months when it comes to the precious metals in terms of like news flow that could impact the price positively or negatively here? >> Uh most concerned about maybe would be um something in the solar industry that's a real breakthrough that's easy to achieve in a short amount of time. So there is some uh you know copper wire that's coated by silver that has 90% of the same output uh as a current solar panel with the same longevity and it cuts the price in half. But if that were to occur, you got to think it through. That would probably mean they just keep building more solar panels. So maybe the amount of silver would still be in the long run the same amount. So that would be one concern. Um there was a uh negative and you said positive as well. Is that correct? >> Yeah, sure. There's got to be something positive. >> Yeah, I think the positive is just um maybe a slow grind. I mean, I don't like the parabolic moves that much, but a steady Eddie moving higher for both the metals and maybe some rationalization amongst nation states where the new proposal rather than being a CBDC is a private system where people have their financial anonymity intact and it's connected to gold in a real way that could be, let's say, audited where people are satisfied that it's the real deal. That would be my wish. Oh, >> fantastic. David, it's always an honor to have you on the program. Always enjoy our conversations. In case our audience doesn't know where to find you yet, where can we send them? >> Yeah, the main page is the morganreport.com and there's lots of vectors from there. You can go to the blog, which is all the free information. There's about us page. Uh we've set it up as a one, two, three, like step one is get on the free list. Step two is watch a couple documentaries. Step three is uh get involved with the paid service. If you wish to, you can circumvent that. I do consultations, a lot of not a lot, there's a small amount of people, entities uh that want to have consultation and uh that works really well for both of us. And lastly, I just want to pitch my u documentary silver sunrise.tv. It's uh two and a half years. It's been issued for free on the web at silver sunson sunsonrise.tv. It talks about the stress, control, and fear that money puts in our lives and how to mitigate that by taking a look at true value amongst you, man. >> No, fantastic, David. It was a pleasure speaking with you. Always great to catch up. Looking forward to the next time already. So, thanks so much for your time. Really looking forward to the next one. And to everybody else, thank you so much for tuning in to Soore Financially. Hope you enjoyed this conversation with David Morgan. And if you did, help us achieve our goal of reaching 100,000 subscribers by the end of this quarter. Really appreciate your support. Uh it's a big goal for us and uh it means a lot. So, thanks so much for tuning in. Thanks so much for watching and uh stay safe out there. Take care and uh don't overleverage.
Silver CRASH Was a Setup? Physical Market About to Break the System | David Morgan
Summary
Transcript
We are living in very volatile times. Gold has corrected. Silver has crashed as per definition. But where are things headed? Uh we have lots on the agenda today for our conversation with David Morgan. We need to talk about the Fed. Are we going to see two rate cuts, three rate cuts? What does that mean? Is the dollar strength an issue? Is the bond market correcting? Meaning bond yields falling a problem for us precious metals investors? Lots to chew through here, of course. But before I switch over to the silver guru, hit that like and subscribe button. It helps us out tremendously reach our goal of 100,000 subscribers and we just appreciate it. Now David, it is a great pleasure to have you back on. Long overdue. We need to talk precious metals. Thanks for coming on. >> Yeah, my pleasure. Thank you, Kai. >> Yeah, really looking forward to the next 30 minutes here with you, David. Um, we got to start high level, of course, gold and silver, let's call it a correction, crash per definition, and silver, of course. But, uh, what what's upset the horse or what upset the card here, um, in the precious metals that we saw that correction? Well guys, you know, I think all of us really know any commodity stock that goes parabolic like silver did is going to correct. It has to. And of course, the futures markets across the board, be it the a softs, financials, or the metals, uh, going parabolic, you're going to see something. When it goes that strongly parabolic, then you know, the faster it rises, the faster it's going to come back down. So we saw a really great market 2025 140% up in silver and platinum and then uh what we saw in January something like a 70% move from like 70 to 124 I believe was the high and bang it got hit hard on the 30th of January and got smashed over 30% and that's a big gulp. It's really harmful to anybody uh physical owners especially people on leverage that got shaken out but that's how markets move. So was it the banks? Was it this combination of a lot of things but it was an overbought situation that needed to come back. So that's my take on it. Going a bit further is everyone not everyone but many said this is the biggest crash ever and blah blah blah. a huge crash, probably the biggest since 1980. But Silver Thursday in 1980 was a bigger crash. In 1980, on Silver Thursday, which is in March, I think it was March 27th, 1980. You can look it up and correct me. We went from roughly $20.60 to 1027. So, we had over a 50% crash. The important point I want to make about saying that again is this. After the 1980 crash to 1027, That was it. That ended the bull market in silver and then we drifted lower over the next few years and more years. Basically drifted down to roughly the $5 level and staying for almost two decades. I mean, you know, being a silver bull in those days was like kind of a dumb thing. You wanted to be in other assets. You wouldn't be in other asset classes. You really didn't want to touch a market that's moving sideways for that long. Having said that, the bigger the base, the bigger the bang. When you trend sideways for 20 years, you have built such a humongous base that once you start to rise, it's really going to roar a roar. And it has and we're seeing that now. So the final point is this guy. The 1980 crash of silver Thursday, that was that time. Now this crash this time it is not over. I think all indications are that yes it hurts. It's going to take a while to rebuild a base and go back up. But I am 99.99% convinced we will be going higher. It is not the end. It's just a pause that scares people out. Lastly, that's because a bull market shakes off as many participants as it possibly can. And it's really good at shaking off the people that never jumped on the bull's back before. And what I'm referring to are the Johnny come lately that are going to get rich quick and buy silver at 100 because it's going to 200. Watch it go to 120 and think they are the smartest guys on the planet only to wake up on Monday and get a margin call they can't meet. They're out of the market. So back to you. >> No, absolutely. Especially the margin plays. That's those are the ones that scare me and I feel bad for them. But it's a it's a game I don't like playing. It's too hot. I don't like playing with fire personally. Right. Um may maybe just staying on that topic like so you're saying maybe just to summarize as well the uptrend is still intact. Nothing has changed. Um we we need to talk about the macro backdrop of course because correct me if I'm wrong David but none of the reasons why gold and silver haven't moved to their levels have disappeared have they? >> No. Let's start with gold. Gold is the ultimate money. I know it. You know it. Our followers know it. And the banks know it. Now who else knows it? Well, Wall Street's probably known it for a great long time, but they've never stated it before. But what happened last year? You had stalwarts on Wall Street that used to kind of make fun of guys like you and I. And now they're saying you should be 20% of your portfolio, 10% of your portfolio. Institutions should be involved. Pension fund should be involved. 401ks defined benefit programs could add silver. Silver's uh silver and gold, excuse me, gold. And now you've got silver switching to silver in this critical minerals list. So there are so many factors and the last factor is what happened at the end of 2025 and it was a paradigm shift. What took place is something that Peter Schiff, myself and many others in our in our arena have said that once the physical metal took precedence over the paper paradigm, we would have a brand new market. We did and we had it for several months based primarily on commercial bars which are backed by paper being added to industry perhaps private hands both to take control of the price. So we had a price discovery going on for a very long time. But as that physical methodology did take control for quite some time, the paper paradigm kept building and building which you already addressed earlier in you know our first question out of the box. But nonetheless now we have a struggle. Who's going to win the battle? Well the physical market will win the battle. And that's why I'm so bullish that we still have not ended this. It's not a 1980s. Hunt brothers, you know, get brought up before Congress and have to testify and they're banned from never trading silver again the rest of their lives. And there was too much paper in that system. There's probably too much paper in this system. The problem this time different than the hunts is that the physical demand is so strong, unabating, and uh rules are changing in China as far as I understand it as far as how much leverage it can use to the downside. So there's a lot of factors this time that weren't around. And the last one is very obvious, but it remains to be stated. You had a Hunt brothers and some Saudis involved in the 1980 market. Today it's a global market. Solar, AI, EVs, all electronics are leading that market. It's a 60 65% demand and isn't going to go away. Whereas if you look back in 1980, I forget the exact number. I know that 1990 it was about 30% of the market. Now it's double that amount at least and the supply chain was about 500 million ounces annually and now it's about a billion ounces. So it's twice the demand on twice the amount produced. So that's a lot more metal that's demanded today than there was back 25 or back in 19. >> Yeah. Yeah. And the deficit is still 200 million ounces per year apparently according to the silver institute which uh it it was for the last 5 years. And uh I I still struggle with understanding how it works if you're constant in a in a in a deficit constantly that the price doesn't really react to it. Right. And uh maybe explain that to us. I know we've talked about this before, but uh >> I'd love to explain that. So [clears throat] a lot of people don't know this. Uh so I'm going to digress a little bit but it's important to understand and in fact there's a paper on the silverinstitute.org's 's website, you can find it. I forget the title of it, but it's some type in what you just said, Kai. You know, why did silver deficit not move the price? And I think it'll bring up the article. The article is probably three or four years old, my memory, but we had a physical deficit for 15 years in silver from 1980 to 2005. Those 15 years we had a structural deficit in silver of average of 100 million ounces a year. As you just said, this time it's 200 million ounces a year. But remember, we're mining about double what we used to back then. Regardless, 15-year deficit and the price hardly moved. So, what happened? Well, to make supply and demand equal, which they must, we had roughly two billion ounces in fine silver in the silver category, commercial bar market at the at the uh high in 1990 and we just drained it away. So, we ate up 1.5 billion ounces of silver under those 15 years and the price didn't hardly budge. Why? That's the big question. And the answer is because the paper paradigm worked so well. The banks had so much control and more importantly anytime the physical demand was made which obviously was made averaged 100 million ounces a year there was enough silver to supply the needs of the physical offtake from the comx London too but let's just say from the exchange and the LBMA to meet that demand. So even if it's the last car on the lot and you sell it, but there's no more demand until you can restock, you've met the demand and everything could be copacetic. So that's what happened this time around. The I won't say sharks, but let's say the more savvy, more aware, and more attuned to what's going on in the global financial system are looking at it and seeing the deficit. Now they're using it to their advantage, not their disadvantage. So really the structural deficit in both cases was very important. In one case it was ignored because people didn't know better or understand what was going on. This time even though the structural deficit is greater it's well understood and especially on the on the industry side because going back again 1980s there wasn't that much physical demand for industry. This time there's a lot. So as I've said in other interviews a lot of industry is not thinking in terms of price. Of course, they wanted to get a best price. That's why the whole silver users association was established was to make sure that industry got a fair price on silver. There the silver users association has gone bye-bye, but industry still wants to get a a good price, but pricemice, they're going to look at ounces. I need x amount of ounces. They're going to worry about price, but not as much as they're going to worry about ounces. How many ounces do we need at Samsung over the next three years to maintain our business business development and current business structure? That's the question they're going to ask. And if Samsung is asking that, you can bet Tesla's asking that, 3M is asking that, a lot of other you Apple computers asking that question. So, I see where this price smash, as bad as it looks right now, could be a a boon to the commercial users that say, "Hey, wait a minute. We paid $100 the ounce, you know, a month ago and we only got, you know, 70% of what we need. Let's finish up what we need, get their last 30%." And just make sure you don't go higher than, you know, 85 bucks or whatever to to bring it home. >> No, exactly. And you brought up Samsung. That's why I want to follow up on that component of the industry here because they are going upstream meaning they're going towards the source. They're supplying contracts. Um do you see that trend continue or do you think there will be another intermediary maybe coming in um that'll help out because usually we have traders like a traffic gury even um that that usually do the brokering for the for the producers or end end users. Do do you see that happening more often now? >> I do. First of all, a lot of people don't know that Samsung had an offtake agreement with Aino Gold and Silver years ago. And, you know, meter readers of the, you know, premium service, the paid service know that because we featured Aino in our list, uh, many times on and off, but now they've added another one. And then you've got other entities, small smaller mines that have been approached for their for offtake agreements. So I think the Tropagura, you know, Glen Core, all these intermediaries that really I won't say control, but certainly have access to the physical metal and they're sort of in the dark. I mean, most people don't know how that actually works between, you know, Dor or concentrate coming uh, you know, refined in China and that metal never hitting the exchange. It doesn't go to the LBMA. It doesn't go to COMX. it goes to a manufacturing concern or a uh somewhere else that needs the metal for industrial purposes. Why does it have to go on the shelf first? It doesn't. >> No, it doesn't. And uh we we'll see where it goes because I think Samsung recently signed another deal with another silver producer. I've given them credit. Thank >> I think it's it's irrelevant to the discussion as well. It's more showing the trend because we've seen that in the lithium space and other like important sectors. We'll we'll see it more in critical minerals of course, but silver is that critical mineral and maybe going on a tangent here a little bit on the critical mineral side. Do you see the US actually starting to stockpile silver? So far there has been no mention of it as far as I'm aware of. >> I do. I had uh Mike [clears throat] Dorenzo, the CEO of president of the silverist association on our mastermind about a week ago, maybe. Yeah, not quite a week ago. And I asked him that question. He kind of picked up his voice. you just yell at me, but he said there's nothing that says they have to stockpile it. You know, then it kind of calmed down and uh you know he I I believe that they will and he said yes that you know just because it doesn't say they have to. He thought that they would as well but the question becomes how soon and how much you know so are they going to grab you know 100 million ounces in a year's time or are they going to grab 30 million ounces in three years time? We don't know the answer to that. But I do think that they will certainly stockpile silver. I think that may lead to other nation state asking the same question. Well, if it's strategic to the US, is it strategic to us? So, there could be other nation states that are saying, "Hey, wait a minute. You know, we love gold for monetary purposes, but we need silver for strategic reasons. Maybe we should jump in [clears throat] there as well." Just for final uh statement on that whole idea, the strategic stockpile was 139 million ounces in 1985. They used that to make the silver eagle or coinage program and it was depleted over several years and then they had to go to the open market to buy silver to to make silver eagles from that point forward. I'm not saying that they're going to try and get 140 million ounces, but maybe they're going to try to get more. I don't know. I would say round numbers I would think at least 50 if not 100 million ounces. Now again house fast because they do it over 10 years it's really not going to put a lot of pressure on the market. It'll put some but if they're trying to get 50 million ounces per year for the next two or three years that may be enough. We just don't know. It's all markets move at the margin but the more demand there is the and for physical the more the price control goes back to the physical side. Last thing you didn't ask is that in the United States, I think it was February 1st, Kai, the defined benefits program, other words called 401ks in the United States can't add necessarily they will do it, but some will uh gold and silver as an option for the savings plan. So that is a big market. These are big uh corporations that have uh these pension programs for employees. I mean, we're talking like Ford Motor Company, General Motors, um, you know, 3M, DAO, I mean, all these big corpses that have lots of employees that have the wherewithal to do these type of things. So, that's a lot of pent up demand that someone that's worked there for 20 years, 30 years, five years, just entering the workforce says, "Wait a minute, my options, stocks, bonds, money market, or gold and silver. Hey, I want 10% of my program going into gold and silver." Well, multiply that times the amount of people that would be steadily consistently buying gold and silver month over month, year-over-year, and what that would add to the physical demand. I think it's important to to bring that to to the four. >> Oh, 100%. Uh, it's really important. Um I don't want to get too timely or ch like discuss like daily moves in gold and silver for example but just just looking at the bond yields of the 10-year it seems like there is a correlation between gold dipping and the bond yields dropping as well meaning more interest being generated of course in bonds um David do you see a correlation there over the last 10 days to two weeks um some of that gold money moved over >> I would just defer to you I'll just you know concur I mean one thing I will add to the the whole thing about you know Trump's one to the administration wanted to take the dollar lower and there's lots of reasons for that. trade trade advantage is the main one but the markets have a mind of their own and this is important to know that uh we or the administration let's say the Fed because that's who controls the interest rates does lower interest rates uh at the discount window federal funds rate it doesn't necessarily mean the 10ear is going to respond lower that's the thing that I think you know you've talked about and I'm I'm going to reiterate because the market may say I I don't care what your discount is for the banks. What I care about is how bad is the inflation rate and what rate of return do I want to even to buy the 10. And I think that's the question that more and more people are asking because the control of the interest rates is done. Uh but it's not as easy it used as it used to be. Rate control is definitely in the mix. I think that's the plan with the new uh incoming uh board with the with this [clears throat] new with Trump's administration as far as who's the head of the Fed. Nonetheless, it can only control it so much and the market again could override that. Uh the Fed does have a lot of control, but they don't have ultimate. >> No, it's a it's an interesting like development. The markets are so what do you call them? Fascinating. Fra I was going to say fragile first, but it's just fascinating what so so many microcurrens. It's it's really difficult to run a podcast and stay focused uh these days. So um what I want to come back to though is just the gold and silver price moves in general and the gold silver ratio. I know you look at it as well. We're back to 65. Uh we were at 45 um for a little bit. What what is healthy in your opinion? 104 obviously wasn't healthy either, but uh 45 seemed to a little too hot. I'm curious like is this idle territory 65 or should we be looking at the lower number perhaps? Yeah, it's real tough because you know being so bullish silver for so many years but you know more data more information you've got to do the late great An Ran you know check your premises you know one of my premises back 25 years ago and probably for the first 10 years was you know silver is a monetary level and it still is but less and less a mon so I put out a um guidance outline for my paid subscribers about silver point of 100 and what you could do to uh filter out at a profit and also on the gold silver ratio and I started that at 60 and I went to 50 and I went to 40 went all the way down to the possibility of maybe 20 but um the market knows more than anyone and and if you do the guidelines that I outlined a lot of not a lot but a fair amount of my premium members did swap they swapped gold in for their silver at the 50 to1 ratio. Well, they look like a genius today. Will they look like a genius a year from now? I don't know. But the way I set this up, uh, they could swap back to one or two. I mean, let's say the ratio got down to 80 to one again, or we could say up to 81, depending how you look at it. You might go, "Wait a minute. I made this much on my swap. I'm going to swap back gold to silver because I think David's right. I think it's going to get below 50 again." You know, I'm not trying to be a trader here, Kyle. I'm suggesting is that you have to have a plan. If you sit there and think that, you know, I'm going to catch the top on a whim because I'm emotionally attached to my investment. It feels like it's the top. Good luck, especially in this kind of a market. And the last thing I want to say because I think it's critical is that, and I have to take a deep breath. I'm [clears throat] not trying to be dramatic, but if we do go to a hyperinflationary environment, the last thing you want to do is sell your metal. It doesn't mean you got to hold it all all the way up. I mean, if you bought silver at 50 and went to 100 and you sold half and have a free trade, in other words, all the silver you're now holding is sitting there for quote unquote free because you made you got your original capital back, then why not, you know, be smart with it? So, there's lots of ways to approach markets as you know, but I think that uh again, you must have a plan. If you don't have a plan, you're going to get hung up in the the emotional wave, you know, because once silver hits, let's say, 150, there'll be people saying it's going to 300. And maybe they're right. And if it hits 200, there'll be people saying it's going to,000. I mean, there's people out there saying that now. And I'm not going to say they're wrong. I don't know. What I do know is in order to get to 300, it's got to get up 250 first. That I know. >> True. That's That's just math. And I can I can even follow that. So that makes a lot of sense. Um David, like we were at 120 like and you said emotions are, you know, really dangerous to um what do you call it? Emotions are dangerous when investing of course. And at 120 like how much of that was emotion versus fundamentally driven like if you were to make that distinction. >> It's hard. I mean they do have sentiment indicators. I didn't look at it because I look at my own based on you know my subscription rate. I mean, we went uh downhill for years and now we're starting to gain subscribers and you know, it starts to go real frothy. Uh that concerns me because that means, you know, the market is getting overbought. There's too much emotional enthusiasm in the market as far as where were we? We were high. How high Kayak really can't say. >> No. No. Fair enough. Um bit bit of a wild card. Just I wouldn't say switching topics, but I think it's it's a tangent. I I warned perhaps you just a little bit that I'll ask about it and it's it's something that I wouldn't say concerns me but something I keep an eye on because it feels like nobody's really talking about it and it's a Supreme Court decision on tariffs. Um it's a bit of a like something I've identified as I wouldn't say a black swan because we're talking about it of course but something that the market seems to ignore and is the chance that the Supreme Court rules negatively on the Trump tariffs and I'm questioning or what the possibility of the outcome is or not the possibility of the outcome but the possibility of the impact of the outcome is um how will it affect us here as precious metals investors and how will it affect markets and I'm curious what your take on that is David. >> Yeah I'm going to go through it and thank you and thanks for briefing me. We want to talk about it. First of all, let's talk about the pro the case for terrorists. First is it is used for negotiating pressure. Obviously, that's hardly needs to be said. But specifically, it's addressing IP theft. You know, intellectual property that's been taken by others. Uh forcing uh tech transfer and trade imbalances. I mean, if somebody steals your intellectual property, that's still theft. So, we could frame that as a national security issue. Some have industrial policy and do domestic manufacturing, steel and aluminum producers have benefited from the tariffs and it has encouraged reshoring and diversification of our supply chains. America has basically offshored almost everything that we do. The protection capacities mainly China and others but primarily China. That's not a good thing. You don't want to be in a situation where you can't produce your own. Bringing that back on shore. That's a pro for tariffs. Um, again, it's leverage revenue source. This is debatable, but as you said, the Supreme Courts looks like they're going in the favor of tariffs, but they generated tens of billion in federal revenue. Tens of billion sounds like a big number. It is relatively high. >> David, just to inter David, may I jump in real quick because I think they're going to rule against the tariffs. It's only 26% >> 26% chance in favor of the tariffs. So, I'm sorry. That's why I'm I'm concerned about the outcome and what it will do to the market. >> Thank you. Thank you. Okay. Um [clears throat] Okay. So, it's signaling a shift from, you know, globalization to coming back to n nationalization. Now, the case against it, uh importers pay the tariffs up front. Costs are often passed through consumers. Estimated price re increases affect all goods. Uh, China retaliated with tariffs on US soybeans and agriculture required large federal subsidies to offshore their losses. Bilateral deficit shifted, but overall US deficit still persists. Supply chains are rrooted through Vietnam and Mexico, for example. Increased market volatility and inflationary pressure. Small but measurable impact on good prices. If it doesn't pass, I think it will have an impact negatively to the medals for a while. But if it but I regardless if it passes or doesn't, and thank you for correcting, I think the impact will mitigate over time because the real reasons for the monetary metals is the disarray in the financial system. Tariffs are a new thing imposed by this administration to mitigate the trade imbalances and get more quote unquote fairness the way the United States sees it from that lens. But if it doesn't work and the Supreme Court says nope, can't do it, it will disrupt the markets in a substantial way, kind of a knee-jerk reaction initially, but I think it'll mitigate over time. No, like for us as precious metals investors, of course, we look at inflation for example and initial shock might be or shock meaning ruling might be disinflationary, but the US will have to print the money if it has to pay the money back, right? Right. Um so that is inflationary to me long term, midterm, mid to long term. >> I I think you know markets usually react to the downside when there's uncertain and that would be uncertain right now. We don't know the vote. Uh but if it says nope, you can't do it, then uh you know, again, I'm I'm making an educated guess. I don't know for sure, but what I do know is it will disrupt it one way or the other right away. And again, need knee-jerk reaction. But as you said, the printing press hasn't stopped. I mean, it just keeps going. And this is the main problem that all nation states face. And uh I forget who I was listening to this morning. I give you give them credit, but you know, if you'll really kind of stay objective, and I try to always, I can't, but I try. >> We're looking more and more like we're going to a gold standard. I mean just by the amount of central bank buying nation states wanting to buy more and more gold and people not trusting the US dollar especially after we the US made the biggest foo of all times by stealing really my word but I believe that's the correct word the Russian assets of 300 billion when they quote unquote sanctioned Russia. I mean, if that doesn't scare everybody understanding what that really means, because what happened from that point till now is other nations said, "Wait a minute. If the United States doesn't like our our politics, our trade policy, our tariff policy, what have you, they can uh hurt us. But if we own gold, we're exempt from that. We own gold, we're in a free market with no liability. If we own gold, we have mitigated that pressure that the United States could put on us." J whiz, you us guess what you just did. You made the strongest gate case for gold accumulation among nation states that's been made probably in the last dec last several decades 100%. I think we're seeing that play out. Besides Tether, the central banks are of course the biggest buyer mostly in the east. Besides Poland, they're all in the east, right? So they're far away from us. David, maybe last question here. like what is something you're most excited about or most concerned about over the next 12 months when it comes to the precious metals in terms of like news flow that could impact the price positively or negatively here? >> Uh most concerned about maybe would be um something in the solar industry that's a real breakthrough that's easy to achieve in a short amount of time. So there is some uh you know copper wire that's coated by silver that has 90% of the same output uh as a current solar panel with the same longevity and it cuts the price in half. But if that were to occur, you got to think it through. That would probably mean they just keep building more solar panels. So maybe the amount of silver would still be in the long run the same amount. So that would be one concern. Um there was a uh negative and you said positive as well. Is that correct? >> Yeah, sure. There's got to be something positive. >> Yeah, I think the positive is just um maybe a slow grind. I mean, I don't like the parabolic moves that much, but a steady Eddie moving higher for both the metals and maybe some rationalization amongst nation states where the new proposal rather than being a CBDC is a private system where people have their financial anonymity intact and it's connected to gold in a real way that could be, let's say, audited where people are satisfied that it's the real deal. That would be my wish. Oh, >> fantastic. David, it's always an honor to have you on the program. Always enjoy our conversations. In case our audience doesn't know where to find you yet, where can we send them? >> Yeah, the main page is the morganreport.com and there's lots of vectors from there. You can go to the blog, which is all the free information. There's about us page. Uh we've set it up as a one, two, three, like step one is get on the free list. Step two is watch a couple documentaries. Step three is uh get involved with the paid service. If you wish to, you can circumvent that. I do consultations, a lot of not a lot, there's a small amount of people, entities uh that want to have consultation and uh that works really well for both of us. And lastly, I just want to pitch my u documentary silver sunrise.tv. It's uh two and a half years. It's been issued for free on the web at silver sunson sunsonrise.tv. It talks about the stress, control, and fear that money puts in our lives and how to mitigate that by taking a look at true value amongst you, man. >> No, fantastic, David. It was a pleasure speaking with you. Always great to catch up. Looking forward to the next time already. So, thanks so much for your time. Really looking forward to the next one. And to everybody else, thank you so much for tuning in to Soore Financially. Hope you enjoyed this conversation with David Morgan. And if you did, help us achieve our goal of reaching 100,000 subscribers by the end of this quarter. Really appreciate your support. Uh it's a big goal for us and uh it means a lot. So, thanks so much for tuning in. Thanks so much for watching and uh stay safe out there. Take care and uh don't overleverage.