The endgame for silver - how will the silver squeeze unfold?

Given the latest surge in the price of silver, there is renewed interest in the idea of a “silver squeeze” - a short squeeze on silver. However, it seems that most people don’t understand this concept, or how it may unfold. A regular short squeeze takes place when there is a large short position on a certain asset, whose supply is limited. If enough new buyers step into the market, they may overwhelm the short sellers and force them to exit their positions. Since the only way to get out of a short position is to buy the underlying asset, this often leads to a price spike.
But with silver the situation is different. The official price of silver is determined at the commodity exchange in New York. This market is dominated by a number of large banks, who effectively control the price. They buy unallocated silver at the London bullion market, and then turn around and sell long futures contracts at the COMEX. This way they are as though balanced. But since the LBMA operates on a fractional reserve basis, and the same silver can be sold over and over to multiple parties, there is no limit to the amount of silver they can sell, and the amount of long futures contracts that can be generated. And since most buyers settle in cash and don’t stand for physical delivery, this shell game can continue indefinitely.
The only way to truly squeeze silver is to take hold of physical silver. If enough people do that, the inventory both at the COMEX and the LBMA warehouses will eventually be depleted, and the banks will not be able to meet their delivery obligations. Technically, this will not constitute a default, since the COMEX has the power to force traders to settle in cash. But in practice, this will be an admission that there is a shortage of silver. Those traders who were unable to acquire physical silver at the COMEX will have no choice but to get it elsewhere, and I suspect that they will empty the shelves of every bullion dealer in the world, practically over night. Join us, as we explore the implications of this event, which could be far reaching.

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Music: Michael Kobrin - The Introvert
https://youtu.be/UufcCic_lQQ?si=YMytzr3zglFrRTRr

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