9 Minutes Read (Some readers may be offended by the language in the seventh paragraph.) Reuters, LONDON, July 9 – Kerry Kraker, 56, has spent his whole working life in kitchens. He’s been spending roughly $100 a week on silver coins since March, around half of his disposable income. He’s part of a rising social media movement that claims to be buying gold and silver bars and coins to safeguard themselves from the coming inflationary era. Kraker, who lives in Seattle, says he feels emboldened as a result of a network of like-minded silver’stackers’ who have gathered on social-media platform Reddit Inc. “They are so optimistic and so convinced in the improvements they can bring about,” said Kraker, who lost his home during the financial crisis. Some of the 122,000-strong community, inspired by Reddit site WallStreetBets, seek to corner the market and bring down what they believe is an unjust financial system. Market experts believe this is unlikely to succeed since there is enough of silver and central bankers in the US and Europe expect inflation to remain in the low single digits. Bankers, on the other hand, aren’t reaching through to this demographic. “There’s a smattering of rage, such as ‘screw the system.’ I might take the back door to wealth if there is one because the front entrance is locked “Kraker stated. “The bankers and others have effectively closed the door to anyone who isn’t themselves.” The movement’s heart is a Reddit forum called Wall Street Silver, which was founded in January at the same time that WallStreetBets was organizing a grassroots rebellion against the financial elites through synchronized stock purchases. More than 20 users, who name themselves “silverbacks” and “apes,” have a home page with a picture of an army of monkeys marching from the “Planet of the Apes” movie, and say stuff like “Ape like shiny,” were interviewed by Reuters. They organize “raids,” which are days when everyone buys everything at once. Ivan Bayoukhi, the group’s founder, is a 24-year-old former auto salesperson who lives with his parents in Alberta, Canada. “NOW IS THE TIME TO WAKE UP AND RETURN THE POWER TO THE PEOPLE,” he writes in one of his signature messages. An ounce of silver costs roughly $26. Stackers believe the price will climb as currency values decline, demand for silver rises, and supply become scarce. Some claim that by purchasing up bars and coins, they may raise prices by 100% or even 1,000%, putting them in a position to compete with the so-called bullion banks, the major financial institutions that dominate precious metals trading. A post from March Our time is running out…keep stacking and we’ll win! : “KISS MY ASS JAMIE DIMON,” a message to the head of JPMorgan Chase & Co, a U.S. investment firm that dominates the bullion trade, was pictured by Wallstreetsilver. JPMorgan did not respond to a request for comment. “We will have millions of people in the movement in a year or two,” Bayoukhi told Reuters. “And then the bullion banks will be done.” “THE MARKET’S CORNER” Silver and gold prices, which have traditionally been considered safe havens for wealth, have climbed since 2019: Since then, gold has risen by roughly 40% and silver by around 70%. Millions of people throughout the world believe currencies are weak, a fear that has deepened as governments have borrowed and manufactured money in response to the outbreak. Tim Hack, a 23-year-old stacker in Germany, said, “It concerns me every day when this bomb would explode.” “You can sense the fundamental physical value of silver and gold when you hold it in your hand.” On Jan. 27, Reddit users joined the silver debate after posts on WallStreetBets claimed that if enough individuals bought the metal, prices could skyrocket. “Corner the market,” one of them said. An allegation made on Reddit that big banks trade massive quantities of paper contracts for silver that they don’t have in their possession, keeping prices lower than they should be, added fuel to the fire. In some ways, you’re right. In the New York futures market alone, contracts covering about 800 million ounces of silver are active – more than twice the amount the exchange claims is in its registered vaults, though not all of it is accessible for delivery. According to bankers and merchants, much of the silver that banks buy and sell in London, another major trading center, is borrowed. They agree that if every professional who owns silver on paper paid their dues all at once, there would be insufficient metal on hand. Because most contract holders don’t want actual metal, which they’d have to pay to keep and insure, the system works. They’re speculators, miners, and jewelers who are hedging their bets. Following the articles on WallStreetBets, $3 billion was rushed into a fund managed by asset managers Blackrock that holds silver for investors. In just three days, Blackrock added more than 100 ounces of silver to its stockpile. The wholesale price of silver increased by about 20%. The majority of the silver held by Blackrock is in London. There had been “concerns that London would run out of silver,” according to the London Bullion Market Association (LBMA), an industry organisation. According to Reuters, Blackrock does not keep track of where the money comes from. “Why don’t I form a Wall Street silver community?” Bayoukhi, the Reddit group’s founder, said to his father as he watched with mounting interest. “FAMILY FOREVER” is a phrase that means “forever family.” The statements made by Redditors that major players can affect the silver market are also true. Spoofing is a strategy used by traders to manipulate prices by putting out bogus buy or sell orders before completing the real trade. JPMorgan paid $920 million to resolve claims that its employees submitted “hundreds of thousands” of false orders into precious metals and Treasury markets in 2020. The bank stated at the time that the individuals responsible had left and that its compliance mechanisms had been enhanced. It declined to speak further for this story. Spoofing, on the other hand, has a short-term influence, according to Ross Norman, a former precious metals dealer based in London. The squeezing in January lasted three days. Then WallStreetBets shifted its focus back to stock markets, and silver began to settle. The price of silver has dropped by a dollar since early February. Wall Street Silver, undeterred, responds with a barrage of advice, analysis, memes, photographs, and support. Although it is only the 3,783rd largest community on Reddit, it is usually among the top 20 in terms of daily post volume. “You are now family forever,” Bayoukhi regularly comments when a new member writes. “IT WAS A HELL OF A TIME” The purchasers on Reddit are at the end of a long silver pipeline. According to researchers, just roughly a quarter of the 1 billion ounces or so generated each year is used to make the bars and coins that the majority of people are purchasing. The majority of the remaining material is used in jewelry and industrial applications. Michael Mesaric, CEO of Valcambi SA in Switzerland, the world’s largest gold and silver refiner, believes the 1,000 ounce silver bars used in the wholesale market are plentiful: It is “completely incorrect” for tiny investors to believe they can corner the market. He stated, “They can engineer a squeeze on products.” “But how much silver is there in total? They’re going to have a blast.” According to consultants Metals Focus, investors will store a lot of silver this year, although less than in 2020. Demand in the West is strong, but the pandemic is limiting people’s capacity to acquire silver in India, one of the world’s largest consumers, according to experts. Metals Focus noted in a research for the Silver Institute that funds like Blackrock’s hoarded 331 million ounces in 2020, the highest ever; bar and coin customers took home 200 million ounces more. According to the consultant, investors will hoard 150 million ounces this year, the second highest amount ever, while bar and coin buyers will buy 253 million ounces. Silver coins and bars can keep their worth for a long time. Higher inflation, as well as increased demand from manufacturers of commodities such as electronics and solar panels, should raise costs, according to Rhona O’Connell, an analyst with traders and brokers StoneX. However, she and others at metal trading firms believe that estimates of $1,000 per ounce are out of this world. Only seven of the 39 analysts and dealers questioned by Reuters in April predicted silver prices will average $30 or more in 2022. They predicted a $44 average as the highest. Redditors, on the other hand, remain unaffected. Kraker, the waiter, has become obsessed with reading about inflation, money supply, and other economic facts. He warned, “There’s a monster around the corner.” “I’m attempting to make my stick sharper.” Veronica Brown and Sara Ledwith edited Peter Hobson’s report from London./n
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