How can you keep the price of a highly sought-after commodity low? How is it possible to have demand for something greater than current production without affecting the price? There can only be one answer: manipulation through fictitious “blank sales” at COMEX (the world’s largest commodity exchange in New York). The basic lesson is that when consumption exceeds production, the price must rise. So why is silver the exception?

In modern trading, physical silver never changes hands and is therefore traded in larger volumes than actually exist. Similarly to writing on a tablet with chalk when trading in the past, here too items are traded diligently and credited to accounts on both sides. In reality, however, no one really wants to hold silver, and therefore the maturity date never occurs. It is a heavy and bulky metal, would have to be transported somewhere and also stored safely. All this would cost a lot of extra money.

This is why in futures trading, stock market players are content to have a document that states: You have bought ten bars of silver and you can pick them up at XY at any time. If the price of silver rises, the person in question sells the receipt at a profit to someone else.

Similar virtual futures are, like paper money, purely a matter of trust. None of the buyers normally checks whether the seller actually has the silver stored somewhere. Even if they did, they still wouldn’t know if the seller had issued more promissory notes than he has bullion!

Yet that is not the point at all. The focus is purely on business, on profit, which can then be virtually credited to an account. This brings us back to the origins of banking and the days when citizens deposited their gold and silver in banks and received certificates of ownership for it. However, depositories soon craftily issued more of these certificates, hoping that their clients would never collect their valuables all at once. So, nothing has changed in the gold and silver market for nearly 400 years.

This means that the silver derivatives markets are larger and more extensive than the market on which the actual metal underlying these derivatives is traded. This is completely absurd. The tail (the securities market) is wagging the dog (the physical market).

Derivatives are futures, i.e. claims on paper. Here one is betting on falling or rising rates—in our case, on a certain price of silver. Only when silver reaches the agreed price is the commodity payable.

This is the secret, and an extremely simple yet ingenious one: in electronic trading, which has replaced the former real trading, it is not real bars that move over the counters but mainly virtual ones that are not available in real life. This is called a blank transaction. In this way, it is not noticeable that approximately 100 times more bars are moved on paper than are actually available.

The bankers, who are also involved in silver fixing, manipulate prices very simply by selling and buying among each other every day bars that may not be available to anyone. In doing so, they create the impression that there is actually plenty of silver available. This keeps prices low, because as long as supply exceeds demand, prices do not rise.

What would happen if everyone who had a paper claim to silver—in stocks, futures, derivatives and funds—suddenly wanted to collect their silver bullion? They would inevitably find that they had been cheated and that the bars in question did not exist at all! The market would crash in a minute and the price of silver would rise a hundredfold, maybe even five hundredfold. When might this happen? The moment the financial market collapses and everyone starts looking for the real thing again!

To put it plainly, this means that people who want to hedge their bets for the hard days ahead would be well served by physical silver. No stocks, funds, or vouchers of any kind! Only what you can hold in your hand. You can invest in coins and bullion from various producers.

The most popular coins are the Canadian Maple Leaf and the Austrian Vienna Philharmonic. These are one-ounce coins (31.1 grams) of pure silver (99.9% purity).

Collectible, special and commemorative coins are often beautiful, but usually not a great bargain because their collector value is almost always higher than the value of the metal, meaning they are too expensive. Bars come in weight categories of one or thirty-four kilograms.

We buy only the aforementioned one-ounce silver coins, mainly for liquidity and security reasons. Gold and silver bullion are profitable to counterfeit, whereas one-ounce coins are counterfeited only very rarely. Another indisputable advantage of silver coins is that each coin has a denomination stamped on it. For example, the aforementioned Maple Leaf is worth USD 5. So if you are transporting your coins across the border, you quote the value that is stamped on the coin. This allows a much larger amount of silver to be transferred without customs clearance than in the case of bullion, where the actual value of the silver is listed.

One must also consider that there have been repeated bans on gold ownership and expropriation throughout history. Expropriation can only affect people whose gold or silver ownership can be proven. This can be made easier for the State when gold or silver is ordered and purchased through official channels, that is through a bank, on the Internet or by credit card. Therefore, the best way is to buy silver in person at a brick-and-mortar shop and pay in cash. This can have its advantages at certain times.