Silver hoarding by JP Morgan: the private credit link

0:00JP Morgan just took delivery of over 12 million ounces of physical silver from COMEX in just one month. Not paper contracts, but actual metal, trucks leaving vaults, that sort of thing. And here is why that should keep you up at night. It's the same bank that paid nearly a billion dollars in fines for manipulating silver prices downwards. So why are they starting to hoard it?

0:28Might have something to do with a $3 trillion time bomb that's ticking in the financial system that almost nobody's talking about. It's the private credit bubble. And it sounds boring, but guess what? Subprime mortgages were also boring in 2007. The insiders, Wall Street, are quietly positioning for what comes next.

0:48And in the next few minutes, I'm going to show you the real plan, not speculation, pattern recognition, and I'm going to connect the dots that Wall Street would perhaps prefer you never see. Why are institutions fleeing into physical metals and why silver specifically might be the most strategic asset of the decade?

1:12So this isn't about being a gold and silver cheerleader. It's about understanding what the best informed money in the world knows that you don't know yet. My name is Felix Prehn. I'm an ex-investment banker. I've seen how Wall Street shenanigans work, mostly from my mentors because those guys worked in banks for 20, 30, 40, 50 years longer than I have. And Winston back there who does all the research of course, he sniffs out all the risk, risk manager in chief.

1:43We've also founded the GOAT Academy where my retired Wall Street mentors teach regular investors like you institutional strategies. We've taught well over 20,000 students over the last 6 years and it's super super fun. And I'm going to, I was going to say expose, let's say explain something I have never talked about publicly. The institutional playbook for monetary system transition. You could say reset, same sort of thing.

2:17So this isn't a conspiracy theory. It is literally a pattern that we can see based on what institutions are actually doing, not what they're saying, what they're actually doing. So by the end of the video, you'll understand the why behind this crazy silver accumulation. You'll understand the private credit crisis that's brewing and what I believe is the real plan for what comes next and how to protect yourself and your family and your money.

2:42But before I show you what JP Morgan, Jane Street, and all the other big institutions are doing with silver, you need to understand why they're doing it now. And that means understanding the biggest financial risk nobody's talking about because again it does sound boring. Pre-2008, everybody was very very bored talking about subprime lending.

3:06So give this a few minutes and you'll be in a better place to protect yourself and your money. What the heck is private credit? Private credit is basically Wall Street's shadow lending system. It's a shadow banking system. So when banks can't make loans because of regulations that were put in place after, yes you guessed it, 2008, private credit funds are acting as the bank. Think of it as the wild west of lending. Bugger all regulation, bugger all transparency and higher risk borrowers.

3:41Now apparently this democratises lending and it provides financing to companies that need it. Basically they're saying, we found a way to make really risky loans outside of the regulated banking system so we can collect the higher rates because we're greedy buggers and we can avoid the rules that were supposed to prevent another 2008. Whoops.

4:01Now here it gets a little bit scary and this is not a doom and gloom video. We're going to be on a very very upbeat note by the end of this, I promise you. But the private credit market has gone from $500 billion just a few years ago to now $3 trillion. That's kind of a lot of money, right?

4:22Buy a lot of tennis balls for this guy. We play tennis this morning. I have a ball machine, about 100 balls come out, he's just exhilarated by it. If you have a dog, you get a tennis ball machine, it's amazing.

4:35But what am I talking about with the $3 trillion? Well, subprime 2007, which is what tanked the market in 2008, generally known as the GFC, global financial crisis, that was $1.3 trillion at the very peak when it all broke and went haywire and some very poor bankers, friends of mine, lost their jobs. Lehman Brothers, was very very tragic, very tragic. That was the real tragedy, investment bankers losing their jobs, that should never have to happen, right? Those people, they work so hard. Forget the doctors, that's what the nurses say.

5:08All right, let's get back to this. So we have a shadow lending market that is twice the size of what caused 2008 with actually less oversight than what we had in 2008. And you may be thinking, I don't want to hear the bad news, give me something positive. I'll give you something positive just in a second, how you can be better informed and make better decisions. But you can't just put the blinkers on and go la la la, we're not going to want to know, because it's happening.

5:37UBS, the Swissies, they just warned that default rates in private credit could spike to 15%. Literally today, a private credit lender in the UK, used to be Great Britain, now it's just Britain or just UK, they can't afford the other letters anymore. They've gone bust, bankrupt, right? Big big big lender. Someone talking about it? No, let's keep it quiet. That way everybody doesn't know about it and we can make some money and we can keep this party going for a little while.

6:05But what does that mean? It means 15% of borrowers can't pay the interest on those loans. They can't even repay them, of course not, but they can't even pay the interest. Now how are they surviving this? They're using something that's called payment in kind. But they haven't got cash. So basically whatever I owe you in interest, you just add it on top of the loan that I can't afford to repay, not even the interest off.

6:36Imagine that. Imagine you have a mortgage that's $100,000 for the sake of it, making it simple. And that's your mortgage. And say your interest on that was $7,000 a year. But because you can't pay the $7,000 a year, your mortgage just grows. That has made your mortgage $107,000 and the year after it becomes $114,000. It's a Ponzi scheme, right? Because you can't pay it back.

7:05Now you might have heard of Jeffrey Gundlach, who's one of the most respected bond investors in the world. I'm not sure that's two terms to go together, but let's give him his title. He called this private credit thing the ultimate sin and said it's going to trigger the next financial crisis. Jamie Dimon, yes the JP Morgan lobby, Jamie Dimon, he said, when you see one cockroach, there are usually hundreds more hiding, referring to this private credit issue.

7:34So if you've never heard about private credit bubbles before this video, maybe let me know in the comments down below. Maybe we can break this down a bit further. I would rather you write shadow bank in the comments because essentially that's what this is, and I'll see it because it'll be curious to see how many people are not aware of this, right?

7:54So let me give you the official kind of translation. When a private credit fund says they have flexible lending solutions for middle market companies, it's basically Wall Street saying we're lending to companies that banks don't want to touch because they are too risky. Now why should you care, right? You don't own a private credit company or any of that. I'll tell you why you should care.

8:18Here's how this works. You have a cockroach, sorry, a private lender, right? A private lender. Picture a loan shark with great intentions. Obviously you have a borrower who wants to borrow money. But where does the private lender, I mean the cockroach, where does the money come from? Well the money's got to come from somewhere and that money comes from banks. So the banks lend to the private lender who have a good credit rating on paper and they pass that money straight onto the borrower. He's got sod all money. Sorry, pardon my French.

9:01So what does that mean? Well it means in reality the banks are lending to the guy with bugger all money and is putting somebody in between to cover it up, right? So why the heck does this matter for silver? Okay, the private credit bubble has got everything to do with silver and gold because when sophisticated investors, they see this risk, systemic risk, cockroach risk, the ultimate sin risk, I'm quoting, in the financial system. Risks that are invisible to you and me because we don't see it. And they start positioning for the fallout.

9:36And the fallout from a $3 trillion private credit blow up, well it could make 2008 look like a warm up act. This is why these guys are fleeing into physical assets, not paper, not ETFs, physical silver. It's a lot of silver because when there's stress, all these fugazi paper contracts tend to lose value.

9:56So why are they buying silver and not just gold? Why do they insist on physical metal? Well there is a reason the thumbnail says silver reset. It's not clickbait. It's what happens when you actually read what institutions are positioning for. So what most people really aren't even aware of, silver isn't just a precious metal. It is a strategic metal. It sits at the crossroads of two enormous trends that are coming together.

10:26First of all, silver is the most electrically conductive element on Earth. It's essential for what? Solar panels, electric vehicles, AI infrastructure. Basically everything in the green energy transition.

10:42That's going to save the planet, that stuff. Solar panels consume 25% of annual solar supply. We expect that to double by 2030. EVs use very significant amounts of it, 3 to 4 times more than your average gas guzzler. And the whole AI boom thing, all those data centres, they need silver for all the electrical components. It's just physics. There isn't a substitute for it that works as well.

11:09That's the first part. Now, the second part is silver has literally been money for 5,000 years. Always in times of monetary uncertainty when you didn't trust the government or the printing, inflation, and also confidence in the fiat system, people flee to gold and silver. You got industrial demand consuming silver. It actually literally gets used up. Gold doesn't really get used up all that much, some industrial usage but not a great deal. But the investment demand is hoarding silver as a hedge.

11:41So we've got 5 years of supply deficits. We're drawing down above ground stockpiles. And just have a look at, let me just show you this COMEX. We have a metal tracking tool with a bunch of stuff in there. And one of the things is the COMEX inventory and we track that every single day. In March we were at 120 million ounces of physical silver in COMEX. Now it's 86 million. That's more than a third that's gone missing in less than a year. Crazy, right?

12:11Gold, similar trend. It's also sloping down in an accelerated rate down. You can track that every day. That tool, by the way, is like $6 a week or something. It's very affordable intentionally. And the other thing I like to track is actually Shanghai is a very different market to COMEX, right? Different sphere. And they have a premium for gold and also for silver and you want to keep track of that because that tends to tell us which direction it's heading into. That's a very useful thing to know.

12:41We track a ton of other stuff in there too, including you can actually track your own metals, which I think is very cool. You can literally say if you've got a receipt for silver or gold or something you bought, just upload it. You can also insert it manually and it'll then track it for you and that way you know exactly what you've actually got. There's also a ton of other stuff in there. News data, stock screeners, carry trade trackers, retirement planners, zombie stocks, and all that kind of good stuff.

13:10So a ton of stuff. If you want to check it out, it's down below. Just subscribe. Go for subscribe to it for a month. If you hate it, you just cancel it. There's no questions asked on that front. But the point is that these supplies above ground are very rapidly diminishing. We have a deficit.

13:28So why are the institutions that basically run the paper markets suddenly buying physical silver, insisting on it rather than the paper stuff? Well, the answer kind of gives you the real plan in my humble opinion. So when you own an ETF like SLV, right, popular ETF, you don't own silver. You own shares in a trust that supposedly holds silver. You can't redeem those shares of physical silver. It's not possible.

13:58So who's the custodian of SLV? Go on, you can guess it. Yes, of course, it is JP Morgan. The same JP Morgan that paid almost a billion dollars in fines in the possession of silver. It is the custodian of the largest silver ETF. You really can't make this up, can you?

14:17So the counterparty risk is there. Well, sophisticates understand something about risk. You own physical silver, you don't have a counterparty risk. It's actually yours. The metal is yours. No fund manager, no custodian, no financial system needs to remain solvent for your silver to retain its value. So when you own that, you're dependent on just yourself. Not the ETF sponsor, not the custodian, not the subcustodians, not the authorised participants. They're all part of that world.

14:47So if you're positioning for a scenario where the financial system gets some stress and say a $3 trillion private credit bubble blow up, which could happen, just ask JP Morgan about it. Well, only the paper probably isn't a genius move, and that's why JP Morgan probably wants to own physical silver. That's my humble opinion. That's why the smart money now wants physical suddenly. It's like there is this right now.

15:14Does that mean we should put all our money into silver, into metals? No, you don't want to ever go all in on anything. It's human nature to want to do that. But JP Morgan is also still buying a lot of stocks and making a lot of money trading. How do they find stocks in this scenario that are more stress resilient? It's very simple. There's a very simple 3 step system that Wall Street has literally used for 50 years.

15:37Do you want to learn it? Should I teach it to you? If you do, write learn in the comments and I'll actually do it. I'll do one better for you. I'm actually running a live training session about tomorrow. Literally will teach you how Wall Street finds better stocks than you do. It's that simple. Can teach that to you in about an hour and a half or so. Sign up felix.org/training. It's free. No credit card or nothing at all. Just show up, be on time. The room gets full. We get 3,000 people limit. We tend to get full. And then people get sad. I don't want you to get sad, but sign up for that. Felix/training and show up a little early. That will be my recommendation.

16:14So what's the real plan here? It's pattern recognition, which I'll teach you a lot more about. You come and join me tomorrow as I'm recording this. You're watching it later. It won't be tomorrow. Obviously, it will be in the past. But there are 3 warning signs that tell you when the big money is positioning for something major.

16:36And the first one is do as I say, not as I do. So the first warning sign is when what the institutions say doesn't really match what they do with their money. So JP Morgan, right, for years this bank was accused of keeping silver prices artificially low through spoofing. They did pay a $920 million fine for manipulating the markets, probably just because they felt like donating $920 million to the greater good.

17:07But yeah, they got caught placing fake orders basically. It's a trick to manipulate the market. And of course they are reformed and apparently they've liquidated their paper positions, their short positions and they are sitting on 750 million ounces of physical silver. Seriously crazy, right? That's a lot of silver.

17:32Now, I'm not saying I know exactly what's going to happen, but when the arsonist starts buying fire insurance, I kind of pay attention. You have to decide what you do with this information.

17:43Warning sign. The commodity exchange where silver futures are traded, COMEX, right? Those lovely people, they have experienced multiple technical issues right before critical delivery deadlines for physical silver. And there's a simple reason for that. Registered silver, the metal that's actually available for delivery, I say here 88 million. That's actually not true. What does our smart chart say? It says 86 million and counting down.

18:13So there is 86 million ounces there. Paper claims are about 240 million. So just a little bit more. 3 times more paper claims for every ounce of real silver. So say half the holders of these contracts demanded physical silver like JP Morgan has done. Well, the system would break, wouldn't it? Yeah, it would really break. And that's also why keep an eye on the physical premiums, the actual cost over paper, which have gone up quite significantly. And again, you can track that in here. Actually, today's premium is surprisingly low. We'll see what happens tomorrow.

18:54And then it is the warning sign of the quiet money, when already quiet money managers make big moves. Well, welcome Jane Street. And maybe you don't know who they are, which is intended. They're one of the most sophisticated quantitative trading firms in the world. They don't advertise. They don't do interviews. They just make money. Lots of it.

19:20Right now, they acquired about 20 million shares of the iShares silver ETF in just one quarter, which is rather a lot. They're now the largest reported holder of SLV, which as we now know JP Morgan manages, bigger than BlackRock's position. And these guys are known as market makers, which is a weird term that most people don't really understand. I'm very lucky. 3 of my senior mentors are market makers. They run our GOAT academy.

19:55And essentially a market maker provides liquidity. They don't usually make large directional bets. So when a firm like this suddenly becomes the largest holder of silver ETF, it is rather curious what they're seeing and the order flow out. And look, if you never heard of Jane Street or market makers, just type Jane Street in the comments because again, I want to see how many people are just starting to learn about the smartest quant firm making big silver moves here. And we can add some more education on that.

20:26And if you want that education, come and join me tomorrow at Felix/training and I'll break down a lot more. It won't be a silver training or gold training. It'll be just literally the patterns and the rules for picking better things. There could be stocks, there could be gold, there could be silver, doesn't matter. It's all the same rule. And I'll show that to you. And these are rules that have been around for 50 years. I didn't make them up. I just learned them from guys who learned them from guys who learned them.

20:51Them from guys. And I guess we go back far enough, eventually somebody actually came up with that. Right, Winston? Was it you? Come on, step here. Why are you hiding behind the chair, Winston? And you see that nose? He's hiding behind me. He's like, "Come on, let's go out. Stop yabbering about gold and silver. We know all about it already." What everybody does want to stand behind.

21:11But there's a 4th warning sign that I've actually just added to this framework and I call it the CEO cash out. When big banking executives are paying themselves like there is no tomorrow, which is what we're seeing, Wall Street CEO compensation has hit levels we haven't seen since 2006. Let me give you some numbers. Goldman Sachs CEO David Solomon, man who apparently needs some cash, he's getting paid $47 million this year. Nice 21% increase. Go to your boss and say, "Can I have a 21% increase like David Solomon, please?"

21:46Morgan Stanley's Ted Pick is getting paid $45 million, a 32% increase. Jamie Dimon is getting paid $43 million. Bank of America's head honcho is getting paid $41 million. Wells Fargo's CEO Charlie is getting paid $40 million. You know what the total is of that? That's $258 million for 6 people.

22:17Now, why does it matter? Look, I don't care what people get paid. And obviously you were all thinking, how does the Wells Fargo guy survive, right? That was probably your first thought, wasn't it? It's like, how does he afford the 6 houses, the 2 jets, the boat, the 4th mistress? I mean, it's got to be a stretch, right?

22:34But why does it matter? Well, this is what they got paid in 2006, which was the year before 2007. And in 2007, we started to see the cracks in the housing market. By 2008, we had the worst financial crisis since 1929.

22:50Now, am I saying we're getting another 2008? No. But I'm saying when executives are starting to cash out at these levels, maybe they know something about risk and they're thinking, well, let's just get some, right? And maybe you remember Lehman Brothers executives. They're getting record bonuses up to the moment the firm collapsed, literally, right? They're not like, "Oh, the business is a bit shaky. Let's take a little bit less." That is not how bankers work.

23:18So, are you concerned about that? Are you concerned about these levels? If you are, let me know. Write it down below in the comments. Just put a dollar sign in there and I know what you're talking about.

23:27And before we go into the real plan, understanding institutional patterns and signals is, in my humble opinion, what separates regular investors from the ones who can actually build wealth. So, if you want to learn how Wall Street really picks stocks, the actual frameworks that you don't get taught in finance classes, I'm going to teach it to you for free live on Friday evening, New York time. So, you just sign up at felix.org/training. It's very quick. It's very easy. And I'm going to walk you through Wall Street's rules for picking stocks, the same strategies that I learned from my mentors who spent decades in banking. And there's a link down below in the description. So, if you're serious about levelling up, which is probably why you're watching this still, show up for yourself.

24:15So, let's connect all the dots and reveal what I believe is the real plan here. What institutions know that retail investors don't, and our mission here is always to fix that. So, first, we have a $3 trillion private credit bubble, which is not good. It's more than double the size of the 2008 bubble. Default rates are crazily high. We literally saw one institution collapse in the UK today. Massive risk and the banks are basically the ultimate lender for these institutions. Insurance companies, pension funds are exposed. So there's a lot of connections here. This will spread if it goes haywire.

24:58And second, we have the most sophisticated institutions in the world are acting. They're positioning now. They're accumulating the world's largest physical silver stockpile. Jane Street became the largest holder of the SLV ETF and Wall Street CEOs are cashing out like the music is about to stop.

25:19So, is that coincidence? Well, it's for you to judge. I don't really believe in coincidence. And then the 3rd part is silver sits at this beautiful intersection where we have actual industrial demand thanks to AI and electricity, EVs and all that kind of stuff. And it is also a monetary metal which provides insurance. It tends to go up when there's inflation in the system fails. We've got 5 years of supply deficits, right? About 800 million ounces have disappeared over the last 5 years. China has classified it as a strategic resource.

25:55So, how do we put this all together? Well, this is what I think Wall Street's seeing. They've identified massive risk in the financial system, $3 trillion. So, they are accumulating physical silver before retail investors really catch on. They're front running the market without trying to drive up the prices. And the COMEX buddies are possibly helping with that. Not an accusation, just a thought.

26:20And if the system breaks, they've got an insurance policy which could be worth a lot more than what they paid for. CEOs are getting paid as much as they possibly can while the music is still playing.

26:31So, what do you do with all of this? I don't give financial advice. I'm not a registered financial adviser. I'm not an adviser on anything other than that Winston wants to go out. You need to do your own research. You need to come to your own conclusions. I can just give you the beginning of it. I can give you the data if you join our community here and you can see exactly what's going on in here.

26:51But there is something that I call an asymmetric opportunity and my first question is always, is there an information asymmetry? Do institutions know something that most people don't? In this case yes, I believe so. They have better data on private credit stress because they're actually lending into that space. They understand the physical metal flow better than anybody, although we do our best with all the data we make available to you.

27:17And then I look at, is there a structural imbalance? So is there more demand than supply or the other way around? And in silver the answer is yes, right? Industrial demand, we've covered that. And then I look at, are the insiders, the guys with the most knowledge on this, are they acting on this? Not just talking about acting on it. Yes, Jane Street is the number one silver ETF holder and JP Morgan is loading up on physicals.

27:43So, what do I look at? I look at how much silver there is left at COMEX every day. It's very simple. I just open up our little indicator here. I keep an eye on the premiums and the ratios. And yeah, I do read a little bit more about mining data and that kind of stuff because there are potentially some beautiful opportunities in there. And again, we can talk about that more tomorrow. We're going to get some miners together and see exactly how to spot those patterns again.

28:12And if this information, I've given you quite a lot of information here. That's always my goal to overload you slightly, but you can just about take it in story. You're like, whoa, that was a lot. Otherwise I'm not being respectful of your time. And if you feel this is helpful to give you that kind of framework, just put an F in the comments or framework in the comments. And again, I'll see what you're getting out of this.

28:32But to sum it up, $3 trillion private credit bubble, starting to see the cracks. Bank that is usually the biggest shorter of silver is buying silver. Big bank CEOs are paying themselves more money than they ever have since, well, 2006. And maybe that's not coincidence, right?

28:52But hopefully I've delivered for you and to shine some light on what I think is the real plan, which was the promise and the premise of this video. And if you want to learn how to spot these signals yourself, understand the patterns, and be on the right side of moves, how to follow the money, then join me live at felix.org/training. We're going to have a ton of fun. I'm going to teach you Wall Street's rules for picking stocks, metals, anything with a chart. It doesn't matter what it is. It's all the same framework and I didn't invent that framework. I learned it from people who've worked in the big institutions for many decades.

29:32So if you got some value out of this, come and join me live. And the only thing I'd ask of you is share it with somebody so more people are better informed. And Winston, any final thoughts? Winston, any final thoughts? Sit up. Sit up. Sit up. What should people do about gold and silver? He says, "I'm not a financial adviser." Better come enjoy the live training.

29:57Thank you very much for tuning in. We wish you a beautiful day and hope to see you live. While everyone's been obsessing over AI stocks, something historic is happening in the silver market that almost nobody's talking about. We're looking at potentially the perfect storm scenario.