In a compelling interview with Liberty and Finance, financial analyst Alasdair Macleod asserts that China has ceased its long-term manipulation of the silver market. This revelation, coupled with Macleod's stark warnings of a looming global credit crisis, has sparked significant discussion within the precious metals community and beyond. Macleod, a former bank director and head of research at a major gold company, now shares his expertise through his substack, Macleod Finance, and argues that China has been secretly accumulating substantial silver reserves for decades, thereby artificially suppressing the price.
Macleod declared, "The days of that suppression have probably come to an end," suggesting that China's strategic silver acquisition program, initiated in the 1980s, has likely reached its conclusion. He pointed to the People's Bank of China's mandate to manage the nation's precious metal reserves, a mandate he believes has been used to justify the clandestine accumulation of silver.
He outlined a complex operation involving international entities, including companies like Glencore and banks like JP Morgan, which facilitated China's silver purchases and subsequent price control. "The man from…either Trafigura or Glencore would come along and assess the value of the (silver) dore," Macleod explained, "and based on his assessment…the dore would be shipped off to nobody knew where." He further argued that the hedging activities associated with these large-scale silver purchases, particularly the sale of silver futures, have been instrumental in maintaining the artificially low silver price.
With China's need for silver suppression potentially diminishing, Macleod anticipates a significant price adjustment for silver. "As gold continues to go higher… I would expect Silver's got quite a lot of catching up to do," he stated.
Beyond the silver market, Macleod presented a concerning outlook for the global economy, predicting an impending credit collapse that could surpass the 2008 financial crisis. He drew alarming parallels between the current economic conditions and those leading to the Great Depression. "This is a huge, huge credit bubble," Macleod warned, "it's the largest we have ever seen in history." He attributed this to decades of central bank intervention and the accumulation of malinvestment.
Macleod highlighted several indicators signaling an imminent credit crunch, including declining bond yields, stalling equity markets, record-high margin debt, and the recent bursting of the Bitcoin bubble. "That bubble is bursting," he said, "and there's going to be a lot of tears I think in the crypto market." He criticized government policies that are hindering the private sector and contributing to economic contraction.
He also expressed concern about the resurgence of protectionist trade policies, drawing comparisons to the Smoot-Hawley Tariff Act of 1930, which is widely believed to have worsened the Great Depression. "This is Smoot-Hawley Mark 2," Macleod declared, "this is the Wall Street Crash Mark 2."
In light of this impending economic crisis, Macleod offered practical advice for individuals seeking to protect their wealth. He emphasized the critical distinction between money (gold) and credit (fiat currencies), urging individuals to reduce their reliance on the latter. Macleod advised individuals to shift their assets from credit-based instruments to gold, and potentially silver.
He also identified potential in the mining industry, particularly companies involved in the production of raw materials and commodities, as a hedge against inflation and economic instability. Macleod urged investors to prioritize wealth preservation over wealth enhancement in the current economic climate. "You're not acting as an investor," he explained, "you are basically trying…to protect your wealth." Macleod stressed the importance of understanding the fundamental difference between money and credit, and the implications of the current credit-based financial system.
Watch the full interview:
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