Well, it's that time of the year again. Time to take a look at our financial portfolios and see if we're holding all the assets that we want to take advantage of the many opportunities before us. As we look back on 2025, we see that the best performing asset was silver, up 146%. In 2026, I'm expecting silver to do even better. And in this video, I want to give you five reasons why you don't want to miss it. Reason number one is a structural deficit. Meaning that supply can't keep


up with demand. So we can see here that silver has been in a structural deficit for the last 5 years. So demand for industry and investment and other uses is exceeding the amount that can be supplied. And when that happens, we have to dig into existing silver stockpiles that are above ground in order to meet demand. So as those stock piles dwindle smaller and smaller and smaller, holders of silver are going to demand a higher and higher price in order to part with them. So this is the primary force that


has been driving the bullish momentum in the price of silver lately and that is definitely going to continue in 2026. Reason number two, sovereign demand and control. So in 2025, we saw several countries increase the amount of attention that they've been paying to silver. In particular, the United States, silver is designated a critical mineral by the US government. The US Geological Survey has officially added silver to its list of critical minerals. This could put further demand pressure on a metal already in short supply. So,


silver has never been on this list before. And all of the sudden in 2025, the US says this is a very important metal for us. And US is not alone. Russia is likely buying silver for its reserves. So, at first this was a rumor. Now we know it is a confirmed fact. The Russian government has allocated a certain amount of money every year to buying precious metals including silver. And finally, China. China will tighten controls on silver exports starting January 1st, couple weeks ago, raising concerns for global industries as prices


hit record highs and the metal gains strategic importance in clean energy and defense. So, we see China restricting the export of silver out of its borders. So the main theme here between the US, Russia, China as well as many other countries is we are paying a lot more attention to silver, we want it in our borders and we might even actively buy it. Number three, backwardation. Backwardation is a property of futures markets and while it's not necessarily a main driver like the first two examples


that we gave, it could cause a feedback loop that can make a bad problem even worse. So what is backwardation? Well, first let's start with the normal state of affairs. It's called contango. Basically, if you look at the futures curve of any commodity, you will find an upward sloping curve like this where prices will be higher further into the future. This is the normal state of affairs. And why is that the case? Because taking an asset in the future causes storage, financing, and insurance


costs. So you'll you'll basically think, okay, I'm willing to pay a higher price to get my asset in the future. That way, I don't have to pay storage costs, financing costs, insurance costs along the way. However, backwardation is when this flips. The curve goes the opposite way and investors start to pay a premium to have the physical asset. now. So, not only are they willing to pay more to incur those costs, storage, financing, insurance, but they're paying an additional premium to get it into their


hands now. So, that happens when generally speaking, there's a benefit to owning the physical material now. So, in the case of silver, you can imagine that's for investment, that's for manufacturing, that's for strategic purposes. So, there's a very interesting feature of backwardation I want to show you, and it's mentioned in this article right here, silver, how record backwardation could ignite a triple-digit rally. And this was published back in October, so about 3 months ago. Silver's futures curve just


did something we haven't seen in over 40 years. It flipped into deep backwardation. The front month contract is trading about $3 higher than the later ones, marking the steepest inversion since 1980. 1980, of course, was the peak of the last silver bull market. When the futures curve inverts this sharply, it usually means one of three things. Either supply is running into stress, demand for physical metal is surging, or the usual price discovery process is breaking down, or perhaps a combination of the three. In this


article, he includes this chart right here showing the that we're currently in or in October, we were in the highest level of backwardation since 1980. You can see how deeply it's backwardated. And there's this giant spike here back in 1980. So, we're not quite at that level, but we are doing something very, very unusual. And what this means is investors want physical silver. That's it. And they'll pay extra to get it. Massive premiums. So, this is a huge thing towards the end of 2025. And this


is going to play a massive part in 2026. And what happens is we get a feedback loop. So investors might be thinking, oh well, I'd rather have physical, but I don't know about everybody else. Once you see that the futures market goes into backwardation, you realize, ah, most people in the market, right? The market in general is expressing the same preference. So if everyone else tends to want physical silver now, they don't want to wait for it. then if I want silver, I better get my hands on it,


too. And you get this runaway effect, kind of like a bank run. So, I think this is going to play a major part moving forward. Finally, at the end of this article, if silver is truly shifting from a paper market to one driven by physical demand, a major rerating seems inevitable. For decades, traders have fixated on the old nominal high of $48 set in January 1980, treating it like a ceiling. But that number doesn't tell the full story. Adjusted for inflation, the same 48 $48 high equals about $199 per ounce today.


In other words, silver hasn't made a real new high in over 40 years. Silver has spent decades forming a massive cup and handle base, which is one of the most powerful continuation patterns in technical analysis. On a logarithmic scale, the measured target for that formation points toward roughly $400 per ounce. $400 per ounce. So, he's not saying that that's necessarily going to happen in 2026, but just that that's what the technical pattern is suggesting. I think that's totally


reasonable, and like I said earlier, I'm expecting silver to do better in 2026 than it did in 2025. Number four, loose monetary policy. The Federal Reserve has recently changed its monetary policy and it's not getting a lot of coverage and it is going to be very good for silver. We can see here on October 29th, 2025, the Federal Open Market Committee, so basically the Fed, announced that it would cease the runoff of its securities holdings starting on December 1st, 2025. So if you don't know


what this means, basically for the last three and a half years since June of 2022, the Fed was engaged in what's called quantitative tightening. So basically, it had tighter monetary policy and less currency was out there in the economy. Well, it's putting an end to this policy or it just did about 6 weeks ago and it's returning to policy normalization. So, what we know from the Federal Reserve is that normally they print the currency into oblivion and then the prices of everything goes to the moon,


right? Including food and housing and financial assets. So, they're putting an end to the tightening policy that was going on the last three and a half years. They're going back to normal. So they're not necessarily expanding the balance sheet right away, but I think we know that in a few months some problem will happen and they'll have to do QE infinity. So that's going to be happening and they're going to be cutting interest rates more often than not. So if we look here at the dot plot,


we see that uh currently in 2025 we're about at 3 and 1/2 or 3 and 3/4%. The median estimate is to drop by a quarter percent, but you can see all the possible forecasts are actually fairly [snorts] low. We could drop by one and a half percent in 2026. And so lower interest rates on the margin are very good for precious metals. Basically, very good for any scarce asset. So, I think that monetary policy is very loose. This is extremely bullish for silver. Number five, volatility. So volatility isn't necessarily a cause of


success, but you can certainly use it to your benefit if you understand it. And the first thing I'll say about volatility is it's not just a volatile price over time. It's also a volatile price over space. Let's take a look here. We see a disconnect between the east and the west. This comes from the ape of Gold Street. We've just entered completely uncharted territory in silver. A $6 premium between Shanghai and the Comx has simply never existed before until now. China just settled


silver at $77 while the COMX trades at $71. Historically, this spread barely moved beyond $2 because arbitrage kept prices aligned. A $6 gap means that mechanism is no longer functioning. At those levels, COMX and LBMA are effectively broken. the incentive to pull physical metal out of ComX and into Shanghai is massive. And he's absolutely right. There is a huge incentive to do this, but there's a lot of friction to actually getting it done. So, while a $6 spread is massive and creates huge


profit opportunities, arbitrage opportunities, it's not necessarily easy to close that gap and execute those trades. But $6 isn't as wide as it gets. From silver trade, with silver surging to nearly $88 per ounce in Shanghai, the China silver premium has stretched to $9 an ounce. So, this tweet here is mostly centered around price manipulation, which is a topic for another video. But the point I want to make is that the spread widened to $9 an ounce, and it got even wider than that. So when


there's a huge dislocation like this, we can think of it as space volatility and you can use that to your advantage either by making a trade directly or simply by understanding how the market is working and just holding through the whole thing. Don't get scared, don't get shaken out, you know, stick to your strategy and hold your position through the volatility because ultimately things will gap up and anyone who holds through it will be rewarded. Here's one anecdotal example of what's happening


behind the scenes. This comes from CNBC. Two Chinese companies contacted a Canadian-based silver company on Friday offering to buy physical silver at about $8 more than market price at the time. According to the CEO of that company, he said one company was a manufacturer and the other was a large trading firm, which is interesting. So, not only is the offer to buy silver $8 more than market price interesting, but the fact that it's coming from two different companies in two different industries.


So, if they were both manufacturers, that tells a different story. If they were both trading firms, that tells a different story. But we're seeing one of each. And where there's one, there's more. Okay. Also, an Indian buyer approached that same company on Monday with an offer $10 above the market price, he added. Okay. So, two two offers for $8 more from Chinese companies. That's on Friday. The weekend goes by. Then on Monday, $10 above market price. So, this is kind of unbelievable. And again, this is just


one very small sample size. If it's happening here, it's probably happening in many, many, many places. So, massive volatility. Another point of volatility I want to mention is this here from the Coobe letter. This is incredible. The double leveraged short silver ETF, ZSL, saw1 million inflow on Tuesday, the largest on record. This was followed by a $60 million outflow on Wednesday, also the largest on record. So, you can see here how absolutely massive this is compared to what it was historically. And by the


way, this is a 5-year chart. This isn't like 30 days or something. This is 5 years. And we have an absolutely humongous inflow and outflow. So hugely volatile into an ETF that is itself a volatile ETF on top of a metal leverage double on top of a metal that is already very volatile. So this is volatility inside of volatility on top of more volatility. Silver is set for much more volatility. So buckle up boys and girls. There's a lot more volatility in 2026. And where does that leave us? Well, I


think that silver is going to be at the top of the list of best investments of 2026, just like it was for 2025 because there's a massive shortage of physical silver. There's a tiny amount left and so many people want it. So, there isn't much there. And that brings us to the meme of the day and it's gone. Thanks for watching. See you in the next video.