The Silver Trade and the Amnesia of Markets
In the first 28 days of 2026, silver is up roughly 50%. Over the previous 12 months, it has been up about 282%.
There are plenty of narratives explaining the move, and no shortage of investors convinced that higher prices are inevitable. But we’ve seen this before, and while there is no telling how high prices eventually go, history gives us a pretty good idea of how it ends.
Remember the Hunt Brothers?
In 1973, they began buying silver at $1.50/ounce and, over six years, accumulated more than 200 million ounces, valued at more than $4.5 billion.
Silver nearly reached $50 per ounce in mid-January 1980, prompting the CFTC and CME to change the margin rules. The price of silver quickly fell to $10 per ounce, the Hunts lost over $1.1 billion on the trade, and eventually declared bankruptcy.
Remember 2011?
Coming out of the financial crisis, silver rose 500% from $8.50 to $50 over two years. But in 2011, the CME raised margin requirements five times in nine days, and silver prices fell by 30% over a few weeks. The prices continued to go lower from there.
But This Time is Different!
The details and environment are always unique, but some things never change. Yesterday, the CME increased margin requirements for silver on non-high-risk accounts from 9% to 11%, while high-risk accounts will see an increase from 9.9% to 12.1%.
Investors shrugged it off, and silver prices continued higher.
But if history teaches us anything, it’s that silver prices do not rise in a straight line forever. I have no idea how high prices may ultimately go, but the pattern is familiar. Margin requirements will continue to rise, leveraged trades will be forced to unwind, and prices will fall back to earth. And once enough time has passed for a new generation of traders to forget how the last cycle ended, the amnesia will set in, and we’ll do it all over again.
Personal Note:
Our house made it through the Texas freeze without any major issues, but my wife brought in a new malnourished foster dog with eight puppies to keep things interesting.
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Story, kinda not read so much. Get that you are a Foster. Lot's of babies