By Gold & Geopolitics - December 30, 2025

When infinite paper meets reality . . .

Remember Greece in 2015? Banks closed. ATMs limited to €60 per day. Then €50. People queuing for hours to withdraw their own money from their own accounts. Pensioners fainting in bank lobbies. Businesses unable to pay suppliers. The economy grinding to a halt because nobody could access cash.

That wasn’t theoretical. That was real people discovering they were unsecured creditors in a banking system that had taken exorbitant risks with their deposits.

And I have a feeling it’s about to happen again. Not specifically in Greece. In banks across Europe that you’ve never heard were in trouble. Because they made bets on the two most boring asset classes imaginable.

A metal. And bonds.

Your deposit isn’t sitting in a vault with your name on it. It’s part of a giant pool that banks use to make investments, provide liquidity, and generate returns. When those investments go bad, your deposit becomes a liability banks can’t honor. You become an unsecured creditor standing in line behind secured creditors who get paid first.

The secured creditors are the big institutions. The prime brokers. The derivatives counterparties. They get the collateral pools. They invoke their legal priority. They take everything.

You get a number in a queue. And maybe €60 a day if you’re lucky.

A tad dramatic maybe, but that might be what’s coming… And silver might be the fuse that lits it.

Banks – both US and EU – have been sitting on this powder keg for years. Those bonds they bought when rates were near/sub zero? They’ve been underwater since central banks started hiking in 2022. The most recent comprehensive data – from September 2023 – showed unrealized losses on euro area bank bond portfolios averaged 30% of book equity. Some banks hit 60%. And with rates remaining elevated through 2024 and 2025, those losses haven’t disappeared. They’ve just been quietly festering on balance sheets, hidden by “hold to maturity” accounting.

That’s the simmering fuse. Billions in unrealized losses. Years of exposure. Banks praying rates come down before they need liquidity.

And now silver adds accelerant.

Derivatives desks were shorting silver. According to SprottMoney, several non-US (likely European) banks hold significant short positions. Paper contracts on the assumption the price stays manageable and contracts settle in cash. Standard market-making. Collect fees. Provide liquidity. Nothing exotic.

Two boring trades. Bonds and silver. Conservative assets. What could possibly go wrong?

Everything.

Central banks started hiking rates. Those “safe” bonds are now deeply underwater. Billions in losses that don’t appear on balance sheets as long as banks don’t sell.

And silver? It opened 2025 at $29.59 per ounce. It closed Friday at $79. Up 167% in twelve months.

Banks that shorted at $29.59 and held are now facing 167% losses. On a €1 billion notional position, that’s €1.67 billion in losses. And it’s getting worse daily. Silver hit new highs last week. China announced export licensing requirements starting January 1st – 121 million ounces of annual exports now require government permission. CME hiked margin requirements to $25,000 effective Monday, forcing more collateral calls.

Why is this a story about more than just silver and bonds? It’s about . . .

[SNIP]