Open question - Financial

[Falstaff]

I take your point, its possible but I don't think so. I don't think any other country has the same level of destructive firepower as the States, but China comes second. There is no reason to suppose they lack real capacity, or training, and in some areas have bested the US. They have simply the best material supply chains in the world. Their own economy is taking a bit of a hit at the moment, like everybody else, which raises pro's and con's re military action, depending upon opinions.

Their war technology is possibly not as good as the US, but certainly good enough to take Taiwan. They have done a lot of wargaming and practice for this. The US has been reluctant to send their key frontline weaponary to Taiwan, and have been hanging back a bit, to coin someone else somewhere. They are very unlikely to send US troops in support, and both sides mass troops are now young and inexperienced.

 

[GreyCat]

I think possibly the other way around...

Winnie had been making too much noise about being able to take Taiwan by force by 2030 and the military top brass know that "People's Army" can't do it; it's all well and good having a gazillion men in uniforms and a million rockets pointed at Taipei but if the men are badly trained and they lack experience and bullets and if the rockets are shiny but have empty fuel tanks, then the invasion is not going to be a great success...

When the Orangitan gets a strop on its very noisy and visible to the whole world. He sends his goons to shoot people on the streets of Minneapolis, makes a big show of wanting to take Greenland (by force if necessary) and abducts a sitting president of a sovereign state, almost live on TV.

When Winnie is unhappy we find out four days later that he's removed several senior generals from their roles on national security and military strategy committees, that billionaire businessmen have mysteriously vanished from Hong Kong, that sales of Champagne, Cognac and other luxury good have fallen by two thirds in response to an "anti-corruption" campaign.

Indeed. The commentary tends to suggest that the general removed by Winnie had been a restraining voice regarding the Taiwan issue. And Winnie is clear that he sees Taiwan as part of the motherland.

I take your point, its possible but I don't think so. I don't think any other country has the same level of destructive firepower as the States, but China comes second. There is no reason to suppose they lack real capacity, or training, and in some areas have bested the US. They have simply the best material supply chains in the world. Their own economy is taking a bit of a hit at the moment, like everybody else, which raises pro's and con's re military action, depending upon opinions.

Their war technology is possibly not as good as the US, but certainly good enough to take Taiwan. They have done a lot of wargaming and practice for this. The US has been reluctant to send their key frontline weaponary to Taiwan, and have been hanging back a bit, to coin someone else somewhere. They are very unlikely to send US troops in support, and both sides mass troops are now young and inexperienced.

Indeed. Supply chains and intent are the key rather than technology.

The USA looks good on the face of it, but faces serious practical challenges. The biggest one is what I will call continuation- the ability to replace the stuff you use up. If USA loses one asset for every 5 "enemy" ones they destroy, but the "enemy" replaces their asset 10 x faster than the USA does, then the USA loses- quite quickly. And that is the key issue.

Although USA is starting to reshore some manufacturing, it's a long way from rebuilding an independent military suply chain- especially as over 95% of the rare earths are controlled by China as they do the vast majority of the processing. And modern war-fighting kit totally relies on such materials. Plus the US kit is expensive and complex- but as the Ukraine war shows, the use of large quantities of lower tech equipment can be effective. As ever, the big military powers are prepared for fighting the nations without much weaponry and/or fighting the last war. Heck, UK cannot even produce an effective mobile vehicle, look at the fiasco which is the Ajax program.

There's also the tolerance or lack of it at home for hardship brought by war. I doubt that US citizens (or European ones for that matter) are that bothered about who controls Taiwan so long as their "stuff" keeps flowing. Whereas the Chinese could well be patriotically delighted if their media shows a glowing campaign to bring Taiwan back into the fold (from their perspective).

We live in interesting times.

GC

 

[Falstaff]

Have to admire China's long term vision and planning, with their "Belt & Road"vision, all done quite openly & publically.
China had the rare earth supply sewn up in 1992, and publically said so, but the western world seems to have only recently recognised the strategic risk, and some not even now.

According to the history programmes, Germany had the same continuation problems and were unable to replace losses quickly enough, leading in all or part to losing their war.

I don't know what the issues are with producing an armoured troop carrier, but I recall that the big US manufacturers also had failures and major problems, coming up with a working viable design of their own. Not sure that they fixed them either. Wonder why we didn't do a licencing deal and build theirs here, instead of reinventing the wheel.

 

[HorseGuy]

Although USA is starting to reshore some manufacturing, it's a long way from rebuilding an independent military suply chain- especially as over 95% of the rare earths are controlled by China as they do the vast majority of the processing. And modern war-fighting kit totally relies on such materials. Plus the US kit is expensive and complex- but as the Ukraine war shows, the use of large quantities of lower tech equipment can be effective.

"Quantity has a quality all of its own" - Joseph Stalin

 

[Chris]

Looks like Silver went into freefall on Friday, down about 36% (I think?).

From what I've read, the thoughts are if on Monday when markets reopen it rebounds at $70/oz ish then that's good news, if it keeps plummeting and goes to sub $50/oz then that's worrying.

What are predictions?

I have no skin in the game so I am just watching with curious interest, but I hope no one here's lost out. It looks like it's still up over the month, but bad news if you bought in the last week.

 

[HorseGuy]

What are predictions?

Volatility. Lots of it.

In the long term I still think silver is going to go much higher (way up to infinity when measured in fiat currency).

In the near term though? The short-term movements will be mostly influenced by what happens in Iran over the coming days. It could go to anywhere between $45 and $300 dollars by the end of February. However it makes no difference either way unless you're actually intending to buy or sell some over the next few weeks. For anyone who already owns silver and doesn't intend selling it for a while then ultimately it will make no difference what happens with price volatility in the short term.

 

[HorseGuy]

It looks like it's still up over the month, but bad news if you bought in the last week.

Disclaimer - Personal opinion here not financial advice.

Even if silver continues to go down next week I'm still sure it'll go back up again soon and will be making new all time highs again within a few months time at most.

 

[TeeDee]

Looks like Silver went into freefall on Friday, down about 36% (I think?).

From what I've read, the thoughts are if on Monday when markets reopen it rebounds at $70/oz ish then that's good news, if it keeps plummeting and goes to sub $50/oz then that's worrying.

What are predictions?

I have no skin in the game so I am just watching with curious interest, but I hope no one here's lost out. It looks like it's still up over the month, but bad news if you bought in the last week.

I often find the comments below such YT is as interesting and educational as the main contents.

 

[HorseGuy]

What's the big deal about Friday's price drop anyway?

Gold is up 11.57% so far this year.
Silver is up 17.07% so far this year.

That's a pretty solid start considering we're only one month into 2026.

 

[Chris]

What's the big deal about Friday's price drop anyway?

Gold is up 11.57% so far this year.
Silver is up 17.07% so far this year.

That's a pretty solid start considering we're only one month into 2026.

It’s the biggest drop at least since the 80s although I think that was over a few days, so it’s significant as the biggest one day drop in history.

Whether it is significant in the long term we don’t know yet, but I think it’s reasonable to call the biggest single day drop ever at least worthy of interest.

 

[HorseGuy]

It’s the biggest drop at least since the 80s although I think that was over a few days, so it’s significant as the biggest one day drop in history.

Whether it is significant in the long term we don’t know yet, but I think it’s reasonable to call the biggest single day drop ever at least worthy of interest.

It was a big movement to have happened in such a short time period of just a few hours. The only significance of this event in my opinion is the size and speed of the paper manipulation which caused it to happen. This shows how desperate the banks must be getting now.

Back in the real world away from the manipulated paper spot markets nothing has actually changed though. Look at the price it costs to take physical delivery of a 1oz gold or silver coin from a bullion dealer website and the price is still the same as it was three days ago before the drop in paper spot price happened. They just increased the 'premium over spot' to make up the difference but the prices are still virtually the same as they were before.

Physical supply shortages have not changed. Industry demand has not changed. The price for physical delivery has not changed. I far as I can tell the only thing which actually changed on Friday was the paper spot price has now become less relevant to real world prices and events than it was before.

 

[HorseGuy]

The Metropolitan Capital Bank & Trust has just collapsed.
Can they keep it contained or will there be contagion to other banks?

 

[Chris]

The Metropolitan Capital Bank & Trust has just collapsed.
Can they keep it contained or will there be contagion to other banks?

Small, single branch bank with liabilities of about $250m. Not big news.

 

[HorseGuy]

Small, single branch bank with liabilities of about $250m. Not big news.

It's a small and inconsequential bank in isolation. The big question however, is this an isolated incident or will there be contagion to other banks as is often the case when this happens?

I don't claim to know the answer. We're certainly not privy to that kind of insider information. There's a good chance it could well amount to nothing as you say. Then again, it could be the start of something much bigger. We don't actually know yet either way. We'll have to wait a few weeks to find out but it's something to watch for signs of though. Especially as there were rumors on the internet a couple of weeks ago that one of the bigger banks in America had to be bailed out in secret to prevent it from collapsing.

 

[Falstaff]

The call for increased capital to back investments might have triggered it, or loans gone bad as the US cost of living bites around Chicago. It sounded like a managed handover not a shock or extreme exposure, so might have been on the cards for a while - of course that might just be the media spin.

 

[HorseGuy]

of course that might just be the media spin.

Just like they did in 2008.

For a long time I've been of the opinion that we'll probably have some forewarning that the 'big one' is imminent when the mainstream media start pushing the narrative that contagion between banks has been contained. That's the key word to look out for. When you see "contained" being repeatedly pushed all over the news cycle everywhere you look, you'll know that there is likely only a few hours or days remaining before the financial system collapses.

 

[TeeDee]

If lower interest rates , what follows.
At least on that side of the Pond.
How will other countries read that and react.
What has no counter party risk.

 

[HorseGuy]

If lower interest rates , what follows.
At least on that side of the Pond.

Price inflation of products and assets which is the dollar losing purchasing power.

How will other countries read that and react.

They will continue to dedollarise even faster by selling more of their US bonds.

What has no counter party risk.

The shiny yellow stuff which bankers and financial advisors like to call an "archaic rock".

 

[Falstaff]

"The shiny yellow stuff which bankers and financial advisors like to call an "archaic rock""

Oh, you mean Sand ! (Not)
Agree about the containment terminology, wonder if they'll come up with another media term for it, reffing maybe Covid?
"Isolated" ? "Quarantined"? "Locked down" ?

or just blame some other country for it...

 

[HorseGuy]

I don't care what the spot price says.
Silver is NOT £56.62 at the moment.

Now that the market has had a few hours to settle down after reopening again I've had a look round the bullion shops and the cheapest that I can find deliverable physical silver is over £84 per oz (including VAT) plus postage. On Ebay 1oz silver Britannias are selling for £100 plus £20 postage.

What does that tell you about the spot price and what happened to it on Friday?