Core Insights - The current price of silver has surged above $50 per ounce, leading to chaos in the London silver market due to a massive short squeeze and nearly complete liquidity depletion [1] - Traders are struggling to find available silver for short positions, resulting in high borrowing costs and some traders booking transatlantic flights to transport large silver bars, a method typically reserved for more valuable gold [1] - The premium of London silver over New York has increased from the usual 3 cents to over 20 cents, with banks reluctant to quote prices to each other, exacerbating the liquidity issue [1] Group 1 - Silver inventories have been steadily declining in recent years, with mine production failing to meet demand from investors and industrial applications like solar panels, leading to a persistent supply shortage [2] - Since mid-2021, London silver inventories have decreased by one-third, with a significant portion held by ETFs, and the remaining freely circulating silver in London has dropped to only 200 million ounces, a 75% decline from over 850 million ounces in mid-2019 [2] - The overnight borrowing cost for silver in London has increased by over 100% year-on-year, surpassing all records from the 1980 squeeze period [2] Group 2 - If the U.S. government does not impose tariffs on silver, the influx of silver from New York could alleviate the liquidity crisis in London; however, if tariffs are enacted, the issues in the London market will worsen, potentially driving silver prices even higher [3]