Silver Once Sustained America, Now It’s Been Outsourced

Examining long-term silver charts can be quite sobering, and internet experts who promote $10,000 silver with heavy doses of conspiracy theories are not particularly reassuring.

James 

Dear James,

Your doubt is a strength, not a weakness. Anyone who recalls the events of 1980 and 2011 has the right to be wary. The Hunt brothers showed us the consequences when speculation outpaces real value. 2011 demonstrated what occurs when interest rate increases collide with highly leveraged positions.

Here’s what sets this apart: The argument isn’t focused on cornering the market through speculation or momentum traders rushing in. It’s about structural supply limitations colliding with unyielding industrial demand. Solar panels aren’t concerned with chart patterns. Neither are electric vehicles or AI data centers. And you can’t extract your way out of a refining bottleneck.

Does that imply $10,000 in silver? No. The eccentric experts cause more damage than benefit. However, it does suggest that the supply and demand calculations are heading in a direction that years of consolidation didn’t foresee. Remain doubtful. Manage your positions wisely. Don’t let 1980 cloud your view of 2026.

Scars make better investors,

Charlie

P.S. If you’re old enough to recall two crashes, you’re old enough to understand when the situation is truly different. Rely on your ability to spot patterns, not on the experts.

Beijing operates with a long-term perspective. Washington focuses on election timelines.

Dear Charlie,

A communication to all Western defense industry producers:

Would you like to create a weapon? If so, you’ll face challenges if you rely on refined minerals from the PRC, as China has decided not to export refined silver, tungsten, antimony, dysprosium, terbium, holmium, erbium, thulium, ytterbium, lutetium, samarium, yttrium, or any other refined mineral that might be utilized in constructing a nuclear reactor, high-performance magnet, computer screen, laser, superconductor, heat-resistant capacitor, or other potential military parts.

Houston (and Tokyo, D.C., London, Taipei, Seoul, Paris, and Berlin), Western defense industry producers face a challenge.

Is there a quick, makeshift solution similar to what was used during the Apollo missions to address this existential issue, which can be implemented before the West’s reserves of critical refined minerals are depleted?

Tony 

Dear Tony,

That’s not a remark. That’s a threat evaluation. And you are correct.

Quick-fix Apollo approach? Here’s the harsh reality: The Apollo space program succeeded because the United States already had the factories, the engineers, and the necessary materials within its own borders. The challenge was the vast distance, not reliance on external sources. The current issue is that the factories are located in Shenzhen, the engineers were educated there, and the processed materials arrive from Chinese ports.

The United States is taking actions. The Mountain Pass Rare Earth Mine, which is owned by MP Materials, is operational. Lynas Rare Earths is expanding its facilities in Texas. The Defense Department is providing financial support. However, “taking actions” and “resolving the issue” are not equivalent. Obtaining permits for a new U.S. refinery takes more time than it takes China to extract from its current supply.

The West’s reserves will provide a temporary reprieve. The duration of this respite depends on the specific material and the intensity of the situation. The makeshift fix assumes access to duct tape—but the West’s supply is now located in China due to lower costs.

Thanks for raising the issue that no one in Washington is willing to address truthfully.

We’re making do with what’s still in the drawer,

Charlie

P.S. The Apollo engineers used slide rules and determination. We have consultants and environmental impact statements. Different time period.

Dear Charlie,

The United States once maintained a stockpile, but these concepts were seen as outdated following the end of the Cold War and the rise of neoliberal policies. We had the opportunity to prepare the country for this crisis, but the entire notion of civil defense, strategic national reserves, and using resources as leverage was discarded.

It was a critical strategic error that could have been readily prevented. Poor leadership, flawed concepts, and complete ignorance regarding Chinese motivations.

We are engaged in a battle for nothing less than global control, and the Chinese are showing no mercy.

Zlatko 

Dear Zlatko,

The history of strategic stockpiles is one of those tales that leaves you wanting a drink and a long, silent gaze at the wall. The U.S. possessed silver. It had rare earth elements. America held essential materials reserved for exactly such a situation. Then Washington concluded the Cold War had ended and sold everything off because markets are more efficient than storage facilities.

China observed America doing this. Subsequently, it established the warehouses. Now it has control over refining; processing; and, as of January 1, the exit points.

“World domination” is a powerful expression. I believe it’s more straightforward than that: China seeks influence—and has developed it while the U.S. focused on maximizing quarterly profits. The mistake wasn’t regarding Chinese goals. It was in assuming that everyone adheres to America’s views on how the world functions. They don’t.

Thanks for taking the time to read and for the sudden dose of strategic truth.

Efficiency is a luxury reserved for times of peace,

Charlie

P.S. The same individuals who sold the stockpiles will be astonished—astonished—when supply chains fail. It always happens.

Dear Charlie,

You are factually correct, but there are numerous possibilities. Keep in mind that China does not produce silver if it is merely a byproduct of copper. You are aware of the major copper mining companies, and they are all located outside of China. Therefore, the rest of the world doesn’t need to spend 20 years excavating new mines; it simply needs to construct refining facilities. That’s a completely different scenario.

And let me tell you, China is no longer the cheapest place to build any kind of factories these days. Quite the opposite. So your story, sorry, doesn’t carry as much weight as the title suggests.

Medicine Landscape

Dear Medicine Landscape,

Valid point regarding mining, but you’re mixing two distinct concepts.

China does not extract most of the world’s silver. Instead, Mexico, Peru, and Chile are the primary sources. However, China holds control over 60% to 70% of global silver refining operations. The country imports raw silver concentrate from these mines, processes it, and then exports the refined product. The critical point in this process is the refining stage, not the mining itself.

“Simply construct refineries” may appear straightforward, but it is not. Historical example with rare-earth materials: it takes three to five years to build the facilities; an additional five to ten years to develop the workforce; and a total of ten to fifteen years to achieve significant Western capability. This timeline assumes continuous government support, which is not currently available.

In the meantime, U.S. refineries are experiencing congestion. Major refining companies ceased taking silver in October. Delays are extending between three to four months. This situation has not occurred in 40 years—and that’s before China’s restrictions.

You could be correct in 2035. I’m prepared for 2026. Timelines are more important than theories.

Charlie

P.S. The most cost-effective location for constructing a factory is where the labor force already possesses the necessary skills. China invested decades to become that location. America spent decades losing that expertise.

Dear Charlie,

I am particularly fascinated by China’s repeated use of its rare-earth strategy. It has always intrigued me that a communist nation could be so clever and develop such successful tactics to take advantage of capitalist markets.

I have one question: I’m curious if the efforts within the U.S. Interior Department to create a list of critical minerals are intended to follow the same approach as China’s strategy. Do you have any insights?

Michal Anne 

Dear Michal Anne,

Regarding your question: yes — but don’t wait too long.

The U.S. Geological Survey included silver on its list of critical minerals in 2024. That marks the initial action. However, the issue is this: China didn’t merely create lists. It invested 30 years in developing a comprehensive refining system, making environmental compromises that Western countries are unwilling to accept, and providing subsidies to state-owned enterprises until it achieved dominance in global processing.

America’s approach to critical minerals is largely about defense: storing reserves, seeking supplies from allies, and reforming permits — these steps are important but respond to existing challenges. The U.S. is trying to catch up on a 10- to 15-year schedule, while China currently controls the key access point.

The irony you’re pointing out is genuine. Centralized planning by the Communist Party has proven remarkably effective in controlling supply chains. Free markets excel at distribution but struggle with long-term strategic thinking. Beijing operates on a timescale of decades, while Washington focuses on election cycles.

Yes, the Interior Department is making an effort. However, copying China’s approach would demand long-term bipartisan support and billions of dollars dedicated to improving infrastructure. I’ll trust it when I see actual progress, not just lists.

Lists are ambitions, shovels are plans,

Charlie

P.S. The communists read Adam Smith. We thought they didn’t need to.

Dear Charlie,

The West should consider adopting nuclear power. Incorporating additional nuclear energy along with natural gas, solar, and wind to address increasing energy needs driven by AI, electric vehicles, advanced manufacturing, electrification, and the refining of precious metals. This approach will also aid in tackling the challenge of climate change.

As an aside, when discussing communist bureaucracy, Oliver North was requested by Hanoi to complete a 20-page questionnaire when he applied for an entry visa to return to Vietnam!

Hoa

Dear Hoa,

You linked nuclear-energy policy to Oliver North’s Vietnam visa in one comment, and honestly, I’m impressed.

You’re correct about nuclear energy. The power requirements for AI, electric vehicles, and onshored manufacturing won’t add up without substantial base-load electricity. Solar and wind contribute at the edges. Nuclear forms the core. If the U.S. aims to handle rare earth materials locally rather than sending them to China, it requires reactors, not just talk.

The irony lies in the fact that communist Vietnam’s 20-page form for Ollie North is likely shorter than the environmental-impact statement needed to construct a U.S. nuclear facility. We ridicule their administrative processes while being overwhelmed by our own.

Thanks for the insight on energy policy wrapped in a reference to the Cold War.

Paperwork is the common tongue,

Charlie

P.S. Oliver North endured the Sandinistas, Congress, and cable news. A Hanoi questionnaire is merely routine.

Dear Charlie,

The actual collaboration lies between China and proponents of green energy. If we aim for a carbon-neutral energy system, we will need to obtain it from President Xi and his associates.

Mike 

Mike,

“Collusion” suggests cooperation. I would say it’s more severe: it’s a meeting of interests without anyone having to make a call.

Western climate policy generates demand. Chinese industrial policy secures supply. Each side achieves its goals, and in the process, American manufacturers start to learn Mandarin.

Appreciate you for reading and spending time to participate.

Keep your ammunition secure and your weapons nearer,

Charlie

P.S. Xi Jinping doesn’t need advocates. He just needs customers who forgot how supply chains work.

Dear Charlie,

Mexico produces more silver than China. Relax, it will work out just fine.

Trey

Dear Trey,

You’re correct that Mexico extracts more silver from the earth than any other country. However, here’s the thing: Raw ore isn’t what is used in solar panels and electronic devices.

Silver must be refined first, and China holds 60% to 70% of the world’s refining capabilities. Mexico extracts it. China refines it. It’s similar to pointing out that Brazil produces the most coffee beans while Nestlé determines what ends up in your cup.

Thank you for reading and questioning. Remain doubtful, but examine the entire supply chain,

Charlie

P.S. The last time someone advised me to not worry about China and raw materials was in 2010. Investors in rare-earth metals are still seeking counseling.

Charlie Garcia is the founder and a managing partner ofR360a network-based group for people and households possessing a net worth of $100 million or higher.He has roles in gold and silver.

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