Ending the Illusion – What’s behind the divergence of silver physical and paper prices?
As I write LBMA, London paper silver is at $63.38 while Shanghai physical silver is at $83.44 an ounce. That is a $20 or 31% divergence between the two.
In this article I am going to break down what makes this event so important for the silver market. I also suggest what is happening to silver is another example of the ending of the bitter Illusion that has permeated every aspect of life for the last 3,500 years. Finally I want to explore the source of this Illusion and what you can expect as you step out into a new reality.
The Illusion being exposed in silver is that paper trading on the LBMA or CME is the same as holding the physical asset. The Illusion depends on the assumption that most silver traders are willing to settle in cash rather than take physical delivery. The 31% divergence between Shanghai and London shows this is no longer true.
Why is this myth now being exposed?
Silver is a metal key to modern electronics industries. As the world’s most efficient conductor EVs, solar panels, computers and AI all depend on silver. In other words, the metal silver is part of the physical economy – the real world.
So important is silver that as of 1st January 2026 the Chinese government will approve all exports. As the country controls between 60 – 80% of global production, physical silver is now a strategic asset with China ensuring supply for its own factories first.
Notice China is not regulating the paper market. There is no reality there.
In the past the Illusion of paper silver has been maintained through arbitrage.
Any price difference between markets is an arbitrage opportunity for traders to buy cheap in one market and sell dear in the other. The action brings prices back into alignment with each other.
But arbitrage does not work if there is little silver left in the vaults of London or New York to ship to Shanghai.
With no arbitrage the main means of perpetuating the pretence of a paper silver market is gone.
Empty vaults in the West also end the myth that paper traders can take physical delivery.
As this realisation spreads among traders the Illusion they are actually trading silver ends.
In short silver is exiting the fantasy land of paper trading and re-entering the real world pricing based on physical supply and demand.
The ending of the Illusion in any area of life is good news. It is the fantasies of the Illusion that perpetuate control by elites and are the primary cause of human suffering. When the Buddha famously said “All is suffering,” he was referring to the immersion of humanity in the Illusion.
The dissipation of this state of affairs can literally be seen everywhere.
For example, Graham Summers, Chief Market Strategist at Phoenix Capital Research suggests the debt-based financial system ended in 2022 when bond yields broke out of a 35-year downtrend to the upside. Summers notes:
For decades, central banks have “papered over” the decline in living standards (falling real incomes relative to increased costs of living) with easy credit/ money printing. This scheme only worked because throughout that period, the bond market was in a super cycle bull market that resulted in yields falling steadily, allowing governments to issue gargantuan amounts of debt without triggering a debt crisis.
Like silver, the fiat system is based on promises written on pieces of paper. When it becomes clear these promises can no longer be fulfilled trust in the system evaporates.
The problem living in the Illusion is that, as silver shows, it rarely delivers on its promises. For those who still believe in it this can have devastating consequences.
The covid era was a huge catalyst to the waking up process as millions ended their trust in mainstream media, government, the medical system and big pharma.
They are the lucky ones.
Denis Rancourt, a former professor of physics at the University of Ottawa estimates 17 million people have died from covid shots and 29 to 60 million injured or disabled globally.
Analysing insurance data former Blackrock executive Ed Dowd says 3,500 to 5,000 Americans are still dropping dead each week from covid “vaccines”.
To help clear any remaining misperceptions about the benefits of vaccines you may like to watch or read this short history of virology.
Recently I discovered the original meaning of the word “legal” was “without God”.
Revelations of the scale of fraud uncovered while Elon Musk was head of the Department of Government Efficiency (DOGE) is another example of what was once hidden is now being exposed.
Having lived one’s entire life in an Illusion that is now crumbling it can be hard to join the dots and see that current crises, be they international, financial or personal are all facets of the same systemic shift taking place.
To demonstrate this shift to you try the Supermarket Test.
Go into a supermarket and marvel at the beauty and luxuriance of the fruit and vegetable section. The avocado, peppers, sweet corn, tomatoes, strawberries have the appearance of health, nourishment and vibrancy. The poisons sprayed on them are invisible. Now look at the people doing their shopping. Are they happy and vibrant? Or do they look worried and stressed? Are their bodies beautiful? Or are they deformed by obesity, injury or plain toxic overload that makes some of them lean on their shopping cart and shuffle instead of walk?
This Supermarket Test is a graphic example of how the Illusion is not to our benefit. It’s promises fail to deliver.
I believe why the Illusion touches every aspect of life is that we are its source.
This is obvious. Like physical silver the natural world is real, not invented. It is what we believe about ourselves that creates the prison.
In my book Wake Up: The Human Journey Beyond Cataclysm (see also the short YouTube videos) I present evidence that we live immersed in the collective trauma of events that took place around 1,500 B.C. when the earth was involved in a near miss collision with Venus. Three mile high tidal waves, flaming meteorites followed by 20 years of gloom coincided with our experience of separation from the creative Source of all there is, attested to by spiritual traditions around the world.
The events were not pretty.
To simply cope we invented a surrogate identity that we still believe is who we are. Built from the negative emotions of the time such as fear, hurt, guilt and despair, it is the largely unconscious expression of these beliefs as we go about our day that weave the illusory world that is now fading.
As a sign of how our reality shifted back then it is only after 1,500 B.C. that Tukulki-Ninurta I, the world’s first tyrant (reigned c. 1243-1207 B.C.), unleashed his bloody reign of terror.
Paper silver is one example of the make-believe world we have woven to protect ourselves from remembering the trauma of events that took place 3,500 years ago.
In short the Illusion is everywhere because it comes down to what we believe about ourselves.
If it is fading it is because an increasing number of men and women are shedding past beliefs and experiencing their true identity.
Structured programs on the Troubles Away website can help navigate this shift. As I put it in the Two Worlds program the shift is out of the fast-food restaurant of life into the ecstasy of the kitchen of creation. It is the experience of the extra-ordinary pleasure of life in the real world.
A common reaction in the face of realising we live in a world not engineered for our own good it to protest. Current events in Europe are a case in point. But China does not protest about paper silver. It simply focuses on what is real. We may wish to do the same.
It is a new day. The past is gone. Anything is possible.