The M2 Mirage: 13.8x More Dollars, But Silver Still 13% Below 1980

Broad money supply is up nearly 14x since 1980, yet gold has only climbed 4.3x and silver hasn’t even recovered. With SLV borrow costs spiking and borrowable shares disappearing, the market’s pressure valve is breaking — and real money is preparing for liftoff.

Author

Luke Lovett
September 12, 2025

📈 Price: Silver now trades at $42.926 — its highest level since 2011.

  • From the start of 2020 ($17.905) to today, silver is up ~140%.

  • From the start of 2025 ($29.19) to today, silver is up ~47% in just nine months.

This isn’t just a rally. This is silver rewriting its role in a market stretched thinner than ever by leverage, debt, and artificial stability.

Signal

Latest Level

Interpretation

Zone

10-Year Swap Spread

–24.73 bps

Still negative and tight; dealers prefer swaps (synthetic exposure) over warehousing cash Treasuries—liquidity in cash bonds impaired.

🟠 Orange

Reverse Repos (RRP)

$26.897B

Safety net remains threadbare versus the $2T+ peak; any new funding stress must clear in live markets.

🔴 Red

USD/JPY

147.86

Sitting in the danger band; carry-trade fragility persists and volatility risk stays elevated.

🟠 Orange

USD/CHF

0.7972

Back below 0.80—safe-haven bid active, signaling persistent systemic fragility.

🔴 Red

3-Year SOFR–OIS Spread

30.17 bps

Now through the 30 bps stress line; lenders charging a heavy “future-anxiety premium” for term funding.

🔴 Red

SOFR Overnight Rate

4.39%

Pinned near recent highs; funding remains expensive despite “ample reserves.”

🟠 Orange

SOFR Daily Volume (SOFRVOL)

$2.80T

Extreme rollover dependence—paycheck-to-paycheck liquidity regime remains entrenched.

🟠 Orange

SLV Borrow Rate

1.55% (700K avail.)

Borrow costs elevated while inventory is thin. Silver spiked above $43 between ~4:30–5:00AM ET and is $42.92 at 6:23AM—classic collateral-chain ignition.

🔴 Red

COMEX Silver Registered

196.78M oz

Cushion stable but wafer-thin versus paper leverage.

🟠 Orange

COMEX Silver Volume

65,945

Moderate turnover—healthy activity while price consolidates after the morning spike.

🟡 Yellow

COMEX Silver Open Interest

160,012

Elevated; directional leverage remains engaged.

🟠 Orange

GLD Borrow Rate

0.40% (5.1M avail.)

Funding for gold remains contained, availability decent.

🟡 Yellow

COMEX Gold Registered

21.29M oz

Flat; physical stocks remain thin versus paper exposures.

🟡 Yellow

COMEX Gold Volume

236,381

Heavy turnover—robust engagement in gold futures.

🟠 Orange

COMEX Gold Open Interest

524,176

Fresh highs—positioning and leverage continue to build.

🟠 Orange

UST–JGB 10Y Spread

2.473%

Hovering below the 2.5% tripline; yen-hedged UST returns deteriorate, raising cross-border fragility.

🔴 Red

Japan 30Y Yield

3.201%

Near cycle/record highs; persistent upward pressure threatens global bond stability.

🔴 Red

US 30Y Yield

4.654%

Long end remains heavy; debt-service pressure at the global base layer stays acute.

🟠 Orange

🚨 The Situation

  • Breakthrough: Clearing $40 was the ignition point. Now silver is consolidating in the $42–43 zone, pushing deeper into 14-year highs.

  • Context: Unlike past spikes (1980, 2011), this surge is happening amid five straight years of structural supply deficits and the most fragile global debt system in history.

  • Velocity: A near 50% gain in 2025 alone shows not speculative froth, but the repricing of a real asset against a failing paper system.

🔑 Why It Matters

  1. Asymmetry in Full View
    Debt is up 41x since 1980. Silver is still below its 1980 high of $49.45. That disconnect isn’t just large, it’s screaming.

  2. SLV’s Warning Shot
    With borrow rates spiking and borrowable shares declining, the largest silver ETF is showing stress fractures. When the paper wrapper buckles, it means physical is tight.

  3. Industrial + Monetary Convergence
    Silver is indispensable (solar, EVs, tech, defense) and it’s monetary. The market is rediscovering this dual role at the exact moment the financial plumbing is seizing up.

  4. Nonlinear Fragility
    Reverse repos drained, SOFR (overnight funding) volume near record highs, swap spreads deeply negative — all point to a system without slack. Fragility multiplies, it doesn’t add. That’s why moves in silver accelerate when cracks spread.

⚡ Bottom Line

Silver at $42.9 is not an overextended rally — it’s the first stage of a structural repricing.

  • From $17.9 in 2020 to $42.9 now: +140% in five years.

  • From $29.2 at the start of 2025 to $42.9 today: +47% in nine months.

This isn’t just a breakout — it’s silver reasserting itself as the pressure release valve.

When debt as the base layer malfunctions, capital doesn’t disappear — it seeks the oldest, truest foundation. And once again, that foundation is gold and silver.

⚡ Silver is the pressure release valve for five decades of distortion. And the valve has just blown open.

📈 Perspective check:

  • The Dow/Silver ratio is still ~1,180 vs ~17 in 1980 — implying a silver “fair value” north of $2,500 if historic equilibrium returns.

    📊 The Math

    • In 1980, M2 was about $1.6T.

    • In July 2025, M2 is $22.1T.

    • That’s a 13.8x increase (+1,280%) in broad money supply.

    Now compare that with gold and silver since 1980:

    • Gold: $850 → $3,688.4 = ~4.34x increase (+334%).

    • Silver: $49.45 → $42.9 = still –13% below its nominal 1980 high.

    ⚡ The Implications

    For 45 years, broad money supply has exploded nearly 14x, but the monetary metals haven’t kept pace:

    • Gold is lagging by 3x. If it had tracked M2, gold would be around $11,700/oz today.

    • Silver is lagging by ~14x. If it had tracked M2, silver would be around $682/oz today.

    This isn’t a niche discrepancy — it’s the most obvious asymmetry in financial history.

    While trillions in new liabilities piled up, the only two base-layer assets with zero counterparty risk have been suppressed, under-owned, and dismissed. The longer this distortion persists, the more violent the reversion will be.

    🔥 Narrative Frame

    Debt has been used as “money” for 54 years.

    • M2 proves the scale: liabilities multiplied almost 14x. But debt isn’t money — it decays. Real money — gold and silver — doesn’t.

      This is why:

      • Every fresh Fed patch (buybacks, Reverse repo drains, overnight funding juggling) just multiplies fragility.

      • Every incremental dollar of debt weakens the promise.

      • And every tick higher in M2 makes the asymmetry of undervalued gold and silver more extreme.

      Put simply: M2 up 13.8x, silver down 13% since 1980. That’s not balance — it’s a coiled spring.

      ⚡ Bottom line:
      The M2 chart doesn’t just measure money — it maps the pressure in the system. That pressure doesn’t vanish. It builds. And when it releases, it doesn’t drift back to real money — it stampedes.

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Luke Lovett
Cell: 704.497.7324
Undervalued Assets | Sovereign Signal
Email: [email protected]

Disclaimer:
This content is for educational purposes only—not financial, legal, tax, or investment advice. I’m not a licensed advisor, and nothing herein should be relied upon to make investment decisions. Markets change fast. While accuracy is the goal, no guarantees are made. Past performance ≠ future results. Some insights paraphrase third-party experts for commentary—without endorsement or affiliation. Always do your own research and consult a licensed professional before investing. I do not sell metals, process transactions, or hold funds. All orders go directly through licensed dealers.

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