China just sent a massive warning signal, and it’s not random noise. This is real macro stress building beneath the surface.
China’s M2 money supply has pushed past roughly $48 trillion in USD terms. That’s more than double the size of the U.S., and the growth curve is going straight up. This isn’t just another headline or data point. It signals a deeper shift in global liquidity dynamics.
When money is created at this scale, it doesn’t sit still. It looks for somewhere to go, and increasingly that means real, tangible assets. China has been quietly adjusting its positioning by cutting back on U.S. Treasuries, reducing exposure to Western equities, and steadily increasing holdings of gold, silver, copper, and other commodities.
Paper assets are being reduced. Physical assets are being accumulated.
One pressure point that’s flying under the radar is silver, and this is where things get uncomfortable. There are roughly 4.4 billion ounces tied up in paper short positions, while annual global mine supply sits around 800 million ounces. That means paper shorts represent more than five times the amount of silver produced each year. At some point, that imbalance matters. You can’t deliver what doesn’t exist. If physical demand tightens while paper leverage stays stretched, this isn’t a normal price move. It’s a forced repricing.
Long term, the setup is hard to ignore. On one side, you have currency debasement, central banks accumulating hard assets, and rising industrial demand driven by solar, EVs, and electrification. On the other side, there’s heavy paper leverage, ongoing supply constraints, and institutions crowded into the same trades.
This isn’t about calling exact tops or bottoms. It’s about recognizing pressure building quietly in the background. When real assets finally move under conditions like these, they rarely do it slowly.
Stay alert. Cycles tend to break without much warning, until suddenly everyone notices.
#MacroEconomics #ChinaMarkets #Silver #Commodities #GlobalLiquidity
