Robert Kiyosaki has never been subtle about his distrust of paper assets. For years, the Rich Dad Poor Dad author has urged investors to invest in physical assets over paper investments that amount to little more than promises. Now, he argues, the global silver market is offering a live demonstration of that risk.
His comments come amid a sharp surge in silver prices to consistently fresh record high levels. Silver prices extended their record-setting surge, approaching the ₹3.2 lakh per kilogram on the MCX. Comex silver futures for March delivery rose to hit a record of $94.74 per ounce in the international market.
In a post on the social media platform Facebook, Robert Kiyosaki said that in the Western silver market, most trading happens on paper. Prices are discovered through futures contracts, derivatives and other financial instruments.
Most trades are settled in cash, and very little physical silver ever changes hands. He said that this system works because banks and large institutions sell silver exposure they never intend to deliver, as most buyers never ask for the metal.
“This is not a conspiracy,” Kiyosaki said. “It’s how the system has worked for decades.”
Shifting Trend
What concerns the veteran author is what he sees happening outside this system —particularly in China.
According to him, Chinese buyers are not playing "paper games". They are buying physical metal: bars, inventory and deliverable supply. And to secure it, they are also willing to pay premiums of $10 or more per ounce over Western spot prices.
Now, the same metal has two prices — one in the physical market and the other in the paper market. He said that this silver gap offers an interesting insight about availabllity of the white metal: If silver were plentiful, arbitrage would erase the difference instantly.
He argues that this premium in silver prices exists because of three reasons: rising industrial demand, limited above-ground inventories and tight physical supply. Futures markets can create unlimited claims, but mines cannot create metal on demand, said the author.
Therefore, the silver buying trend in China reveals that it doesn’t care about “spot" but about availability. Sharing his takeaway, Kiyosaki said, “When there are two prices, believe the one tied to reality.”
Takeaway
He is careful to note that this is not a prediction of a spike in silver prices, but about understanding how the stress in the system shows up.
Stress appears gradually — through persistent premiums, delivery concerns, regional price divergence and price gaps, he said.
History, he argues, shows that when physical markets decouple from paper pricing, the eventual adjustment is never gentle and rarely smooth. "Silver will not run out loudly. It disappears quietly — right before the price resets," he warns.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions.
