# Silver Lease Rates Silver lease rate is the cost to borrow silver. Currently at 8.5% for one month, this screams physical scarcity. ## How It Works Just like renting a car, you can "rent" silver. Who borrows: manufacturers (need silver for 30-90 days), refiners (need silver while processing), short sellers (borrow to sell). ## Normal vs Crisis Normal market (0.5% lease rate): Manufacturer needs 10,000 oz for 30 days. Cost: 10,000 × 0.5% × (30/360) = 4.2 oz. Current market (8.5% lease rate): Same manufacturer needs 10,000 oz for 30 days. Cost: 10,000 × 8.5% × (30/360) = 71 oz. 8.5% for one month = 102% annualized if compounded. Higher than credit card rates. ## What 8.5% Tells You Banks don't have silver to lend. What little exists is needed elsewhere. Industrial users are panicking to secure supply. Current 100-day average: 6.28%. Latest reading: 8.53%. The average is rising, not falling. Stress is accelerating, not peaking. ## Historical Context Normal lease rate: 0-1%. Elevated: 2-3%. Crisis: 5%+. Current: 8.5%. We're in uncharted territory. The only comparable period was 2011, when silver hit $49/oz. But 2011 had no [[Silver Structural Supply Deficit|structural deficit]] and no [[China Silver Export Restrictions 2026|supply disruption]]. ## The Signal High and rising lease rates are classic physical market stress. Combined with [[Silver Swap Rates and Forward Curve|-7.9% swap rates]] and [[Shanghai Silver Premium|12% Shanghai premium]], all three confirm the same story: the market requires meaningfully higher prices. If lease rates hit 10%+, expect panic. Industrial users borrowing at 10%/month (120% annualized) means they'll pay ANY price to secure silver. That's when [[Silver Price Discovery - Paper vs Physical|paper markets]] reprice violently higher. Links: [[Silver MOC]] | [[Why Silver Physical Indicators Matter]] --- #silver #firstprinciple #markets