Is Silver Why Warren Buffett Dumped Billions Worth of Bank Of America Stock?

ZeroHedge reports, “Market observers have been puzzled by Warren Buffett's Berkshire Hathaway's abrupt selling of billions of dollars of its long-held stake in Bank of America since mid-July. Buffett's stock dumps could be driven by looming recession threats and the Federal Reserve's interest rate-cutting cycle, which could begin as early as mid-September and dent the bank's interest earnings. Or perhaps the 94-year-old billionaire has increased cash reserves to record levels because of elevated stock valuations amid the artificial intelligence bubble. 

“Whatever keeps Buffett up at night about BofA has certainly been intriguing across institutional desks, FinTwit X, and various financial media outlets. Some believe this could be a critical market inflection point. Since mid-July, the billionaire has trimmed about 13% of its BofA stake, generating $5.4 billion in proceeds, and adding to Berkshire's record cash holdings.” 

We know that in the late 1990s, Warren Buffet purchased a large quantity of silver. It didn’t work out for him, and he lost interest in silver. On numerous occasions, he seemed to regret ever owning silver. 

The late silver analyst Theodore Butler frequently wrote about a mammoth silver derivative holding of Bank of America. He suggested they held a billion ounces or more of silver in the over-the-counter market. This short position could someday ruin them.

Butler wrote,

“The latest (as of Dec 31, 2021) OCC derivatives report indicates that Bank of America holds a precious metals derivatives position of $27 billion. It is easy to infer that BofA may be short 800 million ounces of silver or more and if it is, that means that it may be short close to 100% of total annual silver mine production. What potential damage and liability await Bank of America which may be short 100% of the world annual mine production of silver? Does this real-world comparison not rise to the occasion where the regulators – the OCC, the U.S. Treasury Dept, The CFTC and the CME Group – should address and clarify Bank of America’s OTC precious metals position?”