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Chinese retail investors have been using the same mass effect for many years, coordinating surges in WeChat rooms.

The crowd moves from one hot market to the next, using its strength in numbers to generate a giant momentum machine. The target is often less important than the potential to catch a moving trend.

The Zhengzhou ferro-silicon contract was squeezed in 2019 simply because retail traders had been pushed out of the bigger steel market by exchange margin increases.

Shanghai copper has been crowd-shorted a couple of times in the past few years, in one instance in a collective battle of strength against a major fund long position.

Social media facilitates the same bewildering mix of mutual exhortation, snippets of genuine information and lots of wild rumor-mongering, as is evident in the #SilverSqueeze meme.

The phenomenon is spreading. In South Korea theyre called ants. In Thailand theyre called moths. Theres a lot of people in this world of low interest rates looking to make a fast buck in the markets.

Chinese regulators have been battling the problem for years. The first line of defense is to increase trading fees, the second is to issue increasingly strident government warnings and the third is to intervene directly, either by suspending some types of trade or mobilizing a team of state-owned banks to crush the crowd.

CMEs margin hike and U.S. Treasury Secretary Janet Yellens pending meeting with regulators to discuss recent market volatility conform to the standard Chinese operating procedure of how to deal with speculative excess.

Western regulators will need to catch up fast with their Chinese counterparts because the retail army is likely to resurface with new tactics.

Reddits Wall Street Bets community () has set a shining example that other movements can follow, according to #SqueezeSilver Manifestos anonymous author.

A dedicated army of everyday people can leverage their collective skills and resources () to alter deeply entrenched power dynamics and level the playing field.

Small investors from Shanghai to Seattle may well agree.

(Editing by David Goodman)

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Populist crowd fails to breach the silver fortress for now: Andy Home - Financial Post