You can't short a one sided long position
Buying physical is effectively going long I guess so the more people that soak up physical the more the contract balance shifts in favour of the longs rather than the shorts. The get around for the market manipulators is just to print more paper contracts so that shorts can dominate as the leverage tends to infinity.
In theory I guess they can keep this up indefinitely. But what if a major player like a BRIC nation decided to end the Americanisation of the world for example? Perhaps if they placed large contracts for delivery of silver paying with say $25Bn of Treasury bonds? Would we see an explosion in the silver market prices with the gold market still falling?
My guess is that the market manipulation ends when holders of American dollars decide they are now worthless and therefore decide to crash the system and send the American military scurrying home. They are going along with it for now so they can milk any residual value their T bills still posess. The short sellers I guess can in principle cover their positions in dollars - I bet the contract notes allow for this in the event that the silver is not available. This of course shows that the whole market is a rigged scam. The short sellers have been in effect been pro-longing the US dollar and not shorting the silver they do not have!
The powers that be intend to keep the system running as long as they can in order that they can milk the savings and equity of the poor and middle classes in the West. The IMFs proposal to impose a capital levy on every Westerner via bail-ins and imposing 10% mortgages on their houses and other net positive worth illustrate this design.
For most people in the West crashing the system now would be far better that seeing all their possesions stolen by the Banksters over years of continuing debt creation - whether they own PMs or not. A currency collapse now means you just lose your fiat and some of your pension funds. The longer they can keep the system going the more the market riggers are going to be able to steal housing, land, PMs and other assets from the people.