The great reset?

We are living through epochal times. Right under our noses, without even most of us being aware of it, The Great Reset seems to be under way. 

In the last few months, silver and gold have been competing with each other to reach new heights.

In normal times, an increase of hundred percent in one year would be considered a bubble, and one would expect that the prices would correct as sharply as they went up. 

But these are not normal times. The price increases are a signal of something that is happening under our feet  as we sleep. 

When fiat currencies come to the end of their lives, this is what you can expect will happen. The dollar went off the gold standard in 1971, and no currency in the world today is backed by anything solid. Governments print money with abandon and strew it around like confetti. With no checks and balances, like say the need to have enough gold or silver to back up every note that is printed, what do you think will happen? Everyone knows the answer, but may not want to admit it even to themselves. Some truths are too scary to contemplate. 

Why have central banks been loading up on gold in the last few years? Why were fresh  issuances of Sovereign Gold Bonds stopped by the Indian government? Why is gold showing no signs of a pullback even after reaching lifetime highs? 

Why is silver in a mad rush to outpace gold? Why was the  price of silver kept suppressed by the big banks led by JP Morgan for the last forty years? Why did that same JP Morgan go from being hugely paper short to hugely physical  long in the last few months? 

Why are India, Russia and China discussing alternate settlement mechanisms to the US dollar? 

If you connect the dots, you will conclude that the process of de-dollarisation is under way. The dollar is losing its value, all asset prices are going up as a consequence, precious metals are shooting up like they have been fed rocket fuel, gold and silver are on a tear, and between them, silver is making up for lost time with a vengeance. 

Everyone will participate in what is coming. If you are prepared and take the necessary steps and take evasive action, you will gain; if you are not prepared and continue to believe in the conventional theories of "asset allocation" that has served you well for the last forty years, ignoring gold and silver, you will lose. You cannot remain unaffected by what is coming, you better decide which side you want to be on. 

Buy gold and silver. If you want some more underlying fundamental reasons, here is the link to my blog post of 2nd December: 

https://www.dineshgopalan.com/2025/12/silver-moves.html?m=1

What if all these fears are unfounded, and nothing happens? What if gold and silver correct sharply ? Sure, that is possible, but ask yourself this: whatever seems to be happening now may be short lived, but how long before it actually happens? How long before the dollar, and all other fiat currencies collapse, and how long for gold to reach 20000 dollars an ounce ( it is at 4400 today) and silver ( at 69 today) to reach 500 dollars an ounce? 

If your portfolio is overweight on debt, you may want to consider reallocating. This is a good time to be a borrower rather than a lender in the debt markets, and to invest that money in other assets, any assets. Currency is not an asset. 

 

Review of Bison

Just saw the Tamil film Bison on Netflix. 

Starting Dhruv Vikram, directed by Mari Selvaraj, this is what a movie should be.

A sports story revolving around Kabaddi, it chronicles the main protagonist's rise from an interior Tamil Nadu village riven by gang rivalries. 

The way the village life is portrayed with the backdrop of sport, is absolutely riveting. Every actor in the movie plays their part well. 

Human drama, sport, individual struggle, and the authentic village backdrop presented brilliantly, this movie is a must watch.

Review of Dhurandhar

Just watched Dhurandhar. It's easily one of the best movies I have seen, and I am not including just Hindi movies. 

The story and screenplay are tight, Ranveer Singh and Aksheye Khanna are both very good in their roles, the background music is outstanding, and the picture has the slick feel of a James Bond movie. 

Why then are the Left Liberals in a meltdown? Because the film talks about terror emanating from Pakistan, about original plates to print Indian currency notes being given over to the Pakis by a very senior politician, the government's total inaction after 26/11... The last frame salutes the "unknown men", I think that is the most delicious cut of all! 

The LeLi meltdown makes the film all the more fun to watch. Indian films, quality indian films, are coming out of the clutches of the Bollywood - ISI - D Company - Islamist mafia. 

Go watch it in the theatres, it is worth  the three and a half hours, Though this is a movie that can also be enjoyed on the small screen once it is released on Netflix also 

SILVER MOVES

In the last couple of weeks there has been a significant uptick in the price of silver. 

From under 50 dollars an ounce ( an ounce is 31.1 grams), silver has moved to 57 dollars an ounce in a very short while. 

This is not an isolated bubble or a rally that will peter out. I expect silver to shoot up significantly in the next few weeks, months, and years. 

First, some background. Gold is currently at 4200 dollars an ounce. Both gold and silver have nearly  doubled in the last one year. Remember, this is not an isolated stock, where such moves are routine, these two are commodities with one price across the world. 

The total stock of gold in the world above the ground is about 200000 tons. You melt all that gold into one massive cube, it will be about 70 feet by 70 feet by 70 feet, smaller than your average office building. Total value: about 27 trillion dollars. 

Estimates of silver stocks above the ground vary, no one really knows. It could be anywhere between 800000 tons to 1.6 million tons. 

The annual production of gold is about 3000 tons and of silver is about a billion ounces,  about eight times the annual production of gold. 

The ratio of the  price of gold to silver price right now is 4200:57 which is about 75:1. 

( All numbers approximate, you can always google for exact numbers). 

Gold and silver are likely to outperform in the immediate future. Between the two, silver will do much better. 

There are a host of reasons converging to make this happen. 

Central Banks have been increasing their gold reserves over the last few years. This is due to increasing global uncertainty, and fears of de-dollarisation. Any alternative to the dollar will likely need gold backing. Once gold runs out, silver is the next choice. They have both been currency for at least five thousand years now. In times of uncertainty, everyone turns to gold. 

Apart from being a store of value, which contributes to the precious metal driver, silver is also a valuable commodity with a lot of industrial uses. It is very malleable, ductile, and a great conductor of heat and electricity. Biotech, chips, electronics, weapons, all need silver. Some of the silver that is used is not recyclable, and thus silver actually gets consumed. 

Add to this, the new drivers for silver usage. Solar PV cells, electric vehicles, data centers, AI rollout, these are the new users on the block and the demand due to them is exploding. 

In the last four or five years, the silver demand due to all factors combined has been greater than the supply. The shortfall over the four or five years is equal to one year's production. As a result stockpiles are at a record low. 

Meanwhile, US has declared silver as a "critical commodity", other countries will follow suit. This means they will start creating strategic stockpiles. 

Silver producing nations, starting with China, may start putting curbs on its export. 

For the last forty years or more, prices of silver have been suppressed due to banks and financial institutions selling short. When that market unwinds, and the chickens come home to roost, it will be equivalent to financial Armageddon. In both gold and silver, the amount of paper in the market is an order of magnitude higher than actual stocks. 

It is not easy to increase mining capacity for either of these metals . Their supply is finite, and when it comes to silver  most of it is mined as a byproduct while mining other metals like zinc. 

What happens when all these factors combine in the market all at once? Supply shortage, no increase in supply sources, explosion of industrial demand, central bank purchases, easy access due to ETFs, fears of de-dollarisation, geopolitical uncertainty, unwinding of the paper trade, sellers facing a short squeeze? 

Both gold and silver will go through the roof. The gold silver ratio will drop from 75 to, who knows, could be 30 ( recent history) , 15 ( historically has been true) or even 8 ( geological ratio based on stocks and production). 

My prediction is that in the next ten years gold will go to 5x, 20000 dollars an ounce from 4000 levels; and silver will go to 10x, from 50 levels to 500. 

Only thing is, it could happen much faster than that.

Accumulate. Buy ETFs. If you are the kind to believe that the worst might happen, buy physical.