Illusions

Anything that scales up and is run by a corporate soon becomes a zombie with all life and soul sucked out of it. 

In the layers of corporate hierarchy, each person has a job to fulfil which has absolutely no connection to the end customer or what is being achieved. 

Each individual working in a corporate is not a person - he or she is just a "role", an automaton recruited and indoctrinated to walk the walk and talk the talk. 

There are two kinds of people working in any corporate. Those who are sold on the illusion that they are doing something useful for humanity and for their own upliftment. HR loves such people, HR's only job is to foster illusions. These people are to be pitied. 

The other category of people is those who know they are working for the sake of their livelihood and don't subscribe to the illusions. Such people pity themselves since not buying into illusions creates great cognitive dissonance, it is surely  not a recipe for happiness. 

I definitely belonged to the latter category, but I always envy those who buy into illusions. They are probably happier

Investment strategies for today

More and more, investment strategies have to focus on the macro aspects like sector performance, asset class performance, etc.

The old mantra of "be invested in all asset classes and it will average out over time" may no longer apply.

When Benjamin Graham wrote "The Intelligent Investor", he emphasized on individual stock selection and margin of safety. With the democratisation of information,  AI analytics and the surfeit of analysts, it is not easy to find the proverbial  "cigarette butts".

Then Buffett came up with "find good companies at a reasonable price" formula.  Buffett, Peter Lynch with his Fidelity Magellan Fund, and the likes of Jhunjhunwala and Sadashiv Mankekar could do it. It is still possible to do this, but not everyone can be like these greats. It is also increasingly difficult to "discover"  hidden gems, for the same reasons as stated above.

The market is increasingly driven by instritutional and cross border money flows. They all tend to move in a herd, and there is always a lag between a trend becoming obvious and it catching on. Can you as a retail investor spot the trend, and move before the herd does?

For example, the place to be for the immediate foreseeable future is gold and silver, gold and silver mining stocks, commodities and within commodities copper and Uranium, and  commodity stocks.

I am in the process of shifting my investments to these. Whether I am right or wrong only time will tell, but there is no option but to have a view and act on it.

Ultra defensive plays like shifting predominantly to debt at 7 to 8 percent taxable is also likely to be disastrous with high inflation on the cards across the world.

We are living in very interesting times.

Import duties on gold and silver

So it has happened! Import duties on gold and silver have risen to 15 percent from 6 percent.

India does not have gold and silver mines, all our gold and silver is imported.

This is a move to save foreign exchange. It has been tried before, and rolled back too since it didn't succeed or had other unintended consequences.

Other consequences, like what? Well, when duties are so high, the arbitrage for smugglers becomes attractive. At 15 percent, the arbitrage is salivating.

Gold is especially easy to smuggle among all the items that are smuggled worldwide. It has very high value to weight / volume ratio. It can be cast and recast into any shape you want. And there is a thriving market in it across the world, after all it is the oldest form of wealth known to mankind.

Now watch all jewelers perk up, especially the kerala based ones. No doubt the newly elected government there is already setting up a gold smuggling coordination cell, not for curbing it silly, but for aiding the smugglers!  Kerala is especially famous for this. No doubt others will follow.

What could be the scale of this smuggling?  The world production of gold is about 3000 tons per annum. India traditionally consumes about one third of the world production. We are talking of the Indian retail market here. Which is about a thousand tons.

Let us assume twenty  percent of this is smuggled. That is 200 tons.  

Gold is currently at 4700 dollars an ounce, which is 150,000 dollars a ton, which is about 1500 crore rupees. The cost of 200 tons works out to 3 lakh crores, and the import duty margin at 15 percent is 45000 crores. This is not counting the gst arbitrage which at 3 percent is another 9000 crores. 

Now once that gold comes in, money has to be sent out through the hawala channels. Instead of money, often it is a reverse flow of goods. Like drugs. Originating from the golden triangle or golden crescent, flowing through india. Or it could be other goods.

There are second order and third order consequences to such a decision.

All governments hate gold. It is for the same reason that all religions hate sex. It is a force they cannot control.

We have highly interesting times ahead, increase in duties on gold was only the first salvo.

Meanwhile, the price of my gold and silver holdings would have risen by 9 percent. Let me go check. 

Travelling in a bubble

Am just concluding my second visit to Bhutan, as part of a motorbiking group. 

Imagine a country with a land area of 38000 square kilometres with a population of just 800000. My suburb in Bangalore has more people! 

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Bhutan shares borders with West Bengal and Assam in the south and Tibet in the north. Historically, they have never been colonised, and have always been isolated. Buddhism came in sometime in the eighth century and spread all over Bhutan. 

The entire country is mountains, part of the Himalayan range. There are monasteries all over, with the iconic Tigers Nest being the most famous. 

Sandwiched between two giants, India on one side and China on the other, here lies a quaint, isolated bubble of a country, somewhat like a real life museum. 

They never encouraged too much contact with the outside world. Even TV was "allowed" to enter the country sometime in the 1970s. 

Historically, for several centuries, power was divided between the king and the monks. It became a kingdom in 1907 with the Wangchuk dynasty installing themselves as hereditary kings. In the nineteen seventies it became a constitutional monarchy, with the King as head of state and a Prime Minister and elected Council of Ministers. 

The King has a semi divine status. The country is quite prosperous, with agriculture, tourism, and inward remittances - one in ten Bhutanese have settled abroad. 

Touring around the country is like visiting a well preserved National Park, largely untouched by outside influences, with people living in a time warp. The culture and practices are quaint and simple, as you would expect from centuries of isolation in such forbidding terrain. 

They are fiercely protective of their culture, including their dance forms and national dress. It is mandatory for all citizens to wear their national dress on most occasions, including government employees at work. 

It appears like the king runs a welfare state, with basic necessities being provided for. Education and medicine are totally free. During covid, citizens got a special monthly dole. 

The roads are excellent, and basic Indian food is available everywhere. In the last few years, tourism has been severely restricted - Indians pay 1200 per day of stay in the country, foreigners pay hundred dollars a day. A guide to accompany every group, including a group of one, is mandatory. Minimum grade of stay is three star hotels. Bringing in two wheelers or cars from India will cost more in daily fees than renting them here, and the rentals are not cheap.  

Which is an attempt to preserve the bubble in this mad mad world. Don't know how long it can last, but then it has lasted for centuries. 

It is very difficult to find places in the world today which are largely uncorrupted by outside influences. The people are gentle, simple and nice. 

Travelling around the country is like going on a highly curated conducted tour. 

It is a must visit, for all these reasons. Something you need to add to your bucket list, if you have not already been here.

Gold ETFs:The beginning of the end

HDFC AMC has sent a communication to all its Gold ETF holders.

It essentially states that the ETF will hold a minimum of fifty percent gold ( which number is ninety five percent now), and the balance can be "gold equivalents". 

It looks like SEBI may have relaxed some rules in the backend. 

Other fund houses may follow. 

In the US, most Gold ETFs are similar, they need not hold hundred percent physical gold. 

This is not a good developement and investors need to watch out. 

The whole idea of holding gold is that it is the ultimate insurance against total systemic collapse, apart from earning investment returns. 

This step introduces a lot of unwanted counterparty risk in what should be a straightforward product. 

The best way to hold gold is in physical form, in your possession. I would recommend this for several reasons, which I have gone into in earlier posts. 

The next best way is to hold Gold ETFs which have close to hundred percent physical holding. 

Investors should be careful before investing in any Gold ETF. If you are in the US, invest only in Sprott, they definitely hold hundred percent physical. 

If you are in India, definitely don't invest in HDFC, and keep a watch on the others, they may go down the same path. 

Some people may respond saying "big deal, why hold gold at all". That would be a big mistake. I just hope for all our sakes that the world does not end up in a situation where I will have to tell you "I told you so". 

REVIEW OF DHURANDHAR 2

Dharandhar 1 was pathbreaking. Dhurandhar 2 continues the good work. 

The Left Liberal appeasement nonsense is out of the window. 

The Aman Ki Asha nonsense is put to an end.

It is not at all subtle in its political messaging, and that is a good thing. The Indian public are not fools, they are politically very well aware, and they know that the incidents referred to in the film actually happened. 

Ok, so what are some of the messages? 

Terrorism has islamic roots. 

Pakistan's ISI is the biggest villain. 

Congress, SP, etc are hand in glove with the Pakis, anti national, and aiders and abetters of terrorism

The days of pussy footing are over. Ghar me Ghus Ke Maarenge is the new slogan.

Once the BJP came to power in India, for Pakistan it was the beginning of the end. 

The Balochis are suffering in Pakistan. They need to shake off the evil yoke of their Sindhi and Punjabi masters. 

And so on and so on. Every Indian watching this knows that this is reality, not the sugar coated candyfloss that Bollywood, under the control of D Company, has been dishing out to us.

Ranveer as the Indian spy, Madhavan as the Ajit Doval equivalent,  Arjun Rampal as ISI front, Rakesh Bedi, Sanjay Dutt, are all excellent in both the movies. Sara Arjun as the main ( and only) female does a good job too. 

The film is almost four hours long, but it doesn't feel too dragged out. The last scene is predictably a dishum dishum between the hero and the villain - nothing has changed since the Amitabh Bacchan versus Pran days, but that is excusable - it is cathartic to see your villains being bashed on screen. 

The songs are not as good as Part 1, and they are unlikely to become iconic like those did. The musical score is very good and tight though. 

So far the films, like Kerala Story and Kashmir Files,  that tried to buck the usual Bollywood narrative have been, how to put it, quasi documentary types, not really a threat to the Bollywood Badshahs. But this film beats the Bollywood variety in all areas, including technical excellence, taut storytelling, drama and direction. Aditya Dhar as Director has done a phenomenal job. 

Move over Bollywood,

Welcome to the New Bollywood! 

GOLD FOR THE AGES

Gold has been a valued asset since time immemorial. So much so that it is part of our genetic makeup, part of our culture and traditions, to believe in gold. 

Gold is the ultimate preserver of wealth. It is indestructible, cannot be inflated away, cannot be devalued, and unlike your currency note, does not depend on someone else's promise to pay. 

Everything else comes and goes, including money, but gold stays on forever. 

When you think gold is increasing in price, you are mistaken. Gold never moves, it stays where it is, it is the other things that we measure in fiat currencies that keep going up in price. 

Take any item, your house, your car, or refrigerator, and measure it against  gold over the last fifty or hundred  years, and you will notice that the price of that item as measured in gold has been steadily going down.

Indians, Chinese, and in general people of the East understand the importance of gold instinctively. The West has lost its cultural memory of gold, nay, it has been systematically erased. 

The West has been completely sold on the fiat currency religion, and for the fiat currency religion, gold is anathema. 

The new world monetary order, without gold backing, which formally started in 1971 with the abrogation of the gold standard by the USA, is about to end. As all monetary orders in history have. Before the dollar it was the British pound, before that the Spanish Guilder, and so on. 

When the dollar goes down, it will take the rest of the world's fiat currencies along with it. It is not a question of if, it is only a question of when. 

You don't have to believe in the doomsday scenario to believe in gold. You just have to believe in gold as an investment. As an investment alone, it has not done badly for itself. 

As an insurance, gold is unparalleled. 

If you don't have gold in your portfolio, it is time to start. If you do, it is time to buy more. 

Silver, the younger cousin of gold, is also good, as a short to medium term play. But finally, it is gold that you will want to return to. 

THE CANARY IN THE PRECIOUS METALS MINES

Very quietly, India has made several moves in the precious metals market which has escaped mainstream attention. 

Last year, India was one of the major importers of silver, at 6000 tons. I am not able to verify who it is that who imported so much, but I would not rule out the Adani Ambani combine since they have massive ( as in really massive) solar energy projects coming up in Rajasthan, and solar panels need lots of silver. Street demand in india has also stayed strong. 

There is talk of a new BRICS currency backed by 40 percent gold, which China, Russia and India are working on. 

Very recently the Indian government allowed silver to be used as collateral for loans from banks. Sometime in the last couple of months it also allowed the Provident Funds to take  exposure to precious metals 

Yesterday, the Indian government has allowed equity mutual funds to invest in precious metals from out of their 35 percent non equity allocation. 

The RBI, along with some other central banks, has been buying gold in the last few years, and reducing its dependence on US treasuries. 

Just yesterday, SEBI has directed Indian mutual funds to stop using London prices for valuing  gold and silver, and use Indian street prices instead. 

About a year or two ago, our finance minister Madam Sitaram stopped issuance of new Sovereign Gold Bonds. 

Meanwhile, pressure in the silver paper markets of the West, Comex and LBMA, is building up with participants demanding delivery, exposing major Western banks who are sitting on massive short positions. This will lead to a short squeeze which is unravelling as we speak, spiking the price of silver. 

Meanwhile, silver prices in Shanghai are at a ten dollar plus premium consistently for more than two months now. This will ensure that metal leaves the west and travels east. 

China, which refines sixty percent of the world's silver ( though it produces say about twenty percent only), has implemented export controls on silver starting January first of this year. 

Saudi Arabia has added silver to its national reserves. Other countries will follow. 

We already know the troubles that the dollar is facing that is threatening its status as a reserve currency. The dollar is in terminal decline. 

Now, connect all the dots. 

India, Russia, China and other countries are slowly preparing for collapse of the dollar, and the emergence of a new world currency order. 

Gold will go up in price since it will be the bedrock of any new financial system as it has been for five thousand years, till the US withdrawing from the gold standard in 1971 delinked all world currencies from gold. 

Silver, which has always been a monetary metal for the last five thousand years, is all set to take up that role once again. 

The countrues are  quietly positioning themselves for it. 

What are you, as an individual, doing? 

Load up on gold and silver, for if you miss this bus, you may regret it for the rest of your life. 

HOW GOVERNMENTS DESTROY YOUR SAVINGS

Savings is something that you build slowly over time, little by little, such that it grows to something big eventually. 

It also acts as a buffer for shocks in your life. 

At the very least, you want your savings to not decline in value. 

That is the expectation. 

What happens in reality? 

For the purpose of this discussion, let us assume you are investing only in debt instruments. That is supposed to be safe and risk free right? Right? Ahem, right! 

Your savings are channeled through the financial markets into some debt instrument. You earn "interest" on your savings. 

The interest, as we all know, barely keeps up with inflation. 

The interest rates are controlled by the government which has a vested interest in keeping  them low for various macro economic reasons. 

To add insult to injury, you pay tax on your interest income. 

Meanwhile, all currencies in the world today are fiat currencies, meaning they are just pieces of paper that governments can print at will. 

The government prints currency, and it distributes the largesse. All that money  eventually goes to inflate asset prices. 

And who owns assets? 

Of course, it's the rich who own all the assets! 

Did you know that capital gains taxes that you pay on assets are invariably lesser than taxes on income? 

Did you also ever think about the fact that it is far easier to evade taxes when it comes to assets than when it comes to income? 

Meanwhile, the government is printing currency with abandon, while you are thinking about all this. 

The deflation in the currency, you can call  debasement also, happens gradually so that you don't notice. And then it crashes suddenly. All fiat currencies come to an end eventually. All, every single one of them. 

When the currency crashes, money is worthless. Only assets have value. 

Who owns the money when it crashes? Money includes debt instruments. The poor and the middle class! 

Who owns the assets? The rich! 

And then a "reset" happens and everyone starts from scratch. 

Who are the people who are positioned to be the leaders when the reset happens? 

You guessed it, those who own the assets! 

This is not a cuspiracy theory that I am laying out. It is just an inexorable, natural, inevitable denouement. 

Money is not an asset. 

Money is not a store of value. 

Real assets are stores of value. 

And what are the real assets? 

Any tool, commodity, item, or thing that lasts over time and retains value is an asset. This includes real estate, equity, commodities, cigarettes, batteries, match boxes, and gold and silver. 

How can you hold these assets? 

You can hold them physically in your possession or you can hold a piece of paper like an ETF, InVit, or stock certificate. All these pieces of paper depend on other people to make good their promises to you, in other words they carry counter party risk. 

Which is the best asset, the one which packs maximum value in minimum space, and  is accepted across the world, easy to hide, store and transport? You guessed it, it is gold! Followed by silver! 

Which is the best way to hold gold and silver? Physically, in your possession of course. And other way involves counter party risk. 

Think about it. And tell me what you thought. 

ON DEBT

The subject of debt has always been controversial. People never seem to agree on whether debt is good or bad. 

The moralist will argue that debt leads you down the road to perdition, and it is so much more satisfying anyway to save up and enjoy the fruits of delayed gratification than to binge on future earnings. 

The economist will say that debt keeps the wheels of the economy moving and the machinery of commerce functioning, and hence everyone should borrow.

The hedonist will aver that it is better to live life for today, borrow and enjoy, for who has seen tomorrow? 

The personal financial planner will say that all portfolios need an "allocation" to debt which should increase as you grow older for debit is less risky. 

I think everyone is missing the point. 

We need to understand the nature of money and the structure of modern capitalist systems first to think through this properly. 

As a youngster, you need to start saving up, and ensure you don't live beyond your means. The modern consumerist culture encourages reckless spending and you need to be wary that you don't fall into the consumerist trap. 

Credit cards, easy EMIs on durables, and other forms of easy credit lure you into a lifetime of deficit, ensuring you keep working for money which is perpetually in short supply. 

Youngsters should avoid debt.

It is not very easy to do so in some cases. What about that educational loan, should you take it? 

Be very careful when you think that through. Most education is useless. Are you really going to borrow and spend 100000 dollars for an undergrad degree  studying gender rights and LGBTQ issues? Does that Comp Science degree teach you anything that won't be obsolete by the time you pass out? Is that MBA degree worth anything at all? Even if they were worth something till now ( except the liberal arts courses, they are of course a scam), in the new world these degrees are going to be useless. 

That does not mean you don't learn of course. Since when have degrees had anything to do with learning? 

Education is one example. In every area of life, learn the difference between price and value, and you may never need to borrow in the first place. 

But as you grow and start saving, you need to take a different view. 

The money that we think is wealth, the rupee, the dollar, pound, eura, dinar... They are all what is called "fiat" currencies, just worthless pieces of paper that keep depreciating in value. 

Forget all the finance theory and what the personal financial planners tell you. Forget what you have been taught to think. 

Think. 

Would you hold your savings in real assets or in that useless fosterer of illusions called money, that constantly keeps going down in value? Why on earth would you keep your savings in the form of money? 

Why would you want to hold fixed deposits, debt mutual funds, or any other form of debt when the return that you earn , that mirage called interest, does not keep up with the debasement of the currency itself? 

Debt is a way for the system to systematically erode your savings, and appropriate it for itself.  It is foolish to invest in debt. 

Rather than that, borrow money if anyone is willing to lend it to you and invest that money in real assets. 

It is better to be a borrower rather than a lender. 

Think about it. 

And ask your financial planner what he thinks. 

The illusion called money... Part 1

As the world moved from the barter economy, we needed an intermediate item to function as money. Gold and silver fulfilled that role for a variety of reasons to do with physics, chemistry and scarcity. 

The fact that these metals also have industrial uses complicates the matter further but I shall be focusing only on the monetary aspect in this note. 

Gold and silver coins were money. The fact that the king's visage was printed on the coin did not make it any more valuable. It was the gold content and the silver content in the coins that gave them value. 

When gold and silver are currencies, there can be no inflation by definition. Things cost what they do and the prices keep varying depending on availability, but the currency itself ought to remain stable. 

But right from ancient times, kings had voracious appetites that needed to be fed. They had vast armies and armies needed to be equipped and kept happy, and various interest groups depending on their proximity to the throne needed doles and freebies. How does a king get money for all that? 

Going back in history, every king finally fell to the temptation of adulterating his coinage with base metals. Slowly, the proportion of gold and silver in the coin would decline. Obviously, prices of goods and services measured in terms of the currency would go up. 

It was never the prices that were rising, it was the currency getting debased. 

And then paper was invented. Someone said let's keep gold in a locker and issue promissory notes payable to bearer against the gold kept in the vaults. "I promise to pay the bearer x amount of gold", said every currency note. 

In theory, you could walk into the offices of the issuer of the note, give your note, and get gold in return.

Post World War 2, in 1944, the Bretton Woods Conference agreed that the US Dollar would be pegged to gold, and all other currencies would be pegged to the dollar, effectively creating an international gold backed monetary system. 

No government kept its promise - they printed currencies with abandon. In addition, the US saw its gold reserves drain away as other nations took gold in exchange for currency. 

Richard Nixon realised that it would be foolish to continue on this path and unilaterally abrogated the US promise, the promise to pay gold. 

Thus from 1971 onwards, every currency in the world is a fiat currency, backed only by faith in the government, and a common understanding to subscribe to the illusion that that piece of paper is worth something. Take out your currency note and see right now, what does it say? "I promise to pay the bearer rupees so and so", not gold, not silver, but the same rupees that you hold in your hand! Realise that what you hold in your hand is a worthless piece of paper! 

And we thought only children played imaginary games. In reality, the whole world runs on illusion and nothing else. 

Meanwhile, every government in the world continues to print money with abandon. This printing can take various forms, including that other fosterer of illusions called fractional reserve banking. 

If you thought that only faith in God is a matter of  pure belief, without any proof that God exists, you have obviously never thought about our faith in money. God is a better and more useful illusion! 

All fiat currencies till date, every single one, has eventually reached the value of zero. 

Well, thanks for the good news,  now what in f*#* name am I supposed to do, you are thinking. 

Doing is for later. First, learn to see. 

Our cognitive maps, meaning our view of the world, is fostered on the illusion that money is something real. The governments and powers that be do everything in their power to ensure that this illusion is maintained. 

You have to step outside that reality and see the truth about money first. 

Once you see it, you cannot unsee it. 

Ok, I see it, you are saying, now what should I do? 

That we shall discuss in the subsequent parts. 

To be continued... 

PROGRESS

It is a world of illusion, 

A fantasy land of plenty;

Where prices keep going up, 

In illusory token money! 

The government keeps printing more and more, 

For money is the wealth you see; 

Till you have lots and lots of wealth,

But can't afford the bread you eat! 

Everything is priced in money, 

Which is but a piece of paper; 

It becomes cheaper to burn it,

To keep warm, for firewood costs more! 

And then the great reset happens, 

Money becomes those things that you own; 

Not paper conjured out of thin air,

Money is only silver and gold! 

Dinesh Gopalan,

29 January, 2026

TRADING DILEMMAS

It is not easy buying and selling stocks or commodities when the prices are highly volatile. 

It is not easy buying or selling  something when the prices have gone up substantially, or gone down substantially. 

When gold was at 50,000 for ten grams, I used to get this question a lot.

" It has already gone up, should I buy now? Or wait?" 

Wait for what? 

A pullback! 

Well, the pullback never happened and gold is at 168000 per ten grams now. 

The same question now repeats. 

Silver is another example. It was at one lakh rupees per kg one year back, and now it is at 373,000 per kg. 

" OMG! Can I buy now?! It's gone up so much! "

There are people who will always feel that the prices are too high, and they will wait for a pullback to buy. Pullback from where? What if it goes up to 420000 from here and drops to 390000? Will you buy? 

I will blame the so called equity analysts and experts for this. "Buy on dips" they will tell you. I have never understood what "buy on dips" means. 

What if I told you I expect silver to go to 6 lakhs by end of this year? Will you buy? 

Worse than the buying decision is the selling decision. I bought silver in September when it was 150000 per kg. What should I do now? Sell? Sell half so that I recover my principal? Sell one third? Sell and invest the proceeds where? 

Silver has been known to correct up to fifty percent in past bull runs. That is stomach churning volatility! 

What if silver happens to be fifty percent of my total investment portfolio? What if it happens to be just 5 percent? Will the answer be different in either case? 

"Book part profits and de-risk. Diversify" say all the investment gurus. That is good advice. 

"Diversification is reversion to the mean. It shows that you have no conviction. If you want to make money, real money, you have to bet your shirt on your maximum conviction trade" say some investment greats. This is also good advice. 

"Depends on what you want in life. If you have reached for target profit, exit" say some people. But the target is a constantly moving thing, it vacillates along with greed and fear! 

"You have already made enough, why do you want more" say others. Very philosophical, and I have said the same to other people in several different contexts. But when it comes to myself, "enough" is a philosophy that is difficult to put into practice. 

There is no one answer to the above questions. It is an ever changing trade-off between risk and stability, greed and fear, philosophy and practicality, risk tolerance versus risk aversion, coupled with my own  comfort in dealing with money, my upbringing, my conviction and my aspirations. 

And then there is luck. Never underestimate luck, or the divine hand of providence! 

I invested in silver four months back when it was 150000 per kg in September. My investment, then and more so now, is a substantial portion of my investment basket. Silver is now at 370000 per kg. 

What would you do if you were in my position? 

Would love to know your thoughts.

A PRIMER ON SILVER PRICES

I have been tracking the silver market closely for a few months now. What I have learnt about how prices are arrived at is interesting. 

I never thought there were so many possible prices, all of them correct and all of them wrong at the same time. 

To set the context, COMEX silver price right now is 109 dollars for a troy ounce, which is 31.1 grams. 

The benchmark price worldwide is set by the COMEX in Chicago. This is an online exchange and operates 24/7 between Sunday evening and Friday evening US time. 

The COMEX price of silver has been suppressed for the last fifty years, and that stranglehold is beginning to break. By whom and for what reason it was suppressed is a topic for another day. 

COMEX trades mostly physical contracts, with very few contracts standing for delivery. The amount of paper contracts is a hundred, or more, maybe a thousand  times the size of actually available silver. 

Big Banks have been shorting silver for years and they are sitting on huge short positions which they will need to cover by buying them back in the next five months or so. Meanwhile, the price of silver has shot up so much that they are sitting on billions of dollars of losses. Big enough number of billions to turn some of them insolvent. 

The Shanghai market which is the other main market, operates mainly on physical delivery. The price there right now is 125 dollars. 

Arbitragers should be buying silver by the truckload and flying it to Shanghai to make easy risk free money. Except that the metal is difficult to source right now, they need to find the physical first. 

However, either Shanghai prices have to come down or Comex prices have to go up, or both. Arbitrage of more than a couple of dollars is not sustainable. 

Silver has risen about 250 percent in the last one year, and in what can only be called Silveronomics as opposed to normal economics, the demand has exploded as the price has gone up. And supply is getting scarcer by the day. 

Spot prices in the Indian market should be ideally the Comex dollar price divided by 31.1, times the  exchange rate, times 1.09. That 9 percent is six percent customs duty and 3 percent gst. The actual street prices on any given day are between minus 0.25 percent to plus 1.5 percent of this number. 

The Indian ETFs base their prices on Street prices in India. They are typically about 1.5 percent above street price. Last week it went to about 6 percent higher than street price and swung to 5 percent lower than street price the immediately next day. That variation is due to local supply demand dynamics. 

The futures prices on MCX are a little higher than spot, which is normal. However, silver is beginning to see instances of Backwardation worldwide which means spot is quoting higher than futures. This indicates a highly stressed physical market with scarcity of supply. 

The street prices I am talking of are the prices at Zaveri Bazar or equivalent places in Bangalore, Ahmedabad, etc. The prices at big branded shops will be more, since they add their own margins. 

I am still talking about silver bars and not jewelry. For jewelry, add twenty percent or more to this price. 

That is as far as the market is concerned. 

If you have bought silver, there is also: 

The price at which you have bought, 

Your target profit,

Your expectation of future prices,

Your risk tolerance, and 

Your position sizing, 

These are the factors that will influence your decision on when to sell. 

Another thing I have learnt over the last few months is that the main stream media is not to be trusted. If you follow only main stream media, you will be an ignorant lout who is thoroughly manipulated by narratives, in short a dumb sucker. 

THE SILVER DENOUEMENT

I have been tracking silver prices quite closely for the last couple of months. The dynamics are extremely interesting, to say the least. 

The benchmark silver price is the one that is set by COMEX, the online exchange at Chicago, which runs 24/7 from Sunday evening Eastern Time to Friday evening Eastern Time. The amount of paper contracts that are traded on the Comex are a thousand times ( or some such huge number, every expert has a different huge number) the actual quantity of silver on the planet. 

The actual quantity of silver on the planet is miniscule. The value of all above ground silver stocks in the world at today's prices is less than the market cap of NVidea or Microsoft. 

The paper prices on the Comex have been suppressed for the last fifty years by the deep state and MIC ( Military Industrial Complex) for nefarious reasons of their own. Gold is a similar story though to a lesser extent. 

In order to keep the price suppressed, big banks have been shorting silver and they are sitting on huge short positions totalling to billions and billions and billions of dollars. 

Silver has been a monetary metal and store of value, along with gold, for 5000 years. Silver is referred to as the poor man's gold, silver for the commoners, and gold for the kings. 

The western centric financial system and educational complex has managed to wipe out the collective memory of their peoples when it comes to silver and gold. They think that piece of worthless paper which is fiat currency and all that is based on fiat like bonds, debt, equity, etc are the real thing. All educated people in India think so too. The poor know better. Gold and silver are the true stores of value, the rest is maya, illusion. 

When anything is kept suppressed for so long the pressure builds. When finally the steam escapes from the pressure cooker, it bursts and hits the ceiling. The exact same thing is happening to silver right now. 

A group of people  have got together to break the chokehold of the big banks on silver. All they have to do to break the market is to demand delivery on the Comex when contracts mature. That's it, it's like a bank run. The amount of paper promises being an order of magnitude higher than actual silver, one of two things will happen. Either the price will go up up and up ( the appreciation in silver in the last one year is 200 percent, and in gold is close to 100 percent), or the market will break and Comex will declare default, or both. The prices have already started moving. The default scenario is very real and may happen. If that happens, it will be one big nail in the coffins of the western financial system, the US dollar, and western hegemony. 

One nail, so many coffins! Which is why the "group of people" we referred to who are doing this include India, China and Russia. Yes, as in the nations themselves!

What is happening to silver, and to a lesser extent to gold right now is not a routine price move. It is a re-pricing, the kind of event that happens only once in any person's lifetime. 

Expect the prices to go up much much higher from here. 

If you already own silver, rejoice.

RACE TO THE APOCALYPSE

Silver has been on a tear in the last few months. Both gold and silver outperform when fiat currencies have over extended themselves. Silver is the more volatile between the two, but gold is the big brother. 

Yesterday night, gold went on a sprint. Like the non striker in a cricket match, silver is quiet and watching gold going berserk. 

So, this is what gold is telling silver right now,: 

Oh how fleet footed art thou,

Racing away to glory; 

After fifty years, you wake up,

Wanting to make up for lost time! 

Meanwhile I will show I'm no slouch,

And can't be held down either; 

I too will get up and race,

Though you may be swifter! 

Together we will decimate,

The fiction that is called Fiat; 

Not for nothing are we known, 

For grinding illusions to dust! 

Eternal store of value, 

Ancient preservers of wealth; 

Our time has come once more come, 

It is time for the great reset! 

Dinesh Gopalan,

21 January, 2026

SILVER BREAKS

The US mint has just suspended its sale of silver coins. This means the government has lost control and is panicking. 

The price has reached 92 dollars per ounce, spot, in the COMEX. I am sorry folks, I can only think in dollars per ounce now, ever since I woke up and started tracking the silver story in September. 

There is a massive supply shortage of physical silver all over the world. In the US, the premiums at the coin shops are above ten dollars. Many shops are reporting stockouts. 

In Shanghai, the closing price yesterday on the Shanghai Gold exchange was 101 dollars. The SGE is the real market where silver is traded physically and that price is the real price. 

Meanwhile, all the factors that we have been talking about that made silver reach here ( 30 percent gain since Jan 1st alone, it was at 50 dollar levels in September) are still intact. Here is the link to my blog post of 2nd December listing out those factors: 

https://www.dineshgopalan.com/2025/12/silver-moves.html?m=0

Conventional economics tells us that when the price of something rises, demand drops. Well, forget your conventional economics. Watch the panic that unfolds now. 

If you are holding silver, don't sell. Don't don't make the mistake of "booking profits", "take something off the table", "reduce the risk" or any of those reasonable sounding anodynes meant for conventional times. These are not conventional times. 

Should you buy at 92? I think yes, but thankfully I am sitting on silver that I bought in September at 50 dollar levels and don't have to take that call at this time when prices have run up so furiously. 

There is still some supply in the Indian market, and surprisingly, there is no street premium. If you are holding silver only in the form of ETF, you may want to consider converting part of your holdings into physical silver. 

Happy Pongal! 

Changing world, re-evaluating investment strategies

The best investment for the next few years: Gold 

High beta investment for the immediate future: silver

The dark horse: Platinum

To be wary about: equity. It is likely US will collapse first, we may still have time to bail before ours does

Commodity super cycle is here. Keep watching for the right time to shift to Commodity stocks. 

 Debt / fixed income products are for liquidity. They are not necessarily investments especially in a situation like today with high global debt to GDP ratios, and increasing geo political tensions. In such a scenario, any assets, including dal, atta and chaval, are better than holding cash. This includes real estate, precious metals, and equity.

Prepare for action in the silver market

If you are into any derivatives position on silver, long or short, exit immediately. Book a loss if you need to, but exit. Do not get into any paper contract in silver. This applies to both US and India. 

If you are in the US, and If you have any investments in silver ETFs, liquidate, and buy physical. 

The underlying of the  US ETFs are suspect. They may not be holding physical at all. 

Indian ETFs are reasonably safe. There is reason to believe that they hold physical.  However, if you can shift to physical, do it. 

If you think the silver market saw a lot of action in 2025, well, you ain't seen nothing yet. 2026 is going to be explosive. 

And yes, it's still a good time to buy. But if you want to buy, do it soon. 

STORE OF VALUE

For decades we have been fed this story about gold…They keep saying, it is not a "productive asset", it has no utility, it just sits there doing nothing, what is the return you are earning on it, etc., etc.

 

Well, what is money then? It is just a promise that someone will pay you something of value. Correction, it used to be a promissory note to pay something of value, back in the days when money was backed by gold. After the US went off the gold standard in 1971 and the rest of the world followed, that is no longer the case. It is just a promissory note. Promising what? Read what is printed on your currency note, it says "I promise to pay the bearer the sum of rupees __". Huh? Promise on the currency note to pay me in currency? That is circular logic!

 

A currency note is a piece of paper that people are compelled to accept in return for their goods or services, that is enforced forcefully by law and held together by convention and faith.

 

Do you know that in international trade no one trusts each other's currency? All international trade is therefore denominated by, and translated through, US dollars. How foolish. The US dollar is nothing but a fiat currency and other countries have at last woken up. Alternate "currencies" or payment mechanisms are being discussed.

 

What will be the basis of these currencies, the hard bedrock on which they are anchored? You guessed it, gold! While they have been feeding you stories about gold not being valuable, etc, etc, they have been quietly buying gold themselves. Central Banks across the world are the largest buyers and hoarders of gold!

 

Why gold? Money serves as a medium of exchange and a unit of measure. But most important, for it to be trusted, it needs to be a store of value, that is, it must retain its value over time. Which element on the periodic table suits these purposes well? The element needs to be scarce, but not impossible to obtain; it needs to cost something to extract; it cannot dissolve or dissipate like all gases do; it cannot be poisonous; it should be easy to carry and store; it should be malleable and ductile, capable of being minted into coins; it should not react easily with other elements; it should be virtually indestructible; it needs to be culturally and socially acceptable to everyone around the world… Gold it is! Closely followed by silver!

 

Every year, about 3000 to 3600 tons of gold is mined. Roughly 216,000 tons of gold is the above ground stock. This stock when melted and cast into a cube will measure 17 metres long, 17 metres wide, and 17 metres deep. That's it! Les than your average office building! Most of this gold is in the form of jewelry, or stored as investment in the form of bullion bars.

 

In case of silver, roughly 30,000 tons is mined every year. Estimates of above ground stocks vary, it could be anywhere between 600,000 tons to 1.6 million tons. It is estimated that all the silver ever mined is about 1.7 million tons. However, there is one problem when it comes to silver. A lot of it is used up in industrial applications, and a lot of it, more than 60 percent for sure, is not recovered, and just goes into landfills. We can safely estimate that all the silver available above ground today, is say, about 1 million tons, or, five times the amount of gold.

 

The ratio of gold to silver in terms of annual production is about 8:1. The historical ratio used for currency purposes for much of human history is 15:1. Currently, silver is severely underpriced, the ratio is around 60:1.

 

If you want an enduring store of value, money that you can pass on to the next generation, and the next, and so on, look no further than gold or silver. When it comes to Indians, you don't need to work too hard to convince them on this point – Indians have historically been consumers of gold and silver for this very reason, that it is a store of value.

 

Remember you past, reclaim your legacy, protect your wealth, include gold and silver in your portfolio! How much, what percent? Well, the current global, economic and monetary situation in relation to these two metals and to alternate investment avenues, suggests going overweight on gold and silver.

 

Happy New Year folks, have a great 2026!

 

Dinesh Gopalan,

1 January, 2026.

 

Posted to my blog https:\\www.dineshgopalan.com