“What good is platinum, you can’t buy gold with it” - Not Charlie Munger
Not a commodities expert but Gold has a higher store of value since Gold is the reserve against which most central banks issue their currency (not necessarily in proportion to the currency issued)
There sure are many elements that are rarer than gold but the utility of those elements is far less than gold is what I think.
Fundamentally gold has no real value.. all of its perceived value comes from fact that central govts are using it for storage and medium of exchange.. now that gold has run up significantly, just wondering what’s preventing some govts to set new standard with platinum, especially when world power is shifting?
Just like a Dollar or a Rupee note.
That’s exactly the definition of a currency.
Gold hasn’t gone anywhere; it remains where it always was. But trust in other currencies (esp. US Dollar) has gone down.
Nothing. They can try. But unless others willingly accept it as a medium of exchange and store of value, they are just replacing one fiat currency with another. Why Platinum, you can even have stones as a currency (here, here).
Indeed, RBI has worked on it
Couple of things to add, since this is the 2nd cycle , I am investing in Gold & Silver. Earlier, it was in 2020, where I was investing through DSP Gold Miners Fund, in Gold. That avenue is closed now because of RBI restrictions.
Both Gold and Silver are highly volatile. You need to treat them as stocks, not as Liquid Fund. Unless, one buys and forgets, like Physical Gold and Silver.
Silver is more volatile than Gold. Infact, there are volatility indexes for Gold and Silver too
Treat Gold as large cap and Silver as Small Cap.
There are multiple theories , why Gold and Silver are going up. It’s impossible for a retail guy to go through all of them. I personally track only XAGUSD and XAUUSD on weekly basis
Nothing from India. U need to invest through some USA broker portal, like Interactive. But I need peace, so investing through Gold & Silver Etf based in India.
This is the reason, investing in Gold ETF based in India is more profitable. Also no issues on taxations + Exchange rate etc.
Posted in my X profile. Gold is beating SPX too.
I think we can safely rule out the risk of any SGB style silver investment scheme. The primary reason is govt took huge gamble with SGBs and looks like it did not play out well for them. They will have a hard time paying the premium ever since great bull run in gold prices. The bonds issued will continue to mature in next 7 years, shells out 2.5% interest annually and tax free gains at maturity regardless of the spot price. Hence, SGBs are discontinued.
Absolutely. GoI shot itself in the foot by issuing SGBs. As someone called it ‘a naked open short against gold’, it proved and will prove for years to come, extremely costly. It ended up borrowing at an insanely high rate, considering the rise in the gold price and the annual 2.5% interest!
But there is one fundamental difference, right? We accept a rupee note (or any currency for that matter) because the government promise on the note “to pay the bearer, a sum of…”. The value of gold comes only from humankind’s fascination with the shiny object - not from any great utility or inherent capability to produce income streams or a sovereign guarantee.
Money can always be inflated away. Countries like Turkey, Zimbabwe and Argentina are but a few examples where inflationary risk is the norm. Then there is no value to the soverign guarantee as its meaningless.
We are fortunate to live in a country or region which currently has low inflationary risk.
For developing economies 3-5% Inflation is considered normal. For developed anywhere between 2-4%.
Why does Gold hold value - because you cannot really ramp up supply beyond a certain amt. Theoretically, you can just print x amount of money and flood the system.
On a lighter note, reading this gold/bitcoin and cash debate, I am always reminded of the superb dialogue by Lord Varys
Power resides where men believe it resides. It’s a trick, a shadow on the wall.
Similarly gold holds value because all sections of society, from regular public / Central Bankers to governments give it value.
Obviously, the topic is nuanced and complex, and there have Nobel-level thinkers writing and discussing on this.
Its nice to see counter views. I was listening to some one and view stayed with me. It said Gold is something that you can hold and goverment cannot control / do anything with gold you hold. Its universally accepted and hence holds value ( physical gold ).
Its been a year since starting the thread. I wanted to write non-market stuff with ethos of a mann-ki-baat but it has instead had the ethos of a monkey hopping aimlessly from branch to branch with no clear intent. It is perhaps an accurate reflection of what goes on in my mind. I don’t see the format changing a whole lot. I can’t resist writing to resolve confusion. Can’t resist going down rabbit holes (CDMO, AI, MTF data, silver etc.). Can’t resist sharing a good idea. I think that will continue
Market has been volatile this year for me. I end the year with a return of ~18% post tax. I hoped for this year to end 20%+ and hopefully that will happen in the three sessions that remain. After how good last year was, it feels good to have not squandered it in a down market but at the same time sobering that it took so much effort to make this return as compared to last few years. Just goes to show how much the environment and luck matters more than what we do.
I read a lot of books during the first half of the year but my review rate still has been very poor. I am not sure what has changed. How did I do all those long reviews? It doesn’t even feel like it was done by me. Maybe AI summaries have devalued real summaries in my mind. But it was still a way for me to solidify what I learnt - so I need to get back to it somehow. First I need to get back to reading books - I have had a 3 month slump now - probably my poorest in last 10 years and there are reasons for that.
I have been spending inordinate amounts of time with AI. At this point I am a paying customer for claude (love opus 4.5), chatgpt (about to cancel) and gemini (new found love) in addition to local LLMs (gemma3 & qwen). I never liked working with others so ended up working alone most of my life as an individual contributor to several businesses. I developed the skill to work with teams and collaborating only in the last 5 years. I felt working with others slowed me down considerably. For someone with my disposition, AI is a godsend because my mind generates a lot of questions non-stop every hour and earlier the effort required in searching was a natural barrier and being poorly organised to note things down to research later, all this was wasted. AI has also helped realise my creativity in building things - I revamped phreakonomics and built many different apps to make my life easier. Also got inspired by son and built some hobby electronics (a basic guitar amp) - all this wouldn’t have been possible even last year. Everyday these days I wake up energetic and optimistic with mind buzzing with ideas. The last time I felt like this was in my early 20s (am in early 40s now). This obsession though is coming at a huge cost to other aspects of my life right now as I find less and less time for running, guitar and books.
Silver has continued its tear last few weeks and I don’t know how far it has to go. As of now HZL despite its 20% run up is valued like Silver will return back to $40-45 while SHFE Silver is trading $80+/oz. While my thesis was for it to hold ~$50/oz, it might be time to recalibrate if it stays above $60 for over 3-6 months. Market will do this slowly over time unlike the base commodity because the value is in durable, sustainable cash flows and not where the commodity is trading on a day-to-day basis. As of now all metals base/industrial are running up but post Q3 earnings, we will start seeing differentiation.
Most people (including myself) think Silver is overstretched when looking at the charts and is ripe for correction. Some thoughts though contradict that - silver’s run up is not solely due to industrial demand but because of devaluation of fiat currencies and geopolitics (export restrictions). SHFE vs LBMA/Comex continues divergence this week with never before seen spreads of $6+/oz. If arbitrage was possible (by flying in physical metal, buying from LBMA/Comex to Shanghai), we wouldn’t be seeing this. Its a first clear sign of East’s preference of Silver over West - which has historically and culturally been the case. People looking at Silver charts from last 50-100 years are missing its historic significance for centuries when across cultures and countries incl. the West, it used to trade at ratios of 10:1 to 15:1. What has happened post ‘Great crime of 1873’ and Franco-Prussian war (read these two fascinating histories) is a de-recognition of Silver as a monetary metal in favour of Gold first and then fiat currencies (China and India were last to give up on Silver in the 1930s and first to recognise it back now). If any of that reverses, we might be looking at Silver:Gold ratio between 15:1 and 60:1 in the next decade but its far too early to make such calls.
Let me end this rambling here. Happy new year to you all and your families and hope 2026 brings great curiosity, health and fortunes to everyone.
Hi @phreakv6 ,
**My objective is certainly not to clutter your thread. But I have to write this. We all have benefited immensely by your capacity to analyze, to connect the dots and go deep into the businesses and industries that you study and present selflessly. I have taken your cue and bought some businesses (the last being HZL, even though, I tried to independently study ). One of the milestones that I have kept for me this coming year is to at least put 1/10th of the effort and diligence that you do in analyzing businesses.The time that you put in to read books and your voracious appetite for knowledge is also something to aspire for. **
**Wishing you and your family a joyous, prosperous, healthy and exciting year ahead. **
Keep sharing your wisdom. Cheers …
Happy new year to you too!
Thanks for sharing new ideas and views.
Sorry for mentioning you but curiosity got better of me. As you haven’t talked about bluejet recently.
Are you still holding it or sold it? As it is technically weak now. And if you sold it, is it because of technicals or anything fundamentally changed in this. Couldn’t find any new information regarding this anywhere except low export data news and end molecule getting in new geographies. Valuations are reasonable now and clutter on twitter about this is low now.
“BREAKING: China will be imposing export restrictions on silver beginning in 5 days, on January 1st. These restrictions will require special government licenses for silver exports. Shanghai silver prices are now up to $85/oz, a ~$5 premium to spot prices in the US.”
Markets have been weak and finding reasons to correct. Stock near 52 wk low touched 30%+ today. Last year’s correction we touched 40% so there is some ways to go though it feels like we are close to the bottom. Also the journey from 30-40% if it does happen will be lot more painful mainly because that would mean breaking the lows made in Feb/Mar last year in several more stocks (since that’s in the 52 wk window).
The thing I find different this time is how everyone is expecting this to happen - that we will bottom out and we will bounce back just like we did last year. This is the part I am a little conservative on. Last year’s structural shift was MTF driven and I suspect it’s a one-time flow which anchored the market which otherwise should have capitulated. I am not sure what’s the risk-taking capacity this time to leverage further. Despite the crash, leverage stays at all time highs (1.16 lakh Cr) - there are lot of leveraged positions that are under water which will continue to put pressure on upside moves unfortunately. The other thing is how our expectations from the market have changed to be bullish all the time. The period between 2018-2020 kept grinding further and further down for a prolonged period. What we have seen now is nothing, though from a contrast effect of how awesome last 5 years have been, it feels painful.
This was my worst fear last year when I made those MTF posts. I decided to back my instincts and go long on silver through HZL and also directly through the *BEES, sort of like a large cash position. Sometimes it’s the defensive positions that end up outperforming expectations. It is also surprising how under-owned precious metals are in the investor community.
The way I see it, though gold/silver have doubled or tripled in last 5 years, we have massively outperformed this through equities (~30-40x has been normal return for most people from covid bottoms) so why anchor? We must be happy we are not a gold/silver investor from 2020 but have switched at the right time when the odds are very much in favour.
The reason why I think this time its different (will regret this, but I change my mind easily, so here goes) - the trust levels between countries is at lows not seen in decades. All of the wealth of last 50 years was built on trust - trust on currencies, govt, policies, institutions, safety of shipping routes etc. This is what made us pile up on govt. bonds like never before worldwide. Everyone holds everyone’s bonds on faith that they would follow a rules based order enforced by UN/WTO/IMF etc. All of that is coming apart and with the current debt levels in the world, there is likely no going back and we are probably at the point of no return. Fate of countries and currencies will be decided by levels of debt and defence.
I think looking at what Trump does this week or next is not going to help much but the “why” he is doing it - that “why” is not easy to change. The $38t in debt and rising yields put him in a spot - he can only fix it by making the rest of the world pay for it - through tariffs, or through forcefully taking resources or of course debasement. There is nothing surprising in it - throughout history, this is how it is resolved.
Global bonds are a $140 trillion asset-class (tradeable gold is ~$3t and tradeable silver is ~$300b and BTC is ~$2t for reference) and this class is now reached the point of no return because it was anyway a Ponzi scheme. A scheme which worked well for decades but like all Ponzi schemes, they tend to end badly. I think a lot of the world’s wealth will move from bonds to precious metals and maybe crypto currencies as well - you can imagine how a small change in flows is going to distort the tiny asset class that Silver is. A lot of it can also be in equities, because equities do quite well in periods of currency debasement. But the negative impact is that if we are going to de-globalize, it will more or less negate the positive impact of the debasement (overall business goes down).
It is impossible for us to see this for what it is because there have been several times in the past the same situation has ended in different outcomes - of kicking the can down the road a bit further - but what the world is staring at is a mathematical impossibility (of recycling debt at higher yields) and will keep showing its face in different ways over time - even if Trump is impeached. Even if he loses the mid-terms. Even if we sign a trade deal with US etc. Trump will likely back off from everything when US10Y yields cross 4.5 or 5% levels - but he would have done enough damage to international trust by then.
To really understand what demonetisation of treasuries will look like, go through and understand what the franco-prussian war (1871) and the crime of 1873 did to Silver. Chain reactions happen when an asset class is dumped. In today’s connected world, we will see what happened over decades in a matter of years/months.
Stuff like this is not normal - JGB 30Y yield was 3.5% yest morning and today it is 3.88%! There are threats of UST dumping from Europe (they wouldnt dare to, but can always reduce purchases) and so on. I think watching yields from here is important. If it continues weakening, its a clear sign of demonetisation of bonds as an asset class and if that progresses, we are in for some very interesting times.
Disc: I am a novice and write to clear my head. This is not investment advice and I am wrong most times.
Agree broadly
Some thoughts -
US has no option but to debase and repay. Western Bonds and Bond holders shall be crushed
PMs have already done well. May continue ( I doubt at the same pace )
EM currencies ( well run ones ) should be in for sharp bouts of appreciation - in not so distant future ( a logical inevitability )
EM companies not focussed on Exports to the West should do really really well
Once EM currencies start to appreciate, EM stocks shall widely outperform Precious Metals in EM currency terms
Disc : views r personal, reserve the right to be wrong, I am positioned in line with my views
I don’t want to clutter @phreakv6’s excellent thread, but given the extraordinary geopolitical climate we’re living through, I felt compelled to share a few thoughts and clear my own head which readers might find useful. With Bharani’s kind permission, here’s my couple of cents—
Over the past few months, I’ve been exploring several books to deepen my understanding of the historical forces and policy choices that have shaped America’s current debt predicament. The U.S. now carries a debt-to-GDP ratio of roughly 130%—or about $38 trillion—an unprecedented level for a global reserve currency issuer in peacetime.
How did the U.S. reach this point, and why might it be nearly impossible to escape this fiscal trap without significant economic and geopolitical consequences.
The current U.S. national debt stands at around $38 trillion, or roughly 130% of GDP. It’s important to remember that the debt-to-GDP ratio matters far more than the nominal dollar figure—it’s the best measure of a nation’s fiscal sustainability.
Interestingly, this isn’t the first time the U.S. has faced such elevated debt levels. Right after World War II, in 1945, when President Roosevelt took office, the nation’s debt-to-GDP ratio was around 118%. Yet, over the following decades, it steadily declined—falling to nearly 33% by 1981.
That remarkable reduction was not accidental. It reflected an era when fiscal discipline was a bipartisan priority, and maintaining manageable debt levels was considered both economically prudent and morally essential.
The chart below illustrates this long-term descent—spanning more than four decades—showing how deliberate policy choices and responsible governance shaped America’s postwar financial recovery.
In hindsight, the 9/11 attacks may stand as one of the most profound economic and geopolitical turning points in modern U.S. history—an event that arguably marked the beginning of America’s long fiscal decline. The country’s debt-to-GDP ratio, well-contained at around 56% before 2001, began a steady ascent in the aftermath of 9/11 and the dot-com bust, eventually reaching today’s level of roughly 130%.
Since 2000, neither Congress nor the White House has demonstrated the same fiscal restraint or long-term discipline that guided earlier generations, especially those who led the post–World War II recovery. Tellingly, the United States has not recorded a single balanced federal budget since 2001—a stark contrast to the ethos of responsibility that once defined its economic governance.
Let’s put America’s $38 trillion debt—or roughly 130% of GDP—into perspective, and understand why it has reached a level where a true reversal seems almost impossible.
In the fiscal year 2024–2025, the U.S. federal government collected around $5.2 trillion in revenue, while total expenditures reached nearly $7 trillion—leaving a deficit of about $1.8 trillion. This gap is routinely covered by issuing new debt, effectively printing more money. No sitting president wants to risk slowing the economy through deep spending cuts, since growth is seen as the only viable path out of this trap—though that strategy assumes the rest of the world cooperates, which rarely happens in practice.
Now, consider the interest burden. At an average rate of 3% on $38 trillion of debt, annual interest payments amount to roughly $1.14 trillion—about 22% of federal revenue. A mere 1% increase in rates would push that figure to $1.52 trillion, or nearly 30% of total revenue.
This math alone explains why there is so much political pressure on the Federal Reserve to pivot toward lower rates—something figures like Trump have been vocal about. The higher the rates go, the faster the fiscal situation snowballs.
Typically, government debt levels rise during recessions—when revenues contract and government spending expands to stabilize the economy. However, today’s environment poses a troubling question: if the AI-driven market boom were to unwind or the U.S. were drawn into a major conflict, does Washington still have the fiscal firepower to respond as it once did? Realistically, the answer appears to be no. Yet, the government would likely spend aggressively regardless, simply because the alternative—doing nothing—is even worse.
What’s more concerning is the lack of political will to restore fiscal discipline. Neither Congress nor the White House seems intent on charting a path back toward sustainable debt management. Instead, U.S. foreign policy increasingly reflects efforts to project economic and strategic dominance—sometimes targeting resource-rich nations—as a means of maintaining leverage amid growing fiscal vulnerability.
We are possibly living through an era of profound transition—one that occurs perhaps once in a century, if not centuries. The U.S. dollar’s status as the world’s reserve currency faces mounting strain, and within our lifetimes, we may well witness a shift toward alternatives such as gold or stronger, more disciplined national currencies for global trade.
Disc: have been long on gold for last 2+ months…..will average up if it goes higher and can cut my entire position in a single day…..do your own diligence and don’t blindly speculate in gold and silver
