Could it happen? About 100 years ago, silver was the preferred precious metals investment in India. Because of the government crackdown on the underground economy by restricting its paper currency, the question is a good one.
India has long held a quasi-dual currency system. Paper rupees used in daily transactions, with gold bullion being a preferred savings currency. The removal of India’s two largest paper currency denominations have had a major impact on the price of gold in India, reviving the question of silver’s role in the country.
Gold demand in India has risen only 25% over the last decade while silver demand has risen by 600%. This isn’t the first time the Indian government has fought precious metals as a currency in their country. Last time it happened the shoe was on the other foot. Silver was taxed and gold became the preferred savings vehicle.
Turnabout is fair play, and people around the world will always seek for a way to protect their wealth.
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