In Part I, I explained in detail why a “mania event” in the precious metals market is much more likely to occur in India and/or China before such mania ever reached Western markets and investors. I also briefly touched on why such an occurrence should be greatly dreaded, if it should occur before the inevitable collapse in the bankers paper, fiat-currencies takes place.
I will now examine how such a mania would likely play-out in these markets. The Indian market for precious metals is somewhat more straightforward, so I will begin there. Any investor with even a modest amount of knowledge about precious metals will already know that Indians are the most-ardent lovers of precious metals on the planet.
Bullion-dealers are almost as common as “corner stores” in Indian cities. The result of having such a deep and established market for bullion is that the “premiums” which buyers must pay to purchase bullion (and the “discounts” for sellers) are arguably the lowest on the planet. With low premiums, wide availability, and an extremely strong cultural attachment to precious metals, the Indian people would be ready/willing/able to much more broadly participate in such a mania event than anywhere else in the world.
Those at the higher end of the income-scale would/could focus their purchasing on gold, while even India’s large peasant population can continue to buy silver (and smaller quantities of gold). However,what separates a precious metals mania from a similar event in any other commodities market is what such an occurrence implies: the collapse of paper money...
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