For many pundits, the recent strong move towards physical silver and gold is a sign that market participants are forecasting a resurgence of inflation.
But maybe there is more to it...
In fact, the strong demand for physical precious metals may also indicate that market participants are moving towards gold and silver to protect their assets from an incoming surge of financial repression.
Indeed, if governments started using financial repression, they would have more luck targeting the returns on paper assets than with physical gold.
Interfering with the return on bonds or equity would actually be easy:
For equity, governments can just double corporate taxes.
For bonds, they can simply force institutional actors to buy more bonds.
And for gold? Interfering with the return on gold is actually more complicated. The only way to do so would be to seize it directly from the people... which is not impossible, but still way more complicated. 😎
