There's a major government move right now that's giving a huge boost to anyone investing in silver…
You see, when things go awry, governments have a tendency to pin the blame away from the government and on a convenient scapegoat.
Take India, for example. It faces a record current account deficit and its currency, the rupee, continues tumbling to record lows against the U.S. dollar.
But it's not government policies that are the culprit here, says the Indian government and central bank. They say the blame lies squarely on Indians' centuries-long love affair with gold.
Gold imports into India hit a record 162 tons in May.
The government says that if only the populace would quit buying so much gold, all the problems would be solved. That is laughable, but the Indian government has implemented measures to curb imports of gold into the country.
It has raised the tax on gold imports to 8% from just 2%. India also put measures into place like stopping banks from making loans against gold jewelry and coins weighing more than 50 grams.
The government has also roped in private entities to help it wage its 'war' on gold. A major financial institution, Reliance Capital, has suspended sales of its gold-backed funds. In addition, India's largest jewelers' association – the All India Gems and Jewelry Trade Federation – has asked its members to stop selling gold bars and coins. This accounts for about 35% of Federation members' sales.Â
It remains an open question as to whether these measures can curb, in more than a very temporary fashion, India's cultural affinity for gold.
Investing in Silver is the Winning Move
But it does seem that another shiny metal will emerge a winner here. . .silver.
This precious metal also has been a part of Indian culture for centuries. And like gold, many Indians use silver as means of saving. Not a bad idea either with the rupee plunging.
Wealthy Indians may have moved their gold buying offshore to places in the Middle East like Dubai. But for average Indian citizens being shut out of the gold market by the government, they have quickly turned their attention to the silver market.
Just look at these astonishing numbers…