I am aware of Bryan Mercadente’s interest in the precious metals because, on our journeys to and from Dr Gabb—currently resident in what is described, with bureaucratic cheerfulness, as a care home, though everyone knows it to be a repository for the criminally insane—we share a railway carriage and, on occasion, a table. It is an interest I share, and have shared for much longer than Bryan has been alive. I have held gold and silver, in one form or another, for decades, and since 2020 I have done so with greater concentration and less apology. I do not wish to deter Bryan from enriching himself. His taste in clothes is peculiar. His diet suggests a private war against conventional nutrition. His devotion to the gymnasium cannot come cheap. His family circumstances are modest. He deserves the gains he has made as the reward of foresight and discipline, and I suspect—though this is not my business—that he needs them. What follows, then, is not a rebuke but a warning, and warnings are best given before they are required.

Bryan’s recent piece on gold is, in its essentials, correct. There are indeed two forces at work in the bullion markets, though he has described only one with full clarity. The first is the structural debasement of Western currencies. After 1945, inflation was the embarrassing by-product of governments—especially our own—spending beyond their means and financing the excess by selling bonds that were quietly monetised by the banking system. Inflation was then something ministers tried to wish away while continuing to cause it. Today, it has ceased to be an embarrassment and become policy. The national debts of the Western states have reached a size at which repayment is inconceivable without a degree of fiscal discipline unknown since the nineteenth century. Interest rates must therefore be kept artificially low to prevent servicing costs from exploding, and the resulting inflation is welcomed as a creeping default on obligations that will never be honoured in real terms. Bryan is right about this, and he is right to conclude that it will not change. This alone guarantees a rise in the nominal price of precious metals over time.

A supplemental cause—both effect and accelerant—is the behaviour of central banks outside the West. Those in the Global South have watched the accelerating decline of the dollar and its satellites with growing alarm, and they have noticed, with a clarity denied to Western commentators, that the dollar has been weaponised into an instrument of confiscation against states and individuals who displease Washington. The seizure of reserves has consequences. One of them is that gold is once again being treated as what it always was: a politically neutral reserve asset. This has pushed prices upward not only against debasing Western currencies but against other commodities. On this point too Bryan is sound, and his analysis is better than anything that has appeared in the regime press.

There is, however, a second force now entering the picture, and it is this that Bryan has overlooked. Until very recently, the rise in gold and silver was rapid but comparatively discreet. It tracked currency debasement and institutional hedging, and it was not a subject of sustained attention in the regime media. That has changed. Gold is now discussed openly, and a bubble is forming. Ordinary people—by which I mean people without lobbyists or inside information—have realised that their savings are being expropriated through pitiful interest rates and are looking for shelter. There is a stampede into bullion. This may burn out quickly, though I doubt it. It may just as easily turn into a vertical climb as panic money chases yesterday’s returns. Early entrants will make fortunes. Their stories will circulate. Speculation will harden into frenzy. At some point—no one can say when—there will be tales of people mortgaging their houses to buy gold.

The danger of any speculative bubble is not that it forms but that it bursts. When it does, those who bought at the top—especially with borrowed money—will be ruined. Even those who entered early may lose a portion of their gains. What makes this especially dangerous is that no one recognises the turning point in real time. I remember the secondary banking crash of 1973. One day my Aunt Catherine was a millionairesse; the next she was reading her broker’s letter and telephoning estate agents. I saw the silver crash of 1980. I lost five thousand pounds in Polly Peck, which may now seem a trifling sum, but felt otherwise when it vanished. You never know a market has turned until it has turned. Every decline can be rationalised as a temporary dip. At ten per cent down, there are always eager buyers congratulating themselves on getting back into the lift at the ground floor.

This brings me to the warning I have already given Bryan verbally and now put into writing. So far, he has benefited from what might be called an organic rise in precious metals: a movement driven by currency debasement and institutional reallocation, swift but not hysterical, and marked by only brief downward eddies. That rise will not, in itself, be reversed. We are now, however, entering a phase of ill-informed frenzy. Gold may leap from five thousand dollars to ten thousand in a week. If it does, that rise will be unstable. When the crash comes—and it will—it will wipe out the speculative premium and may eat into part of the underlying rise, depressing prices below trend for a year or more. The long-term logic remains intact, but the short-term arithmetic becomes savage.

My advice to Bryan, and to anyone else watching this market with widening eyes, is therefore conditional rather than prohibitory. Join the speculation if you wish, but do so with full awareness of its instability. Set boundaries in advance and obey them. Draw a clear line between bullion brought for security and long-term gain and bullion brought for speculative enrichment. Hold the first regardless of what happens from day to day. But be prepared to ignore what appears to be common sense and the accumulated wisdom of experience, and to sell the second even while prices are still climbing sharply. Have a refuge for realised gains—copper, perhaps, or uranium, or oil. Every bubble produces winners as well as losers, but the winners are those who decide their rules before the crowd sets them. Do this, and Bryan’s gymnasium membership will be secure for many years to come.

That is all I have to say, except to add—lest some fellow-solicitor somewhere begin to salivate—that none of the above constitutes financial advice. Always consult someone licensed by your government before making any investment, and remember that assets can go down as well as up. Even gold will do that—though rarely, I might add, when it matters most.

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Gold, Silver, and the Managed Demolition of Western Money Going for Gold Too Soon, Not Too Wrong: Gold and the Meaning of a Fall

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