Previously, I wrote how many Indian nationals were opting out of the national paper currency and voting with their feet as it were in favor of physical gold–even in numbers far greater than usual for wedding gifts, etc.

The situation started as a result of economic and monetary mismanagement on the part of the Indian government and central bank (though the US Federal Reserve's pumping money into the global system and "exporting" our inflation for a time certainly played a role). When Indians increasingly abandoned paper money for gold, the government responded by trying to falsify the demand signals by trying to limit gold imports.

Now the people are adapting again not from gold to paper with diminishing value but to silver. HT to GATA for the news. Reuters reports that despite India's raising the import duty three times this year imports from January to August this year India imported 4,073 tons of silver, more then double the total from all of 2012.

Yes, this is how currency competition works. And yes, the people are smarter than central bankers think they are (and most people may be smarter than most central bankers).