economy
January 27, 2026
What investors piling into gold and silver can learn from King Henry VIII
A Deutsche Bank analyst argues those betting on the “debasement trade” may be operating from a faulty premise.
TL;DR
- Gold and silver prices have surged, leading to increased discussion of a "debasement trade."
- The debasement trade is based on the theory that countries will devalue their currencies by printing more money to reduce debt burdens.
- Historical examples from 1544 England and 64 A.D. Rome show that currency debasement led to inflation and public backlash.
- Deutsche Bank strategist Henry Allen believes a major currency devaluation is unlikely due to historical lessons and political unpopularity of inflation.
- Market signals like inflation swaps and Treasury yields do not indicate an imminent inflation spike or widespread debasement.
- Allen suggests the debasement trade may be based on a faulty premise, as governments are likely to avoid the negative consequences of sustained inflation.
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