India Finance Minister Begs His People To Stop Buying Gold

Tyler Durden's picture




 

While the overnight collapse in precious metals has been notably retraced, the media is unable to take its eyes off the ball that the status quo is shaking focusing on the demise and what that must mean for the future. Well, it seems, the Indian finance minister is very clear. Speaking in New Delhi P. Chidambaram explained his lack of surprise at the increase in gold imports in April (as physical demand exploded amid falling paper prices) adding:

  • *CHIDAMBARAM APPEALS TO PEOPLE TO CONTAIN PASSION FOR GOLD, and
  • *CHIDAMBARAM: MORE STEPS PLANNED TO CURB GOLD IMPORTS IF NEEDED

So China/Hong Kong is importing near record amounts of the precious metal into reserves and India is not only seeing demand but enough to warrant further government intervention... makes perfect sense that (paper) prices should be falling - or are the planners plans backfiring once again? As we noted here, as long as the price suppression of paper gold prices continues, don't expect any notable changes to these demand trends.

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Mon, 05/20/2013 - 10:04 | 3580032 Hedgetard55
Hedgetard55's picture

Silver appears to be getting whacked, what am I missing?

Mon, 05/20/2013 - 10:13 | 3580073 Badabing
Badabing's picture

*Stop buying gold

*Stop breathing air

*Stop drinking water

True market value will stop the madness and nothing else!

Mon, 05/20/2013 - 10:15 | 3580081 Dr. No
Dr. No's picture

Stop listening to Finance Ministers!

Mon, 05/20/2013 - 10:20 | 3580100 flacon
flacon's picture

I'm sure he thinks that Indians should be buying gold-plated zinc neclaces as wedding gifts. Afterall.... it LOOKS the same.

Mon, 05/20/2013 - 10:59 | 3580248 DoChenRollingBearing
DoChenRollingBearing's picture

And what if people in India start reading FOFOA?  How is the government there going to stop not just the cultiral love of gold but the possibility that gold could go up 30 times its present price?  Hmm...

Could gold go up that much?  Do FOFOA's numbers make any sense?  Well, maybe so!

"Gold Arithmetic"

http://tinyurl.com/ba7um78

Mon, 05/20/2013 - 11:20 | 3580332 Rory_Breaker
Rory_Breaker's picture

One more reason to hate the prick, Chidambaram is also calling for merger of banks:

http://economictimes.indiatimes.com/news/economy/policy/p-chidambaram-fo...

Mon, 05/20/2013 - 11:34 | 3580396 Arius
Arius's picture

i wondered at what extent they were going with gold bashing in India ... after all is only REAL stuff, cant do paper games with selling naked shorts of gold stocks in Canada ...

 couple this with capitulation of Hong Kong commodity exchange, ABN AMRO default and you get the real picture before the runner arrives ....

Mon, 05/20/2013 - 12:49 | 3580733 Meat Hammer
Meat Hammer's picture

Dilemma:  Have true price discovery and let the genie out of the bottle that our dollar, and all fiat for that matter, is worthless crap...or keep smacking down the price and watch the plebs buy with both hands.  

 

Mon, 05/20/2013 - 13:04 | 3580793 imaginalis
imaginalis's picture

Indians will stop buying gold when they stop eating chicken curry

Mon, 05/20/2013 - 11:48 | 3580449 tbd108
tbd108's picture

Especially stop listening to finance ministers who really work for the Bank of England.

Mon, 05/20/2013 - 10:16 | 3580083 MillionDollarBonus_
MillionDollarBonus_'s picture

I would wager that the fall in precious metals prices is simply the result of falling global demand.

I notice that another sell side analyst has delivered a sell recommendation on gold today:

http://www.moneycontrol.com/news/brokerage-recos-commodities/sell-gold-silver-advises-karvy-stock-broking_875524.html

Interesting.

Mon, 05/20/2013 - 10:18 | 3580092 mayhem_korner
mayhem_korner's picture

 

 

I'll take you up on that one.  Put me down for 250 Krugerrands.

Mon, 05/20/2013 - 10:18 | 3580093 jcpicks
jcpicks's picture

Nobody wants paper.  Everyone wants the phyzz.

Mon, 05/20/2013 - 10:19 | 3580099 Badabing
Badabing's picture

MDB no demand from HKMEX!

Mon, 05/20/2013 - 10:55 | 3580235 Northeaster
Northeaster's picture

Maybe Karvy will have a better year:

http://www.sec.gov/Archives/edgar/vprr/12/9999999997-12-010311

 

Mon, 05/20/2013 - 12:16 | 3580561 jonjon831983
jonjon831983's picture

ouch

 

looka like that Karvy Inc had big losses there

Mon, 05/20/2013 - 11:03 | 3580267 JOYFUL
JOYFUL's picture

Spot on MDB... as usual, it's only 'the contrarian's contrarion' what has the cojones to just step up and 'tell it like it is!'

Demand has indeed.... fallen off a cliff. The Chinks have bought up everything they need to begin their yuan as reserve currency campaign... the rest of the BRICs... and big players like Turkey too, can't afford anymore damage to their trade deficits, so they're pulling the plug on domestic demand. ...via induced shortages.

Meanwhiles, in the West, the peons are simply too poor to purchase anything other than gas and groceries... and the big $ is scared stiff ... having been blown out of every market other than stocks.

Things are looking grim in Mudville alright... looks like you beat us fair n square MDB!

bUT WAIiT!             

TheOutlook wasn't brilliant for the Mudville nine that day:
The score stood four to two, with but one inning more to play.
And then when Sinclair died at first, and Sprott he did the same,
A sickly silence fell upon the patrons of the game.

A straggling few got up to go in deep despair. The rest
Clung to that hope which springs eternal in the human breast;
They thought, if only Blythe put down the bat, we could stay alive with that.

And then a hush came o'er that crowd, a deafening silence fell like a cloud. Next batter up not one there knew. A moan went up... we're done, we're through!. But that strange batter just eyed the ball, then picked it up … and said “That’s all!”

Game over.

There's only one thing worse than no demand... in the metals market. What could that be?  Ummm,

how bout.... no supply. It's all over cept the screamin now MDB! Next station.... Crash n Burn!

Your Facebook fortune is toasts... but come back soon... we luvs your boasts!

Mon, 05/20/2013 - 10:19 | 3580097 AllThatGlitters
AllThatGlitters's picture

Funny, my wife begged me to stop importing gold into our household too.

So on last night's open, I initiated the process of importing a whole bunch of silver, LOL.

Look at the bounce back in real time: http://www.pmbull.com/silver-price/

Of course, gold never really tanked like silver, and you can still find it much more easily at reasonable premiums:

http://www.pmbull.com/gold-price/

Think the relative shortage of retail silver vs. retail gold signifies anything? I still don't know.

 

 

Mon, 05/20/2013 - 10:58 | 3580252 James
James's picture

"Think the relative shortage of retail silver vs. retail gold signifies anything? I still don't know."

 

To me it signifies that people that quite possibly would have never bought into the metal markets in years past are now and Silvers' price point allows them to do that from a more modest income/net worth position. And then the stack just grows.(Betcha can't stack just one) In years past my cash would have been thrown @ business interests. Now, to me, it is metal in the hope of coming out the other side of this intact.

Same thing is happening w/firearms. People who in the past did'nt own are buying now. My local cabinet shop now sports "Ammo for sale" on storefront. In the past he was too busy selling/installing cabinets.

I'd enjoy a ZH report on just how much of current GDP comes from purchases of things not normaly purchased in bulk. I never used to keep 500 rolls of TP around.

Mon, 05/20/2013 - 12:17 | 3580566 KnightTakesKing
KnightTakesKing's picture

500 rolls of TP? Holy crap!

Mon, 05/20/2013 - 13:56 | 3581034 cynicalskeptic
cynicalskeptic's picture

That's maybe a 2-3 year supply, about right for personal use and trade purposes.   Toilet paper is one of those things that 'disappears' when SHTF  (figuratively).  And it's not like there are free Sears catalogues around to use as a substitute.

 

You could make a nice amount of $$ selling those in Venezuela right now.

Mon, 05/20/2013 - 11:46 | 3580437 mickeyman
mickeyman's picture

He wants to buy it himself.

Mon, 05/20/2013 - 11:47 | 3580439 mickeyman
mickeyman's picture

"Stop buying! You're driving my price up!"

Mon, 05/20/2013 - 11:54 | 3580467 Common_Cents22
Common_Cents22's picture

all your gold are belong to us

Mon, 05/20/2013 - 10:09 | 3580058 insanelysane
insanelysane's picture

Nothing to see here, move along.

Train derailment in Connecticut due to shoddy track and not terrorism.

Mon, 05/20/2013 - 10:18 | 3580095 Badabing
Badabing's picture

the default is being played down.

make no mistake this is big news!

Mon, 05/20/2013 - 10:21 | 3580104 williambanzai7
williambanzai7's picture

Yes it is being played down. And it is quite curious that it should happen in a City where people are jumping the turnstyles to buy physical.

Mon, 05/20/2013 - 11:31 | 3580376 americhinaman
americhinaman's picture

hk merc closed because it couldn't compete with CGSE: http://cgse.com.hk/en/index.php  a very small number of investors were forced into cash settlement, but as with most futures exchanges over 95% of participants would have done that anyways.

physical gold demand in HK has accelerated tremendously, but there's no point exaggerating the importance of non-events such as the HK Merc closing, and the associated implication that any gold-dealing entity in HK has a shortage of physical gold.  physical gold is available in HK in as much quantity as you want.  last time i checked, over fifty 5 tael bars (~6 oz) were available at a single Hang Seng bank outlet.  BOC is fully stocked with gold maple leafs (leaves?).  at the PBOC (chinese govt equivalent of the fed) outlet for gold pandas can order as many as you want for delivery... in fact i saw someone just last friday take delivery of several hundred.  literally thousands of jewelry stores will sell you as much 22k - 24k gold jewelry and bars as you want.  the premiums via any of these mechanisms are virtually unchanged from before April 2013 (maybe a few cents more per ounce now than before... a meaningless difference).

if the CGSE were to have a physical default, that would be a real story.  but for now, there is no point in playing up a story that isn't there.  i'm a bigger believer in gold than most of you on this site, but it does not make a crap of difference when people talk about meaningless stories.  

there are real stories that imply that at some point there will be a shortage of gold, but not in the near term.  here's what i think is the most important... 2 of the biggest "supplies" of physical gold are drawing down fast... ETFs and mines.  it is  true that the pace of ETF drawdowns is currently faster than chinese and indians (and a variety of others) can buy physical gold.  the reason is that we (chinese) save in gold at the measured pace at which we earn income plus some pent up demand from when prices were soaring, while ETF holders liquidate en masse.  but an ETF drawdown today is bullish for tomorrow's gold price, as it simply means that one of the biggest supplies of available gold has just declined.  the other dwindling source of supply is mines.  although the world's miners are able to mine ~2% of current existing supply per year right now, mine supply is decreasing through time.  of all the gold that is available in the earth's crust at for which we currently have technology to mine, there's only between 20-50% remaining.  in other words, of all the gold that exists and can be mined AT ALL, there's at most 50% more than exists already as processed & mined gold (according to geologists and physicists).

it will be an interesting day when the ETF sales have been fully absorbed and when gold mines reach an inflection point... i call "peak gold" the point at which the rate of mining decreases despite advances in mining technology.  in the absense of a huge new discovery, the ability to extract from seawater, magma, the earth's core, asteroids, or the ability to create a supernova in a bottle... at the pace humanity is extracting gold from the earth mined supply will start decreasing within a couple of decades.  when that happens, gold prices in fiat terms will skyrocket, and gold will no longer just have its historical/traditional/current role as a store of wealth... it will be a proper "investment" that will also magnify your wealth as measured in anything else that is available in abundance (whether fiat money, base metals, reneweable energy, food, stocks, or anything else for that matter).

be patient and let the real stories develop.  forget about meaningless stories such as HK Merc and nonexistent physical shortage... these do not affect the thesis for owning gold, and in fact may tend to mislead some stupid people into buying gold for flawed reasons.  accumulate what you can at a pace that is sensible and without leverage, and think about what are sensible reasons for owning the stuff.

Mon, 05/20/2013 - 12:50 | 3580735 JOYFUL
JOYFUL's picture

The Anti-AnAnonymous has arrived amongst us~

Rejoice...(or gnash your teeth...)

Straight talk from the Far-out East - at last!

Are all of Tyler's in-house foils being exposed one by one?

Mon, 05/20/2013 - 10:29 | 3580136 e-recep
e-recep's picture

nice, a rothschild proxy goes to hell.

Mon, 05/20/2013 - 10:41 | 3580183 ParkAveFlasher
ParkAveFlasher's picture

Riddle me this: Who needs an exchange / middle man when you are dealing purely in physical, and not some confabulated pyramid scheme?  What value does an exchange add to the one who owns the physical product?

Mon, 05/20/2013 - 10:14 | 3580074 TeamDepends
TeamDepends's picture

Last gasp desperation by the cartel.

Mon, 05/20/2013 - 10:15 | 3580084 Pairadimes
Pairadimes's picture

A great buying opportunity.

Mon, 05/20/2013 - 11:33 | 3580380 spine001
spine001's picture

"Silver appears to be getting whacked, what am I missing?"

When CBs start printing QE infinitum, the value of assets is determined more and more by what assets can produce and NOT by their intrinsic value unless you can leverage that intrinsic value. Given that what assets can produce is going down continuously as QE progresses (here remember that unless you think that the world is increasing its production of goods and services every time there is a CB QE, then the % of the produce that goes to the Asset goes down), and given that produce becomes more and more scarce, anything that can't produce anything, like gold, will go in value to zero (future cash flows created by Gold = 0). Why did it have value before, well simple, because, it could be used as collateral and leverage upon it to buy other cash flow producing assets. Thanks to the generosity of CBs QEs there is no need any more to hold GOLD as your collateral since they are allowing any garbage asset to be used as collateral (they have no choice whatsoever), holding GOLD becomes a drag if it ties up your capital, since you don't need it any more for leverage. This is related to another question that even my finance professor couldn't figure out the answer, why do we have negative real interest rates being accepted by investors. Well the answer is the same, it is the only way for them to leverage their capital on the way to QE infinity. They need to have it in a financial institution to be able to leverage it. And yes, they may loose it but if they can levarage 10:1 and extract 10% for the 10, they are doubling their capital every single year that this lasts!!! All they need to do is to diversify at the end of each year and start again but from a wider base. That is why they are willing to receive negative real interest rates. In the meantime we all like fools stay on the side lines bitching about Bernanke and just watch while our savings are completely wiped out.

I know it is incredibly unfair, but it is what is happening. What actions can you take? Exchange your PMs while they still have value for goods producing assets, whatever it is, focus on how can you provide value to your local community by transforming your PMs into assets and do it before their value goes up in a sudden spirol as it will without doubt at some time in the future. In the mean time, everything that can not be leveraged will go down in value --> deflation, until the music stops, at that point you will have hiperinflation and recession/depression. Where the only ones that have survived are the ones that leveraged/doubled up/diversified and started again until the end. Remember that as you do this, you coudl diversify into: Land; Weapons; Bullet production Machinery; Tractors, Tanks, etc.

Until next time,

Engineer

Mon, 05/20/2013 - 10:05 | 3580034 Bindar Dundat
Bindar Dundat's picture

I think the run from paper is driving down the physical price.  One question. Can we out gun the banksters?

Mon, 05/20/2013 - 10:07 | 3580046 Olephant
Olephant's picture

Not if they are backed up by the U.S armed forces.

Mon, 05/20/2013 - 10:10 | 3580066 LawsofPhysics
LawsofPhysics's picture

The U.S. armed forces is a volunteer military.  Volunteers will not turn on their neighbors (especially those well-armed neighbors they see on a weekly basis at the shooting range), perhaps the paper-pushers should have thought this through a bit more carefully...

Mon, 05/20/2013 - 10:13 | 3580072 astoriajoe
astoriajoe's picture

a regular paycheck represents a powerful incentive when unemployment is high.

Mon, 05/20/2013 - 10:17 | 3580088 ParkAveFlasher
ParkAveFlasher's picture

The average GI Joe is paid in BennyBux, gets no special mortgage relief, has seen his/her VA benefits cut, and oh yeah is sent to fight unwinnable battles.

Earners will earn and looters will loot, that won't change.

Mon, 05/20/2013 - 10:54 | 3580230 LawsofPhysics
LawsofPhysics's picture

Are they being paid in PMs?  What happens when the paycheck doesn't buy shit again?  Again big fucking difference between theory and practice.

Mon, 05/20/2013 - 11:41 | 3580419 spine001
spine001's picture

You guys/gals have missed all the informatio about robotic weapons!!! They don't need people any more, only very few controllers and programmers, the destruction machines can be set in full auto!

Robots are not science fiction any more!

A cruise missile was a robot, run by a very simple microprocessor with only a few kilobytes of RAM, now they can use 16 cores with Terabytes of RAM to guide anything. REmote controller are only needed for political reasons, those could evaporate in a flash.

Full battleships could be run robotically, the limit today is anybody's imagination

Until next time,

Engineer

Mon, 05/20/2013 - 15:05 | 3581292 MagicHandPuppet
MagicHandPuppet's picture

Sounds like you have a thoery about practice to me.

Mon, 05/20/2013 - 10:18 | 3580094 pazmaker
pazmaker's picture

LoP, I like your post and think you are usually on the money, but I think your wrong on this one.

 

There are so many young naive brainwashed soldiers, marines etc I wouldn't put it past them to blindly follow orders.   Also the opportunity for them and their families to be taken care of is a strong motivator.

Mon, 05/20/2013 - 10:52 | 3580220 LawsofPhysics
LawsofPhysics's picture

Are there not many old, wiser veterans?  There sure as hell are in my neighborhood.  Where exactly are they going to "keep their familes safe" again.  Please.  grow up.

Mon, 05/20/2013 - 11:05 | 3580268 pazmaker
pazmaker's picture

Yes, I am one of them!(older wiser veteran), but we were talking about our current military who are not mostly older and wiser.  How they going to keep their families save and fed?  On a military compound that's how.  I personally know it has been done before at Fort Bragg, NC for certain military units.

  No need for personal attacks by telling me to grow up because I disagree with you.  You probably would find we think very much alike.  Peace

 

PS: will they pay in PM's?   Most likely not, but they will be fed and clothed and will not go hungry as lon as they support the pwers that be.

Mon, 05/20/2013 - 11:17 | 3580316 LawsofPhysics
LawsofPhysics's picture

So am I, and so are many of the members of my farming Co-op.  fed by whom? Clothes from whom?  If the bullshit paper we are getting paid by our commanders becomes wortheless.  All bets are off delivering any food to anyone outside of this Co-op.  Prepare pazmaker, it will come to this.  Again, theory and practice are two different things.

Mon, 05/20/2013 - 14:01 | 3581046 cynicalskeptic
cynicalskeptic's picture

Oath Keepers and others having NO influence on things?  Seems like there was a growing awareness of what was happening in this country and a conscious move on the part of those who thought about such things NOT to be a part of it.

Mon, 05/20/2013 - 10:54 | 3580223 i-dog
i-dog's picture

+1

The only military "friends" I've spoken to ALL say that they will "follow any lawful order to shoot whomever". I suspect they'd especially relish the opportunity for a "lawful" order to shoot me!

They certainly followed Roosevelt's order to tear up the Bonus Army in Washington, DC in 1932 (ie. similar conditions as now) ... headed by McArthur, Patton and Eisenhower with tanks, chemical weapons, and a cavalry charge with fixed bayonets!!!

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