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India Central Bank Prohibits Sales Of Gold Coins
Two weeks ago, with its current account getting crushed by relentless gold imports, India's finance minister Chidambaram literally begged the people to stop buying gold. Judging by the popular response, the ongoing physical shortage, and last night's increase in Indian gold import duties from 6% to 8%, appealing to people's feeling when it comes to the choice of fiat vs physical, has failed miserably. So the FinMin Chidambaram has decided to escalate. Per Reuters: "The Reserve Bank of India has advised banks against selling gold coins to retail customers, Finance Minister P. Chidambaram said on Thursday, a day after he raised gold import duty to try to ease pressure on India's bloated current account deficit." Well, if there ever was one sure way to send demand for any product through the roof (guns, ammo, etc), it is for the government to prohibit its outright sale. What follows next, almost without fail, is a panicked, chaotic buying scramble.
Gold imports by India, the world's biggest buyer of bullion, surged to
162 tonnes in May -- more than twice the monthly average in the record
year of 2011.
"I think the Reserve Bank has advised banks that they should not sell gold coins," said Chidambaram, while speaking at an event in Mumbai.
Chidambaram also urged banks to advise their customers not to invest in gold.
Why? If it is not clear by now, here is the explanation: there is simply not enough gold to satisfy demand at the current artificially downward-manipulated price, no matter what propaganda script is being spun on Verizon TV at any given moment. And with India's idiotic decree, even more gold will be purchased at these prices.
Dear India - here is a simple way to limit demand: price.
Petition the central banks to allow gold to price based on price discovery, or as it is also known supply and demand. Because if gold were to cost $2000,$5000, $10,000/oz then all problems resulting from excess demand would immediately disappear and India's current account would be back to normal.
Of course this will not happen, as the crumbling facade of the imploding fiath based regime would immediately peel away. So back to gold capital controls and other ad hoc made-up measures guaranteed to not only fail but push the price of physical gold much higher.
Good luck.
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Prohibtion also pushes up the price of drugs, booze (in the 20's), prostitution and gambling. The high prices actually make all of these activities and substances more fun, but the same cannot be said for gold.
http://dareconomics.wordpress.com/2013/06/06/around-the-globe-06-06-2013/
Nonsense. Indians who already own gold just made another 2% profit overnight.
Premium for black market gold gonna go through the roof.
How long before every pawn shop gold buyer in the USA has to start operating out of a back room in a warehouse district as the financial equivalent of a 1930's speak easy?
It appears as if the World may return to a time as shown in the James Bond movie, "Goldfinger", where the price of gold varies significantly from country to country and substantial gains may be realized by smuggling.
Hey everybody, I'm from Holland! Isn't that weird?
I cans shmuggle da gold, yes!
First gasp just before drowning...
Cheap gold price is not sustainable for long.
I think gold will continue to trend lower over the next several years...especially if interest rates begin trending higher. The rate of return since it peaked at $800 in the 1980's is really not very good, albeit silver is far worse.
I think that you should marry Nouriel Roubini in the closest state in which such unions are legal.
!! LOL. yeah, something like that; at least get a room.
The prophecy shall be fullfilled 10,000 dollars an ounce but no one will own it. (At least not legally)
Snorkel gear premiums have just gone parabolic...
trained beavers
to chew holes in ZHedgers boats
and steal all their gold ..
glad i have an Inconel hull
so they open a black market for gold in india. wonder what price gold will hit?
PANIC !!!!!!!
Good God these people are a special kind of stupid.
Actually, I think you're right. One of the funnier things I've seen in the last decade was people advising you to buy the Indian Stock Market; you have to travel there. There're special. they can't do anythig right. Stock market my ass.
Price, shmise. What good is being a central planner if you can't centrally plan?
Why not just peg the rupee to gold and make it convertible at any bank. Problem solved. Gold sales would drop off right away.
And the bad money (USD, RMB) would swoop in, convert to rupees, convert to gold and repatriate the metal in a flash.
Martin Armstorng says it is all about capital flows and gold is simply too small a market ergo equity and debt markets are the only solution.
Great lets own debt while the world is falling apart. Great idea!
Well, doesn't that tell you the MONEY SUPPLY might be the problem?
Martin Armstrong says a lot of stupid stuff. He shows pictures of Chinese coins and paper money from the past claiming they are examples of fiat and that the Chinese fiat system worked. He assumes you can't read what is written on the money. The coins have weights of their metal content stamped on them and the paper is clearly receipts redeemable for amounts silk and gold. He also assumes you won't read up and find out that the paper money all died when the redemption system failed. Armstrong says what he wants you to hear.
Yeah, I winced when I read Martin Armstrong say that "the gold market is too small". News flash, Martin-- when gold is $50,000/oz, the gold market will be...um... (50,000/1400 = 35.71)... about 36 times bigger than it is now.
That should be big enough.
Funny how his tune has changed since being let out of solitary confinement.
Too bad, as the man is obviously very intelligent.
LOL
Oly Cow!
For the benefit of those who have missed this excellent summary:
http://thisisnthappiness.com/image/52195453703
Hey Ben,...please make physical gold and silver illegal to sell or buy. Hallo black market!
They did the same kinds of things in Weimar Germany. It simply does not matter. It is obvious the Indian Central Bank is only using the Current Account Deficit as an excuse. The problem is their currency causing some other gold related blow up within their banking system.
I warned all gold bugs several times. Government can prohibit everything.
Will be funny to watch if the government buys back all gold for 100/ounce. There is no save haven in gold.
Yes, there is a safe haven in Goldschläger. Gold bugs can keep their gold while getting drunk.
http://en.wikipedia.org/wiki/Goldschl%C3%A4ger
I'll sell mine for 100 oz of silver per oz
The Government can do whatever the heck it wants, and so can the people.
In conlusion, the people will end up ignoring the government.
That would be the end of our society as we know it.
We have Homeland Security to deal with. You know, those guys with big muscles that are armed better than our Marines and were trained by Mossad? Homeland Security won't be ignored.
I love Homeland Security!!
Sent from my Verizon Wireless account
Classy.
Bubba and Ferdinand from Homeland Security will be at your place tonight for "entertainment".
Sent from a proxy server
Prove it bitch!!!
Sent from Utah Data Center
"Homeland Security won't be ignored."
Oh, don't worry, they won't be ignored. In fact, they'll receive special attention. As my Irish grandmother used to say to the friendly British homeland security troops, "Tiocfaidh ar la." I think it means "I love England." Or something like that...
No safe haven where there is no law.
Ever see a "gun buyback" where there are a BUNCH of guys waving wads of cash paying more for collectible rifles and such? Then that's where you will find me paying $200/oz for gold from a gigantic wad of cash.
"Will be funny to watch if the government buys back all gold for 100/ounce."
Well, it'll be funny to watch the government guys standing around by themselves with wads of cash in one hand and their dicks in the other. LOL...I mean, YOU would probably show up, but no one else would...
Gun buyback programs are the template there. The enterprising few (like myself) would hawk the lines to buy from waiting sellers at a premium, still undervalued. Or, something like that in not so simple terms would happen.
trollolololololololol
They can't prohibit what they can't find, and is protected by AR15. The gold confiscation only worked in the 30's because America was a different nation then.
Great article, brief, factual and to the point.
Or maybe it's just my inner goldbug rejoicing this news?
"Spent" a large chunk of my May paycheck today...
Looks like PMs and PM miners are ready to make a major move - eg cross MA(50), fill the gap and then break out higher in case of $HUI.
Having said that I'm in no hurry to see the prices go up just yet.
They tore down Orwell's home, so the hell with them.
And the shirts? Can we still get those?
Shirts have been sold out, but we have plenty of shorts!
-JamieD
Combine with France's nuttiness this week and we're beginnign to see a plan:
http://www.marketupdate.nl/nieuws/goud-en-zilvermarkt/frankrijk-verbiedt-verzending-van-goud-en-zilver-via-de-post/
Just under 80% of retail gold sold in india is jewelry.
Chains are solld in sizes that vary in centimeters per gram, Very handy way to carry and spend the relic.
Jewelry sales will hit the limit.
Gold is reality, even the poorest indian knows this fact
They, of course being a government, have a monopoly on violence.
"Prohibit"? or what... How much force is being applied here? Is this an EDICT or a "suggestion"? ZH may be exaggerating...for now.
Of course there's always a black market in violence as well.
First the US government allows the stealing of gold from American Indians,
then the Indian government wants to limit the gold of Indian Indians.
Not good to be an Indian, but I'm feeling more and more Indian every day.
Hoka hey.
Of course you can trust the Government; Just Ask an Indian.
pirate beavers
chewing holes in the bottom of ZHedgers boats
stealing all their gold ..
Phyz is running out... Oops, India just realized JPM was "storing" their gold for them.
I guess India is now taking it one step past 100% margin requirements.
Question - If an Indian hammers the detail out of the coin, is it still a coin?
You stupid little man, you will be smashed by the Golden Horde!
Going long Zephyrs and scuba tanks!
This is not racist but an observation.
Indian people are really good at accounts in general and numeracy and not so easily sold a duff invesrment. If nation was going to wake up to the consequences of fiat money it was going to be them.
Best accountants I have ever seen have always been indian and mteiculous for detail and making the numbers add up.
So they prefer gold to fiat money, not surprised.
Don't know about all that, but they are snazzy dressers, that's obvious. Liberace was a piker.
Not only the ongoing PM control fails and currency wars but
now there are signs of trade wars emerging
http://online.wsj.com/article/SB1000142412788732406330457852487251520494...
We all know where this is headed
My advice to wealthy Indian husbands and fathers - don't be letting your wives/daughters go strolling down the street with that pretty little gold ring in her nose or you'll be paying for some cosmetic surgery to fix her ripped face before you know it. And gold jewelry? In Mexico years ago they used to chop off a finger if the ring didn't slide off easily. Just sayin'. Oh, and just because your Mercedes has really good door locks and run-flat tires all it takes to get the occupants out of their rolling fortress is one molotov cocktail and they're outside immediately, ready for plucking.
If the Indian government meant to cause mayhem, they've accomplished it. If they didn't, they've still accomplished it.
Wives / daughters dont go a strollin without security with or without gold. Id feel about 100 times safer strollin through a mumbai slum than strollin in Gary. Just dont hit a cow with your motorcycle, your in deep shit then. Nothing like being beat to death after a motorcycle wreck.
The European play beaches of Goa can be humerous. One big ocean, one naked swedish girl taking a dip, and 100 horny Indian guys deciding that the part of the ocean near the naked swedish girl is particularily refreshing.
And a particularly awesome spot to gang rape the ever loving hell out of her tight Swedish ass, right? tell the story right or fuck right off into the sunset and stop bothering people.
Maybe you should keep up on current events and spare me that safer-than Gary-IN-shit, chief.
Nothing quite as refreshing as a good ol rape session.
Well let me clarify my post because it is a little confusing. No India is not a particularily safe place for women to walk the streets although I have known some women who got away with traveling in India without mishap. Very risky. As I mentioned the locals generally dont let their women go out alone. Rape is also very common here in the USA. I am a man and it has been my experience that even the very poorest neighborhoods in India have much less risk of one on one assault for a man than the poorest neighborhoods are in the USA. I can tell you that the poorest neighborhoods in India are surealistically poor. This is actual experience not reading a account of one (granted horrific) rape in the media. This has led me to believe that violence is more a matter of culture than poverty. In my opinion the risk of assault in India for a man tends not to be somone who sticks a knife in you for rupees but a group of individuals against a group of individuals or a group of individuals against a individual for religous or other taboos. I am sorry if you feel I insulted your living place IndyPat. I have lived in both countries and in the slums of both countries, as a man I feel much safer in the slums of India than the slums of the USA. Walking in the worst slums of India you will be accosted by beggars , by scam artists but you can get through without assault. In the worst slums in the USA not so much. Race wise I dont fit in eithor slum. If you are a peaceful resident of Gary you have my sincere apologies. I think the crimes of rape and serious assault are despicable regardless of where they occur and if I was a peaceful resident of Gary I would of also been offended by my characterization of the community. Somehow there are wonderful peaceful vibrant humans living in both the slums of India and the USA. Risk assesment wise for my gender based on my experience I would rather travel the streets of a Indian slum than a USA slum by a very large factor.
Her nose is what you're worried about? Her bling? Leaping fucking Vishnu, man, get your priorities straight!
***My advice to wealthy Indian fathers/husbands***
Skip the bling. We need it here more than you do and your screwing up the market. Buy the Old lady/Lil' Princess an HK MP5 SD Gang Rape Prevention Device. Paint the fucker gold if you have to, but get one. Clear a sweaty bus load of gang raping animals in no time flat.
Don't skimp on the mags or ammo. Cost you about as much as the gold, you'll still probably have to smuggle it, it is probably illegal to own there, but you'll sleep like a baby at night. This advice is free and straight from the heart. It's absolutely the finest device of it's kind on the planet, coming at your from Deutschland. Worth every Rupee.
Fiat = Faith
You should Never mix religion and economics
The govt basically just made gold more expensive in India with this law. Therefore those who have bought before are now happy to see the gain, proving that holding gold is a good investment! Thank the govt for it! LOL
sensationalized ZH Headline:
India Central Bank Prohibits Sales Of Gold Coins"Advising banks against" and "Prohibiting" are not the same. I feel like I'm missing something in the original article.
nope it's just ZH's normal protocol. Reporting facts doesn't stir up the diehard wingnuts enough.
Frontrunning the inevitable is something different than 'sensationalized'.
It's the same difference as "John is dead," and "John will eventually die some day." It's a huge difference.
John cries all day and is piling up shit all over the kitchen floor.
Johnny is dead, and someone's got to tell him.
I am the walrus.
Your call against the ZH headline is valid and just plain bad journalism. OTOH, "advice" from a central bank is usually a euphemism for a direct order. Anyone know of any Indian banks selling gold coins since they were "advised" not to?
Duhrrrrrrrrrrrrrrrrrrrrrrrrrrrr O_o
They want to prevent their customers to deal with all the losses that are coming from investing in gold coins.
That is what governments are supposed to do, watch over their citizens and make sure they can live a prosperous and happy-go-lucky life.
Oh wait... end-of-dream...
NEWS FLASH,
'Indias Population Tells Central Bank To Fuck Off'.
BREAKING,
'Indias Population Unanimously Calls Bernanke A Cunt',
'Population Said To Have Been Overheard Saying, "Fuck You Bernanke"',
STOP.
BITCHEZ
Careful-- Quoting an Assclown like Munger might inadvertantly rub off
We can't have too many players straining/collapsing the phyz supply lines, can we? Where would this lead to? /s
Although the Capital Controls (FATCA, MMF gates, bank account haircuts), PM Manipulation, PM controls, G+A controls, Drones, Data Center, EU, Syria, Turkey... all smell of "Something Wicked This Way Comes".
Tick tock, tick, tock. I know it's late, does anybody know the exact time?
My clock reads 1 minute to midnight but it hasnt always kept good time.
<--- Private storage near Dimona* = safe
<--- Private storage in US = safe
Just asking, just asking.
* Feel free to suggest better places outside the US, if this place does not seem safe (enough) for you.
Re Dimona as safe: All radioactive isotopes of gold have half lives of less than a week. So you can think of them as having an extremely deflatinary effect on your portfolio :-)
Hmmm...the guy with the gold shirt is going to have to sell it to a Indian member of Parliment. Hope it fits....
wonder how many kilos of gold
you can stuff up a yaks butt...
Yaks I have no knowleddge of..
Utter pradesh water buffalo 2.4 kilos
darjeeling mountain water buffalo 1.7 kilos.
Suture thread- priceless
super glue
.99 cents a tube
That solid gold toilet was a sound investment after all.
On my recent trip to India I bought 20 grams gold coin from local bank, I got it for about 950$ (almost same as buying 1 troy ounce for $1375 + tax etc )
The demand for gold in India is high due to USDINR instability and massive socialist schemes by indian govt decimating the Rupee (fiat currency)
Sadly the import of gold is worsening the US$ to INR - Case being point- people buy Gold as they dont trust currency - the currency worsens as people buy gold - and this gets into a vicious cycle.
Here in America, the labor cost to forge that gold coin into a ring is higher than the cost of gold coin - so I might have to ask Liam neeson the address of that Schilnders list guys business.
Im confused. Your argument is the Indians should not buy gold in order to ensure a lower USD/INR cross therefore ensuring prosperity for many generations? That damn gold evil it is! Did you know gold caused the black plague?
"Golly gee wiz, they sure's makin' one hell of a racket 'bout some traditional worthless barbaric relic nobody wants."
My thoughts exactly. Funny how dismissive the fiatocracy crowd is of PMs, talking about them as if they're toilet paper, but how they also then turn around and shit their pants when the market for it heats up. If it was such a "barbarous relic" only traded by loons, crazies, and the paranoid, why the hell should they care???
This has to be one of the all time classic bad calls. Perfect for the wall of shame. Right up there beside the Bank of England announcing gold sales when gold was $250
The question is why? India has a controlled currency that cannot be exported, and so must pay for all imports with foreign currency. The mass importation of Au must be wreaking havoc with India's foreign trade balance and depleting its currency reserves. Why, horrors of horrors, they might be forced to openly float the Rupee!
The will ban the importation of Au outright before they fully float the Rupee.
Can anyone weigh in on the fiat vs. gold argument? My wife thinks I'm nuts to want to buy gold, but I really want to extract some of the illusionary value from our market holdings (stocks) and put it into something that will go up if the world goes to hell. Nothing is sure, of course, but the argument for gold seems to be this:
Fiat money is money created by government regulation or law. There is nothing backing it but faith in the government. Commodity money is, however, secured by something (usually gold or silver). Reserve currencies are all fiat money since Nixon ended the convertibility of US dollars into gold in 1973.
The concern with fiat money is that governments (US, Euro and Japan, for starters) are totally screwing up by issuing so much of it (money, that is). There seems to be two underlying worries - 1) issuing money is by definition inflationary, and though it hasn't happened yet, at some point all that money in circulation virtually guarantees inflation, BIG inflation, some time down the road. The other part is that 2) governments are all making existing problems worse - instead of letting business fail (as they normally would in a capitalist society) they are running around propping up banks, insurance firms, and car companies. All that government support erodes faith in the government, and will eventually eat into its ability to issue debt. Once the "bond vigilantes" decide the risk of investing in government debt is not adequately rewarded, the market for that debt will collapse. Governments will be unable to economically roll over existing debt at the higher rate demanded by the market which will lead to default. At that point the fiat money, while perhaps not totally worthless, will be worth significantly less than it is today. The impact on the US dollar of such a default might be more muted than the default of, say, Japan, as the US is less dependent on imports. Eventually, however, we have to pay for things (like oil) in dollars that are now worth significantly less. Is this the general thought process behind the idea that gold is where to invest now? What parts have I got wrong, or have I missed entirely?Thanks
There is a significant percentage of the female gender that dont like the way that considering the history of fiat currency makes them feel. After all feelings are important as every human is unique with unique talents to offer the world:) On the other hand I am friends with a couple where the wife is confident of collapse and the husband believes everthing is sustainable within the timeframe of our lives. I sure dont know whats going to happen. You know your wife and you already know whether she willing to cope with fundamental changes to her model of the world. Im assuming you already have a can of spam and a rusty flat bladed screwdriver to defend it. Im also assuming you are happy with the relationship you have with your wife. I have found that some of the women who dont like contemplating or discussing the possible fates of the world actually dont mind that hubby puts a gold coin or two and a can of spam away, they just dont like talking about it. No one really knows what the future is so its really not worth causing possible big problems in a good relationship by demanding she accept your changing model of the world. Buy your cans of spam, if she gives you some shit respond with humour, and continue to enjoy your life with her to the fullest. If she just plain out thinks gold is a bad investment guess what it is possible she is right. Divide the portfolio in half and let her manage her half. Thats not a bad way to go anyway in case the spiky haired mutants dont show. I have a friend who is a brilliant well educated man and believes that our current path is unsustainable. He and his wife have seperate portfolios that they manage seperately and compare once a month. His wife favors investments like citi group. My friend really dreads that monthly comparison.
All of this paper money works...until it doesn't. We are witnessing Gresham's Law happening right before our eyes. Every single day, another person like yourself with half+/- of your working life in the bag, with money to invest, is pondering whether to buy gold or not. Like myself and everyone before you, more and more people are waking up to the criminal paper games (and electronic) that these people are playing. So, if more and more wealth goes into TRUE money like gold and silver, what do you think will happen? Maybe there will be a triggering mechanism that causes a dramatic shift in the confidence of the people, causing major buying sprees here in the states. It is happening in the EAST right now. Soon there won't be any metal available at these prices.
What you should have been doing was dollar cost averaging your metal for many years. So start buying now and do it regularly. Shit, you could have bought ammunition a year ago and made 300% profit. People are moving their money out of paper/digital and into hard assets. I got mine, you better get yours.
There's a reason that the mainstream media tells us not to like gold, all while hoarding it underground in highly protected vaults. They want it all for themselves.
Sorry - double post
Million_Dollar_Bonus would be your best bet on helping you with your side of the argument. Take his advice. You won't get gold, you'll be screwed when we go full Weimar...but you'll still get to sleep in the same bed with her until then.
My friends and family have known I have been a gold investor since the early 90s. I have tried to get them interested over the years but they think it is a fools investment. I have come to the conclusion that people are literally afraid of gold. They think the risk is too high. My sister has not one, but two financial advisors. I have told her on several occasions that she needs to own some gold as a hedge. Her total investment in gold to date: Zero.
I have another friend who KNOWS that the US economy is screwed and going down. His investment in gold: zero. I have an aunt who has more money than God and most of it is in cash in banks. Her investment in gold: zero. I have numerous cousins who are all affluent with millions in assets. Ther investment in gold: zero.
Even though all of these people know that I invest heavily in gold, none of them are interested in it. They think that investing in gold is comparable to what Hugh Hendry had to say about investing in mining stocks: "You have to be insane to invest in mining stocks". I have to give Hugh his props, since he made that statement the mining stocks have crashed hard.
My conclusion is that the mindset around gold is incredibly negative. This is why less than 1% of the population has a significant portion of their assets in gold and silver. However, when this mindset flips the run to gold is going to be dramatic. It won't take long for all of the physical to be in strong hands and hard to come by. The upside potential in gold is significant and rising daily. My conservative estimate is that gold has to reach $3,000. But that is only the floor for where we are heading. We could easily see $5,000 gold and $10,000 is not out of the question.
So, if gold is going to $3,000 (which very few investors think is possible), what does that mean for mining stocks? How many people have ran the numbers on future cash flow and valued mining stocks at $3,000 gold? Hardly anyone. No one is expecting it. This is why mining stocks are so cheap today. What is the free cash flow for a miner with 200,000 oz of production at $1,500 all-in costs at $3,000 gold. It is 200,000 x $1,500 = $300 million. That is free cash flow for 1 year! Do you really think these stocks are going to be valued at 1x cash flow? Are these stocks going to languish with high gold prices for a commodity that everyone suddenly wants?
www.goldsilverdata (for mining stocks).
Does it never occur to these jerkwads to simply quit printing moar FIAT??
of COURRRRRSE! They were consulting with the back-alley crackheads about the benefits of sobriety and came to this conclusion together.
JP Morgan and their lackeys at the Fed have created false metals prices. Be smart, buy it while its on sale, just know you have to pay $100/oz over the phony paper price. The Indians and Chinese have seen these cheap tricks before, and are buying hand over fist.