Indian Temples Fight Back Against Government Gold Grabbing Plot

Tyler Durden's picture

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

The following article from Reuters is a follow up to a topic I have explored on various occasions in the past. Namely, how an inept Indian government is attempting to use the age old tactic of scapegoating in order to deflect attention away from its widespread policy failures. In the case of India, the target is gold. It’s a logical target for any crony Indian bureaucrat or Central Banker to go after. Wealth confiscation is a tried and true method historically used by corrupt elites to stay in power, and there is plenty of gold floating around the subcontinent. Easy pickings... or so they thought.

It appears some of the temples are now drawing a line in the sand, and are in fact refusing to provide details about their holdings. Other temples are a bit more compliant. From Reuters:

The central bank, which has already taken steps that have slowed to a trickle the incoming supplies that have exacerbated India’s current account deficit, has sent letters to some of the country’s richest temples asking for details of their gold.


It says the inquiries are simply data collection, but Hindu groups are up in arms.


“The gold stored in temples was contributed by devotees over thousands of years and we will not allow anyone to usurp it,” said V Mohanan, secretary of the Hindu nationalist Vishwa Hindu Parishad organisation in Kerala state, in a statement.


Guruvayur temple, in Kerala, one of the most sacred in India and boasting a 33.5-metre (110-ft) gold-plated flagstaff, has already told the Reserve Bank of India (RBI) it won’t divulge any details.


“The gold we have is mostly offered by the devotees. They would not like the details to be shared with anybody,” said V M Gopala Menon, commissioner of the temple’s administrative board.


The head of the Hindu nationalist main opposition Bharatiya Janata Party (BJP) in Kerala state, V Muralidharan, said the RBI wanted to “take possession” of the gold and maybe sell it for dollars.

Sounds like a brilliant plan. Take wealth that was accumulated over thousands of years and sell it for an electronic unit of exchange that Ben Bernanke can create in infinite quantities with a single keyboard stroke.  Can people possibly be this stupid?

Subha Unnikrishnan, a clothes shop owner worshipping at one of the temples in Kerala’s capital Thiruvananthapuram, said whatever had been given to the temple should stay there.


“We have given it to the god with a purpose,” he said. “Nobody can take them away.”


Of the three major temple boards in Kerala, which administer more than 2,800 temples, Cochin board has also decided against providing details of its gold, while another has yet to decide and a third says it has not yet received a letter from the RBI.


On the other hand, some of the temples are either extremely naive or captured. For example:

Mumbai’s Shree Siddhivinayak Ganpati temple, often visited by Bollywood celebrities, had already put 10 kg (22 lbs) of its gold into a bank deposit scheme. It still has 140 kg in its vault.


“The gold we have is the nation’s property, we will be proud if the nation can benefit from it,” said Subhash Vitthal Mayekar, chairman of the temple’s administrative trust. He has not yet received an inquiry from the RBI.


It is not alone. The Tirupati temple in the southern state of Andhra Pradesh, considered one of India’s richest, has lodged 2,250 kg of gold with the State Bank of India, which pays it interest.

You can rest assured that gold is already long gone…

If the Indian government is trying to create massive surge in nationalism and unrest, snatching gold from religious temples is a sure way to get there.

Full article here.

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CPL's picture

And que the Holy Warriors, the Gurkas.

fightthepower's picture

Better have guns and ammo...

CPL's picture

Better.  Gurkas are also world class lawyers.  Battle fields and court rooms for thousands of years.  Talk the legs off a goat.  And the bullet would be too merciful.  lol!

knukles's picture

What?  They're midgets, too?

Muddy1's picture

Note to the faithful members of the Tirupati temple, you'd better get your gold back NOW, if you can.


This will happen to churches around the world soon enough.  In America the tax exempt status will be done away with, and offerings will be taxed, soon and very soon.

knukles's picture

Amazing how much attention gubamints pay to that useless, traditional, barbarous relic of m=no monetary significance.

McMolotov's picture

"Gold is a great thing to sew into your garments if you’re a Hindu family in India in 2013."

—Charles Munger, asshat

EnslavethechildrenforBen's picture

Since Gold does not procreate, it can not bear interest.

Mototard at Large's picture

Those guys are actually from Nepal....

CPL's picture

Yup, and that temple is part of their traditions and history.

Dubaibanker's picture

If India is paying 5.77% pa on a 5 year USD fixed deposit in Sept 2013 or GIC as called in Canada or certificate of deposit in US, which was close to 3.87% in Sep 2012 and similar level until June 2013, it is a hike of 1.9% and approx 50% more than last year when the whole world is paying less than 1.5% for 5 years.

Rates today are at 5.77% pa for 5 year USD deposit/GIC/CD.

All Indian banks usually give same rate because of competition and almost full or majority Govt ownership in all of them.

Mini capital controls have come into India starting Aug 2013:

First, resident Indians were banned to send any money abroad effective Aug 15 2013 towards property purchase and limits were reduced for everything else from USD 200k per person per year to USD 75k per person per year:

Secondly, duty on gold has been hiked 1,500% from Jan 2012. It was 1% for the last 30 years and now is at 15% in Sept 2013.

This was supposed to help conserve precious USD but it is backfiring so far with a surge expected in the Oct-Dec quarter.

Previously the Govt has changed rules to make repatriable Rupees (tax free) sent by NRI's into India to receive same rate of interest for NRI's in Dec 2011 when the Rupee last had plunged.

Thirdly, the banks had hiked deposit rates on non repatriable funds (tax payable) in Rupees, which worked until Dec 2011. Post Dec 2011, repatriable funds in Rupees were also hiked and made same until Sep 1, 2013. Now no one wants to send money in Indian Rupees - due to its 50% plunge in the past 3-5 years, because both other options are only available in Indian Rupees, so RBI had to come up with an option to attract USD and now interest rates have been hiked in foreign currencies because of the heavy maturities coming in the next 6 to 12 months. This also shall stop working within 1 year post which they will have NO OTHER options available to attract money.

Fourthly, India has been so desperate for not letting USD leave India or holding back some of the foreign corporations that they have started asking for retroactive taxes since 2012. Last year, Vodafone's USD 2bn tax bill was a major international news but last night's freezing of Nokia's assets has still not made global headlines. 12 major corporations are involved in serious tax disputes for retroactive taxes going back a decade or more and is not being highlighted by any 3 major advisory firms, which I wont name here. Also no analysts in India are covering as well as none of the major global banks who cover India with research. BMW had to call Merkel for help

Finally, today's hot news is about POSCO, the 3rd largest steelmaker in the world who is being urged by UN not to build in India despite POSCO having ruled out a few months ago, in July 2013, that they themselves are frustrated and do not wish to start a project in India. They applied for an Indian steel plant licence in 2005 after paying the usual bribes but have not been allowed to build until 2013 and we all know what all has changed since 2005 in this world, aside from a global financial crisis, major bank failures, Iceland default, Syria, Libya, Tunisia, Egypt revolutions, Cyprus bailout, PIIGS bailout, US downgrade, London/Kenya/Mumbai/Boston terror attacks, and the price of steel has probably plunged over 70% to 80%, rest all is fine. :)

Good news is: India has moved to make a decision in 2013 on an application submitted in 2005 because they need to show how good they are in attracting foreign investors! :)

The Current account deficit (which basically is how much money leaves India for oil purchase or coal purchase, or purchase of pulses or gold purchase or imported car purchase or Apple iPhone purchase etc) is growing at the speed of light. Until 2005/2006, the deficit was barely at USD 1bn which is healthy for a growing economy but has ballooned to USD 21bn PER QUARTER, which means this amount leaves India every quarter!

If these curbs are not capital controls, I dont know what is. To curb this rising deficit they need to control all money leaving India in any form. To satiate the demand, all gold inside India is open game. Wait for the riots when all this gets confiscated.

India has always had religion based riots whether in 1984 on turbaned Sikhs due to Indira Gandhi's assassination or in 1992 due to a mosque being broken or in 2002 in Gujarat where Hindus fought Muslims or in 1947 when British divided India into religion based territories. If gold is taken, religion based riots will begin afresh, if history is any guide.

In another moronic example of the judicial activism, and to show how bad the revenue declines are, the Supreme Court has confirmed that a property developer has to pay VAT of 5% on all properties sold after 2006. :) Retroactive taxation is coming to a city near you now.

If deficit remains high or rises, despite gold duties and other random tax hikes, the only suitable next measure left is complete capital control, whether pre or post a downgrade of the country, whether post or pre bank runs in the country. As we all have seen in Cyprus, Greece, Spain, Iceland, just in the last 2 years, bank runs are a must before capital controls. Did I forget, real estate collpase is mandatory as well, which is yet to happen in India at the same time in 2014.

Indian bankers and businessmen thought they were smart to borrow in a carry trade with US borrowing costs at historic lows of 5% to 8% levels but if income is in Rupee which for most is, then they are doomed because the 50% decline in the Rupee has killed even the hedged investors. This is the way US benefits from other countries by the QE policy well executed in the last few years and by keeping ultra low rates. It may have hurt the US economy and US citizens for a few years, but the next few years will be better and perhaps best when Helicopter Ben ultimately starts 'tapering' QE' and hiking interest rates. Every single country who has borrowed in USD will be doomed and that money will flow back to the US as a gain in addition to the higher interest rates. One country's loss is another country's gain. So, if India loses, it has to be someone's gain: which will be US in this case. At least this is one measure that I see as beenfiting US versus all the other bad news with respect to QE and low interest rates.

I dont know whether I should let the bank runs begin or let the capital control begin in India. You can think for yourself, what happens next in the ongoing India movie before it meets a perfect storm. Karma is a bitch! They should have thought before they spent all this money buying overseas assets whose time has come to pay the debt back or before allowing foreign investors along with their money who now want out at any cost. If both come around together in 2014 with demand as well as supply collapsing simultaneously, can I say, let the riots begin or shall I let bank runs and capital controls.

Damn it, it is so confusing, let all 3 begin! :) IT INDEED WILL BE A RIOT! A 3D RIOT! Or make it 4D with the looming debt defaults that I happened to predict on Aug 30 and Bloomberg caught up on Sept 30, 2013 and Fitch just a couple of days ago.

Winston Churchill's picture

Indeed.Sikhs in India are not a group to fuck over.

A warrior religion with many of the Indian officer corps being

that religion.

The Golden Temple in Amritsar is little hard to hide though.

Ignatius's picture

"It appears some of the temples are now drawing a line in the sand, and are in fact refusing to provide details about their holdings."

Yeah, particularly the gold plating on the Temple walls.

Winston Churchill's picture

Plated ?

Not unless JPM is the property manager.

When I visited that Temple,it was solid gold plate,not plated base..

.There were armed guards back then,30+ years ago.You would

need a full division to take it by force.

In person its much more impressive.The photo is blah in comparison.



ParkAveFlasher's picture

Tell me all the guards all have awesome gold chain mail armor with elephant tusks and scimitars.  Tell me Gold Shirt Man is the Supreme Golden Samurai of the Gold Defenders Superhero Brigade.  I need this. 

MeelionDollerBogus's picture

or, it could be gold-shirt man running for the hills :)

Ignatius's picture

I didn't specify thickness though I presumed it is substantial.

seek's picture

Not just a warrior religion, but one that is based on a doctrine of fairness and protecting the weak that is deeply ingrained. It would be deeply unwise for the government to fuck with any temple deemed protected by the Sikhs.


LFMayor's picture

yeah.  but it's even harder to loot.

Mototard at Large's picture

Same goup of folks who blew up the Air India flight (Kanishka) and killed 329 people?

LFMayor's picture

and shanked Indira Ghandi, too.

EnslavethechildrenforBen's picture

Why would they telegraph their punch?

Dr. No's picture

“The gold we have is the nation’s property, we will be proud if the nation can benefit from it,” said Subhash Vitthal Mayekar, chairman of the temple’s administrative trust.

As he is stuffing a suitcase full of bribe money in his trunk...

Manthong's picture

Hindi is a state religion?

..if not, he might soon be headed or a face-face visit with Vishnu 

ebworthen's picture

I'm pretty sure the Communists and the Nazi's did this in Europe too; which means the Catholic churches and Mormon temples here in the U.S. should be nervous.

LFMayor's picture

hell yeah they did.  Loot On.   by the freakin trainload.  That's what allowed them to out score the Huns and Mongols,  motorized transportation.

I'm not denigrating mike milkin, but he didn't have to carry it all home, either.

Kirk2NCC1701's picture

They'll FF it, and blame it on some Sikhs and some right-wing faction that uses ancient Indian swastika symbols.  Sikh-Heil!

FYI:  'swastika' = Sanskrit svastika, "All is well"

RafterManFMJ's picture

The gold we have is the nation’s property, we will be proud if the nation can benefit from it,” said Subhash Vitthal Mayekar, chairman of the temple’s administrative trust. He has not yet received an inquiry from the RBI.


I'm curious if they hang people in India?  It would seem to me we have a volunteer.

kurzdump's picture

This gold is belonging to me ... err ... our gods!

Hongcha's picture

Sweet Jesus, if they start going after temples, what's next, scraping the gilt and leafing off the domes and the Ganesh's?

That's a path to civil unrest in a country as religious as India.

Paging chidwin13 ... Paging OhRegionalIndian ... pick up please.

LFMayor's picture

ORI must be busy at some pre-arranged marriage celebration for one of his 1400 cousins, haven't seen him post in a while myself.  He was always my favorite right after AnAholeNonymous.


U4 eee aaa's picture

Are gold teeth still popular. Nazi's did that too

Kirk2NCC1701's picture

What about the Dome of The Rock?  Isn't that gold-plated? 

Bullish for an AOG (Act of God), or those "doing God's work".

Sudden Debt's picture

I'm sorry but any religion that stores gold in a vault should be robbed.
That was Napoleon's biggest achievement! And all the rest like democracy for the people followed!

Evil Bugeyes's picture

I personally feel that Napoleon's greatest achievement was demilitarizing France by leading all those French soldiers off to Russia to freeze to death. Kind of like the Pied Piper.

Herdee's picture

Tyler,here's the real reason behind this story and others in India.The majority of politicians in power in India are being investigated on criminal charges.It is a corrupted society and ordinary folks know the extent of the stinking smell of criminal behavior by politicians.

RaceToTheBottom's picture

I think that the Indian government is overplaying it's hand.  But that is just IMHO

Quinvarius's picture

You can smell the banker fear as the Western banks and all those who followed them into the gold price suppression ponzi stand in front of empty vaults.  Turns out paper price suppression is a lot easier than demand suppression.  It is just self delusion.

Ek Onkar's picture

Indian government has been blaming gold for its Current Account Deficit woes.. Gold import bill of $50 bn against total CAD of $90 bn.. So the government's logic is to recycle the temple gold into the retail market thus reducing dollar outflow and utilizing idle gold in temple vaults to satisfy the huge local demand. This will be advantageous to the populace in more ways than one... Lower gold prices as the 10% import duty will be cut alongwith lower premiums, lower fuel prices as that CAD situation will improve, and the most significant of all... More power(GOLD!) to the people!! rather than it just sitting with obscurantist and equally corrupt temple boards...... OR as it is India, some politician/bureaucrat might just swoop in and siphon off the phyzz to some swiss bank  vault for it to be multihypothecated and so on....