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Things That Make You Go Hmmm... Like India's 'Gold Refuge' From "The Establishment"

Tyler Durden's picture




 

India's love affair with gold is well-understood in Asia but completely misunderstood in the West — a phenomenon we have always found fascinating — but recently, as Grant Williams exclaims, it has become abundantly clear that this disconnect is widening almost daily as the Western fixation with 'The Gold Price' and the Eastern obsession with 'The Price of Gold' take ever more divergent paths...

After the recent frenzied activity at the Reserve Bank of India (which, if it had taken place in the USA, would absolutely have been labeled "The War on Gold" by CNN) as they tried every means possible to stop Indian citizens from buying gold (something I documented in "Never The Twain", TTMYGH August 27 2013), I set about thinking why it is that attitudes in the opposing hemispheres are so different regarding the yellow metal.

As I ruminated, a good friend of mine, who has forgotten more about gold than most will ever know, pointed me towards the Hindu Business Line; and there I stumbled upon a couple of pieces by S. Gurumurthy which, rather conveniently, do a lot of the heavy lifting for me.

In the first piece, entitled "Gold: Villain or Saviour?", S. tackles the stark disparity between economists' views of the "barbaric [sic] relic" and the views of the ordinary Indian citizen. And he does so beautifully:

(Hindu Business Line): Modern economists and the Indian people seem to operate on two different paradigms with regard to gold. In the modern West, gold is more a state asset than a private possession. Gold constitutes just three per cent of family wealth there, but a third in India. Western states, socialist or capitalist, expropriated all private gold during the last century. Even the liberal US outlawed private gold in 1936 and built official gold reserves of over 20,000 tonnes by 1950.

 

Modern economics views gold as an uneconomic, wasteful, private investment. But traditionally, in India, gold has been the preferred asset of the rural masses who hold 70 per cent of the nation's stocks. Indian gold habits clearly mock at modern economic theories.

So far, so good. Now at this point S. begins laying down a few facts and figures, and as he does so, the clouds surrounding the question of how important gold is to the average Indian quickly start to evaporate:

Market Oracle, a UK-based market analysis and forecasting online publication, captures the relation between India and gold thus: Indians own 20,000 tonnes of gold worth $1 trillion — almost half of India's GDP. For Indians, gold is not just money or asset; it ensures the financial security and stability of families. It has religious overtones. More than a commodity or money, it is integral to the warp and weft of family life. Investments in gold and jewelry are indistinguishable. Jewelry is the working capital of families; families collateralize it for commercial borrowing.

 

Some 13 per cent of Indian families, more from rural areas, borrow against gold as collateral; while rural India borrows from the unorganized financial sector, urbanites access bank loans.

 

The authors of Market Oracle seem to understand India's family-gold nexus better than Indian policymakers. Yet, despite such a paradigmatic difference, economic laws on gold based on the Western experience are continuously being tried out in India. Result: the establishment hates what the people love.

Do Indian policy makers not understand "India's family-gold nexus"? Of COURSE they do — but gold is the only refuge from inflation for the Indian population; something that just isn't acceptable to "The Establishment", because India's national debt has been run up by politicians amidst a corrupt and totally inefficient bureaucracy, whilst Indian citizens have patiently and painstakingly accumulated real wealth a gram at a time over many centuries. They are not about to give that up.

The Reserve Bank of India (RBI) set up a working group to investigate what every one of its members already knew instinctively (yet more taxpayer money being put to good use), and the conclusion they reached after a year's expensive extensive study was this:

(Reserve Bank of India): Demand for gold appears to be autonomous and a function of several influences and factors in India and may not be strictly amenable to policy changes. Supply of gold, through organised channels can be constricted, but buyers may take recourse to unauthorised channels to buy gold. The share of banks in importing gold has already been on decline over the years. Since it is difficult to vary the demand for gold the policy focus will have to be directed to (i) design and offer gold investors, alternative instruments that may fetch positive returns with a flexibility of liquidity; and (ii) increased unlocking of the hidden value locked in idle gold stocks through increased monetisation of gold. In this context encouraging gold jewellery loans from Banks and NBFCs, ensuring customer protection of borrowers and changes in the practices of NBFCs is desirable.

Brilliant! Welcome back, Captain Obvious!

Seriously, though, this is perhaps the most ludicrous government-funded study since US$3 million was spent on helping the National Science Foundation study shrimp running on a treadmill (no, really).

...

Westerners aren't used to the kind of inflation levels, government confiscation, and currency volatility so common in places like India; and so the need to own gold as protection isn't fully appreciated in the West.

Westerners pay lip service to gold's being "an inflation hedge" or "a currency" or "a safe asset", but these terms are used in an extremely abstract way by the vast majority of the investing public, who see gold as mostly just another trading vehicle. Yes, there are Western investors who have a deeper understanding of the reasons for owning physical gold, but they are a tiny minority.

In short, Asians like their gold to be heavy, shiny, and made of ... well, gold.

This massive disparity in appetite for "placeholder gold" is just one side of the coin, however; and India is just one of the Eastern countries that has been soaking up copious amounts of physical gold in recent months.

...

That is a twelve-fold increase in bullion traffic between the primary vault in London and the major refineries in Switzerland.

Extraordinary.

Now, we don't know with absolute certainty where that gold is ultimately bound — but we know it isn't Switzerland. If we throw into the mix the widely covered movement of gold into China through HK, a picture begins to emerge of an incredible wave of physical metal heading from West to East, even as the price continues to languish.

One of the primary sources of supply in this steady transfer of physical bullion has been the GLD warehouse. I've touched on the subject of the incredible vanishing ETF gold holdings before, but it's worth revisiting the phenomenon and reminding readers of a chart I included in the July 16th edition of Things That Make You Go Hmmm..., entitled "What If?":

The gold in London is heading somewhere — and it's heading there via Switzerland, by the looks of it.

...

The chart below shows seasonal gold price performance since 1969. (Although the data stops at 2010, so that there are a couple of down years missing, the pattern is the important thing here.) I have laid the chart out from September to August to better illustrate the phase we are moving into.

October has traditionally been the weakest month of the year, while November through January has been the strongest period:

So, how does this all play out?

Well, I've been watching this situation unfold through most of this past year with an increasingly bemused look on my face, because the numbers just don't add up. But so far, despite clear evidence of massive demand for physical gold, "The Gold Price" has continued to trade poorly. However, the longer this situation persists, the more definitely it will resolve itself; and it's very hard to see how that resolution ends in anything but higher prices.

Demand levels from Asia continue to soar while production increases just a couple of percent each year; and leaving aside Indian festivals and increasing central bank purchases, the fiat alternative to gold bullion — the US dollar — is coming under renewed pressure in the wake of the Taper That Never Was and the appointment of Janet Yellen as Ben Bernanke's successor.

...

But, like the infatuation America had with the Monkees in 1967, this fascination with the fiat dollar will prove to be nothing more than a passing fad; and one day — perhaps soon — the citizens of the West will, like their cousins in Asia and the Indian subcontinent, realize that there really is no alternative to sound money.

The only problem is, when the realization finally dawns, where will all the gold be?

 

Full Grant Williams letter below:

TTMYGH - Let It Be Fiat Monkees & Golden Beatles.pdf

 

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Sun, 11/03/2013 - 14:48 | 4117520 moonstears
moonstears's picture

One gram gold bar and a "Squishee", please, Apu!

Sun, 11/03/2013 - 14:59 | 4117535 Groundhog Day
Groundhog Day's picture

Those Barbarian hoards with their barabric relics, so uncivilized.......It must be tradition.

THE MUNGER BERNAKE SUMMIT

Sun, 11/03/2013 - 15:27 | 4117580 Peter Pan
Peter Pan's picture

What is mind boggling about the average Indian's love affair for gold is the fact that their average earnings are a lot lower than those of us in the west.

This truly indicates how blinded we have become by trinkets in the west and how well the Indians understand both history and government.

Sun, 11/03/2013 - 15:46 | 4117598 Urban Redneck
Urban Redneck's picture

20,000 tons in private possession is less than 1/2 troy ounce per person or about 15 grams.

Sun, 11/03/2013 - 15:50 | 4117607 DoChenRollingBearing
DoChenRollingBearing's picture

That's not too bad considering how poor India is.  15 grams may be more than the median American has...

Sun, 11/03/2013 - 22:14 | 4118294 TwoShortPlanks
TwoShortPlanks's picture

1. http://twoshortplanksunplugged.blogspot.com.au/2013/11/the-permanent-squeeze.html

2. http://twoshortplanksunplugged.blogspot.com.au/2013/10/imf-wealth-smearing-west-to-east.html

" It might be possible, for instance, for an individual to have a second child or to fly a light aircraft 100 hours per year, but not both. Or one might decide to have an air-conditioned house, but if so, an overseas vacation might be possible only once every ten years."

And for "the great body of people, mentally incapable of comprehending the tremendous advantage that capital derives from the system, [whom] will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests" here is an easy to follow video of exactly what to do. http://www.youtube.com/watch?v=1cwCIkKFFR4

TSP

Sun, 11/03/2013 - 15:54 | 4117609 Peter Pan
Peter Pan's picture

On that basis even bankrupt Greece has more gold than even China has.

Personally I suspect that India has closer to 40,000 tonnes of gold in both private and temple hands.

Mon, 11/04/2013 - 02:34 | 4118650 quadcap
quadcap's picture

This is an example of why averages are very misleading.   Most of the gold in India is held by the corrupt, politically connected, upper class.  The majority of Indians are poor and might have a bit of silver, but no gold.  

Sun, 11/03/2013 - 20:39 | 4118103 daveO
daveO's picture

Blinded by easy credit, dating back to the Sears card.

Sun, 11/03/2013 - 14:59 | 4117537 Manthong
Manthong's picture

“national debt has been run up by politicians amidst a corrupt and totally inefficient bureaucracy.”

 

I wonder where they picked up that nasty habit?

Sun, 11/03/2013 - 15:28 | 4117582 TheGardener
TheGardener's picture

Since I hooked up to gold and gold only . I`m, Chandala.

I`m pure enough to drink from the swamps of conspiracy.

Sun, 11/03/2013 - 14:52 | 4117526 vegas
vegas's picture

It's pretty simple really; believe the bullshit of government fiat or have the shiny stuff in your hands. You gonna believe me or your lying eyes? Fiat currency is only good for wiping your ass, while gold always has been, and always will be a store of wealth. India's people understand this; their financial elite don't.

 

http://vegasxau.blogspot.com

Sun, 11/03/2013 - 15:33 | 4117588 Peter Pan
Peter Pan's picture

I respectfully beg to differ with your proposition that fiat is only good for wiping your ass. I have to much respect for my ass in view of the number of germs that fiat carries. Width also is a problem. Finally, Benjamin Franklin and George Washington deserve more repect.

Mon, 11/04/2013 - 01:43 | 4118618 bonin006
bonin006's picture

Franklin maybe, but Washington deserves it for his response to the wiskey rebellion - sending troops out to deal with small distilleries that objected to paying twice the tax rate of his large distillery.

Sun, 11/03/2013 - 14:59 | 4117536 Quaderratic Probing
Quaderratic Probing's picture

Maybe Indians don't trust their bankers the way we do........

Sun, 11/03/2013 - 15:00 | 4117539 dark pools of soros
dark pools of soros's picture

http://blogs.wsj.com/moneybeat/2013/10/10/one-result-of-the-feds-taperin...

 

That loss of confidence in the rupee has translated into an opportunity for bitcoin. Indian bitcoin client software downloads increased 17.23% in the third quarter compared with the previous quarter, according to digital currency and research firm The Genesis Block. In addition to bitcoin being an alternative store of wealth, the digital currency also allows people in India to send money offshore without having to clear intermediary banks.

Sun, 11/03/2013 - 15:12 | 4117560 Running On Bing...
Running On Bingo Fuel's picture

Yea I posted this out yesterday but everyone kinda missed the point.

The US was the first to network multiple computers, Darpa in fact, creating the Internet, and as such, petty arguments aside, owns the fucker.

If you think the chosen bankers are not going to seize this opportunity to be first adopters/owners you're coo-coo.

I present to you, your future money masters.

----------------

"Israel to become first cashless country."

http://www.nowtheendbegins.com/blog/?p=15056

From Israel National News: The government on Tuesday authorized establishment of a committee that will examine ways to eliminate cash from the Israeli economy – the better to prevent citizens from cheating on their taxes. The committee will be chaired by Harel Locker, director of the Prime Minister’s Office.

Sun, 11/03/2013 - 15:21 | 4117569 dark pools of soros
dark pools of soros's picture

so what..I'll profit and pay off my house in the process... you defeatist are waiting for what??

You are already controlled, and you cry about some wild horse that so far isn't really controlled, that yes, they will be controlled too..   you are a pathetic old beaten farm animal with no spirit

 

 

Sun, 11/03/2013 - 15:34 | 4117578 Running On Bing...
Running On Bingo Fuel's picture

Lies I tell you! For I have TEAM Spirit!

Go Team!

Over.

And a little hint for you, they won't be using bitcoin. I'm in no way antibitcoin bro. If that's the cart that you want to hitch to, GO!

Be careful, it is not endorsed, from any visible vantage point, to a major power like a central bank. But if Israel goes with Bitcoin, then we'll know who Satoshi Nakamoto is and maybe even ZH...

Sun, 11/03/2013 - 16:41 | 4117688 earleflorida
earleflorida's picture

george orwell (animal farm) "it's getting so that you can't tell the difference between the pig... than, from the human"  [sic]

Sun, 11/03/2013 - 20:09 | 4118055 Running On Bing...
Running On Bingo Fuel's picture

Just because I have team spirit and cheer for the team does not mean that my pants come off quickly! You're the pig thinking so Otter!

http://www.imdb.com/title/tt0077975/

Over.

Wed, 11/20/2013 - 19:10 | 4175406 MeelionDollerBogus
MeelionDollerBogus's picture

being an originator of a network prototype is NOT the same as being today's OWNER.
No control & no ownership is conferred.
The control is software & network lines.
The originator (DARPA) put the protocols to words & implementation - which has been duplicated & evolved every  year since  then.
That means what we use now is NOT the same as what came before, hardware, software or all the details of the protocol layers.
Your claim is as baseless as claiming that every thought & note we make is OWNED by whoever wrote the dictionary 200 years ago.
It's nonsensical.

Sun, 11/03/2013 - 15:00 | 4117543 Skateboarder
Skateboarder's picture

Good article. I find the Things That Make You Go Hmm... series pretty well done.

When you associate gold with the gods, you have prosperity.

Sun, 11/03/2013 - 15:13 | 4117562 stacking12321
stacking12321's picture

additionally, you can't go wrong with an article that uses the phrase "warp and weft".

Sun, 11/03/2013 - 17:16 | 4117718 graspAU
graspAU's picture

I'm not much for quoting this book, but I like these, especially the honest weights and measures. Seems to me that may be about exchanging things of equal labor value. Very far from fiat currency for items of significant value.

“And Abram was very rich in cattle, in silver, and in gold.”
-Genesis 13:2

“You must have accurate and honest weights and measures, so that you may live long in the land the LORD your God is giving you. For the LORD your God detests anyone who does these things, anyone who deals dishonestly.”
-Deuteronomy 25 15-16

“A false balance is abomination to the Lord: but a just weight is his delight.”
-Proverbs 11-1

“The LORD detests differing weights, and dishonest scales do not please him.”
-Proverbs 20-23

Sun, 11/03/2013 - 14:59 | 4117544 proLiberty
proLiberty's picture

"In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

From the last two paragraphs of Gold and Economic Freedom by Alan Greenspan. 1966.

see: http://www.constitution.org/mon/greenspan_gold.htm

Sun, 11/03/2013 - 15:39 | 4117593 Peter Pan
Peter Pan's picture

That quote is not from Greenpan. That man died decades ago when he sold his soul to the company store.

Sun, 11/03/2013 - 18:18 | 4117822 proLiberty
proLiberty's picture

Compare Greenspan the brown nose follower of Ayn Rand with him while he was the Fed Head and now again that he is "retired" and hawking a book. Was he lying then or now? For me Gold and Economic Freedom is closer to the truth than anything he has said since.

Sun, 11/03/2013 - 15:04 | 4117550 Running On Bing...
Running On Bingo Fuel's picture

Yea those Gold guys on Discovery left Alaska and went to South America and what do they run into?

A bunch of Chinamen, on their way out after they stripped everything. Lol.

'merica #1.

Over.

Sun, 11/03/2013 - 15:46 | 4117601 DoChenRollingBearing
DoChenRollingBearing's picture

The Chinese are crawling all over Peru looking for gold and other metals.  Just wait until the locals, burned before by bad (pollution) behavior from Canadian (etc.) miners get a taste of the water after the Chinese get done with it...

Sun, 11/03/2013 - 16:21 | 4117658 Carl Popper
Carl Popper's picture

The chinese are huge racists. They treat african workers much worse than colonialists ever did.

Dont worry too much about the chinese taking over. No one likes them. You see there are three types of people, chinese, people who hate chinese, and people who have never worked under chinese owned companies.

Sun, 11/03/2013 - 17:36 | 4117746 akak
akak's picture

 

You see there are three types of people, chinese, people who hate chinese, and people who have never worked under chinese owned companies.

You are forgetting about the Chinese Citizenism shitizen, whose roadside-crapping, dog-wokking, endangered animal-consumptionalizing nature is eternal, alas alas.

Sun, 11/03/2013 - 20:19 | 4118065 Running On Bing...
Running On Bingo Fuel's picture

DCRB, you don't know much about gold mining do you?

You use ground water in wash plants, or well water. No pollution is added, whatever is there is there. It would be too expensive to add in pollution.

Or is your grand thesis that China imports pollution then forces miners to mix the Chinese pollution into the wash plants in a effort to pollute the planet with China-Toxicity that Team America has to clean up at taxpayer expense??

I knew you were a Tyler.

Over.

Sun, 11/03/2013 - 21:21 | 4118174 Diogenes
Diogenes's picture

I don't know anything at all about gold mining but I know there are processes that use cyanide mercury and other toxic chemicals that end up being discarded.

Sun, 11/03/2013 - 21:44 | 4118216 chindit13
chindit13's picture

I suspect you have never visited a Chinese-operated gold mine.  Lots of manual labor (perhaps refugees from bakeries?) hand-kneading mercury through the excavate in order to precipitate the gold.  The Au-Hg amalgam is then burned so as to drive off the mercury and leave the gold ready for the last stages of refining.  The fumes are....unpleasant.  Neither the EPA nor OSHA is anywhere in sight (please factor this, plus wages, and the lack of the corporate aircraft common to listed miners, into your "average production cost of gold";  you'll find the Chinese can produce an ounce on land that's 25-30ppm pretty cheaply).  Other Chinese miners use the cyanide recovery method.  Both pollute, both kill.  Cyanide kills more quickly, at least until sunlight breaks it down, while the term "Mad as a Hatter" makes a comeback as the effects of Hg-poisoning show up in the workers.  Toss in Minamata Disease and you get the picture.

Sun, 11/03/2013 - 22:16 | 4118296 Running On Bing...
Running On Bingo Fuel's picture

Let me explain this to you. In S. America and Africa the wash plant drops gold into the sluse box. It's water and gravity, cheap, efficient, and no bullshit. Chinese gold miners have a nose that can detect 50oz/yard soil from 60 kilometers away.

So quit you propaganda.

Over.

Mon, 11/04/2013 - 00:43 | 4118549 James_Cole
James_Cole's picture

Heap leaching is verrrrrry common (and very toxic) all over the world, I'm guessing you don't know much about mining.

Mon, 11/04/2013 - 01:13 | 4118583 chindit13
chindit13's picture

Let me explain to you....

Well, better you just come see it.  You best bring your own water, because what's available locally is full of nastiness, courtesy of those Chinese miners whom you seem to respect, but about whom you clearly know nothing.  The environmental destruction caused by the carpetbagging Chinese got so bad that the locals took it upon themselves to start blowing up Chinese mining engineers and "bosses".

Sun, 11/03/2013 - 23:13 | 4118424 emersonreturn
emersonreturn's picture

chindit 13,

 

thank you, your comments are always of interest.

Mon, 11/04/2013 - 00:03 | 4118496 DoChenRollingBearing
DoChenRollingBearing's picture

Running On Bing...

LOL!  Believe me, I am no Tyler (or else perhaps one of my two potential articles (admittedly not good) would have been published).

At Yanacocha (Newmont and Buenaventura), there was a truckload of mercury that spilled into an Andean river causing hundreds of people to become sick, killing fish, etc.  The locals almost everywhere in Peru do not want gold mining done because of the bad histories of pollution!  My article below discusses this with a an editor of the Cajamarca (Peru) newspaper, near the middle of the article is where we discuss gold:

http://tinyurl.com/apttqe2

Gold mining is inherently a dirty business.  Environmental protection is expensive.  And my money would be on the Chinese doing a very bad job protecting Peru's environment...

***

And I have been to a gold mine where "they do it right" (in Canada):

http://tinyurl.com/mspqehc

Mon, 11/04/2013 - 00:52 | 4118557 James_Cole
James_Cole's picture

Mining is always highly destructive environmentally, some places a lot more so than others. Canada has a pretty mixed record, better than a lot of places.

The idea that open pit is inherently less destructive than undergroud is not true though, if anything would be the opposite.

Mon, 11/04/2013 - 01:06 | 4118576 DoChenRollingBearing
DoChenRollingBearing's picture

Since Mr. Bing (Over.) writes that I likely know little about gold mining, I certainly will not quibble with you over this one, James (particularly because you might be right about open-pit mines).

;-)

Wed, 11/20/2013 - 18:58 | 4175382 MeelionDollerBogus
MeelionDollerBogus's picture

EVERYTHING we do as a species is destructive environmentally because we use machinery & chemical industries.
If we lived off the land as other animals do there'd be little such problem. We don't & won't.

Sun, 11/03/2013 - 15:06 | 4117552 ebworthen
ebworthen's picture

The central banking hegemony of the West is desperate to eliminate tangible assets and enslave the masses in debt serfdom.

The kleptoligarchy wants every citizen dependent upon digital fiat in exchange for their servitude, not tangible assets.

ETF paper gold is one mechanism by which to manipulate the perception of Gold (to denigrate it).

A precious metals ETF is an oxymoron.

End Central Banking.

Sun, 11/03/2013 - 21:24 | 4118177 Diogenes
Diogenes's picture

Everybody in the whole world would be thrilled to bits to have some kind of money they could depend on to hold its value. Any government that had a stable currency could rule the world as the British did in the 19th century and the US did in the 20th.

Sun, 11/03/2013 - 15:18 | 4117564 apberusdisvet
apberusdisvet's picture

And there are still many among the clueless who believe that if the price of gold goes parabolic, the miners will produce 10 baggers.  Got news for you folks.  Should that happen it would certainly indicate a perception that all fiat was becoming worthless, and mining countries would immediate nationalize all operations within their borders, the better to have the only true currency.  BTW, Obama has done this already, giving himsekf the authority  to commandeer (i.e. steal) all assets in the event of a "national emergency", including your labor, dear slave.

Sun, 11/03/2013 - 15:49 | 4117602 DoChenRollingBearing
DoChenRollingBearing's picture

+ 1

Your argument for buying physical gold vs. the miners is spot-on.

Sun, 11/03/2013 - 17:18 | 4117720 Pareto
Pareto's picture

+1 FUCK I forgot about that Exec. Order.  See!!  Its so easy to forget (not keep track) of the cummulative erosion of rights that have occured in the last 6 years.  This was on another thread this weekend - how what we think we can still do, we actually can no longer do.  Fuckers!!

Sun, 11/03/2013 - 15:24 | 4117574 TaperProof
TaperProof's picture

The day we can't export our inflation the West will again understand why gold matters.  ...and that day is probably coming soon.

Sun, 11/03/2013 - 15:48 | 4117600 Peter Pan
Peter Pan's picture

How true but how little we understand this great truth.

It will unfortunately be too late when the sheeple wake up to the fact that they have not only been fleeced but also been put in line for slaughter.

Sun, 11/03/2013 - 15:38 | 4117591 CultiVader
CultiVader's picture

My gold is at the bottom of Tahoe unfortunately

Sun, 11/03/2013 - 21:13 | 4118080 Running On Bing...
Running On Bingo Fuel's picture

Tahoe. What a group of Bay area elitist fuckers. $4.5 million for a one bedroom A framed house on a 100 sq ft lot. Taxes: $100,500 a year. Yea, Google-boys at every corner sniffing your garbage cans while they pretend to walk their Bearded Collie's and their Pharaoh Hound's.

Paradise.

A-Frame!? You hit your head on everything! The only saving grace that Tahoe had pre-2005ish was that the old school Cplex guys from Berkeley maintained offices there....

Over.

Sun, 11/03/2013 - 15:42 | 4117596 Atomizer
Atomizer's picture

Public Image Ltd.- The Suit

 

It will be fun to watch HollyWeirds next blockbuster primetime reality TV show called, Socialist Banking Fugitives on the Run. This reality show will pronounce how the Red herring affair unfolded under the mask of the MSM spinning two competing dinner plates [alliances] to take down the United States of America. You’ll figure it all in due time, these fuckers have nowhere to hide.

Sun, 11/03/2013 - 15:41 | 4117597 Joebloinvestor
Joebloinvestor's picture

Wait for the rise of the US "shadow economy" when the government tries to penalize (TAX) for redeeming any gold coin.

I figure it will happen the day the price of gold gets away from being manipulated.

Sun, 11/03/2013 - 15:55 | 4117611 moonstears
moonstears's picture

I too have thought of this, just as price controls bring shortages, confiscation threats will bring black markets. I mean, kids don't die from Heroin, 'cause it's not legal. People don't do illegal things nor desire to, ever, right??!

Sun, 11/03/2013 - 15:56 | 4117617 Pareto
Pareto's picture

and the day these fuckers try to "tax" or penalize holders of the yellow currency, will be the day we all publicly tell these fuckers to "fuck off".  You fucked our currency, you fucked our solvency, and now you want to take the only thing of value I have left?........COME AND FUCKING GET IT!  I dare you. 

Sun, 11/03/2013 - 16:13 | 4117642 besnook
besnook's picture

so what this says is india has the most fundamentally stable economy in the world in the sense that there is enough gold in the hands of the people that the fiat rupiah is just a convenient medium of exchange for short term use. in other words, the indians use gold to convert to rupiahs to buy the means of income that is converted from rupiah back to gold. in the absence of rupiah gold(and silver) would be used exclusively.

india has apparently officially joined the shanghai cooperation organization joining russia and china in opposition to western banking interests and neocolonialism dreams. given the more stable foundation their economies have because of their gold and resource assets they are poised to suffer the least and benefit most when the great reset crushes the western banking system.

p.s. the article does not mention that the indian .gov bowed to pressure from the west to constrain the gold trade. articles i have read have said .gov knew it was impossible to change the indian attitude about gold but went along with western bankers to appear conciliatory without giving up anything.

Sun, 11/03/2013 - 16:19 | 4117652 Atomizer
Atomizer's picture

This is why I had posted this earlier on a different thread. You corner the new Disney World fiat currency objectives from both angles. Or you just can continue to read how we need to bomb Iran to salvage BIS requirements for CB expansion.. Pick your poison.

Just roll out 2,000 minted 1 Trillion dollar coins valued at Rare Earth Metals market price. See how easy it is to take over the petrodollar currency based system with another Mickey Mouse faith based currency?

Under the collective Central Planners discussions for new monetary implementation,  MoU (Memorandum of Understanding) & REE (Rare Earth Elements) are being considered as an asset backed leverage to the new upcoming  monetary system. Just be aware..

:\

 

Sun, 11/03/2013 - 16:17 | 4117654 Carl Popper
Carl Popper's picture

Gold and silver are good but seriously no more than 15 to 20 percent of your net worth should be tied up in gold. If you are carrying 15 percent credit card debt and holding gold then you are just a leveraged market timer.

I know a way for you to get a guaranteed 15 percent ROE lol

Sun, 11/03/2013 - 16:27 | 4117667 olto
olto's picture

goldbugs

Sun, 11/03/2013 - 16:30 | 4117675 Quinvarius
Sun, 11/03/2013 - 16:41 | 4117692 SubjectivObject
SubjectivObject's picture

Well, if there is no gold available, what's the next best option, for which there is still some scattered about, and, above ground, reputedly scarce?  Anything?  Inquiring minds want to know.

Sun, 11/03/2013 - 16:55 | 4117704 Skateboarder
Skateboarder's picture

A good, honest, woman who is good at plough.

Sun, 11/03/2013 - 20:34 | 4118094 StychoKiller
StychoKiller's picture

$/Toz of Ag is quite reasonable right now...

Sun, 11/03/2013 - 16:53 | 4117703 disabledvet
disabledvet's picture

the "average Indian" is on the verge of starving to death right now. Sure...they stare at "golden temples" and think nothing of it...but at least give the West credit for focusing on the "need to feed." the basis of all modern finance has nothing to do with "gold" per se (there is no gold standard on the planet...only relative prices set in relatively stable "currencies") but efficient tax collection and an economic means of "distribution." (we seem to be operating under the "spoils system" currently in the USA. nothing new there unfortunately. This has led to the a bankruptcy of Detroit and Puerto Rico remains an intersting Part Deaux.) there are so many different tax regimes in te USA alone it's hard to figure out what "place" in the dollar bloc one should be "in"....but the dollar bloc is clearly preferable for now. not saying don't buy gold...or silver...however. if we finally do even a mild correction in equities (5%?) I would be a buyer. I still would hold off on the mining plays until Spring.

Sun, 11/03/2013 - 17:26 | 4117724 Jeepers Creepers
Jeepers Creepers's picture

Don't you find it amusing how much the Elites hate gold?  They become engulfed in rage at the idea of someone deciding to buy gold with THEIR money.  it's like how dare you opt out of our system, you must be mocked and villified at every opportunity.  It's almost like thy're trying to convince themselves.

Sun, 11/03/2013 - 18:00 | 4117788 Quinvarius
Quinvarius's picture

What is really amusing is that the Roman elite were not even stupid enough to hoard or make people pay taxes in their token silver dipped and bronze coinage.  They gave out their party money for free but you had to pay taxes in gold bullion.  At the end they would not even take their own minted gold coins because they were debased as well.  You had to melt it down and give them bars.  But here in the West, the idiots with the money think paper dollars is where you store your wealth. 

Sun, 11/03/2013 - 19:57 | 4118033 carlin401
carlin401's picture

I remember as child in the USA, it was 1950's, they used to force us in elementary schools to go open little bank-accounts, and then deposit our penny's in these accounts.

Money is so fucking important in the USA, and especially the notion that that your money is ONLY safe in a bank.

In ASIA the only thing SAFE is GOLD, and its usually worn for all to see, or hidden in a home safe.

Also in ASIA if you want PUSSY, then you MUST have GOLD, for if you don't have GOLD, there is no way you can have a wife.

In the USA a man is measured by the car he drives which
will be worthless in 3-5 years, in Asia a man is measured
by the gold in FLAUNTS in public.

Yep, its largely about history, and knowing that all GUBMINT
is rotten and corrupt, its well known in all the ASIAN world that gubmint, and cops are a criminal class.

In the USA for a long time courts, cops, and politicians were held with esteem, it seems that we're just seeing a bitch slap where the USA public finally understands that
the government is there to FUCK THEM.

Sun, 11/03/2013 - 17:59 | 4117785 Atomizer
Atomizer's picture

http://www.rockefellerfoundation.org/search/?q=Gold+holdings

Or type Gold in the seach field in upper right corner.

Sun, 11/03/2013 - 18:12 | 4117810 eddiebe
eddiebe's picture

One of the big questions for the bankers and the 'bugs' really is: How much paper gold can the banksters sell asians for their real thing.

Sun, 11/03/2013 - 20:04 | 4118044 carlin401
carlin401's picture

Besides speculators and ETF morons, who actually buy's paper gold?

I never in all my years in Asia, ever heard of anyone owning paper gold, GOLD is something you keep at home in a safe, or that MAN-Ho's & WIVES wear when they go out in public.

Asian Muslim Men are forbidden to wear gold in public.

Probably the worst aspect of the GOLD PIMPS and ETF frauds, which are the majority of the zero-head OP's is this GOLD crap, almost as bad a RP crap,

I think its been known forever to keep 5% of NET worth as gold, ... real-gold at home, in a safe,

In asia its every familys obligation to keep at home 3-5 ounces of gold, at the ready if The SHTF

But fucking 'paper-gold', ... I mean who the fuck buy's that shit? Besides idiots?

Sun, 11/03/2013 - 18:54 | 4117890 W74
W74's picture

Demand Exists.  That's the nuts and bolts of what should matter to a businessperson.  The "why" part is only secondary.

I don't need to know "why" somebody wants a certain product, whether it be food, plumbing supplies, gold or even spinner rims. 

Once it's off my shelf it's not really my concern, but the fact that demand exists is (in my mind) a damn good enough reason to sell it.

Sun, 11/03/2013 - 22:02 | 4118269 lostintheflood
lostintheflood's picture

THAT is a stunning chart...(the very first one that shows us trading gold etf...ohmigod...)

Sun, 11/03/2013 - 22:37 | 4118353 Seeking Aphids
Seeking Aphids's picture

What comes screaming out of all this is that one cannot trust governments not to devalue currency....they get to pay off their huge debts (including all the money used to buy votes in the first place) via currency debasement without having to cut programs, entitlements, etc. Owning gold is a way of not being screwed by your own government. Governments obviously DO NOT LIKE THIS as they lose control of the levers of the economy if currency debasement can be side-stepped by smart citizens.....hence the attempts to push gold down. Futile attempts imho as there are too many people (outside of NA) who realise what is happening (seen this movie too many times) and who cling to their gold and buy as much as they can as they understand the big picture and the agenda of their government's manipulation of currency........people have to look out for themselves and cannot trust their government to do so....the people of the US will realise this fact (that they have forgotten since the last Great Depression) once currency devaluation really begins to bite........

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