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Indians Urged To Give Up Their "Idle Gold" For The Good Of The Nation

Tyler Durden's picture




 

One month ago, when reviewing India's ploy to monetize the thousands of tons of gold held by the broader population through the issuance of "gold-backed bonds" (which would need to offer a rate of interest greater than inflation to be attractive but they won't), we asked if this is "the start of India's gold confiscation."

As a reminder, as part of the plan, Indians would be allowed to "deposit their jewelry or bars with banks and earn interest, while the banks will be free to sell the gold to jewelers, thereby boosting supply. The deposits can be for a period of one year to 15 years with the interest on short-term commitments to be decided by the banks and those on long-term deposits by the government in consultation with the central bank."

The sovereign gold bonds are aimed at people buying the precious metal as an investment. The securities may help shift a part of the estimated 300 metric tons a year investment demand, the government said in a separate statement. The bonds will be issued in denominations of 5 grams, 10 grams, 50 grams and 100 grams for a term of five years to seven years with a rate of interest to be calculated on the value of the metal at the time of investment, it said.

When stripped of its pompous rhetoric, what India is offering is simple: a gold-for-paper exchange, which however in a culture where gold has been the definition of money for centuries, would likely be a non-starter from the beginning. One look at the chart below showing Indian gold demands is sufficient to show just how ingrained in the Indian psyche gold hasbecome.

However, as we said a month ago, just because it is doomed from the beginning, at least in its current iteration, does not mean it won't be tried (see: Abenomics)... or adjusted. Because this proposal was nothing short of the initial shot across the gold confiscation bow. Here is what else we said:

The one thing to watch for is a shift in the posture of the Indian government: for now participation in the gold monetization scheme is voluntary, and largely geared to the general public with the 500 gram/year limit. But if and when the Modi cabinet starts "urging" the population, and certainly when threats of fines and/or prison time emerge, that is when we will finally have confirmation that the second coming of Executive Order 6102 has arrived.

Fast forward to this weekend when while we still await the Indian government to unveil the "threats and fines" part, it started the "urging" when during an address on his monthly radio programme of "Mann Ki Baat", Indian prime minister Modi "exhorted people to help convert gold to the nation's economic strength by joining in various schemes to be launched soon" adding that "gold can be converted from dead money to an economic force. To leave gold lying as dead money is behaviour not in sync with the modern times," he said.

We are grateful for this stark admission by India's prime minister that in "modern times", possession of a barbarous relic gold is a activity best relegated to barbarians - you see, "modern people" are all about lending, and rehypothecating their paper gold.

Still, Modi was at least truthful in noting that accumulating gold as a form of economic security is deeply rooted in India's social tradition; as a result we expect the threats of fines and incarceration to follow shortly.

For those who are unfamiliar, the Khaleej Times reminds us of the details of India gold monetization plot: 

Earlier in the week, the Reserve Bank of India issued norms for implementation of the gold monetisation scheme, under which customers can deposit their gold in banks and earn interest on it.

 

The minimum deposit required will be 30 grams of gold with fineness measuring 995. It could include raw gold in the forms of bars, coins and jewellery, excluding stones and other metals.

 

On maturity, the principal and interest will be linked to the prevailing price of gold at the time. The depositor will have the option to take gold or equivalent rupees.

 

The union cabinet approved the scheme last month.

As for the motives, we have covered them before, but here they are again: "the objective of the scheme is to mobilise gold, give a fillip to the gems and jewellery sector by making the metal available from banks on loan and reduce the reliance on imported gold."

In other words, to take it away from the population. 

And when this peaceful attempt at "remunerated" gold sequestration fails, the less "amicable" version of gold confiscation - usually involving threats of bodily harm and prison time - will emerge, as it always does when desperate economies scramble to force their population to stop saving (by buying gold), and start spending.

 

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Mon, 10/26/2015 - 14:24 | 6712832 Pladizow
Pladizow's picture

He may have better luck convincing them to eat beef!

Mon, 10/26/2015 - 14:35 | 6712903 FL_Conservative
FL_Conservative's picture

Please send it to my attention for safe keeping in my Nigerian PM storage facility.

Mon, 10/26/2015 - 14:38 | 6712915 Deathrips
Deathrips's picture

Take the man who said this and disembowel him in front of hungry hogs!!

 

Hold IT!!

RIPS

Mon, 10/26/2015 - 14:42 | 6712941 Manthong
Manthong's picture

FU and the sacred cow you rode in on.

Mon, 10/26/2015 - 15:03 | 6713020 SMG
SMG's picture

Translation: "Please let us rob you of your gold."

Mon, 10/26/2015 - 15:07 | 6713029 SWRichmond
SWRichmond's picture

To leave gold lying as dead money is behaviour not in sync with the modern times," he said.

Translation: "Please let us rob you of your gold."

You have translated that correctly, sir. 

"To leave you money outside the system where we cannot steal through inflation it is not in sync with modern times".

In the coming gold explosion, either the banks will get rich, or the people of India will get rich.  Which will it be?

Mon, 10/26/2015 - 15:21 | 6713069 Supernova Born
Supernova Born's picture

Somehow, "idle, dead" gold beats as loudly as the tell-tale heart under the bed of every central bankster.

Mon, 10/26/2015 - 15:26 | 6713109 Karlus
Karlus's picture

Reminds me of those ads to sell your "old gold." Or the widow that brings in the deceased husband's silver coin collection to the pawnbroker and asks "Are these worth anything." Pawnbroker (seeing all the mercury dimes and silver halfs "Not really, but I will get you the best price I can."

Mon, 10/26/2015 - 15:42 | 6713213 Thought Processor
Thought Processor's picture

 

Hey......   about that gold you own.........

 

People from India aren't that stupid.  There is a reason they value gold above all else as a store of wealth.

 

Mon, 10/26/2015 - 18:12 | 6713996 Stuck on Zero
Stuck on Zero's picture

Getting people to give up their gold is a simple two step process: 

 

1) Form a stable government that will last thousands of years. 

2) Issue a currency with essentially zero inflation that lasts thousands of years. 

That satisfied, people will give up their gold for the convenience of the currency.

Mon, 10/26/2015 - 18:49 | 6714205 Majestic12
Majestic12's picture

"Indians Urged To Give Up Their "Idle Gold" For The Good Of The Nation"

Well I guess they will go out and rape some more 4-year old children with metal objects again...

Those damn women and children! Take my gold will you!

Namaste!

Mon, 10/26/2015 - 18:47 | 6714197 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

 

 

So presumably the Indian gov./Central Bank wants to rectify their current account deficit. or at least that's the pretense for this"urging".

But, could there be another motive? Possibly the London bullion banks & BOE are beseeching India to access gold to lease to them

so as to maintain these "reasonable" pricing levels we've seen of late.  OR--  Is there a move afoot within the Worlds Central Banks

and the BIS to phase in a new currency regime, which will be partially backed with gold.  A currency basket forming the SDR with a

Tier 1 collateral percentage.

Mon, 10/26/2015 - 16:01 | 6713336 nufio
nufio's picture

in india the dowry system is still VERY prevelant even among the very wealthy families. Also most of the land + business interests are inherited by the male heirs. In most of the cases, the female child gets her inheritence in the form of gold that is usually passed on as dowry. So whenever a female kid is born, parents buy gold every year so that they have enough to give for her dowry for marriage. Most of this is in the form of jewellery.

This is not at all an uncommon image in indian weddings. http://www.ilfordrecorder.co.uk/polopoly_fs/1.4155421!/image/image.jpg_gen/derivatives/landscape_630/image.jpg

From what I know all this is promptly moved to a locker and sits there as a family asset. 

India does have a lot of gold with the people (as opposed to with the government backing the currency) hidden in various bank lockers. Most indian middle class familes have 2 to 3 bank lockers to store their gold. 

 

Mon, 10/26/2015 - 15:07 | 6713034 NoDebt
NoDebt's picture

OK, so let's back up here, boys and girls.  Let's take a closer look at this: "Idle gold".  

Idle gold?  What the fuck does that mean?  Is that anything like owning an "idle house" or "idle stock certificates"?  The money that was circulated to buy that gold went back into the economy like the purchase of anything else would.  If you buy this highly specious "idle gold" argument then you should also buy into the fact that nobody should ever save any money for any reason.  Idle gold my ass.

Mon, 10/26/2015 - 15:14 | 6713060 813kml
813kml's picture

Gold left idling in the driveway is the leading cause of global warming.

Mon, 10/26/2015 - 16:18 | 6713451 Dead Canary
Dead Canary's picture

RACIST!

Mon, 10/26/2015 - 18:54 | 6714245 Majestic12
Majestic12's picture

"Gold left idling in the driveway is the leading cause of global warming."

But you win Carbon Credits for driving that gold in the market.

In fact, drive it over to Goldman-Sachs and "fill-'er up"!

You are Jewish, aren't you? Or "Gold-ish"? How about Jack "Lew-ish"?

Oh, you're Christian? Then, "Pew-ish"?

Ok, I'll stop. You can stop hitting me.

Mon, 10/26/2015 - 15:43 | 6713220 TheRideNeverEnds
TheRideNeverEnds's picture

"nobody should ever save any money for any reason"

Now you are getting it! Krugman would be proud.

Mon, 10/26/2015 - 18:56 | 6714253 Majestic12
Majestic12's picture

"nobody should ever save any money for any reason"

What if it falls into the water and it can't swim?

Mon, 10/26/2015 - 19:01 | 6714276 ali-ali-al-qomfri
ali-ali-al-qomfri's picture

Krugman hangs out at theatre's lookign for "lucky" actors who broke thier leg to use as evidence of GDP growth.

Mon, 10/26/2015 - 15:15 | 6713064 Dead Canary
Dead Canary's picture

Sacred cow's make the tastiest burgers.

Mon, 10/26/2015 - 18:57 | 6714259 Majestic12
Majestic12's picture

"Sacred cow's make the tastiest burgers."

Sacred hamsters are better.

Better than gerbils anyway...too much dark meat.

Mon, 10/26/2015 - 14:44 | 6712948 MalteseFalcon
MalteseFalcon's picture

Not really a fan of gold, but still I have to laugh. 

Hey government of India, if you want their gold, offer them something they may want:

A much, much higher price.  And a vastly reformed, far less risky economy.

 

Mon, 10/26/2015 - 15:03 | 6713023 Handful of Dust
Handful of Dust's picture

"Take peeples gold lead to civil unrest."

 

~ Old Ghandi Proverb

Mon, 10/26/2015 - 19:00 | 6714270 Majestic12
Majestic12's picture

"~ Old Ghandi Proverb"

Mahatma, or Indira?

Mon, 10/26/2015 - 14:52 | 6712983 Bruce Gender
Bruce Gender's picture

Good day sir,

 

At the request of my business partner, we would like to form an alliance with your enterprise. Do you accept Western Union?

 

Please send address and social security number to NigerianPrince@aol.com

 

Very truly yours,

Akeem Joffers

Mon, 10/26/2015 - 14:36 | 6712908 Hippocratic Oaf
Hippocratic Oaf's picture

All your gold is belong to us.

Please offer your lazy metal for fiat paper today.

Hurry, limited time only please.

Oh, and we know where you live.

Mon, 10/26/2015 - 14:51 | 6712978 Raymond_K._Hessel
Raymond_K._Hessel's picture

good god, man, have you never been to an Indian restaurant?

Mon, 10/26/2015 - 14:27 | 6712833 hedgeless_horseman
hedgeless_horseman's picture

 

 

To leave gold lying as dead money is behaviour not in sync with the modern times," he said.

Fuck modern times.


Mon, 10/26/2015 - 14:28 | 6712857 knukles
knukles's picture

See see see ... they shoulda introduced the antithesis of gold and modern times in Common Core centuries ago and we'd have none of this bull-shit.

Mon, 10/26/2015 - 14:33 | 6712888 messymerry
messymerry's picture

Yup, barbarous relic.  BAH HUMBUG!  <<<  Getting in the Christmas spirit early...  ;-D    

Mon, 10/26/2015 - 14:56 | 6713004 SoilMyselfRotten
SoilMyselfRotten's picture

 To leave gold lying as dead money is behaviour not in sync with the modern times," he said.

 

Yeah, you mean like terrorist behaivior? F*#kwads

Mon, 10/26/2015 - 15:03 | 6713022 Herd Redirectio...
Herd Redirection Committee's picture

Dead money, I guess he means cash and physical precious metals?

Notice how anything that limits the power of bankstas is now a society-wide 'threat'?

I joke with people at stores if they still accept cash.  I tell them "Will you accept [green] paper?"

Cashless society = Mark of the Beast = total control for the sociopathic fascists in charge

Mon, 10/26/2015 - 18:03 | 6713951 GeezerGeek
GeezerGeek's picture

Once the US debt passed $1 trillion I used to joke with bank tellers. I'd point to the sign saying the deposits were insured by the full faith and credit of the US/FDIC. I would point out that an organization $1 trillion in debt did not warrant my having any faith in them. Next time you want to use cash, ask if they accept green paper issued by an organization nearly $20 trillion in debt. I wonder if their eyes will just glaze over.

Mon, 10/26/2015 - 14:30 | 6712871 NYPoke
NYPoke's picture

What he failed to say, "The more Gold the Government gets; the more Inflation soars.  The Poor & Middle Class are screwed."

 

I doubt he is smart enough to understand, but he still wouldn't be able to speak the truth...and keep his job.

Mon, 10/26/2015 - 14:30 | 6712872 Expat and Happy
Expat and Happy's picture

Sure, and all good citizens should hand over to the government, in addition to their "ïdle gold", their "dormant guns", too....oh, and their "unpatriotic children"....

Mon, 10/26/2015 - 14:35 | 6712876 hedgeless_horseman
hedgeless_horseman's picture

 

 

Don't forget the, "dangerous books."

“The books are to remind us what asses and fool we are. They're Caeser's praetorian guard, whispering as the parade roars down the avenue, "Remember, Caeser, thou art mortal." Most of us can't rush around, talking to everyone, know all the cities of the world, we haven't time, money or that many friends. The things you're looking for, Montag, are in the world, but the only way the average chap will ever see ninety-nine per cent of them is in a book. Don't ask for guarantees. And don't look to be saved in any one thing, person, machine, or library. Do your own bit of saving, and if you drown, at least die knowing you were headed for shore.”

 

? Ray Bradbury, Fahrenheit 451

Mon, 10/26/2015 - 14:41 | 6712937 o r c k
o r c k's picture

That just burns me up.

Mon, 10/26/2015 - 14:33 | 6712886 NoDebt
NoDebt's picture

Well said.

Mon, 10/26/2015 - 14:32 | 6712877 Ignatius
Ignatius's picture

Clear indication that gold might be something other and greater than a "pet rock".

Mon, 10/26/2015 - 14:41 | 6712938 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

To leave gold lying as dead money is behaviour not in sync with the modern times," he said.

 

I thought refering to gold as money was supposed to be the mark of the economic illiterate.

 

Funny how the terms of debate shift without anyone stopping to ask themselves who has been right all along.

Mon, 10/26/2015 - 15:08 | 6713036 Herd Redirectio...
Herd Redirection Committee's picture

Yep, some serious shifting of the gold, uh, I mean goal posts.  And we are all just supposed to say "My, how smart these experts are, telling me how I can put my gold to better use!"

Better, for who?

Mon, 10/26/2015 - 15:14 | 6713057 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

At least in the west we probably wont have to hear this from our experts.  

 

Since no one statistically speaking in North America owns any bullion gold, the experts can say nothing and eventually jump straight ahead to, "the 1% who own gold are responsible for eveything bad that happened to you, so turn in those neighbours you suspect of having gold"

Mon, 10/26/2015 - 14:25 | 6712838 Four chan
Four chan's picture

it would be a kick if the rupee became the reserve currency beating china to the punch. they have the gold.

Mon, 10/26/2015 - 14:48 | 6712965 RaceToTheBottom
RaceToTheBottom's picture

SDR based on a % of each.  Gotta share the manipulation around so all can "benefit"

Mon, 10/26/2015 - 14:25 | 6712840 AMPALANCE
AMPALANCE's picture

Your gold is no good, so we'll take it off your hands, because who needs gold?

Mon, 10/26/2015 - 14:35 | 6712899 booboo
booboo's picture

My gold is never "idle". It dances at night, the indian is chasing the buffalo while I sleep

Mon, 10/26/2015 - 14:51 | 6712979 messymerry
messymerry's picture

I dream of incuse designs...

;-D  

Mon, 10/26/2015 - 14:27 | 6712847 Hopeless for Change
Hopeless for Change's picture

Franklin Delano Patel

Mon, 10/26/2015 - 14:27 | 6712850 knukles
knukles's picture

Like citizens holding gold makes for bad economics...  Oh fuckin' yeah, dwarfs fiscal and monetary policies.  And regulations. 
Assholes.
Cries like this are desperation .... another faux enemy, a straw-man like Eurasia, thank you very much, Winston.  Off to Room 101 and the rats for you!
At this rate the PTB really are going to have to contemplate some form of (faux) disclosure a la Paul Krugman about aliens invading Earth
                                          Attention attention!  Alien slime clean up in Los Angeles!

Mon, 10/26/2015 - 14:39 | 6712924 booboo
booboo's picture

 Putinites?

Mon, 10/26/2015 - 14:30 | 6712858 Kaiser Sousa
Kaiser Sousa's picture

why does the Indian government want those pet rocks.....?

oops - i meant "dead money"...

 

fucking hilarious...

and FUCK OFF.

Mon, 10/26/2015 - 15:14 | 6713062 SWRichmond
SWRichmond's picture

Yes.  "We dig it out of the ground, refine it, then put it back in the ground and stand guard over it" or some such stupid shit says the blowhard of Omaha.  If it is so damned stupid, barbarous and worthless / unmodern, and dead, why do the banks want it?  Why is it powerful enough to be "converted to the nation's economic strength"?

Should we tell the Indian people about the American banks charging storage fees for the contents of empty vaults, and then getting away with it?

Give me your gold and I'll give you this awesome piece of paper, plus the feeling you're being patriotic!  Woo-Hoo!

Mon, 10/26/2015 - 14:29 | 6712860 Skeeterworborton
Skeeterworborton's picture

I see a New Indian Prime Minister in the near futur

Mon, 10/26/2015 - 14:34 | 6712898 Kaiser Sousa
Kaiser Sousa's picture

u meant dead Indian Prime Minister...

i got u though...

Mon, 10/26/2015 - 14:52 | 6712867 Supernova Born
Supernova Born's picture

Jim Grant a few days ago on Bloomberg:

"Gold is an investment in monetary disorder."

"What this ends in is a closed loop of intervention ever more radical."

http://www.bloomberg.com/news/videos/2015-10-23/listen-to-what-jim-grant...

 

Mon, 10/26/2015 - 14:30 | 6712869 Able Ape
Able Ape's picture

Yeah right, good luck with that, Sahib...

Mon, 10/26/2015 - 14:30 | 6712873 seek
seek's picture

So... dump the gold for what exactly, to inflate non-gold asset prices?

You could make an argument (a bad one, but it'd be an argument) that this would make sense to fund some sort of development, but given that the entire fucking planet is in deflation mode except for financialize assets, I'm thinking giving asshole central bankers more ammo to piss away your future isn't the brightest idea.

Modern times = we steal more from the people than we did in feudal times. Fuck that.

Mon, 10/26/2015 - 14:46 | 6712875 Latitude25
Latitude25's picture

You can be sure that this is nothing more than the Indians saying, "yes boss" to the corrupt Western bankers.  They will then proceed buying gold as they always have.

https://www.youtube.com/watch?v=jX8rqZQCVaQ

Mon, 10/26/2015 - 14:32 | 6712883 VWAndy
VWAndy's picture

Hahahahahahahaha.  Try taking everyones tools and watch what happens.

Mon, 10/26/2015 - 14:33 | 6712885 XitSam
XitSam's picture

Bank: You want your gold deposit back? We don't have it. Per government direction, we sold it to jewlers, but you can take this fiat instead. It's just as good as gold. Suckers.

Mon, 10/26/2015 - 14:34 | 6712889 RadioFlyer
RadioFlyer's picture

Next month (November 11) starts Diwali festival and that means a LOT of gold will be purchased in India.  Big week!

Mon, 10/26/2015 - 14:34 | 6712894 THE DORK OF CORK
THE DORK OF CORK's picture

Modernism= waste.

Mon, 10/26/2015 - 14:35 | 6712900 Joebloinvestor
Joebloinvestor's picture

HAHAHAHAHA

Watch for a bunch of Indian bankers driving exotics, snorting coke and partying with super sluts.

Then try to redeem your paper suckers.

 

Mon, 10/26/2015 - 18:12 | 6713994 GeezerGeek
GeezerGeek's picture

I suspect the 'super sluts' will accept 'pet rocks' in return for their 'companionship'.

Mon, 10/26/2015 - 14:38 | 6712920 chrsn
chrsn's picture

Hear that, folks?  It's dead money, not live money like a nation's currency!  Wake up and stop carrying around those big, heavy pieces of yellow metal and switch to that light, convenient paper currency with badass artwork on it--just like all the cool kids do!  

 

And for an unlimited time only, we're going to call people who trade in their gold "patriotic"!  Don't be a treasonous little viper--get paper currency today!

Mon, 10/26/2015 - 14:45 | 6712951 o r c k
o r c k's picture

Ofcourse when you want it back you'll be called a terrorist.

Mon, 10/26/2015 - 15:43 | 6713219 Panafrican Funk...
Panafrican Funktron Robot's picture

Pretty sure they just need to offer Spider Man towels.  

Mon, 10/26/2015 - 14:41 | 6712934 Kaiser Sousa
Kaiser Sousa's picture

well this Idian story as well as the following certainly explains the price action over the last 5 years now doesnt it....?

"Gold consumption in mainland China may match or exceed the record in 2013 after financial-market turmoil and the yuan’s devaluation boosted the metal’s appeal, according to the Chinese Gold & Silver Exchange Society, which also saw higher sales at jewelers in Hong Kong.

Buying in mainland China, which vies with India as the world’s largest consumer, picked up after the stock-market turmoil this year and August’s surprise devaluation, according to Haywood Cheung, chairman of the supervisory committee at the century-old bullion bourse. Demand in Hong Kong may expand 25 percent this half after a lackluster first six months, he said in an interview."

http://www.bloomberg.com/news/articles/2015-10-26/gold-demand-in-china-m...

Mon, 10/26/2015 - 14:41 | 6712939 BarbaricRelic
BarbaricRelic's picture

So they are telling me I can exchange my worthless and unwanted gold for valuable paper!? Where do I sign up!?

It's laughable how often they are telling everyone to give up some "barbarous relic" that they take for themselves then hide in a vault with armed guards.

BARBARIC!  

Mon, 10/26/2015 - 14:42 | 6712943 VWAndy
VWAndy's picture

The free shit army is so going to get what it truly earned in Barter Town.

Mon, 10/26/2015 - 14:44 | 6712945 Pumpkin
Pumpkin's picture

They know, they are the nation. 

Mon, 10/26/2015 - 14:46 | 6712955 Jethro
Jethro's picture

HAHAHAHAHAHAHA. Not going to happen. The Indian Government will be like;
https://www.youtube.com/watch?v=WF9gU0huXSM

And the India populace will be like...No! What gold?

Mon, 10/26/2015 - 15:02 | 6713016 justdues
justdues's picture

That ,s brilliant . So Indian kids teach themselves what the Government is really like, unlike our poor CFC/Tri-lateral indoctrinated chilun who believe the Govrnment is good and there to care for everyone

Mon, 10/26/2015 - 15:17 | 6713070 Jethro
Jethro's picture

Well, the video was just somebody teaching Indian kids to say something pretty useless, although hilarious.  However, every single person I ever knew when I lived there all knew the Indian government was completely corrupt, and I knew some pretty top level officials personally.  It's a cultural thing. they call it baksheesh.

Mon, 10/26/2015 - 14:46 | 6712957 THE DORK OF CORK
THE DORK OF CORK's picture

L

ast year a net 21 billion euros of tax was NOT respent into the Irish economy. This is modern life., a chronic shortage of purchasing power. Better to remain in the village. The bankers religious mission is always and everywhere destroy peasant peasant life.

Mon, 10/26/2015 - 14:49 | 6712959 THE DORK OF CORK
THE DORK OF CORK's picture

L

Last year a net 21 billion euros of tax was NOT respent into the Irish economy. This is modern life., a chronic shortage of purchasing power. Better to remain in the village. The bankers religious mission is always and everywhere destroy peasant peasant life.

 

Mon, 10/26/2015 - 14:51 | 6712980 Raymond_K._Hessel
Raymond_K._Hessel's picture

oh, they arent going to back their currency.

They just see wealth - they want to steal it.

Mon, 10/26/2015 - 14:51 | 6712981 taopraxis
taopraxis's picture

I was a heavy buyer of gold in 2002-2004 and again in the fall of 2008. Physical was plentiful and premiums were low in the early years. For months after the 2008 crash, physical metal was extremely difficult to locate except in the form of large bars. In 2011 and 2012, I was selling heavily, bringing my porfolio back into balance, as I was essentially all the way into the metals. Since then, I've been relatively inactive. I was a buyer of paper gold this morning, but that is a trade. Last week I was a bit short the paper, again, only as a trade.

People do not seem to understand why monetary intervention has not produced higher gold prices and more inflation in the real economy as opposed to just in stocks and bonds but I do not consider this a mystery. Central banks almost undoubtedly intervene in the gold market, just as they intervene elsewhere with currencies and interest rates, but there are more critical factors at work as evidenced by the frustration expressed by the banksters that inflation remains low.

And, indeed, general deflationary forces are evident as revealed by the crash in the commodities sector dating back over a year. The economy is in a cyclial recession within a depression. The middle class has been decimated. Jobs and incomes are weak, debt is high, standards of living are in decline...all deflationary forces.

Meanwhile, gold got ahead of itself in fundamental terms during 2008-2011 and gold production increased dramatically. Currently, I see gold at fair value. I am not selling my core position, nor am I adding aggressively. I want to see stocks crash and I want to see interest rates normalize. If that does not happen, then it is hard for me to imagine getting too aggressive. There is no easy money to be made, today...

 

Mon, 10/26/2015 - 17:28 | 6713809 taopraxis
taopraxis's picture

Down arrows do not surprise me at all. I've known too many goldbugs to be surprised. You do not believe in trading it and you do not like paper and you think gold only goes up unless there is a conspiracy to keep it down. I find that kind of thinking unhelpful because it costs too much. That said, all paper will burn in the end...on that, we agree.

Gold is simply not a panacea. It does not work in every market environment. It worked from 1968-1982. It failed to work from 1982-1999. Iff you live long enough, you will see gold win the game but that's a big if for older people like me. I'm not interested in playing the patsy for gold sellers anymore than I am in playing the patsy for the banksters. Gold may be a religion for some people, but hoping and praying is not my style.

Mon, 10/26/2015 - 14:54 | 6712989 Temporalist
Temporalist's picture

"the problem is that consumers are not taking on enough debt." -Steve "Modern Asshole" Liesman

Mon, 10/26/2015 - 14:56 | 6713000 JohnnyBGood
JohnnyBGood's picture

I rest my case. Gold is money. It's alive and bursting with purchasing power! Silver too! The paper dollar is mechanism of theft and long term undetectable to most the confiscation through deliberate inflation.

Mon, 10/26/2015 - 15:22 | 6713089 Albertarocks
Albertarocks's picture

"Silver too!"

Silver 'especially' would be more like it.  Over the past 5000 years the gold:silver ratio has been more or less steady at about 14:1.  That's the approximate ratio it is found in the earth too.  Only since the creation of the Fed has the ratio been seen to be more like 35:1.  The ratio has held at that level long enough that today people think 35:1 is 'normal'.  It's not normal.  14:1 or thereabouts is 'normal'.

Guess what that ratio is today!  74:1.  If people thing gold is a good buy today, just envision how dirt cheap silver is.  Once gold and silver really come under buying pressure it doesn't take long for silver to become the more popular of the two, which is why silver 'always' rises more than gold once the PMs are in an uptrend.  Gold gets too expensive for the average Joe on the street, but he won't hesitate to go after silver instead.

 

Mon, 10/26/2015 - 14:56 | 6713001 JohnnyBGood
JohnnyBGood's picture

I rest my case. Gold is money. It's alive and bursting with purchasing power! Silver too! The paper dollar is mechanism of theft and long term undetectable to most the confiscation through deliberate inflation.

Mon, 10/26/2015 - 15:01 | 6713013 wstrub
wstrub's picture
Executive Order 6102
Mon, 10/26/2015 - 15:07 | 6713033 Bill of Rights
Bill of Rights's picture

Funny the minute they take it the price will jump ten fold...

Mon, 10/26/2015 - 15:09 | 6713039 JohnnyBGood
JohnnyBGood's picture

Instead of the governments again aiming to seize the gold from their citizens the citizens must turn the tables, say hey! these is my private money, not yours, storm the govt/bank vaults, audit and record the findings, weed out the tungsten filler, seize the bars, melt them down to for an  mint to coin new 1/20, 1/10, 1/4, 1/2, and 1 ounce coins and distribute them as real paycheck HARDearned MONEY to the people but only if they have WORKED for it. if they didn't work just print them soup coupons till they work.

Mon, 10/26/2015 - 15:10 | 6713042 E.F. Mutton
E.F. Mutton's picture

"Modern Times" also includes NIRP, Minority Privilege and "Girls" with weiners.  'nuff said.

Mon, 10/26/2015 - 15:13 | 6713056 pcrs
pcrs's picture

We want you to trade your gold back and forth, that is better than to keep it with one person

Mon, 10/26/2015 - 15:21 | 6713090 creeko
creeko's picture

The president of India has been watching too many "cash-for-gold" TV commercials, apparently.

Who in their right mind would ever consider particpating in a scheme like this?

Mon, 10/26/2015 - 15:25 | 6713103 Exalt
Exalt's picture

Well well well... not a barbarous relic after all is it?

Mon, 10/26/2015 - 15:29 | 6713104 Dickweed Wang
Dickweed Wang's picture

Indians would be allowed to "deposit their jewelry or bars with banks and earn interest, while the banks will be free to sell the gold to jewelers, thereby boosting supply.

 

O.K. fine . . . here's the $1183/oz question then.  If Indians are only depositing their gold into the bank(s) and the banks are then SELLING the deposited gold, what happens when said Indian(s) want to withdraw their gold from the bank(s) after say two years or something like that???  Sounds to me to be too similar to how Crimex works, or the business model of Gold Man Sucks or JP Morgue . . . . take something that doesn't belong to you, sell it and then offer the owner worthless pieces of paper when they ask for it back.

Mon, 10/26/2015 - 15:34 | 6713159 T-NUTZ
T-NUTZ's picture

Do you really think ANY government can confiscate gold from 1 BILLION PEOPLE??

 

what a bunch of morons.

Mon, 10/26/2015 - 15:34 | 6713165 economicmorphine
economicmorphine's picture

Everytime one of these fucktards speaks I do the exact opposite.  I hope we get to the "cut off their balls" part of the revolution soon. 

Mon, 10/26/2015 - 15:35 | 6713178 JohnnyBGood
JohnnyBGood's picture

GOVT/BANK/POLICE STATE COMPLEX: Gold is NOT money and worthless. Translation: You 'little people' should not enjoy full purchasing power of precious MONEY and instead be perpetually indebted with depreciating paper debt notes for the rest of your entire life. 

Mon, 10/26/2015 - 15:39 | 6713192 Zero-Hegemon
Zero-Hegemon's picture

The First Indus Bank of Barbarous Relics is now open for bizznatch. Come and store your pet rocks with us! Trained staff!

Mon, 10/26/2015 - 15:41 | 6713208 JohnnyBGood
JohnnyBGood's picture

Printing press currencies are barbarous relics of theft, laziness and greed, exact opposite of hardworking miners who put time in and risk their lives day in and day out producing real NON DEBT assets.

Mon, 10/26/2015 - 15:47 | 6713237 trader1
trader1's picture

#ca$hforgold

Mon, 10/26/2015 - 15:53 | 6713272 Nolde Huruska
Nolde Huruska's picture

Stupid Central Bank Tricks Episode XXIII

Mon, 10/26/2015 - 15:53 | 6713274 JohnnyBGood
JohnnyBGood's picture

Before being jewelry, vases, cups, or whatever it may be the first and foremost function of GOLD and SILVER is that of being MONEY. Paper gets NO serious recognition as money if the metals were never around to back it up from the start.

Mon, 10/26/2015 - 15:58 | 6713311 kaboomnomic
kaboomnomic's picture

Bwahahahahahahahahahaha... NOT GONNA HAPPENS. NOT EVAAA' !!

Ask your indian's friends why..

Mon, 10/26/2015 - 16:00 | 6713328 burocracy
burocracy's picture

I see a lot of comical entertainers beggin on the streets soon. with politicians like  this, daily news beats  SNL anytime.

Mon, 10/26/2015 - 16:09 | 6713383 HoserF16
HoserF16's picture

"Knock, Knock"

"Who's there?"

"Land Shark" (Indian guberment)

"I know that one"

(OPENS DOOR) CHOMP, CHOMP... (GOLD MUTHERFCKER)

Mon, 10/26/2015 - 16:06 | 6713366 JohnnyBGood
JohnnyBGood's picture

Guns are the peoples' EXECUTIVE ORDER against TYRANNY. Alex Jones would like this quote.

Mon, 10/26/2015 - 16:06 | 6713367 HoserF16
HoserF16's picture

People to the Indian Government; GO FUCK YOURSELF!

Now, make gold $5000/Oz and maybe I'll consider it...

Mon, 10/26/2015 - 16:10 | 6713393 JohnnyBGood
JohnnyBGood's picture

Insolvent banks to people: 'We will trade our valuable paper for your 'dead' gold. It's in 'our' national interest.

Mon, 10/26/2015 - 16:11 | 6713404 JohnnyBGood
JohnnyBGood's picture

Stocks and Bonds are barbarous relics of a paper past.

Mon, 10/26/2015 - 16:35 | 6713565 JohnnyBGood
JohnnyBGood's picture

Broke Wimpy GOVT/BANKS to people: We will gladly pay you paper on Tuesday for your gold today.

Mon, 10/26/2015 - 17:08 | 6713728 OzFan
OzFan's picture

Fck me, govts never cease to amaze me.

Yeh, handover your gold to govt for safe keeping.....what could possibly go wrong.

Mon, 10/26/2015 - 17:09 | 6713732 silverer
silverer's picture

Listen to that sermon.  Holy crap!  After everyone tells you gold is so 1800's.

Mon, 10/26/2015 - 17:11 | 6713739 22winmag
22winmag's picture

Idle gold... now I've heard it all.

Mon, 10/26/2015 - 19:26 | 6714379 doctor10
doctor10's picture

The central bankers reach is deep!!

If that isn't a confirmation of gold's prospects I don't know what could be!!

The goldbugs are gonna squeal with delight!

Mon, 10/26/2015 - 20:02 | 6714516 FIAT CON
FIAT CON's picture

Yes. Trade in your real money for FIAT Cause were short of the real stuff...

It's only Gold ,ah precious metal, an asset, but it's not money!Ron Paul vs Bernanke: Is Gold Money? - July 13, 2011 

Mon, 10/26/2015 - 20:52 | 6714726 honestann
honestann's picture

DO NOT TRUST YOUR GOLD WITH ANYONE.
DO NOT TRUST YOUR GOLD WITH ANYONE.
DO NOT TRUST YOUR GOLD WITH ANYONE.

-----

Seriously!  Not even a relative or friend!

-----

Seriously!  To take the one item that has ZERO counterparty risk... and utterly destroy that crucial feature... has to be one of the most stupid ideas in the history of history!

Tue, 10/27/2015 - 00:39 | 6715441 onmail1
onmail1's picture

Indian Mantra : 'In Gold We Trust'

Do NOT follow this link or you will be banned from the site!