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Indians Refuse To Give Their Gold To The Government: Only 30 Kilograms Take Part In "Gold Monetization Scheme"
Two months ago we gave our most recent review of what we dubbed the soft launch of India's gold confiscation program, when the government's "voluntary"gold-to-paper backed bonds conversion went, well, gold: back then, Modi's government approved the gold monetization plan and sale of sovereign bonds proposed several months ago by the Reserve Bank of India.
The plans were first announced by Finance Minister Arun Jaitley in February as measures to woo Indians away from physical gold. As Jaitley explained the deposited gold would be auctioned, used to replenish the Reserve Bank of India's reserves or be lent to jewelers. Subsequently, gold "depositors" can redeem in gold or cash depending on the tenure. Said otherwise, an attempt to "fractionally-reserve" gold, which would then be used a source of gold rehypothecation in the country that despite all the government's efforts, remains starved for physical gold.
Now, one week after the gold scheme's official launch, we take a look at how has it has done so far. In one word, so far the "gold monetization" plan has been a disaster with a laughable 30 kilograms in gold tendered by the people from physical into "government-backed" form.
The Times of India has the details, and reports that in the first-week "collection by the government's sovereign gold bond scheme has been rather tepid with less than Rs 10 crore being reported to the Reserve Bank of India (RBI). The scheme, which closes on November 20, allows investors to purchase between 2 and 500 grams of gold-equivalent.
The spin was immediate: "bankers say that in any issue, savvy investors - including high net worth individuals - usually hold off until the closing date before locking in their funds." Or maybe they don't lock in their funds at all since giving the government your physical gold in exchange for a interest payment - in other words, converting gold into a paper asset with the government's blessing - is about as stupid as it gets.
TofI adds that "the money raised through the sale of these bonds will form a part of government borrowing. According to sources, the RBI, which manages government borrowings, is keeping track of the collections and it has got a number of below Rs 8 crore until last weekend. Of this, around Rs 6.5 crore has been reported by banks and another Rs 1.35 crore by the Post Office. The government has fixed the issue price at Rs 2,684 per gram, which means that the gold-equivalent of the bonds is less than 30kg."
The government has been aggressively marketing the scheme on three main points:
- It is more remunerative than buying gold as the investor gets an interest of 2.75% in addition to getting returns equivalent to the value of gold on maturity. Incidentally this is far below the rate of inflation, so the nominal interest does not even cover rising prices).
- Second, there is no risk of theft since the gold is held in dematerialized form.
- Thirdly, although the bond has an eight-year tenure, it offers liquidity as it is accepted as collateral and there is also a premature exit option at the end of five years.
Alas, none of these appear to have had any impact on people's willingness to part with bullion.
Which brings us to our conclusion from two months ago, when we said that "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."
If and when that happens, expect a full-blown global press to obliterate the price of gold as the gold confiscation wave is finally unleashed, first in India then everywhere else.
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Around 20,000,000 kilos of gold in India and the government gets 30 kilos?
Yeah, I think it's safe to say distrust of the government is as high (or higher!) in India as it is in the US.
Indians have long been known to be an intelligent culture.
When India demands delivery and Blythe can do nothing but blush, watch those premiums hit the roof while Janet attempts a Kim K shakedown to keep the COMEX floating
Gold is money and nothing else is.
Except silver, but you get the point ;)
In India, shirts are money.
http://static1.businessinsider.com/image/53e526e569bedd8043572baa-480/in...
Something witty about sacred cows here but I can't think of anything.
They rather take it in the ass than give up their bling-bling.
Is the only thing helping them to get (ugly as hell) chicks:
http://www.thepornster.com/video/74/indian-wife-takes-it-in-the-ass
no need to watch that, he's just a government agent in charge of repatriating physical gold; he's just probing for her gold.
Yeah.....I'm gonna pay the fine.
Screw you bitch!
Uh... Sacred cows make the tastiest burgers?
I'm long Indian government metel detector contracts
I've actually eaten a holy cow before, when I lived in New Delhi. Worst beef ever. Tasted exactly like their diet, which literally is garbage.
for once betting your shirt actually means something
WOW, no comment from teh Coinhead?
could we use platinum?
I think the broader point is anything can be money provided it's supply cannot be limited or expanded by fiat
The market (as in freely/voluntary transacting economic actors) is the only sustainable and moral way of decising what money is
And those idiots that loaned out the 30 kilo's to their govt deserve a Darwin Award because they have a better chance of getting killed by a Coke machine tipping over than ever getting back their gold. ROFL
the indian government probably loaned the gold to themselves to see if they could get the ball rolling...no such luck
And at a whopping 30Kg, it's safe to say the government doesn't trust itself to return it.
The 30 kilos are probably mainly from the temples. Even they dont seem to trust the government because 30 kilos is is a token amount compared to their stock.
Indians would be wise to keep their gold away from their NWO puppet banking head Raghuram Rajan. He recently sent some gold to London for convenience in transactions.
Indians are just being practical, twenty pounds of gold necklaces are essential when trying to get into the downward dog.
Indians are streetwise.
Why don't they just by some from our friends at the CRIMEX? lol
Good way to shift those 'lookey-likey' faux gold bars.
Well, that affirms my belief that people in India are generally pretty smart.
The Indian government got 0.0000015% of the gold monetized...I'd say that's a massive sucess!!! ...considering that I wouldn't have thought anybody would have been that stupid as to part with physical gold for paper.
If anything can rile the Indians it would be gold confiscation. Modi knows better I'm certain.
I'm utterly and completely shocked they got one ounce.
It will come out soon that even that 30kg was staged.
Hahahaha!
Politicians are completely stupid world wide. Well maybe not Putin though. Chess player.
It's like a Gold Buy Back Program...or sumpin.
Just bring us in Grandpa's old gold coins he's got sitting around in the closet before they get out into the street in the wrong hands and they hurt someone!...lmao!
If we can save one child, it will have been worth it ;-)
Some people seem to think brown people are dumb.
This should settle any argument.
Percy... does your mother know your online with out taking your medication?
Please explain the relevance of your comment.
Smart enough to turn it into clothing. That may seem weird or gaudy or something, but when they are searching your bag at the airport, I doubt they will think to test your shirt.
This is what will happen in the US when the gummint tries to collect all the guns.
Gold is down hard this year in US dollars only. Hence the Cash4Gold stores. There are at least a dozen here in fucking Concord CA, numbnuts USA, home of the eight-year F350 no-down loans. Unreal. The next correction will be a doozy. The future of the Bay Area is disturbing to contemplate.
So glad I moved away from there. I miss some things, but that all goes away when I read statements like yours.
Get married in India, they take in quite a haul of gold and silver. Guys I work with literally go back to India and throw the wedding for their entire towns. The biggest so far that I have heard of is 6000 guests. It is customary to give a gift of gold or silver at these weddings.
The pictures of their weddings are incredible. All of them have paid under $8000 for their weddings, BTW.
Yeh went to my mates wedding near Bhuj. Pretty sure I was first white guy in their village. Giving them gold is part of the ceremony.
The Indians have a little more sense than the people in the west. They know their governments are inept, corrupt and useless. The people in most western countries wave the flag with such a vigor.
Wave harder fucker or you'll go to the camp!
Indians still remember their wealth being stolen by agents in the City of London Corporation.
(British East India Company / also known as The Honourable Company)
They'd rather fight than go through that again.
That's not enough for them? Just re-hypothicate that shit. What the fuck is the problem?
Are those guys called hypothecaries?
Re-Hypothicating Gold in India is showing
the Same gold necklaces to 8 different girls trying to get laid...
or is it showing them to 8 guys i get so confused
Some towns in India have no girls AT ALL. Usually the mother-in-laws forces the daughter-in-laws to have an abortion if the fetus is a girl. So the one unlucky female that tries to walk through some of these areas will be lucky to survive after she is gang banged by about twenty dudes. Scary place. I guess they don't have trigger warnings or micro-agressions.
Indian gold holders aren't stupid enough for giving away their physical stuff against a paper promise which will be broken sooner or later.
Smart move, dudes.
Why am I thinking of MyRA? Cultural differences aside, anyone smart enough to buy phyz isn't gonna give it away to the .gov.
Recently it was found (or lost) that the place where Indian customs kept its kilos (or tonnes) of confiscated gold had nothing but gold painted blocks (probably insiders looted all) .
Similarly ,the gold from GMS may also vanish someday & find its way back to switzerland or british caymen islands
FWIW the Padmanabhaswamy Temple in Kerala with super-major holdings of assorted treasure ("by far the wealthiest institution and place of worship of any kind, in the recorded history of the world") is reported to also possess "gold plating equipment", and it seems that at times the security procedures surrounding the opening of vaults was not always followed with the strictest diligence.
Not to worry, though. Those high priests are pretty darn holy, so it's all good.
Do these Indian Gold Bonds come in the form of a roll?
Perhaps a sausage roll, but not beef
hahahaha
Probably 30 Kg of gold bitcoins, these people aren't stupid, have been around for thousands of years, their culture has seen it all. No need to worry though, the government will for sure leverage those 30 Kg a billion to one, economy will grow!
If someday paper money is worthless and gold is illegal, how are the men with badges and guns supposed to get paid? I suppose cops could just steal what they need or force shopkeepers to accept worthless banknotes, but in such a lawless environment, the word "illegal" has no meaning.
When china started using paper money the penalty for not accepting paper currency was death. So you joking around about forcing might not be joke at all.
If there are penalties associated with not accepting paper, just set one price in paper and another price in gold. Your prices in paper money can be sky-high. No one will pay with paper except a crony first receiver or government official on an expense account and you can quickly unload the paper for goods you can sell for gold.
hell 30 kilos? here in america we could fractionally reserve that gold into 7 trillion in bonds by friday.
Monetizing is pretty much just counterfeiting, why even monetize, just print.
Everything looks great on paper
Everything looks great on paper
I love this reason for converting Physical Gold into Electronic Gold given by the government.
'Second, there is no risk of theft since the gold is held in dematerialized form.'
In other words, nobody can steal it because it no longer actually exists ....and now its gone.
They should have said "there is no risk of theft, because we have already stolen it"
Indians generally don't use toilet paper, probably why they weren't interested.
lol
"lol" is punk ass, something Obama and SOS Lurch might use in emails.
last time i checked Ben Bernake said that gold is not money, wonder why governments want it
Only gold is money.
I want myra
Mulato Yanker reems ass
The POG in India in 1980 - 2015 rose some 24x in local currency. Indian gov't offer won't tempt anyone.
ROTFLMAO.
If these STUPID Indian government officials try and seize the Indian populations gold, hey, it's their ass, and heads on a pike.
Jus sayin.(really good luck with that one)/s
I have another article (referenced back to reuters) that says that the actual collection is...hold your breath...400 grams!
http://www.thehindubusinessline.com/economy/only-400-gm-in-modis-gold-de...
The other scheme of actually selling gold coins by the government has had a runaway success.
Exactly tyler fudged his number its 400 grams not 30 kg!!