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Guest Post: Will India Stop Buying Gold?

Tyler Durden's picture


Submitted by Jeff Clarke from Casey Research

Will India Stop Buying Gold?

We've read mixed reports about how lofty gold and silver prices are affecting demand in India. One month we're told demand is up, and the next it's supposedly down. I'm not suggesting that official reports are inaccurate, but it is admittedly confusing and doesn't help us understand the real trend in the country.

Why should we care about the gold market in India? Well, let's face it; the nation is one of the biggest consumers of the metal, a major driver that can give us hints about demand and investment trends, along with what to perhaps eventually expect here in North America. But reading third-party reports about India is very different than getting information firsthand from a credible source in the country. I wanted to get to the bottom of what's really going on in India by talking to a reputable bullion dealer who could give me the inside scoop, an up-to-the-moment dispatch from the front lines, as it were. So I did just that.

Ashish and Rashmi Sand own Savio Jewellery (Savio means "shine" in Italian), a design studio and jewelry factory in Jaipur, India. They've received many design and manufacturing awards since starting their business six years ago, winning five awards in just the past six months. They source gold from bullion agents in Jaipur, who in turn obtain it from dealers in Hong Kong, Dubai, Mumbai, and Delhi. They have industry contacts, friends, and relatives that span the globe, from the US and UK to Asia and Australia. If anybody knows what's happening in the physical gold and silver bullion markets and the Indian jewelry market, it's them.

In this exclusive interview, you can read what Ashish and Rashmi told me about unstoppable demand, growing silver interest, budding demand for coins and bars, reduced selling, shifting trends with women, burgeoning ETFs, and why they believe a bubble is headed our way…

Jeff Clark: Ashish, tell us about your manufacturing facility and design studio.

Ashish: Savio Jewellery makes conceptual jewelry, which can be worn in five or six different ways. It looks "heavy" but is extremely lightweight. It's also affordable.

We design what you want, for as much as you want to spend. For instance, one of my customers wanted a necklace and earring set for her daughter's wedding; based on their budget, we were able to manufacture a set using 35 grams of gold [about 1.2 ounces].

Jeff: Do you have any difficulties sourcing metal?

Ashish: We don't face any difficulties in arranging gold, whether demand is high or low, because the traders hedge gold on daily basis. We also keep a reserve of gold so that our manufacturing doesn't slow down if metal isn't immediately available. Our suppliers of gold don't face any problem procuring gold, either.

Jeff: How would you describe demand for gold right now in India?

Ashish: We are seeing several shifts in the trends for gold demand. First, even with the increase in price, demand is still strong. People have not stopped buying. Part of this is cultural; wearing gold jewelry in a wedding is a longstanding custom in India and will not change regardless of price.

In fact, our shops are experiencing increased buying in spite of higher prices. Previously we would have one or two customers per day for gold, but now we have five or six. We are getting plenty of new customers, and see new customers more frequently now.

Second, I would say that awareness among customers has increased. Now they see jewelry also as an investment and want a proper return on their investment. Further, due to fluctuations in price, they may book in advance – i.e., if a customer orders a jewelry product, they lock in the gold price ahead of time.

Probably the biggest change we face, though, is that customers are more focused on getting lightweight jewelry, or 14-carat gold instead of 18-carat gold. This is due to the high gold price. This adjustment, however, has not affected the desire to own gold.

The bottom line is that the rise in the gold price has not hampered demand.

Jeff: Are Indians investing more in bullion (bars and coins) than usual?

Ashish: Indians are definitely investing more in bullion due to the rising trend in gold and silver prices. Investing in gold and silver has always been a good idea for wealth protection to Indians, and now we are seeing them buy more coins and bars than they used to. Coins and bars are mainly purchased either in wedding season or during the Diwali festival. Even I purchase gold coins every Diwali – 10 grams, 20 grams, or any amount.

Another factor is that India has experienced many monsoons over the last two years, and the farmers are tending to invest their savings in gold and silver. This is a major factor for the increase in demand for coins and bars.

Jeff: Is much reselling taking place right now? Is it higher or lower than it used to be?

Ashish: Reselling gold has become rare – and this from a country that consumes more gold than any other and where gold jewelry is a central part of the culture. We rarely have customers who sell back their gold or silver. Before we used to have customers who would sell their scrap gold and make new jewelry from it, but now we don't experience many such customers. I would estimate we currently have 90% buyers and 10% sellers, and before the ratio was 80% buyers and 20% sellers.

They're not selling, because they hope that in the next few years the price will rise further and they can get better returns than what they can at present. Just a few years ago, some customers would buy gold expecting to sell when the price rose; now those customers are sure gold will keep rising year after year and are selling only rarely.

Jeff: We've read about an increased interest in silver in India – tell us what you see.

Ashish: Silver demand has increased sharply in recent years, as increasing numbers of investors use silver as a store of value. Customers are also buying silver to hedge against market losses. While global markets have been uncertain over the past four years, silver has provided huge returns and has been an ideal investment. Because silver has provided the highest recent return of all the commodities, this has attracted the average layman.

Silver demand has also increased for the customer for whom the gold price is out of reach. Nowadays, if they cannot afford gold, they switch to silver. So the number of customers requesting silver has increased.

Silver is also part of gift-giving in India. It is customary to give silver items as a wedding gift, and there are rituals where parents gift silver dinner sets to their daughters at their weddings. In addition to dinner sets, silver is usually found in jewelry, such as a necklace, earring, bracelet, or rings; gift items such as glass sets and crafted boxes; and even showpiece furniture.

Last, there is a steep rise in demand for silver in electronic goods.

Jeff: Rashmi, describe how Indian women view gold. And have you noticed any changes in how they view silver?

Rashmi: Gold and silver are firmly embedded in cultural and religious traditions for Indian women. Over the past decade, Diwali and Akshaya Tritiya have become major gold- and silver-buying occasions in India. Gold and silver also play an important role in the marriage ceremony, where brides are often adorned from head to toe in gold jewelry. This reminds me of my own wedding.

[Rashmi is wearing approximately 500 grams of pure gold (about 17.6 ounces), including a necklace, earring, a tika and matha patti on her head, haath phool in her hands, bangles on her wrists, nose ring, arm band (bajubandh), and finger rings.]

So during wedding season, the demand for gold and silver increases. Our women customers prefer lightweight jewelry instead of heavy and bulky ornaments. Increasingly, it also appears they now prefer workmanship over weight when choosing jewelry made from gold. The Indian custom of women wearing jewelry has not changed, though they have started accepting 14 carat gold in order to make it more pocketbook friendly. And people in India wear jewelry to all kinds of parties.

We have also experienced an increased number of women customers in our shop. They still buy gold and silver jewelry, but now they prefer jewelry that is of designer quality and looks good. This is the biggest change I have noticed with women over the past few years; they want jewelry that is unique. They prefer wearing long earrings – danglers or hoops.

They also prefer multipurpose or conceptual jewelry – in other words, jewelry that can be worn in different ways. This attracts the woman customer, as they think they have more jewelry for the same price.

There is a different culture in south India, where the people are more bound to gold jewelry than silver. The parents still focus on giving gold to their daughters for a wedding present. Each part of India has different customs, but the one thing that remains common is that gold jewelry is bought by everyone for weddings.

Jeff: Ashish, you've stated you are very bullish on the price of gold and silver, and that a bubble for prices is ahead; why?

Ashish: To be clear, we are extremely bullish on the price of silver and gold. We believe that both will eventually advance into a full-fledged bubble that will surpass most investors' wildest dreams.

The world is changing and so is the way we invest. Gold and silver were once considered a marginal investment, worn mostly as jewelry or something that was stored in banks. Now it is making a comeback and has become a primary investment asset for many individuals and institutions.

In India, people are very futuristic and are so bound to the culture that they're buying gold and silver in advance. If they know that they are going to marry their daughter in three to four years, for example, they will purchase the gold now instead of waiting when prices will be higher. This will continue to underpin demand and push the price higher.

Jeff: Any other trends you see in India?

Ashish: From the average layman to the high-class educated person, they now want to invest in gold and silver. In fact, those who were investing in equities have been switching to gold and silver. Even the gold and silver ETF has become common in India. This is partly due to rising prices; keeping metal at home has become riskier, so they can avoid the risks of self-storage by using an ETF.

Even I have invested in gold and silver for my personal use apart from my business. Instead of buying equities, I now invest more in gold and silver, with the expectation of getting a good return.

I will conclude by just saying that based on what we see here every day, we believe gold and silver prices will continue to go up.

Jeff: Thanks, Ashish and Rashmi.


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Fri, 03/30/2012 - 20:14 | 2305328 Xibalba
Xibalba's picture

Tungsten for dowry?  

Fri, 03/30/2012 - 20:25 | 2305350 Quinvarius
Quinvarius's picture

Somehow I think he would have noticed that he was making jewelry out of tungsten within the first couple seconds of trying to shape it.

Sat, 03/31/2012 - 08:30 | 2306066 GetZeeGold
GetZeeGold's picture



Let's see....1.5 quadrillion in global market-cap.


divided by the total available supply of gold.


Thus we surmise that gold at $ dirt freakin cheap.


Please don't tell anyone because I'm not done accumulating.



Sat, 03/31/2012 - 14:22 | 2306552 Born-Again Bankster
Born-Again Bankster's picture

I'd like to see one of those chart porn graphs taking into account annual global consumption of gold and silver as a percent of worldwide population and calculating the projected population expansion over the next 25 years to see what would happen to values if the consumption percentage remained constant.  Anyone have links to something similar?  

Sat, 03/31/2012 - 19:59 | 2306972 Oracle of Kypseli
Oracle of Kypseli's picture

Gold value remains the same. The fiat currencies make it look expensive. But a direct answer to you calculations will be gold price to infinity.

The rule of thumb, is:

  1. 100oz of gold will always buy you a nice house in a western country.
  2. or 5 houses elsewhere.
  3. 1oz will get you and Armani suit or a Galanos evening gown.
  4. 150oz of gold will buy you a nice 50 foot ocean going sailboat.

Once the reset kicks in all the above, could be had for 50-65% less

Enjoy the loot

Sun, 04/01/2012 - 18:43 | 2308229 across the rubicon
across the rubicon's picture

I am an Indian. 

There is no Silver ETF in India. (thats an error on mr jeweller's part)

No, Precious Metals havnt become the investment of choice for Indian's just yet. 

Most of the prospective investors I speak to here, are unanimously of the opinion that prices are already wayy too high.


* there is still a lot of skepticism amongst the people who are the largest buyers of gold in the world.

* hence, this bull market still has a long way to go.

Fri, 03/30/2012 - 20:26 | 2305353 urbanelf
urbanelf's picture

It's not like Khazakstan where you just give the father 10 gallons of insecticide in exchange for his daughter.

Sat, 03/31/2012 - 01:58 | 2305845 dark pools of soros
dark pools of soros's picture

was that Khazakstan on Kardashistan?

Sat, 03/31/2012 - 08:16 | 2306051 GOSPLAN HERO
GOSPLAN HERO's picture

Kardashistan women have been soiled by Hamite men.

These women have no trade value.


Sat, 03/31/2012 - 08:56 | 2306090 thatthingcanfly
thatthingcanfly's picture


Sat, 03/31/2012 - 09:58 | 2306149 oddjob
oddjob's picture

I'm sure a whaling ship would harvest them.

Fri, 03/30/2012 - 21:17 | 2305438 ACP
ACP's picture

Hey dollars can still be used for weddings and other celebrations...everyone needs confetti!

Sat, 03/31/2012 - 04:27 | 2305932 Bubble
Bubble's picture

Barmitsvah confetti

Sat, 03/31/2012 - 06:51 | 2305992 The Alarmist
The Alarmist's picture

Dollars won't be very welcome after the Obama administration starts cutting Indian banks out of the global banking system as retaliation for their continued trade with Iran.

Sat, 03/31/2012 - 09:21 | 2306108 Bobbyrib
Bobbyrib's picture

That was bound to happen anyway. We give and take (visas) through free trade while all the while India mainly just takes the most of the benefits of "free trade."

Sat, 03/31/2012 - 14:54 | 2306616 Amagnonx
Amagnonx's picture

Between India, Russia and China - which are all interconnected - why would they care.  They don't really need the rest of the world - if they got cut off, there would be some short term pain - but it would pass quickly enough.

One thing they do need though, are sources of oil - so Iran is necessary for them all, and in the long term so is Afhganistan and the rest of the central orient oil.

Sat, 03/31/2012 - 19:57 | 2306983 Oracle of Kypseli
Oracle of Kypseli's picture

They need Americans to buy their stuff. Wear them two times and buy more. As George Carlin puts it, everyone else's stuff is shit and all your shit is stuff.


Fri, 03/30/2012 - 23:44 | 2305646 stockoptimistic
stockoptimistic's picture

This article fails to mention one of the latest trends in India - Gold backed loans. Previously, it was considered against one pride to keep family gold assests to acquire loans. Now we have profileration of many companies who give out loans in lieu of gold.

Sat, 03/31/2012 - 00:36 | 2305761 Oh regional Indian
Oh regional Indian's picture

Bingo. This Savio gentleman is simply talking his dream scenario.

Glod Loan Companies are THE gold story in India right now.


Sat, 03/31/2012 - 04:29 | 2305933 _Alekhine_
_Alekhine_'s picture

The government of India recently passed a law that would cap the value of loans given on gold to 60% of the value of gold.


The Indian government, like all other governments, has been living beyond its means and wants to spread its inflation across as many people as possible. It's starting to see gold as a threat. Hence the increase in import duty on gold. 


Fortunately, gold has cultural and religious significance in India, ensuring that no government can come close to confiscating it.

Sat, 03/31/2012 - 09:29 | 2306117 Bobbyrib
Bobbyrib's picture

I would argue the import duty has more to do with India's protectionist policies than the government seeing is as a threat.

Sat, 03/31/2012 - 20:02 | 2306988 Doña K
Doña K's picture

By confiscate you mean steal. Correct?

Sun, 04/01/2012 - 09:32 | 2307475 Marco
Marco's picture

The Indian population has been living beyond it's means ... their government is certainly corrupt, but government alone can not sustain the kind of trade deficit India has.

Sat, 03/31/2012 - 15:27 | 2306671 mkkby
mkkby's picture

Did you all catch the lie?  First he said there was no reduction in demand.  Then the next sentence he said people were switching from 24 karat to 14.  The whole article is BS.  No info here on demand.  It is probably falling, but who knows?

Sat, 03/31/2012 - 20:07 | 2306995 Doña K
Doña K's picture

Dowries are just like any other traded asset. They go up and they go down depending on the economic condtions and the balance between the earning potential of the groom vs. the looks of the bride.

Fri, 03/30/2012 - 20:16 | 2305333 Buckaroo Banzai
Buckaroo Banzai's picture

Rupee-cost averaging, baby!

Besides, what the hell else are they gonna do with their worthless fiat.

Fri, 03/30/2012 - 20:19 | 2305340 Vic Vinegar
Vic Vinegar's picture

Ashish: Even the gold and silver ETF has become common in India.

I guess they're not reading over there. 

Sat, 03/31/2012 - 08:27 | 2306061 FinkPloyd
FinkPloyd's picture

Firstly there are no silver ETFs in india. There is only one silver fund (Milestone Bullion Series  - not listed on exchanges), which uses a combination of  futures and physical silver.

One good thing about the Gold ETFs in India , is they are all fully allocated. None of that partially allocated nonsense. That said like all ETFs it's paper gold, with insurance on the physical bullion, and subject to the usual counterparty risk and possibly government confistcation at some point.

Of course the other downside to holding physical, is the indian govt. charges 1% wealth tax on all physical gold over value of 15 lakh rupees (~ USD 30000). 

Sat, 03/31/2012 - 11:46 | 2306259 Quinvarius
Quinvarius's picture

Which is another reason gold will continue to disappear into unreported holes.  All government gold actions cause gold to leave the system into hoards.  Anything the governmnet does will have the exact opposite effect as intended over the med to longer term.

Take all this oil intervention.  It puts producers out of business, causes scarcity, and increases consumption exactly when the opposite should be happening.  So you have several waves of force that are building up under the price.  Then the government intervenes again and the forces get multiplied.  It is like double jumping someone on a trampoline.  The forces either blow the top off (oil prices), or the trampoline (economy) collapses, or both.

The same effect has been going on with gold and silver for 30 years.

Fri, 03/30/2012 - 20:23 | 2305346 disabledvet
disabledvet's picture

When humans stop digging for it i guess.

Fri, 03/30/2012 - 20:25 | 2305349 goldenmiddlefinger
goldenmiddlefinger's picture

Indians N-E-V-E-R stop buying gold.....never!

They have not stopped buying gold for the last 3500 years.....They are not about to start now.

Fri, 03/30/2012 - 22:47 | 2305480 DoChenRollingBearing
DoChenRollingBearing's picture

Then they have the same sense of the marginal utility of gold that many of us in the West do!

"Marginal Utility and Gold" at my blog, gmail me or Google it.

Sat, 03/31/2012 - 12:34 | 2306371 redpill
redpill's picture

Get off gmail

Fri, 03/30/2012 - 20:29 | 2305364 bbq on whitehou...
bbq on whitehouse lawn's picture

Indians will stop buying gold when americans stop washing their cars or buying them.

Gold is not gold in india. its success, devotion and obligation.

If you gave 200 grams of gold to your oldest daughter, would you feel better or worse giving 50 grams to your youngest.

There is so much guilt tied up with gold in many famlies that it may not be possable to discribe.

In Asia obligations mean EVERYTHING.


Fri, 03/30/2012 - 20:51 | 2305395 disabledvet
disabledvet's picture

American obligation:
not bad if your interest is purely purile...

Sat, 03/31/2012 - 15:14 | 2306652 DosZap
DosZap's picture

bbq on whitehou...

In Asia obligations mean EVERYTHING.

Here to, until about 15 yrs ago.

They still have their cultures,values, and more intact,while here it is changing for the worse day by day, thanks to free(taxpayer funded) gub handouts.

Fri, 03/30/2012 - 20:37 | 2305372 goldenmiddlefinger
goldenmiddlefinger's picture

Though I am skeptical of the author's choice of the people he chose to interview. The fake 14 carat bullshit is what Indians do NOT give a crap about. Try selling 14 carats anywhere in the South as something might get lynched. The maximum they might be willing to settle is for 22 carats. That too since it is better for jewellery than the soft 24 carats. This lightweight jewellery bullshit is probably sought by <1% of Indian women. That is a fact!

Fri, 03/30/2012 - 21:11 | 2305427 Monedas
Monedas's picture

He might be trying to make buying 14k more trendy or acceptable.....because there is more profit in it and it's more affordable !  Wishful thinking ?   14k is barely 58% (?) gold by weight and less than 50% gold by volume....unless you're alloying it with Pt ! 10k gold shouldn't even be call should be called 14k copper !   Monedas  2012    Comedy Ganges Funeral Barge Tour

Fri, 03/30/2012 - 23:05 | 2305536 sun tzu
sun tzu's picture

Most East Asians prefer 18k gold. Only Westerners use cheap 14k gold jewelry

Fri, 03/30/2012 - 23:32 | 2305609 whatsinaname
whatsinaname's picture

Wrong! In India it could be no less than 22 or 24 karat...

14 is an abomination.

Sat, 03/31/2012 - 02:32 | 2305879 JOYFUL
JOYFUL's picture

double wong!

As the purchasing power of the average Indian is submerged in a tidal wave of inflation and impending real estate bubbles, the response is to hang on to tradition by buying gold, but changing preference to those more in line with North America's choice of 14 kt jewelry...same phenomena happening in all the gold-hungry states of Asia:

The[Turkish] market is broadly characterised by two contrasting features: sales to the local population which traditionally takes 22 carat 'investment' jewellery and sales to tourists who take 14 carat. However, for some years now, there has been a marked shift amongst the local population, in particular in the cities, away from 22 carat to more fancy, higher mark-up 14 carat articles. Even in the rural areas, the traditional bastion of the 22 carat investment bangle, the consumer is moving to 18 or even 14 carat.

Kartel banking is the abomination...14 k is merely the response.

Sat, 03/31/2012 - 06:00 | 2305964 Sudden Debt
Sudden Debt's picture

Whatever, our average wedding rings are 1/10 ounce of gold. And maybe the average person has 2/10 ounce of gold in possesion.

Sat, 03/31/2012 - 06:40 | 2305982 Moe Howard
Moe Howard's picture

I guess we are not average Sudden Debt.

Sat, 03/31/2012 - 09:31 | 2306122 Bobbyrib
Bobbyrib's picture

No offense, but are you just starting to figure that out now?

Sat, 03/31/2012 - 15:01 | 2306624 Amagnonx
Amagnonx's picture

I'm in SE asia - gold is 23k-24k, sales for anything less are virtually zero.  Silver and gold are easily available here, high purity - no paperwork, prices at spot +1-3%.


I find the 14k idea hard to swallow - that wouldn't sell in this country or in any of the neighboring countries.

Sat, 03/31/2012 - 15:27 | 2306676 DosZap
DosZap's picture

Only Westerners use cheap 14k gold jewelry

Yep, and another reason Western women do not use 18-22-24k, is cost, and they have never been culturally married to the idea of Gold.

And 90% do not wear a tenth as much because they consider it gaudy,and whorish..................its a PURELY cultural customs thing.

Perhaps it would be more widely worn, if it was not considered over dressed, and some biatch did not slit their throats for it.Our women could never walk the streets here loaded up with heavy Au jewelry,their life expactancy would drop off a cliff.

Plus, they have been brainwashed thinking fiat is money..................having never used PM's for money.

Sat, 03/31/2012 - 15:18 | 2306656 DosZap
DosZap's picture


Try selling 14 carats anywhere in the South as something might get lynched.

Yup, I suspect those buying 14, are single women,and just want the appearance of BLING.

Anything lower than 18k-22k, is/was considered crap.

Sat, 03/31/2012 - 20:25 | 2307024 Doña K
Doña K's picture

American women are into large cubic Zirconia. Another impostor. The reason is that the naked eye can not tell if it's a real diamond.

Best way to know if an American woman's diamonds are real is to check if she is chewing gum.

Sun, 04/01/2012 - 05:56 | 2307363 The Alarmist
The Alarmist's picture

A trained naked eye can tell the difference.

BTW, does that rule of thumb also work for breasts?

Sun, 04/01/2012 - 09:41 | 2307487 Marco
Marco's picture

Of course with synthetic diamonds the eye becomes useless and you have to rely on spectroscopy and fluoroscopy ... although why the hell care at that point? Not like diamonds were ever a sound investment to begin with.

Fri, 03/30/2012 - 21:34 | 2305467 Chippewa Partners
Chippewa Partners's picture

Was in India last week.......... had the opportunity to bitch at Christine Legarde at the Taj Mahal Hotel.......she was a typical banker and WENT AROUND the xray machine at the TAJ upon entering.......just not like the rest of us and security didn't do a thing.

The Indians are crazy about anything resembling gold.   Demand for gold in India will only get bigger.  Everywhere I went there were big signs wanting to provide loans for gold collateral.  Imagine that on the New Jersey turnpike some day!!!



Sat, 03/31/2012 - 09:33 | 2306124 Bobbyrib
Bobbyrib's picture

"Everywhere I went there were big signs wanting to provide loans for gold collateral.  Imagine that on the New Jersey turnpike some day!!!"

In the US you can just do cash for gold, our fellow Americans aren't smart enough to hold onto gold as the Fed prints and prints and prints.

Sun, 04/01/2012 - 05:59 | 2307365 The Alarmist
The Alarmist's picture

Puhleeze .... When I was a banker I walked through metal detectors all the time, though when they beeped I just kept on walking. (seriously, in Jakarta they did not even bat an eye when it beeped, just told me it was ok).

Sun, 04/01/2012 - 09:45 | 2307490 Marco
Marco's picture

That was before the elite discovered that they needed a little more radiation to guarantee their safety from the rest of us ... with the rise of cancer causing body scanners they are simply growing accustomed to avoiding them.

Sun, 04/01/2012 - 11:29 | 2307585 The Alarmist
The Alarmist's picture

Oh, I will only go through magnetometers ... Those naked body scanners are very correlated to a number of TSA agent cancer clusters at several airports, which is why you are seeing fewer of the machines and more of the agents ... Oops, they are officers now ... as time goes by.

Want to have fun while being frisked? Innocently ask why their union can't get them issued dosimeters for standing next to the machine, while non-unionized dental assistants get one for standing outside the room while you are being x-rayed

Fri, 03/30/2012 - 22:37 | 2305471 JW n FL
JW n FL's picture






Drive the Price Down!!

Mo Betta! Semi-Free!! Gold and Silver!!


I hope it goes to $1.00 and oz for Gold and $0.10 an oz for Silver!!

They need to add more futures contracts to the COMEX! I am NOT! Kidding! Drive the Price Down!!  

Sat, 03/31/2012 - 01:28 | 2305817 BigDuke6
BigDuke6's picture


its all detailed here - great article on turd f's website

its worth reading the report .... which is rare

Fri, 03/30/2012 - 22:40 | 2305472 e_goldstein
e_goldstein's picture

Good article, but it is "karat," not "carat." 


Fri, 03/30/2012 - 23:02 | 2305526 Sydneysider
Sat, 03/31/2012 - 04:19 | 2305927 Grimbert
Grimbert's picture

Carat in UK spelling, which is what they use in India

Fri, 03/30/2012 - 23:47 | 2305658 Yen Cross
Yen Cross's picture

 I'm Indian/ sarc

                           Will I EVER stop wiping my ass with my left hand?

Sat, 03/31/2012 - 06:04 | 2305966 Sudden Debt
Sudden Debt's picture

As long as you keep poking your nose with your right hand, it's oke

Sat, 03/31/2012 - 11:28 | 2306238 Yen Cross
Yen Cross's picture

 Point taken S/D . I just like to get the froth up. People talk alot, about nothing from the safety of their basements.

Fri, 03/30/2012 - 23:48 | 2305663 Bansters-in-my-...
Bansters-in-my- feces's picture



Bubble head who say's bubble you mean.

Fri, 03/30/2012 - 23:57 | 2305680 Nassim
Nassim's picture

Interesting - an American blog that is interested in what women in India think.

Sat, 03/31/2012 - 01:07 | 2305795 jimmyjames
jimmyjames's picture

Interesting - an American blog that is interested in what women in India think.


Of course we're interested in what the ladies of India think-because as soon as they start wearing paper earrings we'll know the gold game is over-

Sun, 04/01/2012 - 11:31 | 2307595 The Alarmist
The Alarmist's picture

Is it an American blog?

Sat, 03/31/2012 - 00:04 | 2305696 lolmaster
lolmaster's picture

Yes in India they do 24 or 22 usually
None use 14

Sat, 03/31/2012 - 00:09 | 2305708 dolph9
dolph9's picture

Indians buy gold, the problem is they don't know how to use it.

Sure gold is alright as jewelry, but that's not the best use.

Gold is MONEY.

Sat, 03/31/2012 - 05:39 | 2305942 Gringo Viejo
Gringo Viejo's picture

As long as it's physical off the table, I don't care if they use gold for anal beads.

Sat, 03/31/2012 - 05:13 | 2305952 Praetor
Praetor's picture

Dolp9 , alot of the time in India the jewelery is money, they get the goldsmith to affix coins to the chains. These coins  can be snapped off at a moments notice and handed over for goods.

Sat, 03/31/2012 - 00:26 | 2305733 JOYFUL
JOYFUL's picture

And there you have it. As concise an explanation of why EuroMerikans are doomed to the dustbin of history as will ever be found. In a week when even the mighty ZH has floundered upon the rocks of smug cultural assumptions, the clarity of this piece is like a mega-foghorn for those with the wit to actually have a rudder atttached to their boat!

In India, people are very futuristic and are so bound to the culture that they're buying gold and silver in advance.

Futuristic & bound to the culture...a polarity perhaps too big for westerners to get their head around? What's it like to be motivated by respect for tradition(and the ancestors) to give due diligence to thinking about the future? How far the West has drifted from even being able to ask that question! In countries not completely morally adrift, due to the long multi-generational stealth campaign to defraud the people from their past, gold rules~as it always has! Yet in the so-called modern world[developed world\post reality world?!?!] the barbaric relic is possessed by less than 2 percent of that sophisticated, cutting edge populace! Go figure!

The shocking truth is that the West is psychologically defeated, and therefore prey to the vultures who have serially defrauded it of the legacy of great wealth and influence bestowed upon it by the former generations. In less than a century, it's all gone poof...and extend and pretend is just about done.

So called third world, or developing nations, importing huge amounts of precious metals, not just on behalf of their central banks, but to fill the demand of their citizens, are rapidly marginalizing the smug sitting ducks whose (rapidly closing) only window on the outside world is through a distorted MSM spin machine which deliberately reinforces their misplaced arrogance and ignorance of the facts. 

That's why the usually impeccable ZH and many others so badly misplayed the news out of Turkey(another huge gold importer)this week - taking the lense by which they (correctly) view the predations of the western banking kleptocracy to use mistakenly in interpreting events outside their ken....and not grasping the truth that saavy Turks(and Indians etc. etc.) are forcing the hand of their government to resist the huge pressure being applied to them by the pirate Zato alliance....and so voting with their wallets to abandon the Rothschilds banking system.

It matters little that the central banks, and ownership of many of the private banks in these emerging countries are still tied into the old paradigm of parasitism. Events are moving faster than the old rules can handle.

From the average layman to the high-class educated person, they now want to invest in gold and silver. In fact, those who were investing in equities have been switching to gold and silver. Even the gold and silver ETF has become common in India. This is partly due to rising prices; keeping metal at home has become riskier, so they can avoid the risks of self-storage by using an ETF.

What is, in the wake of MFG, a proven path to wealth destruction in the West, is actually working quite well in societies where the fraud and corruption of the Korporo-Kleptocractic state is balanced and offset by the still strong presence of the past.  And the wise combination of past and future thinking is giving those societies the edge in what comes next. Oil & Iran. Zato's fatal appointment with destiny is developing right before our eyes, as mad-dog Clinton seeks the fastest and most maniacal way to sunder America from it's traditional client states and force them to look East instead of West! G-Daff's revenge is right aroud the corner...

Laugh away at your nutty neighbors denizens of EuroMerika, whilst they quietly make off with all the golden acorns!

Sat, 03/31/2012 - 06:50 | 2305991 Moe Howard
Moe Howard's picture

Yep, they rock in India:

In December 2011, over 300 million Indian citizens had no access to electricity. Over one third of India's rural population lacked electricity, as did 6% of the urban population. Of those who did have access to electricity in India, the supply was intermittent and unreliable. In 2010, blackouts and power shedding interrupted irrigation and manufacturing across the country.

They make a lot of money there:

43 per cent of adults' wealth in India is below $1,000, as against the world average of 27 per cent.

Also, a very small proportion of the Indian population (just 0.4 per cent) has net worth of over $100,000.


Now how much gold can someone hold if their net worth is below $1K? A few grams?

We may be morally corrupt, dominated by a 1% group composed of one tribe, but we aren't reading by candlelight yet, like a huge chunk of the Indian population.

Sat, 03/31/2012 - 09:15 | 2306102 goldenmiddlefinger
goldenmiddlefinger's picture

Strength in numbers.

A majority of Indians might not have money for access to electricity. But that is because they have been investing in Gold. 300 Million times a few grams of gold are serious numbers. AND multiply by over a few years, even more serious damage....

Sat, 03/31/2012 - 09:36 | 2306127 JOYFUL
JOYFUL's picture

MOE HOWARD - a man ahead of his times [?]

Sat, 03/31/2012 - 10:52 | 2306197 TrulyStupid
TrulyStupid's picture

And we are seriously fat as well as having 24 hour a day access to Wheel of Fortune. Those poor smucks don't even know how to lever the equity deficit in their homes to purchase a year's supply of ammunition and deep fried twinkies.

Sat, 03/31/2012 - 12:28 | 2306359 akak
akak's picture

I am wanting to be doing the buying of the gold!

Sat, 03/31/2012 - 15:58 | 2306721 Uchtdorf
Uchtdorf's picture

At Goldline's late night call center...

Ring, click, click, tring tring...Hello, this is Bob. Is it gold you are wanting to be buying tonight?


(With apologies to ORI)

Sat, 03/31/2012 - 18:02 | 2306868 akak
akak's picture

If there is being one thing that Indians are universally loving more than gold, it is being the present progressive tense!

Why is this being the case?  ORI, are you being able to enlightening us?

Sun, 04/01/2012 - 00:11 | 2307234 goldenmiddlefinger
goldenmiddlefinger's picture

So that you can being fuck youself in arse....arsehole! (yeah we love to say arse)


Sat, 03/31/2012 - 13:38 | 2306488 Think for yourself
Think for yourself's picture

That you think this is significant shows were you're coming from, and that you have no clue what civilization is.

Sun, 04/01/2012 - 09:58 | 2307500 Marco
Marco's picture

The land of untouchables is a good example of civilization just because they hoard gold? GTFO.

If I want to visit a country with civilized people I'll visit Denmark or Switzerland ... civility lies in civil behavior and education, not view points on capitalism and gold.

Sat, 03/31/2012 - 14:33 | 2306579 finstudent
finstudent's picture

Sure...there are lots of poor people in India, without electricity. But they all have gold. When I lived in India, even our maid servant wore gold bangles..most brides get a minimun of 10 tolas at their wedding...  Why do you think a positive comment about the average indian implies something negative about the average american?

Sat, 03/31/2012 - 00:54 | 2305782 Sandoz
Sandoz's picture

"We believe that both [silver & gold] will eventually advance into a full-fledged bubble that will surpass most investors' wildest dreams." 

Wow, everyone is going to be filthy rich when the bubble surpasses our wildest dreams. I didn't know that becoming rich could be so easy. Is this a dream or is this reality? I dunno, but don't stop! 

Sat, 03/31/2012 - 00:57 | 2305786 Yen Cross
Yen Cross's picture

Ok, I'll take the hit,   I have visited India, and have pictures of (humans) defecating on bridges!

  I'm not taking sides! I will produce the pictures! So Junkster, let's talk!

   India / is NOT a BRiC!  Brazil is more of a BRiC!

Sat, 03/31/2012 - 01:10 | 2305797 JOYFUL
JOYFUL's picture

I have visited Amerika, and that place is really wack! The populace huddle together below underpasses and let the bankster\governing castes shit all over them...and then vote every 4 years for them to be allowed to do it all over agin! But, hey, the government at least prints toilet paper, so everything must be OK!

Amerika is not America...Iceland is more of an America.


I have pictures too! Taken by Corzine's limo driver!

Sat, 03/31/2012 - 02:27 | 2305876 Yen Cross
Yen Cross's picture

 Joyful/ Respectfully!


                                 Smell your ( LEFT INDEX) finger!

Sat, 03/31/2012 - 02:56 | 2305888 JOYFUL
JOYFUL's picture


please take note:

yur fecal fetishism is not a fit phenomena to foist upon this forum.



I clean up after my livestock every ol day,

an never tire of so doin

the stuff they disgorge goes back on the land

and the smell be the profit that scenteth my hand

much more than I can say

of all yur hype about pooin!

Sat, 03/31/2012 - 06:43 | 2305984 Optimusprime
Optimusprime's picture

Well done.

Sat, 03/31/2012 - 09:05 | 2306095 Oh regional Indian
Oh regional Indian's picture

Well said Joyful.

India will recover from it's awful run at Industrialization.

For now, I'm afraid westernization is the theme.

And it looks really really ugly! 



Sat, 03/31/2012 - 09:39 | 2306131 Bobbyrib
Bobbyrib's picture

OK, then let's take a look at the percentage of the population of these countries that are in poverty. How about the percentage of people who can actually feed themselves in both countries? India has lot of catching up to do before it starts talking trash.

Sat, 03/31/2012 - 01:20 | 2305810 suckerfishzilla
suckerfishzilla's picture

When salmon stop swimming up stream Indians will stop buying Gold.

Sat, 03/31/2012 - 13:11 | 2306456 donsluck
donsluck's picture

Soon enough all the salmon will be gone. Where will gold be then?

Sat, 03/31/2012 - 18:05 | 2306871 akak
akak's picture

I'm betting on the silver salmon.

Sat, 03/31/2012 - 01:28 | 2305818 silverdragon
silverdragon's picture

Chinese and Indians will keep buying gold as it is real and has been throughout history. Only idiots buy paper.

Sat, 03/31/2012 - 07:30 | 2306018 Fred C Dobbs
Fred C Dobbs's picture

We're all Indians now.


Sat, 03/31/2012 - 02:02 | 2305850 Clowns on Acid
Clowns on Acid's picture

A lot of caves and dug holes willbe filled up, with pm's from the Indians and effectively all Asians.

Like Fox Con, they know what hunjger is.....the soft fecks from Occupy Wall St don't. Free trade and technology closes the gap...right? the price level in thje West has to start approaching that imn the East.

Price level down bitches...more money printing from the West ...more gold buying by the East.

Whats complicated?

Sat, 03/31/2012 - 09:41 | 2306134 Bobbyrib
Bobbyrib's picture

Junked for not putting free trade in quotations to mock the fact that it certainly is not "free trade", but the giving away of the American economy to developing nations to further enrich the wealthiest citizens of our country.

Sat, 03/31/2012 - 11:23 | 2306233 Deo vindice
Deo vindice's picture

"Free trade" between the USA and Canada certainly was not "the giving away of the American economy..."

It was the sellout of Canadian politicians of the sovereignty of a nation's people and their much sought-after resources.

Sat, 03/31/2012 - 02:07 | 2305853 Clowns on Acid
Clowns on Acid's picture

As things get worse ands worse in Greece, Spain, and Italy of course the citizens will become Bernake disciples and buy US bonds and Euro instead of gold.

Ben Dover Bernanke and his disciples know so much.....and all the citizens of the ECB will place their future w/ Ben.



Sat, 03/31/2012 - 02:32 | 2305878 Yen Cross
Yen Cross's picture

  You Mouth off!  I like the fact that  (opportunity bequeathed) you.

    Do not! Even begin to discuss, ( Trout Fishing @ 12k) with me!

Sat, 03/31/2012 - 02:19 | 2305866 EmileLargo
EmileLargo's picture

Indians buy gold not just because it is a tradition. From recollection, having looked at some charts of gold in Indian currency, apparently, the bull market in gold never stopped in 1980 in India.

The Indian rupee has been debased far more than the US Dollar. If bank accounts never pay depositors a positive real return net of inflation and the currency is subject to exchange controls so that Indians cannot invest in overseas assets, they have only three avenues to escape continuous inflation: (1) property; (2) stocks; and (3) gold. The vast majority of people do not understand (2), which only leaves open options (1) and (3). 

Option (1) is not an easy option for smaller sums of money and not very liquid. This leaves open option (3). These import duties on gold will only exacerbate the problem of gold smuggling, which was apparently a real problem back in the 1980s. A government that is trying to curb imports of gold is saying to its people implicitly that the currency is in trouble. India could have a currency crisis within a year. If oil hits $150 a barrel, WATCH OUT!

Sun, 04/01/2012 - 07:01 | 2307395 Oh regional Indian
Oh regional Indian's picture

Excellent observations Emile.

In fact, a cursory look at the chart of Silver Prices alongside USD/INR is a SHOCKER.

The Rupee has been like a cat that smelt nip for the better part of the last year. I believe India is being set up for a not nice monetary/fiscal event.


Sat, 03/31/2012 - 02:33 | 2305880 Yen Cross
Yen Cross's picture

 7 -11 ( FUCKY SUCKY)

Sat, 03/31/2012 - 06:53 | 2305994 The Alarmist
The Alarmist's picture

Does a bull not shit in Bangalore?

Sat, 03/31/2012 - 06:59 | 2305999 Moe Howard
Moe Howard's picture

Does a Bangalore not take it up the torpedo?

Sat, 03/31/2012 - 20:32 | 2307035 Oracle of Kypseli
Oracle of Kypseli's picture

A better expression is: "Does the Pope have a balcony?"

Sat, 03/31/2012 - 07:24 | 2306016 hungarianboy
hungarianboy's picture

gold knocked sideway. if 1540 is cleared then you can bet to see $1100 or $900 :-)

Good luck you goldbugs. BUGS BUGS BUGS :D

Sat, 03/31/2012 - 09:42 | 2306136 Bobbyrib
Bobbyrib's picture

Have fun defaulting.

Sat, 03/31/2012 - 09:55 | 2306146 Al Huxley
Al Huxley's picture

Good to see you back Nouriel.  Of all the gold analysts out there, you're my favorite, even better than Nadler, Gartman and Buffet.

Sat, 03/31/2012 - 10:47 | 2306188 TrulyStupid
TrulyStupid's picture

The only GOLD I trust is my Golden Mastercard... total return year over year... minus 21%. Perfect for the deflationary environment we live in.

Sat, 03/31/2012 - 12:15 | 2306330 quartshort
quartshort's picture

Well played sir! Investment in plastic futures. Winning!

Sat, 03/31/2012 - 10:49 | 2306194 MeelionDollerBogus
MeelionDollerBogus's picture

impossible. Gold's intrinsic value holds it above 1500 forever. For gold to go under 1000 you'd need to see oil at $10 a barrel and GDP rise 200%.

Sat, 03/31/2012 - 14:27 | 2306566 Bansters-in-my-...
Bansters-in-my- feces's picture

Do not worry hungarianboy,someday you will be a man.

Real men are smart enough to buy gold,but boy's.....

Well you know,not so much.

Sat, 03/31/2012 - 22:10 | 2307125 silverdragon
silverdragon's picture


So how was the lobotomy?

Sat, 03/31/2012 - 22:59 | 2307160 akak
akak's picture

From all appearances, quite successful.

Sat, 03/31/2012 - 09:16 | 2306100 bharat
bharat's picture

I would like to add to the above comments:

a) I personally invested in gold as a hedge to the rupee and will continue to do so. The rupee is affected by the mis-governance of the current Indian government. I believe any crisis (oil / economic) will badly affect the rupee.

b) There is a tsunami of money coming into Gold ETFs in India via gold mutual funds.  Most people are investing via monthly cost averaging.

c) The total money invested in equity mutual funds in India as of Feb 29, 2012 is $31 billion ($=Rs. 51, figures from the association of mutual funds of India website ). The value of gold imported into India in 2011 alone is $51 billion. 

d) I personally don't have any faith in equities. The manipulation at the market maker level as well as the management level is high, apart from the high level of economic uncertainty. Unless you're a smart money player, I don't see how you can come out ahead in this environment.

e) There is a black swan next door called Pakistan. They are suffering the worst economic crisis in their history. All reports point to severe economic and political dislocation over the next 3 years. If they fall apart, the Indian Rupee will suffer a panic collapse.

f) I believe gold will take a hit when (e) happens as people will be forced to cash out their gold to compensate for loss of income as the economy tanks. Their might be forced selling by the entities loaning money against gold as collateral as well. 

g) I believe we (globally) have the technological resources to address most of the resource depletion issues. However, most governments are living in a day-to-day survival mode without looking at the medium term. I support the American governments aggressive use of incentives for hybrid vehicles etc because someone has to take the lead on these things.

Sat, 03/31/2012 - 10:34 | 2306179 EmileLargo
EmileLargo's picture

When my Indian contacts told me about the prices of properties in Delhi and Mumbai, I came to one conclusion: either (1) the properties are in a bubble; or (2) the currency is in a bubble. 

The figures you cite are amazing. $51 BILLION of gold imports in a year??? That really shows how much faith the populace has in the currency! Gold is truly a proxy for the health of a currency. If the gold price stays depressed in any currency, you know the currency (and the country) is in good shape. 

Where I would disagree with you is on Pakistan. I don't think an economic collapse (didn't realise they had an economy that could collapse) would affect India much. Western investor money is not heavily invested in Pakistan and so I do not really see a Pakistani collapse triggering a run on the rupee. I think you could certainly see that happening if the oil price went up any higher. That would be a catastrophe for a number of countries, including India. 

Sat, 03/31/2012 - 11:24 | 2306234 bahaar
bahaar's picture

Economic collapse in Pakistan may be construed as security threat for India.  So there might be a temporary panic.  But the bigger threat seems to be India's current account deficit making Indian economy  very vulnerable to an oil shock.

There's lot of black market transactions in Indian property.   I came across this strange anecdote.  A friend of mine told me that his maid-servant made a deposit of Rs. 80,000 ($1,600) for one room and lives "rent free' for the rest of the year. This woman and her husband probably earn about $3,500 a year.  can't see how they could have save $1600 out of that.  So they probably borrowed $1,600 from the bank.  If so the landlord who took in that $1,600 must be lending it in the black market for a much higher rate than the bank rate.  And there are too many land scams.  Most developers seemd to be building on lands with no clear titles.  And most land deals are settled partly in black.  With so much underground economy it's difficult to make out what the real price of any property is.  And hence the bubble.



Sat, 03/31/2012 - 11:37 | 2306248 malikai
malikai's picture

It seems to me that from a global perspective, a collapse in PK would ring the war worry between India/Pakistan. This should be gold-bullish. Sure, plenty in India and Pakistan would be selling gold to cover losses in other areas, but think about who would fill the vaccum in Pakistan. And how would they distract Pakistanis from the mailaise? Traditionally, war is the best way to distract the masses. Of course, with both countries armed with nukes, war would be flat out stupid for both sides, but people do stupid things when they are in dire straights.

Just a thought. Certainly not qualified in any way.

Sat, 03/31/2012 - 12:26 | 2306354 EmileLargo
EmileLargo's picture

That transaction sounds like an upfront rental payment for the whole year. You are right about the black economy. The prices I have been told about included black money payments. Basically, it makes no sense for houses in some "posh" parts of Delhi to be selling for $100 million. This means that the currency is overvalued. 

Personally, I think a currency crisis would be good for India. The curret government seems even more corrupt than the usual variety and a clean-out of the political class may be no bad thing. But that assumes they would be replaced by people who are better. Somehow I doubt it. 

Sat, 03/31/2012 - 10:07 | 2306161 TWSceptic
TWSceptic's picture

If they know that they are going to marry their daughter


omg sick

Sat, 03/31/2012 - 10:48 | 2306190 Quinvarius
Quinvarius's picture

According to Nadler, India stopped buying gold in 2001 and never started up again.  Then they stopped again every 3 months after that. 

It isn't about India anyway.  You'd have to be a loon to think the only people looking for money are Indian brides.  The dollar is going down like all paper money because the math says paper money is going down.  History says paper money is going down.  Common sense says paper money is going down.

Sat, 03/31/2012 - 12:40 | 2306386 akak
akak's picture

I would add that Nadler's reputation as a supposed analyst of gold is going down as well, but how can that which started at zero move any lower?

Sat, 03/31/2012 - 11:11 | 2306218 Yen Cross
Yen Cross's picture

 It still amazes me? India has massive inflation and pathetic infrastructure.

Sat, 03/31/2012 - 11:34 | 2306244 JOYFUL
JOYFUL's picture

Squeese me?  Did you mean Indiana? 

Why pick one one state...the other's are just as bad!

Sat, 03/31/2012 - 12:11 | 2306320 bharat
bharat's picture

Whatever inflation India has, it is reported on and is probably close to the actual rate.

In comparison, do you think the numbers reported by the Americans and Chinese are correct? For example, the housing component of the CPI in the US was flat during the boom. They used a component called Owners Equivalent Rent. When house prices started falling, they changed over to using an actual housing price index in the CPI. Therefore, true inflation was massively discounted in the U.S. I am sure it happens in China as well.

Regarding the comment about pathetic infrastructure, you are only partially correct. But I believe in a concept called "functional quality". If the infrastructure that is there is functional to the extent that it serves my purpose, then that is sufficient for progress. Right now, that is the case. The roads are getting better slowly and in some states, the infrastructure is very good. That is why global manufacturing companies are looking at India as an export hub for certain volume products, such as small cars. With the upcoming EU-India FTA, the manufacturing sector will get a big boost.

Re: inflation, I run a manufacturing business and one of our main focus areas is on cost containment. We have a technical team that focuses exclusively on improving processes and products, with the result that over the last 3 years, I raised my prices to my customers by only 10%. However, our cost of inputs (on a unit basis) went up by 30%. You can manage inflation by being smart about it.

Sat, 03/31/2012 - 12:23 | 2306346 quartshort
quartshort's picture

How many raises did you give to the workers? What is their ave monthly pay? Answer those questions honestly, please.

Sat, 03/31/2012 - 12:40 | 2306384 bharat
bharat's picture

Average unskilled worker makes about $175 per month at the bottom of the chain. Those who are willing to invest in learning move up rapidly. For example, one supervisor just left because he got a 50% raise after getting trained in a specific process. The star performers at the higher levels (esp. managers) have doubled their salary in the last 3 years (because of a commensurate increase in their deliverables).

Sat, 03/31/2012 - 15:32 | 2306681 quartshort
quartshort's picture

Thanks for the honesty, honestly. I would venture to guess that is a livable wage there? That would cover the expense for my family's food bill about 11 days in the US. That brings great perspective on my end.

Sat, 03/31/2012 - 23:42 | 2307203 bharat
bharat's picture

Food here is subsidized. You might be surprised to know that even on that salary they own their little "home" free and clear without a mortgage.

Sun, 04/01/2012 - 07:55 | 2307416 prole
prole's picture

The international input on ZH is awesome. Thanx Borat!

I would venture to guess that yourself and your peers hold their wealth in RE and Gold and don't worry too much about the high inflation of the national currency. That you/peers rather assume the high inflation and protect yourselves with gold? Just a thought.


Sun, 04/01/2012 - 10:17 | 2307517 bharat
bharat's picture

Yes, but also Real estate and gold are sinks for unaccounted (black) money. So the undeclared profits are used to buy jewelry etc. The inflation protection is secondary. What people look for is nominal return in excess of 18% per annum. That is high enough to account for any inflation.

Sat, 03/31/2012 - 12:30 | 2306361 EmileLargo
EmileLargo's picture

You sound pretty switched on. I would like to carry on a broader conversation about possible investment strategies there. Can we do it on email?

Sat, 03/31/2012 - 12:45 | 2306396 bharat
bharat's picture

I just enabled the Chat function on the Zerohedge site. Just go ahead and enable the Chat and contact me.

Sat, 03/31/2012 - 12:31 | 2306363 LULZBank
LULZBank's picture

Indians and Chinese are only accumalating Gold for it to be taken away, if history repeats or even rhymes, as the saying goes about fool and his money.

India and China are over rated, they are 2 additional layers in the global ponzi and are getting carried away with it. They never were leaders or pioneers. They are just frolicking with all the euro and dollar investments they have had as part of expanding the global fiat ponzi and when that collapses, so will they.

India will collapse before Pakistan. Pakistanis know what they are doing, Indians dont. Old imperialists dont go away so easily.

Sun, 04/01/2012 - 06:05 | 2307367 The Alarmist
The Alarmist's picture

Yeah, like gold has never been confiscated in the land of the free.

Sun, 04/01/2012 - 08:00 | 2307418 prole
prole's picture

It was more like "confiscated" as in ~~ only the stupid surrendered their gold, the goons didn't go house-to-house (zenga-zenga) for the precious... they just put out a call to the sheople, and the sheople delivered as they always do the brainwashed little dears.

I read that somewhere along the line Indira Gandi ran a RE confiscation on the Indian rich~~ could be wrong but I read that.

Land of the free property taxes are so high, it is basically confiscation anyway.

Sat, 03/31/2012 - 13:57 | 2306516 Bansters-in-my-...
Bansters-in-my- feces's picture

"Will the bear stop shiting in the woods"?

My guess is no.

Sat, 03/31/2012 - 14:35 | 2306584 finstudent
finstudent's picture

And no one buys 14karat gold jewellery in India! People are buying more gold as their earning potential rises.. I was looking for a locker in India for my mom's jewellery and there was a six month waiting period for lockers at HDFC. The rep said he'd known of a couple who actually took out a loan against their gold jewellery so they could get a locker while they went on a vacation overseas.

Sat, 03/31/2012 - 22:21 | 2307131 silverdragon
silverdragon's picture

Try and get a safety deposit box in Hong Kong, it aint easy. The hardest thing about buying PM's in HK is getting enough boxes to store them in.

Sat, 03/31/2012 - 15:07 | 2306631 Paramount leader
Paramount leader's picture

Indians dont just buy gold out of emotional or historical reasons but also how well it serves as a poor mans offshore bank account or for outright tax evasion

Gold is the easiest way to do it and its easier to trust a jeweller instead of a banker for a drug dealer or the underworld aka hawala operator.

Yes real estate in major cities in India are crazy, A house in New Delhi got sold for around 40$mil recently and theres this billionare in Mumbai who spent half a billion on his home :d

The logical progression for evading tax is Gold<Real estate< Offshore uber private banking services offered at 999 locations around the world from a bank whos name u havent heard of and will never (hopefully!) hear of

Considering how illiquid and out of reach real estate is becoming as an investment option for most enterprising indians the middle class are pumping money into gold.

Most jewellers offer a put option on whatever bullion they sell so whether or not it was counterfeit is a moot point since they have to accept it back if a customer wishes to sell it. they then hand it off to another customer kind of like paper money except its more durable and is prettier to look at and usually isnt contaminated with cocaine in it :d


Sun, 04/01/2012 - 08:10 | 2307429 prole
prole's picture

That so-called put would be null if someone really was selling fake stuff. Like Madhoff or MF or CDS in Greece, when it came time to collect they would just vaporize.

BUT fake gold in India not (hardly much of) an issue, most Indians can deal with a jeweler 'over generations' and the customer will have multiple buying and selling/melting experiences (over generations) so the trust level they have with their personal jeweler will be at a high level.


A-Most or all Indian gold is slightly under-Karated -- It says 22 Gold but it's actualy 19/20 Karat for example, it's still real but there is a minimal cheating

B- Any average Indian on the street knows 100% more about gold than US sheople. (including me and you!)


Sat, 03/31/2012 - 18:06 | 2306870 John Wilmot
John Wilmot's picture

I think we can agree that "free trade" fucks the people of both countries for the benefit of the ruling class of both countries. And when one of the countries in question in the U.S., then the U.S. ruling class benefits more than the ruling class of the other country - because that's how an empire works.

Hell, that's how society works.

Rings of patrons and clients extending outward until you reach the great unwashed who aren't even entry-level collaborators. Well, not everyone can collaborate in the scheme, can they? There has to be someone outside getting fucked or the scheme collapses doesn't it?

Sat, 03/31/2012 - 22:38 | 2307143 silverdragon
silverdragon's picture

Sorry but "free trade" is good for the world as it evens out wealth, the problem is governments always try and manage "free trade". While it is true jobs in American have been negatively impacted by trade with countires such as China, Americans just have to do what the peoples of the rest of the world do and go where the jobs are. Wealth is fluid and it sloshes around the world chasing the best opportunities. The problem in the US is that the govt spends a trillion or two more than it takes in. "Free trade" creates opportunities for entrepreneurs to build companies which lead to jobs for the people and tax revenues for the state.

Sun, 04/01/2012 - 06:15 | 2307369 The Alarmist
The Alarmist's picture

It would be nice if the US actually engaged in free trade.

They are about to sock it to India for buying Iranian oil. Net result if the US is successful would be that India now competes with the US in the sourcing of oil from "approved" sources like our friends, the Saudis (who are now pumping and selling more than ever and almost to full capacity) which can only serve to raise the prices of oil and gasoline paid by US and Indian consumers.

But hey, don't worry, Big O tells us it is greedy oil companies driving up prices, any Nancy P tells us it is evil speculators ... It has nothing to do with bad foreign policy.

We'll just raise taxes and ban speculation and wonder why we get less oil and even higher prices.

Sun, 04/01/2012 - 08:25 | 2307439 prole
prole's picture

I think we can agree that "free trade" fucks the people of both countries for the benefit of the ruling class of both countries.


I think we can agree on no such thing. That is fvcking socialist nonsense. IF, IF we had free trade with Cuba on sugar (cane sugar) all Americans would pay much less for all sugar-based goods like sugar, booze made with sugar, coke and pepsi. I am not saying that crap is good for you I am just saying we would pay much less for it so we would be richer as a result, and the cubans would be richer too as they would get lots of US dollars for it. Likewise iPhones- since we can have them made in CHina they only cost 400$, if they were made in US they would cost $4,000 bux each (and suck in quality).

And when one of the countries in question in the U.S., then the U.S. ruling class benefits more than the ruling class of the other country - because that's how an empire works.

You are referencing mercantilism and empire, like Britain "trading" in Irish food products while starving the populace, or Israel raping Egyptian Natgas for no money as part of whatever scam they had/have going. That is not free trade in any way. I see the same thing happening in Africa as China/India 'buy' up Africa for agricultural land

Sorry but "free trade" is good for the world as it evens out wealth, the problem is governments always try and manage "free trade".

"evens out wealth?" BS it increases the wealth of both parties. As I appear to be the last Capitalist on ZH

Imagine if we had no imported cars? US cars would be stuck at mid-80's era quality (some might argue they still are,) but the prices would have doubled and tripled from current levels NO COMPETITION. Kind of like customer service at the DMV


Sun, 04/01/2012 - 08:42 | 2307449 The Alarmist
The Alarmist's picture

"Imagine if we had no imported cars? US cars would be stuck at mid-80's era quality ...."

Scary part of that statement is that '80's quality was markedly better than '70's quality. '70s, if you don't recall, we're the last big period of "big government can fix all our ills" in the US, Big Labor was still firmly holding the throat of industry (today it has a death-grip on the biggest growth industry, government), and Big Education was flexing its muscles to misappropriate more of the nation's wealth by invoking the mantra of, "We owe it to our children ...."

We can only hope that Big O is retired at the end of this year (and goes peacefully ... Race riots already cranking up, almost on schedule), but Mitt Romney is no Ronald Reagan, and about the best we can expect under his administration is a well managed decline.

Sun, 04/01/2012 - 22:00 | 2308624 silverdragon
silverdragon's picture


Sun, 04/01/2012 - 14:23 | 2307867 spooncutter
spooncutter's picture

you cant fill your gas tank with it

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