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India To Grab 3,000 Tons Of Gold From Temples To Meet Physical Demand? – Eric Dubin
TND Exclusive: Eric Dubin |
Indian Prime Minister Narendra Modi was elected with the expectation India would liberalize gold import duties and other restrictions. Thus far, the Modi government has dragged its feet, executing only modest changes.
Plummeting crude oil import costs have helped tame India’s trade deficit. But after curtailing normal gold demand in a stepped-up effort since the April 2013 gold cartel attack, Indian gold consumers are once again backing up the truck. India imported an estimated 125 metric tons of gold last month, enough to strike fear among Modi officials preoccupied with India’s current account deficit. Perhaps US Treasury Secretary Jack Lew placed a friendly call too.
Trial Balloon Time
What’s poor Modi to do? Raid temples? Apparently, government and industry sources believe gold imports of as much as 200 metric tons or more can be replaced annually if they can just convince Indian temples to deposit gold into the banking system in exchange for interest payments. It’s not even clear if there is talk about letting the temples have title to the gold and the right to get it back at some point — not that that would ever happen!
Indian temples hold an estimated 3,000 metric tons of gold, collected over the millennia from donations. For all we know, that might even be more gold than what remains unencumbered in official US government and Federal Reserve Bank of New York vaults!
The Modi government has also actively explored ways of setting up gold trusts at banks in an effort to meet Indian gold demand with certificate paper-based products. Indian families control an estimated 17,000 metric tons of gold.
Thus far, gold certificate plans haven’t made major headway. Gold certificates don’t wear particularly well around the necks of Indian brides. It’s unclear if a meaningful percentage of the general public will go along with the Temple gold scheme either. One Mumbai-based gold merchant and his father told Reuters, “I make donations to God; not to any temple trust.”
Ultimately, India should classify the importation of gold and silver as a currency transaction. Gold and silver are money as well as commodities, and if Modi sought to display truly innovative thinking and testicular fortitude, he’d do away with the Current Account problem once and for all as that would be pursuant to India’s national interest.
Don’t hold your breath.
Source: http://thenewsdoctors.com/india-to-grab-3000-tons-of-gold-from-temples-to-meet-physical-demand-eric-dubin/
Girls wearing gold certificates around their necks on an indian weding day just won’t cut it but mine would if you took into account all the silver, me head would fall off.
Yes buy out of the fiat baning system that will implode soon or later due to all the CDS in the world but don’t go thinking that you will make a quick killing when I see paper prices dropping even more because they are just digits on a computer and people are still fooled by the bankers into thinking the digits are real.
Same old every week about gold going to the moon (buy mine now, its cheap) but it won’t come into its own untill all the banks have been burnt down and the bankers hung (Happened many times before) and then it will once again be the only game in town.