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As gold smuggling rises, India’s tax office calls for lower import duty

by Chris Powell, GATA:

Seizures of smuggled gold by the directorate of revenue intelligence has risen by an unprecedented 330 per cent during the April-September period as compared to last year, prompting the directorate to call on the finance ministry to bring down the import duty on the yellow metal and make smuggling less lucrative.

This development comes even as gold imports have jumped by around 450 per cent year-on-year in September touching $3.75 billion, which calls into question the effectiveness of the high import duty of 10 per cent.

Experts say that import duty has failed to as a deterrent and demand for gold has only gone up.

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1 comment to As gold smuggling rises, India’s tax office calls for lower import duty

  • Ed_B

    “As gold smuggling rises, India‚Äôs tax office calls for lower import duty”

    Gee, who woudda thought that creating an artificial shortage of a desired commodity would actually (gasp!) lead to an increase in the smuggling of that commodity? Like, perhaps EVERYONE who has even a tenuous grasp of economic principles?

    /sarc off

    This is what happens when governments take the easy path of addressing symptoms rather than the real problems they confront. History is chock full of examples of people in many countries trying this sort of thing and so far they have a perfect success-free record. By this time, it is safe to say that only idiots are still doing dumb things like this.

    The people in India want gold. It is a strong cultural tradition with them and has been for a long time. Like China, India has a very long history. They have seen fiat currencies come and go and many of their people have suffered great hardship because of these unbacked currencies collapsing and becoming worthless. They all know from personal and family histories passed down through the generations how that can have a terrible effect on people. The current fiat currency in India, the rupee, is not a strong currency. The people in India do not entirely trust the rupee not to collapse as so many other fiat currencies have before it. Because of this, they have a strong tradition of holding their wealth in physical gold in their possession, rather than placing all their faith in their government and its weak currency. IMO, they are most wise to do this.

    The US does not have such a long history as do India and China. We could benefit from analyzing their history to find the things that worked and that failed and adjusting our situation in light of this information. So far, however, only a small percentage of Americans stack gold and silver against the day when our currency stumbles and perhaps falls. Having an alternative currency in hand is a terrific idea. It is a financial “Plan B” that will pay tremendous dividends if / when the US$ collapses or is revalued, as it was back in 1934. During hard times, it is always better to have more options than fewer options and gold and silver DO provide more options than holding all our wealth in paper instruments that may or may not survive an economic collapse.

    Many economists say that the US cannot have an economic collapse. Personally, I think that they are wrong and are saying that because that is what their employers want to hear. My opinion is not based on emotion but on the math of our current situation. The US has an economy as well as monetary and fiscal policies that simply are not sustainable. An objective view of our habit of consuming more than we produce and borrowing the difference on a regular basis should be something that everyone understands cannot work over the long term. Can you spend more than you make forever? I can’t and neither can anyone else, even a government. Bad monetary and fiscal policy is bad policy regardless of the size of the entity doing it. Yes, a government can do it longer than an individual but that does not make it good policy. It just means that they can do bad policy longer than we can. The end result, however, will be the same… bankruptcy followed by destitution.

    Currently, there are virtually no restrictions on US citizens buying silver and gold. It would be foolish of us to assume that this will always be the case. Those of us who believe that the US is already collapsing in a manner that is similar to a slow-motion train-wreck are preparing for the day when this becomes so obvious that even the sheeple cannot avoid understanding it anymore. When that happens, the bidding on gold and silver will commence and LARGE amounts of currency will come into these metals. Since the quantity of metals available is neither particularly large nor elastic, the market will determine who gets what via rising prices. This is how a free market equitably distributes a limited resource in the face of very rapidly rising demand. Be ready for this, as this will be the time when we can sell off SOME of our stack to buy things we really need… such as land, a business, a home, etc.

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