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The Manipulated Markets of The U.S Russia and Ukraine

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2 comments to The Manipulated Markets of The U.S Russia and Ukraine

  • Frank Zak

    India Drops 80:20 Gold Import Restrictions
    By Neils Christensen of Kitco News
    Friday November 28, 2014 11:37 AM
    Editor’s Note: The article was updated to include comments from UBS.

    (Kitco News) – In a surprise move, the Indian government has removed restrictions on gold imports and although generally positive for the gold market, it wonโ€™t significantly change the overall bearish tone, according to some analysts.

    On Friday, the Indian government removed its current 80:20 import rule, which said that 20% of all imported gold had to be mandatorily exported before any new shipments could be brought in. Analysts have pointed out that the news is a surprise because recently there was speculation that the government would tighten import rules.

  • Ed_B

    The Indian Gov has a REAL problem with gold. As most of us know, gold IS a competitor to fiat currencies, and the Indian people are choosing to hold gold rather than rupees. It’s not that they use a lot of gold in commerce but a LOT of their savings is in the form of gold rather than in currency. While a lot of people write this off as a cultural thing, this has the effect of weakening an already very weak currency via the great size of the balance of payments deficit as more and more rupees leave the country to buy foreign gold. The last estimate I read indicated that the Indian people might be holding as much as 18,000 tons of gold, mostly as jewelry.

    Like China, India also has a long and storied history. Part of that history includes failing fiat currencies, so Indians, being smart people, do not wish to repeat that history during their lives with the rupee. So, they save their money in gold, which is not a fiat currency and which does maintain its value over long periods of time.

    Would that more Americans felt the same way. Unfortunately, we do not have such a long history as do India and China, and we have not suffered a currency collapse, although FDR’s 69% devaluation in the US dollar in 1934 came awfully close. While the US dollar may or may not collapse in our lifetime, another devaluation seems awfully likely to me. Instead of it occurring via presidential decree, however, it most likely will occur via China-Russia cornering the available gold in the world, and then resetting the gold price to some number that is substantially higher than its current price. Such is the nature of economics: those who have a thing have great control over its price. In the past, gold prices were set by the US-UK but today a process is occurring that will shift it towards the East.

    But those Western gold vaults have been mostly emptied to maintain the current fiction that nations can indefinitely consume more than they create. Clearly, they cannot, and this will become quite clear when the price of gold surges MUCH higher and those without gold will be paying more and more of their income, not only for the basics of life but for everything. There will be a terrible wealth squeeze put on by this as incomes stagnate but prices rise rapidly. Those who hold gold (and silver as well) will be able to sell their metals for enough fiat to pay those rapidly rising prices. Those who do not have metals will see their incomes consumed by life’s necessities and them having less and less discretionary income for other things. If it gets bad enough, they will have no discretionary income at all and might not even be able to afford the basics anymore. Perhaps at that point, they will finally realize that those of us in the PM community have not been talking through our hats all this time. It will be too late for them to learn this lesson and profit from it… but we will. ๐Ÿ™‚

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