“One
week ago we reported that central bank purchases of gold in 2014 were
the second highest in the past 50 years, driven by purchases out of
Iraq, Kazakhstan and - most of all - Russia, with no offsetting
selling. But what about other more conventional sources of demand?
Take jewelry, which while very strong in the beginning of the
century, dropped off after the Great Financial Crisis, and then
tumbled again after India imposed numerous restrictions on gold
imports, which however merely forced the local population to find
novel ways of smuggling gold into the country.”
“In
short, even with extended draconian measures created by India to
prevent capital account outflows as a result of uncontrolled gold
imports (which still take place only 'under the table'), a whopping
1000 tons of gold ended up in the form of gold trinkets in 2014
mostly in India, and to a lesser extend in China.”
“All of
that is about to change: earlier today India's Economic Times
reported that the RBI, surely facilitated by the drop in oil prices -
a key import for India - has finally lifted its ban on imports of
gold coins and medallions by banks and trading houses. The RBI in a
notification also said banks are permitted to import gold on
consignment basis. Domestic sales will be, however, permitted against
upfront payment only.”
“What
all of the above simply means is that the government, tired of
fighting a losing war with gold smugglers, has opened up one more
avenue by which gold can enter the country on an official, and
taxable basis, and as a result physical gold will now resume flowing
into India officially, a process which depending on how much gold is
being mind out of the ground could mean a rapid depletion of the net
available gold in any one period.”
More:
More:
As BRICS are in the processes to
decouple economies from the Western neoliberal monetary monopoly,
they could bring back the gold standard as a base for their
transactions, which is much more steady than the paper money
unstable financial bubbles. They are ready, because they are
emerging economies with billions of potential consumer tanks and
can attract other countries too being victims of the international
financial mafia, like Argentina and Greece.
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