Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
The Reserve Bank of India (RBI) will go to far lengths to curb the country’s gold imports: Raising import duties, banning credit-card purchased gold, restricting imports and even begging.
But one thing the RBI won’t do is take god’s gold.
Earlier this week the Bank infuriated some religious communities after sending letters to temples asking them to let the government know exactly how much bullion is in their possession.
The inquiry sparked fears that the government would try to restrict gold imports by buying gold from domestic sources, namely temples.
Indian temples have vast amounts of gold – 35,000 tonnes according to India’s NDTV. One temple, Sree Padmanabhaswami, allegedly holds 1.3 trillion Rupees worth of gold jewellery.
According to DNA, major temples will not take any action before speaking with government officials.
On Wednesday, NDTV reported that minister JD Seelam said god’s gold is only a “last resort.”
“I don’t think we will need to do that,” he told the news outlet, while reminding the public that Finance Minister P. Chidambaram has pleaded with Indians to curb gold purchases over the next year while the country tries to reduce its current account deficit (CAD).
Gold and oil are India’s largest imports and high levels of purchasing have eaten away at the state’s Forex reserves and devalued the Rupee to record levels this year.
Meanwhile, Indian gold demand in the second quarter of 2013 jumped by 51% compared to the previous year.
Seelam cautioned that with the upcoming festival of Dhanteras – an occasion when Indians typically buy gold – people should be extra cautious and resist the temptation.
“They already have sufficient gold,” he told NDTV. “They can use it. If everybody uses their own gold, it is more than sufficient.”
Comments
esqualido
Now, if you just issued a currency backed by gold, a la the $USD before FDR, where the rupee was a receipt for gold, you would have plenty of gold spontaneously entering the Treasury (but that would be too simple)