Gold | wealthymatters

The Wisdom Of Our Ancestors

April 7, 2012 3 Comments

wealthymatters.com Here is an excerpt from an interesting from the interesting article here:http://tsr.net.co/2011/07/sone-ki-chidiya-india/911

India is one of the largest importers of gold in the world. As per World Gold Council, a total of 158,000 tonnes of gold have been mined till date. Out of this Indians’ private holdings is considered to be the highest at 15,000 tonnes. American citizens’ holdings is a mere 4000 tonnes.

The estimates of private holdings with Indian citizens vary from 15,000 tonnes to 25,000 tonnes. Even accepting the lower estimate of 15,000 tonnes at current prices of approx US $ 1500 per ounce, the valuation of the Indian private holdings is equal to US $ 725 billion.

India’s GDP is around 1.5 Trillion US $. If our economy has a growth rate of 8 %, the GDP increases by US $ 120 billion. In the last one year, gold has appreciated from approx 1250 $ per ounce to 1500 $, an appreciation of over 20 %. In view of the rupee getting stronger against US $, the appreciation in rupee terms is lower at about 15%. If the above rate is applied to the Indian household holdings of gold, the value of Indians gold holdings has gone up in the last one year by about US $ 90 billion. Read more of this post

Filed under Precious Metals, Tidbits Tagged with Gold, Gold Investment, India's private gold holdings, postaday, valuation gains, wealth effect

Gold To Preserve Wealth

April 5, 2012 1 Comment

Gold is generally believed to be a hedge against inflation.However there has been a spate of articles disputing this belief.I found this nice article here that analysis the relevant data for India http://sachasingh.blogspot.in/2010/01/is-gold-good-hedge.html . The graphs and table below are extracts from this post.

The graph below shows the movement in WPI and average prices of 10 gms gold in Mumbai from 1970-71 to 2008-09.

Eloquent Defence of Gold

April 4, 2012 2 Comments

Mr Buffett’s views on gold (post before}will definitely help us realize just how much money can be made in good times from the possession of various assets like securities and farmlands.But come the hard times there is just nothing else that compares with gold.Ganesh Ratnam explains how gold has been a pretty good investment for Indians.

Gold: India’s Capital Asset through History

Mises Daily:Tuesday, October 27, 2009 by Ganesh Rathnam

India’s obsession with gold is well known around the world. To most Western commentators, this obsession seems irrational, and Indian people seem like incurable gold bugs.

However, on closer examination, gold ownership in India is neither excessive nor irrational. In fact, when religious, cultural, and historical perspectives are considered, India’s appetite for gold seems rather matter of fact indeed. Nonetheless, it is not lost on any Indian worth his or her salt that gold is the asset that best protects wealth and freedom.

When my father, a pediatric surgeon, wanted to buy land to construct his clinic and supplement his meager government income, he purchased the land by mortgaging my mother’s jewelry. Similarly, millions of people in India have capitalized their businesses or farms, or secured their basic necessities after severe business reversals, by pledging their gold jewelry. As we shall see below, were it not for gold, the average Indian’s lot through history could’ve been a lot worse.

India’s Per Capita Gold Holdings

India’s private gold ownership is difficult to determine accurately. However, several websites, such as Gold Eagle, estimate the total private gold holdings to be about 15,000 metric tons. Compared to that figure, the Indian government owns a negligible 360 metric tons of gold. Read more of this post

Filed under Precious Metals Tagged with black money, Gold, Gold Control Act 1962, Gold Investment, pledging gold, postaday

Warren Buffett’s View Of Gold

April 4, 2012 5 Comments

wealthymatters.com “Today the world’s gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce – gold’s price as I write this – its value would be $9.6 trillion. Call this cube pile A. Read more of this post

Filed under Precious Metals Tagged with estate planning, Gold, Gold Investment, postaday, Warren Buffett

The Gold Tax

March 27, 2012 Leave a comment

wealthymatters.com The following is the work of Ila Patnaik,a professor at the National Institute of Public Finance and Policy, Delhi.It was published in today’s Indian Express.

These days it is fashionable to talk about how gold is draining away India’s precious forex,how gold is the refuge of black money and how opting for gold is somewhat anti-social and unpatriotic.I decided to post this article here to remind people of how gold has long been a good friend of Indians of all classes and especially of Indian women.Gold has been around a lot longer than the subject of economics and economists.Economic fads come and go but gold worked for our grandparents and will not fail us.Keep your gold.Hold it as bullion or high karat jewellery and keep it safe and do not be tempted,pursuaded or coerced to exchanging it for paper of any sort whether currency notes or gold deposit/accumulation schemes,ETFs,certificates or dematerialized units.

Having said my piece I will now leave you to get on with reading the article below

With increased import duties on gold, we return to pre-liberalisation thinking

The inflation crisis of the last six years, coupled with a persistent lack of financial inclusion alongside a decade of high GDP growth, has given an upsurge in demand for gold. The increase in custom duty on gold proposed by the Union budget, and the reduction in the loan-to-value ratio of gold loans by the RBI, will hurt the poor. Read more of this post