# $10,000 Gold: Why Gold's Inevitable Rise Is the Investor's Safe Haven Book



## CanadianCapitalist (Mar 31, 2009)

Is anybody reading the book $10,000 Gold: Why Gold's Inevitable Rise Is the Investor's Safe Haven? I got a review copy recently and I have to say that I find it very hard to plow through the book. One reason is because the book gives disproportionate space to conspiracy theories. One example: the Federal Reserve is a private bank, which serves the interests of a narrow clique at the expense of the American taxpayer. But here's what the Fed says about its ownership:



> The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution.


http://www.federalreserve.gov/faqs/about_14986.htm

The book then makes a sweeping claim that the same European banking families own other central banks including the Bank of Canada. Except that the Bank of Canada is a crown corporation owned entirely by the Government of Canada.


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## andrewf (Mar 1, 2010)

Just put it down and step away.


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## CanadianCapitalist (Mar 31, 2009)

That's probably a good idea.


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## Echo (Apr 1, 2011)

I got a review copy of this book, too. I think I'll follow Andrew's advice.


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## andrewf (Mar 1, 2010)

Books like this are just selling confirmation to the already-converted.


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## dogcom (May 23, 2009)

If it were true and the Fed was just in it for the few then they will end up being their own worse enemy as they bring everyone else down on them. They may be this foolish by bailing out big banks and allowing CEO's getting huge bonuses and it still goes on today. 

http://nsnbc.me/2013/05/02/world-ba...ollar-as-an-international-currency-is-waning/

It seems Karen Hudes of the world bank is not a Fed supporter and the world is tiring of the US dollar.

Of course don't forget the huge intervention continuing in all markets today telling us the jury is out on what the Fed is doing.


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## GoldStone (Mar 6, 2011)

CanadianCapitalist said:


> Is anybody reading the book $10,000 Gold: Why Gold's Inevitable Rise Is the Investor's Safe Haven?


You'd have to pay me good money to read such crap.


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## fatcat (Nov 11, 2009)

i love gold
but i realize that i can't really think rationally about it

i am not alone in this, most people can't consider it calmly and dispassionately

abx is has a yield over 4% and offers excellent diversification to a portfolio
but nobody seems to trust the company ...


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## dogcom (May 23, 2009)

ABX got way out of touch with its costs and is paying the price for this. In the past they had to close their hedge book which cost them a bunch of money so yes their is problems trusting what they are going to do. This is why I prefer SLW although they are silver instead of gold, because they don't take on the cost risks that go with the mines.


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## dogcom (May 23, 2009)

I also pulled this one from Zero Hedge on why the Fed should be abolished.

http://www.zerohedge.com/news/2013-05-07/11-reasons-why-federal-reserve-should-be-abolished


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## Echo (Apr 1, 2011)

I only agreed to look at the review copy after I saw that Jon Chevreau posted a review on MoneySense - http://www.moneysense.ca/2013/04/29/10000-gold/

Apparently he knows the author, but he gave an honest review.

"A counterview might have strengthened the manuscript.

If there is a weakness in $10,000 Gold, it is this: anyone viewing this industry with some objectivity would be forced to put Barisheff himself in the “gold bug” camp."


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## Rusty O'Toole (Feb 1, 2012)

I'm reading The Power of Gold by Peter Bernstein. Some interesting history but I can't go along with some of his ideas. For example he takes the typical Keynesian view that inflation is good for the economy and therefore debasing the coinage is a good thing. Failing to notice all the great empires and wealthy powerful countries he describes, thrived for centuries when they maintained the value of their money but went down hill and collapsed as soon as they debased their coinage.


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## andrewf (Mar 1, 2010)

Depends what you mean by thrived. There was no progress in quality of living until the start of the industrial revolution. Your average Briton in 1700 AD was not much better off than one in 700 AD.


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## Belguy (May 24, 2010)

Being a simple man, I just allocate 5 per cent of my portfolio to precious metals and periodically rebalance to keep it at that level.

Then, due to advancing age, I take a nap.:sleeping::sleeping::sleeping::sleeping:

Don't worry. Be happy.


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## Rusty O'Toole (Feb 1, 2012)

andrewf said:


> Depends what you mean by thrived. There was no progress in quality of living until the start of the industrial revolution. Your average Briton in 1700 AD was not much better off than one in 700 AD.


That has nothing to do with debasing the coinage.

How about this. England was on a gold standard for 100 years from the end of the Napoleonic Wars to WW1, the value of their money did not change at all. The British Empire was the world's greatest power. During this century their standard of living rose in a truly unprecedented manner.

In the succeeding century the pound has lost 90% of its value as Britain slid from top of the league to has been.

As British power and relative wealth declined the standard of living of the average Briton increased. But I question the idea that debasing the currency CAUSED the increase in the standard of living. In fact I would suggest the increase in wealth was greater, relatively speaking, in the 19th century when there was no inflation at all, but tremendous progress in science, technology, manufacturing, education and many other areas.


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## andrewf (Mar 1, 2010)

Dunno, I think today's Britons are better off than their 1917 counterparrts.

You're also not mentioning the crushing depressions that were a regular occurrence under the gold standard.


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## willow1044 (Jan 30, 2012)

http://www.zerohedge.com/news/2013-0...d-be-abolished


Good article. Although I believe that 11 reasons are 10 too many. The single and only required reason is that money comes into the system as debt and therefore the harder we work the more in debt we become. And this is why we keep having financial bubbles.

Debt slavery baby!


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## andrewf (Mar 1, 2010)

Currency is a liability of central banks. Not of people...

And if someone has a debt, someone else has an asset. That's an accounting identity, and as immutable as the laws of physics.


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## willow1044 (Jan 30, 2012)

Rusty O'Toole said:


> In the succeeding century the pound has lost 90% of its value as Britain slid from top of the league to has been.


The interesting thing about 'debasing' the currency is that its never mentioned about how you get paid WAY MORE today than you did 100 or 200 years ago. Sure, bread used to cost $0.05 a loaf, you also got paid a dollar a day. Always amazes me how this little fact gets missed...

I've tried finding reference to historical real wages / incomes but it's harder than I thought. Here's a quote from the Guardian with regards to real wage increases over the last 30 years.



> In the seven years to 2009, earnings increased at a rate of 3.7% a year in nominal terms, and thanks to low price inflation by 1.6% in real terms, continuing a trend of positive growth in real earnings every year since the late 1970s.


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## willow1044 (Jan 30, 2012)

andrewf said:


> Currency is a liability of central banks. Not of people...
> 
> And if someone has a debt, someone else has an asset. That's an accounting identity, and as immutable as the laws of physics.


I'm guessing this is a comment on my post.

Currency isn't really a liability except in a theoretical sense. It can't be converted (into gold or another currency for example) and if you could go to the federal reserve and ask to cash in their liability (ie: dollars) they'd look at you pretty funny I'm guessing.

And yes, accounting identities are relevant here, it's just that our debt is greater than our assets by definition since money is created as debt.

In reality, the liabilities created as the result of issuing money rest with the government that has to borrow its own currency. And by extension the citizens of that country that have to pay that debt back. The result is a massive 'debt' that is used to gut social programs, and any other manifestation of responsible government. Debt is a tool that can be used to accomplish what force cannot. Just take a look at what Europe is going through. Germany has managed to find a way to run the continent without firing a single shot.

At the risk of hijacking this thread (and I'll leave it at this): it's our money, and until we can create debt free money our society will never truly prosper.


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## dogcom (May 23, 2009)

Willow1044 you are right about the 5 cents loaf of bread not being mentioned when talking currency debasement. Today however things are a little different with the way central banks hide inflation. Real inflation is much much higher then reported inflation so wages may not have kept up with the misleading way inflation is reported. Also the manipulation of the stock market higher, bond market higher and precious metals lower also puts out a confusing picture of the value of things. 

I would also like to say that even 30 years ago you had a good idea of what things cost and how you would budget for it. Today with all the fees, high housing prices brought on by rates being manipulated lower and ever increasing costs of hiring professionals like plumbers for example it is getting far more difficult to see the true cost of things. We all seem to like near zero interest rates but the true cost will be revealed with even the smallest increase of interest rates by historical standards.


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## willow1044 (Jan 30, 2012)

dogcom said:


> Today however things are a little different with the way central banks hide inflation. Real inflation is much much higher then reported inflation


Along with claims about $ debasement, claims of undocumented inflation are also pretty common. Here's what Paul Krugman has to say about that issue:
http://krugman.blogs.nytimes.com/2011/12/18/inflation-conspiracy-theories/

and another post:
http://krugman.blogs.nytimes.com/2011/06/02/billion-price-update/

If anything, we're much closer to deflation than inflation. The last # I heard for Canada was something around 0.6%.

If that doesn't make any sense to you, think about it this way: average real increases in family income have been stagnant or declining for 30 years (give or take). How can prices for things climb dramatically when people have less money to spend on them? If people have a tough time buying your bread at $4.00 a loaf how are you going to sell it to them at $5.00?

The other thing to consider regarding inflation is that the natural state of a capitalist financial system is deflation brought about by innovation.Think about electronics as a really good example. The cost per CPU cycle or megabyte or RAM has fallen dramatically. Cars are built better and include more standard features than they ever have. I can fly from Dublin Ireland to London England for $5 (EUR), plus tax of course. Free broadband access via wi-fi hotspots is practically universal. The list goes on. 

There's a lot wrong with the world but currency debasement and runaway inflation aren't two of them.


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## willow1044 (Jan 30, 2012)

So how is this related to the original topic? Well, it's pretty common for gold bugs to make both of those claims that people's purchasing power has been destroyed due to inflation and that gold is protection against that. But, if peoples real incomes have actually been increasing and inflation is low, then it would be best to stay away from gold.

Here's a chart from Prag Cap showing real gold prices since 1871:
http://pragcap.com/chart-of-the-day-real-gold-prices

As you can see, the price of gold has born little resemblance to inflation. In fact, as a store of wealth from 1941 to 1971 gold was a terrible investment. The same is true from 1910 to 1931 and 1981 until today (where it continues to drop).


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## dogcom (May 23, 2009)

Gold is a drive towards sound money and inflation under control gives the fiat currency the look of sound money so no need for gold here. People also drive to gold when there is distrust in the system as seen with the Cyprus debacle and the sounds of more bail-ins to come. Look at the demand for gold around the world right now as prices drop. I find it very odd that a price of something would drop as demand goes up big time.


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## CanadianCapitalist (Mar 31, 2009)

dogcom said:


> I find it very odd that a price of something would drop as demand goes up big time.


From what I understand, ETFs are reported to be redeeming gold in big numbers which is cited as a reason for gold's decline. I'm curious why you say the demand for gold is "going up big time".


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## HaroldCrump (Jun 10, 2009)

CanadianCapitalist said:


> I'm curious why you say the demand for gold is "going up big time".


There are reports in the media that demand for *physical* gold has gone up significantly in the last few months.
Esp. from China, India, and more recently Japan.
The physical market is now supposed to be largely disconnected from the paper market.
There are reports of gold bullion traders in the middle east (Dubai, etc.) demanding a steep "sales premium" for selling physical gold, over and above the regular price.

I have no idea how much real truth is in these reports, or whether these are simply chest-thumping by the gold bugs - but such reports are widespread since Feb/Mar.


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## CanadianCapitalist (Mar 31, 2009)

HaroldCrump said:


> There are reports in the media that demand for *physical* gold has gone up significantly in the last few months.
> Esp. from China, India, and more recently Japan.
> The physical market is now supposed to be largely disconnected from the paper market.
> There are reports of gold bullion traders in the middle east (Dubai, etc.) demanding a steep "sales premium" for selling physical gold, over and above the regular price.
> ...


Thanks for clearing that up Harold.


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## Hawkdog (Oct 26, 2012)

just for interest sake, there is a reference to ETF's selling off gold in this interview as well. Not much else in the interview


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## fatcat (Nov 11, 2009)

HaroldCrump said:


> There are reports in the media that demand for *physical* gold has gone up significantly in the last few months.
> Esp. from China, India, and more recently Japan.
> The physical market is now supposed to be largely disconnected from the paper market.
> There are reports of gold bullion traders in the middle east (Dubai, etc.) demanding a steep "sales premium" for selling physical gold, over and above the regular price.
> ...


i'm thinking mostly chest thumping ... silver gold bull is selling generic silver rounds for $2.46 above spot

a lot of dealers run tight inventory and run out often which makes supplies appear tighter than they are

in any event i think it is the big paper traders who move the prices not the small retail buyers

the bugs have an explanation for _everything_ that happens in the metals market, the current meme is that physical supplies are unavailable


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## dogcom (May 23, 2009)

Apparently this physical buying also happened when gold went cheap back in 08. I am also hearing of people wanting their physical gold and being refused or settled in paper. Also from what I understand GLD holds 100 ounce bars and knocking down the paper market can loosen out these gold bars to the bullion banks.


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## andrewf (Mar 1, 2010)

People being refused physical gold? I'm skeptical.


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## dogcom (May 23, 2009)

Just googled and took one of the first stories I could see.

http://goldsurvivalguide.co.nz/more-warnings-about-physical-gold/

I am also hearing things like physical demand is on a 1:1 basis, the paper supply is easily 100:1. There is no gold just paper to settle in unless you have huge amounts of cash like the banksters or China and Russia as examples.


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## CanadianCapitalist (Mar 31, 2009)

Saw this report today:

http://www.gold.org/media/press_releases/archive/2013/05/gdt_q1_2013_pr/

It appears to confirm that demand for jewellery, coins and bars are up but total demand is down because ETFs had a significant net outflow. Lower demand = lower price.


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## dogcom (May 23, 2009)

The ETF's must sell as the paper price drops because the ETF's I believe are almost paper as well. I don't think the ETF's own the gold and if they do it is being pushed out by the paper market into strong hands. I have zero faith in the CRIMEX and don't believe in the ETF holdings of physical gold. I believe you have to own the quality producing stocks or the metal itself and stay away from the paper market.


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## HaroldCrump (Jun 10, 2009)

There is another underlying issue in the physical gold market, and I believe this one has some degree of truth in it - that of sovereign gold holdings.
There is a lot of uncertainty around how much gold each of the major world governments have, where it is, and how much of it is truly callable.

Major gold powers, incl. Britain, Germany, and the US have mortgaged out some of their physical gold to other governments in return for forex reserves.
Those governments, in turn, have mortgaged and re-mortgaged it to others in a complex pyramid of leveraged physical gold.
This occurred particular during gold's spectacular run up between 2009 and the summer of 2011.

Now, there is confusion around where exactly is each ton of gold and how easily these layers of mortgages can be unwound, if needed.

Germany demanding its gold back from the US vaults earlier this year re-ignited this discussion.

Late last year, there was a big dog-and-pony show with the Queen of England and the Duke touring the royal gold vaults with the Chancellor of the Exchequer and "verifying" all the physical gold bars in the royal vaults.
At the end of the tour, during a brief press meet, the Queen quipped : _I gather not all the bars belong to us_

Now, the UK has mortgaged a lot of its gold out as well over the last decade.
But, they are also holding gold on behalf of other countries, incl. some European countries.

Could physical hold holdings be as hard to trace when the time comes as the CDO derivatives during the financial crisis - cut up in tranches and sold and re-sold numerous times all around the world.


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## fatcat (Nov 11, 2009)

harold,
you are correct, there are lots of questions about ownership by central banks
and some central banks are buying

there is confusion in the gold market

but most of what you hear are bugs referencing other bugs

dog, you need to back up your point by referencing a mainstream financial news source, not a site devoted to gold

most of the references to gold on this forum are links to and from sites devoted entirely to gold
of which there are thousands

gold is a religion and an article of faith to some people


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## Hawkdog (Oct 26, 2012)

fatcat said:


> most of the references to gold on this forum are links to and from sites devoted entirely to gold
> of which there are thousands
> 
> gold is a religion and an article of faith to some people


Thanks for pointing that out, I should have mentioned that in my post. Definitely it was from a gold bug.


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## dogcom (May 23, 2009)

I agree fatcat but the problem with the mainstream media is there is no real reporters anymore. Almost all information about anything has to come from other sources unfortunately and I am not just talking about gold. Do we really know what is going on in Syria as an example. Or what really happened in the Benghazi attack and why didn't Obama do anything about it before it happened. There are a ton of questions about almost everything happening in the world and there are not many mainstream reporters doing the work like they did in the old days to get whatever the truth is out.

We do get a ton of reporting on entertainment like American Idol, Kim Kardassian or what Honey Boo Boo is doing as people have just lost interest in anything that is real in the world.


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## Belguy (May 24, 2010)

Gold investors don't care anymore--they just want out!!

http://www2.canada.com/calgaryheral....html?id=b5e89947-3e45-4903-a97a-8cf1aa8ad2ac


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## ban (Nov 1, 2012)

That is a good sign. Keep buying and be patient... :encouragement:


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## Belguy (May 24, 2010)

ban said:


> That is a good sign. Keep buying and be patient... :encouragement:


That's one thing that gold bugs need--patience!!!


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## PuckiTwo (Oct 26, 2011)

dogcom said:


> Just googled and took one of the first stories I could see.http://goldsurvivalguide.co.nz/more-warnings-about-physical-gold/


I am referring to the article dogcom posted:


> First Jim Rickards reported that a Swiss bank refused to deliver roughly $40 million of gold bullion to a wealthy client for 30 days, and only finally physically delivered his gold when the client brought in his lawyers and threatened to take his story to Reuters and other syndicated financial news networks.
> 
> Later in the week, James Turk reported that he is aware of another individual who has been trying to take physical possession of approximately $550,000 of silver for two months now from a Swiss bank with zero luck. Turk further elaborated that the bank has been trying to pressure the client into accepting the cash equivalent market value of the silver, rather than deliver the physical silver to the client.


The question remains of why investors want to take possession of their physical gold/silver deposits from Swiss banks. In 2011/2012 Marc Faber was quoted as recommending in ‘Wirtschaftswoche’ “to spread wealth around regionally, e.g. gold”. According to the article Faber has a large part of his gold deposits in Switzerland, “but not all. Every time I fly back from Switzerland to Asia I take some gold with me”. The article goes on to say, “In case something happens Faber wants to have gold where he lives - and in other safe havens”......... 

If this sounds too fantastic - presently there is a lot of fear among Europeans that their banks+EU+individual countries are working on getting more control over peoples’ cash and investments


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## dogcom (May 23, 2009)

I am not positive of how much gold the Swiss banks have but I do believe we are in a fractional gold system where paper may outnumber the physical 100 to 1. The deal is everyone wants the physical and so there is a nice premium over the paper price and if it gets wide enough then people will want delivery and then sell it in the physical market. Of course this will also scare people in the paper market because if they fear the gold is not there then they not get paid back properly.


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## dogcom (May 23, 2009)

dogcom said:


> I agree fatcat but the problem with the mainstream media is there is no real reporters anymore. Almost all information about anything has to come from other sources unfortunately and I am not just talking about gold. Do we really know what is going on in Syria as an example. Or what really happened in the Benghazi attack and why didn't Obama do anything about it before it happened. There are a ton of questions about almost everything happening in the world and there are not many mainstream reporters doing the work like they did in the old days to get whatever the truth is out.
> 
> We do get a ton of reporting on entertainment like American Idol, Kim Kardassian or what Honey Boo Boo is doing as people have just lost interest in anything that is real in the world.


Here is a little more on the mainstream media. Of course it comes from a perma-bull silver site.

http://silverdoctors.com/7-things-a...that-they-do-not-want-you-to-know/#more-26920


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## HaroldCrump (Jun 10, 2009)

India's Finance Minister is _begging_ citizens to stop buying gold and invest in stocks and mutual funds:

*Contain uncontrolled passion for gold: Chidambaram*
http://www.hindustantimes.com/busin...on-for-gold-Chidambaram/Article1-1065559.aspx

_Finance Minister P Chidambaram on Friday asked countrymen to contain their "uncontrolled passion" for gold and instead save in financial instruments_

If one were to read the first couple of paragraphs, it sounds like some holy monk asking his followers to control their passion for sex :rolleyes2:

Ironically, nearly 1 year ago, the then Finance Minister of India - Pranab Mukherjee - made the exact same appeal.
http://www.businessinsider.com/indi...aign=Feed:+businessinsider+(Business+Insider)
_Speaking at an awards ceremony, Mukherjee said (via iBNLive) that he regretted all of the inflows into gold.
He said that there is a need to promote financial literacy in the country and to push people to invest in market instruments – stocks, bonds, Forex etc._

Even more ironically, Dr. Pranab Mukherjee is now the President of India.

As for the "stop buying gold" movement started by these revolving door clown Finance Ministers, try getting the Japanese to stop eating Sushi instead.
Or the Americans to stop eating hot dogs.
They may have better luck with that.

In the last few years, India's currency has devalued severely against the USD (and Gold).
They seem to be coming a full circle since the late 1980s when India had to mortgage its entire sovereign gold reserve to the IMF under an economic liberalization program.
Part of that IMF led program was a gradual un-pegging of its currency - the INR from the USD.

During the last decade, India has seen massive, uncontrollable inflation that is destroying the middle classes.
They are obviously buying gold as a hedge against that.


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## fatcat (Nov 11, 2009)

HaroldCrump said:


> During the last decade, India has seen massive, uncontrollable inflation that is destroying the middle classes. They are obviously buying gold as a hedge against that.


are you sure about that harold ? ... how much is the middle class buying with an understanding of the importance of inflation hedges and how much is the lower class buying as they always have because it is their traditional store of wealth ? ... i suspect the majority of the buyers just buy out of habit but i may be wrong


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## HaroldCrump (Jun 10, 2009)

fatcat said:


> are you sure about that harold ? ... how much is the middle class buying with an understanding of the importance of inflation hedges


The vast middle classes in China, India, etc. may not know fancy sounding words like inflation hedging, but they certainly understand what it is.
Thy hypothetical Chinese housewife - Mrs. Wang, her Japanese counter-part Mrs. Watanabe - understand the traditional role of gold.

http://1goldinvestment.com/japan-and-china-start-new-bidding-war-for-gold/

^ the problem with links like the above are that they are almost always posted on gold bull websites.
Take their propaganda with a bit of salt, but I do believe that the reports of record levels of physical gold buying are indeed true.

The Indian govt. slammed an import duty on gold over a year ago.
In the last 12 months, that import duty has been increased twice, and is now double of the original amount.
Things like that are not propaganda.

Central banks do not want citizens to buy and hoard gold - that is not a good use of forex reserves in their mind.
They would like citizens to use the country's forex inflows in different ways, such as buy stocks and mutual funds :rolleyes2:



> how much is the lower class buying as they always have because it is their traditional store of wealth ?


It is indeed the traditional store of wealth.
Now, I don't know what the wealth level cut offs would be in India to qualify one as middle class vs. lower class, but given the high rate of poverty in India, I'd say not many in the lower classes can afford to buy gold.
It is the middle class and the _nouveau rich_ that can afford gold at these levels.



> i suspect the majority of the buyers just buy out of habit but i may be wrong


There has been a significant increase in the volumes of purchase YoY, though.


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## new dog (Jun 21, 2016)

It seems gold and silver are making a comeback, maybe things are starting to rot in the banking world. At some point fiat comes to nothing so we will have to see what happens.


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