Monday, July 22, 2013

India's CAD, rupee fears drive RBI to crack down further on gold imports, price to rise

The Indian government is doing everything in its power to dishoard its citizens of their private gold holdings.  The false cover is that importing gold is accretive to their current account deficit, and further weakens their currency, the rupee.

It's a cover because importing gold balances out the net worth of its citizens against a backdrop of a debauched sovereign currency; hoarding hard assets does not contribute to the currency's weakness.  In fact, a central bank accumulates gold to strengthen its foreign exchange value.

The most effective way to reduce a country's current account deficit is to export more goods and services, and to reduce its over-spending.  The fact that the Indian government would impose controls and taxes on its own citizens is troubling and indicates corruption, which has been running rampant.

India is no longer a British colony, but it sure acts like it in this regard.  Kowtowing to the crooked global banking system which financializes every market sector, is not an act of a sovereign nation, but one of subservience at the expense of the masses.

Contrast that to the Chinese government, which encourages Chinese banks and citizens to convert paper currency into physical gold holdings, and one gets a sense of which country is preparing for the demise of USDollar hegemony.

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