Indian's fortunes are about to change. 

By Vin Maru, Golden Fortunes
Aug 27, 2011

Being Indian and Hindu by background, I found the article below very interesting. The author could be biased and for good reason, but it’s interesting to see a Indian website discussing the gold standard being introduced into the monetary system, something I am all for.

I think the push for gold being introduced into the monetary system will come from India and China, the 2 largest cultures in the world who have an affinity to gold and have always been collecting it as a store of value.  China until recently, had a ban on its population buying and owning gold, this has changed in the last few years, so their appetite is big. Being the oldest and biggest democracy in the world, India as a country and its citizens have always bought gold and will continue to do so forever.  Unlike western cultures who believe in paper wealth, Indians have always had an affinity to gold and this will never change. 

So during the last 30 years, while gold prices were depressed, it was mostly the Indian’s buying from Western Central banks during the lows.  When have we ever seen central banks get things right. Their investment motto should be sell low, buy high and print as much fiat paper as you can to cover up your mistakes.  As they continue to print fiat paper, the price of gold and silver will rise just because of the demand for the physical metal, let alone Central banks have now become net buyers of gold.  Indian were buying low and over the next decade will be selling high if a selling at all.d

As a culture, I believe that Indian’s have a the most physical gold in the hands of the people, mostly in jewellery form but  of highly quality 22K out of 24K  gold or about 92% pure.  There probably is no other culture out there who can rival Indians when it comes to its citizens having so much physical gold in any form.  This will be a game changer for  the Indians in general as the price of gold and silver rise.  When the Roman Empire debased it’s currency and it fell, most Romans and it’s conquered colonies went into the dark ages.  Their citizens endured tough times as a result of the debauchery in the Roman currency.  However, many eastern European countries where totally unaffected and even actually prospered during these times because they were still using pure gold and silver as a currency and medium of exchange.  With so much gold in the hands of people, average Indian citizens will financially prosper without having to doing anything accept holding on to your gold.

It will be interesting to see if we do go back to a gold standard and at what price it will come in at.  Regardless of whether or not gold will be introduced back in the monetary system, the price of gold will rise because of basic supply and demand economics.  The price of a product will rise when demand is high and growing and when supply is flat or decreasing, this is Economics 101, something every gold bear should know or they will be schooled by the physical market very soon. 

The Indian population will experience a rising standard of living as their savings in gold and silver increases dramatically over the next decade.  This new found wealth will be because of rising gold prices and not from GDP growth or higher employment in India.  In fact, many Indian live on a day to day basis with wages/commissions just covering daily living expenses.  It’s their savings in gold that will help them experience a better standard of living and even allow them to prosper during the next decade.

Being born in India and coming to Canada when I was 4 years old, I never understood the value of Gold.  Western culture took over my identity and thought  process.  Growing up, I would see my mom buying Indian jewellery (22Karat) and would criticize her saying it was a bad investment and why waste your money on it, especially when you can invest the money in the stock market and make a significant return on your paper money.  Studying finance at University, I only knew about stocks, options, futures, bonds and real estate as an investment, so I would keep pushing my parent to invest in these markets.  Little did I realize that my mom, who has very little education,  was a more prudent investor and saver that I was.  

After studying the financial markets and turning bullish on gold 7 years ago, I now understand why Indians value gold as an investment and a form of savings.  Now it’s the west’s turn to realize the same thing Indian’s have known for thousands of years,  Gold and Silver is true money and savings.  The Indian culture has always been skeptical and untrusting of gov’t, banks and paper money, maybe the rest of the world has a lot to learn from their 5000 years of experience.

Please pass this message on to every Indian you know.  Let them know that their fortunes and wealth are about to change for the better.  As a culture, we may become one of the most richest people in the world over the next decade.  History, knowledge, experience and a raging bull market is on our side.

Regards,
Vin Maru.

Drifting back to gold standard
http://www.thehindubusinessline.com/opinion/columns/s-s-tarapore/article2032360.ece?homepage=true