Was reading news about plans by RBI to make rupee stronger – and to
stability indian economy – a new plan is being hatched.. RBI (reserve bank of india) will ask banks to
buy back gold from citizens..
Rbi has about 550 tons of gold reserve.
Every year, indian citizens buy (import) almost 1000 tons of gold. The official figure for year 2012 is 820 tons
of gold. That is the legal figure, which
is never correct in indian setting.
Imagine, how much gold Indians would have imported since 1993? 20,000
tons?
What does gold do? Most of it remains in locked up safe/lockers
etc. it blocks all the money as
well. Lets say, 10 grams (1 tola as per
indian usage) cost something like rs.30k.
here we are talking about 1000’s of tons!! Imagine, if all that money was
spent on education… since 1993!!
Thus, Govt. should not help to increase demand of gold. It should sell whatever gold it has.. all the 550 tons of it, and then allow gold
to be imported to india as much citizens want to. Thus breaking its demand, and flood the
supply.. along with that, should do campaigns
to spread awareness about uselessness of this shiny metal. Rejecting it as a status symbol and fashion
accessory, just the way ‘fur’ clothing was pushed out in the west – as cruelty
to animals.
Warren buffet had quoted, that gold doesn't increase wealth. (google for detailed article on it) And in today’s difficult economic times, Indians and world over people should focus on
development, not hoarding. We will have
to learn to deal with our insecurities (which lead to this hoarding behavior in
the first place).
By being less worried about our future, we can make it better for
ourselves and future generations!
1 comment:
interesting psychological twist on an economics problem. the part about the insecurities. may be govts approach should focus on how to deal with those rather than asking people not to buy gold.
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