Recently I ventured into a Tanishq store to explore if I could afford a miniature piece of jewelry to be given as a wedding gift. There wasn't much on offer that could fit my budget. It was partly on account of skyrocketing prices of gold and partly on account of steep making charges that account for almost one fourth of the total cost! Why not gift a small gold coin then? I made inquiries with the salesman and learnt a couple of things. First is that even gold coins have a making charge though it is much less than jewelry. It may be okay as they use a single rate for buying and selling. Hence making charges must at least cover a margin for trading too. The second fact was that they had no coins to sell!! A few that they did have were fitted with a hook to make them a pendant - a jewelry!
This was a rather shocking discovery. The salesman explained that there were directives from the Government NOT to sell gold coins. There is a news in today's NavBharat Times that says that Post Offices will NOT sell gold coins. This makes the salesman's explanation sound credible. This also means that gold coins were selling fast and the government did not want them to. It is significant that there is no ban on wasteful and expensive gold jewelry and its sale doesn't bother the government.
If gold coins were selling in large quantities, it could not be just for gifting. People are using it as a store of value. This a function that money is supposed to fulfill but the the fiat money is failing miserably to do so. Inflation is high and the government is using pressure tactic to keep interest rates artificially low. On top of these meager interest rates, the interest income is subjected to high income tax! This means that if you keep your savings in the form of fiat money or even bank deposits, its value is getting continually and seriously eroded. And the blame for all of this squarely rests with the government. It is their economic policies that have lead to this bleak situation. Ordinary citizens facing such predicament cannot be faulted for trying to store their hard-earned savings in gold which is far more inflation resistant and risk-free.
This being the case, denying the option of investing in gold to a common citizen is unfair and unjust. The government is persisting with its bungling, inefficiencies and populism happy in the knowledge that the costs can be forced down the throat of a hapless middle class. Will the judiciary take notice of this please and can they remedy the situation? We don't know who else to look to for a remedy.
This was a rather shocking discovery. The salesman explained that there were directives from the Government NOT to sell gold coins. There is a news in today's NavBharat Times that says that Post Offices will NOT sell gold coins. This makes the salesman's explanation sound credible. This also means that gold coins were selling fast and the government did not want them to. It is significant that there is no ban on wasteful and expensive gold jewelry and its sale doesn't bother the government.
If gold coins were selling in large quantities, it could not be just for gifting. People are using it as a store of value. This a function that money is supposed to fulfill but the the fiat money is failing miserably to do so. Inflation is high and the government is using pressure tactic to keep interest rates artificially low. On top of these meager interest rates, the interest income is subjected to high income tax! This means that if you keep your savings in the form of fiat money or even bank deposits, its value is getting continually and seriously eroded. And the blame for all of this squarely rests with the government. It is their economic policies that have lead to this bleak situation. Ordinary citizens facing such predicament cannot be faulted for trying to store their hard-earned savings in gold which is far more inflation resistant and risk-free.
This being the case, denying the option of investing in gold to a common citizen is unfair and unjust. The government is persisting with its bungling, inefficiencies and populism happy in the knowledge that the costs can be forced down the throat of a hapless middle class. Will the judiciary take notice of this please and can they remedy the situation? We don't know who else to look to for a remedy.
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