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Showing posts from November, 2015

Arrival of Mr.Gold BOND!

After a number of measures taken to convert the investment in physical gold to paper gold, the government may have at last found the secret formula by introducing the Gold BOND scheme this week. Let us look at the interesting developments behind the arrival of Mr Gold Bond! The Problem The fundamental problem being addressed here is in ensuring that the Indians' love for the yellow metal does not damage the broader economy. How so? Indians' insatiable thirst for gold leads to huge imports (842 tons in 2014) every year leading to a spike in India's import bill. Gold forms 12% of our total imports. This causes a huge trade deficit, which in turn causes serious repercussions in the economy such as unstable macro climate, low sovereign rating, higher borrowing rates, currency fluctuations, capital outflow from stocks, bonds, rise in interest rate & inflation and lastly lower employment. Since 2013, the government has taken a number of measures ranging from curbing of