Monday, February 13, 2012

India's Gold

Last night CBS' 60 Minutes aired a great segment on India's penchant for buying gold. I've written a few thoughts below, but first watch the segment:


First, here are a few notes I took from the video:

1.2 billion people in India. 10 million weddings each year in India. Half of the gold bought in India is jewelry for weddings. In India, a family without gold is an "incomplete family."

Indian households save about 30% of their income compared to Americans who save about 5%.

The tradition that a bride's parents will give her gold is a financial burden to some families.

Gold is so important to the lives of Indians that the poor can now get financing for it.

The World Gold Council is funded by a group of mining companies. Its representative in India created the program to help India's poor buy gold.

Q: How can you be both frugal and conservative yet be willing to spend thousands of dollars on gold?

A: When Indians buy gold, they don't think they're spending money. In their minds, that is a savings. That purchase of gold is going to your savings account. It's not an expense, it's an investment.

Indians believe the price of gold will continue rising. It is impossible to tell an Indian consumer that the price of gold will fall, because the belief that gold will continue rising is backed by its past performance.


To give you an idea of why Indians might view gold's past performance differently than we do, here are two gold charts covering the same period, 1971-2004. The first is in dollars and the second is in rupees.

Gold in India is more than just a store of value. Gold is a visible status symbol of such cultural importance that demand for it apparently exceeds net-production (savings). Some are even willing to borrow money to look like Mr. T, and the mining industry supports this.

To put this in perspective on an aggregated basis, India is importing around $34B in physical gold while running a $150B overall trade deficit. And the trade deficit is still growing, projected to reach maybe $160B this year.

India gold import bill may touch $100 bn
New Delhi, Mon Feb 06 2012

The report said that at these levels, "gold imports are a huge burden on the balance of payments and accentuates the current account deficit".


According to RBI, the current account deficit is a cause of concern because of inelastic gold and oil demand, it said.

With the government increasing import and excise duties on gold and silver, both commodities are set to cost more.

Terming the current gold import as huge burden on the balance of payments, the chamber has urged the government to encourage formal financial instruments to make the investment more productive.

"India's gold imports are unsustainable and the government should encourage channelising savings in formal financial instruments to increase productive capacity of the economy," it said.

It said efforts must be made to introduce more financial saving instruments and extensive education campaigns should be undertaken - particularly in rural areas - to minimise propensity towards gold.

The report said that post offices should be used to sell such government guaranteed instruments to extend their reach throughout the country.

Being the largest importer of gold in the world, India accounts for nearly one-third of the annual demand with import bill rising from USD 4.1 billion in 2001-02 to USD 33.8 billion in 2010-11, it said.

Rupee appreciates for 6th consecutive day on rising inflows, more gains seen
Reuters Jan 19, 2012

The main issue for the rupee has been the financing of its external obligations, including the trade deficit, said Daniel Hui, senior foreign exchange strategist at HSBC in Hong Kong.


India's trade gap widened to $43.9 billion in the September quarter from $37 billion a year earlier, while the current account deficit was little changed at $16.9 billion.


India is the biggest consumer of bullion and the metal, along with crude oil, forms a major chunk of the country's massive import bill.

Foreign institutional investors bought about $3 billion of Indian debt and moved $854 million into shares since the new year began, data from the market regulator showed on Wednesday.

India Trade Deficit Widens as Import Growth Outpaces Exports
February 09, 2012, 9:59 AM EST

India’s trade deficit widened to a three-month high in January as import growth outpaced the climb in exports, the top bureaucrat in the commerce ministry said.


A trade gap Khullar said may reach $160 billion in the current financial year threatens to revive pressure on the rupee after it tumbled the most in Asia last year.

India facing serious balance of trade problem
9 Dec, 2011

NEW DELHI: India is facing a serious balance of trade problem, Trade Secretary Rahul Khullar said on Friday, as export figures so far in the current fiscal year have been overestimated by $9 billion.

India's trade deficit for the 2011/12 fiscal year is seen in the range of $155 billion to $160 billion, he said

Is it possible to buy too much gold?

Interesting question, huh? It seems that all the gold buying in India is contributing to a balance of payments problem, a current account deficit, and a currency overvaluation problem. No wonder they raised the import duty on gold! What's interesting about this situation is that India had a balance of payments problem back in 1991 with similar symptoms.

This is just some food for thought and discussion, but it's also quite a gold story! From Wikipedia:

1991 India economic crisis

By 1985, India had started having balance of payments problems. By the end of 1990, it was in a serious economic crisis. The government was close to default, its central bank had refused new credit and foreign exchange reserves had reduced to such a point that India could barely finance three weeks’ worth of imports. India had to airlift its gold reserves to pledge it with International Monetary Fund (IMF) for a loan.

The crisis was caused by currency overvaluation; the current account deficit and investor confidence played significant role in the sharp exchange rate depreciation.[2] [3] [4] [5]

The economic crisis was primarily due to the large and growing fiscal imbalances over the 1980s. During mid eighties, India started having balance of payments problems. Precipitated by the Gulf War, India’s oil import bill swelled, exports slumped, credit dried up and investors took their money out.

In mid-1991, India's exchange rate was subjected to a severe adjustment. This event began with a slide in the value of the Indian rupee leading up to mid-1991. The authorities at the Reserve Bank of India took partial action, defending the currency by expending international reserves and slowing the decline in value.However, in mid-1991, with foreign reserves nearly depleted, the Indian government permitted a sharp depreciation that took place in two steps within three days (July 1 and July 3, 1991) against major currencies.[2]

With India’s foreign exchange reserves at $1.2 billion in January 1991[7][8][9] and depleted by half by June,[9] barely enough to last for roughly 3 weeks of essential imports,[8][10] India was only weeks way from defaulting on its external balance of payment obligations.[8][9]

The caretaker government in India headed by Prime Minister Chandra Sekhar Singh's immediate response was to secure an emergency loan of $2.2 billion[11][12] from the International Monetary Fund by pledging 67 tons of India's gold reserves as collateral.[1][12] The Reserve Bank of India had to airlift 47 tons of gold to the Bank of England[6][7] and 20 tons of gold to the Union Bank of Switzerland to raise $600 million.[6][7][13] National sentiments were outraged and there was public outcry when it was learned that the government had pledged the country's entire gold reserves against the loan.[6][10] Interestingly, it was later revealed that the van transporting the gold to the airport broke down on route and panic followed.[1] A chartered plane ferried the precious cargo to London between 21 May and 31 May 1991, jolting the country out of an economic slumber.[6] The Chandra Shekhar government had collapsed a few months after having authorized the airlift.[6] The move helped tide over the balance of payment crisis and kick-started Manmohan Singh’s economic reform process.[7]

Here's the source of that fun van story:

"I have a very deep belief that Cabinet posts should be filled with politicians unless the economy is in serious meltdown, as it was in 1991, when Manmohan became finance minister," he explained.

"That was a time when nobody was going to give India any money. People forget that we had to pawn our entire gold stock. Normally when you have gold stock, the International Monetary Fund accepts that that gold stock is there, and gives you money against it. India had to physically move the gold stock out of India, abroad. I'm informed, by very, very reliable sources, that the van taking the gold to the airport broke down, and there was total panic."

Desai used this point to illustrate how far India had come economically in such a short span of time. Now, he argued, India is better prepared to handle economic downturns, even ones as severe as the current ongoing global financial crisis.

And then, of course, India bought back its 67 tonnes (and then some) from the IMF in 2009:

IMF Sells Gold to India, First Sale in Nine Years
November 3, 2009

The International Monetary Fund sold 200 metric tons of gold to the Reserve Bank of India for about $6.7 billion, its first such sale in nine years.

The transaction, equivalent to 8 percent of global annual mine production, involved daily sales from Oct. 19-30 at market prices and is in the process of being settled, the IMF said in a statement yesterday. The average price to India, the biggest consumer, was about $1,045 an ounce, an IMF official said on a conference call. Gold for immediate delivery gained 0.2 percent.

“The fall in the U.S. dollar seems to be pushing all the central banks to strengthen their portfolio with gold,” said N.R. Bhanumurthy, professor at the National Institute of Public Finance and Policy in New Delhi. “Gold is a safe store of value compared to the U.S. dollar.”

The IMF sale accounts for almost half the 403.3 tons that the Washington-based lender in September agreed to sell as part of a plan to shore up its finances and lend at reduced rates to low-income countries. Asian nations, which have amassed stockpiles of foreign currency reserves since the 1998 financial crisis, have shown increased interest in diversifying out of U.S. assets as the dollar loses value against other currencies.


Proceeds from the sales and other IMF resources as well as individual contributors would help pay for discounted interest rates on loans to low-income countries, the IMF said in July. It plans to grant as much as $17 billion in extra loans to poor nations through 2014. The 403.3 tons the IMF agreed to sell amount to one-eighth of its stockpile.

“This transaction is an important step toward achieving the objectives of the IMF’s limited gold sales program, which are to help put the fund’s finances on a sound long-term footing and enable us to step up much-needed concession lending to the poorest countries,” IMF Managing Director Dominique Strauss- Kahn said in an e-mailed statement.

Reserve Management

The gold purchase was done as part of Reserve Bank’s foreign exchange reserves management operations, the central bank said in a statement on its Web site today.

India’s foreign-exchange reserves advanced $684 million to $285.5 billion in the week ended Oct. 23, the central bank said Oct. 30. That included foreign-currency assets of $268.3 billion, gold reserves of $10.3 billion and the special drawing rights with the IMF.

“There seems to be consensus among the central banks that it’s better to cut down on currency holdings and diversify into assets like gold, which has upside potential,” Krishna Reddy, a precious metal analyst at Way2Wealth Commodities Pvt. said in Mumbai. “The Reserve Bank of India gold purchase is a clear reflection of this belief.”

Today India has 557.7 tonnes of official gold reserves, valued at more than $30B. Before the 2009 IMF sale it had 357.7 tonnes. India's total foreign exchange reserves now stand at $296B, ranking it 9th in the world with China at #1.

A Few Thoughts

It occurs to me that Indian savers are saving at full capacity and then some; call it the savings rate ceiling. The problem is that Indians like physical gold. You don't see much paper gold at those weddings, do you?

Gold demand is generally inelastic in currency terms because its primary use is as a wealth reserve. This is in contrast to industrial metals where demand is relatively inelastic in weight terms. In other words, gold flow by volume should be observed to decline as the price rises while gold flow by value might remain steady. Yet India's gold intake has risen from $4.1B in 2002 to $33.8B in 2011. That's an 824% rise in demand in currency terms at the same time as the price of gold in dollars rose only around 600%. And this while running a trade deficit:

India's Balance of Trade since 2002

This has to be putting tremendous pressure on anyone working to delay Freegold, assuming such an effort even exists. I guess it's a good thing there are only 1.2 billion Indians.



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costata said...


Part 2/2

The retail sector in China is tightly controlled by the government. Demand is high and growing. According to the CIA World Fact Book China has per capita income that is more than double India’s average income. Encouraging retail demand for gold (and silver) is official policy. We have no information on China’s public sector gold reserve dealings. Lastly China has vast FX reserves it could use to influence trends in that market.

To sum up the situation – China has the means and the motive. Let me sketch out a scenario that might fit with that paper you linked from Bron Suchecki. Last year the BBs detected weakness in dealer demand from India, weakness in the TA on the rupee (or a rally on the horizon for the US$) and sales of 400 oz bars by the Perth Mint via the LBMA. They saw an opportunity.

China could have gone direct to the Perth Mint (PM) for wholesale supply. As Bron noted some time ago the PM will sell that 5 m/t of wholesale gold they crank out each week to the highest bidder. Far wiser for China to quietly buy that PM gold through the LBMA. (Bron may favour us with an explanation of the delivery procedure – could a shipment destined for London be diverted en route to, say, Hong Kong and never even arrive in London?)

In any event the source of a particular bar is not critical. In this scenario, instead of running the price, China took advantage of price weakness and increased the volume of their imports.

Well, well …. I took a break from writing this comment to do one of my sweeps across the blogosphere and the MSM. Guess what I found here?

Marcus Grubb, managing director for investment at the WGC, a gold mining industry lobby, said the buying by the People's Bank of China could explain a large gap between Chinese gold imports and the WGC's estimates of consumer demand for the metal.

If my scenario has any validity then we should keep an eye on the Indian rupee during periods when the spot gold price is rising. If the PTB in China have sufficient control of the overall gold demand from China and/or willingness to supply gold from their mines (or reserves) then they could be ideal client for an enterprising LBMA spider seeking to profit from volatility in both directions.


Robert LeRoy Parker said...

Hi Costata,

Thanks for the link, but I can't in good conscience encourage more time being spent on the Eric Sprott manipulation angle at Screwtape.

I think there is a lot of interesting things about silver, but that one not so much.


Michael dV said...

on the second page of comments denoted 200-209 there are only 2 I missing some (7)?

Michael dV said...

ok now it says 201-201 !! Blogger??

ChrisF said...


Sorry, I was not clear. I should have said
"the possibility of receiving 1000 oz of physical worth 50 million for an outlay of 20,000 is worth investigating fully IMHO ..."

I agree that aim is to try to find a way to guarantee the delivery of physical should the bet pay out.
This is the crux of the discussion, for which thanks.

LD said...


AdvocatusDiaboli said...


from your last post I think that I can read moral judgement and anger about the current system.
In order to adress the points you mentioned you do not need gold at all, and actually having any kind of gold related system does not change a think about your complains.
The only think that would change something would be liability and punishment.
e.g I guess Mr. Corzine would remember quite well or would have documented better in the past, if each day now somebody would cut off one finger.
Or if a politian or CEO can be held responsible with his own personal wealth in case of gross negligence or stupidity.
Greets, AD

jeb said...

Hi team free gold. Intellectual retard here with another question. How will interest rates be decided in a free gold environment?

One Bad Adder said...
This comment has been removed by the author.
Jeff said...

Feb 17 (Reuters) - Until last October, farmers and fund managers rarely lost sleep over the extra money that they habitually maintained in their brokerage accounts, confident that it would be there the next morning.

Now, stung by the loss of customer money from the failure of MF Global Inc, many cannot sleep soundly without transferring every spare cent into their own banks overnight.

jonny49 said...

I just read something that highlights another BIG problem for the current system in the UK, and I would think in the US and elsewehre.

Policymakers are keen to keep interest rates low. They also need it, as their deficits become unaffordable at higher rates, and households also would struggle with higher debt repayments.

But one sector that is hating lower interest rates is the pension sector. In the UK the pension funds have to maintain solvency based on long-term gilt rates (which have more or less halved in the past few years). I am sure the same is true in the US and elsewhere.

So, now the pension scheme trustees are crying to the authorities here that they either need much higher funding levels, so some other way to just ignore/fudge the figures (mark to myth springs to mind).

Defined benefit pensions are just an accident waiting to happen, their assumptions n future growth are so wildy optimistic. Yet another opportunity for printing to keep the game going.

Also, just read this on ZH, a brief piece, but further evidence that the 'final straw' that will cause the collapse (confidence disappearing IMO) has just been bent a little further:

'A well-known bond expert summarizes today's "market positive" and supposedly just completed ECB bond swap.


See, with gold they wouldn't need to do any swapping, or altering of terms, cos it's just gold!! (you knew that tho).

Anonymous said...

Jeb sez

Hi team free gold. Intellectual retard here with another question. How will interest rates be decided in a free gold environment?

*cracks knuckles*

I'll take a shot at this one. The following is my personal speculation based on what I have read here, and I would welcome critique by some of the more seasoned posters.

In a post-freegold environment, gold will be widely considered by savers to be a viable alternative to saving in debt. Thus, demand for debt as savings will decrease, and investing in debt will return to being the province of speculators who want to risk their capital to earn a return.

Decreased demand for debt should imply higher interest rates and/or better collateral for debt. However, there will still be central banks that will have the ability to manipulate interest rates and socialize losses through debasement, lending at 0%, etc. The difference under freegold is that this manipulation/socialization will be less effective, and will have less of a devastating impact on the economy, because savers will have a safe and viable alternative as a counterbalance to these activities.

burningfiat said...

Gary said:
See, with gold they wouldn't need to do any swapping, or altering of terms, cos it's just gold!! (you knew that tho).

I've been thinking about swapping some krugs for maple leafs, but that's just because they are more purty.


Ps. Latest LEAP2020 preamble

Max De Niro said...

Reuters: Italian anti-mafia prosecutors said they seized a record $6 trillion of allegedly fake U.S. Treasury bonds, an amount that’s almost half of the U.S.’s public debt.

Some connected (?) mumblings about plutonium too.


Motley Fool said...



Why are current interest rates where they are (in certain countries)?

Would an incentive to manipulate interest rates still exist under FreeGold?


burningfiat said...

Regarding fake U.S Treasury Bearer Bonds in Italy, remember this story from 2009?

Motley Fool said...

Max de Niro

After having read that reuters article ad both ZH posts about it, I still don't know what to make of it.

Very very peculiar.


burningfiat said...

One Bad Addergeddon drawing closer?

^IRX peaking?

jonny49 said...

It's all very interesting!

Gillian Tett's latest re central bank losses and angst (apparently Bernanke has threatened suicide recently):

So, we have the ECB swapping out its Greek bonds for new ones to avoid taking a loss. Why would they care if they took a loss?

In doing so (surely they MUST KNOW) they are going to put serious pressure on the other problem countries' bonds, as no one in their right mind is going to risk buying/holding them, knowing the ECB will just shaft them later on (or could do).

The ECB must realise this will further destabilise matters.

Are they therefore just bringing matters to a head, forcing countries to face their reality via the market sooner rather than later? (freegold sooner rather than later?).

Or are they truly just stupid, and don't realise the consequences of their actions?

Or is there another explanation, or is it just me?

It's so surreal watching the market action today, gold (electronic price only) is tracking the S&P and the FTSE tick by tick. Was there ever any further proof of what a crazy system we have now?

(PS, I was kidding, the Bernank didn't threaten suicide, but I couldn't resist). :-)

Peter said...

"In doing so (surely they MUST KNOW) they are going to put serious pressure on the other problem countries' bonds, as no one in their right mind is going to risk buying/holding them, knowing the ECB will just shaft them later on (or could do)."


"The ECB must realise this will further destabilise matters."


"Are they therefore just bringing matters to a head, forcing countries to face their reality via the market sooner rather than later?"


Hey look ma, I'm a yes man!

DP said...

Hi Gary,

So, we have the ECB swapping out its Greek bonds for new ones to avoid taking a loss. Why would they care if they took a loss?

Because it would knock their system out of balance, forcing them to do something about it.

Have a great weekend!

Jeff said...

Iran is seeking to close grain purchases using gold and oil as payment, and has paid in yen for a large volume of wheat in its first deal since Western sanctions against Tehran started choking imports of food staples, European wheat exporters said.

jonny49 said...


A shame they didn't go for option three, the evil option!

Tommy2Tone said...

how do you read [past the 200th comment?

Anonymous said...


concerning the UK pension funds. During the late 1990 and early 2000s, there was a huge campaign in the UK in order to advertise long term gilts to the pension funds, lead by the Financial Times and other mouthpieces of the official doctrine. The argument was "to match their assets to their liabilities". Funny, isn't it? Well, not so if you are a pensioner. I would not be surprised if all the (soon to be) toxic bonds that have not yet been bought by the BoE, are patiently sleeping somewhere in the pension funds.

Concerning the ECB bond swap. On Zero-Hedge this was portrayed as foolish because it increases the risk for private holders of government debt. But perhaps that was precisely the point of this move.

Max and burningfiat,

if someone offered me US$ 6 trillion in US bonds dating from the 1930s, wouldn't I ask whether there existed that much money during the 1930s? This must have been some 100 times their monetary base at that time.


Jaqship said...


It is my understanding that most of the EU's gold is held in custodial accounts in the US and London. If so, I can imagine that the EU would hesitate to launch Freegold before its gold is returned to Europe, lest the newly desperate US & UK gov'ts go nuclear and annex this gold, despite the downsides of such a brash move.

I can also imagine that the $IMFS would regard as "going nuclear" any public EU demand that its gold be released from these custodial accounts.

Does anyone have any guesses as to the real state of play regarding EU efforts to retrieve its gold from $IMFS countries?

Tommy2Tone said...

that did it. In chrome, then firefox the link for the posts after 200 would not show up. i shut down, reopened, tired firefox etc. i then made a post and when it refreshed, viola, i could see costata's 2/2.

I understand some of you like this comment system...i think it's a disservice to this forum and makes it unnecessarily retarded.

burningfiat said...


The bonds must of course be fake. I just find it noteworthy with all the fake bonds always being confiscated in Italy.

From Max's link:
"As part of the probe, fake bonds for $2 billion were also seized in Rome. The individuals involved were planning to buy plutonium from Nigerian sources, according to phone conversations monitored by the police."

Plutonium selling Nigerians getting scammed by fake US bonds? You couldn't make this stuff up :-)


Motley Fool said...

These were also apparently a threat to the world monetary system.

Luckily this nefarious plan to swap the fake bonds for Nigerian plutonium was

Motley Fool said...

These were also apparently a threat to the world monetary system.

Luckily this nefarious plan to swap the fake bonds for Nigerian plutonium was

Peter said...

I prefer my Plutonium to be with the Mafia than some Nigerian scammer

burningfiat said...


Massive luck there. Think of the dire straits our IMFS would be in had this plot not been unwound. Ha!

jeb said...

Motley Fool, poopyjim, than you for your insights.
I take it that artificially lowering interest rates would have the effect of driving more people into freegold. A battle between a return of capital or a return on capital.

One Bad Adder said...

jojo: -
From one retard to Another ;-) CAN simply add in the address line, after "true" - &page=2 ...then refresh.

One Bad Adder said...

jeb: -

They DON'T artificially lower rates, the Market does that ...and "they" are forced to follow.
Believe it or not!

One Bad Adder said...

Jeb: -
...after "that" include ..on the "credit side".

The reason we're "down here" has to do with "credit money" having no-where to invest "safely and securely" ...and STILL eke out a decent Yield.

The "time-risks" aspects of investing in T's has YET to fully impact the System of this (Here, Saturday 02-18-12)

jeb said...

Thank you one bad addder, I hadn't thought it was the market pricing bonds so low, but of course it makes sense now.
I understand how gold would act as an alternative store of value and compete with bonds and hold back credit creation.
Do you think gold needs to be set as an [b]official[/b] store of value for free gold to take root or will the markets choose it on the failure of the bond market and the central banks follow?
I understand two ways gold will act in freegold, firstly by being a store of value and secondly to act as the brake and spur on the economy. Is there other ways gold will act that I need to study up on?

One Bad Adder said...

jeb: -

I think they'll have to "reactively" acknowledge FreeGold as a result of the GOLD Market simply locking up after a Systemic collapse.
Apart from that you're right in your understandings re: FG ...IMHO.

costata said...

This is all getting a tad incestuous IMVHO.

Mr Turk actually no longer owns GoldMoney, contrary to what many seem to think, but rather acts as their paid spokesperson and consultant. GoldMoney is in fact owned by a collection of investors including Doug Casey (Ed Steer's boss), David Tice, IAMGOLD (a large Canadian mining company) and our old friend, Eric Sprott....

Unknown said...


FWIW, Blogger is not a great system, but there are work-arounds such as I described here.

costata said...

The European Central Bank is swapping its Greek bonds for new ones to ensure it isn’t forced to take losses in a debt restructuring, three euro-area officials said.

The Frankfurt-based ECB is exchanging its Greek bonds for bonds of an identical structure and nominal value, the only difference being that they would be exempt from so-called collective action clauses, the officials said late yesterday on condition of anonymity. One said the bonds have a face value of about 50 billion euros ($65 billion)......

.... An exemption from collective action clauses, or CACs, would mean the ECB would not have to participate should the Greek government impose involuntary losses on bondholders. That may occur if not enough private creditors agree to a voluntary swap.

Greece will submit legislation to parliament on Feb. 21 to allow the use of CACs in a debt-swap process that will start on Feb. 22 and conclude on March 9, Athens-based Naftemporiki newspaper reported today.....

“In Europe, all bond holders are equal, but the ECB is more equal than others, apparently,” said Thomas Costerg, an economist at Standard Chartered Bank in London. “

Yes Thomas.

jeb said...

On the idea of a systemic crash -

Date: Tue Nov 25 1997 10:06ANOTHER (THOUGHTS!) ID#60253:The US$ is today, backed by oil. As all other currencies are but “digital units” tied directly to the dollar, they are indirectly on the oil standard also. This world currency position is supported thru the BIS. In CB circles, it is well known that the world debt markets as we know them, can only be maintained with cheap and cheaper oil! Without cheap oil the entire system fails and reverts back to pay as you go economies. This is the central reason for “two price gold”.

Firstly I don't understand the last sentence on two price gold. But I shall put that aside for the moment for future learning.
What I'm looking at is the idea that the economy needs cheap oil to sustain debt markets, but I'm having trouble reconciling that idea with another idea that says the US wants higher priced oil so it can look for oil in its own back yard.
I had initially thought thought the US's actions in the middle east was not to secure cheap oil but to force the price higher.

JR said...

Two priced gold refers to the two tiered gold market - check out Open Letter to EMU Heads of State


but I'm having trouble reconciling that idea with another idea that says the US wants higher priced oil so it can look for oil in its own back yard.

This was more a Nixon's closing gold window until the 2nd or real oil crisis late 70s.

Sheikh Yamani: Well that’s a very long story, and the reaction of America for what happened is not a one reaction. They decided to raise the price of oil 400%. They needed to help the oil companies to invest outside OPEC. In Mexico, in North Sea and so on. And this will not happen without a high price of oil.

Sheikh Yamani: Yes and there was an agreement between the Shah of Iran and between Dr.Henry Kissinger to raise the price of oil… I really highly respect Henry Kissinger. He is really a planner and strategically he is a man to be respected.

See the 400% and then the overshoot? Just because someone wants “expensive oil” doesn’t mean they want infinitely-priced oil.



What I'm looking at is the idea that the economy needs cheap oil to sustain debt markets

So when the dollar lost control and oil overshoot the 400% goal, the dollar basically died. Only with the support of the Western Gs (BIS/EURO) did the dollar survive. this was the birth of the paper gold market. The dollar needed to keep the price of oil under control to survive, yes?

JR said...

Have you read Credibility Inflation recently?

The Setup

Part of the reason the rest of the world did not abandon the dollar in 1971 was that the rate of economic expansion flowing from Middle Eastern oil cheaply priced in U.S. dollars was already exceeding the expansion rate of the money supply. So the switch from a semi-gold-(con)strained monetary system to a much more expandable "balance sheet money system" as I like to call it — or another name I like is "purely symbolic monetary system" — allowed for the non-deflationary addition of many new "quality of life" gadgets, widgets and shipping lanes that the world had never before imagined.

For the next three or four decades we would be able to comfortably afford the new introduction of Betamax VCR's, microwave ovens in every home, personal computers, DynaTAC cell phones, camcorders, digital cameras, LaserDiscs, Compact Discs, DVD's, MP3's, and on and on. Eventually, all of these wonderful products would be built cheaper by someone else on the other side of the world and shipped to us cheaply using the oil purchased from the Middle East with easily available U.S. dollars.

The reason I like the term "balance sheet money" is that whenever there is a need for more dollars they can be easily gotten from any bank's balance sheet. The dollars don't have to be there in the bank. You simply jot down the "need" for them on one side of the balance sheet and the dollars magically appear on the other side. Presto!

Of course once that "need" (demand) is supplied, the balance sheet must then be serviced with interest. But the thing about easy money is that you can always borrow new to service the old. In the previous system (con)strained by its parity fixation to the U.S. Treasury's limited supply of gold all these wonderful life-enhancing advances would have put a deflationary pressure on the dollar.

What this means is that when all these new products came to market, the dollars we needed to purchase them would have become more and more precious with each new widget that came to market. The cost to borrow dollars to buy a new BMC-100P or DynaTAC-8000 would have been prohibitive. And even if you did borrow the money, the service of that debt would have grown more and more burdensome over the life of the loan as dollars became ever more precious.

This deflationary dynamic would have stifled the global economic growth rate and confined it to only reasonable risk-taking. Which is part of the reason the foreign central banks, represented by the BIS, did not lobby the U.S. to officially devalue the dollar against its Treasury gold in 1971.

Rather than closing the gold window, the U.S. could have, for example, raised the price of gold to $200 and kept the system going for another 30 or 40 years. A move like this would have been the mathematical equivalent of increasing the Treasury's physical stockpile 5X to double what it was at the height of the Bretton Woods experiment.

But while that would have satiated the monetary transgressions of the past, it would have done little for the future. It would not have substantially changed the system to one of easy money. It would only have extended the old system of hard money.

It was reasoned at that time that more than just the ridiculous price of gold being broken, the system itself was broken, and needed a global finance structural change. So the international consensus was to let the U.S. default outright on its gold obligations rather than lobbying for a revaluation of its gold at a new fixed rate. But then continue using the dollar anyway, as long as relatively cheap oil could be gotten for dollars.

Mr. Smooth said...

i only see 200 posts??

JR said...

One more to re-read: How The Dollar Made It This Far:

"...During the '70's, dollar price inflation was bad, but by no means did we see the "runaway price inflation" that should have come from a reserve currency without gold backing.

In practical theory, oil now backed the dollar as world oil payments were settled in dollars. In return, gold now backed oil from a US guarantee of an open market for the metal. Over time, a portion of oil dollars could be replaced with real gold through actual physical purchases or in participation with evolving world gold banking (paper gold). Even though the dollar gold price had surged, the higher oil prices were allowing a percentage of those dollars to be converted back into gold at the old gold/oil rate. [Note: After the gold window closed, dollars surrendered for gold REMAINED in circulation!]

Slowly, the old dollar holdings (prior to 71) were effectively being used to reclaim gold. The expansion of the world dollar money supply was seen as reflecting the more modern importance (value) of oil in the economy. As long as growth in the production of economic goods outstripped dollar price inflation, the dollar could be expanded to match the unrealized value held in oil. ..."

JR said...

Note things changed when the Euro was rolled out and we started on the road to higher gold prices.

Anonymous said...

You remember our discussion about Another's estimate of the free gold price. Just for fun, here is the calculation for silver:

By the way, the free gold/free silver ratio comes out as 64.


Unknown said...

Is that why their savings rate is so high? When American's buy gold it's marked as spending and when Indians buy gold it is marked as savings?

Or are Indians actually saving that high % in paper?

jeb said...

Thank you JR, I shall put aside some time to read your reccomendations.

costata said...


The estimated savings rates quoted don't include gold. These are percentages of currency income.

BTW statisticians in various countries differ in the way they calculate savings as well. From memory in the USA the official stats include paying down debt as "saving".

Edwardo said...

Just for fun...I think.

JR said...

Hi Jeb,

To follow up on this:

Note things changed when the Euro was rolled out and we started on the road to higher gold prices.

So the Euro rolled out and we got higher gold prices. At this point its not the paper market keeping gold down, its post the WAG and Brown's bottom and the price is rising as gold is cornered and there is not enough physical. In this environmental, consider the impact of rising gold price with a static (or in the face of a recession/credibility inflation), falling oil prices. Remember that oil effectively backed the $ when the $ left the gold standard, so from the $IMFS perspective, keeping the oil backing was the way to keep the dollar as international reserve currency

In practical theory, oil now backed the dollar as world oil payments were settled in dollars. In return, gold now backed oil from a US guarantee of an open market for the metal. Over time, a portion of oil dollars could be replaced with real gold through actual physical purchases or in participation with evolving world gold banking (paper gold). Even though the dollar gold price had surged, the higher oil prices were allowing a percentage of those dollars to be converted back into gold at the old gold/oil rate.

Gold surging is OK as long as oil surges too and the oil dollars can be converted back into gold at the old gold/oil rate.

Here is a link with some gold/oil ratio.

Mr. Smooth said...


jeb said...

Thanks JR, just so I can be clear in my understanding, Gold is cornered by the oil states through the oil/gold swaps, the WAG was likely set up so the oil states would accept euros in the new system as well as to force gold higher for the benefit of saudies and the EU alike. Browns bottom was a bail out of the LBMA, who fell short on a physical delivery, quite likely to an oil state.
And just while I Have your attention. I need to understand where china fits into all of this.
I have limited understanding of china, but did the ECB reduce their US bond purchases (support for the imfs) and this slack was taken up by the Chinese, but only if they got accepted into the WTO. There is also an idea that china saw what was going on in the gold for oil swaps and started purchasing straight from the SA mines.. hmmm did that supply cut off lead to browns bottom? Have I got the story right so far JR? Cheers for you help.

burningfiat said...

Mr. Smooth,

You already said you can only see 200 posts, so why do you keep posting?
You won't be able to see the responses anyway!!!

Hey...wait a sec... you won't be reading this comment then... Doh!

Bjorn said...

Looking back a year or two, all the "cash for gold" schemes paid quite a bit below spot. Now the last month or so I´ve noticed several of (the Swedish ones at least) run "campaigns" paying well over spot for limited amounts of 24k gold. Check for example
Today 411skr/g vs spot 372skr/g.
I´ve been wondering how much those sms-goldclones were bringing in, and just how big a factor they´ve been in delaying the end game. Anyhoo, they seem to be struggling at the moment... I see some people from other parts of the world are saying they see more buy gold ads now, but up here we only get the sell gold ads. And those are EVERYWHERE. What do you make of this? Insignificant or something to keep in mind?

Motley Fool said...


We have not yet reached those levels. I may get close to spot, with some difficulty.

Definitely interesting that you are getting offered more than spot.


Mr. Smooth said...

burning fiat- sorry to upset you so but when i come to this page, i only see the first 200 comments- teh link for more is missing. when i post, the auto refresh takes me to the rest of the replies.

blogger is terrible performance.

Mr. Smooth said...

oh, and thanks for the welcome to this forum burningfiat. I just arrived here, you make someone not as smart as you feel real i not fitting certain qualities to be here? Please tell me and I will leave.

ChrisF said...


Thanks for your comprehensive comments on the out-of-the-money options for physical idea. I am working on it and will let you know the general outcome if successful,
since I know you believe that a settlement in bullion will not be granted. Let's see what I can get.

One Bad Adder said...

Mr Smooth: -

Do this - CAN simply add in the address line, after "true" - &page=2 ...then refresh.

Zenscreamer (above) also offers a more in-depth solution.

FOFOA said...

There are *TWO* ways to read the comments:

1. In the white "comment form" page on that opens when you click on "Comments"

2. Right on the blog itself, under the post!

I prefer #2.

If you are using #1, you can use OBA's addition at the end of the link:


If you are using #2, you need a different extension:


I suspect that most of the people having problems are using #1. Try using #2 instead. Just click on the name of the post at the top of the blog like this:

India's Gold

Then scroll down to the bottom of the post and voila, there are the same comments. Now scroll to the very bottom of the page, right after the 200th comment, and you'll find these links:

1 – 200 of 269 Newer› Newest»

Those links work fine for me, but if they aren't working for you, then you can simply add the following extension to the URL in your browser:


It will look like this:

That will take you to page 2. Likewise, you can change the 2 to a 3 if there are three pages.


RJPadavona said...

Hello Friends,

I know 'Life in the Ant Farm' has been discussed here at great length, but something dawned on me today and I thought I'd share it.

So while I was in deep thought earlier today (on the toilet) I was wondering: What would happen if FOFOA had his own 'Ant Farm' ?

It would take a special kind of ant (geek) to be a part of this community. Ants who had devoted an enormous amount of time learning some very important information that would cause this Ant Farm to be more resilient than any other Ant Farm when the Giants came stomping around.

I think the followers of this blog should think of ourselves as a uniquely evolved species. Maybe like ants on the Galapagos Islands? :-)

When the Freegold bomb detonates, I think FOFOA's Ant Farm will look something like this:

Knowing I'm part of this special Ant Farm sure makes for some good sleeping at night. I hope you all sleep as well as I do.


RJ Padavona

Nickelsaver said...


I nominate you Queen. Can I get a second?

FOFOA said...

Hey RJ,

Did you watch Fringe last night? Similar theme. The episode was called 'A Better Human Being' and, depending on your ISP, you can watch it here.


RJPadavona said...


Thanks for the nomination. That may be an appropriate position for me since the Queen Ant has little decision making power in the colony and its sole function is to reproduce. That sounds a lot like my home life :-)

BTW, I was thinking about you the other day when I saw the following clip of California's favorite son:

You should put that clip up on your blog. It's a classic!


Thanks for the link. I'll check it out and let you know what I think. I live in ACC country so College Hoops is religion down here. It's all that's been on my TV lately. When I'm not watching Duke destroy everyone, I've been watching The IT Crowd on Netflix thanks to DP and Max. That show is as good as gold..... well, almost ;-)


Nickelsaver said...

LOL...Charlie is still Charlie ain't he.

Anonymous said...


You have my vote for just about anything as long as you have Dio for your avatar. Pretty awesome.


Yeah... That Wilcock financial tyranny story, quite the story. A major part of their conspiracy involves 2 million tons of gold, and that kind of shit involves me shaking my head and maybe puking on my keyboard. I can't trust anyone who honestly believes we could've mined that much gold on this earth. Get this, when you question them on it they say the Chinese have had super-secret gold mines for thousands of years.

Sure they probably do, but they didn't mine no 1.8 million tons of gold from them! It's ridiculous, and would be kinda funny if they weren't serious.

I think someone along the way has mistaken a big pile of paper gold for the real deal ;)

If you take(waste)the time to read through the whole story, you will see the many holes in it and some other stuff that doesn't add up.

Aaron said...
This comment has been removed by the author.
Robert LeRoy Parker said...

@RJP, SleepingVillage

I knew I recognized that avatar from somewhere! In highschool I attended a Dio/Scorpions concert with a couple buddies and one of their dads. We packed a bunch of booze in my buick for tailgating at the concord pavillion, but upon arrival found a cavalry of horsecops patrolling the parking lot! I'll never forget pregaming for the concert by pounding beers in the back of my tinted buick with my friends dad. That same friend is now a lawyer who is always available to help me with my legal troubles, which unfortunately pop up when you least expect them!

Dio will always have a special place in my musical repertoire for this reason, although I'm more of a blues man these days...

Nickelsaver said...

Rare Dio

Aiionwatha's Nation said...

Love the Scorps. Don't know Dio but I like what I see.

My own personal RPG anthem along with the Phil Collins insert by FOFOA some ways back. You all are top notch.

I'm still dreaming of negative stated interest rates.

Personal prognostication for gm blowing open is June 12 of this year but as a heads up I had May of 2011 as the gig was up based on an exponential model I had developed on the back of an envelope. My listeners thought that was uncanny in august but they don't know what to think now. Big reversal in attitudes from $US1895 highs.

Aiionwatha's Nation said...

...and by listeners I mean folks I have spoken to about what is taking place. I have no media outlet.

RJPadavona said...

Good to know I'm amongst people with good taste.


I love the blues too, but I can't figure out why? We own gold......What do we have to be blue about? It must just be a side effect of watching all the dirty pool being played in the financial markets:

burningfiat said...

Proper welcome Mr. Smooth,

I'm happy you found ways of enjoying commentpage 2.

I'm certain there are no criteria to post on this forum. I've never seen a mention of it anyway.

My comment to you was a poor attempt to joke about the fact you couldn't read the replies on page 2, and here both you and I were (posting/replying on page 2). Sorry for the bad delivery.


Zebedee said...
This comment has been removed by the author.
costata said...


DP said...

Yaaaay! It's good to know that even when I'm far, far from my beloved blogging steed's keyboard, there are some of you queens keeping the YT flame burning bright.

Get it up ye's, YT-haterz! :)

Edwardo said...

Sleeping village,

I posted that piece for *$#@s and giggles, and, because, it related, however fantastically, to the story on the arrests of those said to be holding bearer bonds with preposterous note values.

I'm always deeply skeptical of stories of this sort, especially when they are semi-coherent in the telling, and the idea that a massive hoard of Chinese gold (itself likely plundered by Kuomintang, though, that isn't admitted) of that size seems, as you suggest, preposterous.

What isn't preposterous, however, is the idea that, whatever actual hoard existed, was spirited out of the Far East for "safekeeping" and has, essentially, been stolen by those tasked to to act as trustees.

Also, if I were turning over such a hoard with such special provisions, i.e. customized gold bonds, I would want the sort of documents that would make it indisputable who actually owned the putative hoard. What are, essentially, customized bearer bonds wouldn't, and clearly, don't cut it. Sealed official letters and signed notarizations in triplicate sounds about right when talking about verifying ownership of the proverbial riches of Araby.

In any case, we peons are rarely, if ever, privy to but a scintilla of the extent of the scheming and chicanery that goes on all around us. And there is a lot of scheming and chicanery because A.) there's generally a lot at stake and B.) folks enjoy engaging in it. This is especially the case when said scheming and plotting rarely redounds on those who pull the strings. Now please excuse me while I polish my rakish tin foil fedora.

Bjorn said...


On a little further inspection it seems the offer of those high prices is more limited than I thought. A couple of weeks ago it was max 100g in bar form/person, but now it seems it´s limited to max 25 g in specifically Boliden bar form at one buyer ( and 25 g in unspecified bar form at

The Boliden bars carry a premium for sentimental reasons in Sweden because they don´t manufacture small bars anymore.

So probably less significant than I first thought.

Anyone else have any general thoughts on the impact of the cash for golds of the world on the extension of the paper game? My personal gut feeling is that it might not be insignificant. I personally know several who have sold their old rings and chains and whatnot in the last few years. It adds up. I have even bought from some friends myself when they against all logic "threathened" to sell to smsguld.

Alien said...

Just in case someone wants to know more about the next steps in EU

Anonymous said...


A tinfoil fedora can be alright to wear for an entertaining night on the town once in a while. Hey, I've been following Wilcock's story for a few weeks now, hah! There may even be nuggets of truth in there somewhere, as you suggest. Makes no difference to me who owns these "bonds" if they're fake or real... until someone sends me one or two:)

I too believe there was likely a large gold hoard in China at one time, as a lot of trade on the silk road ended there. I also accept there has likely been more gold mined than is officially recognized. The record-keepers during the various gold rushes were not so good and nonexistent for many of the early years. As we know, China is ,and has been, a somewhat closed society for a very long time, and we truly have no idea when it comes to what they secretly mine. We DO have geologists and scientists, though, and data which tells us a lot about our earth and her resources.

In the end it makes no difference if there's 225 000 tons of above-ground gold, or 170 000. We just need to burn all the paper gold and we will eventually see all that glitters.

JR said...

a tribute

One Bad Adder said...

Re: BLOG: -

FWIW - I personally like the full-screen version for reading the "comments" ...and the "&page=2" (or 3 etc)extension can simply be "added to favorites" for seamless retrieval later.

SV: -

I think ANY assessment of "above-ground GOLD" is going to be wide of the mark ...(there was the Guyat (sp) figure of circa 1 million Tons doing the rounds a few years back) in any future FreeGold "arrangement" it will only ever be nominal.
In this context I'd suggest 500,000Tons would be a nice round figure to arbitrarily start with.

One Bad Adder said...

...and on that basis, the cost of maintaining the Vaults etc could easily be accomodated with "new supply" at (say) 1% ie: a "neutral ...or net Zero" system.

mrbeyond said...


JR said...

Looks like you are well on your way Jeb, you got a pretty good grasp so far.

dave2004 said...

Is the ECB precipitating freegold by changing rules in the sovereign bond market?’s-box

Where will the money go which doesn't want to go into bonds anymore?

Robert LeRoy Parker said...

Question for the good folks here.

I came across this pdf from the LBMA through mortymer's site.

It states the following:

Q1 2011: Daily average gold turnover $240 billion

This is about 10 times the $ amount LBMA has in its clearing statistics for the same time period. How should I reconcile this discrepancy? Also, how would this fit in with the red baron's (~3-5)x(LBMA clearing)= (World Volume) equation?

Another interesting tidbit from that pdf is this:

There are ~720,000 bars in the London vaults, worth a total of ~US$500 billion

Maybe this could be used for a reserve ratio estimate.

jonny49 said...

An interesting comment on the ZH article re the ECB swapping Greek bonds:

Freegolder's picture
Vote up!
Vote down!

The article says:

'the ECB swapped their bonds for new Greek bonds with the assent of the Greek government and it is now a done deal.'

So they had the consent of the Greek government for the deal. The article seems to imply there was something 'dodgy'about this! Not at all. The Greek government agreed, deal done.

Sadly the author, and indeed most of the world, and certainly the ZH part of the world, just do not grasp that the ECB knows precisely what it is doing. It knows.

It knows:

that a huge chunk of peripheral government debt is junk.
that most of it will never be repaid (not ever, ain't gonna happen).
that QE by a central bank to support goverments directly is the road to hyperinflation, so it won't do it.
that it must protect its own balance sheet for the time being, whilst the global currency war end game is being played out (versus the dollar of course).
that this will force market holders of peripheral debt to avoid throwing good money after bad, and maybe to attempt to sell the holdings the have already.
this will crytalise the Eurozone's sovereign debt crisis far sooner rather than later (a goal of the ECB).
This will strengthen the Euro, as the issues will be faced, reality will be faced, true austerity, the true nature of economic capitalism will come to the fore (exactly unlike the US).
Once every sovereign has bitten the bullet, the market has been cleansed, as painful as that might be, rebuilding can begin, and you can bet sovereigns will not make the same mistake again in a hurry, AND NEITHER WILL THE LENDERS
that global currency wars are a long game, and it has been fighting this was since the Euro was conceived back in the 1960s.
that the US is adapting exactly the opposite policy, saving all the bad debts, monetizing government spending, refusing to take its medicine.
that within 5 years the Euro will still be a VERY strong currency, with marked-to-market gold rising in reaction to dollar debasement.
that the rest of the world will grow increasingly annoyed with the US for its 'kill the dollar' policy, and so Euro usage will grow, especially as the Eurosystem has such large marked-to-market gold reserves.
that the US cannot EVER voluntarily mark its gold to market, as that would immediately signal the end of the road for the dollar.

Yes, the ECB knows all of this, and it acts every day to maintain the Eurosystem's banking liquidity, to preserve the currency, and to force economic reality on the Eurozone countries, as painful as that may be.

I rejoice, and so should we all, that a reserve currency is ready for freegold, when the US's exorbitant privilege comes to an end.

JR said...


Nice Blog!

Q1 2011: Daily average gold turnover $240 billion

This is about 10 times the $ amount LBMA has in its clearing statistics for the same time period. How should I reconcile this discrepancy?

The 240 billion turnover is big money looking for a currency hedge, and the roughly 10:1 ration with the cleared volume sheds some light on the fractional reserving in the LBMA gold market.

Re Red Barron's reference to the FT article with the quote of Mr. Jeffrey Rhodes' that "the 30m ounces should be “multiplied by three, and possibly five, to give the full scope of the global market” - I regard it as a bit of public understatement. The now available LBMA indicate this figure is closer to 10.



Date: Sat Jan 10 1998 23:49

How much paper GOLD is out there ready to be squeezed?
Over 14,000 tons.

Looking back (this information was not public then) daily clearing volume was 43.7 million ounces in Dec. ’97. So like 1,359 tonnes cleared every day.

Based on the info from your link and also from this LBMA survey from Once Upon a Time, we see TOTAL daily turnover is close to TEN TIMES the daily CLEARING volume.

so 10 x 1,359 tonnes = @ 14,000

Edwardo said...

Singapore ends tax on gold.

Anonymous said...


According to the LBMA clearing statistics at

in Q1/2011, they cleared about 2000 transactions of an average size of 10000 ounces (US$ 13.6mm each) per day for a total of 19mm ounces which is 590 tonnes or US$ 26bn (US$ 1360 per ounce at that time).

This is not all physical gold. Firstly, imagine the quantity. Secondly,


Excluded are: Allocated and unallocated balance transfers where the sole purpose is for overnight credit. Physical movements arranged by clearers in locations other than London.

And so we know which part of the trading volume is not included in the clearing data: either intra-day trades that are reversed before the end of the trading day (need not be cleared - LBMA clering is T+5 if I remember correctly). Plus overnight lending.

This might explain the factor of 10 compared with the figures in the PDF presentation.

720000 LGD bars is 288mm ounces or 8950 tonnes. The question is who owns them. If they are allocated to customers, this number is of no use in order to estimate the physical reserve of the banks. Some questions:
* does it include GLD (1250 tonnes)?
* does it include the CB gold in the BoE vault - the BoE is an LBMA custodian (4600 tonnes)?
* does it include privately held allocated gold? Where is the ME gold? Still partly in London?

Using the estimates by ANOTHER with today's data, I got between 80 and 290 tonnes of physical bank reserve underlying between 1500 and 5500 tonnes of unallocated.


Rx said...

India rupee has now fallen to an all time low against USD. Inflation of food and fuel rose close to 10%. The poor are hugly impacted as food is 70% of the total income.
The Royal Bank Of India claims it is selling gold? How can that be in the interest of India when Europe, China, and the US are hugly inflating currenceis (stimulus)?
In 2008, Electronic Trading accounted for around 80% of gold trade. Now, silent physical gold accumulation from Central Banks outside of India account for around 75% of physical gold transfer with ETF at about 25%. Central Banks could be paying 20% premiums, whild RBI is selling at ETF prices.
Central Banks can pay 20% or even 100% premiums with freshy printed electronic money that they know will devalue by 20% over the next year.
RBI gold reserves may not even be in India. As Germany is learning, a "receipt" for physical gold is "subject to new interpertations".

Anonymous said...

The gold loan is the loan that you can avail by pledging your jewellery. The gold loan is easiest to avail and the processing time is also very less. You may get the gold loan on the same day. The interest rate is also low. In case of gold loan, you can pay the interest portion only for the entire loan term. At the end of the loan term, the borrower can pay the entire loan amount and get the jewellery

DP said...


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