some uninformed comment on India for you

I don't know much about India, just what I get from (mostly) Kiron Sarkar at Ritholz's blog. But here's what I'm operating on:

1. India's a clusterfuck, but it always has been. Never forget that. The country will never become as politically competent as (say) Peru or Brazil.

2. India does have some severe balance-of-payments problems right now. The gold tax was meant to help address that - much of India's trade deficit is due to the rabid consumption of gold.

3. India's biggest problem is that they have massive producer subsidies, to help out poor farmers - as well as consumer subsidies for poor consumers. Problem is, when you have a third-world economy that begins economic expansion, those subsidies hurt the state's coffers more and more. Especially consumer subsidies, when in a commodity-inflationary environment. Eliminating them is political suicide, and continuing them is economic suicide.

Point 2 might get fixed with continued rupee devaluation. Or something, I dunno. But point 3 only ever gets fixed by economic collapse and broad hardship.

So goldbugs better fucking hope that China continues to produce more demand for gold, because India's becoming dangerous and it'll be bad for the POG when that 25% of total demand takes a multiyear holiday.

I'd be very interested in finding out about gold demand trends in the broader Indochina world - I was under the impression that Indonesia, southeast Asia, and so on are heavily influenced by Indian tradition, and maybe they can take up India's slack entirely. But I don't know that. So there's some research to do in future, I guess.