Dominic Frisby sent me this link:
Gold Chat - India gets serious about anti-gold policy.
I scanned through the article and emailed Mr. Frisby back with the following:
Yeah this is old news mate, Modi and Rajan have been on about that crap for the past year.
Try telling a peasant farmer in Uttar Pradesh that his 15 grams of physical gold will do better for him if he puts it in a "bank". These people are medieval and don't believe in 1s and 0s, they make Ron Paul look like a Marxist Keynesian gay rights activist.
They also remember history - both the 2500 years of physical gold accumulation from exports, and the last 60 years of government mismanagement. India's a whole other world, man, and I'd rather learn about this stuff from an Indian than from some white-ass blogger.
And India doesn't care about gold imports now that the price of oil is crashing. Their current account is going to be beautiful this year. Rajan's big goal was to monetarize & hypothecate gold holdings, to provide a local source of metal for jewelry manufacturers, to fix the current account deficit: he shouldn't care now, and anyway over the long term that will just move gold into more sticky assets - from bullion into jewelry.
An idea was floated last year of letting Indians put their gold in a bank directly, and earn interest on the gold that would be paid as more physical gold. (Does that sound weird to you? Well, it makes sense from an Indian peasant's perspective.) But the interest offered was a joke - 2-3% or so.
And even then, long term that would *increase* demand for gold: practically, it means Indian banks would have to add to (paper at least) gold holdings by 2-3% a year to cover interest; and economically it means gold suddenly becomes an interest-bearing investment, which should increase demand.
Imagine how many rich white-ass honkies would ship their Swiss gold to India to earn 2% interest. Rajan would turn the world upside-down by making gold an interest-bearing security.
The guy [on the blog] is right though, progressive Indians need to see a positive real interest rate to participate in modern banking. Oh and they need to see a banking system that they can trust.
The cashless economy bit is good though - that already exists in Africa, people keep money on their cellphone. But good luck with India ever implementing anything as successfully as sub-Saharan Africa - as Piketty notes, India's per capita productivity today is only equal to Africa's. Let that sink in.
Everyone seems to think Modi's just going to wave the Holy Handbag of Margaret Thatcher and everything will be fine. But even Gandhi couldn't fix India and he was a demigod. Modi just looks good to Whitey because he speaks the neocon language.
In short, it's important to remember several things:
1) Reading the news will tell you when it's old news.
2) Old news is always already priced in.
3) Don't believe anything that an Indian politician says, especially when he's repeated it for the past 6 months without doing anything.
4) Don't believe anything a white-ass honky tells you about India.
5) India is this whole other country, unless you've seen it you have no clue (and I haven't seen it so yeah I have no clue either, but at least I know what I don't know).
6) gold and junior miners go up in January.
Anyway, this gold chat blogger fellow seems good, in that he picked up on the stupid "Russia sells its gold reserves" article the same day I did.