I think boglerdude is right when he says (in the 'Diversifier' thread):
Stuper1 saidAs countries develop citizens dont need gold. India, a huge source of gold demand, will move away from gold as it modernizes. Central banks raise rates when the money supply gets too big. When they cant, you have a failed state and gold is more of an emergency tool like guns and food.
Which also makes sense to me, but then I read this article in the print version of a Bloomberg magazine which came through my mail slot, unsolicited. Looks like the citizens of India might not have a choice.Have you been to India? I haven't, but I'm guessing people there won't be slowing down on their gold purchases any time real soon. Maybe in 200 years.
India’s Cash Crackdown Hits Gold Pawners
...The gold-loan business has suddenly gotten bumpy. Prime Minister Narendra Modi’s decision last month to invalidate all 500-rupee and 1,000-rupee notes has Indians scrambling to get their hands on valid currency. Because almost three-fourths of payments for gold-loan interest and principal are made in cash, as opposed to, say, bank transfers, the shortage of legal tender is hurting lenders. Modi’s move, known as demonetization, is designed to crack down on tax evasion by forcing people to tender their cash to the bank, where it can be recorded.
Gold, says CEO Nandakumar, “is seen as the poor man’s credit card.”
You can read the rest here: https://www.bloomberg.com/news/articles ... ld-pawners
