just back from 'street economics' in india. what happens on the street happens to find it's way onto the stockmarket.
india has just raised import tax on gold by 50%. that is from 4% to 6%
the indian gvt is shyte scared because gold imports distort the trade balance by 80%.
india's love of gold is very understandable and is culturally ingrained but house quality and affordability, especialy to the fast growing middle classes, is one thing to note here. as house values grow and so far they are doing so at a sustainable rate then gold will become less attractive to the indian peoples. helped along by the gvt who's promoting homes as against gold as an asset then gold sales in india might well be a thing of the past. not to say gold will not be considered a good investment for some but many will move their attention to buying a nice home. their family will benefit in more ways than one.
imo a decent roof over the families head will be far more attractive than the jingle of overpriced jewelry.
india must be considered a wealthy country by all the gold spread about but what happens if gold suffers a downturn ?
from these levels people might get frightened by their losses but the gvt will likely be pleased as the trade balance turns positive.
the gvt rules. remenber that. they will do all that is possible, as and when they can.
another juicy bit discovered. india expects to be self sufficient on oil by 2020.
imported iron ore attracts a big import duty atm. there is quite a bit of iron in india. self suffficient too here, feels 40.
a very promising country which 40 believes will soon enough take a very big leap forward. however, there were signs of too much property being built in the best industrial areas visited but this i'd expect to be a short term thing as the growing middle classes take up their loans from the banks and get a decent life.
all in, i feel india is on the verge of an explosion northwards economically. the pollies are doing all they can to make it so. past growth imo is nothing to that waiting to happen.
hey, and after a week or so on the toilet, the food aint that bad lol.
