Friday, August 30, 2013

A Precursor to Gold/Wealth Confiscation

As the Indian Rupee collapses......

....... the Indian government is floating an idea to 'buy' gold holdings of individuals and other private parties and divert it to refiners. As Reuters reports- 

India is considering a radical plan to direct commercial banks to buy gold from ordinary citizens and divert it to precious metal refiners in an attempt to curb imports and take some heat off the plunging currency. 

While further still-

The RBI will ask the banks to buy back jewelry, bars and coins for rupees. Lenders will have to offer better rates than pawn shops and jewelers to lure sellers.

Any talk of using the country's gold to help meet India's international obligations revives memories of a 1991 balance of payments crisis - when India flew 67 tonnes of gold to Europe as collateral for a loan to avoid a sovereign debt default.

Earlier on Thursday, India's Trade Minister Anand Sharma said the central bank should look into the possibility of monetizing gold holdings.

Monetizing of gold holdings? The creation of paper is what created the currency crisis and has led people to search out sounder currencies. More paper money will not solve this problem.

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