Recently published data about India imports of gold and silver shocked analysts Monday after India’s commerce and industry minister Anand Sharma released trade figures for the month of May.
Those figures show a 500% increase in May (month-over-month from April) and another impressive hike of 222% from May of last year. Bullion imports reached $8.9 billion in May, which, if put into more meaningful perspective, represents nearly half of India’s average imports for the ENTIRE YEAR!
The article, first published on internationally recognized source of mining data, Mineweb.com, has since gone viral on the Web within the gold community since yesterday.
“People in India have accepted high inflation as a reality of life,” Rajesh Shukla of the Centre for Macro Consumer Research told Mineweb. Shukla also noted that Indians turn to gold during times of excessive central bank money printing, and is most likely the cause of the spike in gold and silver imports during May.
India’s craving for gold and silver is beyond outsized, now. It’s a frightening show of what sheer numbers can do to the short-term (and long-term, in the case of India) of any given market. What was once pretty much under the radar of Wall Street analysts is now too glaring to miss. Move over Peak Oil theorists, the Peak Precious Metals thesis could soon spread more quickly now that India has decided to stampede its Indians onto the gold and silver life raft.
Moreover, and probably most troubling to the gold cartel, the latest India import report strongly suggests that India’s 1.1 billion population can break the precious metals market suppression scheme all by themselves without any help from American media, who have been tirelessly urging mainstream investors to accept blindly Ben Bernanke’s dangerous, untested and unsound monetary policy moves.
But the hang up among American investors centers, first, on a prerequisite deprogramming of false economic theory regarding a vital role gold plays in economics, taught in Western-centric colleges, and repeated as gospel from the flock of the high priestesses of Modern Monetary Theory (MMT).
So when Bernanke and his echo chamber at CNBC report on the Fed’s latest actions (and obscuring the primary dealer and accounting fraud), investors believe that, though the economy is “not at full capacity,” we’ve been here before and it’s only a matter of time before we dig out of this hole and create meaningful jobs again.
“The gold story is puzzling” Standard Chartered financial analyst A S Kirolar told Mineweb. “Consumers are shying away from stocks and bonds and heading to safe assets like gold and real estate, but one cannot understand this given the meager 12% growth in imports of petroleum and oil products.”
As Western-trained analysts remain puzzled from the recent “unexpected” demand for gold in India, Indian authorities, on the other hand, aren’t confused at all, taking steps to open the gold spigot wide open to accommodate the feverish demand for gold to its people of the world’s largest democracy.
Shivom Seth, the Mineweb author of the article, wrote:
“Analysts maintained that India’s central bank, the Reserve Bank of India’s decision to grant licenses to seven more banks to import bullion has helped push up demand. Karur Vysya Bank, State Bank of Bikaner and Jaipur, State Bank of Hyderabad, Punjab and Sind Bank, South Indian Bank, State Bank of Mysore and Seth continues:
“As of the start of 2011, some 30 banks in India have been granted permission to import gold and silver. Jewelers are getting easy supplies which is also helping push up demand. Moreover, the flow of scrap is also expected to fall from a yearly average of 200 tonnes, which could again boost imports, underlining the insatiable appetite of the Indian consumer.”
Adding that latest report out of India to the gold story emerging out of “Communist” China, then the verdict on the value of gold to investors is taking shape: No matter what a people’s political ideology or cast, the people want to hold gold—especially during times of government theft of purchasing power.