What will save India

Quiet Progress
For the last 20 years, World Gold Council has shown Indian gold consumption rising from 400 tons (1987) tons to 800 tons (2007). Estimated Indian gold reserves at 25,000-30,000 are double of the next largest country – the USA with 14,000 tons. India has 20% of the world population and also 20% of the world’s above-the-ground gold.

Which is quite unlike China!

India and the World
For much of the last 2000 years of recorded history, India has been the largest buyer of gold. Roman historian, Pliny, lamented some 1800 years ago, how India, the sink of precious metals, was draining Rome of gold – an appellation that resonates even today.

In the Indian North West (modern Afghanistan), Greco-Bactrian coins were made (seemingly) from the “Roman gold coins, which poured into India.” To “manage” this drain of gold, Romans started cheating the Indians. They reduced the gold content in coins. Septimus Severus, (193 AD-211) further debased the currency. Indians just stopped accepting the debased coin – and demanded payment in pure gold.

In mid 17th century, a Superior of the Capuchin Mission at Isfahan, friar Raphael du Mans wrote an authoritative (in 1660) Estat de la Perse, which was used by the French Minister Jean Baptiste Colbert, to form the French East India company (1664) – and in modern times, as a source book for tobacco habits in medieval Iran. This Christian missionary in Iran, Raphael du Mans thought that India is “where all the money in the Universe is unloaded as if into an abyss.” Central Asian invaders, for gold, aimed at the सोने कि चिडिया (loosely the ‘golden goose’). Their partially successful raids, were deemed as invasions by colonial historians.

The Byzantine Empire, successor to the Assyrian-Achmaenid-Macedonian-Roman lineage, similarly found that their reserves of precious metals were ‘again, leaked away to India.’ A significant part of Indian royal treasuries, when these hoards “fell a prey to European invaders, it was found that the gold coins of the Byzantine emperors formed no small part of their treasures”

In 1748, Baron de Montesquieu, warned Europeans that …

Every nation, that ever traded to the Indies, has constantly carried bullion, and brought merchandises in return. … commerce of the Romans to the Indies was very considerable … this commerce was carried on entirely with bullion … They want, therefore, nothing but our bullion, to serve as the medium of value, and for this they give us merchandises in return … that bullion was always carried to the Indies, and never any brought from thence. (ellipsis mine).


Restrictions on export of gold from Iran to India to India were put by the Safavid Iran. – and the Ottomans in turn put restrictions of export gold to Iran. No help at all.

Even modern writers resent the fact that despite the “absence of indigenous sources of gold and silver” the “very favourable export-import balance” resulted in “inherent strenghth of the Indian economy”. Further, it has been correctly observed that in “our period the subcontinent drew vast amounts of gold and silver, exceeding previous periods and exceeding all other parts of the contemporary world so far.”

A French visitor to India Francois Bernier enviously wrote how

It should not escape notice that gold and silver, after circulating in every other quarter of the globe, come at length to be absorbed in Hindostan. (from Travels in the Mogul Empire By François Bernier, Irving Brock)

Another current day writer describes how

“in exchange for textiles, spices and other Indian agricultural and industrial products, merchants from across Europe and Asia flooded India’s bazaar’s with dinars, tangas, ducats, guilders, reals, francs, rixdollars (reichthalers) and countless other varieties of coins, all of which were minted into rupees. (from The Indian diaspora in Central Asia and its trade, 1550-1900 By Scott Cameron Levi)

Moving away from Central Asia, the general European economy, was simple -

Europe had a net balance in the difference between the arrivals of precious metals (mostly from the New World after the sixteenth century) and export of the same (mostly to the Far East for the purchase of luxury commodities).(from Economic systems and state finance By Richard Bonney, European Science Foundation)

It was not surprising therefore to find that Ian Fleming, pitted Western fiction’s best secret agent, James Bond against Auric Goldfinger – who was smuggling gold out of a declining, post-war Britain to India.

And Indian exports were not only textiles, spices and indigo. Students came from all over the world – and paid large sums of money to Indian teachers for education!

The Pre-WW2 Currency Crisis
During various collapses of temporary gold standards in history, Indian gold reserves (usually unwillingly) stabilised world economies. In recent history, Indian gold reserves went out to stabilise the American currency during the Great Depression and the German currency during the post-Wiemar drift. Indian silver reserves broke the Hunt Brothers’ back and their silver gambit in the 1980’s.

After (colonial) India’s accession to the world gold standard in 1898, India, especially during WW1, rapidly built up a export surplus. British reserves of gold started drying up – in spite of gold export restrictions to India by the USA, Britain and much of the Western world. There was hysteria in popular press and politicians on the subject of India and its appetite for gold.

Crash in silver prices
Between 1800-1900, new mines and increased silver production saw a crash in silver prices. Abundant silver discoveries and mining had flooded the world with silver, depressing prices. Germany moved to the gold standard in 1873, further releasing silver in the world markets. The Opium trade further released vast amounts of silver from China – which was opened to ‘free trade’, giving rise to some of the biggest Western fortunes (of the Roosevelts, for instance).

US silver coinage was being depreciated due to increasing supplies of silver.

On the other side, Britain had a large debt due to WW1 – principally to the US of A and India. Groaning under the weight of WW1 debt, Britain took the easy way out to assuage the impatient creditor – US of A. Britain and America stuck a deal at the cost of the Indian subjects of the British Raj. They paid the US in gold – sourced from South Africa, Ghana, Australia and Canada – and instead bought silver from the US at inflated prices, to settle Indian debts.

Britain decided to settle Indian debts with silver. Large US silver reserves were released when the US passed the Pittman Act which mandated silver sales at more than a dollar per ounce – double the 50c per ounce prevailing price of silver. The resulting payment crisis was averted, and it was decided to pay India in silver released by the Pittman Act. Silver prices which were ruling at o.50p an ounce in the London market, was sold to the Indian colonial Government for more than US$1.0 under the Pittman Act.

Gold prices were deflated. Interest rates in India were increased. Restrictions on gold (and even silver) imports on were placed and gold demand in India was ‘normalized’. Subsequently, even payments in silver became difficult. India then started getting paid by Bank Of England credit notes.

So, finally, it was the Indian native who financed the WW1, who paid the price!

But of course, the Indian native was ungrateful to the US of A who, “by passing the Pittman Act, Congress gave India an opportunity to obtain silver” (from Our silver saved India from crisis - New York Times, Published, August 23, 1918).

Modern restrictions on gold exports to India
Between WW1 end and the start of the WW2, it was evident that sooner rather than later, India would not remain a colony for long. Between 1920-40, in a series of measures, policy decisions were taken, which made Indian interests subsidiary and inferior to Western interests. Central bankers from the USA, Britain, France and Germany had many meetings “coordinate monetary policy.” The agenda – gold flow management between themselves and an obvious understanding - don’t let the browns get the gold.

Indians were paid, with inflated and abundant silver stock, instead of gold. This silver was the same silver released by the Pittman Act. The silver buffer solution to the gold drain to India was seen as the “only buffer to protect Western gold reserves against the Indian drain (was) a silver buffer.” Of course, later the British Raj decided to settle Indian debts with promissory notes – and not even silver. It was this Indian ‘sacrifice’ which enabled the recovery of the West.

They (Hjalmar Schacht, Governor, Reichsbank, Charles Rist, Deputy Governor, Banque de France, Benjamin Strong, USA Federal Reserve, Montagu Norman, Bank Of England) agreed that Indian demand for gold had a “…deflationary effect on global liquidity,” therefore Indian demand for gold had to be regulated.”

in the spring of 1926, when Norman induced Strong to support him in fiercely opposing a plan of Sir Basil Blackett’s to establish a full gold-coin standard in India. Strong went to the length of traveling to England to testify against the measure, and was backed up by Andrew Mellon and aided by economists Professor Oliver M.W. Sprague of Harvard, Jacob Hollander of Johns Hopkins, and W. Randolph Burgess and Robert Warren of the New York Reserve Bank. The American experts warned that the ensuing gold drain to India would cause deflation in other countries (i.e., reveal their existing over-inflation) (from America’s Great Depression By Murray N. Rothbard, Chapter 5, The Development of the Inflation; Ludwig von Mises Institute)

The Anglo Saxon bloc clearly realized that “it was most important for the Allies to agree on a policy that would prevent the Huns from capturing the very valuable raw materials which can be obtained in India, and sometimes in India alone” (from Our silver saved India from crisis – New York Times, Published, August 23, 1918). Further, The New York Times stated “how without Indian products there would be greater difficulty in winning the war” (from SELLING OUR SILVER TO INDIA from The New York Times, Published – August 25, 1918).

So, as the West traded, profited and consumed Indian production and goods, when it came to paying for the goods, they cavilled – and ‘regulated’ Indian demand for gold – and even silver!!

How millions of Indians died
Like much of Western history, the British Colonial administration (Lord Willingdon, Montagu Norman, Neville Chamberlain, Winston Churchill, the Chancellor of the Exchequer) executed a scorched earth policy in India. (After all what is brown life worth?)

They implemented a series of economic and administrative measures, (significantly, under Churchill’s baleful influence) that killed millions in the Bengal Famine would impoverish India – and sustain the empire. The result – Bengal Famine of 1943 which killed 40 lakh Indians. The Bengal Famine of 1943, of course had may other layers to it – but nett, nett, as Gideon Polya has pointed out, Australian sheep have lower mortality rates.

The Bengal-Burma link of the ages was broken. After being demonized, the Chettiar money lenders were thrown out of Burma, the role of Chettiars (for e.g. in Singapore) was wiped clean. From being a granary of Asia, Burma started declining – and there was no rice for exports. Result – The Bengal Famine of 1943. Tally – 40-50 lakh deaths.


After the fall of Singapore, and the rapid Japanese advance, with Subhash Chandra Bose in the vicinity, a revolt by Bengal would have had catastrophic effect on the colonial administration. Howard Fast, in his novel ‘The Pledge’ believes that the Bengal Famine was deliberate creation – possibly to weaken the local population and deter support for Subhash Chandra Bose.

Crisis in Britain
Britain in the meantime, returned to the gold standard under Montagu Norman and Winston Churchill (then the Chancellor of the Exchequer) – with the famous prediction by Keynes that this action would result in a world wide recession – of which much came to pass. Churchill confessed “I’m lost and reduced to groping” but went along with Montagu Norman, united by their racism.

On October 27th, 1931, the Ramsey Macdonald led “National” Government (Conservatives and Liberals coalition, fearful of the rising Labour Party) in Britain won a huge majority of 554 MPs of 615. The economic crisis of September (misnamed as the Indian Currency Crisis), ensuing Depression era problems in the US, the Weimar Republic problems – and other issues pushed this ‘National’ government to ram through a series of measures (page 130-131) that depressed silver and gold prices and raised interest rates in India.

Done over the protests by Gandhiji, trade bodies and merchants and threats of resignation by the Viceroy and his Executive Council, the resulting ‘money famine’ (page 155) had the Lord Willingdon ecstatically say ‘Indians are disgorging gold.’ Indians have a different reason to revile Neville Chamberlain, who with great satisfaction said “…The astonishing gold mine that we have discovered in India’s hordes has put us in clover …” after impoverishment of the Indian serf.


More currency and less gold
The Nixon Chop
On August 15th, 1971, President Nixon after a two day huddle with 15 advisers at Camp David, delivered the Nixon Chop to the world.

The Nixon chop (my name for this event), one month after his China breakthrough, cut the convertibility peg of US$35 to gold as US gold reserves were severely depleted. The French had been regularly redeeming gold for their dollar earnings – and for this ‘perfidy’ the US had not forgiven France. This was much like the pre-WW2 French methodology of devaluation, new peg, old debt for new gold routine which got the US hackles up. Many decades have passed since these redemptions by France, and the new French President, Sarkozy believes it is now possible to renew US-French relations again.

On the opposite side of the world, a beleaguered Indian Prime Minister was celebrating 24 years of Independence with a “ship-to-mouth“ economy, dependent on PL-480 grain. Private gold reserves in the Indian economy after nearly 25 years of post-colonial rule, were steadily rising. Over the next 10 years, the Western world (and most of the rest) blamed OPEC for post-1971 inflation, gold scaled US$800 an ounce; the Hunt Brothers launched their bid to corner the silver market; stagflation made an entry and Soviet power grew. Nixon Chop, itself the result of many years of gold reserves erosion, was one in many steps that brought the US$ to its knees – only to be saved by the Oil dollar tango.

The Greatest Crime Wave … Ever?
From the 1960-1990, the Big Issue for people across large parts of the world was Big Crime. The 1960-1990 peak in organized crime, globally, is interesting due to the synchronized time frames – across USA, Europe and India.

In India, the rise of the underworld was delayed by a decade – as was its decline. India’s underworld, centred in Mumbai, at its peak, intruded into trade unions, films and entertainment, gambling, real estate, extortion and smuggling. The specter of Dawood Ibrahim haunts India-Pakistan Governmental relations – even today.

Roosevelt had earlier in 1933, during his New Deal years, nationalized all American gold. This restriction was finally eased only on December 31st, 1974, with Executive Order 11825 by Gerald Ford. It was Roosevelt’s gold nationalization which allowed the US to wage WW2 and create the Bretton Woods system.

From 1939, (the start of WW2), gold imports into India, the world’s largest market and also the largest private reserve of gold, were controlled or banned. Not only the largest, but Indian reserves of gold, are also the only significant reserve in the world without a history of war, genocide, slavery or loot, (unlike US, UK, Canada, Australia) or to due nature’s bounty (unlike South Africa, China, Peru, Ghana, etc.).

The first effect of restrictions on gold imports in India was on prices. Indian gold prices, on an average, were 30%-40% higher than international prices. The other thing that happened was that gold imports went underground. Gold imports (illegal), called smuggling, spawned the biggest criminals that India has seen.

The common threads in this were, of course, America, drugs, underworld, war, corruption, warlords – but what made all this possible was Indian appetite for gold.

All this was made possible by the Indian hawala system of money exchange. Hawala made money transfers safe, instantaneous, at a low cost. Traditional Indian ships from a thousand ports in Goa, Maharashtra and Gujarat sailed with this contraband and brought back gold.


Golden Triange & Golden Crescent
The countries comprising these Golden Triangle /Crescent are India’s neighbours. The Indian underworld transported drugs through India. These drug shipments originated, were acquired, grown and traded from the Golden Crescent and the Golden Triangle.

The US eliminated gold ownership restrictions in 1975. India followed. In 1992, India started its first hesitant steps towards legalizing gold imports. By 1995, these import control laws had been diluted to near non-existence. With the dilution of restrictions on gold imports came the abatement in the biggest crime wave in modern history.

Today, the abatement in organized crime is ascribed to vigourous efforts by the police and legal systems. The earlier lack of success is conveniently forgotten. Many ‘encounter’ specialists claimed credit for the reduction in the power of the India’s underworld. Much like the fading away of the mafia in the US and Italy, in India too, after the gold trade was legalized, the mafia’s source of power, liquidity, earnings, profit were taken away. With it came the underworld’s loss of power and influence. And that coincided with the reduction and control of organized crime from the US and Europe and India. And an end to the greatest crime wave in the modern history.

So, why this desperate poverty
With global monetary system in a flux and the decline of the dollar (especially after the Plaza Accord), the perceived utility of gold and the price outlook of gold has been positive. After the Nixon chop, at an estimated 15,000-18,000 tons, India was in a position to create instruments, obtain leverage and create wealth from the world’s largest gold reserves.

It is the failure of the Indian economic minds – that they have not found any instruments and means. Some 35 years after the Nixon Chop, and with Indian gold reserves approaching 30,000 tons mark. Some other countries tried feebly, and failed. Japan and Asean tried setting up the Asian Monetary Fund – after 1997, currency crisis – and were arm twisted by the US to drop the idea.

Is the US likely to give up the central role?
Unlikely! Let me correct myself! Pretty damn unlikely!!

Will the Western world share its pre-eminence with Japan, China and India. Bet your bottom yuan, yen, rupee or gold – they wont. Especially since the Anglo Saxon Bloc control nearly 80% of world gold production.

What are they likely to do! Some of the older measures by which gold was transferred from the old (and the new) world to Western world are no longer possible.

But if any central bank (or monetary authority) were to: -

Mask purchases
Build up gold positions
Take physical possession of gold (Avoid Czech Gold, Montagu Norman & BIS Scam)
Look at a positive outcome to a war scenario
then that country will be able to bolster their gold reserves position by: -

About 10,000-15,000 tons
Limit the cost of purchase
Make it economically unviable for anyone else to match them
The only country that can (currently) match these criteria is the USA – and China.

The US GATA Committee has been running a low profile campaign on gold price manipulation. This attempt, if successful, at increasing gold prices will possibly make it difficult for Indians to buy gold in larger quantities. The Indian Central Bank, preoccupied with a developmental agenda, is in no position to take up this challenge.

From an Indian standpoint
While the silver lining is private reserves, we have a blinkered RBI & GOI response. India has one of the lowest monetary reserves of gold in the world. Against a global average of 10.5% RBI holds only 3.4% of its reserves as gold. The EU holds 40% of its reserves in gold and USA – 70%.

And while the RBI & GOI gently sleep, the Chinese have grown their gold purchases. China has become world’s 3rd largest consumer of gold – up from a 100 tons to 350 tons. Shanghai Gold Exchange has made it easier for individuals to invest in gold by reducing the transaction size from 1 kg to 100 gm.

Importantly: -

Is India in a position to militarily defend these reserves
Does the GOI and the RBI have any strategic intent vis-a-vis gold
Making the job easier for the GOI and the RBI are Indian economic habits of the centuries that have allowed this build up of gold reserves. India stands at a historical cross road. Are Indian economic and political minds at work to exploit this window of opportunity. Or will it be a wasted chance.

Gold and War
Alexander’s campaign started with the gold reserves that his father had built from the mining operations at Mount Pangeus. The Macedonians were the first in the Hellenistic world to keep standing army – a luxury and a big expense, in Greece, at that time. The Roman empire was similarly funded by gold mining and loot. Julius Caesar’s European conquests were funded by Gaellic loot. The Punic Wars with Carthage were fought over Spanish Gold. Roman conquest and love affair with Egypt was motivated by grain and Nubian gold.

Carolus Magnus, Karel de Grote, Karl der Grosse, Carlomagno, Charles the Great – or more commonly known as Charlemagne (ruled between 768-814) waged war for 30 years, spread over more than 50 battles. Charlemagne’s conquests were funded by the Saxony mines, the Haartz mountains, etc. His victory over Avars, (modern Hungary) gave him treasures which needed 15 carts, pulled by grey steppe oxen for transport.

The British loot from Canada, Australia, South Africa – and India, gave the world, numerous wars and brought humanity “under the heel by means that will not bear scrutiny.” It is these very same Gold reserves which gave birth to the Bretton Woods – and we know what happened after that! Roosevelt gave a New Deal to the Americans. He took away all their gold. WW2 followed soon thereafter.

This short look at Western history makes the linkage apparent. The main factor is the pattern of gold ownership by Governments and war becomes a fait accompli.


Gold Reserves - Global (2ndlook estimates)
What Should We Do With Gold
Just sell it to people. From all the countries of the world.

The world financial organization should limit control of global gold output by any mining organization to 10% or a single mine – which ever is lower. Gold holding should be widely dispersed, as widely as possible, amongst individuals – like the Indian gold possession model. No national government, in the new financial architecture should not be allowed to have more than 250 tons of gold – to progressively reduce to 50 tons.

What this will do is disperse gold holdings among the citizens of the world – and dilute the ability of nations to wage war! National Governments (like the US), have used gold looted from their own citizens (and others) to deprive other peoples of the world of gold – and wage war.

What we should not do?

Good Ole’ Gold Standard
In the last few decades between the Nixon Chop and the Bush Whack, the Western academic world, has floated another ‘hot air’ balloon. It is the revival of the ‘pure,’ Gold Standard. The story goes that in the ‘olden’ days of 19th century, in the golden age of Western civilization, there once reigned the Gold Standard.

The simplistic logic of this theory is that the world should ‘go back’ to the Gold Standard - or as some put it, improve the ‘corrupted Gold Standard’ of the 19th century, and then everything will be fine. All currencies of the World, should be indexed to Gold – and then everything should be fine. Currency can be redeemed against gold – and gold reserves equivalent to currency should be kept as reserves. This will kill inflation, stop war, make politicians honest, make tax payers honest, citizens hard working and business efficient.

In short a magic bullet.

The last time, we saw this, it was called the Bretton Woods. The US and the Anglo Saxon Bloc came together and said we will administer the new world currency system. The world agreed – once again. And we know what happened.

Two years ago …
This post had estimated that the Chinese could possibly (and they have) increase their monetary gold reserves. On April 24th, 2009, Bloomberg reported that China had increased

its (gold) reserves by 454 tons to 1,054 tons through domestic purchases and refining scrap metal, Hu Xiaolian, head of the State Administration of Foreign Exchange, said in an interview with the Xinhua News Agency today. China, the world’s biggest gold producer, has increased its holdings before, Hu said in the interview carried on the administration Web Site. They rose from 394 tons to 500 tons in 2001 and to 600 tons in 2003. The U.S. has the world’s biggest gold holdings at 8,134 tons, followed by Germany with 3,413 tons, World Gold Council data show. France has 2,487 tons and Italy 2,452 tons, while the IMF has 3,217 tons, according to the council.

Another report, from Market Watch, a WSJ web publication added,

The increase makes China the world’s fifth-largest holder of gold, just ahead of Switzerland, and among the six nations plus the International Monetary Fund that have reserves of more than 1,000 metric tons. Although Hu did not elaborate on where China had sourced the additional bullion, her comments were interpreted as meaning they came from domestic sources and may included refining of scrap metal. Traders also say the gold was accumulated systematically over a number of years. Last year China ranked as the world’s largest gold producer with 12.2% of world output, equivalent to 288 metric tons. The U.S. ranked second with a 9.9% share, or 234 metric tons.

What are the future plans of the Chinese? A report quotes an analyst

China should increase its gold reserve from 600 tons to about 2,500 tons in a short term and to 3,000 tons in a long term to cope with the versatile exchange rate risks, said Teng Tai, an economist of China Galaxy Securities Company.

Of course, this really does not mean much – except that it may keep gold prices on boil. Whether a currency is backed by a 5% or a 10% gold reserve may not mean much, in this era of rampant use of (not just by the US of A) “a technology, called a printing press” as an economic tool. For long term economic stability, gold needs to be in the hands of individuals – and not Governments.

It's time for india

If you are a true Keynesian then ofcourse this proposal is heresy. But India is in a unique position. The last 12-18 months have shown how fragile the global financial architecture is. The USD is being used solely for achievement of USG objectives, the rest of the world be dammned. Why should India which is this unique position of being able to back up 100% of its M3 money supply with domestic gold not look at unique solutions? It does not have to be M3, it can be M1, heck it can even be 25% of M1. But what it will give the rupee is credibility. Eventually in an ideal world, and 20 years down the road, anybody in the world should be able to hold the rupee with confidence. Even a 25% margin, will have credibility.... it can also provide GOI with some flexibility if that is what they need..... But there will always be long term limits to fiscal and monetary irresponsibility. Totally the opposite of the open ended money printing being done by everybody today.

Consider that money creation is nothing but debt creation and also consider that the relationship between money creation and asset prices is highly non linear e.g. $10B of FII inflows into the Indian stock market makes the sensex jump by 30% and adds $300B to market capitalization. This is not confined to the Indian markets. As you know Wall street is the original purveyor of this lunacy and itt continues today.... in fact at an accelerated rate with thin trading volumes. Is this madness or what? Asset price increases are nothing more than the devaluation of the currency that they are denominated in. I would much rather that productive assets be created. Yes, asset price inflation can feed into the "real economy", but that is a highly dangerous game to be playing as many countries have discovered.

For all of these reasons, one should consider a currency for what was its original purpose i.e. as a store of value.

To provide a link between gold with Indians and money supply GOI should:

1. Make purchases of gold, tax deductible without any limit.
2. Abolish capital gains tax on gold profits.
3. Provide an ammnesty with no time or amount limits for declaration of black money provided the same is invested in gold.
4. All Indians holding gold will have to declare annually their gold holdings.
5. Purchase for the account of the RBI any amount of gold tendered and pay in rupees at then current market price.

Taken together 1 through 4 should provide a disincentive to not declaring the gold each family has. Further disincentives via a tax or inspection regime can be decided on. The only objective of the exercise being to tie, say MI money supply to Declared Gold.

Whats the advantage of this? Simply that it will impose disclipine on creation of money supply either via deficit spending or via monetization. If Declared Gold is tied to M1 then money creation via the multiplier effect will not be impacted and as such M3 can continue to increase to support additional business/consumer borrowing demand as and when warranted. Similarly when demand wanes and there is a cyclical recession, M3 can be destroyed via the same reverse multiplier mechanism. But there will no permanent increase in the monetary base as is the case under the present fiat currency regime.

Why is this needed now? Because unless India wants to live in perpetuity either under a mismanaged dollar regime or a new yuan regime, the time to begin acting is now.

India is probably the only country in the world which has this unique capability now where domestic gold with citizens can back money supply. In no other major country are the two numbers even close together. In fact if the objective is to back M1, then M1 money supply as of June 5 in the RBI site link given in my last post is the equivalent of $250 billion which is about 25% of the estimated gold holdings in India. As such even if a declaration scheme as outlined in the 4 points above has a success rate of only 25%, the gold linkage can be established for the rupee.
I cannot think of a better time politically than now for GOI to act. The numbers in Parliament are such that this government should last for a full 5 years. Any difficult decisions they make now will begin to payoff in time for the campaigning for the next elections.

This "representative gold standard" does not have to there for the really long term. But it can provide a very solid foundation for the Indian economy over the next 20 years. The stock of gold in country now at about 30,000 tons at current prices and if it provides backing for a 50% MO margin, will ensure that M3 can ultimately grow to $12.5T at the current multiplier and at current gold prices. If the velocity of money remains constant (unlikely, in fact it will become faster), this will support a $15T economy. If you reduce the margin to 25% of MO, then it can support a $30T economy. Are we really limiting the size of Indian economy here? Is $15 trillion or $30 trillion peanuts for Indian GDP? In fact, at the end of this process, the Indian economy will be a rupee centric economy because such a scheme if successful will tie the rupee far more closely to gold than any other currency including the US dollar.

More importantly, when the next global financial cataclysm does arrive, and it will arrive at some point of time, what with the way Obama is spending money the US does not have (makes a drunken sailor look sober by comparison).....India will have a currency with which it will be able to buy what it needs from the rest of the world.

See, if Indian politicos get their heads out of from where the sun does not shine and look ahead 20 years, they will have no hesitation in adopting or adapting such policies.
China on the other hand is f*****. The only way out of this mess for them is to get hold of real assets in the ensuing period as they are dirt cheap. GOI should do the same, Buy Petroleum feilds, Mines, grasslands and encourage private enterprises to do the same. Give a line of credit.
This 'Latrine' economics of Obama and company - printing more money will doom the dollar in the period of 6 to 10 months. Get ready for hyperinflation after that. The root cause of this mess was the cheap credit nd the way being found out of it is also cheaper credit. How will it work? Friends, the only smart way is please buy assets, Gold land, Farmlands anything... When the wunbum $$$ crashes, it will take down lots of currencies and thus the inflation will ensure that the real outflow of your money towards loan repayment will be much lower.
meanwhile GOI should look at pegging the INR to Gold, bring about credibility.
Till the time Petroleum continues to be traded in $$ this latrine economics of Obama and Amirkhan will continue and that is the real worry for China and russia. That si the real threat for Iran. Iran wants to move to Euro as currency for trading their oil and US will not allow it. it deprives their printing press of employment and them a cheap source of money without working for it.

Year of 75

That time of the year,
when the figure changes,
when I see new sprouts around the ear,
has come again.
come again with the collage ,
Let me open the trunk.
memories, beautiful, ugly, breathtaking,
Heartbreaking, joyrides, painful & bountiful.
Since i have come in the 30's ranges,
I can hardly remember I used to be a punk,
"Move on man",
Yes i will.
Searches at the twillight,
Once again , I am robbed in exile,
Emeralds, cut glasses, scandals,
Video tapes & lies,
Cut them out.
I want to drink the arabian sea,
piss it on the candles,
Don't feel like blowing them off,
may not have too much of breath,
I am left breathless,
Frozen heart,
cold start,
warm summer night,
from the endless mush,
I wanna see respite.
kalyan, I wanna be the night hawk,
cold but not sullen.
I wanna make myself invisible,
Though I know how to make myself gigantic,
Do not know how to turn small.
Too many many memories of yore,
I forgot,
I turn thirty four.
"You are not sincere,You are a mistake that's not dear",
It lends credence to my fears,
Spinach, Garlic, food and loads of lies,
This is how time flies.
will sleep on the beach this time,
Moon will turn into a woman's face,
Will say the grace,
Eat some paav ,
come home and stare through the night,
from this pain
I may get some respite.
Time to shut the door
as I turn thirty four.

Come again

You know me too well,
I hate you,
rather hate calling your name,
It hurts
Why did you call me?
You know my price. It
never changes, I still look for that smile.
Death of
me will give you life
& free you from a vile
fate.
You can caress the demon,
slay him
it is getting late.

If I could see you again
& talk with you,
walk a short while in your company,
and drink the heady brew
of your smell long with the smile,
I thought

to rescue a soul already
ruined. To achieve respite.
Going to God or the pub,
exactly the same,
It's a quick fix.
I mean you want me to come,
with you to the lord?
To plunder green gold
on a pirate raid & bring
to camp the glory of old.

My mind created both,
Gun and religion,
purpose?
to protect my interests!
Use one of them and protect yours.
Come again, come again into the swirl
Did i forget to add 'love' to the list of creation?
Add it sweetheart.
Come again, come again,
Distant voices from the yore.

what?

What has befallen the race of men? Why is it that words like integrity and honesty are sitting wounded in a secluded corner of some shady bar. Where is that famed moralistic Sanatan outlook. We were supposed to be harbingers of rational thought and move into spiritual plane. Why truth resembles a woman violated, a man crestfallen. Now the question can be, why am I too bothered about all this?
I walk over but again both of them look at me as if an alcoholic looks at a drunkard spilling a few ounce of scotch. I guess, they look for new identity, brand makeover. Why have they become a pariah? Even a pedophile has more friends , pimp more clients and liars more women. Have I ever bothered about them myself? Let me think, I have used them selectively and as per my definitions. Oh here she comes , bringing moonlight in the night, Let me bask in her glow tonight.
“will you help us? Spare us a thought, will you? We have been humped in , bumped in, cars, hotels, Motels and bars.”
I can not spare you a thought but let me spare some to myself. Why do I hear you too often? Is it because I analyse life too much, don’t exhibit my emotions because of the fear of getting hurt? Do I sometimes meet the real me? Yes I do. I let myself be known but who read me? I refuse to meet myself because I don’t want to loose again.
Let me spare a thought. Isn’t integrity linked to being me? Isn’t honesty a part of our upbringing?
People walk around today calling everyone their best friend. The term doesn't have any real meaning anymore. Mere acquaintances are lavished with hugs and kisses upon a second or at most third meeting, birthday cards get passed around offices so everybody can scribble a snippet of sentimentality for a colleague they barely met, and everyone just loves everyone. As a result when you tell somebody you love them today, it isn't much heard. I love you Kalyan, you are my best friend. I can't imagine going through life without you as my best friend. " I'm not going to kiss you however."
Love has passed the shores and I am contend with never having to say these 3 words to anyone in the world again. I said them already and this is my tribute to you too both – Honesty & integrity.Do i like being me? best, leave it hanging.

Drunken ramlings

As I look back
over my life,
I am struck by post cards
ruined snaps shots
faded posters of a time I can't recall.
I am a lier
I am told really,
snake in a glen
son of a military man.
Tested teachers in school
found maths very cool,
unlike kids my age,
was given a desk in the corner,
smartest kid around or fool?
well night was, what night shd be,
a girl, glass of wine,
went along dine.
"got a rubber?
can't get it up!
You are in love,
go, be with her"
love has poisoned my soul,
some tired future,
can't get off the disease,
Me, greatest cannibal of all,
Dig, bury me alive in a hole.
Remove my glass
from this hall of mirrors,
may land up breaking all,
you look like her,
I mean how could you
when no one ever did,
let me draw you,
on paper, not nigh,
Saw you driving other day,
new car, new life at speed a little high.
"Book a ticket, get back to her city, I am not what you seek."
Niether am I!
Living life in cruel bindings,
reading love only in school books,
The pimp!
my wallet, butterfly , shutter bugs & posers,
Stories, cravings, sufferance and the loosers.
Night is what night should be,
A girl, glass of wine.
can't wait for the room,
park, secluded, dark,
hide and seek, fear, tears and punishment,
runaway at twenty,
Who am I?
looser, warrior, traveller,
in my mind words plenty!
"can't get it up".
drunken brawls,
night crawls,
lumbering slowly through the darkness,
Sun is so big and red,
like the lips,
night was what a night should be,
A girl, glass of wine.
What if the guests return?
you will be asked to go,
midnight alleys roam,
"you are my friend, I will welcome you home."
butterfly, shutter bugs, pimp and my wallet,
Well night was a night should be,
A girl, glass of wine.

Who inherits the earth?

Untrampled footsteps
Borderline dreams
Occasions for sinners
Alive if it seems
Given to wander
Alone at the shore
Wanton to whisper
I am no more
No, I am not committing suicide but according to some, I am going through a slow death. Moot question is, aren’t all of us dying every moment? Some say why see the negative side of the things,” We are alive and it is beautiful, accept it and enjoy the life in all it’s beauty. Do what you want, take what you want, snatch it.”
This brings me to the fundamental question and I see it unresolved for centuries because the polarity it creates in philosophical thought and in some ways gender thoughts re also driven by it. Eastern Philosophy of ‘Tyag’, ‘Bairag’ and the western philosophy( rather modern ) Power centric. However the fundamental question still remains, Who inherits the earth? I have trying to answer this question through the perspective of three hypothetical characters. Let me start

ME
This is something that has been pricking my mind like a thorn for some days and I am going about my daily chores as always but there is no respite from the pain. Somehow the pain works even while I am asleep. I see the same daylight but it has lost the sheen, radiance. What has happened? What has come to cast a shadow over the moon of my life. I have become so sensistive that the hypocricy of the sorrow that has been masquerading as joy in my heart for all these years, now is tearing me apart and the deepening sense of shame and anguish is no longer hidden, although it tries desparately to take cover. My heart can fathom and see things unperceived so far.
Till the last day of my life, reality will extract with interest every paise that I have invested in the illusions these one and half years of my life. Coming back to the question we started with, What can I achieve by force or pride? Perhaps time has come to accept and bow my head and say that I lack certain qualities, perhaps I do not have that quality of expressing my love in normally accepted ways, appearing to be dominating them all the time, of the world and what women look for most in men. But does this firmness and ruthlessness to achive your desires mean one can unhesitatingly stamp other’s under his/her feet? What is this firmness? Whim or boast of a sick mind , What? Unworthy, undeserving, contemptible, I may be but isn’t love all about loving you for unworthiness. What’s the big deal loving somebody for qualities, Love is all about loving somebody for the inadequacies as my friend Jay puts it.

I wanted to open her mind to possibilities of thoughts and knowledge of the profession she had chosen. I pushed hard sometimes rudely so to jolt her and learn, not fall, grow as a person more balanced emotionally as well as professionally. She is a creature bound by the trappings of imaginary limits she has put on herself and starts admiring and falling into wrong hands any average mind who can glib talk. I wanted her to understand her own strength and love me for the reason I wanted to be loved for.I have always seen men(not in gender terms)as proud,clean, wise and the one's who can rise above their own prejudices to create their own future. I always wonder did the Love I was getting spring from the depths of her heart or it was some fixed ration everyday like the municipal tap water.

B
Am rather was I greedy? Was I aspiring for more than what I got? No, I was just a lover, I wanted a ‘B’ loving me from the strngth of her understanding of me and the world. I had really thought of one thing then – If I wanted to see somebody as free as herself then I would have to lay aside all my claims on her. This disturbed her a lot and she took as alienation. Till today ‘B’ has never understood one aspect of me, I have always considered use of force and deceit as a kind of weakness. The person who is weak does not have the courage to judge fairly, he tries to achieve quick results by unfair means. B does not have the faith in patience. She wanted to run away and stay. My honour never permitted me. Till the time I was wild and arrogant she cried for respect and yearned for my company. When I domesticated, she is gone.
I guess she wanted the fierce, even unjust, wild streak in men. She yearned as much to be terrorized by man as to respect him. I always thought that by enetering a bigger space she would learn to look at the world from a larger perspective and become free of her obsession of domination. However now I realize it is part of her nature. She loves the perverse from within. She wants to spice her all simple and ordinary pleasures so that it burns everything from the tip of her toungue to the base of her entails. Everything else she holds in contempt.
There was no joy in winning an arguement as it never showed difference n our intelligence but the difference in our temperament. She always accused me of being an unromantic person, devoid of imagination. Does it mean that in the lamp of my hear there is Oil ,perhaps a wick too but no flame. I say on the contrary such tempersment belongs to the so called romantics like B. They are without brilliance like flint stones, so much of striking , so much of noise is needed to make you guys spark a little. Those momentary sparks can make you more arrogant but cannot broaden your vision.
B’s pride was her devotion. She took great pride in it and I am sure she excels in it. She would take care of every smzll thing, Clothes,Food, medicine, sleeping time, basically everything. It was her oride and I had to accept defeat as far as devotion was concerned. However whenever I would try to talk to me the same things again and again I would refrain as I felt my reasoning and her emotional impatient nature would not match. She still tried and felt humiliated at the end. I too felt bad.
In the beginning, when she just joined D’s company, she would complain about the nature of ‘D’ . She would talk his womenising and his hitting on her.
D
When I first met D, I too noticed the grossness of avarice in his nature. This fleshly desire is what makes him construct a rhetoric of infatuation about his creed. This eggs him to hit on any woman who joins his organization.
It was the job interview. Yes you are right, I liked the prospect of working with B.
Despite his gaffes, it is his sharp intellect that he valorizes own predilections, just as he needs the gratification of his sensual pleasures. B would tell me of his sojourn with his secretary cum assistant, would even book a room for him to saty with her. I don’t want image of 'D' to get influenced by my pain but wht else to say of guy who has built his business by pimping to the govt officers.
As B is getting married to D, I want to say no more, best of luck and happy life.
Moot question is who inherits the earth? For me, I am at the odds with the order of this colossal life.As she explores her destiny, I will also know that whatever I was preoccupied till now was only a delusion. There, I feel, will not be need for such a deceit. If I live to see that day, I will not fight it, I will simply make myself scarce. Will I use Power, coercion to have my way ( change myself)? Can power compete with the truth? However, what is ‘The truth’? Is my truth ‘the one’? Does the truth of a D absolute wherein you get things somehow. Or the truth of a B will survive?

When facing society,Why is that the men who can contribute the most, are to contribute the most has least say in it. Why all the reason, logic they give is already taken as prejudicesd. What are the scales society(B as an embodiment of society) use to measure them? How do they arrive at them? Do they have any power of reason? This is what separates men from animals, the reasoning mind. Standing at this crossroad of life, I keep wondering, looking for a frnd to whom I bare my mind and soul and when the poet in me looks at myself, he looks at a comrade in arms, hurt in battle. My mind is a battlezone. He desperately wants to carry me to a vantage point from this war to safety. Do love and safety have any destination ?
I guess women are the inhabitant of the real world. My friend and mentor Sharmila once told me,"in the end it all boils down to practical things, I am a woman and I am teaching you this". Nature created men and women in pairs in a way that their union is more genuine than that of any religious mantra they could be imbued with. Women have a full bodied desire that does not dries in self mortification or retreats by the force of counter-arguements. Men by nature are rational and too moral concious as a whole. Neway

Who moves this Earth?

slave of the dream

She lives in the city
near the sea,
Slave of the dream,
prisoner of the pirate.

I want to be with her,
watch her stand by the shore,
beautiful, warm, smiling,radiant,
could I ask for more?

want her to see,
in turn watch her face,
light up with that childish glee,
things that I wove,
sea turtles that bleed.

let us put the seeds for the plants we need,
growing older by an hour,
hair grown grey as wheat flour,
may be stained lot ,
life is surely lost.

The bride

The bride to be,
waits in her room.
silence sleeping on her bed,
listening to the festivities downstairs,
Someone stole her in a dream last night.

The dream and the bride,
Watching each other narrowly,
Like the banks of river,
flow together,
never meet.

The drop is afraid to fall in the ocean,
don't want to loose identity,
It becomes the ocean,
after the fall.

I hate him for making me cry,
all those arguements,lies,
don't love him anymore
after the fight
Someone stole her in a dream last night

strange circus

Welcome to the circus,Story of a lifetime run in few minutes.
Me? My name is sad song and I wanted to be happy.
"Tell me what is that you love about me,Figure,Eyes what?"
"Can you switch off the tv please, I am trying to concentrate."

You have a beautiful heart my love.
In the royal congregation,
what can a desire of poor accomplish?
my beloved, where there is fear of king,
what weight would the pleas of a lover carry?

My beloved, behind the curtains,
of the advertisement of love,
you shd have glanced at the tokens of love,
the first email from official ID, First visiting card,
first call from new number.
I guess you were expecting dead broken flowers instead.

lot many people have loved before,
and will continue to embrace,hug, yearn for each other,
who says that their emotions were not pure?
only that they did not have money ,tact for advertising.

" You complete me as a woman,friend and partner, I am honoured to be part of your life."
I am in love with this part. Go on reading.
" Waky -waky, this is my couch, stop dreaming,
She loved for a hobby and sold it for comfort."
Lisa- Lisa, sad Lisa-Lisa,
Her eyes like windows, trickle down rain.
"can you stop this tv, I am trying to concentrate!
Juliet when we made love you used to cry,
I will love you till i die.

Welcome to the circus
My name is sad song, Wanted to be happy

Some one strums a guitar,
Hear a faint voice from past,
in the heart tears a hole,
feels like my twin soul,
no ripples in sea of tranquility,
We, in love for posterity?

This is a market, everything is on sale,
what you wanna buy?

"kyaa likhe mile ab duniyaa,
aansu ke sivaa kuchh paas nahii,
yaa phool hi phool the daaman mein,
ab kaaton kii bhii aas nahii,
matalab kii duniyaa hai saarii,
bichhade sabhii, bichhade sabhii baarii baarii "

"I am trying to concentrate, She loves me.Please switch off the tv."
I will love you always, but isn't love and always mutually exclusive?
In the future, Either me or love won't exist.
"Nothing lasts forever, learn this lesson and leave the couch."

Welcome to the circus
My name is sad song

i walked

I walked and walked and walked,
Away from Light, Colors Bright,
Away from darkness, Misery and Pain,
Away from Love Affection and Profane.
I walked and walked and walked,
till I could Count the Bones,
Identifiable by Different kind of pains,
Till darkness met with light,
Joy with Pain,
Deserts with Rain,
Exhausted, Perplexed at the Unholy marriage,
Spirit Somehow Prevailed.
I walk, I walk and I walk,
Where sun will radiate the warmth of my heart,
Nights will melt with my Whispers.
Where Gods Of fortune and Devils of misfortune will not play with Human Heart,
Where I will get Peace,
Where I meet death,
The Gateway to that land of freedom and Austerity.
I walk, I walk.......