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A person poses with gold biscuits inside a jewellery showroom in Mumbai in this June 4, 2013 file photograph.
A person poses with gold biscuits inside a jewellery showroom in Mumbai in this June 4, 2013 file photograph.
(DANISH SIDDIQUI/REUTERS)

CARL MORTISHED

India’s problem: too much gold hoarding, not enough energy

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Too much hoarding of gold, but not enough stockpiles of oil or coal, is India’s problem. While Indian households trash the rupee in a mad scramble to import a useless yellow metal priced in dollars, the government wonders how the nation can afford to pay its fuel bill. In their frantic pursuit of India’s traditional store of value, citizens are worsening the country’s $90-billion (U.S.) balance of payments deficit. So deeply ingrained is such behaviour – Indian farmers tend to buy gold after a bumper harvest and then sell it in lean years – that the government isn’t even trying to stop the buying frenzy. Instead, it is considering a plan to direct Indian banks to buy gold on the local market and make it available to fabricators, thus reducing the ruinous cost to the country of gold imports.