December 6, 2005
ANOTHER MYSTERY SOLVED:
India's costly love affair with gold: Money spent on gold could be cutting the country's economic growth by 0.4 percentage points per year (Sunil Jagtiani, 12/06/05, The Christian Science Monitor)
With a stockpile already worth $200 billion, Indian gold purchases jumped nearly 40 percent this year, making the country the world's leading consumer of the precious metal.
Gold may seem like a savvy investment as its value hits a 22-year high. But experts say it may actually be weighing down one of Asia's fastest rising economies. It would be better if the money locked up in the glistening yellow metal went instead to finance new start-ups or better roads, boosting the Indian economy over the long term, economists contend.
That could provide quite a boost, given that the amount Indians have saved in gold - mostly as jewelry - is worth 30 percent of the country's $690 billion economy.
Get them to buy our bonds like the Chinese are and we can really cut taxes.... Posted by Orrin Judd at December 6, 2005 7:37 PM