They say all that glitters is not gold. But today, that might be a slightly misplaced sentiment. Gold is glittering so much that everything seems to pale into significance. I mean the price of gold. If you haven't noticed, it has skyrocketed. And the cause of it is coming from an unlikely direction.
Gold hit an all time high price of $1424 a troy ounce in Nov. It seems to be zooming northward. I haven't done the math, (after all this is a Sunday post !), but gold might have performed as well as equities as an investment vehicle in the recent past. That's a little funny given the significant difference in risk profiles.
Cut, to a completely different angle. One of the fundamental cultural differences between Indians and Chinese comes in the area of addiction to the yellow metal. Indians simply love gold and can't resist hoarding it. Gold jewelery, that is. It is passed from generation to generation; safely stored in bank lockers. They are taken out only for weddings, when Rajalakshmis try to outdo each other in the amount of yellow they display. Regular readers will remember that the aforesaid lady is in a regular battle with the weigh scale. But for once, she doesn't mind adding substantially to it, by decking herself from head to toe (literally) in gold.
Madame Wang has different tastes. She simply doesn't like gold at all. She won't be caught dead wearing yellow; convincing proof that the nomenclature of the yellow race is a misnomer.She has a fancy for diamonds; especially those paid for by the male species, but that's another story.
End result. China used to consume some 200 tonnes. Indians gobble up some 600 tonnes. No contest.
No longer so. Chinese imports surged five fold in 2010. Consumption stands now at some 450 tonnes. The unthinkable may happen - China may overtake India as the largest consumer of gold.
What on earth is happening ?? Has a cataclysmic change happen in the gemological tastes of Madame Wang. Yes; but not what you might think. She still doesn't like to wear yellow. But she has money flowing through her ears. She doesn't know what to do with it. What can she do ? She gave it to the Americans until they can take no more. She started giving it to even the Greeks, but there are far less Marias than there are Wangs. Who else to give it to ?? So she's now started to buy gold instead. Not jewelery, but just plain bullion. stocking the stuff.
So here's a tip to Rajalakshmi. Start selling all that's in the bank locker bit by bit to Madam Wang. In a trickle. Empty it over the next two years. You'll make a fortune. And walk lightly into the next wedding !!!
PS. Yes , I know its a Sunday, but .............
