A very happy August for the common man India as the non violent revolution also known as the ‘India against corruption’ movement seems to have achieved its first victory in the marathon battle. Dinakarananda was fortunate enough to witness the movement in the two places that were most active, Delhi and Bengaluru. Ramlila ground in Delhi is where the legendary victory of good over evil is celebrated every year on Dussehra day. Freedom park in Bengaluru is the area surrounding a British era jail and so it is very symbolic in some ways.
Everyone agrees to the fact that the sheer numbers of common people participating in this movement made it a success. The question is what motivated these people now. The lead man, Anna Hazare and the evil, corruption existed ever since 16th August 1947. May be it was inflation that was the catalyst that drove people to make it a success just as it pushed people out or their torpor in many countries in the middle east, north Africa (MENA) and recently in Europe (prominently London, Greece etc) and other places.
If this analysis is true then we could witness more such movements in other countries and might also get a chance to participate in some movements in our own country. The US FED (Federal Reserve Bank), the source of global inflation is getting ready to dump another massive dose of inflation on the world markets. It is only a matter of when not if QE3 (quantitative easing episode 3) or printing dollars would be implemented to save US financial institutions that lost heavily in a bad gamble with all kinds of securities.
The price of gold is demonstrating the futility of all such attempts by the central banks to prop up economies by printing fiat money. The metal exchanges around the world are driving away petty traders by hiking the margin requirements. In simple words only those with deep pockets can trade in bullion. When the going gets tough the tough get going. In this case the tough are the serious long-term investors. Central banks of many emerging countries are snapping up every opportunity to buy gold and so any fall in the price of Gold due to new regulations is becoming evanescent. The price of Silver is also recovering after the steep fall last month. Gold is the darling of central banks with the deepest pockets for obvious reasons that it is not as bulky as silver to store and protect for the same dollar amount.
Something seems very strange when it comes to the attitude of mainstream media towards gold. People are advised to deal with caution and are prepared for an eventual fall in the price of Gold. This is not the case with other asset classes like real estate or equity when they are in the midst of a bull market. Any fall in price during those times is seen as a healthy correction and is advertised as a great opportunity to buy more. Equity markets are continuing to slide down the slope of hope while gold continues to climb the wall of worry. Soon it would be time for selling gold and buying equity to start getting richer from just preserving wealth. Dinakarananda wishes you happy investing and go for gold to insulate yourselves from rising inflation.