China and India Smashing Gold Import Records.

Within the past year, China has imported more physical gold than ever before in modern history. In August 2013, China imported an impressive 131.4 tons of gold; in March of 2013, China imported a record-smashing 223.5 tons of physical gold.

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India historically imports a large amount of gold, namely because it is used far more heavily in Indian cultural traditions and customs more so than in any other culture. India is consistently one of the top gold importers in the world at any given time. They consistently import 100 to 200 tons of gold every month. This is a lot of gold. Recently, their net gold imports have become larger.

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China and India import more gold than any other nations on earth. Recently, they have seemingly begun to kick their gold purchases up yet another notch. The chart below puts into perspective just how much gold these nations import.

https://i0.wp.com/goldsilverworlds.com/wp-content/uploads/2013/08/india_china_gold_imports_Q2_2013.gif

Needless to say: China and India import a great deal of gold.

When we say that “China” and “India” are buying a lot of gold, there is a key thing to understand: we are not referring to the Chinese or Indian governments as the gold-buyers. We are referring to the people as gold buyers. The governments buy gold, but very little compared to the people.

The Indian Government, in fact, does not like gold. The Indian Government detests the importation of gold by Indian citizens. Indian politicians and bureaucrats have been tightening the tax noose on gold within the past few years in an attempt to cut it off. When Indian citizens sell rupees to buy gold, it typically lowers the international value of the rupee. This makes the Indian Government upset; they want control over the money supply. They want Indians to use the rupee. So they enact draconian import taxes on gold. These taxes do not seem to be working. Indians still import record amounts of gold. This is because Indian citizens do not trust the rupee; they do not trust their own socialist government.

In China, the case is similar. Chinese citizens do not trust their government. They understand that the Chinese government is basically one gigantic power-struggle between bureaucrats with no intention of ever relinquishing control. The Chinese government purposefully devalues the yuan in order to subsidize their exports. The devaluation of the yuan hurts the purchasing power of Chinese citizens and devalues their yuan-denominated savings. Chinese citizens understand this is happening, and therefore choose to buy and hold gold instead of yuan, because they understand that they will preserve their wealth in the long run by holding gold.

Indian and Chinese citizens are smart. They know better than to play along with what bureaucrats want. They understand that bureaucrats are far more concerned about their own power and relevancy rather than the public interest, and they understand that buying gold gives them a degree of liberty and wealth-preservation outside the control of bureaucrats and the Central Bank. It is a beautiful and healthy mindset. I commend it heartily to the American citizenry.

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