Episode 332 (May 22, 2024) asks a question: Should India's households buy gold? Central banks buy, hold and sell gold. When gold is such a highly-rated commodity, shouldn't India's families be buying gold? This episode explains why central banks such as the Reserve Bank of India (RBI) and the People's Bank of China buy gold. Central banks buy gold because it is dead as a dodo. Gold produces zero cash fows.
Well explained Gopalan Ramachandran ji
Super Sir
Assistant Professor at Bharathidasan Institute of Management; Area Chair - Strategy, Sustainability & General Management; Mentor - BIMPreneur (The Entrepreneurs Club at BIM)
9mo1. Gold is a hedge. So families buy and invest in gold. 2. Gold is a feel-good factor. Families buy gold as jewels 3. Gold is divine. Families buy and keep worshipping gold. However: Gold is no more a standard for money creation. Economic activities are the standard for money creation. Value addition in each activity is the standard for demand for money and supply of money. Families involving in higher value adding activities sizzle up, with or without gold.