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India's love affair with gold

February 12, 2012 4:04 PM

"No gold, no wedding," is a saying in India, indicating the importance of gold to Indian culture and tradition. Byron Pitts reports on India's obsession with gold.

India's love affair with gold
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by globalcitizn September 9, 2012 2:37 PM EDT
This program does not do a good job in explaining why Indians buy gold, instead it raises more questions by interviewing wedding planners who cater to the rich and have no idea about the traditions. To understand that, you need to first understand, that Indians have been traditionally socialized to set aside a part of their earnings as savings.However, they do not trust banks or have no education about investments. The only investment they know is either buying land or buying gold. With 22-24 carat pure gold jewellery, they can convert their cash into something that is beautiful but also something that can be pawned/sold when liquid cash is needed. So the more gold you have, the more you had saved. In olden times, this gold was purchased as coins that were put in copper vessels and hidden in the house usually under the mud flooring. Many ppl found these vessels later on when old houses/fields were being repaired.

Now, the culture has changed where people have become ostentatious and buy jewellery to show off. However, their mistrust with banks & bonds still continues and gold is the only investment that most will consider. This is the reason that India was saved during the global economic meltdown because they did not invest in any company stocks. The British colonization has also played a huge role in ppl not trusting any corporate entities.

India has always had a love affair with gold since ages. The west is making a big deal out of it now becoz all the gold that Indians have invested in is upholding the country's economy which in turn is growing, thus giving ppl an ability to buy more gold. This fascination is again different from state to state, fr ex. in Kerala state, people buy ridiculous amount of gold and even wear all the gold while in other parts, two gold ornaments, that is the marriage thread (gold), necklace, earrings and bangles are traditional ornaments of women. No matter how much gold you have, married women have to wear silver anklets and toe-rings, no gold here.

Please do not blame america's economy on India's prosperity. The percentage of jobs that outsourcing has generated is very less and cannot be correlated with Indians buying gold. Even now Indians do not like buying anything on credit. They have to save to afford it and then buy it. America's condition is the result of greedy people who bought more than what they can chew on credit, while mortgage agents wanted to earn their commission. The rich people took the hard-earned money of the poor to fund their ridiculously lavish lifestyles while the govt is in bed with them. America's manufacturing industry has moved to china two decades back and killed many cities like detroit. Nobody made a sound when millions of blue-collar jobs left the country and continue to buy everything made in china. Now that a few hundred white-collar jobs are lost, there is a huge cribbing over outsourcing.

India never wanted globalization but it was forced into it because big companies wanted the 1 billion market that they can sell their stuff to. Well, they forgot that globalization is a two-way street and capitalism is a double-edged sword.
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by replyindia March 27, 2012 10:17 AM EDT
Great reporting by an unbiased reporter without showing other cultures inferior to USA. Now, let me try to make an attempt to respond to some of the biased viewer comments above to clear their ignorance of rest of the world.

India is 7,000 year old culture which survived half a dozen foreign invasions, occupiers and looters. They did not come to India to help but, to fill their own pockets. India has nothing more to prove. Whereas, United States is only 200 years old culture which has has lot more to prove in coming years if it can survive as long as India has.

Those who are upset about Indian taking your job are ill-informed about market forces. Don't forget It those 400 million Indian middle class who has helped US auto industry growth by selling American cars, and products to them. Also, outsourcing in only less than 15% to India's GDP. 85% comes from Farming, Industrial products and other services. India has and will survive and grow even without American outsourcing. If you don't believe me, just look at last two years growth figures. When United States & Europe economic growth slowed, India posted 8.6% growth and this year projected to be 7.9% (triple the growth form US). 1.3 million people seen as curse by westerners, are the same people driving the economy domestically without any outside help.

Many from Western world booking at Indian poverty fail to understand that, unlike US population addicted on welfare system where staying home is promoted more than working, India has no welfare system of any sort. Take the welfare system out in United States and see the those people bagging not he streets.. Only difference is beggars in India has savings account and beggars in United states drives the car owned by the bank, rent the apartment paid by fellow working poor tax payers, and eating food from food stamps paid by 49% tax paying Americans.

Most importantly, those smart Americans who commented on stupid Indian and their obsession with gold missed the most important aspect of the program. The Indian people, women, family values, their savings habits, and their assets allocation strategy towards savings which war showcased in the piece. But, sorry I forget! They were too busy basing other culture while they sit helplessly watching their own culture going down the drain fast. 35% of girls getting pregnant before they get their High school diploma. 6 out of 10 American can't afford world's best healthcare system. 9% unemployment rate and other 20% underemployed. Large population, including children on anti psychotic drugs. Majority of States on verge of Bankruptcy.. Bankrupt Education system which keeps producing graduates who can't add or multiply.

It is about time, we in United States get off hour high horse of superiority complex, because while we were busy fighting wars in other countries to show off our power, other countries have been too busy learning from us and working furiously to beat us off our own games... Don't be surprised if American would need visa to enter India and oh! ya! forgot, will be asked to perform Drug test, STD test, Psychiatric evaluation and answer morality questionnaire like, I will not kill, cheat, steal and treat every fellow human being with humility before they will be allowed to enter the country.

I would just request those smart American to visit India once, to see what we can learn from them... it is about time. As they say in India, it takes three generation to get filthy reach and only one generation loose all the wealth. We are that American generation who is riding on their high horse which was actually built by previous generations of hard working americans but destined loose it all unless we stop our obsession of superiority, welfare system, and actually go to school to learn instead of get pregnant, do drugs or show off fast cars...
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by englishchuck February 21, 2012 3:31 PM EST
It bothers me why the media keeps saying that Indians got gold from Europeans. Didn't Europeans/Muslim invaders come into India for Gold? Hello...remember Columbus? What was he searching for? Why? Not to trade spices.

Someone needs to teach history to these ignorant people. I won't be surprised if the next generation will say that Columbus was looking for India to buy cinnamon and cilantro powder for his evening dinners.
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by soonermeg February 16, 2012 12:47 AM EST
I understand the comments above about Gold being a stable investment etc.. However, the statement that the value/cost of gold fluctuates only because of manipulation is not entirely true. The cost does in fact relate to supply and demand.. Right now the demand is very high.. India, and China, are experiencing an income boom and have more money to "invest" in gold dowery (a boom mainly thanks to all of the jobs WE have exported and created there). So keep in mind, once our jobs come back (and they WILL, given we don't elect someone who's eye is on something more than the bottomline)... then the booming middle and upper classes in Asia will buy less, and the cost/value of gold will drop here... at least that's my belief.
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by ceriselapin February 14, 2012 3:46 PM EST
I think the important aspect is that indians save 30% of their incomme unlike people from u.s. that only spend and get indebt, indians are hard workers know how to save money and they have a lot of family values, they also are very bright and teach their childrens about having a good career and working hard, yes yes they do have arranged marriages (that b the way are mostly succesfull) but as I know the bride or groom can say no, and the parents search from some one else, it's possible that go to marriage thinking of it as and investment and joint partnership causes less disapointment that thinking you are in love, but hey it seems the way to go is indian way since america has a huge economic troubles and values trouble india looks like is doing right so maybe u.s. people need to think if their way to go is the most productive one.
and by the way I see a lot of news about poverty in u.s. to.
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by Stockguy22 February 14, 2012 6:20 AM EST
good broadcast - I trade gold and already knew the power of Indian weddings on demand but may start looking at it in a different way. Impressive to hear how much Indians save of their income 30% vs. 5% of Americans and the fact middle & rich Indian families outnumber poor families for first time.
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by bryan067 February 13, 2012 11:36 PM EST
2 thoughts come to mind: 1)You never know when someone else needs the gold too, while you're wearing it! 2)The women can't speak up or choose her own husband, so the gold talks for them? Get a life, it's a dowry/power game or slavery...a spade is a spade.
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by cobrasixtysix February 13, 2012 10:24 PM EST
Yeah, stupid Indians, what are they thinking, Gold isn't really money!, erm, is it? We'll see who's got it right soon enough. My money, erm gold is with the Indians. :p
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by Click2invest_com February 13, 2012 10:15 PM EST
Gold is the way to go and I particularly liked the 1 gram units they showed. I believe gold is more secure and practical in easily transferable units, and with smaller and certified units you get the full protection gold has to offer. I consider it a free insurance policy that covers you in worst case scenarios where every other insurance policy fails. India is well equipped in case the fiat currencies fail.... It is also worth noticing that they have understood the value of saving gold over time, something that makes the price fluctuations of less importance. The true value is instead the economic security gold provides.
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by getinfo8786 February 13, 2012 7:44 PM EST
Obviously,this comment is from a not-too well-informed old-timer with stereotypical 60's views about India!! Or more like LOONEYBELLE would have been a more appropriate name... if this person ever got out from under her rock and came into the 21st century world, they would know what is happening economy-wise in India. ''cannot understand how Ron Pitts could say India is such a triving nation'... because HE IS SMART and HE WAS THERE !! I am sure living under a rock in DEEEXIEEE land could only turn people's brains to mush.
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