Is India still on Gold Standard?

[rahulkumar]

I am hoping India is still on Gold Standard because last thing i want to hear is India is also printing money out of thin air and devaluing the Indian currency.

Here is an article on Gold Standard - http://www.usagold.com/gildedopinion/greenspan.html

The problem with central banks like the Fed is that they distort the markets by setting interest rates at artificial levels. That sends incorrect signals to investors and businesses. For example, low interest rates cause business valuations to rise, so stocks go up. Or apparently cheap money might allow a business to justify a loan or an expansion that wouldn't be possible if rates were higher. That's the boom phase. What happens next is that when the economy gets "overheated" (high inflation), the central banks raise rates. Things then start to unwind: company valuations drop, new loans are no longer affordable, etc. That's the contraction (recession) phase.

On a gold standard with full-reserve banking, interest rates are always set at free-market levels -- so businesses and individuals are receiving correct, undistorted information about the economy. Rates also tend to be more consistent. Longer-term planning becomes possible; 99 yr loans again become feasible, for example. The business cycle also goes away: no more booms and busts, because the assumptions underlying investments and other spending don't suddenly turn out to be untrue.

 

[vijay]

Indian economy is worth bankable these days .... provided the fact that you want to invest for a long term. FII already did the damage whatever they could do ....... analyze over stretched Stock Market few weeks back and now grounded back to reality.

We Indians are the second largest growing economy after China on this globe ..... provided that our leaders ( mostly corrupt ) play forward it honestly.

 

[rahulkumar]

sorry but that still doesn't answer my question. Is India on Gold Standard? You can stimulate economy easily by printing money for a short period and that's how we do it in United States. Pumping money into economy dilutes the value. From what I am hearing, Inflation will hit both India and China soon.

 

[karan]

Answer to your question, India is still on gold standard. Nothing has changed, to give you an example, during economic crisis of early 1990's we had to colllateral 70 tons of gold to our former Mai Baap...Vilayaaat aka Great Britain. Indian Gov't doesn't print money out of thin air it can only print money based on amount of gold it has, or its worth. Now a days gold price and other precious metals is so sky high, you can print more money without increasing the inflation point an example Zimbabwe courtsey of Mr. Robert Mugabe. How much gold GOI imports is anyone's guess, I am sure there are some NON Corrupt, smart people working for this nation, who believe in this nation are quietly building up gold reserves.

 

[rohittewatia]

India ka standard to theek hai, Per US kah haal burra hai...People must be aware of the fact tht US ki Federal Reserve Bank aik Private Authority hai,..which has been misusing their authority for centuries... They haven't followed the rules untill now...The ratio they maintain is more than 10:1, so instead of maintaining a 1:1 ratio.

And the surplus money thus induced in the market is used by banks to further earn interest by Loans n other such things.

The´only country maintaining the highest ratio is Switzerland.

 

[ygulia]

I am hoping India is still on Gold Standard because last thing i want to hear is India is also printing money out of thin air and devaluing the Indian currency.

Here is an article on Gold Standard - http://www.usagold.com/gildedopinion/greenspan.html

There is no country in the present world that follows the policy of Gold Standard. Yes it is true that you can print the currency as much as you want but it will depriciate the value of rupees vis a vis other currencies of the world and hence there will be no use of printing the currency. Everything depends upon the GDP of the country and expenses of the country. There is always deficit. In order to cover the budget deficit Govt. borrows from the market and other sources and what ever gap is left after borrowing, Govt. prints the currency.
Although I am not an Economist but I hope that I am able to answer your question up to a certain extent.
Yoginder Gulia

 

[rahulkumar]

Answer to your question, India is still on gold standard. Nothing has changed, to give you an example, during economic crisis of early 1990's we had to colllateral 70 tons of gold to our former Mai Baap...Vilayaaat aka Great Britain. Indian Gov't doesn't print money out of thin air it can only print money based on amount of gold it has, or its worth. Now a days gold price and other precious metals is so sky high, you can print more money without increasing the inflation point an example Zimbabwe courtsey of Mr. Robert Mugabe. How much gold GOI imports is anyone's guess, I am sure there are some NON Corrupt, smart people working for this nation, who believe in this nation are quietly building up gold reserves.

thank you for clarifying it

Here is an interesting read - http://www.cnbc.com/id/23588079/from/ET/