‘Risk involved in investing in gold has heightened’
The steep rise in gold prices over the past few years indicates that the risk involved in investment in gold has heightened, cautioned K. C. Chakrabarty, Deputy Governor, Reserve Bank of India.
This is a fact which is not recognised by people, he said at a Workshop on Financial Literacy.
Some basic concepts are not fully appreciated even by seemingly literate groups, resulting in assumption of excessive risks.
“One example that I often quote about the widespread financial illiteracy is the theory being floated around by the so-called ‘financial advisers’ about investment in gold being a ‘hedge against inflation’ and a ‘safe asset’,” said the Deputy Governor.
Given that the price of the yellow metal has surged in the last few years, Chakrabarty flagged the risks involved in investing in gold.
According to the RBI’s Financial Stability Report, the price of gold carries an ‘uncertainty premium’ arising from risk aversion among investors in recent years. This has caused an above-normal return that is not sustainable in the long term.
Since Indian households hold a significant quantity of gold, they face the risk of a correction in gold prices.
There has been a reduction in the share of financial assets in household savings as households’ preference for physical assets and valuables like gold seem to be rising, thereby adding to the pressure on the current account deficit (CAD). This is a worrying factor, said the report.
CAD arises when a country’s total imports of goods, services and transfers is greater than exports.
CURBS ON GOLD DEMAND
To tamp down the demand for gold, the Government has upped the Customs duty on gold imports from 4 per cent to 6 per cent.
Further, a RBI working group has suggested introduction of gold-linked financial products, which are not backed fully in physical form, to help reduce gold imports. Inflation-indexed bonds are also in the works to offer investors a hedge against inflation and dissuade them from gold investments.
According to the RBI’s Macroeconomic and Monetary Developments document for the third quarter, continuing large imports of oil and gold have resulted in a deterioration of the trade balance.
Further, low growth and uncertainty in advanced economies as well as emerging market and developing economies continued to affect exports in the third quarter of 2012-13.
The deterioration in trade balance (with imports outstripping exports) has led to the CAD-GDP ratio reaching a historical of 5.4 per cent in the August-September quarter of 2012-13.
Gold imports continue to account for a large part of India’s CAD. Also, the country accounts for a quarter of the world demand for gold.
PM's daughter blows whistle on 54 nations that helped US detention program
WASHINGTON: It does not matter if it is Republican President George Bush or Democratic President Barack Obama in the White House; Prime Minister ManmohanSingh's daughter Amrit Singh's canvassing for human rights and campaign against secret rendition and torture cuts across party lines — and across countries.
In an exhaustive 214-page report released Tuesday, Singh, currently a senior legal officer at the Open Society Justice Initiative, has exposed 54 countries that helped facilitate the Central Intelligence Agency's secret detention, rendition, and interrogation program in the years after the 9/11 terrorist attacks. The report draws a stark picture of scores of people, both hardcore al-Qaida types and wayfarers, who were caught in the massive and foggy US counterterrorism drive worldwide after 9/11.
Singh has also named 136 people who were detained and transferred by the CIA and its allied or cooperating intelligence outfits, the first time such an extensive and detailed list has been compiled. She describes how and where they were apprehended, transferred, and interrogated. The list, which includes many Pakistanis, Aafia Siddiqui among them, is the largest one compiled to date, and it reveals how detainees were moved around the world without due process, often to countries which ran secret prisons and torture cells.
The 54 countries which were co-opted in the sweeping CIA drive against terrorism include the usual suspects such as Pakistan, Afghanistan, Saudi Arabia, Egypt, Algeria and Libya which have poor or non-existent legal systems, judicial oversight, and human rights. But it also includes western countries such as Australia, Canada, Sweden, Denmark, Belgium, Finland, Germany, Spain, and Italy, some of which are fierce advocates of civil liberties and human rights.
India is not among the countries named in the report. The list of 136 detainees does not include any Indians, nor were any apprehended in India. A majority of them were detained in Pakistan in raids and many of them are Pakistanis, confirming the country's reputation as a terrorist haven.
Singh, who is the youngest of Prime Minister Manmohan Singh's three daughters, was a staff attorney at the American Civil Liberty Union's Immigrants' Rights Project before she joined the National Security and Counterterrorism program at the Open Society Justice Initiative last year. Some of her human rights work is chronicled in a book Administration of Torture: A Documentary Record from Washington to Abu Ghraib and Beyond, that she has co-authored. She is married to Barton Beebe, a professor of law at New York University.
She has been a persistent critic of U.S human rights violations, particular during the Bush years, but she has not eased off during the Obama White House either, even as the Democratic President has reneged on some of his commitments. Indeed, the latest report is sharply critical of Obama and his administration.
"The time has come for the United States and its partner governments to admit to the truth of their involvement in secret detention and extraordinary rendition, repudiate these practices, and conduct effective investigations directed at holding officials accountable," Singh writes in her conclusion.
In an exhaustive 214-page report released Tuesday, Singh, currently a senior legal officer at the Open Society Justice Initiative, has exposed 54 countries that helped facilitate the Central Intelligence Agency's secret detention, rendition, and interrogation program in the years after the 9/11 terrorist attacks. The report draws a stark picture of scores of people, both hardcore al-Qaida types and wayfarers, who were caught in the massive and foggy US counterterrorism drive worldwide after 9/11.
Singh has also named 136 people who were detained and transferred by the CIA and its allied or cooperating intelligence outfits, the first time such an extensive and detailed list has been compiled. She describes how and where they were apprehended, transferred, and interrogated. The list, which includes many Pakistanis, Aafia Siddiqui among them, is the largest one compiled to date, and it reveals how detainees were moved around the world without due process, often to countries which ran secret prisons and torture cells.
The 54 countries which were co-opted in the sweeping CIA drive against terrorism include the usual suspects such as Pakistan, Afghanistan, Saudi Arabia, Egypt, Algeria and Libya which have poor or non-existent legal systems, judicial oversight, and human rights. But it also includes western countries such as Australia, Canada, Sweden, Denmark, Belgium, Finland, Germany, Spain, and Italy, some of which are fierce advocates of civil liberties and human rights.
India is not among the countries named in the report. The list of 136 detainees does not include any Indians, nor were any apprehended in India. A majority of them were detained in Pakistan in raids and many of them are Pakistanis, confirming the country's reputation as a terrorist haven.
Singh, who is the youngest of Prime Minister Manmohan Singh's three daughters, was a staff attorney at the American Civil Liberty Union's Immigrants' Rights Project before she joined the National Security and Counterterrorism program at the Open Society Justice Initiative last year. Some of her human rights work is chronicled in a book Administration of Torture: A Documentary Record from Washington to Abu Ghraib and Beyond, that she has co-authored. She is married to Barton Beebe, a professor of law at New York University.
She has been a persistent critic of U.S human rights violations, particular during the Bush years, but she has not eased off during the Obama White House either, even as the Democratic President has reneged on some of his commitments. Indeed, the latest report is sharply critical of Obama and his administration.
"The time has come for the United States and its partner governments to admit to the truth of their involvement in secret detention and extraordinary rendition, repudiate these practices, and conduct effective investigations directed at holding officials accountable," Singh writes in her conclusion.
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