Wednesday, November 04, 2009

You can't eat gold

Indian Minister of Finance --

“We have money to buy gold. We have enough foreign exchange reserves.” He contrasted India’s strength with weakness elsewhere: “Europe collapsed and North America collapsed.”

So India celebrates its strength by paying $6.7 billion for an asset that doesn't pay interest and doesn't serve any physical function. It does make for a highly speculative financial play. Apparently that's the new business of central banks.

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