Gold

Gold is more than a hedge for Indians, it is an attachment.At best the temple trusts that hold huge cache of the metal will count for the scheme ,not households. Even here the proposed scheme needs to be made attractive and yet the government will be the ultimate gainer as it will have greater leverage. On the monetary front,gold was the shield against inflation  and corrective  monetary measures  kept the balance.But when monetary polices are upended,   deflationary recession gets pitted against  inflationary pressures of  the monetary expansion by the world's most important central banks.Global Quantitative Easing (QE) has  injected a huge $10 trillion of  into the global economy.  

   The crisis in Cyprus  saw the spectre of  imminent sale of its gold to meet  debts ,creating a fear that this would spread to other ill placed Eurozone economies  that  together account for 18 percent of all central bank held gold. .Little later  the two largest sources of demand for gold, India and China,  ,a consumption boom that started  with the onset of the financial crisis, was abruptly halted . Gold prices now plunged  

  Gold prices have been  rendered  multifactor-sensitive and the metal has not been able to compete with the dollar or bond market as the spread in gold is far too small to match the capital moving out of any stressed economy, Despite this ,when bullion  prices dip, buyers use the opportunity to buy more at  reduced prices and the spiral resumes.The fourfold increase in bar and coin retail investment from 2002 to 2011,proves that buying physical gold flourishes in blind addiction..In today's global economic maze even the best of schemes as these ,can not match the unpredictability of the yellow devil.