Gold. The metal is synonymous with Indian culture. All the aunties that are shamelessly pressuring us younger folk to get married, are really doing so simply because it will provide them occasion to sport their bling. When my mom travels overseas she always calls me to have “the talk:”
“Abhi-beta, if something happens take care of your brother. You know where we keep the family gold right?”
She proceeds to tell me in laborious detail about the many locations, safety deposit boxes, etc., where the family jewels are kept. I shouldn’t even mention the map to the dig site in the forest behind our house. The Christian Science Monitor reports that India’s obsession with Au is actually weighing down the growth of the Indian economy:
In India, nearly all that glitters is, in fact, gold. With a stockpile already worth $200 billion, Indian gold purchases jumped nearly 40 percent this year, making the country the world’s leading consumer of the precious metal.Gold may seem like a savvy investment as its value hits a 22-year high. But experts say it may actually be weighing down one of Asia’s fastest rising economies. It would be better if the money locked up in the glistening yellow metal went instead to finance new start-ups or better roads, boosting the Indian economy over the long term, economists contend.
That could provide quite a boost, given that the amount Indians have saved in gold – mostly as jewelry – is worth 30 percent of the country’s $690 billion economy. But Indians have a deep cultural soft spot for the soft metal – something that may hinder new efforts to introduce more modern investment strategies for India’s burgeoning middle class.
“It’s fair to say India’s economic growth would be higher if the money tied up in gold was invested more productively,” says Diana Farrell, director of the McKinsey Global Institute in San Francisco.
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p>But really now, how are you going to convince those aunties that giving up the gold is better for their society? I myself am a silver man. I especially like it on my kaju-katli.
…earlier this year there was a mini gold rush in Tamil Nadu, where people affected by last year’s tsunami put up to half the aid money they had received into gold jewelry,” Ms. Leyland says. “They could wear it, keep it safe, and it was in a form where it couldn’t be frittered away.”Worries over security aren’t restricted to poorer or displaced Indians, however. The country’s growing middle class is still skeptical of financial investments and even bank deposits, preferring physical assets like gold and property.
There is definitely going to be a generational conflict over the gold in my family. My mom made me a gold Om chain a long time ago but I never wear it. I’m always afraid I will lose it and I just never thought gold was that attractive (one of the many reasons I am a bad Indian son). I have always admired gold for its more pragmatic uses.
I made the following comment on Vikram’s blog – he posted about the same article a few hours ago.
If it’s for cultural use, fine, I won’t protest too much… sigh… to each his own. Though like Abhi, I’m more of a silver person, and I think it looks more flattering on many brown skin tones.
If it’s an economic investment, then it’s a dated one which I don’t think is wise… there are definitely better investments to be made. But noooooo, the aunties love their gold! It makes them feel like they’ve “arrived” or “made it”, I think. Like a status symbol. But status symbols are supposed to be flattering, no? (Same goes for Louis Vuitton bags, which I also do no get).
Jim Rogers the commodity guy thinks gold will go all the way to 800$. So, it might not a great investment for the country but is pretty good for the small investor.
Silver and anti-blood-diamond woman here, who is set to inherit a rather sizeable fortune in gold and diamonds. sigh
Considering the amount of time my mom, aunts and brother’s wife agonize over the designs and patterns (and only prolonging the shopping epedition by involving their husbands in the matter, like they give a damn), I wouldn’t go so far as saying that “many people in India think upon gold and jewelry as an investment.” It’s very much a cultural thing – 24 K and nothing less than an E VVS when it comes to diamonds.
Blog Confessional: I like me some Indian bling sometimes. Sometimes.
I don’t think I’ve ever talked to anyone brown who saw gold as an investment – more as a status symbol and worth wearing closer to “pure” if you were going to pay that much money.
I’m also more partial to silver, or, my favorite for “nicer” jewelry that doesn’t tarnish… white gold!
Mmmmm….Kaju-Katli…yum yum! I just can’t stop having them. I’ve made a few browns and non-browns get addicted to that stuff, once they got over their fear of the silver stuff on top. Some of them have even stopped gingerly brushing off the silver before gorging on those. Yummy pic, Abhi…I must go to my local uncleji’s shop and get some for myself.
Indian gold is usually 22k, not 24k.
Historically it has not been a good long-term investment (though its had its moments), and it tends to rise in times of crisis or perceived crisis.
My partition grandparents smuggled gold out of Lahore and it helped them get going in Delhi.
Interesting whether the secular upshift in the growth rate of the Indian economy will continue to bode well for gold!
I got out of my gold stocks and other investments late this year. Too many people were talking about it desi parties. Could have made another 10% (at least), but hey, it’s next to impossible to get out at the top.
M. Nam
Heh… better get out of GOOG then 😉
Having just had my wed in India, I can tell you that the pressure to buy Gold is much more than I expected. Even though it might be for status, it surely digs a hole into the pocket.I managed to fight it off by wearing selected pieces from my mom for sentimental reasons.
As gifts we were presented Gold Chains, and silver cups, trays — traditional south indian gifts. Although it sounds horrible, I much have rather the money have gone into either a charity or helping us pay for the wedding.
Although Gold is quite valued and displayed in India, the best quality of gold is set to be bought from Singapore or Sri-Lanka.
actually, that article wasn’t surprising at all…
my parents are both physicians and i find it totally bizarre that they actually own little bricks of gold. why? they have stocks, bonds, a 401K… what on earth are they going to do with a couple of little gold bars?
and abhi, about the indian mom hiding places for gold…i once washed one of my mother’s gold necklaces. apparently the hamper was a ‘hiding place.’
since that incident, we have now invested in a safety deposit box!
I can’t handle gold. As in I think it’s perfectly fine on some people, but personally I’m more of a silver/platinum person myself. Amusingly enough, as a desi, I actually have some sort of weird skin allergy to gold. I’m convinced it’s just the gay coming out in every conceivable form, including saving me from any potential fashion disasters.
Forget da gold, pass me the Platinum baby! Diamonds (a girls best friend) look the best in Platinum. And Indian bling talk with a boy is such a waste. My brother can only comprehend discussions on what happens with dad’s Benz, certainly not my mother’s bling!! The bling is all mine!! evil laugh
All Mixed Up, you have no idea how much trouble I am going to be in for even writing this post. When my dad logs on in Ahmedabad he will tell my mom I wrote this entry. Then my mom will become massively paranoid, accuse me of divulging the family secrets, and make me sign a waiver that all future phone conversations will be confidental. Also she won’t bring me back any Kaju-katlis. 🙂
is that the same thing as kaju barfis?
Yourbloodyvalentine: I think gujjus call what we know as kaju barfi, as kaju katli.
Katli’s are like barfis but thinner and harder. Oh what the hell do I know. There are very few Indian sweets that I like (my tastebuds revolt against sugar as much as they hunger for dark chocolate). I only know their Guju names.
abhi–katlis are the ones with the silver on them, right? trying to explain that to my nonindian friends about the sweets at my house was a riot…
but tell her to bring back bengali sweets.. nothing like a little chum chum 🙂
Nothing says long term investment like gold. After all people are still finding gold stocks from ancient civilizations.
Your aunties are smarter than you know, oh wise brown 20 somethings.
Fiat currency may rise and fall, but gold retains its value in good times and bad as it’s always been worth more than paper, or the “productive” use to which young MBA’s would have it put.
hmm…they both have the same recipe so they must be exactly the same thing…
There are a couple of other reasons why Gold is seen as an investment above and beyond it’s jewelry value in India all having to do with recent (as in 20-30 yrs ago) indian economic history –
(until very recently) India had a massively underdeveloped banking sector. The banking experience just plain sucked and you didn’t trust your Desi state bank as far as the director could run with his embezzle loot.
massive tax evasion – if you did put your savings in the bank, the govt knew how much you made and could thus tax you… couple that with corrupt tax assessors… you’re best off hiding your wealth in “invisible capital”
unstable currency / “managed” trade – as a result, sudden devaluations, international currency speculation, etc. could all rapidly attack non “internationally-hardened” stores of value
i’m looking at the little pudge chortling into the mirror – and am filled with loathing – not against her in general – but am reminded my last time in delhi – south extension part ii – see tthis beggar child outside barista coffee – and this pale cow in a blue sari – jiggling her way past with a servant boy in tow – dripping with gold – made me want to yell – you have no right to flaunt this much wealth. it’s just NOT RIGHT. … another time much before that – i was a kid – at delhi station .. a beggar was sleeping under a bench – this burly police guy came by – took off his leather slipper and hit the beggar on the head with as much force as possible – he had this lewd grin on his face – and he kept hitting – the beggar was writhing – i got a good look at his face- got this expression of hate, outrage mixed with shame and he’s choking tears – this is just NOT RIGHT to have this much power over someone else – and i am looking at this little ghoul admiring herself up there and it’s one of the most obscene things i have seen in a while .
I definitely am not a fan of gold, either. And Egyptians love their gold, too. I wish I did, it seems that I have so much. But I prefer silver and platinum (when I can afford that – one day). And I also like Desi men…! What a rough life.
It seems like Gen X desis/ABCDs have a preference for silver/platinum/iridium over gold. I agree completely. It looks better on my skin than gold, and it looks great with any jewel or gem set in it. White metals and marcasite, hello?
Sadly, like onceabride said, the tradition of gifting tons of gold jewelry to a desi bride has not considered a personal preference, so many Gen X brown brides have a lockbox full of gold that we really cringe to wear.
But it does go nicely with certain saris and stuff… So we’ll bust it out on occasion. All of it 😉 twinkle twinkle, baby
12-8-2005 [9:44pm local time] Ahmedabad, Gujarat
Abhi: You are absolutely right. She will give you a little piece of her mind next time you talk to her. I will have to make it up by buying her some more gold and diamond something. May be not, as we put down some token money today locking in the current price for our future retirement home in Ahmedabad. Let us hope she does not ask me to have “gold” bricks on the patio. As for “Kaju Katli” make sure you never- ever warm it up in microwave. I have learned my lessons. Back in Washington they are freezing, and we are having 80’s and 90’s everyday. Heck even the sun looks “Golden” here……love Dad
Dubiyan Arabs love their gold too…and not just on themselves but in houses & cars, on fingernails & hair, in shoes & clothes.
With this opulence on one side and my mum’s insistance on accumulating relativley modest quantities of gold for “a verrry spey-shial day” on the other, I grew up hating the sight of that yellow stuff. However, in recent years I’ve begun longing for the nineties and big, chunky, fake gold stuff a la C + C Music Factory styles. My great grandchildren will thank me when they inherit all my personalized earrings and kente caps.
I grew up in South Africa and gold is rather cheap there and for every occasion you are going to get a couple of ring, chains or earings! I have a huge pile lying at the bottom of my underwear drawer! When I turned 16 I had to beg my grandmother to buy me a stereo instead of more gold!!!!! For god sake our skin has a yellow undertone, we cant get away gold!
It doesn’t look bad but it makes a soft look. I prefer something far more striking like cool silver/white metals on sun-warmed brown skin. 🙂
i guess i’ll be the pariah here and admit that i like gold (and silver….platinum & diamonds — not so much)….
i’m not promoting going out everyday like its wedding day …but a nice necklace and earring set can really make a sari happen!!!
some saris require that the jewelry be silver….but dammit you know you have a sari you love that looks amazing once accented with the perfect gold jewelry 🙂
busted. And in those cases I am happy to rock the gold, if the xari connotates so. -usually those cases require the full-on Devdas-style bling anyway, so I’m happy to roll that way.
i dunno… there’s something to be said about Indian gold. i love that it’s orangey or more goldeny or whatever… i actually dont like any other kind of gold–i think it’s tacky.
Let us hope she does not ask me to have “gold” bricks on the patio.
I LOVE that Abhi’s dad reads this and shares his sense of humor. 😉
My own bf’s family has loads of wealth locked up in gold jewelry, but they told him from a young age that it would all go to his older brother and younger sister, not him. He’s still bitter about it. My (white) family has no bling at all.
– (until very recently) India had a massively underdeveloped banking sector. The banking experience just plain sucked and you didn’t trust your Desi state bank as far as the director could run with his embezzle loot.
massive tax evasion – if you did put your savings in the bank, the govt knew how much you made and could thus tax you… couple that with corrupt tax assessors… you’re best off hiding your wealth in “invisible capital”
unstable currency / “managed” trade – as a result, sudden devaluations, international currency speculation, etc. could all rapidly attack non “internationally-hardened” stores of value
Very well put Vinod. Also,
The high rate of inflation which cuts into the otherwise high interest rates might also have something to do with people not investing in CDs in India.
Combine that with the ‘rent control’ problem and the problem of ‘evicting tenants’ in India which stops a lot of small investors from investing in real estate.
Yo dad is cool. Less self-loathing and more kewl like yo dad, Abhi! 🙂
Vinod, good points! It made me ponder at what point does a good economic, sound reason become turn into a cultural practise (if you believe in functional determinism)? I think India is getting to that point, particularly with economic growth and more faith in banks and other investment systems. And don’t forget that the parents love the gold bling here even though they’ve got stable, adequate portfolios, etc… It’s all about the pure love of status-y bling. I won’t judge that, but I can’t say it’s a good investment in the present, either.