How often do we come across a book that is so small, powerful and yet so poetic? The...
In an enlightening session on Gold at the Moneylife Foundation Knowledge Centre today, Debashis Basu, editor and publisher of Moneylife used decades of data to expose many myths about gold that are (freely available and strongly propagated on the Internet) and strongly held by both retail and institutional investors. He also suggested what should be the correct approach to gold buying
On occasions such as Akshaya Tritiya and Dhanteras, which are considered as auspicious days for buying gold, the demand for gold as investment and jewellery goes up. In India, gold is bought for various occasions. The demand peaks around the festive and the wedding seasons. But should gold be a significant part of your investment? In nominal terms the price of gold has more than tripled in the last 20 years, despite the recent crash, this makes it a very attractive asset class—with the benefit of hindsight. But what we do really know of gold prices? In a special seminar on investing in gold conducted by Moneylife Foundation, Debashis Basu, Moneylife Foundation trustee and editor of Moneylife magazine, explained the various myths about gold as an investment and what really drives the price of gold. Similar to the seminars exclusively on gold in the past, this one too received a huge participation of Moneylife Foundation members.
Mr Basu gave the participants a brief of the history of gold. Gold may go back to a thousand of years, but it’s only in the recent century where its fondness as investment has grown. Mr Basu explained why gold is such a unique commodity and then further explained how gold was used as money. On going into history Mr Basu showed that crashes such as the recent one is inherent with all market-linked products and since gold is one, nobody should be surprised. Many investors just look back 10-15 years, but to get the true sense of an asset one needs to go deeper into history. Mr Basu took the participants through the gold bubble and bust of the 1980s. Many buy gold because they consider gold as a safe haven or an inflation hedge. But these are all myths as they are not supported by long term historical facts. Through the help of graphs and charts, Mr Basu addressed five different myths regarding the precious metal.
If you are interested in reading more on the myths about gold, go ahead and read our Cover Story: Gold Turns Cold
Finally, he explained the six main factors that drive gold demand and how little we know about them. Unlike other assets there is no way to value gold. There are many complex and global factors that affect the price of gold, he explained. Not even institutional investors keep a regular track of them or have a model to use them to arrive at a fair value of gold.
The presentation was followed by an interactive session where the participants put forth their queries on gold.
Following the arrest of Vijay Singla, the nephew of railway minister Pawan Kumar Bansal while accepting a bribe, activists have demanded an enquiry of the promotion and transfer process of the Indian Railways
Following the arrest of Vijay Singla, the nephew of Railway minister Pawan Kumar Bansal, activists have demanded an enquiry into the promotion of Mahesh Kumar as member of Railway Board as well as the role played by the minister.
Mumbai-based activist Samir Zaveri has been sending letters to the prime minister and railway minister as well as Railway Board to dismiss Mahesh Kumar for failing to detect several frauds when he was heading the vigilance team at Western Railway in Mumbai.
Similarly, Lucknow-based social activist Dr Nutan Thakur has demanded that in the light of Pawan Bansal’s nephew episode, the Central Bureau of Investigation (CBI) should also enquire into railway officer Mahesh Kumar’s recent promotion to the post of Member, Staff.
In her letter written to director of CBI, prime minister and secretary, ministry of personnel, she has said that now there is an immediate and imminent need to look into Mahesh Kumar’s promotion process from general manager of Western Railways to Member of the Railway Board.
Suggesting to treat the entire episode in two distinct stages—promotion from GM to Member from Staff and attempted change to Member from Electrical, Dr Thakur has demanded to act against all those, including the railway minister, involved in the previous decision-making of promoting Kumar from GM to Member, Railway Board, in case circumvention of rules and foul play is found there.
On Friday, the CBI arrested Vijay Singla, nephew of railway minister Pawan Kumar Bansal, for allegedly accepting a portion of the Rs90 lakh bribe to ensure the appointment of a Railway Board member.
The agency also registered a case against three other people—including the accused member (staff) Mahesh Kumar who had taken up his position on the board only a day earlier—after conducting raids in several cities.
Singla, son of Bansal’s sister and one of the leading businessmen in the region, was picked up by a CBI team from New Delhi on Friday evening.
Singla is accused of accepting the money in return for ensuring that Kumar, a 1975 graduate from University of Roorkee who had been the general manager of Western Railway, would be appointed to the Railway Board, which the ministry announced on 2nd May.
According to Zaveri, Mahesh Kumar as chief of vigilance at Mumbai failed to detect and take any action on several frauds in his jurisdiction. “It is open secret that there is a price for getting selective transfers and promotiona anywhere in the Indian Railways from top to bottom. I had sent several requests through emails with supporting evidence to the President of India, the prime minister and others to investigate into the transfer and posting scams in Rail Protection Force at Central Railway as well. However, there is still no action,” he said.
Zaveri said, during Mahesh Kumar's tenure as head of vigilance at Western Railway, the CBI raided a divisional railway manager (DRM) from Ahmedabad and found Rs80 lakh in cash, one kg of gold and 30 wine bottles (prohibited in Gujarat) subsequently arresting him. Citing media reports, Zaveri claimed the CBI was more active in detecting frauds and arresting railway officials than the WR vigilance department headed by Mahesh Kumar.
Incidentally, Subhodh Jain, general manager of Central Railway, was also promoted recently as member of the Railway Board, Zaveri pointed out.