Sabka Saath, Sabka Vikas, SMUGLLERS, included.

6^th July 2019

Sabka Saath, Sabka Vikas, SMUGLLERS, included.

Dear Fellow Travellers,

Greetings from Hitesh! Our post on 3s formula was a super success. If you have missed, I suggest you must read in the weekend. Yesterday, the budget was declared and as expected most of the budget was a repetition of Interim budget only.

On one side there is a lot of PUSH for NON-CASH transactions / tds on cash withdrawal/ no debit and credit card fees charges for small merchants and customers. We all know that not a single economy can run without cash. How to rotate cash in the economy for those who are having tons of cash? For them also the GOVERNMENT has taken steps in this budget.

What will happen to GOLD prices due to IMPORT DUTY increase to 12.5%?

Say gold is costing USD 1400 in the international market. Currently, we are charging 10% import duty and 3% GST. Now, as per apparent information – it looks – that gold will be charged 12.5% + 3%, so 15.5% duty.

As of now, there is a lot of interest in SMUGGLING as there is a difference of 13% in gold prices. Now it is 15.5% difference. You just have to go to DUBAI, buy GOLD, come back and sell it. You make 15% instant. Say a person invest Rs.1 cr and makes one trip per month. He ends up making Rs.18 lakhs in gross profit by just buying and selling gold. This is just for 12 trips per year. With an increase in duty, margins of the smuggling community will increase. So, Sabka Vikas.

Chief Economy Advisor talked about BLUE OCEN strategy on THURSDAY: -

He suggested doing the right things in terms of economy and help investment-led growth in India. If his suggestions were followed, total import duty on gold should have been removed. With the GOLD becoming at parity with international price, there will be no incentive to buy from outside. Gold is a major investment for average Indian family due to social reasons. This will increase the demand and a lot of new jewelers will come into the market. The CASH which was going into GOLD + CORRUPTION will come to market for buying GOLD or other things. This will be added to the economic cycle very fast. But somehow, the noble intentions of our CHIEF ECONOMIC ADVISOR are not followed in the BUDGET. 

Maharashtra is earning close to Rs.20000 Crs or more in Liquor tax. Gujarat has DARU BANDI. Now, who is making this Rs.20000 Crs? (Assuming GUJARAT consumption of wine same as Maharashtra). The same thing is applicable to GOLD import duty.

Don’t you think GOVT is knowing such simple arithmetic?

They are fully aware of it. And they have knowingly kept this window open. Their logic is to increase the prices of GOLD, so normal middle class avoids buying it. They may tell you to invest in GOLD bonds and other forms of demat gold. But, I see a bigger plan for this.

USA is going towards GOLD STANDARD: -

Since early 2018 talks are going on for moving to the gold standard and adjusting DOLLAR against that. That’s why experts are predicting GOLD PRICES to USD 5000 to USD 10000 per ounce. This may or may not happen in the near future. But the fact is, RUSSIA / CHINA are net gold buyers in the world market since long. It speaks about the importance of GOLD.  

How to SAFEGUARD the BIG PEOPLE’s INTEREST?

Doing smuggling is not a cup of tea for a normal guy. But for really big guys everything is possible. They can deploy their cash in this business, as there is no other business where they can deploy their cash now. Real estate was the prime source of investing big cash. Thanks to MANDI there, they are not able to rotate their cash.

GOLD demand will move up internationally thanks to the warlike situations, financial conditions and the USA moving to the GOLD standard and thousand other reasons.

This will provide opportunities to real big guys to make some money or reduce their losses in the real estate sector or keep their cash rotating. In short, this will keep the CASH economy alive for India. If the GOLD standard comes back, they will be the first to make tons of money.

What has been our advice to my readers since 2006?

I am a die-hard believer of BUFFETT principle of control. Buffett success is due to the control he can assert on the company he invests. The same way we need to have control over our assets. That’s why I have always recommended buying PHYSICAL GOLD.

What NEXT?

There is no place of IDEALISM in life and politics. History shows Idealistic politician/leaders have been killed by their followers only. I see MODI Government has knowingly kept this TRAP open and someday they will catch a big FISH in the net. Today is Saturday and lord of Justice Shani being in idealistic sign SAGITTARIUS now. So, if you are planning to do something ILLEGAL – be ALERT.

Have a SWEET SATURDAY.

Follow me on Twitter @hiteshmparikh Or on Whatsapp - +91-9869425399.

Live With Passion…Invest With Passion.

Hitesh Parikh.