USD vs GOLD - Who is winning?

The last two decades, the heavy weight battle is gaining momentum, the trend shows its between USD Vs Gold, particularly when compared with India currency.

The early ninties, India had balance of payment crisis, which made them to pleadge gold to IMF for a loan. I still remember, the exchange rate of US Dollars was in the range of INR 20 per dollar and we used to fill motorcycle tank at Rs 20 per litre and 1 gram of 22 carat gold was in the range of 200~250 INR. The early nineties was the time, when talk of globalization started and India started opening up its market. The telecommunication started picking up, the snail mail OR postal mail gave way to Fax mode of instant communication.


If one looks at the chart, the gold prices in US Dollars from 1985 till about 2002, it was relatively stable. It had been in the range of 200 US Dollars to 400 US Dollars per ounce (10 to 14 USD per gram). This had been the period when US Dollars was considered precious, every country wanted to boast its foriegn reserve currency in USD and interestingly this also made US Dollars to claim high which kept gold rate in check. In the period of 1990 to year 2002, USD had appreciated almost 2.5 times, from about 18 INR in 1990 to about 48 INR per dollar in 2002.


Following period of 2002 to till date US Dollars has been losing stream and more or less a cooling off period for USD. Again, this is when the other heavy weight commodity like gold started gathering stream and winning the price war against USD. Its was about 10~14 USD per gram even in 2000, now its has claimed to be at all time high of about 40~42 US dollars per gram.




For a common man in India, he does not invest in US Dollars, so he is not really bothered about US Dollars flactuation but he does invest in gold and real estate. Question in any Indian mind is will gold prices reduce or stabilize in near future? looking at the trend it does not look so, with the world reserve currency - US Dollars seems to have lost out the race. Not only individuals, but even country governments consider gold as the safe bet, now. So till a time, there is an alternative to gold, where money can be parked as reserve currency, the "Gold" should be winning, the price war.

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Inspiring story of self made entreprenuer.....

Read this on Rediff, simple and straight. Its all about taking up the challenges or stumbling blocks into stepping stone towards the goal.

Inspiring story of a self made entreprenuer

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Smart mobile phone...A look into the future.

Clearly this device cannot be described through text blogging. The feature I wish my smart phone had !, not just one feature but it has many....


Presenting to you, the future technology smart phone (click on link) . For best results, have your microphone handy.

When I found this phone in the net, I was amazed by its features and wanted to look at the manufacturer who has made it possible, however, to my surprise I found it to be an advertisement strategy.

Nevertheless, its worth the effort by the place Navo scotia, Canada. A great concept selling by Navo Scotia... I saw the wonderful phone presentation, which took me into the future, which was beyond imagination and looking for the day when such phone becomes a reality, well looking also for a day when I can visit Navo Scotia, Canada too.

Truly Amazing...Good luck Navo Scotia, Canada.

Maybe, as indicated by Navo Scotia, one day in the future this might become a reality. I am sure many design specialist of phone manufacturers would have been thought provoked by this phone.

Once this kind of phones becomes a reality, there is no language barrier for me towards travelling across the globe with language constraint, I would be carrying language translator with me and making presentation without looking for a projector. Interesting, shaver, harmonia & coffee brewing is possible.

I still remember the late 90's when mobile phone where introduced, only calling was its feature. Slowly camera, radio FM were added and then came internet browsing & emailing, GPS. Hmmm..., would like to see the next generation phone with language translator, projector, shaver, coffee brewer and harmonia... May be to this list of features, wish to add feature such as a car remote key or door remote key, all that is needed is the electronic lock circuit should identifiy the PIN or passcode sent by mobile phone and the mobile number itself and when both matches with lock preset values, then the lock would open, this means, one can open the door from anywhere across the globe and allow his or her house to be accessible to his relatives and friends.... interesting is in't?.......... and wait, why not it be linked up as an identity tag?.... instead of wearing a corporate identity tag as a garland around the neck.

All these might be classified as wants for a person like me now, however once manufacturers introduces these unique features, they will certainly turn out to be a need for a mobile phone user.

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Go Green...... Sun is the answer

Each decade, brings in a new technology which revolutionise the way world works. Clearly the last decade, I would say belongs to Telecommunications. Internet and mobile telephony in the last decade, clearly changed the way business is done, the words like Back office, call centre, BPO, Outsourcing was unheard till late 90's. More, importantly all these made India more stronger and this made other countries to upon India with envy. Now, let's look at realitistic way of a technology which can change the world we live,


So.,, what next, whats going to be next revolution? has telecommunication reached in saturation?. May or may be not, there might be a slow down telecommunication sector. Is there going to be a high growth sector?. The one technology, which is yet to be completely tapped is green energy, the tapping of solar energy is still at a very nascent stage. Probably the reason for this is all developed countries like US, UK or Japan does not have sunshine all round the world and this might be one of the reason that world do not look at Solar energy is a great way!.

For country like India, which sunshine almost all round the year, it could be one great opportunity to harness this energy and lead in the front. In India solar energy is tapped in a small way for street lighting and water heating. When solar energy is can produce electricity, why not it be used for vehicles like motorcycles,cars and buses. This technology is already is already there, the University of Michigan had demonstrated a solar power car. If one has to think about a situation in India, where 90% of vehicles are solar powered, will India not be a best country to live in, with no pollution and more importantly saving billion of dollars year or year due to huge import bill of petroleum, which can hopefully be used for other infrastructure projects. For a common man, he may not worry about fuel price hike.

View of solar powered car
Just not the vehicles alone, electricity to houses can be through solar energy. I have a weird thinking, we all know electricity is produced from one state is transmitted to another state within India. Through similar means, if solar energy is used to generate electricity and if there is going to be a way to store and transmit to a different place, if this can lead to export of electricity produced by solar, India would be at its best with sunshine all around the year and could well be on its way to be a pretty rich country in the world.

The solar powers seems to be limitless, I was amazed to read in wiki about, a solar-powered aircraft in Switzerland completed a 26-hour test flight starting at 7 a.m. on 8 July, 2010 which ended at 9 a.m. the next day. The plane was flown to a height of nearly 28,000 feet (8,500 meters) by Andre Borschberg. During the evening, the plane slowly descended to an altitude of 4,500 feet (1,500 meters), where it remained for the rest of the night using battery power. An hour before dawn, the plane still had six hours of flying time left in its solar-fueled batteries.

Once the cost of solar panel reduces and so is the size of panel, it can create wonders, where ever electricity or battery power have been put to used.

In the coming years one has to tap the green energy... and Sun seems to be the answer, will Indian Government and Indian entreprenuers wake up and make up the best of this opportunity?.

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Compulsive spending.

Any economy is bound to grow, if there is increase in spending by the citizens rather then saving. But, over spending can create a dent in the financial health of an individual.


Recently, came about the following article in a blog .
and thought worth sharing, its about the "so called" special days, the fathers day, mothers day, valentine day, womens day and I believe there is even Ice cream day and our own Akshya tritiya, which is more towards making people to spend.

To add a point on Akshaya Tritiya,

i) It was unknown about a decade back, so did the people not prosper without buying gold on Akshaya Tritiya in previous generation?.

ii) Akshaya Tritiya symbolises with Akshaya Patra, which is a vessels which keep producing food when you keep giving. So this ideally means one have to offer help or offer food or give to others towards prosperity, however this has been completed twisted for the benefit of the seller.

The second article is about compulsive spending , both articles are almost in line with my thought on "4 debt traps to avoid" which I had posted on July 5Th.

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4 Common Debt trap to avoid

About a decade back, getting a loan had its own challenge. One has to visit bank a number of time and provide all the needed document/security before getting a loan, this has changed drastically in the last 10 years.



Most of us would get a call almost on a daily basis about loans & credit card from Banks. Its easy to get loans these days, but you need to ensure you have sufficient fund flow with you before taking up debt route to finance your needs.

Like a business man one have to effectively uses Loan (Debt) and his own funds(equity). High content of loan can get you easily trapped to the path of Bankruptcy. Lets see some of the common used loan facility.

Credit cards : A nice financial instrument, if effectively used and can be a financial killer if abused. No longer does one need to carry cash his wallet and ensure its security, if effectively used one get 45 days credit. Further these days, one get life time free card. Just paying minimum due would take you to the debt trap, plan to pay at the end of your credit period, if you feel due to commitment you would not be able to pay its better to postpone purchase unless its a necessity. Its not a wise, to pay credit card dues through a loan, unless its available at your disposal for almost negligible interest rate, if not Zero.

Home loan: The concept of Home loan has changed drastically in the last 8 to 10 years, now one can get home loans without visiting banks. Few years back, the Equated Monthly installment (EMI) was almost equivalent to the rent paid for an accommodation, hence it was wise to own house, since at the end of loan tenure the house or apartment becomes your property. The same is not true now adays, in the most cases rent is almost 1/3rd of the EMI, in case if you have opted by 85% financing through loan.

With sky rocketed property price in the last few years, one has to also take into account depreciation, if he opts for a flat. This being the case, if one calculates the total capital outflow till the end of the loan tenure vs the flat appreciated value, the total capital outflow might end up higher at the end of the loan tenure.

One might also end up paying more interest rate as compared to tax benefit available. Its better to keep home EMI 30 to 40% of the take home pay and take up decision after some home work is done.

Consumer loan: Any consumer product can be procured through loan, more particularly the vehicle loans. Considering the fact, consumer products have highest depreciation, its better to look at your needs rather than looking at the luxuries, while opting for this loan.

Personal loan:: Personal loan does not have any tax rebate and interest rate of quite high, these loan has to be used only if case of emergency. Personal loan & credit card loan are the first one which need to paid off as soon as money becomes available. The interest rate is much higher than home loan


Always keep a check on the cash outflow on regular basis and ensure some saving in form of the alternative investment is made on a monthly basis. Also, it imperative at any point of time the total of all your EMI is not beyond 50% of your take home monthly income. Though there is no hard or fast rule, its easier to save money at early age(between 20~30 years) than at a later stage(40 + years) of your life due to commitment one gets. Remember, unlike developed countries, India does not offer social security to its citizen during sunset years.

Pay check might increase over the years, but so is inflation and commitment over the years. Hence, one need to work according to a some financial plan.

Remember these days, the credit default information are updated into the database maintained by Credit information Bureau (India) Limited cibil . Hence, better not get into a debt trap, which can prove much expensive.

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Alternative Reserve Currency

Recently, read an article about Global reserve system - A Asian perspective by Asian Development bank



This seems to be in line with my thoughts, as why a weaker currency countries will continue to grow as compared to stronger currency like USD or Euro.

In the article, according to Barry Eichengreen, after World War II, when the United States accounted for the majority of the industrial production of the non-Soviet world, it made sense that the dollar was the principal unit in which exporters and importers invoiced and settled their trade, in which international loans were extended, and in which central banks held their reserves. But this situation makes less sense today when the US accounts for only some 20 per cent of the combined output of countries engaged in international transactions. Because habits die hard, the dollar continues to play a disproportionately important role. But simply because this is true today does not mean that it will be true tomorrow. Countries that trade with and borrow from the euro area will increasingly seek to hold euros as reserves. Countries that trade with and borrow from the People’s Republic of China will similarly seek to hold renminbi, if not today then in the not-too-distant future.

Somewhere, I read 18th century belonged to France/Germany, 19th to Great Britain, 20th to USA and 21st to Asia. Well, if you consider BRIC (Brazil, Russia, India & China) only Brazil, is away from others geographically. If RIC (Russia, India & China) can form a trilateral ally, then undoubtedly 21st century can belong to Asia.

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