The week is drawing to a close and it’s time to usher in the weekend with open arms amongst the current oil imbroglio which have witnessed protests in the usual parts of the city leaving the denizens frustrated and motionless creating traffic jams aplenty. The hike in the prices has left the consumers in an unsteady frame of mind but when one opts for staging protests leaving thousands stranded on the roads, it leaves behind a question answerable only by the rational thinkers-Are the protests the only way to turn around the decision? Thoughts for you to ponder upon!

Across the border, India is struggling with slowing growth, a declining currency and policy inaction from a government that is wrestling for lost power and the country’s huge appetite for gold which is putting the economy in an insecure position. The surging gold prices of year 2011 had failed to dent India’s demand for the precious metals. The Asian powerhouse had imported a record 969 tons in 2011, putting enormous pressure on its already ballooning trade and current account deficits.

The government had responded by doubling the import duty on gold, sparking off strikes by gold dealers across the nation. By official statistics, India is the top importer of gold in the world, importing $58 billion worth of the precious metal in the fiscal year, up from $38 billion in the previous fiscal. Morgan Stanley had exclaimed that India’s household gold consumption has gone up from $19 billion in 2009 to $45 billion in 2011.

However, some economists argue that gold’s contribution to the current account deficit is overstated because, unlike oil, which is consumed, gold has a tangible value and can be readily traded in global markets. The close to a mammoth $200 billion in imported gold over the past decade does not represent a drain on India’s resources, rather a diversification of India’s wealth into precious metals. But according to some analysts, the funds used to by gold are “misallocated capital” as they should be going into funding infrastructure growth for example. Hence, the recent move by the government to increase import duty is thus a small step in the right direction. But for the huge gold consumption masses of India, one wonders if the move will hinder the growing demand for gold.

Nearer home, one wonders if the protesters are right in their method of urging the concerned authorities to lower the prices of oil yet again. A penny for your thoughts!

Have a great weekend everyone!