The simple logic of gold.

"In FY19 (financial year 2019), India imported 983,000 kg of gold, the highest since FY14," wrote Vivek Kaul. Buying gold doesn't make sense because it is taxed at over 15% and there is 5% GST on the cost of making ornaments. Sovereign gold bonds pay 2.5% interest per year, which is taxable, but most people prefer to buy jewellery. The price of gold varies depending on demand, mainly by central banks, falling from $1921 per ounce in 2011 to $1538 today. Also, the hallmarking of gold jewellery is mostly fake in India. So are people idiots to buy gold? After the Asian tsunami in 2004 people in Aceh province in Indonesia "rebuilt their lives using gold they had on their bodies", found Richard Davies. "Gold also acts as a kind of informal insurance mechanism." Presently, India is seeing widespread protests against the government of Prime Minister Narendra Modi where people are chanting the preamble of the Constitution. "What is the role of an ongoing popular protest movement in the context of a well-functioning representative democracy such as India?" asked Prof Vivek Dehejia. If the definition of democracy is winning elections by distributing handouts on taxpayer money, then surely India is a democracy. People are protesting against a series of repressive measures against citizens unleashed by this government. "In today's social media world, it is relatively easy to organize a protest, and those who believe in the cause, or those who have nothing better to do (or perhaps some students who prefer bunking classes instead of studying), may well show up," writes Dahejia. That is so arrogant, sanctimonious and contemptuous. "Nonviolent protests are twice as likely to succeed as armed conflicts -- and those engaging a threshold of 3.5% of the population have never failed to bring about change," wrote David Robson. It was precisely such leaderless protests, despite attacks by the regime, that brought about the fall of Hosni Mubarak in Egypt. The revolution failed because it was hijacked by the Muslim Brotherhood which moved toward an Islamic dictatorship. Dahejia thinks that the India Against Corruption movement failed because the Aam Aadmi Party (AAP) won the subsequent assembly election in Delhi. He forgets that AAP has failed to make any gains outside Delhi and is hanging on here by making extravagant promises. This government has made India a world leader in shutting down the internet to control protests. In its recent judgement the Supreme Court ruled that "freedom of speech and access to information on the Internet on the one hand, and the freedom of trade and commerce on the Internet on the other, are both 'constitutionally protected'," wrote Gautam Bhatia. Internet shutdowns cost $3 billion between 2012 and 2017, and the shutdown in Kashmir since 5 August has cost the local economy $2.4 billion, wrote Neelanjan Sircar. This, together with the cost of police repression, will hurt the economy which is already slowing down. The Congress won just 44 seats in 2014 because of the economy. It's Modi's turn. India is no democracy. That is why Indians buy gold.