Wednesday, August 13, 2014

Tolas and Luongs

Hi all, I just read something that made me fully understand what a Tola is and as a result why the digits 375 are often a reference point in the precious metal industry.

From The Hindu Business Online

At the centre of it all was the rupee, which, since 1835, had been a silver coin containing one tola (0.375 troy ounces) of the metal of 91.67 per cent fineness. Besides being a token coin made of silver, it was freely convertible against the pound sterling at a fixed exchange rate of 1s 4d.

As India had the world’s largest economy from at least the year 1000AD into the late 17th century, Indian financial measurements were in used across the Indian sphere of influence, which spread over all of SE Asia via religion and trade. When the French introduced the metric system across their colonies in the early1800's - Vietnam, Laos, Cambodia and part of South China the 375 number was converted into grams. With 37.5 grams being referred to as a Mot Luong or simply a Luong, then from there decimal factions of a Luong such one tenth being 3.75g.

From wikipedia:

In French Indochina, the colonial administration standardised the tael (lạng) as 100 g, which is commonly used at food markets where many items typically weigh in the 100–900 g range. However, a different tael (called cây, lạng, or lượng) unit of 37.5 g is used for domestic transactions in gold. Real estate prices are often quoted in taels of gold rather than the local currency over concerns over monetary inflation.

India's Inflation Rate Running at 8% But Those Holding Gold Unaffected

Slightly old news but if you weren't aware India's official inflation rate is currently 8% (see here) and the Reserve Bank of India are discussing measures including an inflation target of 6%. But with the average Indian spending up to 50% of their income on food, weather and crop yields are more likely to have influence on the inflation rate than a few guys at the RBI leaning on financial levers.

Interesting to note that those Indians that choose to save in the local INR currency are down 8% (less any interest earned after tax - one 1week rates are 4%). Versus those who saved in gold whom are even (gold is up 8% in INR this year - see table)

Aug. 13 (Bloomberg) -- India’s consumer-price inflation quickened more than economists estimated, adding pressure on central bank Governor Raghuram Rajan to keep interest rates elevated even after factory output slowed. Haslinda Amin has more on "First Up." 

Putin vs. the Fed

CNBC's Jeff Cox, and Larry McDonald, Newedge USA, debate whether the Federal Reserve or geopolitics have a greater impact on the market. "Shark Tank's" Kevin O'Leary thinks Russia is the big story. 

Lest we Forget

Andrew Hoffman--The Postal Wasteland Non-Industrial State


Hitler is called by Mrs. Doubtfire

Hitler Rant Parodies pays tribute to Robin Williams.

From Hitler Rants Parodies