Citizens of India have been watching, in stunned amazement, as over the past month the local currency has lost an unprecedented 15% of its value, with a record plunge taking place just last night. And, as so often happens, the population habituated to a government "acting in its best interests" is asking itself - how could we have possibly known this was coming. The answer, as usually happens, was staring everyone right in the face.

As Grant Williams shows in his latest "Things That Make You Go Hmm", the warnings came loud and clear, and were very explicit in the form of not one, not two, not ten, but many more sequentially imposed and escalating forms of capital controls by the Indian central bank that sought to prevent the conversion of paper into hard currency. Gold. (Which also overnight hit a record high in rupee terms).



Following are the measures taken by the central bank and the government in 2013:

Jan 21 - The government raises the gold import duty by 2% to 6%.

- The government raises the gold import duty by 2% to 6%. Jan 22 - The government more than doubles the duty on raw gold to 5%.

- The government more than doubles the duty on raw gold to 5%. Jan 30 - Finance Minister P. Chidambaram says there are no plans for additional taxes or curbs on gold imports.

- Finance Minister P. Chidambaram says there are no plans for additional taxes or curbs on gold imports. Feb 1 - The Reserve Bank of India (RBI) plans to introduce three or four gold-linked products in the next few months.

- The Reserve Bank of India (RBI) plans to introduce three or four gold-linked products in the next few months. Feb 6 - The RBI says it would consider imposing value and quantity restrictions on gold imports by banks.

The RBI says it would consider imposing value and quantity restrictions on gold imports by banks. Feb 14 - The central bank relaxes rules on gold deposit schemes offered by banks by allowing lenders to offer the products with shorter maturities.

- The central bank relaxes rules on gold deposit schemes offered by banks by allowing lenders to offer the products with shorter maturities. Feb 20 - The Trade Ministry recommends suspending cheaper gold jewellery imports from Thailand.

- The Trade Ministry recommends suspending cheaper gold jewellery imports from Thailand. Feb 28 - India keeps its gold import duty unchanged in its annual national budget, defying industry expectations.

- India keeps its gold import duty unchanged in its annual national budget, defying industry expectations. Feb 28 - India proposes a transaction tax of 0.01% on nonagricultural futures contracts, including for precious metals.

- India proposes a transaction tax of 0.01% on nonagricultural futures contracts, including for precious metals. March 1 - The Finance Minister appeals to people not to buy so much gold.

The Finance Minister appeals to people not to buy so much gold. March 18 - The Reserve Bank of India says it is examining banks that sell gold coins and wealth management products to identify "systemic issues", with a view to closing any legal loopholes.

- The Reserve Bank of India says it is examining banks that sell gold coins and wealth management products to identify "systemic issues", with a view to closing any legal loopholes. April 2 - The Finance Ministry suggests it is unlikely to raise the import tax on gold further to avoid smuggling and would instead introduce inflation-indexed instruments.

- The Finance Ministry suggests it is unlikely to raise the import tax on gold further to avoid smuggling and would instead introduce inflation-indexed instruments. May 3 - The RBI restricts the import of gold on a consignment basis by banks.

- The RBI restricts the import of gold on a consignment basis by banks. June 3 - The Finance Minister says India cannot afford high levels of gold imports and may review its import policy.

- The Finance Minister says India cannot afford high levels of gold imports and may review its import policy. June 5 - India hikes the gold import duty by a third, to 8%.

- India hikes the gold import duty by a third, to 8%. June 21 - Reliance Capital halts gold sales and investments in its gold-backed funds.

- Reliance Capital halts gold sales and investments in its gold-backed funds. June 24 - India's biggest jewellers' association asks members to stop selling gold bars and coins, about 35% of their business.

- India's biggest jewellers' association asks members to stop selling gold bars and coins, about 35% of their business. July 10 - India's jewellers announce they might continue a voluntary ban on sales of gold coins and bars for six months.

- India's jewellers announce they might continue a voluntary ban on sales of gold coins and bars for six months. July 22 - The RBI moves to tighten gold imports again, making them dependent on export volumes, but offers relief to domestic sellers by lifting restrictions on credit deals.

- The RBI moves to tighten gold imports again, making them dependent on export volumes, but offers relief to domestic sellers by lifting restrictions on credit deals. July 31 - India hopes to contain gold imports well below the 845 tonnes that were shipped last year, the Finance Minister says.

- India hopes to contain gold imports well below the 845 tonnes that were shipped last year, the Finance Minister says. Aug 13 - India hikes the import duty on gold for a third time in 2013, to 10%. Duties for silver and platinum are also increased to 10%. The customs duty on gold ore bars, ore, and concentrate are increased to 8% from 6%.

- India hikes the import duty on gold for a third time in 2013, to 10%. Duties for silver and platinum are also increased to 10%. The customs duty on gold ore bars, ore, and concentrate are increased to 8% from 6%. Aug 14 - India turns the screws on gold buying again, banning imports of coins and medallions and making domestic buyers pay cash.

All of that culminated with the events from last night when the Rupee literally imploded.

Were the signs there for all to see? Why yes. If only people had opened their eyes.

Much more on this, and the different attitudes toward gold between the West and the East can be found in Williams' full newsletter below



