Occupy Dalal Street in India

The screaming headlines provide insight into the dichotomy that prevails in our society. It is reported that in Chandigarh alone (in northwest India) Rs 80-crore worth of gold ornaments and nearly 800 cars were sold on the occasion of Dhanteras. Far away in Patna, Rs 400-crore were withdrawn on the same day from ATMs. It seems buying metals on this auspicious occasion had beaten all records.

Most families consider Dhanteras to be an auspicious occasion to buy gold and silver. Unfortunately for them, the prices of these precious metals have gone through the roof in the last few months, making it difficult for many to buy even a coin of few grams. Completely unable to comprehend the reasons behind such high price-rise, many of them can be heard asking, “Why have gold prices increased so much”?

Little do they know that the unprecedented escalation in gold prices is only because of speculation in which just one per cent of the investors are raking in huge profits while 99 per cent end up paying through the nose. This in short is the essence of the slogan, ‘We are the 99 per cent’, that is sweeping across the continents. More than 950 cities in 82 countries have seen thousands of people streaming in to the roads, squares and the parks to protest against economic inequalities. What began as a silent sit-in by a handful of protesters in the Wall Street -- the financial capital of the world -- New York a month back, has now spread like a wildfire.

In India too, some groups, including the Communist Party, have launched of the Indian version ‘Occupy Dalal Street’ from Nov 4.

Well, before we follow the global trends let me take you back to the days when petrol price internationally had shot up to $ 140 a barrel. This was barely two years back in 2009, just before the world witnessed an economic meltdown. I remember even Prime Minister Manmohan Singh saying that he wasn’t sure whether it was because of a slump in production or rise in demand. The fact is the stupendous rise in oil prices was not because of supply-demand constraints. It was simply because of speculation in trading. The companies which have invested in its stocks on the Wall Street try best to garner more profits.

Oil prices subsequently slumped to a low of $ 40 a barrel. From $ 140 a barrel to $ 40 a barrel certainly proves that demand had nothing to do with prices. It was all in the game of speculation.    

Devinder Sharma in Ground reality. Here