Gold can be reinvested and it is done quite often as well. I assume that the idea of a gold loan is crap to you as well.
That assumption that you have made must be applied to people who convert BTC to INR as well in that case? Aren't people who sell their Bitcoins implying that govt securities would outperform??
Please understand what you are investing in before proceeding. This goes without saying.
Most of the signups and deposits so far, as I am told are from the US. This was expected. It is easier for an Indian to invest in an Indian security like FD's, but not others outside the country.
If there are any assumptions that people do not invest in INR, then take a look at some of the older Bitcoiners like Stephen Gornick, who ensures a monthly sum invested in INR through Milaap. This is only one example.
I had posted some of the figure calculations in the thread existing in the securities sub forum. There was no answer to the calculation. With all due respect to your knowledge on bitcoins (cause I know you are gonna be pissed with this post), your lack of knowledge about finance is staggering.
First, gold loan is not an "investment". If you look at the ads about gold loans all of them have one feature -- a person having a dream - open a business, becoming an artist etc, puts his/her gold as a
collateral to get the money. What it means, if the business is successful he/she is going to get back the gold being put. So there isn't even apple to oranges..rather potato to oranges comparison when saying things like that.
If you really want to make a comparison --- why not prove that converting your gold into INR and investing in FDs (or bonds) will give you superior returns. You cant!!! Reason it doesnt do that.
Secondly, people converting their BTC to INR - I am just stumped how people doing that are implying govt securities will outperform? Yes there is an interest funda here but that doesn't tie to govt securities at all:
If a person buys BTC using his INR,
hypothetically he is giving up on his rights to earn interest. How is that? A normal savings account will earn somewhere around 4% interest on yearly basis (ex.
http://www.icicibank.com/interest-rates.html) So basically if I have 25k and I dont do anything with it, I earn 4% on it without doing anything. But if I were to buy 1 BTC instead I loose that right. The obvious thinking here should be (which normally people dont put) is that, BTC will rise above 4% in a year to actually make "investing" sense.
Conversely, if I sell BTC and convert it to INR, then hypothetically I can earn 4% on that money. It has nothing to do with government securities, rather RBI interest rate. And no, they are not same as "government securities".
But that said, people convert BTC to INR for various spending reasons. Suppose I want to buy a shiny new Ps4, I dont give a damn about the 4% in INR. How am I implying the so called government securities have anything to do with it?
And I think you are completely misunderstanding, who said people dont invest in INR. It is just that this program is full of potholes like Bangalore roads
. Btw Milaap is a NGO, isnt? Is Gorrick earning a % - 6 or watever - from "investing" in Milaap? Nope. So its another of potatoes to oranges comparison and show complete lack of understanding of any finance related stuff.
Last but not the least, are you guys registered investment advisor or NBFC? You might think as long as I am taking BTC, I will be fine. Wrong!!! The moment you convert it to INR, you are in the gambit of the Indian government or rather SEBI. If one was to report this, you can bet they will come after you. And then again it will be such hue and cry over how our government is draconian etc etc. Before you quote me example of other INR or USD based programs -- let me say this they also flout regulation.
PS: Please dont mind the post. I have tried my best to explain the fallacies in your reasoning but if you think it is still correct, just delete this post.
