Directions: Choose the word, which is most similar in meaning to the word printed in bold as used in the passage.

Consumed

Directions: Answer the given question based on the following passage:

The price of gold has gone up from $256 an ounce in 2001 to $1,424. Meanwhile, price levels have struggled or crashed with respect to almost all other asset classes. Central banks have slashed interest rates. Yet, gold prices, it has been predicted, may go up and up. The many reasons for this renewed love are convincing. Interestingly, not long ago, pundits had predicted the end of gold as the world's default asset class and were clubbing it with commodities. It appears that the yellow metal is making a comeback to reassert the pre-eminence it has enjoyed for 5,000 years of history.
Its supply is falling. No new mines have been discovered. The existing ones are getting exhausted, and miners are digging as deep as 5 km. Gold content in ore has come down from almost 12 gm a tonne to 2 gm. And it costs more and more to take that out. Environmental concerns have also contributed to mine owners' problems. The wages of miners are going up; so is the cost of providing them safety and security.
Emerging economies such as China and India are accumulating gold: China has 1,054 tonnes and India 565 tonnes. No wonder, as emerging economic superpowers, China and India want to add to their reserves. Industrial use of gold is on the rise the world over. With the US economy still drifting with the threat of the dollar losing its undisputed position of reserve currency, the rush to gold is increasing.
Added to all this is the rekindled investor preference for gold. Money is moving away from mutual funds and equities and the once fashionable and often discredited hedge funds are also getting into gold. Exchange traded funds (ETFs) are channelling ever more funds to gold. Some pension funds are increasing the proportion of gold in their basket of assets. Given all this, gold can go nowhere but up. That is the consensus.
Everyone seems to be joining the new gold rush. But is everything well with gold? Or is it a bubble building up?
Consider the conventional wisdom. Money generally gets distributed, though not in any fixed proportion, among assets stocks, cash, government securities, gold, investments in factories and equilibrium in a global economy, across geographical boundaries. As long as the flow and the increase in returns are consistent, everyone rushes to the same destination. Excess demand, though often artificial, creates excess supply, as in the case of real estate.
Excess supply leads to price crashes. Is something similar happening in gold? The general consensus is 'no'. Gold is different. It has never let anyone down in 5,000 years. It is indestructible. Its supply is limited. The argument in the case of gold is that excess demand cannot create excess supply as the total world supply is limited. But this time it is different. Is it really so? Gold has also gone up and down in the past. It was $424 an ounce in 1990 before crashing to $255 in 2001. Still, it moves only within a range and huge fluctuations are not possible in gold, argue some people. Actually, gold gave much better returns in the 1980s, only to stagnate and lose those gains in the 1990s.
A crash of gold prices could be the ultimate crash, nothing like we have seen. No one has managed to discredit the yellow metal in 5,000 years. But it appears that for the first time in history the ETFs, the hedge funds and the governments are about to do the undoable. The fact that it has not already happened is no guarantee that it will not happen. Look at all the easy money coming into gold. All those who have shifted money from real estate, mutual funds, pension funds, hedge funds and stocks are pouring it into gold. Gold ETFs are the fastest growing investment vehicles today. This is all real quick money, but can evaporate at the click of a key. Of course, governments such as China and India are also betting on gold and increasing their reserves. But then whoever said governments can make no mistakes?
The intrinsic value of gold has not gone up from $255 to $1,424 in 10 years. Gold is not consumed heavily like oil or grain. Industrial use of gold is limited. Gold is the most recycled commodity. Of the annual production of 2,500 tonnes, about 50 per cent goes to make jewellery and it is almost entirely recycled. The rest goes to industrial and other uses, and even here the recycling rate is high. In other words, all that demand is artificial and can be deflated in no time. There is no need to have excess supply to lead to a price crash, unlike other products. The sheer fact that gold is only a hedge instrument and does not serve any practical use by itself will negate the 'there-is-new-supply' theory. Someone somewhere is watching for the perfect moment to disgorge the hoard, to create sudden panic and buy up following a crash.
There is no sign that a crash is going to come tomorrow, or for that matter next year or the year after. It may still go up for two or five or even 10 years. But crash it will, if we are to go by the economic history of boom and bust. Also, the higher it goes and the longer it stays there, the more painful the crash is going to be, especially for India. Indians sit on an estimated 18,000 tonnes. India has always had the largest gold reserve with individuals. Imagine what will happen to millions of Indians if gold were to crash. A crash of gold will be the crash of the Indian economy.
That should make us more responsible. That makes it imperative for our economists to track gold movement. That makes it important for our financial wizards to prevent a bubble in gold. That should force us to act before it happens. Never in history have we had so much idle money chasing so little gold. Gold is losing its respect as the default and fail-safe asset class and becoming a speculative instrument. This shift of gold from being an item of passive wealth to an instrument of speculation is dangerous. Gold is being talked up by crafty speculators and unsuspecting governments. And these predictions are being made by those sitting on gold worth billions of dollars bought at yesterday's prices.

Question

Multiple choice

Directions: Choose the word, which is most similar in meaning to the word printed in bold as used in the passage.

Consumed

Directions: Answer the given question based on the following passage:

The price of gold has gone up from $256 an ounce in 2001 to $1,424. Meanwhile, price levels have struggled or crashed with respect to almost all other asset classes. Central banks have slashed interest rates. Yet, gold prices, it has been predicted, may go up and up. The many reasons for this renewed love are convincing. Interestingly, not long ago, pundits had predicted the end of gold as the world's default asset class and were clubbing it with commodities. It appears that the yellow metal is making a comeback to reassert the pre-eminence it has enjoyed for 5,000 years of history.
Its supply is falling. No new mines have been discovered. The existing ones are getting exhausted, and miners are digging as deep as 5 km. Gold content in ore has come down from almost 12 gm a tonne to 2 gm. And it costs more and more to take that out. Environmental concerns have also contributed to mine owners' problems. The wages of miners are going up; so is the cost of providing them safety and security.
Emerging economies such as China and India are accumulating gold: China has 1,054 tonnes and India 565 tonnes. No wonder, as emerging economic superpowers, China and India want to add to their reserves. Industrial use of gold is on the rise the world over. With the US economy still drifting with the threat of the dollar losing its undisputed position of reserve currency, the rush to gold is increasing.
Added to all this is the rekindled investor preference for gold. Money is moving away from mutual funds and equities and the once fashionable and often discredited hedge funds are also getting into gold. Exchange traded funds (ETFs) are channelling ever more funds to gold. Some pension funds are increasing the proportion of gold in their basket of assets. Given all this, gold can go nowhere but up. That is the consensus.
Everyone seems to be joining the new gold rush. But is everything well with gold? Or is it a bubble building up?
Consider the conventional wisdom. Money generally gets distributed, though not in any fixed proportion, among assets stocks, cash, government securities, gold, investments in factories and equilibrium in a global economy, across geographical boundaries. As long as the flow and the increase in returns are consistent, everyone rushes to the same destination. Excess demand, though often artificial, creates excess supply, as in the case of real estate.
Excess supply leads to price crashes. Is something similar happening in gold? The general consensus is 'no'. Gold is different. It has never let anyone down in 5,000 years. It is indestructible. Its supply is limited. The argument in the case of gold is that excess demand cannot create excess supply as the total world supply is limited. But this time it is different. Is it really so? Gold has also gone up and down in the past. It was $424 an ounce in 1990 before crashing to $255 in 2001. Still, it moves only within a range and huge fluctuations are not possible in gold, argue some people. Actually, gold gave much better returns in the 1980s, only to stagnate and lose those gains in the 1990s.
A crash of gold prices could be the ultimate crash, nothing like we have seen. No one has managed to discredit the yellow metal in 5,000 years. But it appears that for the first time in history the ETFs, the hedge funds and the governments are about to do the undoable. The fact that it has not already happened is no guarantee that it will not happen. Look at all the easy money coming into gold. All those who have shifted money from real estate, mutual funds, pension funds, hedge funds and stocks are pouring it into gold. Gold ETFs are the fastest growing investment vehicles today. This is all real quick money, but can evaporate at the click of a key. Of course, governments such as China and India are also betting on gold and increasing their reserves. But then whoever said governments can make no mistakes?
The intrinsic value of gold has not gone up from $255 to $1,424 in 10 years. Gold is not consumed heavily like oil or grain. Industrial use of gold is limited. Gold is the most recycled commodity. Of the annual production of 2,500 tonnes, about 50 per cent goes to make jewellery and it is almost entirely recycled. The rest goes to industrial and other uses, and even here the recycling rate is high. In other words, all that demand is artificial and can be deflated in no time. There is no need to have excess supply to lead to a price crash, unlike other products. The sheer fact that gold is only a hedge instrument and does not serve any practical use by itself will negate the 'there-is-new-supply' theory. Someone somewhere is watching for the perfect moment to disgorge the hoard, to create sudden panic and buy up following a crash.
There is no sign that a crash is going to come tomorrow, or for that matter next year or the year after. It may still go up for two or five or even 10 years. But crash it will, if we are to go by the economic history of boom and bust. Also, the higher it goes and the longer it stays there, the more painful the crash is going to be, especially for India. Indians sit on an estimated 18,000 tonnes. India has always had the largest gold reserve with individuals. Imagine what will happen to millions of Indians if gold were to crash. A crash of gold will be the crash of the Indian economy.
That should make us more responsible. That makes it imperative for our economists to track gold movement. That makes it important for our financial wizards to prevent a bubble in gold. That should force us to act before it happens. Never in history have we had so much idle money chasing so little gold. Gold is losing its respect as the default and fail-safe asset class and becoming a speculative instrument. This shift of gold from being an item of passive wealth to an instrument of speculation is dangerous. Gold is being talked up by crafty speculators and unsuspecting governments. And these predictions are being made by those sitting on gold worth billions of dollars bought at yesterday's prices.

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