RBI, Government, Inflation and Price Rise

While it is quite clear that the only plausible reason for ever increasing price rise is the printing press that is being controlled by the RBI through which it keeps creating new money out of thin air, the Government and the RBI governor keep offering ridiculously insane excuses to shun away from their defaults. The basic reason behind price rise is the inflationary policy of Indian government and RBI as both of them work in collusion.

To help those banks and to finance for some extremely ridiculous socialist populist policies of government, such as education for all, healthcare for all, food for all etc. ((How India is Becoming a Totalitarian State, a Brave New World)),  the RBI kept pushing new money in Indian economy. The result was obvious, inflation kept creeping up while our Prime Minister of UPA government Mr. Manmohan Singh kept promising that prices of commodities and food articles will come down within next six months. He is Keynesian economist and it’s not like Mr. Manmohan Singh doesn’t know the real cause of price rise, he is intelligent enough to understand the basic flaws of Keynesian economics well. It doesn't take an Eisnstien's brain to understand the Broken Window Fallacy. So, while the MNREGA and other similar forced employment provision policies by government encourages rural people to break windows and recreate them, or dig holes and refill them to attain governmental aid in form of salaries, politicians like Beni Prasad Verma feels happy that prices of food items are going high, as now farmers can earn more.

Now when the government and RBI have *literally* accepted that they can't do anything to reduce price rises (as the dragon of inflation has already been driven out of the closet in the streets), the politicians and the Governor or Reserve Bank of India are offering ridiculous excuses for the extreme price rises.

I have explained the basic reason behind price rise and economic crisis in India ((Explaining Indian Economic Crisis)), while the government is yet to affirm that Indian economy is on a downtrodden road. I also have clearly explained the fundamental difference between inflation (the cause) and price rise (the result) ((Reason Behind Indian Inflation)). However, governmental economists, including the Governor of RBI, Mr. Subbrao are yet to learn the difference between inflation and price rise. In addition, the Indian government, Indian corporate, and Indian banks are conspiring to ease out the way of further increasing inflation. It should be noted that Keynesian economists historically offer more poison as the cure for the poison they already have created. This is the reason why there is no difference between an economically illiterate Beni Prasad Verma and well educated Keynesian Prime Minister Manmohan Singh, or Governor of RBI Mr. D Subbarao who, recently, made an excellent Keynesian excuse against the complains of ever mounting price rise in food and commodity sector. According to D. Subbarao, the income of rural Indians and poor people are increasing and hence they are eating more, eating better and this is the main reason for the increasing price rises of food articles ((There's a small satire over this statement by D. Subbarao, RBI Governor's Request to End Malnutrition Campaign))

It should be noted that in 2007, just before accepting the enormous economic crisis, the former President of the United States, George W. Bush also claimed that the cause of “inflation” in food articles in the US is the fact that the poor people in Asian countries are now eating more, eating better. So, Bush can sue D. Subbarao for copying his “idea” about price rise of food articles. However, neither Bush, nor D. Subbarao understand the basic economic fact that inflation is not price rise, rather it is the cause of price rise and inflation is not caused by people eating more, inflation is caused by government and central banks, printing more money out of thin air.

What could be the Reasons Behind These Ridiculous Excuses for Price Rise?

The major reason behind such dumb excuses is that while these Keynesian crooks know their crimes, they also know that Indian populace in general is yet not aware of the economic facts and can take the false pill that suggests that price rise is prosperity, war is peace, truth is false and black is white.

It is a known fact that Indian GDP is continuously decreasing and the reason behind this is the inflationary policy of government that triggered the boom and bust cycle in Indian economy. During the boom time, Congress enjoyed the credit for higher GDP, now when the false growth rate and forced maladjustment in economy are causing problems, the government has no way but to infuse more false money to keep on their false propaganda of economic reforms. This is necessary to fool Indian public again so that the UPA may again try to grab the ruling power. Obviously, this is all about grabbing the ruling power on innocent shepherds of India. This is why Finance Minister P. Chidambaram is trying hard to convince corporate and banks to continue those 215 projects that have been stalled because of the fact that there is no real savings for expanding the production structure of India. This is the reason why there are 126 more such projects for which the Indian banks have already offered loans, but the entrepreneurs are not interested in taking risk of wasting those loans by starting those projects. And this is the exact reason why Indian Banks are demanding free hand to create credit expansion, which in turn will increase inflation or may be hyperinflation, which will cause extreme price rise while ddestroying the basic threads of Indian economy and these crooks will continue offering ridiculous excuses ((The Fradulent Mix of Government, Corporate and State Bank of India)) .

These Keynesian crooks strictly want entrepreneurs to gamble on the loans, however, entrepreneurs realize that the Indian society yet not have increased their voluntary savings enough to continue major projects that could expand the production process and hence, the whole economic structure of India. This, in fact is the phase where businessmen have realized that there is no real money and all that money which is being offered by government and banks is fake, printed money with no backing of real voulntary savings and such money can only cause an increase in price rises, which will also increases the expenses of entrepreneurs and businessmen and will cause extreme losses for them. 

However, with all these bailouts and forced enthusiasm, the government will succeed in causing more maladjustment and economic blunders and what will be the result? An extreme economic crisis in India is awaiting to write history. However, as someone said, Systems have to crumble before they can be rebuilt differently.

West is Red now

USA was never a capitalist state, yet there were hopes of Liberty.
Now when USA is reddening itself in the colors of statism, government controlled robbery, socialism and communism, Liberty has no space in US.
Bloomberg.com reports about the total of about $9.7 trillion economic stimulus by government in a bid to get above the so-called economic crisis.

I call it end of Freedom in USA.

Economic Crisis and India

So a new government report shows that Indians lost 500,000 jobs in India. Rediff news


Yet MOIA is thinking more about help package for those who are returning from foreign states.

Why?
There can be two reason.
First is, Indian government really want to profess that its foreign countries that suffered the major blow of recession, and India is doing fine. After all, it is election period, no government will feel good about exposing the reality. So, by promoting help packages for foreigners and ignoring Indians who lost job in India, government is playing safe.

Second thing is, the number of job lost can be so high (which obviously have not been displayed yet) that government knows it is useless to talk of any unemployment help package.

In any case, it is good for Indians if government keeps away from the idea of economic stimulus for anyone.

The Emotional Economy plan

Recently, Indian government announced a proceeding in making of a new fund to provide economic stimulus to those Indian workers who were working outside India, but due to economic crisis and loss of jobs, may now return back to India.

Ok, how good it feels to help the Indian brothers who went away for making big millions of dollars and now are coming back as their jobs are no more.

MOIA, (The Ministry of Overseas Indian Affairs), is planning to ponder over an amount of Rs10 crores every year to help such workers. "ET News"

It is just a form of economic stimulus by India to overcome the issue of economic crisis. Let us discuss over it.

Not only those who went away in search of big money better jobs are loosing money, but the Indian compatriots who are dependent on production industry are loosing jobs, to say clearly, India is in huge economic crisis, yet government supported Indian new channels keep showing some fake Osama stories and economic crisis of USA, and other nations, as if India is untouched by any such crisis, and ohh yea why not, after all India is well-regulated mixed economy, how can it crumble. Yet that is not the fact. Indian government has already provided economic stimulus for Indian markets and we have shown that such stimulus will only increase the tenure of crisis.

When compared with huge amounts like Rs2000 crores, these Rs10 crores per year may seem nothing, but ultimately the Indian citizens have to pay these Rs10 crores too, it is a burden on Indian citizens as it will increase Fiscal deficit and put further debt on Indians.

Now let us discuss about Unemployment.

Unemployment is a situation when a worker is not working because either he is not getting any work, or he considers the available works not apt for him, as he is much better than doing those jobs.

It is simply not possible to not get any work, as there always remains a situation to do some work or other to gain an honest living that is what entrepreneurship is.

Yet, if a person is not working because all the available jobs he considers of low standards than what he is capable of, then it is a voluntary unemployment. That is, the worker is not working by his choice.

Consider this, a software engineer who was working in Florida someday ago at an annual package of Rs1.20 crores per annum, is now unemployed. He comes back to India. He can easily get a job in India, but he cannot get same salary package.

He was working at a salary of Rs 1 lakh per month, now he do not want to work for an annual package of Rs 2 lakh 40 thousand per annum, that is Rs15,000 per months.

Since he does not want to work at this lower salary, he is not working it is his own choice. Can we say that he is Unemployed? Yes, well he is voluntary unemployed.

Do we need to help him by any economic plan of say Rs 10 crores per annum (As MOIA is thinking about)? No, when he is not even ready to work for Rs15,000 per annum, why will he agree to beg, and if he really feel that he is in dire situation and he needs money any how, he will start working for Rs15,000 per month or even less.

A poor will be more than enough happy about getting a job of Rs2,000 per month too.

So, why providing any stimulus plan for such workers, who are returning to India because they lost their better salary providing jobs.

Someday ago, when Air India announced that it is planning to send about 15,000 workers on pay-less salaries, political parties opposed the move, but when there is no money to keep those high profile rich salary jobs, how is it possible to keep maintaining those jobs? It is simply a bad investment or "Non-Productive-Asset".

Only such Malinvestment and "Non-productive assets" actually increases economic burden and causes economic crisis.

Thus, MOIA is not planning to "help" some returnees from foreign, but it is planning to sustain economic crisis, and why is it doing so? To gain some emotional vote bank?

I will be writing more on Unemployment on ReasonForLiberty soon.

The cliché of Obama's economic stimulus plan

ET while reporting Obama's stimulus plan says

"Much of the money would go for victims of the recession in the form of food stamps, unemployment compensation and health care."
(Economic Times)

Ok, so it is the proof of governments in influence of Keynesianism. First of all, the question is, why will a person opt to go for work if he is getting free health care, and unemployment compensation?

Now, some of the workers were getting huge salaries, can government provide them same salaries? No, it will provide some money based on minimum possible need program.

If it is not provided, may a person go for looking job of some other kind, he may innovate ways to cope with new situations, but government do not want him to think.

Now the question is, when Obama is proposing $819 billion stimulus plan, which may well go to 1 trillion, from where is all this money coming from?

1> government will publish new currency notes/Dollars.

In that case, government is not making any wealth, it will again increase inflation and things will remain as it is. No improvement.

2> Government may tax more on those who are yet working and earning. Ahh so what will it make? More poor, More hungry? How will a poor hungry man provide job to another hungry/poor man?

By doing so, Obama will just decrease the potential of Americans to provide jobs for fellow Americans.

Now the thing is, US is already in huge fiscal deficits, and debt. With new stimulus plan, Americans will be indebted with further huge deficits, which they will have to pay back somehow, otherwise more world tensions, and wars will take place, more terrorism will spread its wings.

In anyways, Obama's stimulus plan is going to take US further downhill to the oblivions of mystery, loot, slavery and socialism.

By the way, I heard a bill to be passed which suggests that American companies should remove foreign workers first rather than removing American workers, now that is protectionism, the American Patriot Economic plan. The thing is, by removing cheaper and better workers first, the entrepreneurs will not get any savings, and they will have to keep bearing the costlier and less productive American workers, that will further deplete American economy, a further blow towards the down hill.

Further read: threat of protectionism

And Economic Crisis and Fiscal Stimulus by Government

Economic Crisis and Solution

Ron Paul on Economic Crisis--

“We got here by spending too much money, borrowing too much money, and inflating too much money — with the Federal Reserve too involved in central economic planning through the manipulation of interest rates, and the congress passing too many regulations. As long as we think that’s benign and has nothing to do with it, then I guess it seems very logical that we come up by spending more money, borrowing more money, printing more money, and writing more regulations - and think that we’re going to get different results.

It seems to me today that the big argument is who the central economic planner is. Is it the treasury, or is it the congress, is the FDIC, is it the federal reserve? Believe me, central economic planning doesn’t work - that’s why we’re in this mess.

If we’re looking for a solution, we have to have liquidation of debt. We don’t want to prop up the bad debt. The problem was created by bad policy. The longer that you delay the liquidation of debt, the longer the agony will be.”

Read more here--

Economic Crisis and Fiscal Stimulus by Government

Atlas Shrugged

Technorati Profile

It is the recession time and Obama-Biden and co. are trying their best to reshape the economy.
Will the Obama stimulus Plan Work?

No it won't...why?

let's see

Obama: "Will you tell me what's wrong with the economy?"

Jake: "What I just told you over the last three hours, is that it won't work."

Obama: "Why not? Just tell me why not!"

Jake: "Okay, I'll tell you. You want me to be Economic Dictator?"

Obama: "YES!"

Jake: "And you'll obey any order I give?"

Obama: "Implicitly!"

Jake: "Then start by abolishing all income taxes."

Obama: "Oh no! We couldn't do that! That's not the field of production. That's the field of distribution. How would we pay our government employees?"

Jake: "Fire your government employees."

- From Ayn Rand's Atlas Shrugged, when John Galt (Jake) is held prisoner by President Thompson (Obama) and told at gunpoint he should "fix" their economy.


Read more here---

The Dilemma of Reserve bank of India

The Government help for economic Crisis