Now we are all set of mid quarter monetary policy from RBI.
Already the blood sucking corporate mafia and financial markets gave their views and their reasoning through their broker analysts to RBI. Their point is that the vegetable prices are going to come down from next month, so inflation will cool down from next month. So RBI need not hike rates. In case if their conscience troubling them, they are allowed to raise the rates by 25 basis points. Now since there is no one to represent common man to RBI, they ( RBI) will do exactly the same. We will analyse this deeply.
1. Food inflation is only 14% of overall WPI. If the 20% raise in food inflation in the month within 14% weightage comes down even to 10% next month how that is going to result to huge downtick of inflation? What about other components?
2. The baby steps of Subbarao amid Chidambaram's blackmailing is well documented. Still why we are raising rates at quarter point every time? even countries like Indonesia and Turkey have more spine than our central bank when comes to rate hikes. We need 1% hike at one go and that is to be kept for 6 months to solve this problem once for all.
3. To control inflation, the rates should be more than inflation by atleast 2% points. 25 basis points is nothing and the system will easily swallow it and it also confirms the fact that Govt and RBI are not willing to control inflation and this adds to inflationary expectations.
4. People have spoken through assembly elections and if still congress does not get the message then one thing is clear. Government and rBI wants to help brokers at the expense of common man.
5. I have written amply about the 'food inflation' and 'supply side' bull shit theories. these theories are written by idiot economists to hoodwink the public and it is sad that many people fall prey to this. When inflation ruled at below 4 or 5, were we not have 'supply side' issues?
6. People who ignore this points in my opinion may either by stupids and I dont think they can be so stupid and if not, they must be cheats. one of these two. YOU CHOOSE.
7. In the last 5 years, our interest rate never even close to touching the inflation figure and forget about the inflation +2 and also we do not follow CPI like other countries do.
8. Now Raghuram Rajan's credibility under stake. He has to take one path. Is he falling under the category of stupid/cheat or he really a economist/patriot?
9. The single minded fanatic focus on 9% GDP landed the country in great mess. 9% GDP - minus 12% inflation and we are already going down. What the F***?
10. And even a child won't believe govt figures. Then I think the inflation must be above 20% and it is ironic some people celebrating 9-11% salary hikes when inflation well over 20%.....? what a joke?
Good Reads
http://www.firstpost.com/economy/raghuram-is-enabling-govt-to-run-biggest-ponzi-scheme-1289615.html
http://www.business-standard.com/article/finance/year-2013-unexpected-reversal-of-interest-rate-cycle-113121600661_1.html
http://www.livemint.com/Opinion/57M0ooklRGW7Z0HAUHXlkK/Indias-latest-political-problem-inflation.html
Already the blood sucking corporate mafia and financial markets gave their views and their reasoning through their broker analysts to RBI. Their point is that the vegetable prices are going to come down from next month, so inflation will cool down from next month. So RBI need not hike rates. In case if their conscience troubling them, they are allowed to raise the rates by 25 basis points. Now since there is no one to represent common man to RBI, they ( RBI) will do exactly the same. We will analyse this deeply.
1. Food inflation is only 14% of overall WPI. If the 20% raise in food inflation in the month within 14% weightage comes down even to 10% next month how that is going to result to huge downtick of inflation? What about other components?
2. The baby steps of Subbarao amid Chidambaram's blackmailing is well documented. Still why we are raising rates at quarter point every time? even countries like Indonesia and Turkey have more spine than our central bank when comes to rate hikes. We need 1% hike at one go and that is to be kept for 6 months to solve this problem once for all.
3. To control inflation, the rates should be more than inflation by atleast 2% points. 25 basis points is nothing and the system will easily swallow it and it also confirms the fact that Govt and RBI are not willing to control inflation and this adds to inflationary expectations.
4. People have spoken through assembly elections and if still congress does not get the message then one thing is clear. Government and rBI wants to help brokers at the expense of common man.
5. I have written amply about the 'food inflation' and 'supply side' bull shit theories. these theories are written by idiot economists to hoodwink the public and it is sad that many people fall prey to this. When inflation ruled at below 4 or 5, were we not have 'supply side' issues?
6. People who ignore this points in my opinion may either by stupids and I dont think they can be so stupid and if not, they must be cheats. one of these two. YOU CHOOSE.
7. In the last 5 years, our interest rate never even close to touching the inflation figure and forget about the inflation +2 and also we do not follow CPI like other countries do.
8. Now Raghuram Rajan's credibility under stake. He has to take one path. Is he falling under the category of stupid/cheat or he really a economist/patriot?
9. The single minded fanatic focus on 9% GDP landed the country in great mess. 9% GDP - minus 12% inflation and we are already going down. What the F***?
10. And even a child won't believe govt figures. Then I think the inflation must be above 20% and it is ironic some people celebrating 9-11% salary hikes when inflation well over 20%.....? what a joke?
Good Reads
http://www.firstpost.com/economy/raghuram-is-enabling-govt-to-run-biggest-ponzi-scheme-1289615.html
http://www.business-standard.com/article/finance/year-2013-unexpected-reversal-of-interest-rate-cycle-113121600661_1.html
http://www.livemint.com/Opinion/57M0ooklRGW7Z0HAUHXlkK/Indias-latest-political-problem-inflation.html
dear mangoman,
ReplyDeletedo you think that all the current economic problems in india is due to real estate?I believe so.
yes...I believe RE is the root cause of all problems...I can prove that
Deleteyes it is cause of the real estate housing is up a lot still there is huge speculation.NOW the rates will rise in a chaotic fashion get food keep some cash at home coz the system will really blow up with 10 year Gsec hitting upper ckt
ReplyDeleteDear Mangoman: No new postings for long time, is it that all is well with the Indian Economy
ReplyDeleteYou are missed. Time for a new post.
ReplyDeleteHi Mango,
ReplyDeleteAre you well?We have not heard anything from you of late.Please keep the blog alive if time permits.
Time to take off this website off my bookmark?
ReplyDeleteAnyway, I was of the view that Rajan would pursue hard money policy and it's coming true. He might not find this kind of freedom once a new government comes to power though.
Hi Sorry all..I am back
ReplyDelete