I quoted from Ludwig von Mises' 1958 lecture on inflationism the other day:
One of the privileges of a rich man is that he can afford to be foolish much longer than a poor man. And this is the situation of the United States. The financial policy of the United States is very bad and is getting worse. Perhaps the United States can afford to be foolish a bit longer than some other countries.
And India is so very poor - when compared with the USSA - which means we cannot afford to be foolish - by following the financial policies of the USSA.
Where have the financial policies of the USSA brought them to today?
The answer comes from the following report of a Bank of International Settlements warning about an impending CRASH:
Equity and fixed income prices have reached unusually high levels that don't reflect the current weakening in the global economy, according to the Bank of International Settlements, leading to concerns of a fresh credit bubble. Further quantitative easing (QE) by the major central banks appears to have encouraged investors to take on more risk to find higher yields, according to the BIS, and sales of riskier types of bonds have increased in the last three months. "Some asset prices started to appear highly valued in historical terms relative to indicators of their riskiness," it said in its quarterly review. "Market participants attributed a significant part of the rally in asset prices to further loosening by central banks, notably the Federal Reserve." – CNBC
Who are faithfully "following the financial policies of the USSA" - but very wealthy Japan - as this report says, for the Japanese Liberal Democratic Party is in power once again, and about to "will usher in a government committed to a tough stance in a territorial row with China, a pro-nuclear energy policy despite last year's Fukushima disaster and a potentially risky prescription for hyper-easy monetary policy and big fiscal spending to beat deflation and tame a strong yen."
Based entirely on the completely INSANE "theories" of Keynes - that the greater the supply of money the greater the demand.
INFLATIONISM - that's the direction Chidambaram wants us to take - as per this report - and which I did rip apart in my previous post.
Simple: There is no other way by which any of our "political parties" can ever obtain "allies" - in order to achieve the "majority" necessary to form a "government" - other than by handing them PORK - which is why I called Chidambaram Mr. Pork Pie Hat - and then played "Goodbye Pork Pie Hat" for you all - for that is what YOU need to do - to survive!
POLITICS - is a NEGATIVE-SUM GAME - some win, while the vast majority lose; as with taxation, and inflationism, in particular.
The hard evidence:
Welfarism is but PORK - for bureaucRATS - who keep crying for more! - and no one else even cares for it.
Rajiv Gandhi himself famously said, "Out of every rupee spent, only a few paise reach the poor."
We in poverty-stricken India simply cannot AFFORD to keep on playing this ABSURD lose-lose game of socialist-democratic-welfarist-inflationist POLITICS - and must therefore BREAK FREE - to engage in the POSITIVE-SUM - that is, WIN-WIN - GAME of free consensual trades, by which both parties to that exchange gain. This is OBVIOUS enough to even the observer - for both sides thank each other, if a polite culture prevails.
To the theoretician, of course, it goes far deeper than that - for the consensual exchange indicates a "divergence of SUBJECTIVE values" - and the seller and the buyer OBVIOUSLY "value" the good or service being traded DIFFERENTLY - with the seller preferring to exchange it for cash; and the buyer eager to give up his cash for that good or service.
The exchange - has an agreement over PRICE we see - and a divergence of valuations that we DO NOT SEE - and can only arrive at by using the correct SUBJECTIVE THEORIES.
Note: The Marshallian intersecting curves of Supply and Demand employed in Economics classrooms worldwide are NONSENSICAL - since they do NOT convey how the human mind thinks, and then acts. Marshall was Keynes' teacher in Cambridge - and Keynes made things even more nonsensical by postulating intersecting curves of Aggregate Demand and Aggregate Supply - referring to The National Economy!
You may now add "VALUE" - which is "subjective" - to the other three "logical categories" I mentioned the other day while discussing "The Origins of Capitalism in Africa": Property, Arithmetic, and Time. To these, when you add "subjective value," you realise how and why "consensual trades" transpire - naturally, peacefully, and for mutual gain; or Why Humans Are Not Natural Predators On One Another.
WIN-WIN - both sides gain - with TRADE.
LOSE-LOSE all around - except for State Personnel and their CRONIES - with POLITICS - with WELFARISM - and with whatever socialists call REDISTRIBUTION or SOCIAL JUSTICE.
Anyway, one side of this "debate" has been taken by Renu Kohli today, writing in Mint, on what she thinks "The task of reviving economic growth" to be all about.
For a full-scale revival in investment momentum, what matters is entrepreneurial willingness to invest.
For this "entrepreneurial willingness to invest," Renu Kohli favours THE STATE and its "political action" - a new "Cabinet Committee on Investments" - which will decide on matters such as "land acquisition, mining allocations and natural resources’ pricing."
Quite obviously, given her "professional affiliations" above, Renu Kohli cannot possibly be in favour of LIBERTY - to "homestead" unowned natural resources - which would be excellent for the POOREST!
Now, I started off quoting Mises in order to say that Indians cannot afford to follow the "foolish financial policies of the USSA" - because ours is a predominantly POOR nation-state.
Next, as proof of the foolishness of the financial policies of the USSA, I provided an extract from a Bank of International Settlements warning about an impending CRASH - but the Daily Bell article from which this is extracted is actually a CRITIQUE of such warnings - as their own ANALYSIS of this BIS warning demonstrates - which ought to be highly educative for us Indians:
The power elite have created a seamless network of something like 150 central banks around the world that pump outfiat money in excess of what economies need. When times are going well, central banks print to fuel the boom. When times are bad, central banks print to ameliorate the bust. But central banks almost always print.
By printing, central banks create terrible bubbles. And this is what has happened yet again. Stocks markets have inflated around the world and the US stock market has expanded a great deal as a result of what is euphemistically known as "easing."
Easing is just more money printing and now the central bank supervising authority, the BIS, is calling attention to the bubble that its own facilities have created.
This is a purely cynical exercise. Central banks cannot know how much money is too much and inevitably they print more of it than is needed. The BIS is now warning us that too much money is available and circulating.
Anyway, I contributed the following CRITIQUE to Renu Kohli's column on what she thought is required to "revive growth" - which is by "reviving POLITICS"! - and the following has also been published on the webpage below her column.
I am republishing this comment below - as the concluding section of a post on the dangers of poor nations following the foolish financial policies of the wealthy Americans, and the Japanese: so, read it, and THINK!
I have also just written about how CAPITALISM began in AFRICA - so I leave you with MUCH to THINK about - all over Asia, and Africa, too: