Monday, March 16, 2009

Some Questions

1. This is Recession time.
2. The Indian economy, which was growing at 8% pa, has been slowed down to a growth of 5% pa, but nevertheless, it is still GROWING.
3. The US economy, the worst hit, is having negative growth right now.

1. Have we ever wondered WHY THE ****, in spite of facts 2 and 3, Rupee is now at its worst Ever in HISTORY against the US Dollar ??!
2. Why havent we ever wondered the question 1 ??!

Possible answers:

Why, in spite of facts 2 and 3, Rupee is now at its worst ever in HISTORY against the US Dollar ??!
1. Every other currency is gaining against the US $. This is because India is one of the few (if not only, I dont know) countries that allow direct trading between its currency and the US $. There are a lot of rich people/corporates in US. For eg, General Motors, the car manufacturer, has more net value than the GDP of the Kingdom of Saudi Arabia (and we thought Saudi is a rich country!). So when currency is traded freely, the rules of supply and demand works. People with money have the power to create artificial anomalies in supply and demand and increase or decrease the "value" of any commodity that is traded. So whatever losses they get when Dollar weakens against say Euro, they make up by the gains they get when Dollar strenghthens against Rupee. OK maybe not all the losses, because the volume of trade is different, but still, US companies get losses when they trade with a country whose currency is gaining against
the dollar, and they make profit when they trade with India.
Why are we allowing this ?? Why is our Finance Minister allowing direct trade of Rs and $ while FMs of other countries are not ?? Why is the Oppostion not questioning this ?? Why are they letting Indian companies trading in the international market bear the losses of their stupidity ??
I m sure this is not the only reason as to why Rs is weakening against $. I dont know enough economics to figure out the other reasons, mayb there are stronger reasons and the reason i gave might b insignificant or even wrong. I dont know. I m writing just one possible explanation.

Why havent we ever wondered the question 1 ??!
2. "Who cares ???" - isnt that wat came to ur mind when u read my 1st question ?? Yes, we, the present generation, the "Gen Next" or "Gen X" or whatever, just DONT GIVE A DAMN. And why ? For us, entertainment is EVERYTHING. And economics, is not entertaining. Whom do we watch in TV ? Shar Rukh Khan or some nerdy reporter asking such questions? Which page do we read in newspaper ? The sports page or the economics page ? ("Is there an economics page???" - some of us might be wondering.) I say "we", because i too do the same. I too am "Gen X" or watever. Why are we all-consumed by this mass hysteria abt entertainment ? Why are we oblivious to the problems of our nation and fellow countrymen ??
Because THIS IS WHAT THE MEDIA WANTS US TO DO - We shouldnt think, we shouldnt raise questions, we shouldnt stand up against such absurdities in our society. We should just sit in our homes, watch Channel V and ESPN, eat at Mcdonald's and Cafe Coffee Day, party all the time in clubs and pubs. The media and corporates, they tell us only wat they want us to hear. And we think, that is what we want to hear. They feed us the answers
which we think are true. And we dont counter-question. Hell, we dont even question !! They are manipulating the way we think. And they are doing a damn good job. That is why question 2 is more important than question 1.

This is an open ended discussion.

RAISE SUCH QUESTIONS. Show them we (still) have the power to think logically.

This is my 1st blog. I never thought i ll blog. but this is something i want everyone to ask. This and more questions. so i wanted to share this. the "facts" i ve written here mayb wrong. i heard it from a friend of my Dad. my "answers" also might b wrong. they are my own thoughts. Please forgive my mistakes, if any, and do point them out.

Also, please comment, criticize, discuss and question.

- Sreejith Ramachandran


  1. Regarding point 2 that you made .. India is having a 5% growth on a year-on-year basis but since the major effects were seen during September last year, it makes sense to look at a quarter-on-quarter growth reports. But the Indian Government never gives out GDP growth per quarter ... Countries in Europe and US project q-o-q growth rates and are in -ve. India might also be in such a situation which might be evident in this year October when all indices will be in -ve !!

  2. It is a very interesting argument that you have given here. I do think it is a possible solution to the undervalued-rupee problem. The capitalists in US wud go to any extent to make some extra money. It is this greed game dat actually led to this global meltdown in the 1st place.

    And the argument about media manipulating the people... That is another excellent point that you have made. It is not just the case in India.It even happens in countries like US. It is ultimately, the huge capitalistic corporations who rule the world now, where money is power. And I must say that the greedy politicians are just their puppets who wud even clean the toilet of the rich to get money

  3. As for your question on the exchange rate .. India is helpless as it cannot control companies from taking our their investment from India. This is what is causing the high exchange rate... This could all have been prevented if India had gone the communist / socialist way but who would want that to happen!! CPI is very happy that its policies in the banking sector helped protect the Indian financial sector from collapsing overnight... Indians should actually thank them for the FDI restrictions!!

  4. wat my friend naga has said is correct.. india is helpless.. dollar IS the world currency and we have to trade with it..
    but as he also pointed out to me personally, the present weak Rupee is actually helping india.. india's main import - oil is comin very cheap now (some 30-40 $ per barrel) and india's main export - textiles is reaping a lot of Rupees because their prices have not fallen in $..

  5. Is the nerdy reporter asking questions a female? Just curious..