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India's "demonitsation" could have a flaw

The procedure introduced in India in an attempt to make 'black money' null and void, or 'demonitise' such funds is inherent with a flaw, I believe.  

In practice, the idea of forcing people to exchange their 1, 000 and 500 rupee notes has caused lot of frustration, with people having to que up outside banks to exchange these high denomination notes.  Some of the banks don't have the money to give in exchange - such are the ques and such is the quantity of money being brought to be exchanged.  So far, about five billion pounds worth equivalent has already been exchanged.  The Indian authorities believe there still is about nine billion pounds worth of the high denomination notes still in circulation.  Of that, they estimate it will whittle it down to approximately five billion poundsnt? worth equivalent which will not be able to be exchanged legitimately.

What will happen with this five billion pounds worth equivalent in rupees?  By demonitising this,  the Indian government is going to write it off, I suppose, making the possessors of the black money effectively holding worthless paper, never in the future being able to use their treasure which has been written off.  Effectively, the Indian government surely is not going to reduce the amount of money in circulation by such a grand amount?  It would be such a shame.  Removing such an amount from circulation would create a squueze, probably necessitating an increase in the benchmark interest rate.  When the Western nations with their reserve currencies have been printing more or authorizing more digitally, can India afford to be effectively tightening their money supply to their detriment?

It just not make sense, to effectively reduce to null and void what is part of their nation's wealth.
That is where I suggest the flaw lies.

What may be better may be to levy a tax of say twenty five or thirty percent on money that may be surmised to be black money.  This way, the culprits with black money will be identified,  charged tax on that, but they may have the oppprtunity to hold as savings in banks their hoarded money, effectively keeping it legitimately in circulation.  This would be good for perpetuation of the nation's wealth.  And the tax thus collected will prove useful for national purposes, be it providing education, social security, or building houses, schools, dispensaries.

Kind regards,
Durudarshan
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Donald Trump will be a good great President

My reading is that Donald John Trump will make a good great  President, creating work for people, helping them rebuild America, and turn the ecnomic Recovery into Prosperity.  I believe it is time for all people to halt the protests and demonstrations, and instead rest awhile till 20th January.  Immediately he is in charge, I belive this good man who has realized his full potntial and still seems to have plenty more he will achieve, certainly is of a generous heart to enable and provide the wherewithal to all other fellow citizens to realize their dreams.

He promised to get the coalminers up and working again.  You can imagine the young men and women in the rust belt waiting to restore or renew as soon as their work is renewed.  Donald Trump has promised them work, and it shal be so.  
His plan to create several million jobs at a cost of Six Hundred Billion Dollars seem a classic way of creating jobs and repairing or renewing national infrastructure, creating indeed fulfilling jobs which were dormant, creating livelihod and prosperity for the people.  

Donald Trump likes  to fund distribution of the Bible, and drew inspiration from his Pastor, the Revernd  John Vincent Peale.  That brand of positive thinking and Christianty is certainly that enthuses people to do good for themselves and  by inclusion be doing for the community, or even the world at large.

The author of Art of the Deal certainly believes in talking and discussing and renegotiating, and obviously he is a man with a good understanding heart.  

They spnt about eight years trying to get th Wolstan Ice Rink built in New York, and nothing as achieved, all wasted.  Donald offered to get it built, and he got it completed in eight months and under budget.  This man is a legend.  This man will get all people working, and make America great again.  He bears no ill will towards anybody.  He is as the Saviour would have him do.  Judging by his record, I feel we will all admire what he achives in his first year.  Now it is time for all to congratulate him on winning the election fair and square, and welcome him and look forward to his leadership.  

Kind Regards
Durudarshan

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The Euro unification of currency and philosophy has thrown up its own challenges

The inception of the Euro and the evolving political and social philosophy of the nations it serves has been almost natural, an experiment in the growth of both, facing challenges as the journey has progressed, addressing the various crisis the best they knew how.  It has been an interesting journey so far.  God willing, it will continue further to unite the spirit of the European nations, and allow the Euro to successfully become a Reserve Currency.  At the moment, of course, the Euro is in its infancy.

In retrospect, questions should have been asked : How could the Maastricht Treaty overlook the printing of the Euro, or the issuing of it?  It seems the Euro Area, which was growing in number of member nations and consequently serving a bigger population, was consigned to try and manage on a 'limited budget'.  It seems not to have occurred to the powers that be that as they enlisted more members, the size of the pool of capital should have automatically been allowed to grow.  That fiscal adjustment to the collective balance sheet of the European Union nations should have been a natural, routine point.

Just imagine : First of all, East and West Germany combined, joining their currency and wealth pools to replace it with the Euro.  Remember, they had BMWs in one country, Skodas in the other, now they were going to have similar values.  Should the prices in West have been adjusted downwards, and perhaps not adjusted upwards for the East?  Was there a middle ground? 
When Greece turned all the Drachmas and Gold reserves over to Germany, what calculations were made to allocate them the Euro instead?  Was there a scientific system of transferring value?
This is just some simplistic absurd arguments, but you get the point.
It seems the Union kept growing, with more nations surrendering their original monetary units and getting the Euro instead - and this was from the limited pool that was created in the first instance.  (The Maastricht Treaty did not have any stipulation for printing or issuing more, and this was only recently looked at whereupon Mr Mario Draghi announced suitable modifications to that policy and authorized printing or issuance of more of the stuff.).

This is food for thought, and can only help in growing the Euro to a powerful, respectable Reserve Currency of the future, and the political and social unification of Europe as something that may be a cohesive, harmonious federation.

In the meantime, it seems the economic jargon utilized may have obfuscated the whole issue, as urgent issues were tackled with the most convenient solutions being thrown at the problems as they arose.  Perhaps it may be best to accept that it cannot have been any other way? 

Now with hindsight, and some scientific analysis (or even some inspired ideas), hopefully the Euro will grow stronger, the European Union nations feel they were each served equitably by the Euro, and allow the harmonious mingling of the nations combine and celebrate a culture that reflects the unity of all these people, the values they share and their aspirations for a secure, honourable and prosperous future for the E.U. and associated nations. 

Certainly with the ECB stimulus in place, there ought to be growing strength and confidence in the future, a rosy future that could hasten the economic Recovery and perhaps take us all to Prosperity, which may be just around the corner.

As for the rest of the world, China and Russia are re-creating the new Silk Road, which should see economic development in a lot of the countries that lie across the route.  Logically, there should be good numbers this year, regardless of who becomes President in the U.S. As for Brexit and the Article 50, it seems most probable that the United Kingdom will choose the options that bestow the greatest advantages to themselves.  There is a jubilant atmosphere here in the U.K. that things will be more than okay, and we will get the best of the bargain.  There seems there will be no lack of goodwill in the U.K. towards all the European nations, and shall continue trading with all these nations on the best terms under the current situation.  Brexit will turn into a blessing in disguise, for the U.K. and her friends the other Euro Area and E.U. nations. 

I would propose a toast : to the longevity of the Euro, and happy, harmonious times for the European Union and the United Kingdom.

Cheers!

Durudarshan H. Dadlani

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00:23 hours  GMT  30th July 2016  London

 




The Japanese stimulus may do wonders for the world.

Mr Kuroda, the Bank of Japan Governor, has at least authorized the £265 billion stimulus suggested by the Prime Minister, Mr Shinzo Abe.  This should work wonders for the world.

In view of the huge stimulus already in place, which perhaps may sink the system eventually, it was good Mr Kuroda has not added to the current stimulus, but just authorized what will be needed for the near future.  Of course, the period over which this stimulus would be issued and pumped into the system has not been clarified, but it can be assumed it will last beyond Mr Abe's current term as P.M. 
Abenomics proved its success in his first term in office, and it was suggested a second term should be rightfully his, so that he could nurture fully the economic regime in set in place.  The results seem to have been good, maintaining Japan's place as the fifth largest economy in the world.  There economic influence worldwide is far-reaching and welcomed everywhere.  Recently India under PM Narendra Modi-ji borrowed an investment of $35 billion from Japan; of course, they would have obliged him with more, had he just asked.  The Japanese bear friendship towards all friendly people, and their circle is bound to grow, with demands for capital in all the developing countries.  As well as their marvellous electronics and cars and scooters and weighing machines, Japan is exporting capital.  And their stimulus has done a great deal of good around the world, mirroring the stimulus in the U.S. and now in Europe. 

In short, all these nations have printed the stuff that keeps the economic momentum going.  It would be better still if all that money is loaned out to everybody, to keep their businesses operating in sometimes difficult conditions.  (For example, specialist Farm hotel in Tuscany not being able to operate due to temporary lack of customers, and reduced profitability due to withdrawal of E.U. subsidies and local regulations, which of course the E.U. governments need to modify and adapt in tune with today's realities, so that as banks get bailouts they can bailout their customers for the meantime and enable them return to profitability.)

Mr Abe has asked for the £265 billion stimulus to use for government financing, so this will mean a lot of work in the Public Works departments to create infrastructure but also possibly to put some money into people's pockets, in an effort to raise inflation to about 2 percent.  This could materialize for them, by giving some social security benefits for couples to start families, perhaps money to low-paid workers to take a holiday (perhaps to Tuscany?) and so on.  This money could be dished out to the public directly; about $4000 equivalent in Yen per annum to be spent on each citizen, by way of education, medication, health and social care facilities, but also some for socially useful items as giving people a holiday....that would cheer people up.  They have to do something to lift up their spirits after the Fukushima tragedy not so long ago.  Once their spirits feel refreshed and restored, things could work out very nicely for them all.  For a population of 20 million, they could dish out the stimulus at 80 billion per annum.  And once this feeds into the economy, it will create plenty of jobs, give some freebies to the people, and with enhanced expenditure perhaps the inflation will pick up.  Who knows?  Certainly everyone hopes so.  May God's blessings be upon the Japanese people and their friends for a successful deployment of this stimulus.  it may do wonders for the world.


Kind regards,
Durudarshan H. Dadlani

(c) Copyright, but may be shared and freely distributed, with acknowledgement.






 

I believe Japan should be cutting the Stimulus

Recently, I read the highly esteemed Emperor of Japan was considering abdicating.  I wonder why.

Also, I always hear the news that their population is growing older, but not growing in size.

Most of the young people cannot think of starting families, so expensive it is to maintain a living standard.

If people lose their jobs, they exist very quietly, not calling attention to their status.

On the other hand, I have heard of houses filled with (toy) dolls, because there are no children.
This shows a desire for some kind of "life"

With the huge Stimulus that Japan has started to print plenty of Yen in a semblance of the quantitative easing in the U.S., Mr Kuroda has authorised the issuance of as much as 85 billion (or was it 110 billion?) U.S. Dollar equivalent per month, so their monetary expansion is on par with the U.S. 

Forgive my saying, but that is enough money to sink the system.....it is only a matter of time.
The signs are already there : the economy is picking up, the GDP and GNP remain pretty subdued, and all that money is not being borrowed - making it necessary for Japanese banks to offer negative interest rates to depositors, so the savers pay something to keep their money at the banks. 

That is a phenomena that is catching up in the rest of the world, especially the mature economies (sometimes referred to as the industrialised world).

More printed money, which is not being borrowed, seems a useless effort......On the other hand, the Yen by itself is stilling strong and rising in value.

Therefore, with all due respect to Mr Kuroda, would it not be the brilliant idea to 'taper' the Stimulus.
Ha, so, cut the amount of money being printed or issued into the system (including electronically).

I believe that should do the trick :  Once the Stimulus is cut, the false expectations of free money will disappear.  In place, you may see more goods from Japan being imported by other countries : people just look the unbeatable Japanese electronics and TVs, the wizard microwaves, jogging stereos and so on.  Why has the Yen been rising so far? - because people are borrowing it as capital.

In the meantime, it may also prove very prudent and necessary measures to increase the amount of social security paid to people, especially the young folks who wish to have children.  Some generous measures will be good.  For this island nation of some 20 million persons with the 5th largest economy in the world is an amazing fact.  They certainly can celebrate life with the highest standard of living in the world, plus generous provision for coming generations, and encouraging people to have children.

Japan is one of the few very lucky nations that can afford to buy everything for their citizens, even overseas, be it houses, cars, food, entertainment, whiskey, brandy, champagne, whatever the people wish for.

Perhaps His Exalted Highness wishes to hand over the state duties to His Son?  In the meantime, he could certainly drop this hint to Mr Kuroda, to taper the Stimulus.

Kind regards,
Durudarshan  H. Dadlani

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