The Financial Crisis and more

The Global financial crisis is causing tremors in the Western countries. Food prices have skyrocketed to unbelievable levels in the developed West. But the Indian economy mostly remains isolated – or rather, protected ( with the exception of the Stock Exhanges ofcourse  ). The stock markets rarely have an effect on the life of the common (wo)man. (s)He is more concerned with the prices of essential goods and fuel costs.

The fact that food prices have increased in India too is undeniable. But these levels are manageable. In comparison, the food bill of a Western citizen has tripled and in some places, quadrupled. How has India managed to keep food prices at manageable levels ? Simple. It banned the export of rice from India. It left the paddy growers no choice but to sell their produce at the local market price. But this decision has spelt doom for Non-Resident Indians , Indian students studying in foreign countries and Indian professionals working abroad. They have resorted to buying Basmati rice which frankly, is not meant for everyday use.

What about the stock markets ? To me, the plummeting of the stock markets is a good sign. Analysts have been saying for quite some time that the Indian stock markets are overperforming. It is time they got a touch of reality. However , if you have invested in the stock markets or in mutual funds, then you should be worried.

Following the path of the stock market is its distant cousin, the real estate market. Real estate is ridiculously overpriced in India. The current recession in the market is nothing but a correction. Let’s face it. Mumbai is no New York City. And Gurgaon is no Indian Wells. DLF is facing a crisis. It has taken loans to develop real estate, and now with the fall in real estate values , there is no one to buy homes at pre-crisis prices. It is now left to pay the interests. This serves DLF right. I dont think Mr. KP Singh deserves the fortune that he has amassed. It certainly wasn’t the fruit of hardwork. In the long term it is companies like TATA ( which are dedicated to the service of the people, to the welfare of their employees, and to the progress of the nation ; And more importantly do productive work unlike real estate developers) which will prosper.

The falling rupee is no reason to panic. It is a direct result of FII’s withdrawing funds from the bourses. Once they withdraw all their money, the rupee will stabilize, courtesy of the gargantuan reserves of forex that India has built up.

I dont know if this theory is accurate. But there is enough evidence in support of it.

Withdrawal of Foreign Investment -> Less Money in the country

Less Money in the country -> Fall in real estate prices , lower inflation

But I could be wrong. Economists dont take into account the black money. This is how their predictions tend to go awry a lot of times.

Nevertheless, to advocate anyone to go ga-ga over how our country remains unaffected, would be foolish. If there is one thing that our country dreads, then it is the scenario of crude prices skyrocketing. Crude price defines the Indian economy, ………. FOR NOW.



PS1: Manchester United could be bankrupt in a few years. ( I aint complaining )

PS2: Iceland up for sale on ….. you guessed it right , EBay.

PS3: Pakistan on the verge of Bankruptcy. ( not NEWs really, Pak has been living on counterfeit Indian currency for quite some time )

PS4: England on a roll. ( the football team , if you didnt know )

PS5: I can make Cheddar Cheese pasta now. ( got the recipe on the internet )

PS6: Bought an electric scooterette, “Ultra Motor’s Velocity”.

PS7: I can peel and chop onions now 😛

PS8: We eat brown rice now.

PS9: TataSky to intoduce DVR technology.

PS10: Off to Tirupati to tonsure my head.

PS11: Started Operation flatten belly.


One response to “The Financial Crisis and more

  1. Nice Post

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