03-01-2007, 12:01 AM
<!--QuoteBegin-gangajal+Feb 27 2007, 05:00 PM-->QUOTE(gangajal @ Feb 27 2007, 05:00 PM)<!--QuoteEBegin--><!--QuoteBegin-rajesh_g+Feb 28 2007, 01:03 AM--><div class='quotetop'>QUOTE(rajesh_g @ Feb 28 2007, 01:03 AM)<!--QuoteEBegin-->As aam-aadmi all i will say is sure it is supply-side but i think it might be because of money-supply and I do think that GoI has to acknowledge the problem and face it head-on.
http://www.rediff.com/money/2007/feb/27bud10.htm
<!--QuoteBegin--><div class='quotetop'>QUOTE<!--QuoteEBegin-->It squarely blamed the supply side shortages for the inflationary pressures, for which there were no immediate solutions, and said: "Poor agriculture performance, as the current year has demonstrated, can complicate maintenance of price stability with supply side problems in essential commodities of day to day consumption."<!--QuoteEnd--><!--QuoteEEnd-->
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Not easy to face the problem head on. A squeeze of the money supply may also trigger a recession which will be like jumping from the frying pan to fire.
[right][snapback]65073[/snapback][/right]
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Gangajalji
I didnt say it was an easy problem to fix - infact I have expressed my inability to understand hyper-growth environments. The fact is however that cheap money supply is definitely hurting people and has led to putting real-estate (for eg) totally out of reach for the aam-aadmi. My dad used to have a small business which had a few employees. The salary about 3-3.5 years ago (around 2003) for this particular employee was around 1800 rupees. I think it might have gone up to 2100 rupees now. The real-estate prices in the meantime has gone up 2.5-3 times in ahmedabad. Whatever hopes he had of owning his own place is totally out of question unless solution can be found for inflation. An economy-inside-economy where the benefits trickle down will work eventually but in a society like India this will lead to unbelievable pressures (jealousy is a b1tch) on the social fabric.
Bottomline is, even if problems are difficult they have to be acknowledged as such before a solution can be thought out. Coming up with silly claims like PC is definitely not the solution.
http://www.rediff.com/money/2007/feb/27bud10.htm
<!--QuoteBegin--><div class='quotetop'>QUOTE<!--QuoteEBegin-->It squarely blamed the supply side shortages for the inflationary pressures, for which there were no immediate solutions, and said: "Poor agriculture performance, as the current year has demonstrated, can complicate maintenance of price stability with supply side problems in essential commodities of day to day consumption."<!--QuoteEnd--><!--QuoteEEnd-->
[right][snapback]65061[/snapback][/right]
<!--QuoteEnd--></div><!--QuoteEEnd-->
Not easy to face the problem head on. A squeeze of the money supply may also trigger a recession which will be like jumping from the frying pan to fire.
[right][snapback]65073[/snapback][/right]
<!--QuoteEnd--></div><!--QuoteEEnd-->
Gangajalji
I didnt say it was an easy problem to fix - infact I have expressed my inability to understand hyper-growth environments. The fact is however that cheap money supply is definitely hurting people and has led to putting real-estate (for eg) totally out of reach for the aam-aadmi. My dad used to have a small business which had a few employees. The salary about 3-3.5 years ago (around 2003) for this particular employee was around 1800 rupees. I think it might have gone up to 2100 rupees now. The real-estate prices in the meantime has gone up 2.5-3 times in ahmedabad. Whatever hopes he had of owning his own place is totally out of question unless solution can be found for inflation. An economy-inside-economy where the benefits trickle down will work eventually but in a society like India this will lead to unbelievable pressures (jealousy is a b1tch) on the social fabric.
Bottomline is, even if problems are difficult they have to be acknowledged as such before a solution can be thought out. Coming up with silly claims like PC is definitely not the solution.