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Awara1984 Side Hero Username: Awara1984 Post Number: 5358 Registered: 12-2010 Posted From: 125.16.29.3 Rating: N/A |
However Inflation is the legacy of the previous government. If you study the 1998-2004 period that BJP was in power, the path they took was one of consolidation. Reforms were implemented but the government balance sheet was also repaired. State debts were restructured and the stage was set for what they called ‘India Shining’. So why did they lose the election? My socionomic answer to this is simple. The lack of speed. We often believe that the people at large want economic growth. But they do not. People at large have basic needs and are not concerned with Macroeconomics. So the primary reason for the loss in the 2004 elections may have been that the slow process of bringing about the change needed to kick off the next cycle of growth took so long that by the time growth had taken off the effects had still to be felt at the bottom of the economy by the public at large. Before the election the Sensex had doubled in value but we were just first year into a bull market. Social mood had not changed to Positive from Negative. | ||
Awara1984 Side Hero Username: Awara1984 Post Number: 5357 Registered: 12-2010 Posted From: 125.16.29.3 Rating: N/A |
The good news is that we have now recognized the problem and therefore started to do something about it. Having done so, we are now on the path towards ending the winter cycle and Kicking off into the Kondratieff Spring. My timeline for the Start of Spring is Jan 2017. So the Winter should be done before that. I can however be wrong on time depending on what the government decides to do. | ||
Awara1984 Side Hero Username: Awara1984 Post Number: 5356 Registered: 12-2010 Posted From: 125.16.29.3 Rating: N/A |
The last part [winter] gets the most interesting because it is the only one that involves excessive pain and someone is going to be blamed for it. Though the debt is built up over several decades human memory is short. So those in power do not want to take blame for pressing the reset button. This leads to decisions in the short term that postpone the eventuality, or to solve it without too much distress. While the end result is that the Debt must come down as a % of GDP so that the cost of capital is lower than growth, there are many paths to this end. The government is forced to get involved [because it affects everyone] and therefore the path cannot be predicted. You may get outright deflation, or maybe hyperinflation first, or maybe a middle path with negative real interest rates for years, with mild inflation. You may see a lot of defaults or a lot of bailouts. You may see massive transfer of assets from the private sector to the public sector, or vice versa. How the debts will be cleaned and who will be made to pay for it? In one way or the other the public at large pays. Through inflation or taxes, by government bailouts [tax payer money], or bank runs on public funds. It can be done in 2 years or take over a decade. | ||
Awara1984 Side Hero Username: Awara1984 Post Number: 5355 Registered: 12-2010 Posted From: 125.16.29.3 Rating: N/A |
1. Spring – the birth of an economy, start of economic activity 2. Summer – the end of the first growth phase followed by subsequent inflation , recession from the contraction associated with controlling inflation and monetary excess 3. Autumn – High Growth amidst low interest rates and inflation, leading up to a bubble in asset prices, and build up of excessive debt 4. Winter – the process of closing out the debt so that the economy can grow again at a rate higher than the cost of capital. | ||
Bongemkadu Junior Artist Username: Bongemkadu Post Number: 817 Registered: 04-2012 Posted From: 85.17.24.67 Rating: |
eee sodhi antha evadiki kaval ehe nen chepta ela untado general ga 1) economy will run according to domestic economy's pace of consumption 2) back drop lo there will be less significant but considerable shocks due to business cycle (starts with businesses expanding and falls during loans going sour and general downsizing) + what the central bank is doing with policy rate 3) last tremors will be due impact of currency and how that plays into domestic economy's receptiveness to global economy, and what foreign institutional investors are doing to the stock market idhi sangathi, antha rayakarledu ra babu evadu chaduvuthadu antha rasthe | ||
Awara1984 Side Hero Username: Awara1984 Post Number: 5354 Registered: 12-2010 Posted From: 125.16.29.3 Rating: N/A |
http://www.indiacharts.com/icjpages/index.php/indiamkts/20-e conomy |
