Sunday, August 15, 2010

INDIA AND AMERICA





Inflation is at 3%, in INDIA it is over 10% and everything seems to be fine, because we have enough to feed inflation, i mean supply stocks are enough, and if the government really needs it can bring inflation near 5-6%, which is manageable. The Government here needs will power. Nobody buys consumer-durables out of his monthly incomes. Nobody's is that resourceful, i mean the majority. Manipulating expectations is another way around, only if you do not take them into another trouble. The point is, if you do not want to drop money from helicopters choose to pay them in interest-rates, i mean higher interest rates, around 8-9%. Here you can choose to print some currency. It is supposed to do two things, it will affect expectations, that the economy is reviving, and second it will affect savings, actually savings in banks. Banks' confidence will revive, too. Inflation around 8-9% for a reviving economy is not bad. "IT'S JUST AN OPINION."

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