The economy has
internalised inflation and interest rate and expectations based on the adaptive
expectations or estimates and communication signals and the higher nominal
wages/incomes/profits expectations... However, the real wages/incomes/profits
expectations have already accounted for the first two expectations after full
employment and full investment which may reduce consumption due to inflation
and expectations and increase savings due to inflation expectations which means
lower value for money and, moreover, spending and lower demand for debt and
interest rate and more investment and supply due to inflation and expectations,
which increases foreign supply relative to domestic demand, and lower price and
growth and expectations, instead of inflation... Low real wages/income/profits
expectations due to inflation and expectations have resulted in lower value for
money spending and price and growth and expectations... which is the true
picture we are observing... low prices and lower growth than the potential...
Due to inflation and expectations, lower real rates could hurt savings and
investment and growth expectations...
Without saving
investment is not possible........ Everybody couldn't take risk... either
invest time through labor... but for that, too, you need time and money,
both... A lay man saves in bank accounts, which is savings and not
investment... Investment is the capacity to take calculated risk... Only if it
does go to debt and interest payment, it is an outgo… otherwise you earn
interest income on savings or deposits, which comes in... Savings are assets
and are different from a liability, which is also a matter of accounting…
Contagious NPAs to roll
to the PRIVATE SECTOR... Counting begins... due to lower demand supply and
growth in the economy… Higher real effective interest rate has made the INDIAn
Banking, Industry and the ECONOMY uncompetitive... Leading to the lower demand
supply growth and estimates subject to adaptive expectations and has also
lowered warranted growth rate by rational expectations based on the lower
current or actual growth rate...
Medium or long run
investors need not to worry... more than two-three months or at most a
quarter... Stock Market revives sooner than any market... At low prices
investors invest more (who’ve money)... Keynes' equation of demand for money is
relevant for all except wagers with low marginal propensity to save or be
precautionary for uncertainty, let alone speculation...
2018 would be more
intriguing given high growth potential expectations... The stock market, now,
the safest due to information symmetry and technology... There is only one rule
"BUY A GOOD STOCK CHEAP".
Consistency in returns
is a sign of good stock...
"it helps form
rational expectations..."
A stock could grow 500%
in 5 years...
****Real incomes,
consumption and savings and investment could grow 6% with 4% inflation with a
total 10% increase in the Nominal incomes given the money supply and velocity
of circulation of money, a year... which means it would increase savings and
investment only 30% on real terms against 480% in the stocks... 5 years...
The government has few
funds to increase high quality jobs in the higher education... Temporary
arrangement is exploiting labour when there is already jobs crisis due to low
investment in UP relative to other states... UP has had been a center of higher
exploitation due to higher land and labour or economies of scale... scale of
corruption commensurate with the size...We have free phone calls… that's a
progress... But, education and internet education has still a long way to go...
Not just movies and music... True there is huge education and SKILLS gap...
SPECTRUM too... bandwith is too poor...
Mahatma on Unemployment
(excerpts)........" ....I believe that for a nation to prosper, it is very
important that its people are employed and the nation is self-reliant...."
".....So it is of primary importance that in a society, especially one
under foreign rule, there are jobs for people to work and feed their families.
Only then we can fight for other rights such as freedom...." and
EQUALITY....... UNEMPLOYMENT and poor SKILLS is the theme for happiness... Let
everybody sing...
Data gap is real...
About, Globalisation... it has increased inequality even in the US... then what
about China, INDIA... the US is unequal to a significant degree... God help
others...
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