Expectations or forward guidance about future inflation and unemployment and interest rate to shape and take investment decisions wisely and avoid sudden change in course in the face uncertainty and the then economic policy and the resulting effect on investment is what is expected from the central bank which is described in the monetary policy... Todays central banks are like a big rating agency run by the govt jointly to guide investors to take the right decisions...
Investment reinforces or crowd in investment... More investment would lower yields due to higher money supply and increase bond price expectations which means more investment... especially in the short term which is more predictable than the long run... Like higher fiscal deficit has been well received by the investors as that is likely to crowd in more investment by the private sector...
The govt is increasing layout on a lot of issues... The govt has plans to increase spending through sale of shares for the private investor... It would have more money for productive purposes... The effect on the total economy would be minuscule...
Spending on infra means that wages would go to the unskilled vulnerable labourers... Moreover, it increases productivity and more revenue from tolls means more investment and more wages...
The govt may set quota for every state to include farmers from all states in the FCI purchases...
The govt should implement the quota system so that dumping by states and lower prices do not happen... Oversupply depress the prices, supply must match demand... It is important to to save the livelihoods of small and marginal farmers which do not produce in high scale... Contract farming could help the mismatch in demand and supply...
Like opec has quota for the member countries, to match demand and supply and control prices, the farmers must produce in accordance to the demand... The govt has subsidised the agriculture even though farmers plight are unavoidable especially the small farmers... The Farmers Unions must set prices according to the cost of production... Farmers are businessmen, they must decide prices on their own based on demand and supply...
To gain the Kisan Unions themselves follow the aggregator of the aggregators model, Unions must invest in this model, themselves...
Investors shall set the stock prices at the high price range after buying... To gain in the short run... If all would set same sell high price all would gain...
Money from investors is likely to reduce yields and increase prices in the short term... Bond demand would increase bond prices... Fiscal deficit to increase productivity and supply would contain yield and prices... Lower yields would reinforce supply from the private players and prices...
If the rupee becomes strong, to 68-69, if the RBI sells dollars, oil prices could become 7-10% cheaper, moreover it would also increase foreign exchange inflows to recoup the dollar slowly... It would also lower imported inflation and could make the economy competitive and more productive... Lower inflation and higher domestic exchange rate would also increase exports...
The RBI may sell dollars to contain fuel prices... and, the govt may try to settle oil contracts in rupees... moreover, the govt could ink a long run contract with the US to import either biodiesel or oil... which is now a net exporter of oil... EVs have changed the dynamics in the oil market... Storing too much oil or investment in it is a too much risky bet... The oil prices have increased on the back of production cuts...
Oil from the US and Saudi, lowest cost, in opec are in direct competition and conflict to increase market share, even china imported alot of oil from the US last years and a big importer of crude oil from Saudi... Nevertheless, china is the new US, a big guzzler of oil... Low oil demand and cov19 benefitted china as far as oil prices are concerned...
The evidence from the West suggest that as money supply has expanded the price level has remained muted even though the FDs continued to be high, low borrowing cost has increased the productivity and productivity of capital and supply with innovation... The interest rate in INDIA would converge to the developed countries like the US and Japan...
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