[…] increase the inflation to extreme heights. Why? It has already been explained here in the article The price of Rice, What Caused it go so […]

[…] Lets check what happened to the logical advice I gave back in my rice article. […]

[…] discussed how government interference in market causes all inflations and depressions here The Price of Rice, What caused it to go so high? And here The story of Money; what causes Inflation. Yet, even price of gold can change, appreciate […]

power of gold has always been there and amazingly benficial to those who have invested in it systematically..good information ..some that i knew and some that i did not think about much earlier.. certainly hv issues to think about..
nice one and i dont oppose much of the facts that u have put either..
agree with you on this..

@C R D
well..i doubt the first world countries would allow third world nations to follow the gold standard.
Seriously dude on what basis are you saying this? Is there a basis for that, or its just some anti-developed world rant.

None of the third world countries are even remotely thinking about getting back to Gold Standard, and you know why, because going to gold standard means all our quasi-fascist govts(including Indian govt) will have to give up MASSIVE amount of power.
No more loan waivers, no more money to IITs, no more making damns nobody uses, no more creating Golden Quadrilateral, no more subsidies to farmers before elections.

No govt would wanna go back to Gold Standard, it simply means power TO the people, taken FROM the govt.

If gold standard had something for the govt’s own survival too, then the govts would have supported it.

Right now all sorts of reasons are cited that “Gold standard is impractical, gold standard is cumbersome, we don’t have enough gold to back the wealth floating around already”.
All are simply excuses to not go back to Gold Standard.

theyd definitely try their best to place obstacles..mebbe theyd introduce a few restrictions.
Gold is Gold, and anyone who wants to do business with us will have to trade purely in Gold, if any country has to take a payment from us, they would rather take it in Gold rather than our fiat currency.

Till 1999 there was only one country in the world which was on Gold Standard(Switzerland, what else). Because of fears of payback to Jews, they went off the Gold Standard.

well..i doubt the first world countries would allow third world nations to follow the gold standard..theyd definitely try their best to place obstacles..mebbe theyd introduce a few restrictions.

gold is in great demand in the subcontinent mostly for religious and ceremonial purposes.tht wud mean countries like india,pak,srilanka,nepal,etc. the dubai gold shopping festival has 90% of its customers from these places.

hey whrs my comment..i had posted a comment here few days ago…??
frm how long r u into blogging…coz u luk like a pro in dis…awsum

Prashant said…

Looking inflation in terms of purchasing power of people is totally wrong. Look what CAUSES that.

You have a nice point. What I am talking about is the rich becoming richer and poor becoming more poor.

Neat post!
Really informative and substantially calculative!!

About gold, an eye opener!
Good one!
Keep up the good work!

Anyone more interested in reading a short book about What has govt done to our Money please read Murray Rothbard’s book:
http://mises.org/money.asp

Its really a short book, but a must read. Its written for American audience but its equally applicable in India. Our Reserve Bank of India is their Federal Reserve bank or just Feds.

Anyone more interested in reading a short book about What has govt done to our Money please read Murray Rothbard’s book:
http://mises.org/money.asp

Its really a short book, but a must read. Its written for American audience but its equally applicable in India. Our Reserve Bank of India is their Federal Reserve bank or just Feds.

@Arun Kumar
BTW can i know what course are you studyin or studied…??
Anyone who studies Economics in India thinks high prices are caused by:
*) Low rice production
*) Global Warming
*) People suddenly eating more
*) Speculators
*) Rahu-Ketu caused it
*) Shani Grah crossed Mangal planet

Basically everything BUT blaming the govt. Just because they were never taught this way, coz if they do start teaching that, then all the Indian economics professors will be out of job(all are on govt salaries).

@Swarnadeep Chatterjee
what is the solution ?
- wouldn’t it work if we can minimise out current population by half?:P
NO IT WON’T!

As I said we are programmed to think that all problems are temporary, but they are not, they are deeply embedded in our system, no matter how less energy you consume, no matter how LESS rice you consume, Govt will still point out that its because WE are over-reproducing, its because WE are over-consuming, no matter whose fault it is, the Govt will always run a propaganda campaign telling us how since we are not doing something that’s why we are suffering.

Eliminating corrupt people can never get rid of corruption, reducing population can never bring prosperity because even when we were only 30 Crores we will poorer than now when our population is 100 Crores.

Whenever you see a govt sponsored ad on Television just presume that if Govt is willing to spend Crores of rupees on something on Television, they are definitely hiding something they screwed up badly.

@Pratee
Increase in buying power of people also caused this. Along with it there is consumption.

What do you think causes increase in buying power of people? You are talking as if its a Natural calamity.

In fact tell me this, if people are not able to buy rice(because its too costly) does that mean people’s buying power has increased or decreased?

Looking inflation in terms of purchasing power of people is totally wrong. Look what CAUSES that.

@Ron Lemon
with economy you cant predict anything. end of the day, things turn out good :)
Ok I am sorry you thought its all good that we have that much gold, since we are NOT on Gold standard that Indian govt is literally totalitarian in nature over us, and the only effective weapon to counter the despotic nature of the govt is Gold Standard.

Secondly, why do you think American people don’t have that much gold as we have? Well the reason is because since Great Depression it was illegal for private citizens to possess Gold(yeah that happened in America).
So if someday govts of the world get disenchanted by fiat currency standard, Indian govt will simply seize our gold and you won’t be able to do anything about it.

@Arun
I am an architect.
Completed my B.Arch, from Malviya National Institute of Engineering Jaipur.

Economy, philosophy, social sciences, humanities, politics is my sort os my passion. Afterall I am living, hence I am thinking.

@unpretentious diva…

read those articles…liked them..especially the article about how inflation is caused..

n once again what have u studied…??
or its jus acquired knowledge thro reading??

Wow! what a great information you have… Keep it up bravo!

@chatterjee
I know some people like you find it difficult to read something and understand it.

Population is no problem.
It is another illusion created by government to fool public that population is too high. It is not.

Solution, I have already mentioned.
But as usual, you weren’t in mood to read it.

what is the solution ?
- wouldn’t it work if we can minimise out current population by half?:P

This is a neat post..m a research analyst myself…i liked the way u have gone abt ur post…u have given numbers to justify…xplained the reasons for inflation and given a solution..

LOVELY!!!

Cheers
Tee

@ arun kumar.

Here is the Loan Waiver program by P.Chidambaram.
Read This too.
You can read how government waste money and creates Water Crises that post has included a recent scientific report on the government’s strategies which find it corrupt and waste.
and here you can read How Bush is fooling public.

a really informative post…
more like an advice to tackle inflation….(the need of the hour..)

n cud you pls explain about the debt elimination programme…whats that…???

BTW can i know what course are you studyin or studied…??

@ron
Economy is not something mystical to be predicted.

Economy is reasoning, economy is shear math and use of mind to simplify human trades