One of the tricks used by Economists, top Finance Ministry personnel and others like that is to do some top quality gymnastics with words that stringed together makes absolutely no sense to the reader. The average guy thinks that all this mumbo jumbo is intellectual stuff and beyond his scope of understanding. The latest press release by Reserve Bank of India on rising the interest rates is one such. It is bad enough that RBI raised the interest rate by0.25% but their subsequent explanation takes the cake. If any normal man speaks like that in his daily life, he will be tied up and taken to the nearest mental asylum.
It took me a good part of the day to get the real meaning of the press release by RBI. I am reproducing salient part of the release.
“it is critical at this juncture to demonstrate on a continuing basis a determination to act decisively, effectively and swiftly to curb any signs of adverse developments in regard to inflation expectations.”....................... (it means, whenever inflation figures go up, which anyway happens every friday, RBI will resort to hiking the interest rate because they don't know what else to do).
"annual policy statement for the year 2008-09 (April 29, 2008) had stated, inter alia, that the overall stance of monetary policy in 2008-09 will broadly be to ensure a monetary and interest rate environment that accords high priority to price stability, well-anchored inflation expectations and orderly conditions in financial markets while being conducive to continuation of the growth momentum."......................(well, well........very lofty goals!! anyway those are the goals which RBI has no intention of achieving)
'Further, it was proposed to respond swiftly on a continuing basis to the evolving constellation of adverse international developments and to the domestic situation impinging on inflation expectations, financial stability and growth momentum, with both conventional and unconventional measures, as appropriate.'............... (constellation of blah blah blah................. I give up! This is beyond my limited abilities)
'The annual policy statement for the year 2008-09 (April 29, 2008) had referred to the unprecedented uncertainties and dilemmas that exist and added "while monetary policy has to respond proactively to immediate concerns, it cannot afford to ignore considerations over a relatively longer term perspective of, say, one to two years, with respect to overall macroeconomic prospects.' ........................... ( it means, RBI doesn't have a foggiest of idea what managing economy is all about and someone in the RBI did a magnificent job of saying everything when it is actually nothing)
'At the same time, it is critical at this juncture to demonstrate on a continuing basis a determination to act decisively, effectively and swiftly to curb any signs of adverse developments in regard to inflation expectations.'................. (in fact economy will do much better if these idiots at RBI don't mess it up regularly)
'In light of the above, and on a review of the current macroeconomic and overall monetary conditions and with a view to containing inflation expectations, it is essential to take appropriate action on an urgent basis.' .................. (and RBI hikes the interest rates. simple as that)
We are supposed to be ruled allegedly by some of the best brains in the country..........Prime Minister Manmohan Singh- a self proclaimed economist, Finance Minister P Chidambaram - A Harvard Scholar and Dy Chairman of Planning Commission Montek Singh Ahulwalia - another economist. The honourable PM has expressed his helplessness in controlling inflation after promising to curb it in two weeks in April 2008 (we all know what happened since then), Finance Minister has suddenly found a thorough disliking for the press and the cameras, and the Dy Chairman of the Planning Commission in a TV interview expressed the hope that inflation will come down by September. Now, you might think and he might claim that if this happens, it will be because of the steps taken by the Government and RBI. No such thing. Any idiot knows that prices come down after a good kharif season.
Extraordinary situations call for extraordinary actions and out of the box thinking. Forget about out of the box thinking, the trio of PM, FM and DCPC can't even think. They are so obsessed with their neo liberal economic policies that they are oblivious to what is happening in the real world of the commmon man.
