My Home Minister said that all these past 5 years that we have been here, she never spent more than 150 rupees on vegetables. Today, she had barely bought much – the bag was still quite light on my bony shoulders – and 250 rupees had already been blown away. She further added that, all these years, she had to carry a whole lot of coins to conduct her purchases, but now no longer needed to do so, for nothing sold for less than a 10-rupee note.
The economist in me saw this as a clear sign of the effects of inflation. That is, inflation is not the general price rise. Rather, inflation is the increase in money supply, which causes the general price rise. What did Chacha say?
As per this news report, Chacha called all his Bhateeja chief ministers to a conference in New Delhi and told them to take “necessary steps.” Are these bhateejas the cause of inflation? Certainly not! Chacha is merely passing the devalued buck. The chief minister of Goa can hardly be blamed for the high prices of vegetables here – and anyway these vegetables come from Belgaum, in Karnataka. It is noteworthy that, at the conference, the chief minister of Karnataka alleged that the real blame lies with the central State. He is dead right.
In the meantime, there is another report here of a statement made by the head of Chacha’s economic advisory council, C Rangarajan, an IAS baboon who climbed the greasy pole to head the central bank. This dude says that the “stimulus package,” by which money supply was hugely increased, should not be withdrawn; and if so, only gradually. What is this multilaterally co-ordinated “stimulus package”?
As Ludwig von Mises made clear long, long ago, global monetary co-ordination is nothing but concerted efforts by all central banks to pump more and more credit into the world economy, thereby inflating the world. In the present case, Chacha, also a central banker, increased money supply in India, in tandem with other central banksters, in order to shore up the US dollar, which would have nosedived if they had not done so. This is multilateralism in monetary matters. That is why I recently advocated unilateralism as the path to sound money – which means the end of inflation.
In his magnum opus, Human Action: A Treatise on Economics, in the section on "International Monetary Cooperation," the last section in Chapter XVII on "Indirect Exchange," Mises writes:
What governments call international monetary cooperation is concerted action for the sake of credit expansion. They have learned that credit expansion, when limited to one country only, results in an external drain. They believe that it is only the external drain that frustrates their plans of lowering the rate of interest and thus of creating an everlasting boom. If all governments were to cooperate in their expansionist policies, they think, they could remove this obstacle. What is required is an international bank issuing fiduciary media which are dealt with as money-substitutes by all people in all countries.
[The fully searchable PDF file of Human Action can be found here. For this quote, go to page 476.]
Chacha Manmohan S Gandhi, and his crony, Rangarajan, are not economists. They are inflationists. They are “banksters” (as in “gangsters”). They should be identified as such. They are the biggest enemies of the poor Indian common man. They are friends of Ben Bernanke.
Real economists believe in the "economization" of scarce resources, in promoting savings, in increasing investment. These inflationists believe in eroding savings, causing malinvestments, destroying economic calculation and causing "capital consumption." They are the cause of all the "de-civilization" we see around us.
We are fortunate that there is even worse news about Chacha mortgaging the interests of the poor Indian to foreign powers. He has just supported the legitimacy of RK Pachauri, TERI, and IPCC. The poor Indian needs cheap energy – not this “sustainable development” and “climate change” bullshit.
So Chacha is a liar on many counts. I hope the nation sees through his deceptions.
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