Economic Decline finally hits India too. Govt. in denial?

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MAGNeT said:
Present Indian scenario::Well to be fact 2008 recession wasnt a hard hitting stuff for india as our many market was europe for export sectors.
But the scenario is changing elsewhere.Us the biggest importer of products is all of a sudden turning into exporter of oils.With shale gases it again have reserves much more than present middle east countries.In sort one of our market is out of reach.Europe now dont have capacity to pay for products.Though some of the PIGS may have capacity to repay but the restructuring have made other feels if this countries can go through without repaying why dont we also do the same which is not a good sign for Euro currency .As already billions on money in debt which is down the drain is somewhere there in some other economy.GIving more such euros will furthur increase supply and will hit the currency.

What the government needs to do or will do::What the government needs to do well we all know but it wont be done untill 3rd or 4th quarter of next year as elections will be more nearer.But problem is countries elsewhere are changing fast again on monday election in greece happening and if again no party gets majority again a fall will start in share market again big outflow will take place.
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Just wanted to make two points:
1. Countries like Ireland had gone through tough reforms and got out of trouble. Countries were government kept rolling out populist reforms (Greece/Spain etc) are the ones which are creating problems now. Our government can take a real look at it -- Rice at 2/kg - It was reported that a similar policy in TN led to dwindling labor force (don't remember the paper/date).
2. Though it is widely believed that Greece will have second hung parliament. if SYRIZA wins the Greek election we might just have a Lehmann like event.
 
Excellent quote from the discussion which is very relevant to the discussion we had above:

the early history of paper money was certificates issued by storage-vaults of precious metals (i.e., early "banks"). Instead of carrying around yellow and silver rocks, you could deposit them somewhere and get a piece of paper entitling the holder to withdraw a certain quantity of gold or silver or whatever.
Pre-1934 dollars, like virtually all paper currency until fairly recently, could be redeemed for physical gold or silver at a Federal Reserve Bank, and dollars were only printed if the treasury had enough physical gold and silver to "pay off" the bearer with precious metals.
For a whole lot of reasons that are topics for another discussion, decisions were made that eventually led to the abandonment of the "gold standard" and now the dollar, like most modern currencies, is pure fiat paper: it's only "worth" whatever everyone agrees it is worth, and can only be "redeemed" by trading it to someone else for whatever they will give you for it. There are long, loud, and ongoing feuds over whether that was a good idea, and I'm not going to get into that here.
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pretttt said:
Excellent quote from the discussion which is very relevant to the discussion we had above:
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bro, I thought we agreed to disagree ;)
That said, fiat value you are thinking is in terms of a particular village (reddit example). Yes, the agreed value doesn't change even if we used plastic money. Cause every village member has agreed to its worth.
But what I meant was that other villages (other than the original village) might not take too kindly if they were given plastic in lieu for their paper. They might be inclined to ask more plastic per unit paper of their currency. Ergo, a value depreciation. It draws out a put trade in terms of currency trading.
Something which I have done since July 2011 ;)
I hope we can still agree to disagree :)
 
sharktale1212 said:
bro, I thought we agreed to disagree ;)
That said, fiat value you are thinking is in terms of a particular village (reddit example). Yes, the agreed value doesn't change even if we used plastic money. Cause every village member has agreed to its worth.
But what I meant was that other villages (other than the original village) might not take too kindly if they were given plastic in lieu for their paper. They might be inclined to ask more plastic per unit paper of their currency. Ergo, a value depreciation. It draws out a put trade in terms of currency trading.
Something which I have done since July 2011 ;)
I hope we can still agree to disagree :)
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Yes, yes, our agreement still stands buddy. ;)
Just thought I would bring to the attention of anyone else who might've been interested.
 
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