Saturday, July 31, 2010

After repeating government assurances like brain dead parrots for the last year the freeloading, Congress following press have woken up to the reality of inflation. For months the criminal politicians have been treating us like idiots with platitudes while continuing to increase prices by increasing taxes on everything. They have been blaming last year's drought and promising that the rate of inflation will fall to around 5% by December. That is because prices were rising by over 10% last year so the rate will decrease because of base effect. Prices are not going to fall but continue to rise at a lesser pace. The Reserve Bank, RBI should have increased interest rates aggressively but has not been allowed to because the liars are terrified of a decline in the rate of growth which will mean less in tax collections. The RBI is unable to control money supply because it does not know what the GDP is because of black money. Some estimate that the black economy is 50% of GDP but it could be 60, 70 or even 90%. No one knows. The only way to judge if money supply is coming under control is to monitor property prices. If property prices come down by about 70% compared to present values then we can be sure that the RBI is getting the economy under control. That will severely reduce taxes from the property market The criminals are desperate because the government is bankrupt.The combined external and internal debt of the government is Rs. 34 trillion While total tax collection is Rs. 7.34 trillion. Interest on debt is in trillions so the government borrows more to keep running. Is their any way to prevent a crash? If only we had a truthful honorable press instead of the Congress dogs we have now.

No comments: