The Sensex fell 432 points on Friday along with other markets in the world. Among news items spooking markets was the gloomy outlook by Cisco, Ireland seeking help from the EU to prevent defaulting on its debts and China reporting inflation rate of 4.4%. Analysts feared that China might increase its interest rates in an effort to slow down growth and this resulted in a sell off in Asia. The Shanghai Composite lost over 5%. For us in India it seems strange that an inflation rate of 4.4% in intolerable for China while we are happy that our food inflation rate has come down from 12.85% to 12.3% in October. This may not be a true fall but may be because of the high base rate of last year against which it has been calculated. The government reckons that this will be down to 6% by the end of the year so no action is necessary. Our Consumer Price Index is at around 8%. To rein in inflation the RBI has been increasing interest rates. On the other hand the same RBI is trying to increase liquidity by allowing banks to borrow from it twice a day instead of once as in the past. Industrial production fell two months in a row. While other countries are trying to neutralise increased dollar inflows to contain inflation our government says that can take in up to $ 70 billion without problems. Either the rest of the world is mad or we have a conjuring trick that will set everything right. Clearly the government is desperate for money whether through growth or through hot money inflows and is willing to sacrifice the people to the agony of inflation. Inflation is lethal for the aam aadmi for whom the Congress is always bleeding. On the other hand loot is going on merrily. So cheers.