They have no clue.

An expert interviewed on CNN said that high oil prices prevailing at present do not matter to Japan. High oil prices indicate that the world economy is recovering, increasing demand for oil. Economic growth in other countries, especially in US and China, means more export for Japanese manufacturers and is good for its economy which is dependent on exports. If oil goes up to $120/ barrel Japanese economy will grow by 2% and if it reaches $160 it will grow by 1.2% and inflation will go to 1%. Apparently some inflation is good for Japan which has been suffering from deflation for over a decade. High oil prices are not good for the US. A rise of 1 cent adds $1.4 billion to the cost of motoring for American drivers. Price of petrol has risen by 40 cents at pumps across the US which is causing a lot of anger. Even so petrol is around Rs 45/lit in the US compared to RS 70/lit in India. Although prices have reduced in recent days Light Sweet crude is still at $106.50/barrel while Brent crude is at $123.65/barrel. After today's round of elections price of petrol will surely rise adding to inflation which is still at 7.5%. The government does not want to increase the price of diesel which sells at Rs 42/lit because food is transported by trucks and any rise is diesel price will instantly reflect in the price of food. This price difference leads to adulteration of petrol with diesel and to loss for oil companies. Which is why ONGC shares could not be sold 2 days back. Public sector banks were forced to step in to save face. Credit rating of SBI was reduced to D+ from C- on October 4, 2011 by Moody's. All these banks need more capital but where is the money going to come from. Desperate to increase revenues the government wants the RBI to reduce interest rates to stimulate growth in the economy which will augment tax collections but the RBI is unable to do so unless the government reduces expenditure and fiscal deficit. In today's TOI we learn that industrialists are being encouraged to lobby the RBI to reduce rates. We know this is a very bad idea because it will fuel inflation. But who listens to us? A note released by the IMF, no less, says," Monetary policies can be eased in economies with diminishing inflationary pressure," but it adds that in India " with relatively high inflation and public debt, policy space is more limited, warranting a more cautious stance toward policy easing ". In other words, do not touch interest rates, control public spending and bring down inflation. Seeing the morons running around like headless chickens would have been fun except that we are going to suffer while they fly first class to the US for check ups. There is no silver lining.