Just do the right thing.

" India won't face a repeat of that situation ( as in 1991 ) as it has enough reserves for about seven months of imports, compared with 15 days back then," said our most revered Prime Minister. Livemint, 19 August.  Maybe, but we do not have Mr Narasimha Rao, a patriot and not a cringing sycophant, leading us out of this mess. So, as citizens, we may fear that we are far in greater danger today than we were back then. In all this babble about growth, forex reserves, bond yields and so on not one person is talking about the real disease, which is inflation. Inflation is at the basis everything that is wrong with the economy and unless that is controlled there is no hope of stabilsing the rupee and getting the economy to grow again. During the First World War the German Parliament decided to finance the war through borrowing. The Mark fell from 4.2 to 8.91 to the dollar. In the first half of 1921 the Mark fell to 60 to the dollar and Germany suffered a period of hyperinflation till 1924. The Germans have never forgotten that experience and that is why they enforced unrelenting austerity on Greece, Ireland and Spain when they racked up debts they could not repay. After a few years of extreme pain these economies have bottomed out and will start to grow again. The inflation rate in the Euro zone was 1.60% in July and 1.2% in May and interest rate is 0.5%. The average inflation from 1991 to 2013 has been 2.25%. In the US inflation rate was 1.96% in July and 10 year bond yields were at 2.83%. In contrast in India the Consumer Price Index was 9.64% in July and the Wholesale Price Index rose to 5.79% July from 4.86% in June. Instead of using every means to control inflation the talk is about the " comfort zone " for the RBI which is a WPI of 5%. Yields on the benchmark 10 year bonds have soared to 9% which increases the cost of government borrowing. In contrast Japan suffered a period of deflation, which means prices were going down. The Japanese Yen rose to 78 to the dollar and exports began to suffer. Since Mr Shinzo Abe became Prime Minster the central bank in Japan has started a bond buying program similar to the one in the US. The aim was to infuse as much liquidity into the system as to generate inflation to about 2%. The Yen has dropped to near 100 to the dollar and exports are booming. You don't have to be a World Famous Economist to see what is in front of your eyes. You have to be a man.