Pontificating on what ' may ' happen is silly.

Why are financial predictions by so called experts in India constantly so wildly optimistic. One predicts that our stock market index, the Sensex will reach 50,000 in 3 years. But why stop there? Another predicts that the Sensex will reach 100,000 in 5 years. It is not delirious talk while high on magic mushrooms. Commodity prices are likely to remain soft in the medium term as Europe and Japan remain weak and growth in China slows down. Interest rates in Europe and Japan are likely to remain at 0% which will push investment funds to buy Indian stocks to increase profits. Corporate profits will rise to 25% as the government cuts corporate taxes and simplifies laws to make it easier to run businesses. Spending on infrastructure will increase, which will create jobs, thus increasing consumer spending. Inflation is falling so people will spend more, increasing demand for consumer goods. All very logical, but the Sensex fell by over 2% yesterday. All because the US added 295,000 jobs in February compared to a forecast of 235,000. The unemployment level has dropped from 5.7% in January to 5.5% in February. Economists believe that an unemployment level of 5.5% means full employment but we do not how many jobs were due to seasonal factors and whether it accounts for the long term unemployed who have stopped looking for jobs. However, it was enough to scare the bejesus out of our market. Why? Because it may allow the Federal Reserve to increase interest rates in the US sometime this year. Will it? Liberal economists like Paul Krugman would like interest rates to remain at 0% until the inflation rate is above 2%. They are afraid that a premature increase in interest rate may reverse economic growth like in 1937 when a premature tightening following the Great Depression plunged the economy back into recession. On the other hand Republicans would like interest rates to go up soon because they see high inflation as more damaging to the economy, because high prices reduce demand. Politicians, dependent as they are on industry for campaign finance, are acutely sensitive to what business fellows want. A combination of the improving economy in the US, and quantitative easing in Europe and Japan, resulting in a steep decline in the values of the Yen and the Euro, and the falling Yuan in China means that the dollar is stronger against all major trading partners of the US, which is hurting exports and reducing corporate profits, when money is converted from other currencies into dollars. Foreign investors have bought heavily into Indian bonds because of our high interest rates. As the RBI starts to reduce rates bond prices will rise allowing them to make handsome capital gains as they sell out. The rupee fell to 68.85 to the dollar in August 2013 on fears of tapering of quantitative easing. What happens when FIIs start selling out? It is silly to keep ranting on about what may happen? Unless they are trying to fool us deliberately. To cheat us?