Politicians think that their homes are their houses.

Recently President Obama told a heckler," Listen you're in my house......it's not respectful." Obama has a law degree from Harvard no less, while we are ordinary people, but we beg to differ. It is not your house. The White House, as it is known, belongs to the nation. It is your home. Temporarily, until a new tenant moves in, in 2017. Politicians in India are well known to try to hang on to bungalows they were allotted while in office. Obama is definitely a ' suit boot ki sarkar ' while our politicians weep copiously for the poor, provided they cadge as many privileges as they can, on taxpayer money. Why is this relevant? Because same type of politicians have same type of policies, resulting in the world going downhill at an alarming rate. First, Bush and Blair got rid of Saddam, releasing the forces of ISIS. Then, Obama and Cameron got rid of Gaddafi, resulting in a flood of refugees into Europe and the deaths of so many European tourists in Tunisia yesterday. But this is nothing. If the global economy goes into a 1930s type of depression, as Reserve Bank Governor, Raghuram Rajan, warned in a speech, then a bloodbath could follow, just as World War II followed the Great Depression. He was referring to competitive devaluation of currencies by rich countries, started with quantitative easing by the US Federal Reserve and followed by central banks in Japan and Europe. This was apparently what countries did 100 years back which resulted in the Depression. " In the 1930s, one country after another pushed down its exchange rate in a desperate effort to export its way out of depression. But each country's depreciation only aggravated the problems....Eventually even countries that valued currency stability were forced to respond in kind," said Prof Barry Eichengreen. The Swiss economy is on the brink of recession as the franc is becoming stronger, harming exports, despite having negative deposit rate. Rajan's problem is that he wants to lower interest rate significantly, to stimulate growth in the economy, but is being restricted by high retail inflation. Partly this is a result of having to sterilise excess foreign exchange coming into our stock market, thus increasing liquidity, and partly because of the enormous spending on social schemes by the previous Congress government, fueling double digit inflation. He has lowered the repo rate by 75 basis points but public sector banks are reluctant to lend unless they can reduce their mountain of bad loans. " The question is, are we now....trying to produce growth out of nowhere or we are in fact shifting growth from each other, rather than creating growth," asked Rajan. Good question. Central banks have to respond to policies and poor politicians lead to poor policies. Same to same, as we say in India.