Back to representative currency?

Read this interesting post on a possible anti-fiat currency wave.

Something has to give and will give soon. There is not that much we can do to hedge ourselves except to hold our cash in a few currencies and retain something else that would appreciate against all of them when they begin to engage in competitive devaluations. Regardless of all the arguments touted against gold, it is the anti-fiat money, just as the euro is the anti-dollar.

Will we go back to gold though? Post Bretton Woods collapse the money supply has grown exponentially. Do we have enough gold to go back to?

There are some answers. This video has some suggestions towards the end as to what will be a viable way to go forward. With $13 trillion in debt as of this writing, Ron Paul says it best, fiat money is destroying the US dominance. The rest of the world will move away if it doesnt get its act together.

Back to the basics

The dangers of being on the top of the food chain is there is nobody to cull the overpopulation of people based on carrying capacity of the space we occupy. I shudder to think of the day when we need to do that ourselves. Close to 40% of the worlds people are in India and China. Yet in India we work on the we 2 ours 2 philosophy. Even at sub 2% growth we are going to run out of space on earth in a little more than 700 years. So we need to get to zero population growth very quickly. Not celebrate more octomoms. There will be attendant issues, but if we cannot manage the population growth forget about controlling the available resources. Like Prof. Bartlett says it is our inability to understand the exponential function that will be our undoing.

In the meantime, voices against urbanization demand we stop building living and working spaces because we destroy the natural resources. Is this possible? How do we fulfil the requirements of growing life on earth without being able to occupy more space on the planet? Becoming cavemen eating berries is not the answer. We cant have 6 billion people go back to sitting around idle hunting for food. We are going to run out of berries anyway. What happens to the economy then? I can understand the argument to get away from the dollar and choosing a more neutral currency. I can even discuss the options of going back to gold (or a widely available valuable metal of you choosing) standard. But barter system living in caves! Thats stretching things bit too far.

Its not the economy which is directly harming the environment, it is the people and their requirements. But, we cant have the economy that we have by living in caves. So what is the next best thing? Sustainable living.

In my view we need to be able to occupy the land we live and build what we want without upsetting the balance of nature. We can do that only by measuring the amount environmental damage a building or habitation causes and creating an offset somewhere else for an equivelant amount.

The carbon credit system is the first step in measuring damage and allow the creation of offsets. The sustainable living of the future is going to have carbon credit play a major role in it. The carbon miles on a persons card will determine the cost of carrying the person on earth. Sorry to sound harsh but in the near future it will define how valuable a person is when it comes to culling time.

No to bail outs, one more voice

Here is another opinion on why govt should stay out of businesses. The conclusion, you dont make it any better by butting in with a wad of cash. Indian govt can learn some lessons here. Its time to let go of public sector and definitely Satyam. Let it be run by its new owner the way they want. Learn to let go and be a watch dog.

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Disingenuous disinvestment

Here is Montek Singh Ahluwalia, a conservative economist, trying to do work in a populist, socialist govt. I would have preferred him as the FM, but the intentions of the govt are very clear in putting a left leaning Pranab Mukherjee as FM. Now back to the planning commission in his second stint deputy chairman, he is willing to set a plan to get deficit down and get govt out of the public sector, but clearly is setting limits and caveats on all.

Now Montek in an interview with CNN IBN has indicated even with disinvestment, govt control of 51% will exist. Why? Frankly I dont want my money going to running public sector companies, however navrathan they may be. Please give me a reason why my money needs to go into making watches or soaps? If I believed in a story I will take equity and invest. I dont think these symbolic lip service attempts at disinvestment is going to help.


Poor audio

Listen to Jim Cramer's opinion on GM. I can draw a parellel with our continued clinging to the public sector units. Government should be out of doing business with tax payer money. No good has ever come out of this, especially in mature sectors. They should only be regulators. The eagerness to jump into everything even if there isnt a systemic risk is too much for fallible human beings running the govt.

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The Left Overs

Even if the communist parties change their name to socialist party and stop calling each other comarades their economic policies are scary. Here is a preview of their intentions.

Population, Arithmetic, and Energy

A landmark presentation "Population, Arithmetic, and Energy" by Prof. Albert A. Bartlett. The 8 part series is enlightning to say the least and depressing to some extent. What lessons does it hold for India? Will quality of life solutions in India fall flat because of our population?

Classic Friedman

On Greed


On Poverty


On Prices

No more business as usual

Here are two interviews that to me stand out as sane voices in this period of uncertainity. Should I take heart in the fact that people like this are around or be concerned that it seems a long road ahead for the recovery of the US economy.

Elizabeth Warren has the unenviable job of figuring out what changes are needed in regulations so the mistakes are not repeated when the US economy gets back on track. She has a good head on her shoulders. Good luck to her. Take a look.



Eliot Spitzer went over and above his call of duty to try and fix the system when he was the AG & NY Gov. One highlight in his speech is while people are looking for legal wrongdoing most mistakes have been really bad judgment within legal framework. Here he is.



These choices are courtesy Arianna Huffington another stunning woman I admire. I share some of her views on socialism in losses and capitalism in gains. Take a listen.

SEBI as a regulator

Very enlightening discussion with SEBI Chairman CB Bhave on how the Global meltdown, Satyam, Pyramid saimira and others were handled. The highlight to me was how well the financial regulators and ministries work together to tackle crises, while the other arms of the govt (especially the ones handling homeland security) compete to bring the each other down. Why is this?

Frugal Innovation

Nano was hailed as being the worlds cheapest car. Tata engineers had to use frugal Innovation to ensure they made a car which could cost less. India as a culture had frugal built into it. Mostly because of the fight for resources given the density of population. One such area India is pioneering frugal innovation is healthcare.

The public sector has been overwhelmed, which is not surprising considering how little India’s government spends on health as a share of national income. Accordingly, nearly four-fifths of all health services are supplied by private firms and charities—a higher share than in any other big country

Some examples from this very interesting article in the Economist

“beating heart” surgery causes little pain and does not require general anaesthesia or blood thinners, patients are back on their feet much faster than usual. This approach, pioneered by Wockhardt, an Indian hospital chain, has proved so safe and successful that medical tourists come to Bangalore from all over the world.

Most of the new, expensive imaging machines are only a little better than older models. Meanwhile, vast markets for poorer patients go unserved. “We got out of this arms race a few years ago,” he says. Fortis now promises only that its scanners are “world class”, not the newest

International experts vouch that the care is good, not least because Aravind’s doctors perform so many more operations than they would in the West that they become expert. Furthermore, the staff are rotated to deal with both paying and non-paying patients so there is no difference in quality. Monitor’s new report argues that Aravind’s model does not just depend on pricing, scale, technology or process, but on a clever combination of all of them.