feb 24th, 2011 CE
the 'brilliant economists' have been stoking inflation like there's no tomorrow.
the first reason is to transfer money to their cadres and supporters: like the wasteful NREGA, the babus' pay-hike etc.
the second reason is that inflation forces people to spend, not save: thus artificially increasing demand and thus creating the illusion that industrial growth, GDP growth etc are greater than they really are.
these sins are now coming back to roost, as investors pull vast sums out of india, and the sensex starts falling (i predict there will be a trough somewhere around 13,500 to 15,400 -- at PE of 12 to 14 on FY12 earnings).
my prediction? they will bring in GST, which, like VAT, is a regressive tax that will affect the poorest the worst; and it will simply go into the central kitty to fund things like largesse to pakistan for floods, haj subsidies, and the many and varied scams. and they will bring in the hellishly idioitic 'right to food', which means more money being transferred to congress cadres, and 100 billion rupees vanishing from the account books. the best way to create a right to food would be build agricultural infrastructure such as cold storage, better far price information networks etc and help agricultural productivity. but no, they want to come up with harsh-mander-jean-dreze-authored crap like the 'right to food' which is NREGA 2.0.
the net result: indians will have to tighten their belts. literally. a recent study highlighted by the economist (http://www.economist.com/blogs/dailychart/2011/02/daily_chart_global_obesity ) quoting the medical journal lancet (http://www5.imperial.ac.uk/medicine/metabolic_risks/bmi/) showed that people had grown fatter everywhere in the world, except in india, afghanistan (state of war), and congo (state of war). in other words, india is in a state of war too: the UPA is waging war on indians (except of course on mohdan and xtists indians who get all sorts of government giveaways). in india people have actually gotten thinner over time, unlike say, in china, or even pakistan. so much for the aam admi, eh, fat cats of the UPA?
i echo what arvind was saying: exit currency, get into commodities. although commodities like gold, silver and real estate are all oversold and overly expensive. maybe into wheat futures, considering china's drought?