The global economic crisis and India

The year 1991 marked a turning point in world history . The collapse of the soviet union was proclaimed as end of history , the victory of free markets and free trade over communism . The United states became the undisputable super power which can bomb where ever and when ever possible. The US is the undisputable poster boy for the proponents of free market and free capital. Our own trio of Manmohan-P.Chidhambaram-Montek until recently were favouring more tighter integration with the global financial regime . Propositiions like Capital account convertibility , increasing the cap of FDI in insurance to 49 % , allowing foreign banks to buy up equity stakes in Indian banks were said to be reforms that were obstructed by an obdurate Left . The withdrawl of Left was hailed in the capitalistic media as the go ahead for more financial liberalistaion like investing pension funds in stock markets etc.

The root cause of the current crisis is the very capitalistic mode of production itself.The global capital of around 700 trillion dollars didnt have any suitable means to invest.Poor old chap Alan Greenspan gave only 1% interest on american treasury bonds . Thus the global capitalists spearheaded by the investment bankers were feeling itchy.They banked on one principle the price of houses in US never fall . Thus they aggresively started lending to individuals to buy houses.These were converted to CDO’s something like shares and sold to global investers who get money when people pay their EMI’s.

The housing market was a bubble and when it burst it has made a mess out of the entire financial system.

The US government in an unprecedented act nationalised ailing investment banks in a last ditch effort to save the markets.Thus its rewarding greed by socialisation of losses and privatisation of profits :).The US has consistently advocated for governments not involving in business.The sheer size of the firms nationalised is greater than all of nationalisation that has taken place in the Latin america . As Hugo chavez quiped recently “Comrade Bush How are you πŸ˜€ πŸ˜€ “.

A Spectre is haunting the world once again !.

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samratashok

An Insane just adding irregularity to the universe

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