Joseph Stiglitz, on being interviewed by Amy Goodman of “Democracy Now!” stated that the “Housing Bubble” in the US was a Fed architected one. FYI, Joseph Stiglitz has been at logger heads with the neo-liberal policies of the current neo-conservative US administration.
With the repercussions of U.S. economy slowdown, we have seen the Rupee (INR) weaken against the Dollar (USD). This can be attributed to several reasons. The rapid liquidation of investments by Foreign Direct Investors (FDI) can be counted as one of the reasons for Sensex blood-bath [statistical data].
India’s top five FDIs are Mauritius, Singapore, U.S.A, U.K and Netherlands; with Mauritius alone contributing 45%. Few questions to our free-market pundits (excuse me for these dumb questions):
Don’t we have regulations in place that would prevent these Investors from panic selling at their own whims and fancies?
When we knew that the U.S. markets didn’t have the kind of regulations that would regulate their financial institutions, then why did we go ahead and expose our markets to their players?
What does it mean when an Indian higher official says that our banks are not directly exposed to the subprime crisis? Should it be interpreted as indirect exposure? (like; a friend of common friend of mine fucked up things?)
It is so stupid to hear our Prime Minister’s statement [link]. I respect him as a human being but that doesn’t dispel my opinion of him being a very weak administrator.
A slow down in economy will certainly deflate the real estate bubble in India as well. It will take an year or two.
The only thing that I can conclude is: It is a not a fact that USD is weak, it is an undeniable truth that the INR has been weaker and the recent blood-batch at stock exchange shows just how vulnerable the Rupee is at the mercy of Foreign Investments. To a sustainable future, if there is any realistic expectation that India can be an Asian power, I think, the Government should focus on sectors that bring in self reliancy as well as encourage industries that create markets outside India. Services alone cannot carry the Country forward. It can offer employment and short-term gains. May be who knows…are we trying to emulate a Singapore model? But our size and population aren’t the same as Singapore and we are not a carved out one either.