I've seen some flats which have a parking lot on each floors. Most brokers say the buyers will convert it to the living space in the future. Salman's case will cause immense grief to these buyers as BMC will slap big fines on these flats.
By Sudhir Suryavanshi | Agency: DNA
Bollywood actor Salman Khan has once again landed in trouble for paying a higher amount than the actual market value of a house in ‘The Address’ building at Bandstand in Bandra (West).
Khan has bought a 1,079-square metre carpet area on the 11th floor of the 28-storey building. The building is being developed by Samudra Developers Pvt Ltd of the Dheeraj Group.
Besides paying Rs1. 64 crore towards stamp duty, Khan has paid almost Rs20 crore for the said area.
“It comes to almost Rs1.80 lakh per square feet, against the market rate of Rs25,000 to Rs30,000. The amount is six times more when compared to the existing market rate. It is quite high. It must be a case of money laundering,” said YP Singh, an activist who played a major role in exposing the controversial Adarsh Housing scam.
209 comments:
1 – 200 of 209 Newer› Newest»Apologies for hijacking this thread. Wanted to post my reply to the discussion on the previous blog post.
@Pawan - "Every tom, dick and harry is getting paid in top dollars today but that too is a bubble."
Amen to that. A common feature across all bubbles is that the large majority don't know that they are in a bubble. A small minority do (the warren buffets, peter templetons, george soross') and they profit immensely from it.
Salaries (at least in IT) are in a bubble. And folks seem to expect double digit rises for ever. What remains to be seen is whether this will be pricked by a slowdown or the rise of another low cost competitor.
@Anon - "people renting houses are looked down upon and have less social standing. "
Not universally true. More people rent in Germany than own. This was true to an extent in the US as well, till the invention of the 30 year fixed mortgage, that fueled the ownership culture.
Why am I not surprised!?
CBI MUST investigate every property transaction starting with land dealings.
Follow the money. That's how US busted the Mafia.
Obviously Sallu is returning someones favor by overpaying.
// Not universally true. More people rent in Germany than own. This was true to an extent in the US as well, till the invention of the 30 year fixed mortgage, that fueled the ownership culture.
In europe and US, rentals are managed by professional companies. You typically dont deal with landlords. Moreover certain things differ culturally. For eg in IT in US people code even in their 40s. In India if you dont become a lead/manger within 5 years, something seems to be wrong with you.
In India if you dont become a lead/manger within 5 years, something seems to be wrong with you.
You have never worked with real techies have you?
Open your eyes: Real Q4 GDP Growth is now negative at -3.06%.
http://capitalmind.in/2012/06/has-india-plunged-into-recession-gdp-data-fudge-reveals-details/
You have never worked with real techies have you?
Elitist dialogue ?? I work in a reputed product company where people code even in their 40's and no one runs after a managerial job but such jobs are indeed rare. Most of IT is composed of service companies where this holds true to a large extent. After all how many people do companies like Yahoo, Google, various start-ups etc hire ?...it pales in comparison to companies like Infy, CTS etc
It's like quoting your own personal success story in the middle of an economic depression as a counter argument.
Anyways here's an article that should open people's minds...http://www.firstpost.com/world/austerity-hits-no-jobs-in-hand-greeks-return-to-farms-336433.html
Of course it's old...FP just picked it recently. I heard about this back in 2010. I daresay that this is the future most MBA's and engineers in this country are going to see. Not the rosy high 6 or 7 figure jobs that people dream of.
Greece is not the problem, it's a symptom, albeit the very first one to pop up, like that irritating mole on your face which is followed by a full blown cancer.
Its only a matter of time real estate market is going to fall heavily.
@aam aadmi
Elitist dialogue ??
How does remaining a programmer instead of becoming a manager elitist? In fact it is exact opposite of that. Elitist is breaking away from the ranks of 'resources' who burn midnight oil debugging a hard problem while the manager can go head with non-stop BS using a power point slide.
And if I sounded elitist then that was in response to "something seems to be wrong with you" part of the statement. It is like saying something is wrong with you if you are not married by 30 or own a house by the time your kid starts going to school.
Its only a matter of time real estate market is going to fall heavily.
I think people need to change their expectations, collapse need not be just in terms of housing prices, of course that's one way collapse occurs. Other ways it can happen is that house prices don't track inflation or rental yields stay stubbornly low or as in a rigged market like India's...one does not find any second buyers for one's home in-spite of 'high prices'.
Too many of us are looking for flash-bang collapses like 2008. It may not happen like that, collapse can be slow and pervasive like continual destruction of wealth due to inflation or environmental degradation. In the end the result is the same. The latter is actually is more dangerous since it does not lead to any reforms.
In the end it boils down to Human psychology...we are not trained to look for slowly emerging threats, we respond well only to sudden threats. contd below...
To borrow an experience from the Peak Oil community, many people in early 2000 were thinking that once oil reaches 200$ it will be the end of society. There will be a sudden collapse, riots on the street, wars between nations blah blah blah...
Of course oil reached $147 and nothing of this sort happened...the reason was that price rise was accompanied by demand destruction and severe recession. So now it has turned into a situation where oil prices rise and economies collapse...oil prices dip and then economy bounces back...followed by another cycle of oil price rise and recessions.
This continues till destruction cancels out fall in production. The result is a slow and agonizing death of the economy, much like a python squeezing the life out of it's prey.
In India's case it's inflation and depression that will suck the life out of the economy.
And this will happen while people keep complaining as to why RE prices are not falling. While in reality, builders are stuck with a piling inventory and owners are stuck with low rental yields.
@Pawan
You misunderstood the context. You assume that Indian IT sector is populated by 'real techies', which is clearly an extrapolation of your own experiences. My comment was in reference to that.
I spent the first few years of my career in service companies, so did my friends in various other service companies.
The statement In India if you dont become a lead/manger within 5 years, something seems to be wrong with you. correctly describes the service companies. It's not a problem per se...that's how they are structured, programming is supposed to be a substitute for labor so it's treated as such.
I know fully well what programmers go through.
Well he did wrong. But he is super star and he do everything so there is not wrong
real estate india
hahah - Another bailout -
Rs 12000 Crore -> 120 billion Rs
http://economictimes.indiatimes.com/news/economy/finance/rbi-to-infuse-rs-12k-crore-into-market-to-ease-liquidity/articleshow/13933069.cms
@aam aadmi - Well put.
Another reason that builders are getting away with loan payments is that the land banks they own can be sold to $investors for 20% gain via $depreciation - and the loans for unsold inventory can be services.
The real pain that was supposed to start with builders defaulting never happened as they had acquired land by bribing government officials for dirt cheap rates, then sold them for higher price (both by bubble and the Rupee devaluation).
India has a real estate bubble- not a "constructed house" bubble.
Wherever you go there will be no shortage of land, but there will be shortage of buyable houses in decent neighborhoods.
Renting has been recommended by many, but renting isnt any good if you are raising a family. Barring Mumbai, double income households can still easily afford houses albeit in a bit suburban areas.
// You have never worked with real techies have you?
This is not what a techie thinks about other techies. This is about the perception other people have. A Vice President in a small bank or a services company is valued by common people as far better compared to a senior developer in Microsoft or Google. I have friends in Microsoft who feel the same. Beyond a point coding and debugging loose their value. I know several senior SDEs who tell relatives in India that they are Program "managers". No matter which company you work for you should move on to managerial positions in your late 30s.
Anyways here's an article that should open people's minds...http://www.firstpost.com/world/austerity-hits-no-jobs-in-hand-greeks-return-to-farms-336433.html
In India, the migrants to the cities are going to stay put as they have nothing to go back to. They were indentured servants to the zamindar in the village and they are indentured servants to the middle class in the cities.
So no hope for them. Expect increasing crime in cities as the underclass becomes more and more desperate.
Open your eyes: Real Q4 GDP Growth is now negative at -3.06%.
http://capitalmind.in/2012/06/has-india-plunged-into-recession-gdp-data-fudge-reveals-details/
Thanks for the link.
Even more enlightening one is this:
http://capitalmind.in/2011/06/dirty-money-is-not-just-black/
Pertinent to real estate:
The answer is to take serious action against the laundering of black money. We need to question the source of any money...
@above
Yes that's the problem. The complexity of every law is increasing. Till recently this was questioned only on a ideological basis but new social sciences now question the costs of maintaining such complexity in society, such as how much energy is wasted in maintaining such complexity.
All incomes above a limit should have a flat tax, absolutely no mercy shown. Even tax on insurance claims. In return tax rates can be lowered to very low levels, say 5-10%. But I don't think this can be implemented in a democracy.
There are just too many interest groups who stand to lose a lot if such a law comes into force. Not to mention the army of accountants and lawyers who will become unemployed. Imagine a two line tax return(for salaried employees) with no exemptions and no multiple tax rates, wouldn't life be simple.
Here is where I part company with Aam Aadmi and the ilk of Deepak Shenoy.
I know I won't win any popularity contests by taking the following views, but here goes nothing.
Why is everybody so interested in the color of money - black or white? What's the difference between the two?
Black money isn't counterfeit money, I think this much is clear.
But what isn't so clear is that it isn't even money that was accepted as a bribe. After all, a bribe is a gift for a favor, and if you take the favor out of the equation, then your gift of money to your parents is also technically black money.
If you analyze this deep enough, you'll realize that "black" money is simply the money on which taxes haven't been paid.
But by whose definition have taxes not been paid?
Say a businessman under-declares his profit by Rs 100. Does that mean that no tax has been paid on that Rs. 100?
No, because several other taxes have in fact been paid - such as taxes paid by the producer who produced the goods, taxes paid by the transporter, octroi, excise taxes, import duties paid by those who imported the raw materials that the producer used and so on. Include inflation in that list as well.
Further, if I bought something with that Rs 100, I've already paid Rs 35 on it as income tax.
In fact this list goes on and on, and every single transaction is taxed - until you realize that a Rs 100 note or a $100 bill has actaully had a huge part of it already paid as taxes to the government.
So then, just because one person in the chain did not pay taxes on Rs 100, do you call it black money?
Or do you call it "grey" money?
Is all grey money automatically classified as black, or do you want to differentiate it from "black"?
So then, let me ask this: what is black money after all?
Please, if you can, provide a clear and unambiguous definition.
I'll continue this after we have some clarity about what black money really is.
If we can have a meaningful discussion about this, I promise you, you'll come away one step closer to learning who the real culprit is (it isn't black money).
Dhiman, we all get it that black money is not literally a different color but it's a metaphor referring to tax evasion and the fuel for crime and corruption.
BTW. taxation is not on money (after all technically 100 rupee is just a piece of paper with GOIs promise written on it.) Tax is on production. If you earn 100 rupees and put that note in your piggy bank forever, there is no recurring tax on it (apart from inflation which is a hidden tax, but that's a discussion for another day)
In a democratic society, that's the only way for the state to run the affairs mandated by the citizenry. It is by taking some meaningful contribution from everyones productive activity. Consequently there are incentives for able citizens to engage in productive activity.
If you want to live in a fair society this is something *everyone* needs to follow. Hopefully, you pay your housing society's membership and maint. dues on time and expect others to do the same in exchange for all the common services you enjoy.
Otherwise, you get decay and eventual collapse. Maybe not overnight but that will be the trajectory as more and more people take on the attitude that "someone else (i.e some sucker) is footing the bill" This is similar to the point Aam aadmi makes with special interests.
Another trivial example, if there is no one monitoring a traffic light most Indians pay scant regard to the red light.
Beef up the traffic cop presence and make an example out of a few motorists who dare to break the law and you'll quickly see the herd fall in line.
That's what is needed to curb black money in India. You don't need to go after every one, just make it clear that CBI or some task force is out there to get the violators and if caught the penalties should be onerous including full confiscation of the untaxed amount.
Then watch as the rest of the sheep fall in line.
As a follow up question for anti-tax vigilantes I guess they would probably prefer to live in a country like Somalia, where tax payment is entirely voluntary. In that case, I'd only caution them to be careful what they wish for.
On the other hand, I'd gladly contribute 30% or more of my productivity if it means everyone can avail of excellent institutions and fabricate a strong societal bond and a sense of collective purpose like much of the Scandinavian countries have.
I don't want to go into a discussion about whether taxation is right or wrong; I just want a simple, unambiguous definition of what black money is.
As I pointed out, in the life a Rs 100 note, taxes have been paid several times over - probably even exceeding the Rs 100 value of the note itself.
It is immaterial if you choose to think of these taxes as taxes on money or taxes on production - the fact is that the government or "society" got some share of that Rs. 100.
Hence that money can't really be black money, if you define black to be money on which no taxes were ever paid.
It would be money on which some taxes were paid but not all - i.e., grey money, right?
I dunno - all this is fodder for dismal scientists.
For us engineers, there is still the nagging issue of a missing definition.
So I ask again, please define black money clearly and unambiguously so I can proceed with further (hopefully civil) discussion.
As a follow up question for anti-tax vigilantes I guess they would probably prefer to live in a country like Somalia, where tax payment is entirely voluntary. In that case, I'd only caution them to be careful what they wish for.
While not wanting to deviate from the real thing I want - a clear and unambiguous definition of black money, I want to address this one point.
The problem with taxation is the use of force.
If I take Rs 100 from you by force, i.e., by holding a gun to your head, or by kidnapping your kid, would that be morally OK?
I'm sure you'd say no.
Let's up the ante.
Is it OK if I take Rs 100 from you by force again, but I take it to give to a starving single mother to feed her baby? Is this morally OK?
If you have any moral fiber whatsoever, you'll still say no - because forcible taking of property is robbery, regardless of what purpose it is done for.
Let's up the ante even more.
But what if 20 people got together and took a vote, and then decided that because everybody voted likewise, we should take that money from you by force to give to that starving mother?
Does this make that robbery moral? Does this now make that act of forcible taking somehow a good and beneficial act?
If you are a person of solid enough moral character, you cannot condone robbery, regardless of why it is done, how it is done, and who does it.
What constitutes robbery? The fact that I take something from you by force, or by using the threat of force.
That this money will be used for a noble purpose is irrelevant, that it is done because a majority of people want it is irrelevant, and that it is done by the government and called "taxes" is irrelevant.
If something is taken from you by force, it is immoral and defined as robbery.
How you reconcile taxation (i.e., robbery) with morals? If the government gets the right to commit one immoral act, then what prevents it from committing ten thousand?
You scream about corruption and you scream about the decay of morals in society, and yet your own moral fiber isn't strong enough to recognize robbery for what it is, nomenclature be damned.
What right do you have to demand a moral and just society when you cannot even accept the lack of morals in the very fabric of taxation?
Who are you to decry black money when you cannot even provide a clear-cut definition of what it even is?
Stop parroting the lines dictators and totalitarians use about corruption and black money and think for yourself.
Start by defining the demons - we'll fight them immediately after.
Now, let me ask one more question to the statists who want and love taxation.
If you love taxation so much, and you think it benefits society so much, and if you think that civilized society would simply collapse without taxation, then please enlighten me, why, why don't you pay more than what you are legally required to?
This coming tax year, if your tax owed amount is Rs 10,000, please send the income tax department or IRS or whoever double that amount.
I challenge you to disprove my assertion that nobody will do so.
If Rs 10,000 is good for society and feeding starving mothers, then I'm sure Rs 20,000 is better.
If you love society so much, then why don't you do something about it by paying more than the absolute minimum required from you under threat of force?
Dhiman, if you want to live like an animal there are plenty of options. You can start with Somalia and see how far your version of morality takes you.
The rest of us who have evolved won't miss the likes of you much.
BTW. all your pureile examples of not feeding starving mother etc. when taken to their logical conclusion would imply that you would discard all non-productive, weak members of your own family and show the same tough love, right?
Even completely devolved animals take care of the weak and vulnerable.
I guess we should aim for living like bacteria in your version of utopia!
And taxation involves the use of force as much as any other government function in a democratic society. I guess the government should not use any force to control your behavior on public streets as well. Don't come crying when someone runs over you or your family then.
Last I checked you can vote in India and if you believe in no taxation take out your campaign on the street and see how many supporters you can gather to change the law.
why, why don't you pay more than what you are legally required to?
The same reason why you pay more taxes than you would like to.
If you love society so much, then why don't you do something about it by paying more than the absolute minimum required from you under threat of force?
I hope you're smart enough to realize there are countless ways to contributing to society than simply cutting a check to the government each year.
You don't seem the type who'd engage in any such activities but I'm sure you read about and know individuals who make tremendous contributions without any expectation of returns or profits.
Suffice to say that I'm blessed to come from such a background.
To the three Anons above - I don't know if you are the same guy, but I'll assume so in my responses.
First, stop being a coward and hiding under "Anonymous" - give yourself some identity (even anon123 would do) so that I can specifically address you.
Second, when confronted with logic or reason, don't indulge in ad hominem attacks, which are the last resort of ignorant imbeciles.
Third, don't assume that your posturing and strutting will have a positive effect on your argument, which continues to be devoid of reason and logic.
Having said that, let me respond to your statements:
Dhiman, if you want to live like an animal there are plenty of options. You can start with Somalia and see how far your version of morality takes you.
Ad hominem attack masked by a specious logical argument. What gives you away as a statist hack is that you think that there exist more than one "version" of morality.
Someone with morals realizes that there is only one version. Thus, if you disagree with me that the use of force is immoral, then your moral compass needs checking, not mine.
The rest of us who have evolved won't miss the likes of you much.
Another ad hominem attack implying that I'm not evolved enough and am an animal.
Why do you hide behind the words "rest of us"? Are you afraid to stand up as an individual and claim that you are more evolved than others? You know that would make you a racist and a supremacist, so you say "rest of us" as if that hides your intent. It may, from someone else, but I see you clearly for what you really are.
BTW. all your pureile examples of not feeding starving mother etc. when taken to their logical conclusion would imply that you would discard all non-productive, weak members of your own family and show the same tough love, right?
Did I say that it is immoral or bad to feed the starving mother?
If you want to, by all means, spend your life savings for feeding her or doing any cause you consider good.
I told you that my forcing you to do so is immoral.
Please don't put words in my mouth.
Even completely devolved animals take care of the weak and vulnerable.
I guess we should aim for living like bacteria in your version of utopia!
Where do you get the garbage that you spew? Again, by all means, live like an elevated human and help others if you want. By forcing me to agree with you and do the same, you display your lack of civilization - because you choose to use force.
You have the right to live like whatever your version of an elevated or evolved human is.
You have absolutely no right to tell me that I cannot live like a bacterium if I choose to.
To be continued...
Continued...
And taxation involves the use of force as much as any other government function in a democratic society. I guess the government should not use any force to control your behavior on public streets as well. Don't come crying when someone runs over you or your family then.
That's another specious argument. The US has very strict traffic laws, but they do jack to prevent road accidents; in fact traffic deaths account for the vast majority of accidental deaths in the US.
You imply a connection between the use of forcible laws and safety but such a connection has not been proven as a general rule.
If you have the intellectual wherewithal, then why don't you prove it? After all, the burden of proof lies on you, who makes such statements.
Last I checked you can vote in India and if you believe in no taxation take out your campaign on the street and see how many supporters you can gather to change the law.
Nobody will do that precisely because there is the threat of force - they would be "dealt with" if they did that. Pseudo intellectuals like you even try to quash all discussion (such as this very one we are having right now) when someone says that taxes are immoral. That pretty much proves that you are what I said - a statist, an elitist, a supremacist and even a racist.
At the same time, you yourself, like elites and elitists everywhere, won't pay one red cent more than what you absolutely must to not get on the wrong side of the "law".
That proves what I earlier said you were - a coward with no moral compass.
The same reason why you pay more taxes than you would like to.
Can't frame a lucid and clear response, can you? What does that sentence even mean as a response to my question?
I hope you're smart enough to realize there are countless ways to contributing to society than simply cutting a check to the government each year.
What are you saying? That ... gasp! ... there are better ways to use your money than giving it to the government?
So you agree then, that it is better to not pay your taxes, or at least try to reduce them as much as possible than pay?
Take a stance, man! Are you arguing with me or agreeing with me?
You don't seem the type who'd engage in any such activities...
So, trying to educate people on a forum from which I can have no possible gain whatsoever doesn't count, right?
So, free knowledge is less valuable than free money, correct?
So, you know me so well that you know that I'm an uncharitable bacterium, right?
I call it... you guessed it... an ad hominem attack.
I'm sure you read about and know individuals who make tremendous contributions without any expectation of returns or profits.
Name just one.
Suffice to say that I'm blessed to come from such a background.
So your family, or lineage is superior to that of others?
Thanks for proving my point that you are elitist, supremacist and racist to boot.
After all this talk, is there not a single person on this forum who can precisely define what black money is?
Please treat this as my challenge to every one here - come up with a clear and unambiguous definition of black money.
If you cannot even define it, then you don't even know what it is, so it makes no sense to blame it for all the evils of the world.
Dhiman what do you have to say about the Zakat system under the Islamic law ?
In this system, there is no Income Tax, ie your income is not taxed. What is taxed is the wealth which is lying around unused for one year. So if you have any wealth that is unused or uninested for one year then you will be required to pay 2.5% of that wealth, a flat rate, just 2.5%.
This means that even if you earn a million dollars per year and spend all of it withing a year or invest it then you do not have to pay any zakat.
On the other hand if you earn a 100 thousand dollars and do not spend or invest it for a year then you have to pay the paltry 2.5%.
But it does not end here, in this system the zakat money collected can only be payed to the poor and the needy. The government cannot take the money and invest it in other projects like infrastructure, industries, education, corporate welfare, bailouts etc etc. The money can only be given to the poor people of the society.
The money created by the fractional banking system is much more (by orders of magnitude) than the 'black money' floating around. This is why RE fell 40% in 2008. Black money did not disappear, banking credit did.
In any case, even if all the black money were 'converted into white' by paying wealth/income tax, it would reduce that amount by 15-20%. Is that a game changing number? Unlikely.
@Dhiman
You are unnecessarily complicating the matter...tax is not on a piece of paper, it's the productivity that you generate. If you make a profit and earn something out of it, whether it's money or land or gold or vegetables or whatever, you pay a tax on it.
Of course we need a money system to associate value to that productivity which is where the 100 Rupee note comes in.
Yes taxation is forcible. Govt is an entity which has a monopoly on force in an area. That definition is quite simple and clear. It's also this monopoly on force which keeps a place from slipping into anarchy, in the end there are no free lunches. You don't want to pay taxes, fine...go live in a tribal society where you don't use any government facilities or go solo in the himalayas. No one will ask you to pay taxes
Taxation has always existed in society, You are free to read chanakya's treatise on taxation, maybe it will impress the meaning of it on you.
Taxation should be just and meaningful, which is why people earning below a limit are not taxed, and that limit should correspond to a basic healthy lifestyle in society.
In India the govt is not increasing this limit even though inflation is going up, tha tax rates are also too high, both of them should be reasonable.
@Dhiman
If you cannot even define it, then you don't even know what it is, so it makes no sense to blame it for all the evils of the world.
Dhiman, most people probably will not even be able to define lightening in technical terms but that does not mean they can't be afraid of it.
I am hazarding a guess but when most people say `black money` is the root of all problems, they are actually saying `corruption` is the problem.
Though I agree that the process which generates `black money` i.e., corruption is the problem. What most people do not understand is that opportunity for corruption arises from opportunity itself.
If govt. has money to spend on CWG games then there is an opportunity to siphon off some of that money. If govt. has no money, where we seem to be headed as a result of GDP fall, corruption will also be less and so will be its ill effects.
Samix - there are two aspects - a theoretical one and a practical one.
Theoretically, and morally, the use of force is wrong and immoral, period. There are no ifs and buts about this.
Thus, if a government or any other entity takes anything from you by force, it is wrong and immoral.
In practice, governments need money to do certain things - and it is a matter of debate what functions of a government are proper and what functions are not.
Arguably, the only proper functions of government are defense and mediation and resolution of disputes.
Everything else can be handled privately or as non-profit functions of society.
Justice for instance could be handled by local gram panchayats, or charity could be handled by temples.
People think that if government doesn't provide a specific service or do a specific function, it would never get done, which is patently false.
Further, the problem with collectivist, socialist thinking is that governments should take the money from individuals by force and then use it for some common good.
However, who would buy the government's services if there were an alternative?
Do you fly by Air India or by Indigo?
Governments don't have an incentive to provide quality - so in effect you are paying for receiving crap.
Let me phrase this as a challenge. I challenge that the government be run as a business - and pay for its functions from its profits.
After all, Apple, IBM, HP and Cisco can make billions of dollars in profits every year by selling without coercion and force, so why can't the government?
This only proves that whatever it is that government is selling (security, laws, order, roads, railways) we buy only because there isn't another alternative, not because we need it or want it or like it.
This is the real problem with all taxation - forcible extraction, which also goes by another name - extortion.
If this were some tiny percentage - like 1%, then perhaps it wouldn't be so offensive, but at 35% income tax + 12% VAT + 15% inflation + import duties + whatnot, it gets to be a real burden and one must question its usefulness and indeed the usefulness of the very entity that demands it.
You are unnecessarily complicating the matter...tax is not on a piece of paper, it's the productivity that you generate.
What's the difference? Something taken from me by force is still something taken from me by force.
By the way, I did not bring up taxation - I simply asked, and still ask, for a clear and unambiguous definition of black money.
Dhiman, most people probably will not even be able to define lightening in technical terms but that does not mean they can't be afraid of it.
Pawan, sure most people cannot define lightning, but the point is that a definition exists and is clear and unambiguous, and scientists and engineers know it.
I want the equivalent for black money.
Surely, some wise economist knows what black money is and can enlighten me with a clear and unambiguous definition.
If it can't even be defined, how can it be opposed, fought against and defeated?
Lightning is a physical thing, so you can show it to someone and say "that is it".
Is black money a physical thing? If so then how do I identify it? Does it have a specific color, smell, taste or feel?
Or is it simply a concept, like numbers in mathematics? If so, how may it be defined?
Everybody blames black money for the ills of society, but for me to do the same, I'd like to know what this great evil really is.
The money created by the fractional banking system is much more (by orders of magnitude) than the 'black money' floating around. This is why RE fell 40% in 2008. Black money did not disappear, banking credit did.
In any case, even if all the black money were 'converted into white' by paying wealth/income tax, it would reduce that amount by 15-20%. Is that a game changing number? Unlikely.
I agree 100%
Aam Aadmi, let me ask you a question.
In Chanakya's time, gold was money.
Today, fiat is money, and government can simply create as much of it as it wants.
Thus, there should be no need to extract taxes from the populace at all.
Simply print up as much money as is needed for whatever common good and be done with it.
So why are taxes necessary in a fiat money world at all?
Dhiman, at the risk of sounding like a fan boy, you sir are an extremely intelligent man.
It is enlightening and a pleasure to read your posts.
Ayn Rand would be proud of you. :-)
It would be interesting to see if anyone from the rest of the intelligent lot (Aam Aadmi, Pawan, Samix et al) is able to come up to your challenge of "defining" black money!
I am truly honored by your compliments, Getafix. Thank you.
@Dhiman,
Well Black Money is no technical term. In common parlance it refers to money on which tax has not been paid.
This by itself does not mean it was amassed by wrong means. Last time I paid my dentist in cash. If he does not show it in his income, it is black money in his hands as he has not paid his share of taxes on it. Even though I had paid full 30%+ of tax on it. So my definition is that income not declared is black money.
However, the context in which most people use it, they mean money obtained through corrupt means.
So the common man definition becomes, income not declared because it was obtained through illegal means is black money.
Now who defines what is illegal? If RBI prints a 1000 Crores then this is not hidden and neither illegal. so technically its not black money. But it is probably the worst kind of money.
So why are taxes necessary in a fiat money world at all?
To fool the populace into thinking that money is scare and difficult to come by, if the populace ever comes to know how easily money is created from thin air, people will call the bluff of the paper peddlers easily.
hey getafix, I am in the Dhiman gold camp! I do not feel that black money is any different from white money, for me both are money, a 10 bucks black money note and a white money note will buy me equal amounts of peanut!
black money is nothing but a excuse to blame policy failure and rampant stealing on some one else, just like population, the entire Indian ruling class blames population for all the woes of the country, but guess what, India, as big a country that it is does not even have 10 proper cities, when looking at the land mass and the resources it should have had 100's of tier one cities and 1000's of tier 2 towns, if that was the case we would have proper spread of population and would not feel the pinch of overcrowded cities.
@Dhiman - So why are taxes necessary in a fiat money world at all?
The ostensible aim is to redistribute income and 'buy' peace and stability.
The govt could far more easily print and buy, but this would not be progressive. Inflation generally tends to be regressive, hurting the poor more than the rich.
Taxes, then are designed to be progressive. Rich should pay more. Whether this is indeed the case in practice is a different question. The recent debates in the USA about WarrenBuffet paying lesser than
his secretary come to mind.
skeptic's ghost said...
hahah - Another bailout -
Rs 12000 Crore -> 120 billion Rs
http://economictimes.indiatimes.com/news/economy/finance/rbi-to-infuse-rs-12k-crore-into-market-to-ease-liquidity/articleshow/13933069.cms
Just last month May 25, the RBI had conducted another open market operation worth 12000 crore rupees, and now just after like 15 days the RBI is at it again annoucing another open market operation worth 12000 crore rupees. This is how bad it seems things have become in India, 12000 crore rupees translate into 216.84 million U.S. dollars, if you are require 216.84 million U.S. dollars liquidity injections every 15 days, you are terminally ill...
@Samix - "it should have had 100's of tier one cities and 1000's of tier 2 towns "
This may yet happen. Increasing costs in tier-one cities, and better connectivity to tier-two cities might be the forces that enable this.
@Polt, keeping aside weather taxation is fair or not, what we need to understand is that progressive income taxation is repressive and detrimental to the poor whereas a excape route for the rich. Please note my emphais on income, in terms of taxation.
In a fiat money regime the rich get richer not through their income, but rather they keep getting richer and richer with the endress appreciation of thier assets due to incessant money printing. Considering that the aim of income tax is to tax the income, progressive income taxation can never be equitable becasue the bulk of the little mans income is his monthy salary which comes under the purview of income taxation, whereas the bulk of the rich mans income is fiat appreciation of assets which is not taxed under the income tax system.
Thus according to me a more equitable tax system would be wealth taxation and not income taxation, because it is fair to tax people only on what they have hoarded and not on what they earn each month, because I can earn a 100, 000 rupees and spend most of it on food, clothig, shelter, education and bills.
let me try defining black money
any money that is paid as part of a transaction for a service which was not reported and hence not taxed as per norms. to the taker of such money the sole purpose perhaps of not reporting it was to save tax on the transaction or to hide the nature of the transaction itself (say bribe), so i would stretch the definition thus to say there are two motives which may or may not occur together.
how different could this be from white money? let's see this from the perspective of the taker and holder of above defined 'black money'. as a holder one has two options, one is to hide the source and trail of such money totally where in one might buy assets that dont show in his bank transactions or if one is underwriting my profits, then show them as expenses (again money could be withdrawn to buy assets or stashed away elsewhere). either ways it requires the taker to spend it soon on something. this limits where such money could perhaps be spent and in that way it is different from the white money. the 'intent' to hide the source or trail could trigger the purchase of assets which otherwise perhaps did not interest the taker (be it gold or RE) and thus increases the demand for such assets thereby making it difficult of people with white money. maybe that's why we consider them evil?
This may yet happen. Increasing costs in tier-one cities, and better connectivity to tier-two cities might be the forces that enable this.
Polt I have my own theory for this not happening, the all pervading caste system in India. to begin with most Indians are what is classified in the caste system as the so called "lower classes", on the other hand caste system is all pervading in the Indian heart land we may not feel so in cities like Mumbai.
Thus I would agrue that ,India has not approched development so actively because development means empowerment and considering that majority of India comes from the so called backward classes, there is a fear that these people will get unecessarily get empowered.
Thus development is restricted to only surgerical blocks in our country so that the right kind of people are able benefit ?
More towns developing?
If the cost of real estate is any indication, you have 1000s of these small towns 200-250 kms from Tier 1 and Tier 2 cities, that are already more expensive than any major mid west city in the US.
Villages around these towns may still be reasonable as far as buying a house is concerned, but not for long.
@samix -
'12000 crore rupees translate into 216.84 million U.S. dollars.. '
No, this translates to $ 2.168 Billion!
@Samix = "Thus according to me a more equitable tax system would be wealth taxation"
That too would not be right. The wealthy (atleast in the West) keep a large percentage of their wealth in financial assets. (Stocks, bonds, private equity funds, VC funds, pension funds ). This is actually productive wealth. It enables entrepreneurs/firms to raise capital and invest. They do not have the same fascination for gold/RE that we have.
In India unfortunately, a lot of the wealth is stuck in unproductive RE (folks holding acres of empty land), or tons of gold and jewellery. If you see the newspaper reports of income-tax raids, it is usually runs like this - '3 plots in city A, 2 homes in location B, 5kg of gold' and a few measly lakhs in mutual funds and stocks :(.
One question to all: The US prints the dollar, the world's reserve currency. It (the Fed) has created trillions of such dollars for the last four years to revive their moribund housing market, but has been unsuccessful till date. Why do people feel that the RBI in India can do better if the housing bubble starts to deflate?
True, in the west people do invest in productive places and thus the wealth tax wont be applicable to them because just by virtue of investing and letting their money rotate in the market, therby taking a risk they have done their part for the society, it is those people who do not want to take a risk with their wealth to whom the wealth tax is applicable to.
Under wealth taxation system you will tax gold as well as the land that a person owns. Yes taking inventory is going to be difficult but hey, that is what the tax man is for!
Thank you anonymous! I underestimated the money printing, the actual amount is 120 000 000 000 Indian rupees = 2.1672 billion U.S. dollars 2+ billion dollars worth and not 216 million dollars as you noted.
Which means that in less than one month the RBI has printed rupees worth 4+ billion dollars, now that is some printing!
Today, fiat is money, and government can simply create as much of it as it wants.
Thus, there should be no need to extract taxes from the populace at all.
First I assume that it's a rhetorical question...to point out the absurdity of collecting taxes, however you and me both know that one cannot print money like that without destroying it's value.
And printing is not actually the same as borrowing which is technically what the governments are doing.
In a world with infinite resources, the govt can borrow as much as it wants without any problems, but borrowing is same as consuming and world's resources are fixed so it shows up as inflation everywhere.
Second you are too blinded by ideology and words like collectivism and libertarianism. Idealistic worlds exist only in textbooks. In reality there are only two things which matter, human psychology and laws of physics. And both of them say that infinite growth cannot continue on this planet; whether one adopts gold/silver/copper or paper money as the standard is immaterial.
The current debt problems are actually problems of maintaining high living standards in the face of dwindling resources and falling productivity (at least for Westerners). It's not a problem of government tyranny. Without govt intervention the recession would have been thousand times worse, of course it will be the same in the end, they have only managed to delay it for a while with liquidity infusion.
Guys,
Dont take it wrong with RBI printing. RBI OMO is equivalent to the dollar it sells.
sell dollar.
buy INR.
PUt into circulation. So no new printing. only you lose dollars.
am I right? that is the definition they put.
but I am not sure about the numbers
The bubble will NEVER burst. Why?
http://www.economist.com/node/21556576
Similar in tone to the economist article posted above.
http://economictimes.indiatimes.com/opinion/interviews/pre-2003-growth-rates-to-be-new-normal-for-indian-economy-ruchir-sharma-morgan-stanley/articleshow/14004922.cms
Anyone else addicted to this forum? I sort of keep checking updates every hour.........since last 5 years.....
Definitions so far:
Pawan: In common parlance it refers to money on which tax has not been paid. This by itself does not mean it was amassed by wrong means.
Samix: black money is nothing but a excuse to blame policy failure and rampant stealing on some one else, just like population...
analog: any money that is paid as part of a transaction for a service which was not reported and hence not taxed as per norms.
Well, the consensus so far is that money that isn't reported as income and on which income taxes haven't been paid is black money.
Fair enough. Let me show you how this is a red herring.
1. Do you know what is the estimate of all such black money in India? Let me put it at 100% of white money. To use simple numbers, and not percentages, lets say the total amount of white money in India is Rs 100 and the total amount of black money is Rs 100.
So, at most Rs 30 weren't paid as income taxes to the government. What is that as a percentage of the total money supply?
30/(100 + 100) = 15%.
This number is likely less, because not all taxes are income taxes - some would be capital gains, some would go away as depreciation and so on.
2. Even if this Rs 15 were to be paid back to the government, it wouldn't disappear from the economy - the government would spend it right back into projects and so on, and the net circulating money supply would not change at all.
The point is, when Rs 15 is spent in the economy, it will have certain effects - but these effects are independent of who spends it - you, me or the government.
3. Some people might argue that taxes are on "production" or "productivity" or on "transactions" - and others will simply say that money on which taxes have been paid is white. This is a meaningless distinction.
Like I said earlier, if you look at any money in your possession - there isn't an audit trail that it carries along with it that shows what taxes were paid at every step along the way.
Some steps may have been missed, some may not.
Thus there is absolutely no way to define which money is black and which is white; money is fungible after all.
The only thing you can probably say with certainty is that government got less revenue that (it claims) it was owed.
Thus, I contend, all money is "grey" - a mixture of some black and some white.
Blaming black money for anything simply distracts from the real issues, and is a sleight of hand trick that is being used by politicians and their ilk.
They want you to chase a ghost, knowing full well that you can never catch it; while they continue their profligate and corrupt ways.
Aam Aadmi: First I assume that it's a rhetorical question...to point out the absurdity of collecting taxes
No, you misunderstood. It was not a rhetorical question at all.
I really want you to think and come up with some logical answer to why governments need to tax when they can print.
And printing is not actually the same as borrowing which is technically what the governments are doing.
Look, don't get caught up in the minutiae - you'll miss the forest for the trees.
Government has unlimited license - if to borrow, it can get the CB to print in unlimited quantities and borrow thus.
Witness the US raising its debt ceiling like clockwork every so often.
The point is, they can get as much money as they want - after all, it isn't a physical commodity.
But they still tax, onerously so.
Why?
And let me repeat, this is not a rhetorical question.
Second you are too blinded by ideology and words like collectivism and libertarianism. Idealistic worlds exist only in textbooks.
You're getting me wrong again.
First, I sure use words - but these are definitions of something. It's like using "electricity" or "magnetism" - these are precise words with precise definitions.
Similarly, "collectivism" is a precise word, with a precise definition.
I use it because it describes the attitude of some people on this forum, sometimes you included.
Further, let me put your fears to rest - I'm not an idealist at all.
Let me give you an analogy. Let's say you want to find out what's wrong with a broken computer. How do you proceed with debug?
You have to first make a reference point of what a working computer is like - an idealization if you will. This reference could be in your mind - you after all, know how a working computer behaves.
Then you have to compare the differences between the working computer (even if it is in your head) and between the broken one.
That's how you arrive at the fault itself, and fix it.
If you see me asking questions or making statements that seem "idealistic", know that I'm trying to define reference points.
There is no other way to debug and there is no other way to learn.
To be continued...
Continued...
The current debt problems are actually problems of maintaining high living standards in the face of dwindling resources and falling productivity (at least for Westerners). It's not a problem of government tyranny.
That's the visible cause that everyone is pointing fingers at. How do you know resources are dwindling?
Not a rhetorical question, but a sincere one - what is the methodology? What's the proof?
Aam Aadmi - I don't know your age, but there is still a charming naivety about you - when you grow older, or at least more cynical, you'll learn to question everything.
Trust no one.
If you dig deeper, my friend, you'll find that you have to unlearn most of what you "know" about economics for it to make any sense at all.
For instance, here's a piece of data: There are six billion people in the world. Give each and every person 1,000 square feet to build a house or whatever. How much area is this?
6*10^9 * 1*10^3 = 6*10^12 square feet, or 6 trillion square feet.
Given that 1 sq km equals 10,763,910 square feet (approx 10 million sq. feet), you'll see that 6 trillion square feet equals 600,000 square kilometers, or even smaller than the area of Texas.
The truth is, my friend, numbers and statistics can be manipulated to show nearly anything.
You have to be more careful of trusting people's conclusions and rely more on raw data to get your own.
The truth is, no resource is ever plentiful. Life, and evolution is all about the ability to use scarce resources efficiently, and resources are always scarce.
The error happens when people try to portray that some resources are not scarce, or that some kind of socialism or communism will use scarce resources better; or when they print money and act and behave like no resource is ever scarce at all.
All these are errors and will result in catastrophe.
But socialism, communism or collectivism (as properly defined terms) is the precisely wrong way to deal with scarce resources.
@Dhiman: So how does all this grey money contribute to the various bubbles all over the world in general and the Indian RE sector in particular?
@Getafix - I posit that it doesn't at all; what matters is the total amount of money and credit available. If this total amount keeps increasing it will cause inflation, this much is obvious.
What is not that obvious is that a bubble is just "controlled inflation" - i.e., inflation in one sector of the governments choosing to sink all the money being created.
How do they "choose" to have money go into real estate?
By having a legal framework wherein buying RE exempts you from some taxes, i.e, by making entry lucrative; and then by making exit harder, such as a law that taxes will be exempt on the profits derived from the sale of a house provided you buy another house within 12 months.
It's as simple as this: if you are a government, you must grow your money supply to show GDP growth; but if you do this, you will get inflation; so you must blow bubbles to create controlled pockets of inflation rather than a general inflation in everything.
This is the game, pure and simple.
Black money is just a sideshow for the sleight of hand.
'So how does all this grey money contribute to the various bubbles all over the world in general and the Indian RE sector in particular'
Not Dhiman, but I will take a stab at this anyway :)
The grey money has at best a marginal impact on asset bubbles. Banking credit and sentiment matter far more. Both of which seem to be reversing now in India. Our stock market bubble has clearly burst and now at 12 times earnings is below long term mean and likely undervalued. It might fall much further though.
RE bubbles can be more drawn out. The Japanese bubble was from 1979 to 1989, USA - 1999 to 2007, Spain - 1998 to 2007. Ours started around 2003, when interest rates were reduced and FDI was allowed in RE.
Credit clearly is hard to come by nowadays. Witness builders struggling to raise funds and complete projects. As for sentiment, I am not sure. I still meet many folks who still think RE remains a sure shot bet.
>>Thus there is absolutely no way to define which money is black and which is white; money is fungible after all.
@dhiman - there is definitely as distinction. black money and white money are not chasing the same goods to the same extent. black money is chasing assets (gold or RE) more while white is chasing all goods. This i would say is where you need to distinguish. are you trying to say that this is not different from the case where all money is white?
as far as taxes go, i don't think the problem the govt. has is with lesser taxes being paid. the problem is that a lot of money is locked up in unproductive assets and so the govt. has had to print more for growth of the economy which has devalued the currency and lead to inflation.
so what is your point again in calling money grey?
@dhiman -
>>Government has unlimited license - if to borrow, it can get the CB to print in unlimited quantities and borrow thus.
>>Witness the US raising its debt ceiling like clockwork every so often.
>>The point is, they can get as much money as they want - after all, it isn't a physical commodity.
>>But they still tax, onerously so.
>>Why?
If they print in unlimited quantities, how exactly do they expect to fit in a global economy? how will they attract foreign investors who want to repatriate with their profits? aren't these things straight-forward? why do you ask redundant questions?
there is definitely as distinction.
analog, your "distinction" is loaded with ambiguity.
In this physical universe, if two things are different, then when I get one of each, I can tell them apart with certainty.
Apples and oranges are different. When I hold an apple in one hand and an orange in the other, I can tell which is which with 100% certainty.
If I handed you a bundle of Rs 100 notes in one hand which was black and one in the other hand which was white, could you tell which was which with certainty?
But the effects of spending the bundle (inflation, rise in prices or whatever) is exactly the same, whichever bundle you spend.
Further, would it matter if you gave me one third of one bundle and I spent that and you spent the rest? If there are any consequences of this spending, they are irrespective of who did the spending.
Thus we come to my point - which I've said more often than I care to count - that the distinction between black money and white money is ambiguous, specious and immaterial when it comes to the ill effects on the economy.
The root cause is money printing, which causes ill effects.
It's like this: you're blaming the Yamuna river for having water and causing floods, saying that if only it dried up, everything would be fine; all water would flow through the Ganga and there'd be heaven on earth.
But you ignore the root cause, which is the arrival of summer and the melting of snow; or the arrival of the monsoon and the rains.
You are blaming the effect, not the cause. Your distinction is as meaningless as flooding by the Yamuna or flooding by the Ganga. If you really wanted to stop the flooding, you'd have to stop the melting of snow or stop the monsoon.
If you really wanted to curb inflation, or to not blow bubbles, you'd have to stop the central banks from creating so much money and credit.
That is my point.
My externalized take on the black money discussion -
Man in an inherently competitive (like most mammals). This means that no system/religion/country on the planet would ever offer fairness (economic, social or even moral) - Whatever you try something or the other woven in man's psyche will override and create the elite, middle class, lower classes and an underclass.
Nations, religion, Armies, Governments, Rule of law, system of currency, social customs, taxation, ownership are created by humans themselves to try to confine man's competitiveness. There is no reason to be loyal or firmly opposed to any of man made systems (there might be more). Money itself is an institution for exchange of goods and services - calling it black, white, grey is just another label.
Who owns the planet or its resources? How does BP/Shell/Exxon drill for oil in the ocean, but ONGC/Sinopec not? Why does the Indian government force Reliance and Cairn to sell gas found in Bay of Bengal to it and not the market? The same reasoning applies that workers in Foxconn who assemble iPhones cannot afford one while people in US get one for nearly half the price barely denting a few day's salary. The answer might be that the world is at the mercy of elites (in the form of countries do).
Similarly who needs governments? US is the worlds most economically liberalized country yet there is a huge desire in the past decades to make it socialist.
China is the worlds most socialist country yet it has striven like mad to be the worlds leading business friendly country. This alone is enough to understand that no system on the planet works best.
Taxation during Robin Hoods time was called corruption. Corruption today is called skipping taxation. America was founded on the basis of not having to pay taxes to the crown. Taxation today is almost always done by the government in exchange for offering higher living standards -
But at the same time central bankers are upto printing like there is no tomorrow.
Like all mammals who live the planet the elite male and females rule their clan - Man is no different - just that our (human) definition of elite-hood changes from time to time. While there might be black swan events that brought about collapses of erstwhile bubble, the real human competition is warfare! and warlike situation alone can reset the clocks of the ticking timebombs of unsustainable systems.
If they print in unlimited quantities, how exactly do they expect to fit in a global economy? how will they attract foreign investors who want to repatriate with their profits? aren't these things straight-forward? why do you ask redundant questions?
I don't know - hence I ask. What's a redundant question to you doesn't have an obvious answer to me.
For instance, what do you mean by "fit in a global economy?" How is India, or any country for that matter, fitting into the "global economy"? What is the global economy?
Why does anybody need to attract foreign investors who want to "repatriate with their profits"?
If money were gold, would you like foreigners taking away your gold?
How come you think it is so great if they take away your fiat rupees?
What's so good about foreigners repatriating money from India?
Hell no, none of these things are straightforward to a thinking, rational and logical individual. Or to a cynical skeptic who trusts nobody, such as I am.
skeptics ghost - you nailed it perfectly. Bravo!
This is my worldview too.
But I want to take it one step further - I find this world and its ugly competitiveness repugnant.
I would like to have some few possessions that are enough for me and my family, and be left alone from that point on.
Unfortunately, I can't be left alone when the little wealth I'd like to save for my old age gets stolen from me via inflation.
Or, said differently, the actions of other people will affect me (however indirectly).
I simply seek to insulate myself from this.
@Dhiman
Resources are dwindling...there is no argument against it.
I can provide mountains of data but I doubt you'd listen.
The truth is that our environment is in the beginning stages of a collapse. And as far as your 1000 sq feet per head calculation, I haven't seen a more naive assessment of how much footprint a man uses. 1000 sq feet is just the size of your house. Ever wondered how many hectares do you need to feed yourself and your family? how many hectares of trees does one need to generate oxygen for one person? How many hectares of ground is dug up to extract the metal that you use. How many hectares of trees used for your furniture ?
I could go on and on but you get the point. We don't need one Texas, at our current rates we will need 1000 Texas or maybe 5000. There are far too many people on this planet and they all want to live like Americans/Europeans.
Socialism/Capitalism is irrelevant to me, for me they are two sides of the same coin...tragedy of the commons...the first one though government intervention and the second one through private.
Can it be argued then that, since the traditionally labeled "Black Money" due to its very nature will be less under the Governments'/Central Banks' control than the "White Money", it will contribute more to inflation?
I have had this question in mind for a long time now.
Have any studies been done to find a correlation between uncontrolled inflation in an economy vis a vis the levels of corruption in that country?
@dhiman - For instance, what do you mean by "fit in a global economy?" How is India, or any country for that matter, fitting into the "global economy"? What is the global economy?
Why does anybody need to attract foreign investors who want to "repatriate with their profits"?
are you now asking why do we need foreign investors? to keep up with technological growth elsewhere on the planet for one? think of all the wonderful technology you use in your day-to-day life. cellphones, televisions, washing machines etc. were they invented in india? think of vodafone and its massive investments in india. why do they do it? its a mutual win-win. that's a global market.
are you really serious when you ask these questions? if you are, i suggest taking a macroeconomics 101 course
>>Can it be argued then that, since the traditionally labeled "Black Money" due to its very nature will be less under the Governments'/Central Banks' control than the "White Money", it will contribute more to inflation?
black money is locked up in unproductive assets. if the govt. needs money re-invested and finds growth has come to a standstill, it has to print more and _that_ leads to inflation.
Can it be argued then that, since the traditionally labeled "Black Money" due to its very nature will be less under the Governments'/Central Banks' control than the "White Money", it will contribute more to inflation?
No difference. Money is never "locked up" like analog says - it must constantly flow around.
For instance, if you give me a crore rupees of black money, and I promptly buy real estate with it, that one crore black money did not get "locked away" at all. It just changed hands, and is free to go about chasing other goods and causing inflation.
The same is true if you buy gold with the black money or whatever else.
The money, black or white - may keep changing hands, but never disappears from circulation, and thus continues to cause inflation in precisely the same manner, regardless of whether it is black and white.
This is why I say that even bothering with a discussion of "black money" is like chasing ghosts and goblins - it maybe entertaining, but is entirely unproductive.
@dhiman - well you just stated your hypothesis as the conclusion without debating it.
let me try again.
>> The money, black or white - may keep changing hands, but never disappears from circulation.
no one is denying or debating that. it is where exactly it keeps circulating. if it does not become available for growth and instead is locked up in massive amounts in real-estate transactions, the goods that are bought with that money are confined to those goods. its like having a different currency altogether that is applicable only for certain transactions, although in reality it can be used for anything. with the 'intent' for spending (hence circulating) being higher for this kind on certain transactions, the price of goods that are bought with it, have gone upwards and more and more black _and_ some hard earned white money via EMIs are circulating in those assets.
Now where is the money when a SME needs a loan going to come from?
Where is the money when there is a growth stagnation (A owes B owes C owes D owes A and so none can do business as an example) going to come from?
the govt. prints! there comes the inflation due to the 'locked up' nature of the money in assets which are preferred by black money.
makes sense?
I can provide mountains of data but I doubt you'd listen.
Don't take a negative track, my friend. If you can provide mountains of data and prove your point, do so. Why bring in negativity like "you'll never listen"?
And as far as your 1000 sq feet per head calculation, I haven't seen a more naive assessment of how much footprint a man uses.
Come on man, don't you get it? My original point was actually to show you how statistics can be manipulated to show literally anything.
As an example, I used that 1000 sq ft calculation.
Don't get literal and go postal.
Once again I urge you, question everything.
You said that resources are scarce - and dwindling.
I just tried to illustrate to you that resources are always scarce, but data can be manipulated to show that they are plentiful.
My point was that collectivism is more wasteful, and thus less efficient at using these scarce resources for the good of a people.
Now about dwindling - it's not the same thing as scarce - and I haven't seen much proof that our resources are dwindling irreplaceably.
For instance, the water table - sure it's been falling. But that is, as you say, the laws of physics. If you suck out enough water from the ground to have agriculture in the desert, then sure the water table will fall.
Does this make it irreplaceable? No. Let enough humans do enough foolish things, then they'll die, and the water table will be just fine.
Even if we cut down all trees on this planet, does it mean that no trees will ever grow again? There was a time on the earth when there were no trees.
The only thing foolish humans will succeed in doing is wiping their own species and that of many others out.
In the grand scheme of things, so what?
If you're going to try to solve the problem, then you have to begin by trying to find the root cause. "Tragedy of the commons" is nice, warm and fuzzy, and vague enough that you can't act at all against anything to avert the disaster.
Or perhaps you think it can't be averted at all - like a fatalist.
I'm not one of those.
>> The only thing foolish humans will succeed in doing is wiping their own species and that of many others out.
:) now we have a doomsday hypothesis too do we?
analog: it is where exactly it keeps circulating. if it does not become available for growth and instead is locked up in massive amounts in real-estate transactions, the goods that are bought with that money are confined to those goods.
When you receive a crore rupees of black money, you have a choice of where to spend it, don't you?
Why would you spend it only on real estate?
Why wouldn't you use it to invest in an industry?
Are you trying to say that everyone who receives black money instantly goes and buys real estate and gold with it?
Surely some people go invest it in stocks or in industries.
And surely people who have white money also buy gold and real estate.
Now where is the money when a SME needs a loan going to come from?
Where is the money when there is a growth stagnation (A owes B owes C owes D owes A and so none can do business as an example) going to come from?
the govt. prints!
So if government got all its tax revenue and there wasn't any black money, the government wouldn't print or wouldn't need to print?
In the US, there is very little black money - every transaction is tracked and taxed, no matter how small.
But the US government (or Fed, to be specific) continues to go on printing. How come?
:) now we have a doomsday hypothesis too do we?
Not at all. It's a conditional, to take a term from programming languages. An if-then-else.
if (you put your hand in the fire) then (your hand will get burnt) else (you'll be fine)
Similarly,
if (humans are foolish about how to use scarce resources efficiently) then (they'll wipe themselves and possibly others out) else (the resources will be fine and we won't need to worry about them)
You want to misinterpret what I say, go right ahead.
>> When you receive a crore rupees of black money, you have a choice of where to spend it, don't you?
yes. when you have a gift voucher for shoppers stop, you spend it in shoppers stop. think about it. bit of an exaggeration but you will get the point.
>> Why would you spend it only on real estate?
there is no centralized tracking of getting all properties owned by 'xyz'
>> Why wouldn't you use it to invest in an industry?
can be tracked extremely well. you know about what happened with the 2G scam money trail.
>> Are you trying to say that everyone who receives black money instantly goes and buys real estate and gold with it?
i dont have the stats, i wont make the claims but if i have money that should not leave a trail, i know damn well where _I_ would spend it ;)
>> Surely some people go invest it in stocks or in industries.
And surely people who have white money also buy gold and real estate.
No one is denying that.
>>So if government got all its tax revenue and there wasn't any black money, the government wouldn't print or wouldn't need to print?
>> In the US, there is very little black money - every transaction is tracked and taxed, no matter how small.
>> But the US government (or Fed, to be specific) continues to go on printing. How come?
greed has various forms. we are talking about the form found here. there the money was locked up in RE due to a credit bubble unlike here where its a mix of black money and credit. where there is a bubble, there is stagnation and there is printing.
>>You want to misinterpret what I say, go right ahead.
was hoping you would have a funny bone mate. sorry about that.
was hoping you would have a funny bone mate. sorry about that.
Sorry - my mistake, and a f*cking retarded one at that.
I get the humor now - apocalypse and all that.
I'm embarrassed like the last guy who laughs at a joke...
yes. when you have a gift voucher for shoppers stop, you spend it in shoppers stop. think about it. bit of an exaggeration but you will get the point.
You're right, it is an exaggeration.
there is no centralized tracking
And you're right that there is an incentive to keep money in things that can't be tracked.
But there is all the framework for tracking real estate - you need a PAN card, bank account and whatnot. Most people don't do "benami" these days.
Currently, the game is to go into debt as much as possible and get multiple properties. Rent, take the tax break and hope your property appreciates.
This is what fuels the bubble, much more than trying to park money which you don't wish to show as income, or at least so I think.
Or, to put it clearly, I think this is a credit fueled bubble far more than a black money fueled bubble.
In my opinion, the ratio may be 90-10 credit to black or even more towards credit.
Perhaps I'm wrong, but I base my opinion on the bubbles in places like Europe, US, Australia and so on where black money is negligible but the bubbles raged unabated.
@Dhiman,
You have already established that Black Money is not the reason for fueling real estate bubble. There will always be new people on the board who would raise the same questions again and again but If we keep harping on the same points, the decision becomes regressive.
I guess we need to start discussing what actions one must take to profit from the coming RE bust. Or whether the Indian govt. will try to prop up the bubble. It is already expected that RBI will cut rates in 18th. What happens then.
Pardon me my ignorance but who is providing the credit for the Indian bubbles?
Isn't it an oft repeated claim that Indian real estate is bought mostly on the strength of savings and the loan component is smaller as compared to, let's the American situation before the mortgage bust?
>>You have already established that Black Money is not the reason for fueling real estate bubble. There will always be new people on the board who would raise the same questions again and again but If we keep harping on the same points, the decision becomes regressive.
his point today however was proving money was grey or some such exercise, the point of which eludes me still. not to mention his question on why we need foreign investors. regression indeed, but of a different kind i smelt.
Nope, Pawan got it right, you didn't, analog.
The point has always been (since I've been writing on this blog) that black money is a red herring, and discussions about it do nothing more than obfuscate the true nature of the bubble.
You brought up foreign investors and so on, and you threw around terms and concepts with lightning speed, and I just told you that none of that is simple and straightforward.
There's a saying - fools are so certain of everything, but wise men are full of doubts.
I told you my doubts.
If you find the concept of grey money laughable, you should also find the concepts of black and white money laughable, and for exactly the same reasons.
I'll take Pawan's advice and try to focus on something else: what is, is. What matters it? Let's figure out how to make money from this all.
BTW, I'm always for making more money, becoming richer and everything - within my ethical and moral boundaries of course.
>> You brought up foreign investors and so on
I brought it up because you were asking why a country doesn't print as much as it wants when it wants it instead of taxation. that discussion required it. remember what happened when the govt. was considering retroactive taxation back in apr? it led to fuming foreign investors (read vodafone) and had to be quickly withdrawn. we might as well have printed its equivalent and it would have had the same effect, that's why we don't. we can never print as much as we want, it risks losing foreign investors and our own companies that have debt in USD.
>> There's a saying - fools are so certain of everything, but wise men are full of doubts.
who is the fool here, i am having doubts. oh good, that must been am not one. :)
>> BTW, I'm always for making more money, becoming richer and everything - within my ethical and moral boundaries of course.
I like how you skipped 'legal' there. intentional?
http://www.bloomberg.com/news/2012-06-11/s-p-says-india-may-be-first-bric-nation-to-lose-investment-grade.html
black money is not fake money. But fake money is black money. When black money cannot be traced, so is fake money.
Let's say there was no fake money in play.. the white money quantity (that is on books) should lessen... and quantity of black money increases given today Indian culture and economy scenarios. But GDP number wise and on book India is strong on white money. So here is contradiction. So where is black money originating from?
hmm.. taxation is all different game to talk about.
I brought it up because you were asking why a country doesn't print as much as it wants when it wants it instead of taxation.
And your answer did not even come close to the truth. Not by light years.
who is the fool here, i am having doubts. oh good, that must been am not one. :)
Ha. Ha.
I like how you skipped 'legal' there. intentional?
The law sir, is an ass.
@Dhiman
It's an RE blog, so I don't want to get into a lengthy resource depletion discussion. Neither am I going to post any links for you to read since there is a lot of garbage out there on internet. I would however recommend a few books for you to go through.
1. "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy" by Matthew Simmons
2. "Too Smart for our Own Good: The Ecological Predicament of Humankind" by Craig Dilworth
3. "Limits to Growth: The 30-Year Update" by Donella Meadows et al
4. "The Upside of Down: Catastrophe, Creativity, and the Renewal of Civilization" by Homer-Dixon
5. "A Forest Journey: The Story of Wood and Civilization" by John Perlin
A few other well known books are Guns Germs and Steel by Jared Diamond and Collapse of Complex Societies by Joseph Tainter
All of them are well researched books with plenty of references and data. You are free to look at just the data and derive your own inferences. You can also read the German Army's report (http://www.energybulletin.net/stories/2010-09-28/review-putting-bundeswehr-report-context) on Peak Oil and US Army's strategic report on challenges in 21st century.
The common thread across all books and reports is that they analyze existing and past problems from the perspective of systems theory, thermodynamics and natural history rather than going into cultural nuances such as culture, religion, ethics etc etc which are extremely vague terms and are very hard to pin down across cultures. What you will find is that any civilization is basically a prisoner of it's environment and resources. Once they go so does the civilization.
Yes, peak oil. I know. Believe me, I've researched it.
As an addition to your excellent references, please add this one video.
And please do some research about abiogenic oil. I'm sure it'll add some fuel to the fire, as it were.
Now back to dwindling resources.
There is a disconnect between what I am saying and what you think I am saying.
I agree with what you are saying; and am going one step further - it's not only the environment and resources that man is a prisoner of; he is also a prisoner of his own disastrous thought.
What you are saying is that nature is such that one must eventually die, and I'm saying that whatever we're doing is the equivalent of committing suicide.
Good policy won't prevent eventual demise - but not committing suicide is certainly preferable, no?
Your suggestions - more laws, more restrictions, trace every rupee for black or white, show no mercy and tax everybody period - all these policies are deeply rooted in socialism, communism and collectivism, and have proved to be disastrous time and time again.
Such policies and laws inevitably lead to favoritism, corruption, nepotism and eventually, worse exploitation of the very natural resources you want to conserve.
So, effectively what you're saying is, since we'll die anyway, lets just commit suicide.
I'm opposing that - I'm saying, sure we'll all die eventually, but let's try to make life better and lets not commit suicide.
>>And your answer did not even come close to the truth. Not by light years.
And how is that? lets do this step-by-step
1. Do you agree that we cant print because it will scare away foreign investors?
2. if you don't agree to #1, then do you believe that we dont need foreign investors?
3. if yes to #2, do you realize that it would mean not having a company like vodafone that has revolutionized mobile communications in india?, or for not having all the technology we use that were invented and owned by patents abroad
now, which part of this do you have a problem with, that you makes you still claim printing money is an option to taxation?
I'll go along.
1. Do you agree that we cant print because it will scare away foreign investors?
Depends on how the exchange rate is handled, and whether the printing translates to weaker INR vs USD (or whatever) or whether a local bubble has been blown which gives investors 20% p.a. with relatively stable exchange rates. This latter scenario is such that more printing will drive in more investors.
2. if you don't agree to #1, then do you believe that we dont need foreign investors?
We don't need foreign investors. We may want them, but we sure as heck don't need them. If we have come to a point wherein we need foreign investment, then our economy is already dead and there's no use flogging it further.
3. if yes to #2, do you realize that it would mean not having a company like vodafone that has revolutionized mobile communications in india?, or for not having all the technology we use that were invented and owned by patents abroad
Foreign investment is a want, not a need. Ergo, Vodafone is "nice to have", but one could do without it just as well.
Humans did without cellphones and the like for their entire evolutionary history, and they did just fine - given that you and I are here and talking.
now, which part of this do you have a problem with, that you makes you still claim printing money is an option to taxation?
That no part of this has any connection with taxation - or at least, you haven't been able to establish any such connection between statements 1, 2 and 3 and taxation in a fiat world.
>> This latter scenario is such that more printing will drive in more investors.
so you do agree that you cant print any time you want but at certain times its beneficial in terms of attracting investors. in that case, it implies that the govt cannot blindly print because its "extract tax" time because it will scare away investors who will not know when their assets will be reduced in value and by how much.
for the rest, you seem to imply we don't _need_ foreign investors as we can very well be cave dwellers. do you think foreign investment (read companies that make products that you use day-to-day) is always on a want and not a need basis? forget vodafone and think pharma companies or ones that make surgical equipment. would you still say they are wants and not needs?
so you do agree that you cant print any time you want but at certain times its beneficial in terms of attracting investors.
I said that if you wanted to attract foreign investment, you may do it by some mechanism that went opposite to what you were postulating.
in that case, it implies that the govt cannot blindly print because its "extract tax" time because it will scare away investors who will not know when their assets will be reduced in value and by how much.
I'm sorry - that sentence is just unparseable.
forget vodafone and think pharma companies or ones that make surgical equipment. would you still say they are wants and not needs?
This isn't about pharma or whatever. It's about domestic production and manufacture that invigorates a local economy versus one that only runs on foreign money.
You seem to be saying that attracting foreign capital is the reason why governments tax and don't simply print money.
Think of the US - it doesn't need or want any foreign capital - heck, their money is the world's reserve money. So at least they could print as much as they wanted without onerous taxation, right?
This debate isn't about India alone. It is about any fiat money emitting government that simultaneously taxes.
That ignominious list probably includes every nation on earth.
Getafix: Pardon me my ignorance but who is providing the credit for the Indian bubbles?
Banks are. SBI, HDFC, ICICI ... all of them.
It's rather simple - come up with a down payment, 3 payslips, and a PAN card, and you can get pre-approved in short order.
Or, if you're from abroad, a W-2 and two paystubs will do.
That simple, and no credit check or anything - no such mechanism in India anyway.
That simple, and no credit check or anything - no such mechanism in India anyway.
http://www.cibil.com/
@"Man in an inherently competitive (like most mammals). This means that no system/religion/country on the planet would ever offer fairness (economic, social or even moral) - Whatever you try something or the other woven in man's psyche will override and create the elite, middle class, lower classes and an underclass."
Please don't scapegoat your own prejudices. "It's in the psyche/genes/reptilian brain!" Shrug.
Evolution is a continuous process. Certain societies today are more equal than those 100 years ago and even then some societies 100 years ago were more equal than those 1000 years ago etc.
Idle folks still arguing over definitions and depressing each other with theoretical arguments, in the real world, prices are poised to reach even higher as luxury end of the market is picking up steam and on it's way to becoming red hot.
Ground observation from Pune is that luxury projects are getting booked before even launch! Big demand for designer homes with brand recognition as Trump, Yoo, Local brands like Gauri Khan (SRK's better half) and Twinkle Khanna getting in on the act as well.
Certain class of end users have tremendous purchasing power.
Middle class being priced out and pushed to outskirts.
Over time, Indian cities will increasingly take on Western European model of downtown with exclusive high rises for rich and penthouses for super rich. Suburbs for those with more modest economic means. Poor / homeless will squeeze into the gaps.
now back to your scheduled program...
>>That simple, and no credit check or anything - no such mechanism in India anyway.
where did that come from? you really are in a cave mate. like the other poster pointed out, ever heard of the cibil database? they have been tracking credit transactions for at least 10 years including your loans, credit card swipes, payments etc. via affiliation with all leading banks and housing finance corps. and the banks do their due diligence.
@"Thus, there should be no need to extract taxes from the populace at all.
Simply print up as much money as is needed for whatever common good and be done with it."
Correct. That's the unofficial and much preferred policy of the rich/elite class.
Once your wealth is stashed in inflation protected assets you can unleash inflation on the middle class / poor.
Ofcourse this toxin needs to be administered in token amounts lest you kill the patient or worse cause the patient to wisen up and get yourself killed in the process. ;-)
What's the debate over black money? Issue is well known and covered including on Wikipedia.
Probably one issue where every Indian from irrespective of background has a good grasp over the concept.
Read and update the reference if required:
http://en.wikipedia.org/wiki/Indian_black_money
where did that come from? you really are in a cave mate.
The cave has a name. USA.
Sorry, my bad about the cibil database.
However, the point remains - even in the US, a credit check via SSN is mandatory, but that didn't stop banks from doling out credit to anybody who had a pulse.
This is why chalta hai attitude prevails in India and why people dont care
http://www.punemirror.in/article/2/201206122012061208564787896b8017/Sule-paves-road-to-solving-Zinnea-residents%E2%80%99-problem-.html
Now Pawar's daughter has bailed them out and soon everything will be forgiven and forgotten
Anon above, a disabled and helpless citizenry is the politicians wet dream.
Sadly very few amongst us are corruption free to be able to throw the first stone at our corrupt leaders.
Everyone wants to take the law into their own hands and follow their version of democracy. Well, this is the end result, opportunistic parasites ruling the roost...
So, effectively what you're saying is, since we'll die anyway, lets just commit suicide.
I have no idea how you drew that conclusion. I am not proposing anything like that, I am asking for the growth paradigm to be changed.
Instead of GDP let's focus on health, education and happiness and instead of inventing new technology to cope with increased numbers every time let's bring down the pop.
And I am not proposing anything draconian or new, taxation is necessary for a govt to function. All I am saying is that make tax laws simple and bring down the rates, I don't any see socialism in it, it's a rational move not a popular one, after all someone has to pay for the roads, the judiciary and the police. They are not free. Govt should exit all service sectors and commit itself only to making guidelines and laws. What's socialistic about it.
And you lost all credibility with abiogenic oil. I haven't heard of a bigger load of nonsense apart from 'intelligent design'.
contd..
Governments cannot be abolished altogether, they can be made smaller in size but they cannot be done away with, they are necessary for a healthy society whether it's the municipal government or the national.
Anyone who has studied people at close quarters knows what kind of basic instincts take over in the absence of authority, only an insignificant minority of people in a society are capable any modicum of self-discipline.
Meanwhile in the real world:
Pilots defaulting on EMIs
Of course this is India, black money, we are different blah blah blah.
Local brands like Gauri Khan (SRK's better half) and Twinkle Khanna getting in on the act as well.
There can not be a bigger warning sign than this. Run run run...
I have no idea how you drew that conclusion. I am not proposing anything like that,
The following statements gave me that impression.
All incomes above a limit should have a flat tax, absolutely no mercy shown. Even tax on insurance claims. In return tax rates can be lowered to very low levels, say 5-10%.
Yes, you do say reduce the level of taxation, but you also say "no mercy shown" - which is the way of dictators and tyrants.
It's also this monopoly on force which keeps a place from slipping into anarchy
You seem to be in the "government is a necessary evil" camp; and you don't seem to want to even consider that alternatives are possible, and have even existed in human history.
The common thread across all books and reports is that they analyze existing and past problems from the perspective of systems theory, thermodynamics and natural history rather than going into cultural nuances such as culture, religion, ethics etc etc
You want to ignore the vast mass of human data and solve the problems of humanity by looking at thermodynamics?
Don't get me wrong, Sadi Carnot is one of my ideals - he pretty much came up with the Carnot cycle by using "thought experiments", and I idealize that.
But choosing to ignore data, especially highly specific data from our own culture is hardly fair. It is almost as if you have a bias against any thought that goes against generally accepted current ideas - a bias that is wholly against the spirit of scientific inquiry.
Taxation should be just and meaningful, which is why people earning below a limit are not taxed, and that limit should correspond to a basic healthy lifestyle in society.
This is the epitome of socialist or collectivist thought.
Who decides what is "just and meaningful"? Who decides what is the lower limit? Who decides what is a "basic healthy lifestyle"?
You want to ascribe this amazing clairvoyance to a group of people (government, committees, whatever) - when individually none of them have such power?
And you don't see the lack of logic in it?
To be continued... (hate this 4096 char limit)
Continued...
It's not a problem of government tyranny. Without govt intervention the recession would have been thousand times worse
How do you know this? You ignore history (of which the most authoritative is actually Indian), you ridicule me when I point out alternatives which existed in our own past.
How come you worship government so much that you even say that this isn't because of government "tyranny"?
Have you heard of the tyranny of good intentions?
Anyone who has studied people at close quarters knows what kind of basic instincts take over in the absence of authority, only an insignificant minority of people in a society are capable any modicum of self-discipline.
You are convinced that the nature of humans is base, mean and low.
And yet you are simultaneously convinced that when the most sociopathic of such base, mean and low individuals are taken together and become a government, they miraculously become smart, intelligent and capable of deciding the good of the entire mass of humanity.
By doing as you say, hand over more power to sociopaths and psychopaths in government in exchange for less taxes, you are damning humanity to an earlier demise - or as I called it - suicide.
You may not realize this, but your policy recommendations will lead to suicide.
Re. abiogenic oil. Go to the wikipedia page I linked; scroll down to the extra-terrestrial argument. Here's the text:
Some comets contain "massive amounts of an organic material almost identical to high grade oil shale (kerogen)," the equivalent of cubic kilometers of such mixed with other material;[61] for instance, corresponding hydrocarbons were detected during a probe fly-by through the tail of Comet Halley in 1986.
It's not my credibility at stake here - it is that of existing theories.
Those who claim to know everything about everything are usually dead wrong.
Biogenic origin of oil is a theory, and a damn good one; but there is data that also supports abiogenic origin.
Not even wanting to consider that is acting like the church that did not even want to consider heliocentrism.
Who decides what is "just and meaningful"? Who decides what is the lower limit? Who decides what is a "basic healthy lifestyle"?
It's a good question...but it's an intractable problem like many human problems.
massive amounts of an organic material almost identical to high grade oil shale (kerogen)," the equivalent of cubic kilometers of such mixed with other material;[61] for instance, corresponding hydrocarbons were detected during a probe fly-by through the tail of Comet Halley in 1986
I think you are confused between methane on Jupiter and oil on earth. Hydrocarbons even amino acids have been detected on comets and asteroids. It's not the same as oil in the earth's crust, biotic oil production is a well studied phenomenon. Which is why it doesn't exist anywhere and everywhere, which should be the case if it was abiogenic.
And yet you are simultaneously convinced that when the most sociopathic of such base, mean and low individuals are taken together and become a government, they miraculously become smart, intelligent and capable of deciding the good of the entire mass of humanity.
You are both right and wrong, governments suffer from the same delusions as humans do but they are also entities which can detach themselves from the situation and sit in peace and think rationally. It's what differentiates it from a mob. It's the best one can have.
The importance of governments and or the concentration of power and access to plentiful resources is quite evident from the fact that violence levels in human society are now the lowest ever in recorded history. In other words we've never had it better. We are living the longest, eating the best food and living the best life possible. What argument can be made against this ?
To summarize I recognize that humans are still animals and are beset by the same instincts that are present in all animals, violence, territorial ambitions and an urge to consume as fast as possible etc. Although we also have cortex that is capable of rational thought which does not exist in another animals, it cannot always compensate for our reptilian brain.
And I don't claim to know it all, I am only talking about stuff that has already been thoroughly studied but is ignored.
I rest my case.
http://timesofindia.indiatimes.com/business/india-business/April-industrial-output-up-0-1-worse-than-expected/articleshow/14051769.cms
Industrial production growth slows to 0.1% in April, RBI may cut rates
>>It is almost as if you have a bias against any thought that goes against generally accepted current ideas - a bias that is wholly against the spirit of scientific inquiry.
and you sir, have a bias of equal measure in the other end of the spectrum, and a sophomoric love for conspiracy, rebellion and disbelief.
and you sir, have a bias of equal measure in the other end of the spectrum, and a sophomoric love for conspiracy, rebellion and disbelief.
Thank you, thank you, thank you for that wonderful compliment.
I have to say, there are so many posts and analysis in last couple of days. If only you guys put the same effort elsewhere, you will make enough money to buy a house and more and not have to waste your time on this blog ;-)
>>I have to say, there are so many posts and analysis in last couple of days. If only you guys put the same effort elsewhere, you will make enough money to buy a house and more and not have to waste your time on this blog ;-)
and what makes you think we don't have one (or a few) already? ;)
will be nice to have a poll on this blog to see the demography of visitors.
own an apartment - fully paid for
own an apartment - paying EMIs
own a house - fully paid for
own a house - paying EMIs
own a residential land - fully paid for
have cash in INR and speculating to buy apartment/land/villa
have cash in USD and speculating to buy apartment/land/villa
wondering if i should take a loan and buy an apartment with some down payment
wondering if i should take a loan and buy land
wondering if i should take a loan and buy villa
and so on.
and what makes you think we don't have one (or a few) already? ;)
If you already had, why would you visit this blog or why would you not sell your house and make a fortune ;-). People come here to take some consolation that there are similar people and console each other on not able to buy a house and the prices are a bubble and only you people will have the last laugh. And when you guys run out of economics to talk, you start chatting about evolution, anarchy, Governments et al. :-)
People come here to take some consolation that there are similar people and console each other on not able to buy a house and the prices are a bubble and only you people will have the last laugh.
Bwahahahahahahahahahahahaha.
Already having the laughs here, dude. If only you knew.
Already having the laughs here, dude. If only you knew.
The guy who only laughs for himself is ......(fill in the blanks)
>> If you already had, why would you visit this blog or why would you not sell your house and make a fortune ;-). People come here to take some consolation that there are similar people and console each other on not able to buy a house and the prices are a bubble and only you people will have the last laugh. And when you guys run out of economics to talk, you start chatting about evolution, anarchy, Governments et al. :-)
projection bias
The guy who only laughs for himself is ......(fill in the blanks)
Bwahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha!!!!!!!
Stop it! You're killing me!
This forum is getting funnier with each post!!!
HEHEHEHEHHE!!!!
http://ksmfinanceindia.blogspot.in/2012/06/this-country-is-going-to-collapse.html
Today IIP data comes are 0.1. I am pretty sure that the govt spin masters did not want to show negative figures for second consecutive month. So they made as if it looks like a positive figure. The drama does not end here. The brokers ( lets cut rates lobby) started their rheoteric and this time they are very arrogant. They said that they are not bothered about inflation. So now the cat is out of the bag. We know all along these b******s are not bothered about aam aadmi and they are concerned about their fat paychecks and corporate profits. Since they are earning in crores in case of slow down or recession they can leave happy life. Only the middle class herd crowd will suffer hugely. Sadly this middle class idiots are not understanding this and playing cheer leaders to corporate mafia.
If we cut interest rate, we are officially gonna to say that our interest rate is fuckingly low than the official inflation. Won't foreigners laugh at us by seeing this. Remember I am not talking about the CPI which many countries use. We talk about WPI. CPI is 10 and more. WPI is 7 and more. Now already our interest rates are less than inflation which is a great joke. But we are now going to do that in terms of WPI. RBI is going to be a laughing stock.
Dont forget the currency is damaged and out of shape now. The prudent way is to raise rates. That is what a educated banker is supposed to do.
Also please dont forget that the rate cut will not be passed on the customers. It will be eaten by the banks.
RBI is misssing another golden opportunity to prick the bubble.
But one silver lining is Chakravarty is making right noises. But one summon from north block will make these guys to eat humble pie.
So Any thoughts if we are looking at a system with schrodinger's point of view-
http://en.wikipedia.org/wiki/Schr%C3%B6dinger%27s_cat
where exactly are we? in side the system? outside the system? cat? or even the atom itself?
Local brands like Gauri Khan (SRK's better half) and Twinkle Khanna getting in on the act as well.
There can not be a bigger warning sign than this. Run run run...
Dude, it's designer stuff. For the exclusive 0.1% of the market.
Average Indian wouldn't know or appreciate design if Steve Jobs himself came and slapped them in the face.
S&P downgrades India to junk status
India no more part of BRICS
These are loud rumors but very likely true by July 2012.
IF FIIs flee India and if India finds it difficult to keep its commitments, the financial storm is likely going to be tsunami.
I just wonder if Real Estate is going to be affected. Appreciate comments from the economic pundits in this forum
I read a funny thing in TOI today. UN, EU & US say that India, Pakistan, Bangladesh & Sri lanka are exempted from Iran Oil Embargo. Now, all these countries are nearly bankrupt and Iran needs cash to survive. I really can not figure out this trick. This is as puzzling like our real estate prices.
Second news item is our builders are running away from Dharavi project. Does this mean that the govt is redistributing the acquired land to new slum lords for a premium.
The day has started with puzzles. Hope some of you will pool in your ideas to solve these puzzles
The imminent recession is likely hit the computer coolies very hard, I being one of them. I am spending sleepless nights thinking how to pay the EMI. When one goes to sellers market, one realizes that you can not get half the price what one paid last year. It would be interesting to know if any of you face similar problem
@anon above
If you don't have carrying capacity then better to drop sooner than later. this is purely financial advise.
If this is your only home you should try to beg, borrow from in-laws/family/friends and continue to make payments because without property ownership you will be considered a failure as per the prevailing culture.
@I just wonder if Real Estate is going to be affected. Appreciate comments from the economic pundits in this forum
Not a pundit by any stretch but based on what has played out in other countries and knowing the Indian real estate landscape, investment/speculative real estate will be decimated as builders will simply abandon ongoing projects as sales dry up.
Loans backed by built up property will most probably get principal adjustments (at tax payer cost) so banks don't collapse if too many borrowers default on payments.
Ultimately anyone who bought in the last 5-10 years (especially those in the fringe areas) will suffer the brunt since government/infrastructure spending will crawl at a snails pace as we are forced to balance the books not unlike what is happening with Greece and Spain.
@Pawan - 'I guess we need to start discussing what actions one must take to profit from the coming RE bust'
The smart money train has already left the station. Look at RE stocks. Most of them are off 80-90% from their 2007 highs.
What we could do is start building up liquidity. My guess is that in a year or two, we might be presented with a once-in-a-lifetime buying opportunity. At that time, folks who can hold their nerve and step in at periodic intervals into a fast falling market will be richly rewarded.
It's a good question...but it's an intractable problem like many human problems.
No it's not intractable at all. Here's where a study of history helps. Thing is, our ancestors already found the solution, it's just that people either don't know it or don't think it'll work.
But it did work for ages.
It's not the same as oil in the earth's crust, biotic oil production is a well studied phenomenon.
Careful now! Studied by whom? Oil companies and universities funded with oil money? Independent scientists?
Methinks that it is tremendously advantageous to oil companies to promote a theory that implies that oil is in imminent danger of complete exhaustion.
I'm not saying that the theories are all wrong, mind you - but the parties involved are certainly not neutral.
Which is why it doesn't exist anywhere and everywhere, which should be the case if it was abiogenic.
Nobody argues that iron or gold or silver or tantalum is biogenic in origin, and yet it is not found uniformly in the earth's crust.
Iridium, osmium and other rare earths are overwhelmingly found in Africa. Life originated in Africa; hence iridium, osmium and other rare earth metals must be derived from living matter.
If this strikes you as illogical and stupid, that's because it is.
Let me state my position clearly, instead of arguing further on this topic.
I believe that the probability of the biogenic theory of the origin of oil being correct is high, but not 100%.
...cont'd
cont'd...
You are both right and wrong, governments suffer from the same delusions as humans do but they are also entities which can detach themselves from the situation and sit in peace and think rationally. It's what differentiates it from a mob. It's the best one can have.
You mentioned systems theory, right? What makes a system fail? The weakest point, right? It fails first, and then starts a series of events that eventually lead to catastrophe.
The weakest point in a governance system is a person getting power and being trusted to put aside his own desires, wants and lusts and think rationally for others, when that person doesn't even do that when he does not have power.
This weak point will eventually fail - the first sufficiently weak minded corrupt person with sufficient power will change the law to suit himself or his buddies, and voila! - the next thing you know, your system is in tatters.
Systems theory predicts this and this is borne out by history. You think that the Roman empire died because of a lack of natural resources? They died because the senate became corrupt and completely out of touch with the average Roman.
There was an exodus out of Rome, and ordinary Romans even preferred to help the barbarians overthrow the empire, so onerous had its taxes and so corrupt had its government become.
The famous saying "Rome burns while Nero fiddles" epitomizes this fall.
And once again, emphatically - NO! This is not the best we can have. There have been better systems in history. Educate yourself if you want, but please don't delude yourself and others by hiding behind fatalistic attitudes exemplified by words like "this is an intractable problem" or "this is the best possible".
To summarize I recognize that humans are still animals and are beset by the same instincts that are present in all animals, violence, territorial ambitions and an urge to consume as fast as possible etc.
No. That's a terrible way to think of ourselves. Ancient Indian thought doesn't think of us as "fallen angels" or "the sons of those who committed the original sin" - our philosophy tells us that we all are divine, and capable of a tremendous amount of good and love and happiness.
If at all, you should try to remind people of their own higher nature - not because it is "good" or "moral" or whatever, but because of sheer self interest. If people consider themselves animals, and live like animals, then they'll also die like animals.
If there is a true tragedy, it's that your education and thought has convinced you that you are not a divine being capable of greatness but rather an "animal".
I am truly sorry to see this self-loathing.
Anonymous: If you don't have carrying capacity then better to drop sooner than later. this is purely financial advise.
Polt: What we could do is start building up liquidity. My guess is that in a year or two, we might be presented with a once-in-a-lifetime buying opportunity. At that time, folks who can hold their nerve and step in at periodic intervals into a fast falling market will be richly rewarded.
If I wanted financial advice, I'd first read very carefully these above lines - and make sure I understood every word before risking even one red cent on anything.
Polt is dead on. The right time to buy is not into a rising market, but into a falling one, because you are cost averaging down! Similarly the best time to sell is into a rising market, because you are profit-averaging up.
99% of people lose money because they do exactly the opposite.
rupee poised to breach 56 again today...
My favorite author is back!
@Dhiman - "99% of people lose money because they do exactly the opposite."
True. Most people do not realise that assets become safer when asset prices fall.
Instead they join the herd when they are rising and again join the herd in getting out when prices fall.
@Anon - 'one realizes that you can not get half the price what one paid last year.'
While this may be an extreme case, it is true that new homes sell at a significant premium to used ones (at least in India and China). Which is why many speculators do not rent out the homes that they own.
Systems theory predicts this and this is borne out by history. You think that the Roman empire died because of a lack of natural resources? They died because the senate became corrupt and completely out of touch with the average Roman.
That's exactly what I wanted to point out, this is the same sorry excuse that is given for fall of every single empire. It's nothing new and is always mentioned in retrospect..."oh the country fell because it became corrupt", "the people are lazy", "the country is morally bankrupt" blah blah blah. It's not an objective description and very hard to pin down, besides in the case of the Roman empire which existed for close to 300-400 years before it collapsed why did
corruption begin only at that point of time and not earlier.
The thing is that corruption always exists, one could argue that as time progresses the people in power grow more complacent but people in power die as well and a new generation takes over all the time. Empires and societies don't collapse because of that. Many hunter gatherer societies like the San people have existed for close to 40,000 years, have they collapsed because of corruption in their society ? Or do they have some magic potion which prevents so called 'moral' corruption in their society...the answer is No.
So what's really behind some societies collapsing while others sustaining themselves for thousands of years ? The answer lies in society's ability to find energy and resources to solve their problems. A government is basically a problem solving mechanism, problems that cannot be solved by a group of individuals are solved by the government.
And problem solving requires complexity which in turn requires energy, as a society grows so does it's complexity and so does it's energy consumption, when a society runs out of resources to maintain complexity it collapses. It's as simple as that, it's not the corruption hocus-pocus.
Contd....
RE will never go down in India because it will be sustained by NRIs, rich Indians and corrupt govt. Indians pay 30% tax but get nothing in return. No govt facilities, schools, employment insurance. All this tax money will flow in RE. Govt will never let RE fall in india.
If you think of the society as an IC engine...you could think of corruption as efficiency. By itself a low efficiency engine does not collapse when compared to a high efficiency engine.
Although a low corruption society definitely can run longer on lower amount of resources it cannot run on no resources. The Romans collapsed because they could no longer finance their humongous armies which were required to pacify the mass of rebellious slaves and disgruntled population. After 300 years of empire building, they had stripped their forests of timber and had run out of places to plunder.
It's a story that runs across almost all major societies, if you study deforestation patterns in early history you will understand what I mean. It's hard to imagine now but once upon a time the middle east was a thriving green forest with lots of timber, as the forests were depleted the empire collapsed and moved west to Greece where forests were still accessible and when the Greeks destroyed their forests the empire moved further west to Rome, and after Rome it was Germany and France. All of this is not a coincidence.
Look I am not saying that things like culture and religion don't matter, obviously they do but they are secondary and subservient to environment and geography.
Oh and adding to the IC engine analogy...the biggest and most complex engines require the highest amount of maintenance as they age.
Of course none of them can run forever. They must be recycled and built again.
Correct me if I'm wrong but your points are these:
People are fundamentally animals.
Societies collapse not because corrupt people eventually start gaming the system but because they run out of natural resources to exploit.
Government is a problem solving mechanism that can solve problems that individuals cannot solve.
I agree that when you run out of a vital natural resource, your civilization is more or less over. That much is true.
But you've got the role of government completely wrong.
Name one problem that any government solved, anywhere in the world, and at any time from the big bang till the present instant.
The answer is - not one.
Problems are solved by individuals free to pursue their desires, not by decree.
The only "solution" that governments have to any problem is imprisonment or genocide (that includes war).
Depleting natural resources? That must be because of overpopulation. Kill a billion or two. Or perhaps invade a neighboring country.
Corruption? That must be because rich people evade taxes. Imprison them all and show no mercy. Kill the worst offenders.
You idolize government - the very culprit that causes decay and demise.
There is a saying - a fish starts rotting from the head.
Societies aren't corrupt - only governments are.
When you transact with another private party - do you expect to be threatened that your work won't get done unless you pay a bribe? Does Airtel do that? Does even Reliance? Tata?
No, the only time you encounter such BS is when you interact with that den of snakes - government.
Governments become corrupt - because the worst kind of people go to government; corruption for a government is as natural as the sun rising in the east.
That starts the failure process.
You said that the Roman empire fell because, and I quote, "they could no longer finance their humongous armies which were required to pacify the mass of rebellious slaves and disgruntled population".
Get the cause and effect straight - government starts corruption and profligacy first - this causes a massive mis-allocation of capital - which in turn causes shortages of commodities even in the presence of abundant natural resources - which leads to rebellion and disgruntled populations - which requires humongous armies to suppress - which requires even more scarce commodities - but war itself is a mis-allocation of scarce resources and capital - and therein starts a positive feedback loop that destroys the system.
The San survived this long not because they always had abundant natural resources, but because they did not have a government to come and fuck it all up.
Name one problem that any government solved, anywhere in the world, and at any time from the big bang till the present instant.
You've gotta be kidding me...the space program, GPS, hydro power, public health programs, nuclear power, the suez canal, panama canal...the list is endless...couldn't you even think of one of these.
Polio would never have been eradicated in India if it weren't for the Govt's efforts. Govt's create a lot of problems as well but it's not all dark and gloomy.
And spare me the society is honest and govt is corrupt crap, the thing is that both are corrupt, one cannot exist without the other. Germans get a good(relatively) government because it reflects the German ethic while we get a bad one because our people are still uneducated and prone to religious and social ills. Governments are not some isolated entity, in fact it's not even distinguishable in many cases.
The problem is that you think emotionally and in black and white terms, the world is never like that. You've gone into the paranoid camp where even a Frisbee is a flying saucer.
The right time to buy is not into a rising market, but into a falling one, because you are cost averaging down!
Dhiman, this can't be universally true. There is no guarantee that the asset will ever raise again back. There CAN NOT be a simple empirical formula on investment else everyone would be millionaires. The only way is use individual judgement to be smart to ride the tide and exit before the bust.
the space program, GPS, hydro power, public health programs, nuclear power, the suez canal, panama canal...the list is endless...
So if mankind had not gone to the moon, or had GPS, or had public health programs or nuclear power or the suez or the panama canals - what - we'd be extinct? We wouldn't be able to survive?
What would have been the problem had none of this happened?
Humanity lived and flourished fine without GPS for a million years, and nobody ever thought that not having GPS was a problem.
If you had your facts straight, you'd know that GPS and the space program were nothing but arms races.
You're engaging in what is called circular reasoning.
couldn't you even think of one of these.
Umm, like I said, these are hardly problems, and the credit for their "solution" hardly goes to government.
Polio would never have been eradicated in India if it weren't for the Govt's efforts.
Now who's thinking emotionally?
So, do you know what other side effects were caused by the polio vaccine? Do you have statistics about whether autism increased as a result of vaccinations? Rather, do you have absolute, irrefutable proof that eradicating polio was not done at a cost greater than polio itself?
Autism was a rare disease once upon a time. Today approximately 1 in 88 kids in the US has an autism spectrum disorder. This has coincided with the widespread use of vaccines; and there seems to be a valid case to be made for correlation, if not causation.
Is this how your beloved governments solved the "problem" of polio?
(Yes, I know that mercury isn't used now in vaccines, and other vaccines than polio could be responsible and all that. I'm just using autism as an illustration of the "unintended consequences" of any action - or as your beloved governments like to put it - "collateral damage".)
I know you'll call me a conspiracy theorist for not believing the official line.
I'll call you naive for believing the official line without using your own critical thought.
The problem is that you think emotionally and in black and white terms, the world is never like that.
I've been accused of being a robot, an automaton and a non-human for not being able to think emotionally. You're the first person who understands my emotions! Wait - what is that salty liquid flowing down my cheek?
You've gone into the paranoid camp where even a Frisbee is a flying saucer.
All I do is tell the guy who claims it's a frisbee - "prove it!" and to the guy who claims it's a flying saucer - yes, that's right - "prove it!". That's not paranoia, that's not conspiracy theory. That's just being scientific and demanding validation for every claim. I know of no other way to find the truth.
You're simply upset that I'm not being a good citizen and rejecting the flying saucer claim outright.
aam aadmi - let me ask you one more question.
You said it yourself - societies grow more complex, then need more energy to maintain this complexity and then run out of resources or energy and die, right?
The example you gave was the San hunter gatherers - who never had that complexity and its cost, so they didn't die out.
It appears that you prefer stable societies that won't die for long, right?
It is also apparent that today's world is exceedingly complex and requires a vast amount of energy and resources, right?
Now, in order to achieve your ideal of a stable long lived society, we need to cut down complexity and energy, right?
But doing that would preclude government from doing things like agriculture in the desert, building roads, building the Suez canal and the Panama canal, or going to the moon or GPS or nuclear arms races.
In other words, would you agree that today, the biggest hindrance to solving the problem is that very entity that has the ability (in your view at least) to do so - government?
>>So if mankind had not gone to the moon, or had GPS, or had public health programs or nuclear power or the suez or the panama canals - what - we'd be extinct? We wouldn't be able to survive?
@dhiman - it looks more and more like you are averse to development in general. is survival is your lone criteria? you seem wonder who wants cellphones, who wants gps, who wants polio vaccine :) are you arguing for the sake of arguing?
>>So, do you know what other side effects were caused by the polio vaccine? Do you have statistics about whether autism increased as a result of vaccinations? Rather, do you have absolute, irrefutable proof that eradicating polio was not done at a cost greater than polio itself?
do you? you are the one with the conspiracy theory. now do go ahead and present your facts, we are waiting.
>>Now, in order to achieve your ideal of a stable long lived society, we need to cut down complexity and energy, right?
>>But doing that would preclude government from doing things like agriculture in the desert, building roads, building the Suez canal and the Panama canal, or going to the moon or GPS or nuclear arms races.
>>Now, in order to achieve your ideal of a stable long lived society, we need to cut down complexity and energy, right?
No.
That is where you are misguided. with that line of thought, if we did not have satellites in space, think how inefficient our usage of resources on the planet will be. these projects aim to make us more efficient. do stop your black and white thinking, you are sounding resoundingly stupid. now dont ask why did we even have to use resources efficiently when we need not be using resources at all (this has been your typical thought-process, so i am preempting your stupidity). we call it development and most of us think we need it.
t looks more and more like you are averse to development in general. is survival is your lone criteria? you seem wonder who wants cellphones, who wants gps, who wants polio vaccine :)
A luddite? Moi? Surely you jest!
are you arguing for the sake of arguing?
How'd you guess?
do you? you are the one with the conspiracy theory. now do go ahead and present your facts, we are waiting.
I don't (and can find evidence of correlation if I looked) but you don't get that I don't even need to.
Say you're given a glass of milk and you smell it and find that it smells rotten or rancid.
Do you need proof or logic to decide that you'd better not drink it?
Now to the guy who comes forward and says - it's fine, there's no problem here, sometimes milk smells like that - it's perfectly safe!
Now he must provide absolute airtight, irrevocable proof that his claims are true, right?
If you say that the burden of proof is asymmetric then you are right - safety and survival tilt the scales.
>>Now he must provide absolute airtight, irrevocable proof that his claims are true, right?
yes. correlation is not causation. more so in a conspiracy theory
That is where you are misguided.
Wow!
Aam Aadmi has been constantly arguing that as resources run out, we'll all perish but government is our only savior.
I've been arguing that as resources run out, we'll all perish, but government accelerates that process.
You're saying we don't even need to cut down complexity and energy use, because we won't perish - we'll send satellites into space, find new resources and Hallelujah!
Wow.
we call it development and most of us think we need it.
That argument works just about as well as this one: "We are sheep and most of us think that we should be jumping off cliffs."
Majority doesn't make right.
That last post isn't by "anonymous" - it's by me. Hit the "publish" button too soon. Apologies.
>>You're saying we don't even need to cut down complexity and energy use, because we won't perish - we'll send satellites into space, find new resources and Hallelujah!
yep! everything is exactly as it should be. we will constantly reinvent ourselves and/or technology will solve all our problems. there will always be human stupidity, there will always be corrupt and there will always be science. we will colonize space and move off this rock. to think we are running out of resources is terribly short-sighted and lacking faith in our ability.
yep! everything is exactly as it should be.
OK, I guess that's a good and valid enough standpoint, and I don't have problems with that.
The only problems I have are with government - specifically with stupid people with power who deem it their duty to control other people's lives.
>>The only problems I have are with government - specifically with stupid people with power who deem it their duty to control other people's lives.
there is nothing wrong with the concept of a govt, just like conceptually democracy or marx's communism are not bad. the problem is with the implementation and a govt. is a function of the people. it will only ever be as good as the people let it be.
marx's communism are not bad...
Some things are inherently evil, not merely good or bad.
Marx's communism is not a form of government - it is an economic theory, just like Keynes'.
But it has at its heart the greatest evil of all - redistribution of wealth, much worse than the evil of Keynes' theory which was that deficits don't matter - the government can deficit-spend its way out of recessions.
In fact it is the Communist Manifesto that requires a progressive income tax.
Both theories try to subvert natural business cycles - with disastrous consequences.
If you didn't already guess, I'm strongly against both - the only economic way in my opinion is laissez-faire but it is nearly impossible to expect that to be reality in today's world.
from the wiki link,
"with only enough government regulations sufficient to protect property rights against theft and aggression"
and you make it sound like you dont need a government at all in your pipe dream. read the above sentence again. that is hole enough to breed mafiosi in your utopia
Scroll up, or search for "arguably".
I wrote, "Arguably, the only proper functions of government are defense and mediation and resolution of disputes."
I did not say that government should be abolished completely.
I do hold that government's role in the macroeconomics of a nation should be near zero.
That better?
>> That better?
A bit.
>> the only proper functions of government are defense and mediation and resolution of disputes
now who pays for defense? how?
>>mediation and resolution of disputes
that sounds exactly like the stuff mafia are made of. you see why I called that model a pipe dream?
now who pays for defense? how?
A small sales tax - 3-4% should do nicely in peacetime; in wartime, maybe 10%?
that sounds exactly like the stuff mafia are made of. you see why I called that model a pipe dream?
Doesn't government do this in the current model as well? How is it a pipe dream then?
But your point is taken. Scratch that from the governments functions. Private courts work well enough - as established by arbitration courts in the US.
Also, keep in mind - I used the word "arguably" to preface my sentence. I understand that there is significant debate outside this forum about the proper role of government.
The goal is the smallest possible government. Period. I know the goal, and I don't claim to have all the answers of how to go about achieving it.
Better still?
>> A small sales tax - 3-4% should do nicely in peacetime; in wartime, maybe 10%?
nice. so we have started collecting taxes :) you remember the problem you had with marx's communism? ;)
>> The goal is the smallest possible government. Period. I know the goal, and I don't claim to have all the answers of how to go about achieving it.
give it time and the smallest possible government would get to the stage our present governments are in. that is why i dont have a problem with the present. we are exactly where we are supposed to be. something will break and we will reinvent ourselves. we are resilient as a species
>>Better still?
Yes!
nice. so we have started collecting taxes :) you remember the problem you had with marx's communism? ;)
I highlighted it in italics - "...progressive income tax"
Sales tax is a fantastic tool - you can avoid it simply by consuming less; sales tax is use of force too and I abhor that, but at least it has an "out". If you feel that the military is getting out of hand, simply consume less for a while. Voila! (Partly joking, btw.)
Income taxes have no way out, and while you can reduce and avoid spending as much as possible, there's no way you can avoid earning.
give it time and the smallest possible government would get to the stage our present governments are in.
That is also likely true - such is the nature of entropy in a system. You personally may be OK with the system and have faith that it will all work out, but even you've gotta be aware that the way things play out - when that something finally gives - you and your family could well be the collateral damage.
I have no delusions that I can change the system - nor do I particularly care - I'd like to avoid being shrapnel bait.
Or, like I've said often, I'd like to insulate myself from the stupidity of others.
OK now?
>> I'd like to insulate myself from the stupidity of others.
I would often think this is a price I have to pay for making a living out of the stupidity of others (no i am not a RE broker).we are all making money out of the stupidity of others so we cannot really be insulated from it. law of karma n all that.
>>>>>
we will colonize space and move off this rock. to think we are running out of resources is terribly short-sighted and lacking faith in our ability.
>>>>>
Okay, So then what is the difference between viruses/bacterias and humans?
Doesn't it mean that humans are parasites on this planet?
If yes then animal theory present above looks okay, if not then what are we?
-SG
>Visit this blog for the first time
>People talking about Evolution, Intelligent Design, Vaccine = Autism Conspiracy, Luddites vs Marxist vs Liberals vs Libertarians.
All iz well.
>> People talking about Evolution, Intelligent Design, Vaccine = Autism Conspiracy, Luddites vs Marxist vs Liberals vs Libertarians.
welcome to the madhouse
>> Okay, So then what is the difference between viruses/bacterias and humans?
we are simply a resilient parasite. leaving the rock needn't be just because we are running out of resources but also to maximize the species' chance for survival as we go hurtling through space.
This blog is becoming worthless due to idiotic posts by failed MBAs. Please shut this down
How did this thread devolve from the original topic of a prominent and culturally significant personality accused of money laundering to this drivel.
Not even one post related to the original topic!
Moderators, where art thou?
>>>>
we are simply a resilient parasite. leaving the rock needn't be just because we are running out of resources but also to maximize the species' chance for survival as we go hurtling through space.
>>>
yep, but that implies that the original theory in past posts was about majority of humans being irrational holds strong and explains many things.
May be its time to re-read the whole discussion from top to bottom post-:)
Also lets keep the forum clean and do not attack each other personally for the sake of the discussion to reach a conclusion.
-SKG
I would often think this is a price I have to pay for making a living out of the stupidity of others (no i am not a RE broker).
You must be a doctor then ;-)
Not even one post related to the original topic!
How much can you talk about celebrities? Doesn't everybody talk about them enough already?
People here are trying to discuss the world around them - we may not always agree, but at least we respect each others' point of view enough to listen, respond (and occasionally get mad).
Only a f*cktard sees something wrong with that.
Moderators, where art thou?
Finally! Here comes the cry of the sociopathic control-freak coward!
We need more regulation! We need more police! We need more discipline! Control the behavior of others! While we do exactly the same (hope you noticed that your inane post wasn't on topic either).
Dude, get the hell out if you don't like it here. Who died and gave you the authority to police others and control other people's conversations? Didn't your parents teach you any manners?
You are the very embodiment of the stupid people I have been railing against.
Two must-read articles.
Going Deep
Becoming an autonomous man in an other-directed world
How did this thread devolve from the original topic of a prominent and culturally significant personality accused of money laundering to this drivel.
Yes. I including many others have hijacked the thread, I plead guilty.
In my defense though the threads on this blog are meaningless, since every post is just a forum for a new round of discussions and any serious discussion on things such as economy are bound to disintegrate into discussions about philosophy.
No more rants from me. I will only post news items or numbers that I consider relevant to RE from now on.
@aam aadmi
I will only post news items or numbers that I consider relevant to RE from now on.
Nothing of significance comes out in public news as far as RE is concerned. You better shut the blog down.
Dhiman, if you think about it, sales tax will hit the poor the most, they are having the shortest supply of cash, this would not be good for them.
But if you look at wealth tax, then it is only the wealthy who have hoarded wealth, and do not allow it to circulate who will be taxed, If there is a wealthy guy who is invested amply then then he does not beed to pay on the invested wealth.
Don't you think that this is more fairer ?
>>How did this thread devolve from the original topic of a prominent and culturally significant personality accused of money laundering to this drivel.
this is a idler's lobby, akin to a village tea shop at 7am in the morning. no?
@samix - let me guess what dhiman would reply to that
>>sales tax will hit the poor the most, they are having the shortest supply of cash, this would not be good for them.
the poor are poor because they chose to be poor
>>Don't you think that this is more fairer ?
it reeks of socialism. fair? it not fair for me to be paying for someone who chose to be poor
http://www.bloomberg.com/news/2012-06-14/singh-doubles-tax-free-bonds-in-blow-to-projects-india-credit.html
Prime Minister Manmohan Singh’s drive to double tax-free bond sales risks a glut that will make infrastructure borrowers pay a premium over government debt for the first time, according to India’s biggest underwriter.
TO THE MODERATORS:
You are losing control of this board. We come here to share our views on the real estate situation in India and about whether there is a bubble and if so, how we may profit from it.
We are NOT here to listen to conspiracy theories, paranoid hysteria and drivel about anarcho-capitalism, Malthusian fantasies, wet dreams about Lew Rockwell (or any of his fellow nutters), Darwinian evolution, the differences between viruses and humans and the like.
I have stopped frequenting this board because it has sadly become devoid of any rational conversation being filled as it has become with lunatics from loonistan.
I'm sure there are many others who feel like I do.
Again, you need to take control of this board before it is too late.
I have stopped frequenting this board
We didn't know you, beloved anonymous, because you never revealed your name, not even a pseudonym, but we promise to try to miss you if you never come back.
While I agree that lately real estate has become kind of a side topic here, but this has been so much more fun. And informative!!! :-)
NRIs spouting off nonsense and pretending to be experts on India.
People like these are a joke anyway, US doesn't accept them as Americans and they are totally out of touch with reality on Indian streets.
Let's not remove the last bit of solace they get in the online forums and the free entertainment they provide from time to time.
Dhiman, looks like the main influence the US has had on you is that you're a dyed-in-the-wool republican now. The libertarian ideals (themselves fundamentally flawed) have been twisted so badly by the Repubs to continue increasing economic inequality in the US, and everything that you propound will continue to widen that gap. In society envisioned by you, the guys at the top will gleefully enslave the poor wretches at the bottom and keep them that way. Welcome to the Confederacy and the plantations.
alright then lets stick to the topic. the real reason i believe salman khan overpaid is because he is from the future and has time traveled and paid future rates. that is a good indicator of how RE prices will track in INR going forward.
i sometimes miss that chap that would keep commenting everyday here that this was a wonderful and informative blog. forgot his name.
next post please
Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog.
@Anon 10.18
NRIs spouting off nonsense and pretending to be experts on India
?????
you should be grateful to NRIs for their contribution towards the development of India. Without NRIs India would have been continued to be a begging bowl of Asia. All the high tech investment, technology etc is the courtesy of NRIs. Indians, wherever they live, they love their motherland and invest there. People like anon -10.18 are jealous and this venom comes out on blogs.
Jai Hind
Dhiman, looks like the main influence the US has had on you is that you're a dyed-in-the-wool republican now.
If I can use one word for myself it would be that I'm an an individualist. There's a test for where you fall on the political spectrum. Take it.
My results are that I'm a non-interventionist cultural liberal, FWIW.
The libertarian ideals (themselves fundamentally flawed) have been twisted so badly by the Repubs to continue increasing economic inequality in the US, and everything that you propound will continue to widen that gap.
I hate ideals, be they L or D or R. I'm the laissez-faire kinda guy - and I don't want governmental interference, be it version D or version R.
If you want an egregious example of governmental interference, here it is. Warning - this link contains graphic images of the recent forcible abortion uproar from China.
I'm sure this is just a wise government doing whatever is best for the common good of all.
I too agree that this forum's discussions have run their course and their marginal utility is now in significant decline.
I do enjoy the fun - as analog said, like a village teashop. Hope at least this continues, while we have ringside seats to the RE show.
>the poor are poor because they chose to be poor
LMAO. This is gold.
@NRI at 11:32 AM
// All the high tech investment, technology etc is the courtesy of NRIs. Indians //
No it isn't, you nincompoop. Come back from your fairy land.
Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog. Shutdown the blog
^ Go on a hunger strike first.
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