Vivian A. DSouza wrote:
> And what is this constant harping on the under-valued rupee?
> The rupee has appreciated at least 25 percent against several
> major currencies in the past year, and is bound to appreciate
> further as the Indian economy booms. The undervalued rupee
> is a mixed blessing. On the positive side, it contributes to the
> export boom that India has experienced in recent years. As
> the rupee appreciates, Indian Goods and Servides will no longer
> enjoy the advantage they have had so far in the international
> marketplace. On the negative side it brings out the jealousy,
> amongst those who make a living in the local economy, as
> they see those who have returned from abroad able to afford
> things that the locals cannot. That is life., But in the not too
> distant future the disparity in incomes is bound to dissipate,
> as it has already begun to do.
Bwana D'Souza,
Until recently, the US dollar was a well managed currency. It was in short
supply and thus valuable. We all know that when you buy a unit of a country's
currency, you are buying a share of that country. It is similar to buying a
share in a company. The less shares there are in the company, the more likely
they will be worth a lot.
In the past few years, the current US administration has been spending money
like drunken sailors. Worse yet is when they ran out of money, they started to
print more. Last week, communist China told the US that if it did not stop the
weakness in the US currency. China would switch its foreign exchange reserves
to other currencies. Saudi Arabia sent the same message. So did Sudan.
Inflation in the US is running at 5.1%. As you know, the US has an unique
method of measuring inflation. It does not take into account the cost of food
and petrol. Maybe this is because US residents are not concerned about those
two components. Pensioners living in the US are faced with the prospect of
losing half the purchasing power of their pensions if they live over ten years.
India on the other hand, has suddenly found its currency appreciating. In part
because its economy is expanding at a breathing taking rate and partly because
the US dollar is sinking like a stone. Indian businesses dealing with US
customers will soon feel the pain. As you have correctly pointed out, Goans
working in the gulf will be in the same situation soon. On the other hand,
Goans working in India will get wages that will soon close the gap between
their cousins working in the gulf.
Mervyn3.0
PS. The depth of the US dollar crises finally hit me yesterday. I run the
office pool for the local lotto. When I went to count the money of the people
who had paid for tickets, I found someone had cheated me. Someone had slipped
me two US 25 cent coins. Those coins were worth only 24 cents Canadian. I felt
violated. I felt depressed. And especially so because after years of me
slipping Canadian coins in the US, Americans were now (forced into?) doing the
same trick on Canadians.
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