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Story of inflation.


Inflation is  in everyone’ s lips.

The Americans are reeling under it.

The housing loan flop, the sub prime crisis, and the weakening dollar,are squeezing U.S. economy.

India and china the upcoming economies are not spared.

Every single commodity is over priced

Gasoline price has been raised in almost all countries.

Movements are restricted.

Oil has hit record high

Gold is marching ahead.

The economists , analysts are baffled.

Their predictions always go wrong.

The world at large  is gaping.

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Arrogance of a bank


A story  of an entrepeneur.

The sundarams of the temple city in South India,are first generation of entrpeneurs.

They are a very enterprising couple, known for their integrity and dedication.

As early as 11991, they promoted a spinning mill in the outskirts of their city.

The biggest bank in India The State bank of India accepted to finance their project.

The Sundarams  were  excited. The commercial production started in mid june.

The bank had given them a term loan and promised to sanction the working limit as soon as the manufacturing process starts.

Thebank did not keep up its words.

The Sundarams were disappointed.

They in their enthusiasm to make the unit get on the wheels,had given the factory, lnd and another valuable property as colatral.

The bank ,after much persuasion ,released 10 lakhs on adhoc basis ,when the need of the hour was 38 lakhs.

The promoters  were compelled to run the show,with little funding.

After 10 months, the balance was released.

The initial set back was pinching.

unmindful of the bank’s callous attitude the company worked in full swing.

It employed nearly 100 people.

It produced weft quality yarn,which found a ready market in Ichalkaranji, Bhiwandi and malegoan.

Unfortunately, textile industry  was slowly losing its momentum. recession set in .The promoters were in a fix.

The Sundarams  wer prompt repayers so far.

After 6 years of full production, the unit falterd.

The  interest  was very high nearly 23,5%.

The management was in a deep stress and strain.

The bank refused to help them.

Thecompny became a Non performer.

To keep the pot boiling, the management pumped in its own funds.

They could not prolong further. The bank filed a case in debt recovery tribunal.Shutters were brought down.

Workers were given compensation ,

All obligations were fulfilled.

An one time settlement was rached.

The promoters borrowed money ,sold some other asset  to settle the score.

But the final payment got delayed by 3 months.

The bank accepted the payment.

it transferred the amount from no lean account tothe company’s account,

The statement showed that there was nil balance in the account.

A year and half has passed, the bank has not released the documents.

The sundarams  are desolate and writhing with anger.

They get no proper response from the officials.

The Shylockian syndrome has surfaced.

The bank is demanding more.

The bank is holding the document and the money.

Many defaulters go  free.

The genuine repayers face the brunt.

The world should know about it.

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Hot Topic


Inflation is the hottest topic of the year 2008.
Inflation can be defined thus -there is lot of money, but there is no intrinsic value.
A foot ball is inflated, so is a tyre of a vehicle..
If the ball or tyre is pumped beyond its hold,they burst.
The paper money is in wide circulation, it is overspent.
Growth of money is manifold, surpassing the limit
The bubble cannot be subdued, it bursts.
Inflation has settled in.

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Gold glittering


Gold once again in upswing.
It may go up to 1000$ .
It is too early to predict
Its counterpart oil is surging.
Oil will rule the roost for quite some time,as war clouds are seen in Israel and iran.
Dollar is hit.
A factor which aids gold rise.
Equities slump.
All features attribute to Gold’s envious status.

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Investment idea


The investor is perplexed.
He is apprehensive . He is alarmed. He is dazed.
Mutual funds have not helped him.
Stocks are posing a danger.
Commodity prices are making him nervous.
Bank deposits are showing negative signs
It is imminent and imperative to develop short time investment avenues.
This will dispel the fear and gloom .

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Intrigued Investor


Investing in what when inflation is running crazy.
Stocks ,commodities,real estate.
Which is better?
What is the best?
Investors are scratching the head,
Stocks have lost their glitter. Wall street, Shanghai and Mumbai are very weak.
Commodities find a safe niche,and probably the best bet.
It also has its shortcomings.
Today gold is trading at 930$,in March it was 1013$,last week it was 880$.
The difference is too high.An average investor finds it hard to combat.
Land is a good buy.
It has become too expensive
Development land is beyond the reach of the common man.
Building costs have escalated in geometrical progressions.
Agriculture land is affordable.
The returns they fetch is not encouraging.
Liquid cash is secure.
It has to dance to the whims and fancies of the ever changing dollar.
Have a smattering of all in your basket of investment, dear investor.
Success is yours.

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Crude rides rude


Price of crude oil is a sensation.
It has become a cynosure of all eyes.
As it rises ,it shoves down stocks and pulls with it commodities like gold.
Its movements are closely monitored
Wall street, Mumbai and Shanghai,affected by its up and down movement.
The weak dollar and geopolitical activity in Iraq,Nigeria,are responsible for this erratic trend.
Inflation is staring hard.
Commodities are in upswing.
There is lot of deployment.
There is still more wage cut.
India’s Reserve bank has increased the CRR.
Fed is aiming, but caught between housing slump and weak dollar.
The song in Sound Of music is well remnant of this situation
“How to solve the problem Maria?”
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Windfall Tax


Malaysia Is introducing windfall tax,to fill up its treasury.
The hike in gasoline by 41% has created much discontent.
Every commodity sees a surge in its prices.
Right from vegetables to cement there is a steep rise.
Malaysians have started feeling the pinch’
Stocks are trading low.
Now the new entry windfall tax.
Oil Palm plantations in Peninsular Malaysia are to pay 15%,over and above CPO price-2000RM.
For Instance
Price of CPO-3500RM
FIXED pRICE -2000RM
difference—-1500RM
Tax 15% of RM 1500=225RM
The plantations paid cess last year to supplemnt cooking oil prices.
Now there is no scarcity in cooking oil supply.
The rise in cooking oil price remains the same
Will the government pass shotfall benefits to plantations ,if the CPO trades below 2000RM.?
Strange are the ways of the governments.

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Economy

Financial Inclusion


The Indian Finance Minister has asked the poor not to go to money lenders. If they approach the private financiers, then he ,in charge of the finance portfolio is a failure.
Well said,Mr.Palaniappan Chidambaram.
Admitting one’s defeat needs courage and grit.
The Indian FM has almost accepted his shortcomings,though belatedly.
IS the honourable minister not aware of the interest charged by the private bankers?
The poor run from pillar to post seeking financial assistance.
Having been turned down by the banks, they resort to money lenders.
The loan sharks charge abnormal interest. Some even collect interest for a day.
Getting money from such people is immediate, has less procedures,and saves time.
THe Indian FM has promised financial inclusion for the poor in the banks.
They will be charged 10% interest.Even this is little high.
I recollect,Bernard Shaw’s words
Lending money for interest is second to prostitution.