Collapse of Indian Currency (Rupee)
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Susmit Kumar, Ph.D.
Note: This article is from my book "Casino Capitalism" published early this year. I have written the same, i.e. collapse of Indian currency, in my 2010 article at this blog, titled "Stop Blaming China – It is the Structural Failure of the Global Trade System" (please see the last paragraph).
In 1991, India had to go to the IMF to get a loan because its FOREX was worth only three weeks of essential imports, and India was on the verge of default. One of the main reasons for this economic crisis was imports of luxury items during the late 1980s under the Rajiv Gandhi administration. India had to airlift sixty-seven tons of its gold reserves to London as collateral in order to get $2.2 billion from the IMF. In addition, India had to liberalize its economy and sell several of its profit-making public firms at throwaway prices to US firms such as Enron.
How much are you paying to commodity speculators?
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Susmit Kumar, Ph.D.
Due to the rise in investments in commodity markets, the global prices of commodities such as gas, corn, wheat, rice, and potatoes are going through the roof. These prices are not determined by demand and supply but by investors, who in almost all cases do not take physical possession of these commodities, except maybe precious metals, at all. In mid-2011, the gold price was up by 40 percent from a year earlier. This tremendous rise in gold price is not because of a sudden increase in the number of users of gold or a sudden drop in supply. The rise of price is due to investors. The same is true for the steep rises in consumer items such as gas, wheat, onions, corn, and potatoes.
Wall Street Leans on Its Adversary the Government
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Susmit Kumar, Ph.D.
The rich people are not getting richer on their own, but with the help of government. The people on Wall Street are making hundreds of millions of dollars in bonuses while helping rich people to become ultra-rich who invest in Wall Street hedge funds. Due to government deregulations, the people in Wall Street have been making this much money using special (financial) instruments like Credit Default Swap or CDS, Short Selling, Derivatives, Options, Futures, Forward Contracts, participation of financial firms in commodity market, etc. These activities have no social value at all. They are not contributing anything to the general economy except, of course, that they increase the GDP of the nation, distorting the distribution of wealth. The government has authority to revoke or regulate these financial instruments.
Limited Government, Limited Mentality
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Susmit Kumar, Ph.D.
For the last three decades, conservatives, especially Republicans, have been demonizing the government. But the truth is that the average citizen receives more services from the government than he or she gets from any of the Fortune top 50 firms. The government provides infrastructures (like roads and bridges), Social Security, Medicare, Medicaid, services after natural calamities (like hurricane, flood and tornado) and defense. The main driving force of any corporation is to generate profit. So why don’t the people on Capital Hill work to increase government revenue by increasing its income rather than giving tax-cuts to the rich? One point worth noting is that the rich people are not getting richer on their own, but with the help of government.
Krugman’s Third Depression or Collapse like 1990s Russia?
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Susmit Kumar, Ph.D.
According to Paul Krugman, the economy is in the early stages of a third depression and it will probably look more like the Long Depression of the 19th Century that followed the Panic of 1873 than the much more severe 1930’s Great Depression. According to him, the cost – to the world economy and, above all, to the millions of lives blighted by the absence of jobs – will nonetheless be immense.
What we are witnessing is not the early stages of third depression. Instead it is the initial stages of economic collapse like 1990s Russian economy as predicted in my book Modernization of Islam (Booksurge, Jan. 2008). It took me 4+ years to write this book and I wrote the chapter “The Collapse of the American Economy” in this book in the early 2007. It is worth noting that Russian GDP decreasing by 45 percent during 1990s.
Dr Kumar on Sudarshan News TV on Oct 24, 2016
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Stop Blaming China – It is the Structural Failure of the Global Trade System
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Susmit Kumar, Ph.D.
In the U.S. more than eight millions are unemployed, with no relief in sight. Now economists have started predicting another recession. Political leaders and several economists, including Nobel Prize winner Paul Krugman, are blaming China for the economic condition. We need to stop blaming China. Instead we should accept the inevitable: The collapse of the global trade system (Please see chart).
Wall Street Takes the Juice Out of Fruit (General Economy)
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Susmit Kumar, Ph.D.
More than eight millions are unemployed in the U.S. today, with little relief in sight. On the other hand, the people on Wall Street are again making hundreds of millions of dollars as if nothing has happened. If you follow the money trail, you will find that most of this money is coming out of the pocket of common people. When you squeeze the juice out of a fruit, then what remains in the fruit? That’s what the hedge funds/Wall Street have done with the US and the global economy.
Dr Kumar on Sudarshan News TV on Oct 26, 2016
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Dr Kumar on Sudarshan News TV on Feb 15, 2017
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Reaganomics – A Bogus Economics Paid by China and Japan
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Susmit Kumar, Ph.D.
Had Japan and China not financed Reaganomics, i.e. the U.S. debt, the economy, i.e. capitalism, would have collapsed before the collapse of Communism.
Reaganomics stands for limited government spending, deregulation of economy and reduced tax. Tea party activities and people like Ron Paul have similar ideas. These ideas are nothing but bogus economics (please see charts and tables below). For the economic boom during 1990s and 2000s (until 2008 economic downturn), conservatives are giving credit to Reaganomics. The truth is that due to the Reaganomics the country started to accumulate debt, which was first financed by Japan and then China (Please see the data in charts and tables). Now the debt has become unsustainable and an equivalent to terminal cancer.
Dr Kumar on Sudarshan News TV on Jan 24, 2017
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Nikkei, Dow 4000, 401K and Small Government
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Susmit Kumar, Ph.D.
Nikkei average went up to about 39,000 in December 1989, but after the crash it hovered around 15,000 during the lost decade of 1990s. In the last several years it has hovered around 10,000. Several economists, including Nobel Prize winner Paul Krugman, are fearing a similar lost decade for the U.S. economy, too, which would cause Dow Jones to hover around 4,000, leading 401K to become 101K. As a majority of firms have stopped pension options, the future for the entire country seems very bleak, especially because of the unsustainable debt of the government.
Dr Kumar on Sudarshan News TV on Oct 15, 2016
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Can the Obama Administration Cure the Terminal Cancer Created by Reagan and Bush?
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Susmit Kumar, Ph.D.
If a doctor prescribes you a wrong medicine which furthers deadly cancer, then it will take a lot of money (more than you spent initially and paid to the first doctor) as well as time to cure it. In the name of limited government and deregulation of economy the bogus theory of Reaganomics, especially under the recent Bush administration, have destroyed the U.S. economy to an extent that may be likened to a person having deadly cancer that can not be solved even in 5 to 10 years; it may even take a generation. Please see the below tables and my article (Reaganomics – A Bogus Economics Paid by China and Japan )
Dr Kumar on Sudarshan News TV on Oct 16, 2016
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The Global Economy Desperately Needs Another Brilliant Keynes Idea
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Susmit Kumar, Ph.D.
It is better to negotiate some kind of tax on both trade surplus and trade deficit as proposed by Keynes when debts are manageable, otherwise China is going to rule the global economy.
Before the 1930s Great Depression, there were recessions in 1797-1800, 1807-1814, 1819-24, 1837-43, 1857-60, 1873-79, 1893-96, 1907-8 and 1918-21. The government did not intervene in any of these previous economic recessions and opted to let the economy find its own solution. Until 1930s Great Depression, economists thought that free markets would automatically provide full employment on their own without the intervention of government.
Dr Kumar on Sudarshan News TV on March 1, 2017
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