Ten years after the global financial crisis, a debt-fuelled world economy is headed towards another crash, the IMF has warned. With the Rupee at a record low, unemployment at a 20-year high, and 78 of its largest corporations defaulting on massive debts, India’s rapidly emerging as the epicentre of a crisis that could dwarf 2008.
From WSWS/Automatic Earth: Bitcoin has been hailed as the currency of the future; and dismissed as a bubble at best, or a tool for organised crime at worst. But one thing is clear; its soaring demand is a direct result of a broken global financial system trusted by nobody and on the verge of breakdown.
India’s former energy secretary E.A.S. Sharma writes in The Wire: Everyone knows that the NPA problem is due to the lack of due diligence on the part of banks. If banks were to refuse new loans to some of these indebted companies, nearly 40% of the coal blocks assigned to them would not get developed.
Live Mint reports: Agriculture is likely to be the worst affected by the note ban, because 1) The policy coincided with harvest of kharif crops, and farmers are facing difficulty selling it. 2) Lack of cash must have posed difficulty in sowing of rabi crops. 3) Unlike other sectors, farm output is perishable in nature.
Milind Murugkar writes: ‘Why doesn’t the informal sector, supposedly badly hit by demonetisation, protest or scream in pain?’. Defenders of demonetisation often pose this question. If you want an answer to the question, please listen to Sachin Jadhav. His story takes us through the long chain of economic loss and suffering of the rural population.
The digital economy is a design for atomisation, for separation… Imposing the digital economy through a “cash ban” is a form of technological dictatorship, in the hands of the world’s billionaires. Economic diversity and technological pluralism are India’s strength and it is the “hard cash” that insulated India from the global market’s crash of 2008.
Devinder Sharma writes: After a month of demonetisation, the picture in the rural areas remains too bleak. I know of villages where the farmers had to return empty handed even after seven days of queuing up. As a TISS study points out, nearly 81 per cent of the villages do not have access to banking.
Shankar Gopalakrishnan writes: Demonetisation’s biggest impact will be on the distribution of resources within the economy, whatever happens to the economy as a whole. Demonetisation’s a giant vacuum, sucking up the resources of the weak and delivering them to the powerful, while acting like it’s doing the opposite. More importantly, this transfer will be permanent.
Acclaimed journalist P. Sainath reports from rural Maharashtra: The “Modi masterstroke”, a term contrived by assorted anchors and other clowns on television to hail an unbelievably stupid action, is spreading agony and misery in its wake across the countryside. If there’s been any stroke, it’s the one the heart of the rural economy has suffered.
Monetary historian Mike Maloney says in this podcast: Within the next few years you’re going to see probably the greatest crash in history. I have often said that the crisis of 2008 was just a speed bump on the way to the main event. We are in the process right now of seeing this unwind.
Is ‘crony capitalism’ behind Rajan’s impending exit? RBI has been cracking the whip on major banks, collectively saddled with Rs 5,00,000 crore of bad loans. The banks in turn started forcing big debtors–including Reliance, Essar and Adani-to sell prized assets to repay debts. The numbers in this May 8 report in The Hindu speak volumes.