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Sunday 31 July 2011

US facing default prospect

The US govt is facing the prospects of defaulting if the Congressional approval for the raising the debt ceiling does not come about by Tuesday. What a pity that the world's super power more readily losing financial power than it seems to lose the military might. In any case, the exalted status in both cases is fast to become history in case of USA, is now the perception.

In case of financial status, it seems that USA has some unethical motives. It first consumed more than its share in world's available resources and that too against borrowed money. Than it wanted to ward off trouble by diluting dollar through monetary easing in more than one tranche. Now it is keeping the world on tenterhooks by driving the technical issues to the edge. The govt got sanctions for the spending by the same law-maker who now wish away the responsibility to take the next natural step.

It may turn out to be that the situation is save at the last hour. But this would be seen worse than not being actually in a position to take care of the payment obligation. This will make a case for change in world's financial order more urgently.

I notice that the financial markets have not behaved in the way they should have if the seriousness of the situation was to have its due effect. The bullion has not become suddenly as costly lately as it should have. Is that some big speculator (the type of George Soros) is privy to next moves and has taken position in that light. Is the calm signalling some storm. Is some thing unexpected on card or some ordinary development would have extra-ordinary impact. Every possibility should be kept in mind while the we witness the unfolding of events ahead.

Every economy and govt is coming under pressure under the programmes for justifying the welfare-state principle. We in India have not gone so far deep in it while we talked much but are slowing falling into the same situation every passing day. The welfare can never be ensured in the way it is undertaken by govt by first letting a section population suffer for the economic policies it maintains and then trying to mitigate the problems of this very section through governmental efforts. This exercise itself is faulty and mischievously conceived. The best is let not people go down in economic status by letting the natural resources owned by all equally. The ones who put in more effort in exploitation of the natural resources may have only slightly more to themselves than the rest. The passing on of the ownership right in extra proportion is the basic fault that has been allowed since ages. In earlier times only those who had more physical power controlled more assets and then after the organised states were created , the ones with better intellect also started controlling assets under laws.

Every thing will move around in the world on the above lines and the have and have-nots will remain till the basic right to natural resources is not understood and respected...kbk

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