Friday, May 12, 2006

Money Theory

Money Theory
Medium, measure, standard and store.Money in circulation has multiplier effect.Money printed is presumed to be money in deficit by virtue of non-circulation/improper-circulation/Hiding and genuine demand forgrowth.
Inflation will not result(too much money chasing too little goodsand services)if all monies are generating genuine growth in otherwords money is growth driven whether in circulation or underprinting. Objective assessment of requirement for saving and growthis utmost important for retaining value of money.
Money Vs Money
Demand for one money over the other arises out of contemporaryPolity as well as emerging globalization.People normally prefer one money over the other for reasons ofsuperiority, acceptability, availability, and the value it commandsacross Borders.
Monies vs Goods
Goods and services are driven by money and sometime monies for valueand relative superiority of one money over the other determines thebest value for the goods.Preference over monies has to balance between availability,acceptability,optimal value for goods and services.
Deciding Global Money.
This has been the subject matter of debate, political rivalry foratleast 100 years now from gold standard, to basket of currencies,to free float,to now choice of international currencies(euro-dollar)and now again to prefer Gold for Dollar.
Future of Rupee:
Rupee like any Currency has two facets 1.Internal. 2.International.
Internal:
Money in the economy should generate growth not only forproducing goods and services but also in empowering thepeople.Growth Big and Beyond without limits of money should be Buzzfor the Economist.Lateral growth of money preferred over vertical.Weneed more entrepreneur,more consumers(not population withoutpropensity to consume),More money above all.
International:
Rupee slide is linked to rupees dependence to anothermoney which again is dependent on Rupees inability or deficiency tocommand required goods and services internally vis-vis producingcompeting goods and services for exchange internationally.
Solution:
Produce competing goods and services for exchange to stabilize rupee.
Path:
Generate Money and Generate value for Money

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