Monday, April 25, 2011

Broken Promises: How RBI and Indian Central Government is Cheating Upon its Citizens

Indian central bank RBI (Reserve Bank of India) and the Indian Central Government is cheating upon its citizens by breaking their promises. What promises the RBI and Indian government have made to their citizens which they are breaking? To get the answer of this question we need to analyze the currency note printed by RBI and guaranteed by the Central government. Below is a scanned picture of 100 rupee note. The orange circle contains the text of the promise made by the RBI governor to the bearer of that note. The text reads: I promise to pay the bearer the sum of one hundred rupees. Below the text there is a signature of RBI governor D. Subbarao.

100 Rupee note printed by RBI and backed by Indian Central Government
The yellow circle contains the text of the government backing of this note. It reads: Guaranteed by the Central Government. As is evident in the RBI currency note, RBI and the government have made a promise to pay the said sum (in this case 100 rupees) to the bearer. Now the question is, have they kept their promise or they have broken their promise? The evidence which I will present now will prove that they have broke their promises and thus have cheated their citizens.

The Broken Promises 
How did they break their promises? They broke the promises by paying less than the printed promised amount on the note to the citizens. RBI and Central government are paying less to their citizens by reducing the purchasing power of their rupee note. This they do through Inflation. Let me give you a concrete example to drive home the point. Let us take the case of currency note on one side and commodity 'onion' on other side. Table 1 below presents the 10 year price of 100 kg onion in the Vadodara market.  As you can see, in 2001 it took 375 rupees to buy 100 kg of Onion. While it took 2,250 rupees to buy that same 100 kg onion in 2010. What has happened during this 10 years? Have onion became more dearer? No. RBI currency notes have become more cheaper. It takes more notes now to buy the same weight of onion i.e., 100 kg. Because I am using an example of 100 rupee note so let me convert this prices on 100 rupee scale. Suppose in 2001 the price of 100 kg onion was 100 rupees i.e., it took 100 rupee to buy 100 kg of onion. But in 2010 to buy that same 100 kg onion you will require to pay 600 rupees. That means, in 2001 one 100 rupee note was buying 100 kg onion, but in 2010 it requires six 100 rupee notes to buy that same 100 kg onion! That means RBI's 100 rupee note has lost 83% of its purchasing power in 10 years time. 100 rupee note is worth only 17 rupees in 2010. RBI is promising that they are giving us 100 rupee but actually they are giving us only 17 rupees!!!  Now that is one big broken promise.
Table 1: Onion Price



   










RBI broke its promise and central government is not guaranteeing anything to see that RBI keeps it promise to pay its citizen the printed amount of money. So they are also cheating upon Indian citizens. Actually it is a partnership between the government and banks to rip its citizens off of their hard earned money through inflation.  

Conclusion
Every citizen of India should punish the RBI and Indian government for this heinous crime of diluting the purchasing power of peoples' income. By reducing the real income of its citizens they are lowering the standard of living of its hard working citizens; they are making most of its citizens poor and helpless. They are killing many poor people who are living on the margin. Banksters and Indian government are murderers of its own people. This is their crime against the humanity and they should not go without punishment for this cruel crime.

Instead of wasting their time in movements like Lokpal bill, Indians need to bring RBI and Government in the people's court for their crime of inflation. Citizens need to vote against the State (i.e., against all political parties because they all are same) to dismantle it while simultaneously dismantling the RBI. History tells us that no government and banks have kept their promises. Giving all the powers in the hand of government (printing money through RBI) and banks (money deposits) and then expecting that they will not abuse that power is naivety. We need to take that power back in our hand by removing the State and saving and investing our money in hard assets like gold, silver, home, land, consumer durable goods, our and our family's lives etc. Unless and until Indians do this they are going to be ripped off by their government and banks.   


5 comments:

  1. Sir,
    It may be erroneous to compare 'Value' of money with its 'Purchasing Power'. RBI guarantees for the 'Value' and not for 'purchasing power'. If we replace 'Rupee'/'Money' with any other commodity; wont it happen.
    I think other side of the argument should also be taken care like increase in average household income, infrastructure development, increased population etc.

    ReplyDelete
  2. Autopsia Cadaverum:

    FIRST SENTENCE [DAY 1]:

    Rajiv by this sentence [It may be erroneous to compare 'Value' of money with its 'Purchasing Power'], do you mean to say that.....

    Today you worked to earn 100Rs to buy 80Rs Food and SAVE 20Rs to buy Clothes for your kids but..... tomorrow the price rises to 90Rs and HELL! your saving decreased by 50% to just 10Rs. You can't buy the same food for 80RS as promised by the "PARASITES" government. Kids can manage without clothes for few more days after all its summer time and clothes is a bad idea!

    Now compare the VALUE of your saving with the PURCHASING POWER, forget the psychological cost!!

    SECOND SENTENCE [DAY 2]:

    Breaking NEWS!! Issued [Ordered actually] in public interest [frustration actually]:

    RBI guarantees for the 'Value' and not for 'purchasing power'.

    Real Version of the same sentence:
    "We [RBI and government] don't give a darn how much you are able to buy with the same hard earned 100Rs "PAPER" tomorrow. You can't by food and clothes that's not our [government's] problem."

    Government turns philosophical and says "Every man should learn to control their wants..... Look at Gandhi. Did he have majestic wardrobe? Rolls Royce! Airline or Cruz-line! Mobile Phone! No! That's why he was mahatma. Simple living, forget thinking. We are here to take care of you (use you). Be like him and..... don't forget to pay taxes on time. (or else how the hell are we going to buy food and clothes for our kids and wife and other affairs, because we are useless enough to get job somewhere else!)."

    THIRD SENTENCE [Day 3]:

    If we replace 'Rupee'/'Money' with any other commodity; wont it happen.
    [forget it! I [D] don't understand what this sentence means. So..... No comments.

    FINAL SENTENCE [LAST LAP]:

    Rajiv says "I think other side of the argument should also be taken care like increase in average household income, infrastructure development, increased population, etc."

    D says "Rajiv would definitely agree on following things:

    1] It should be made compulsory to have only two kids per couple [LOL i have a breaching idea though.....Have kids before marriage or after Divorce.....Quantity no bar!..LOL]

    2] Taxes should be increased for households having higher incomes.

    3] Hell-mates compulsory. It saves lives.

    4] Go green. It's global warming.

    5] Pakistan should be nuked twice an hour. Terrorists should be shot at sight [no if no but...just bullet in butt]

    6] Every family with EXTRA [WTF!] sibling, I mean more than 2, should be sent in ARMY, NAVY or AIRFORCE.

    7] Government job is the ultimate job.

    8] Government should develop infrastructure and increase taxes a little bit high. It will be better for those who don't have homes.

    9] God is the ultimate power.



    Rajiv take everything personally and reply whatever you feel like. I'm fully loaded."


    MIND BEND [Band New Section Amigos!]:

    I have question for Rajiv:

    India is on war. Government orders that it's compulsory for every household in India to keep only one kid at home as support to their Parents, others required in ARMY, NAVY AND AIR FORCE to strengthen Defense. Stronger one goes and Weaker one stays. Which one would you send?

    ReplyDelete
  3. LOL... My comment is as long as a BLOG!
    Makes me think to start blogging!

    ReplyDelete
  4. Nothing can live longer....as the same....
    everything has a depreciation...........(Exception Gold etc.)

    Any productive item... will have a depreciation
    Food is produced by JACK (Value=amount of work).....
    it sold to JILL........(work is converted to money)
    ,,,,,now JILL eats...(JACK's actual work is coverted to energy for JILL)
    .........Government's money has landed in to JACK's pocket....

    ........when the government gives the money to someone....like a farmer....
    ........they buy the rice.....that particular RICE produced can't be get forever...
    it has to be used.....All that matters... is who the government distributes...
    stuff to the working class....and their basic needs.... Then they can be healthy and
    more involved in production.........

    How will they produce: their resources are taken away by someone else...
    resource are in the hand of people who want to make more PROFIT...
    resource are not in the hand of someone who really want to produce more....

    Just for examples
    Class A....Lands....Constructions....Inflated Prices...Inflated rents...more profits...
    Class B..Construction Workers: oonstruct home for others....but where do they live.... they starve...
    they live on open spaces...no house for them....

    Someone who wants to work.... tomorrow... you can't find them.... they may cease to convert themselves to Class A..... or .....it will cease their little chances to live and ability to work...

    One can be hungry...but can't eat his hand..
    One can do business...but not the cost of someone who serves the society...

    ReplyDelete
  5. You are an absolute idiot, go read some economics
    note has got nothing to do with what it could purchase or is equivalent value of something else. Its just ensures 100 RBI Rupees.

    ReplyDelete

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