QE1, QE2, QE3……………..QEn.


” There’s no disaster that can’t become a blessing, and no blessing that can’t become a disaster.”  Richard Bach, author of Jonathan Livingston Seagull.

I have never failed to notice one common thread in most Hollywood disaster movies. Of a precursor to the main event whose significance is lost to all except the protagonist. And how, when the latter tries to convince the authorities about the impending cataclysm, he is ridiculed. Till it is too late.

So in Independence Day, when David Levinson discovers a signal within a signal which is counting down to the Doomsday attack of the aliens, most of Mankind prefers to think of the event as the path to Deliverance. And in Day after Tomorrow, when the paleoclimatologist Jack Hall presents clinching evidence on global warming at a United Nations conference, diplomats are unconvinced. Interestingly the audience, sitting on the seat edge comprehends the emerging situation with the main guy and one tends to leave the theatre wondering at the woodenness and ‘stuck in the groove’ mindset of the powers that be in the movie.

As I sat reading a piece on the global economic situation the other day, one aspect caught my attention.  Of how more and more Governments are raising funds against bonds. Enter the central bank ( Fed in the US, RBI in India) which buys back these bonds and credits the commercial banks through a single entry and hey presto! money has been created out of thin air. The much touted QE1 and QE2 in the US were such “money printing” initiatives. The banks sit on piles of cash which they would like to lend out. And the more such money sloshes about in the economy, the more it chases physical assets like real estate, gold etc. And before we know it, we are inside a bubble, a dangerous territory to be in.

I remain amazed at how nonchalantly the world has passed over the above real life disaster in the making. How Governments, like opium addicts, continue to indulge in QE3, QE4………. up to QEn, by which time we are sure to be overwhelmed by hyperinflation. And how the interest payments on the borrowings are becoming unbearable and sending whole economies into a vicious tailspin. What a huge problem China, with its three trillion dollar reserve in US treasury, is facing due to a looming bond crisis. Or how an aging population in developed economies are finding their pension systems increasingly under threat. As people watch in horror their life savings getting eroded to near nothing.

Keynes in his 1919 essay on Inflation quoted Lenin, the Communism ideologue, as saying, “The best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens……………………………. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.” 

So like David Levinson and Jack Hall of our movies, did Lenin have the prescience of what would happen a hundred years later? Was he the one man who foresaw the self destruct capability of Capitalism nurtured economic forces gone wild?

In Learning…….                                                               Shakti Ghosal

Acknowledgement:  Keynes on Inflation. Excerpts from ‘The Economic Consequences of the Peace’ by John Maynard Keynes, 1919. http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_inflation.html

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We need a second planet by 2030!


A Vedic Hymn to the Goddess Earth

                                                                                                                                                                             Atharva-Veda, XII,I

 Truth, greatness, universal order (rita), strength, consecration,creative fervour (tapas), spiritual exaltation (Brahman),the sacrifice, support the earth. May this earth, the mistress of that which was and shall be, prepare for us a broad domain!

 The earth that has heights, and slopes, and great plains, that supports the plants of manifold virtue, free from the pressure that comes from the midst of men, she shall spread out for us, and fit herself for us!

 The earth upon which the sea, and the rivers and the waters, upon which food and the tribes of men have arisen, upon which this breathing, moving life exists, shall afford us precedence ……….

                                                                               

The independent think tank,Global Footprint Network (GFN), insists that humanity is operating on an overdraft, having surpassed nature’s budget. According to its calculations,mankind would need a second planet to satisfy its hunger and dispose of the waste, as early as 2030.

I time travel back fifteen years to that weekend show of “Independence Day”, of that opening panorama of the low flying alien ship blotting the sun out, a technologically empowered species waiting to unleash, invade and take over our world and its resources. Are we also destined to venture out of our earth cradle on a similar mission?

As we welcome the seven billionth newborn into our midst this week, as our planet strains to host this level of humanity,many of us are left wondering whether doomsday predictions may yet come to haunt us. When Thomas Malthus forecast in the eighteenth century that our propensity to reproduce would outstrip our ability to sustain food and other resources,could it be that he was right after all and simply a few centuries ahead of the curve? While we might be able to stabilise the world population sometime in the  future, would the strain not become unbearable in the poverty stricken regions of Asia and Africa which face the fastest population growth?

Some of the red flags are already up. As Mathias Wackernagel of GFN says, “From food prices to the crippling effects of climate change, our economies are now confronting the reality of years of spending beyond our means”. Many may see this to be uncalled for scare-mongering and would repose faith in technology and Man’s creativity to provide the necessary scallop. Similar to the way Industrial and Green revolutions proved the Malthusian doomsayers wrong in the last two centuries.

But as I reflect on all of this,I wonder whether we are not missing the woods for the trees. Is this devouring of the planet’s bounty, from forests, fisheries, fresh water to minerals and oil,due to the population getting added?  Or is it more due to the ravenous greed of the existing one?

Is the “flattening of the world” as Thomas Friedman aptly puts it, bringing those additional billions of the developing world onto that level playing field? And what happens when these billions start aspiring for the materialism of the west, for that “great American dream”? Kamla Chowdhury, Professor, IIM Ahmedabad, in her Earth Charter theme provides an answer, “We live in a world which has an obsessive preoccupation with growth and unlimited confidence in new developments. We have pursued the philosophy of cancer which grows and expands on its host, eventually killing it. We are behaving like the cancer cell, killing earth by using it ruthlessly and unsustainably.”

So what is the way forward? To heal the earth, I believe we need to heal the individual. The post industrial era ushered in a societal belief of the supremacy of Science and Technology and these became the only approach to knowledge and power. In the process we have become rewired towards greed, aggrandizement and become spiritually contaminated.Methinks we need to regain the moral and ethical values to take a holistic view.

  • Perspective shift towards technologies and innovation with a human face.
  • Societal values and Economics that would cooperate with our world and its ecology rather than exploiting it.
  • Spiritual positivity and sustainability in our thinking and actions.

Can we empower ourselves to adopt a new paradigm for development based on the above values? That surely would be the biggest turning point in human history.

“The world has enough to fulfill all our needs but not our greed.”

Mahatma Gandhi

In Learning………………                                                                                                                                                  Shakti Ghosal

Acknowledgements:

  1. Global footprint Network : http://www.footprintnetwork.org/
  2. The World is flat A brief history of the  twenty-first century : Thomas L. Friedman
  3. The Earth Charter: Kamla Chowdhry.