About the Governor State Bank of Pakistan, convening a meeting at Karachi yesterday, announcing a 300 basis point interest rate seems like business as usual -- as if nothing has happened. Pushing the policy rate around 300 basis points translates into a core inflation of 20%, which is insane in any manner, whatsoever.
Anyone not familiar with the idea of Core Inflation shall understand that it is a measure of price change without considering the prices of energy and food, since the latter are more volatile.
The SBP Governor, yesterday, was heard saying that 20% inflation is just nothing and will not hit the economy much, since the wages will also increase. This is just like telling you that your house has been burned down, but be merry because your clothes still haven't caught fire. These retards, while addressing an audience of financial experts and industrialists put up a blunt face in front of them and kept spewing lies, which they knew their audience will not buy at any cost.
It is a settled principal and has been proven time and again in the annals of economic history of the world that whenever the inflation is induced due to increase in taxes, duties and/or basic interest rates, the industry and production starts to wane. This would eventually mean less jobs for people and more money required to feed them with the same amount of bread as they eat today. This would eventually hit the revenues of the Government too, since the business activity will also be squeezed. The phenomenon is known as the Laffer's Curve in economics. Yet it seems like the Governor SBP and the Finance Minister are totally unaware of the term.
It is a time tested theory that increasing the tax rates above a certain limit only decreases the government's revenue because of reduced economic activity in the country.
What is more troubling is that Pakistan was not even on the agenda of IMF's last board meeting, held two days ago. It means that they have stopped taking us seriously anymore.
So, what is our fate? can we read the writing on the wall? can we not see what is being done to us? Why we deliberately kept delaying the IMF's review for so long? just to make our people starve and push our country into a deeper mess?
Last, but not the least; it is speculated by many of the experts I have spoken with since yesterday that Pakistan's economic crises is deliberately being worsened and the main agenda, before the PML-N leadership leaves the office (and the country) are the loot sale of our State Owned Enterprises (SOEs) to UAE and/or Qatar for great kickbacks in the name of corrective measures of economy. This would've been a corrective measure if they were planning to sell out the loss making SOE's like PIA and Steel Mills etc, but they are selling out the profitable SOE's like OGDCL, PPL and Marigas etc. and that too not in an open bidding, where Pakistani investors may be allowed to take part in the bidding, but all this will be done behind closed doors with the Governments of other countries and according to the new enacted law, no one can challenge the deal in any court of law.
RIP Pakistani awaam, you are being sold, you children are being sold .... and all is being sold at dirt cheap prices and the ones responsible for all this keep telling us to Pray.... Pray for the economy to get better.
Anyone not familiar with the idea of Core Inflation shall understand that it is a measure of price change without considering the prices of energy and food, since the latter are more volatile.
The SBP Governor, yesterday, was heard saying that 20% inflation is just nothing and will not hit the economy much, since the wages will also increase. This is just like telling you that your house has been burned down, but be merry because your clothes still haven't caught fire. These retards, while addressing an audience of financial experts and industrialists put up a blunt face in front of them and kept spewing lies, which they knew their audience will not buy at any cost.
It is a settled principal and has been proven time and again in the annals of economic history of the world that whenever the inflation is induced due to increase in taxes, duties and/or basic interest rates, the industry and production starts to wane. This would eventually mean less jobs for people and more money required to feed them with the same amount of bread as they eat today. This would eventually hit the revenues of the Government too, since the business activity will also be squeezed. The phenomenon is known as the Laffer's Curve in economics. Yet it seems like the Governor SBP and the Finance Minister are totally unaware of the term.
It is a time tested theory that increasing the tax rates above a certain limit only decreases the government's revenue because of reduced economic activity in the country.
What is more troubling is that Pakistan was not even on the agenda of IMF's last board meeting, held two days ago. It means that they have stopped taking us seriously anymore.
So, what is our fate? can we read the writing on the wall? can we not see what is being done to us? Why we deliberately kept delaying the IMF's review for so long? just to make our people starve and push our country into a deeper mess?
Last, but not the least; it is speculated by many of the experts I have spoken with since yesterday that Pakistan's economic crises is deliberately being worsened and the main agenda, before the PML-N leadership leaves the office (and the country) are the loot sale of our State Owned Enterprises (SOEs) to UAE and/or Qatar for great kickbacks in the name of corrective measures of economy. This would've been a corrective measure if they were planning to sell out the loss making SOE's like PIA and Steel Mills etc, but they are selling out the profitable SOE's like OGDCL, PPL and Marigas etc. and that too not in an open bidding, where Pakistani investors may be allowed to take part in the bidding, but all this will be done behind closed doors with the Governments of other countries and according to the new enacted law, no one can challenge the deal in any court of law.
RIP Pakistani awaam, you are being sold, you children are being sold .... and all is being sold at dirt cheap prices and the ones responsible for all this keep telling us to Pray.... Pray for the economy to get better.
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