rising inflation. loss in purchasing power. centrally planned economy ,,,

[blueazure]

it is now an open fact that a centrally-planned , central bank regulated economy has failed in pakistan. the opaque policies of state bank and unquestioned money printing is leading to inflation numbers not seen before. in march alone, inflation was 9% YoY.

what is inflation ( from investopedia)

Inflation is a quantitative measure of the rate at which the average price level of a basket of selected goods and services in an economy increases over a period of time. It is the constant rise in the general level of prices where a unit of currency buys less than it did in prior periods. Often expressed as a percentage, inflation indicates a decrease in the purchasing power of a nation’s currency.


a few questions-


1. what is the total amount of PKR in circulation ? what is the formula of its printing ?

2. what backs the PKR ? what is the collateral behind it ? how much gold / silver does state bank have in its vault ?

3. how does SBP plan to control inflation ? russia and china are buying gold en -masse and stocking it . china plans to peg yuan with either oil or gold soon. russia working on similar lines with with the ruble ..

what plan does the IMF employee mr raza baqir have for PKR ? does he plan to buy gold and to back the pkr ? we have gold in riko dik ? when are we taking it back ?


money printing and centrally -planned / central bank run economy is the biggest scam on humanity . state bank of pakistan simply prints a paper and writes that its a receipt that issues value with state bank backing, in short, its value is just an IOU ( ) and not backed by anything . ( soviet central planned economy ? poverty ? rings a bell?)


to cut it short, if some one has 10lacs PKR in cash at home, its 'value' has been decreased to 40 percent just by more printing in six months.


if this is not daylight robbery, i dont know what is .......


azad pakistan, who is giving us daily lectures on FBR and taxes , please comment

 

[blueazure]

https://www.zerohedge.com/news/2019...-dollars-and-buying-gold-fastest-pace-decades

Why Russia Is Dumping Dollars And Buying Gold At The Fastest Pace In Decades

Russia tops global gold buyers list as it turns away from US dollar

https://www.rt.com/business/458281-russia-leading-gold-buyer/

China's gold-buying spree continues as central-bank market booms

https://www.businessinsider.com/gol...ontinues-as-central-banks-boost-demand-2019-4

Whoever controls the volume of money in any country is absolute master of all industry and commerce. And when you realize that the entire system is very easily controlled, one way or another by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.

U.S. President James Garfield noted in 1881:

understanding inflation ;-

https://news.bitcoin.com/back-to-basics-what-is-money/

In economics, inflation is the increase in the price of goods and services in an economy over a period of time. Inflation occurs when the economy’s aggregate volume of spending grows at a faster rate than its output. This is how governments and banks take your money – through the inflation of their fiat.

Dr Edward W. Younkins, a professor of accountancy and director of the Institute for the Study of Capitalism and Morality, writes: “Inflation is a dishonest and deliberate policy and tool of politicians who do not wish to reduce their spending. The government creates new money in order to cover what it spends in excess of its income. The existence of an unbalanced budget is a frequent reason for the government to print more money. When more is spent than is raised by taxes, the government makes up the difference with fiat money. The basic cause of inflation is the government’s unwillingness to cut its spending plans or to raise the funds it desires by increasing taxation or by borrowing from the public.”

 

[ps3linux]

1. what is the total amount of PKR in circulation ? what is the formula of its printing ?

2. what backs the PKR ? what is the collateral behind it ? how much gold / silver does state bank have in its vault ?

3. how does SBP plan to control inflation ? russia and china are buying gold en -masse and stocking it . china plans to peg yuan with either oil or gold soon. russia working on similar lines with with the ruble ..

1) depends on what you are talking about M1-1 is 4.686 Trillion PKR as on February closing. SBP is printing money like anything M1-1 was 4.384 trillion as on July 2018 closing, only 302 billion printed without any collateral.
2) Nothing now, quaide awan, a***ole canceled SBP directive that all currency in circulation has to be backed by 1/3 value of gold, if you study inflation/devaluation of currency figures from 1947 onward only after bhutto's this decision there was real inflation and devaluation of PKR, other PKR vs US$ exchange rate remained stable at 3:1. If ever there was any collateral I am sure there would now only be copper bricks painted in gold color left.
3) SBP these idiots don't even know how to control inflation, you can ask malaria control from mosquito, SBP is the prime culprit in creating inflation by printing currency on Govt. demand the only credible person I remember is Mr. Shahid Kardar who refused to print only Rs.5000 notes and deliver them to president house every Friday. There is no collateral at least not anymore.

 

[Zhukov]

Hold your horses boy. Money is backed by the Total value of Goods Produced and Property Worth of a Country. Not just some obscure Metal that some one else has more then some one.
Its not simply the printing of money that is causing the inflation and economic slump. Its how your nation is putting this money to use. State Prints money and hands it over to people to circulate in economy, Do transactions and run the country etc. It does not need to be pegged against anything as it is only acceptable in your own country and not in international market.
If your Pakistan Takes 100 Freshly Printed Rupees and Starts a Manufacturing Concern with it say a factory, He Will create jobs, he will create economic activity, Such money will move the country forward. The Rise in Prices will be coupled with ECONOMIC Growth as well.
On the other hand your Pakistan Takes the Money and Buys PLOTS from it instead of starting a manufacturing business, The Goods will have to be Imported, No jobs created, Inflation grows without economic growth. Worse, Pakistani Buys imported Cars and Electronics by converting that Rupee into USD (Buying USD from State bank Reserves and paying it to abroad sellers) Hence Depleting the USD reserves as well.

In Short, Your Currency represents whole of the Production of your country. Clothing, Electronics, Food Products, Fashion ware, Machinery etc etc. Printing more currency is simply a means of pushing redistribution of wealth as well as supplementing economic growth. Its all messed up in your country because of your people not the system.
If your Businessman Gets the Printed money (which is given to Commercial banks) and Starts manufacturing Cars, Mobiles, Machines, Equipment, Cooking oil etc in your country. It will stop depletion of dollar reserves and jump up economic growth create jobs more employment more wealth etc etc. They make Marriage halls, Buy Plots. You cannot even make your own dams and Highways. Hell people are not even willing to give up one time tea (Imported Item) or changing mobile phones for leisure every 6 months (also imported items)

 

[ps3linux]

On the other hand your Pakistan Takes the Money and Buys PLOTS from it instead of starting a manufacturing business, The Goods will have to be Imported, No jobs created, Inflation grows without economic growth. Worse, Pakistani Buys imported Cars and Electronics by converting that Rupee into USD (Buying USD from State bank Reserves and paying it to abroad sellers) Hence Depleting the USD reserves as well.

Very valid observation, missed mentioning it earlier, while studying at Boston IFI, it was a surprise for me to understand that US has very strict rules against holding more than 1 residential property (non declaration of source of income is never considered), there are strict tax implications. Transfer of property from parent to children also carries strict CGT implication, gift tax, generation skipping all have almost the same tax rates. Thats why real estate investment there is never considered by individuals. When I expanded on other territories I did find out that almost every developed economy has some sort of check/penalty on investments in real estate by individuals.

Two things went horribly wrong with Pakistan "installation" of bhutto his destruction of economy in the name of nationalization from which the country never recovered.

Zia, who was a follow-up to bhutto when it comes to economy, or may be worse, opening the flood gates, tax break/no tax/source of income on real estate and making armed forces personnel and later the whole nation property dealer, the worst kind of investment with zero or no benefit to the economy. I attended three roadshow aimed at chamber of tri state USA all aimed at real estate projects, few foreign friends did inquire you guys don't have any business/industry where you would want the foreign investors to come and invest.

Now you go to any office / sit among a group of people / friends the most common topic of discussion is real estate/file prices.

 

[Pakistan Space Agency]

PTI is solely to blame for this 9% inflation due to their lack of political experience and economic understanding. This did not happen during the previous PML Government's 5-year tenure.

If PTI don't know how to handle or run an economy, they need to go back to Khyber Pakhtunkhuwa and hone their skills there.

 

[Arsalan 345]

economy collapsed.we are screwed.

 

[Super Falcon]

Pak economy un fixable un payable debt

 

[Rusty]

PTI is solely to blame for this 9% inflation due to their lack of political experience and economic understanding. This did not happen during the previous PML Government's 5-year tenure.

If PTI don't know how to handle or run an economy, they need to go back to Khyber Pakhtunkhuwa and hone their skills there.

40 years of mismanagment...... ItS PtI's FaUlT!!!

get a life patwari, no one is buying your crap.

 

[Pakistan Space Agency]

40 years of mismanagment...... ItS PtI's FaUlT!!!

40 years and mismanagement?

1977-1989 military-rule and war.
1999-2008 military-rule and war.

If you have a brain, even a rusty one will do, use it.

 

[Rusty]

40 years and mismanagement?

1977-1989 military-rule and war.
1999-2008 military-rule and war.

If you have a brain, even a rusty one will do, use it.

What part of "40 years of mismanamgnet" said "but not including Military"

I know you paid for your education with a plate of biryani but even you can't be that dumb.

 

[Pakistan Space Agency]

What part of "40 years of mismanamgnet" said "but not including Military"

I know you paid for your education with a plate of biryani but even you can't be that dumb.

Oh ok. But if you used a brain cell or two even if its rusty, then you would realise the previous Governments one after the other had the same issues too. However, none of them were that clueless that they needed to pass three budgets in just nine months.

 

[AZ1]

Oh ok. But if you used a brain cell or two even if its rusty, then you would realise the previous Governments one after the other had the same issues too. However, none of them were that clueless that they needed to pass three budgets in just nine months.

You are an idiot who doesn't even know that when PPP left it was $2 billion defecit and when your favorite PMLN Left $19 billion defecit but yes just forget them and blame new govt.

At least check the previous performance and then compare. I don't know why type of naan qeema Nawaz has given to you.

 

[Pakistan Space Agency]

You are an idiot who doesn't even know that when PPP left it was $2 billion defecit and when your favorite PMLN Left $19 billion defecit but yes just forget them and blame new govt.

At least check the previous performance and then compare. I don't know why type of naan qeema Nawaz has given to you.

The Nominal GDP of Pakistan was $231 billion in 2013 and it rose to $313 billion in 2018. That's $82 billion added to the Nominal GDP of Pakistan in five-years during PML tenure.

However, during the first eight-months of the inexperienced PTI's moronic rule, the Nominal GDP has shrunk by $35 billion to $278 billion.

Source: IMF Economic Outlook April 2018

Now, to question your intelligence - is Nominal GDP growth year-after-year a sign of good governance or is Nominal GDP shrinking a sign of good governance?

 

[Rusty]

Oh ok. But if you used a brain cell or two even if its rusty, then you would realise the previous Governments one after the other had the same issues too. However, none of them were that clueless that they needed to pass three budgets in just nine months.

Here it guys, biryani plate education.

Patwaris are reduced to complaining about "three budgets"

I rather have 3 budgets then billions looted and sent to Europe and Panama.