The Fading Indian Rupee

This is something most of you might have been reading in newspapers and watching on news channels. The depreciating INR is sending a chill down the spine of the government (the economy), the corporate and economists alike. Though the common man would be least bothered about the "depreciation" of our currency, its effects on the economy and us are proving to be deleterious.

Let's try to analyse the case colloquially :

Let's begin with some factual numbers -

As of today : 1 USD = Rs. 51.3
Meaning you need to shell out Rs.51.3 to buy the resilient USD.

The same rate pondered between Rs. 40-45, when the world economy was travelling on a safe road; meaning you had to pay Rs.40-45 to buy $1.

The government understands the dismal effects of such numbers; the industrialists yearn to keep such numbers only in their wildest dreams; the economists hold a neutral stance ( it's study gives them jobs ); what about us ?!

The common man just takes a vituperative stance - accusing the government of their unending predicament - inflation, petrol prices - 2 of the common man's biggest problems. Well, the graft loving Indian government surely does have a role to play; but one of the major reasons lies in the fluctuating dollar-rupee exchange curve.
In such a case all we can do is to become silent spectators of the ongoing turbulence in the markets.

• Withdrawal of money from the stock market : With the current state of affairs in Europe, the probability of a Greek default, or may be even Italian default - has forced investors to withdraw their money from the Indian equity market and invest them in some safer instruments. Some investors are even keeping hold of their dollar reserve to avoid any risk of losing their money - thanks to AA US Credit rating.
• Indian economic commotion : Rising fuel prices, inflation - the top contributors to the investors apathy towards Indian markets.

Stock market bears the brunt of the aforesaid reasons. The stock prices decline -> equity in the form of USD starts vanishing -> INR comes under pressure -> INR Depreciates -> Prices of goods & services rise -> Dissatisfaction among consumers -> Blogger like me get a chance to present our views !!

So tomorrow, if you think you are going to accuse the government 'wholly' for your plight, think twice and just hope for a better INR vs USD exchange price.

Note : The views are personal. An effort has been made to explain the posts in the simplest of ways possible.

GREECE'S WOES - The Economist

A must read article from The Economist :

Greece's Woes

The Renminbi VS The US Dollar

It's the season of crisis and some more crisis; socio-political-economical; the world is witnessing its share of miracles and news that just make things astonishingly worse or may be good for some.

And when it comes to miracles; how can we forget the nation that taught the world its art of duplicating miracles !

The Red Republic - CHINA - most populous yet the most robust economy of today's world.

The Monarch State's economic growth - when the entire west is under the sulky clouds of debt crises and recession fears; the Dragon continues to roar and just doesn't seem to stop.

And why not;  Chinese products have become the part & parcel of everyone's lives today. 1.3trillion USD Forex reserve - the largest holder of the world's reserve currency; China has it's reasons to outshine every other economy.

And today with the US state of economic affairs in jeopardy, the world's trust on it's reserve currency the USD is slowly declining.

"WHY TRADE WITH THE OTHER COUNTRIES IN A CURRENCY THAT BELONGS TO A THIRD COUNTRY." - that's what the "little eyed dragons" have started thinking !

USD rate high or USD rate low ( wrt to the aborigine currency); the positive & negative impacts on exports & imports are quite obvious.

Let's take the example of trade between India & China:

Today when China has to export or import goods from India ( or vice versa); both countries have to deal in USD; and the market price of the USD ( compared to their native currency) is the deciding factor of the amounts of profits & losses.

So what's the standing of the RENMINBI compared to the USD today.

• The world is losing faith in the USD.
• Chinese economy is the most robust economy of today = RENMINBI can be trusted when it comes to international trade.
• The Chinese are anyways manipulating the exchange rates of the RENMINBI compared to the USD by printing & bringing more currency notes in the market.
• An appreciating RENMINBI compared to the USD will ensure China's stronghold on the world economic platform.
• With RENMINBI replacing USD; the right side nations of the Atlantic ocean will become the leaders of the modern economy.
• Chinese trade with the rest of the world in RENMINBI will make it's already robust economy even more rigid.
• With CHINA leading from the front - it's say in the world economic matters can never be neglected.

The bottom-line of the above write-up is :

USD's reign is slowly diminishing; the dragon's fire product - the RENMINBI in the coming years might very well replace Uncle Sam's green "enviable" piece of paper !

NOTE : All ideas expressed are my personal views. 

For suggestions & queries - contact me : nakul.r90@gmail.com

THE EMERGING INDIAN MARKET - a photographic glimpse

THE INDIAN MARKET

$ The Ailing US Dollar $

The season of economic crises is writing an epitaph for some of the most trusted entities in the world markets. US Dollar - one of the most resilient and the reserve currency of the world seems to be in grave danger. I will present my personal colloquial views on the same very soon. But for the time being, I couldn't help but share this self explanatory article from the 'Wall Street Journal'.

Why the Dollar's Reign Is Near an End


The article explains why the world chose the USD as its reserve currency and gives some of the possible reasons as to why the next decade will see the birth of a new reserve currency.


UTZKVAXXDRM4

'Demand - Supply Cycle' & Effects

Demand & Supply; two very simple words that have been popping up a lot in just about every news or magazine article. Thanks to the current economic doldrums, the words that seemed so simple are actually turning out to be much more than what their literary meanings connote.

So I have analysed some of the most basic yet essential (for an economy) impacts of the 'Demand - Supply Curve'; that are making up news and leading the world markets into a turbulent phase.

I shall make up my own headlines and try to explain them one by one.

• INFLATION - The most searched word on the net !

So what has the demand supply curve got to do with inflation ?

Well the root cause of inflation lies here itself. Discrepancies in the 'demand supply curve' gives rise to Inflation. How? Let's understand in simple words:

Imagine the DEMAND for goods & services increases; SUPPLY of goods & services on the other hand falls short to pacify the demand.

RESULT : To check the increasing demand; price of goods & services increase bringing the DEMAND SUPPLY CURVE in perspective; resulting in INFLATION.

What if the SUPPLY increases and DEMAND decreases - DEFLATION !!! Decrease in prices ! That has been a dream for just about every common man.

• US DOLLAR VS INDIAN RUPEE : The war not won !

Okay, let me put it this way; the price of $1 has been fluctuating a lot of late, mainly between Rs.43-Rs.50 (past 5 yrs).

Reasons for such fluctuations are countless, but again 'demand - supply' plays a good role here. The USD is the reserve currency of the world - implying that the equity floating in the markets is in the form of USD. Considering the Indian market, more the investment in the market, more will be the amount of USD flowing in; more & more USD means SUPPLY is more, when the DEMAND is still the same.

More SUPPLY, less DEMAND - Value of INR appreciates ( eg. from Rs.45 to Rs.43).

Similarly, when the investment is less or the investors start withdrawing their money, USD volume decreases; implies the SUPPLY decreases which eventually means an increase in DEMAND - And INR depreciates (eg. Rs.45 to Rs.49); which is the current status of INR.


With the commotion in the world market and the news of an oncoming recession, FIIs have decreased, resulting in the INR depreciating in value.

• SHARE MARKET : The commotion that never ends !

Alright ! Recession or no recession; the share market plays its fair share of unpredictable Bull & Bear fight. Now what has the 'demand - supply cycle' got to do here ? Well the idea was presented a few lines above, but now I shall elucidate.

Okay, the world market can never be truly understood. What topples it, or what pacifies it; no clear picture ! But one thing's for sure, even the slightest of rumours can lead to a decline in the share prices.

The current economic scenario has done quite a similar thing.

US & EU Crises; JAPANESE earthquake; investors have never felt such risks in the past decade. Eventually, they have started withdrawing their funds from the share markets, selling them to overcome their fear of losing their money. Also, FIIs have decreased; leading to a decrease in the amount of USD floating in the share market.

Now less money = less share prices = the current situation !

SO THE NEXT TIME YOU COME ACROSS 'DEMAND & SUPPLY' (the words); KEEP IN MIND THAT IT'S THE SIMPLE THINGS IN LIFE THAT ARE ACTUALLY THE ONES TO BE CAUTIOUS OF !!

CENTRAL BANKS - The Mainstay of an Economy

RBI INSIGNIA

Central Banks - simple banks for most of us; their complexity and primordial importance in an economy is what most of us tend to neglect, rather not bother about. And there's no harm in not knowing about a Central Bank's function, especially when we are living in a healthy economy.

But what has the recent trend showed us - the recent economic crises, inflation (as mentioned in my last post), financial stalemates et al; all have in some way or the other brought a nation's Central Bank in the picture.
So what is a Central Bank ? Why is it so important ? I shall answer these questions citing the example of the RESERVE BANK OF INDIA (RBI) wherever necessary.
RBI - the Central Bank of India; a bank that controls money flow in our economy, issues currency, controls foreign exchange & controls the interest rates in our economy.
Hard to decipher ?! Let's see this:

• CONTROLS MONEY FLOW & ISSUES CURRENCY : Pick out a currency note from your pocket; saw the name of RBI written everywhere ?! What does it imply? In simplest of terms it means that the note you just saw has been printed & issued by the RBI. Meaning that all the currency in the form of INDIAN RUPEE (INR) in the Indian as well as the world market is printed and sanctioned by the RBI. (not much important a point)
• CONTROLS FOREX : Every nation has certain amount of its wealth in the form of foreign exchange of some other country like US-dollar, Euro, Dinar etc. Example India has around 318,220million USD as forex reserve.(Source: Wikipedia). USD being the universal trading currency, all forex is measured in terms of this omnipresent US-DOLLAR.
• CONTROL INTEREST RATES : One of the most important functions of the central banks (RBI in India) is to control the rates - rates of lending money and rates of receiving money to and fro an economy. Let's understand this is detail...

In an economy, the banking system enables the flow - in and out of the consumers' hands. Where do these banks get money from ? How do the banks gain profit ? The answer : 

Well the money printing machine i.e the RBI lends money to these banks for them to function. Now lending sure comes at a price. This price is in the form of an interest rate - REPO RATE(RR) - the rate at which RBI lends to different banks. The current repo rate stands at 8% i.e if a bank borrows Rs.1,00,00,000/- from RBI, for a period of 2 years compounded annually, it will have to pay back Rs.1,16,64,000/- after 2 years.

Meaning : more the repo rate more strenuous will the task of borrowing become and vice versa.

REVERSE REPO RATE(RRR) - Rate of interest at which RBI borrows funds from other banks. RBI AND BORROWS MONEY ? Well let's say that banks deposit their money with the RBI at this interest rate to get good returns in the future - depending on the Reverse Repo Rate - the current RRR is 7%.

SO IN A WAY, THE CENTRAL BANKS ARE IN TRUE TERMS THE MONEY CONTROL MACHINES OF AN ECONOMY - by balancing the interest rates, central banks ensure that an economy functions smoothly; by controlling inflation(to be dealt in the next post), ensuring economic growth.

TO KNOW MORE ABOUT RBI's FUNCTIONING - refer to this comic book - issued by RBI itself - RBI - MONETARY POLICY - MONEY KUMAR COMICS

INFLATION - The Contemporary Economic Witch

The world today is becoming a sobriquet for Correction; correction in share market, correction in dollar rates, correction in interest rates and very soon as prognosticated by many trade pundits-correction in gold prices ! The logic is simple - a boom in any economic sector is followed by a correction period; after-al "the bubble of health" has to burst someday. That's what we have been witnessing since the past year.

But there's one thing that just doesn't seem to correct itself - INFLATION

Ever rising prices of household items, services, taxes; with just the same income in hand of the middle and lower classes and the exponentially rising anger and dissatisfaction is what the word INFLATION connotes to me in the most basic of terms.

The best example of inflation: The price of petrol :

From Rs.45 in 2008 to Rs.64 in 2011; a whopping 42% increase and rising !

REASON :

Inflation basically finds its roots in the "Money in hand-Demand-Supply Cycle"

More the money in the hands of a consumer --> More will be his/her demand for goods & services

---> Difficult for an economy to meet the growing demands ---> To curb the demand, price of goods & services rise -> INFLATION is born !
As a matter of fact, whatever/whichever event leads to depreciation in the supply of goods & services, becomes a reason for inflation !


SOLUTION : 
Though no particular solution to tackle inflation is cent percent effective; yet to tame this 'witch' few of the steps that our governments have been taking can be listed as :

• ROLE OF CENTRAL BANKS (RBI in INDIA) - The money control machine of an economy aka the central banks or the Reserve Bank of India in our purview; control the supply of money by correcting the interest rates (Repo Rates & Reverse Repo Rates - explained in the above post), hence bringing down the inflation rate.
• MONITORING SUPPLY - Supply of goods in an economy should be effectively monitored to check any discrepancy that might lead to inflation. Example : Indian economy is an agro based economy; bad harvest due to poor irrigation or chemical treatments should be checked by the government to keep the demand and supply of agricultural goods balanced.
• AUSTERITY MEASURES - More the the expenditure, more will be the rise in prices; thus to tame inflation a government should adopt austerity measures for sometime by restricting its spending.
• COLLECTIVE EFFORTS - Do I need to explain that ?!

The above steps can to some extent jeopardize the economic growth of a nation, but for a small period; and in the long run the INFLATION WITCH would face its own sudden death !

                

SAFE HAVEN ?! Let's go "GOLD" !!

As connoted in my last post; when all investment options fail, it's time for investors to GO GOLD ! As promised; let's do a reality check as to why the 'yellow metal' will certainly yield good returns.

GOLD AND DOLLAR - the inverse relationship 

The price of the US Dollar and Gold are inversely proportional. As investors start losing faith in the green currency, they start to invest more in gold and hence lead to the shooting up of the price of gold.

Let's understand this with a simple example ( Source : Economic Times)

"Like most other commodities, gold is priced in US dollars in the international market. And the US dollar has been losing value against other currencies, including the Indian rupee. The rupee has appreciated by around 6.2% over the past two years, and currently quotes at around . 45.6 against . 48.6 two years ago. This has limited the returns in rupee terms. Let us understand this phenomenon through a simple example. Let us say at a certain point of time gold is at $1,000 per ounce. A year later, it is 
at $1,200. The return in dollar terms is 20%. 
    Now, let us say one dollar was worth .Rs 50 
initially. So, at that point of time in rupee 
terms, one ounce of gold was worth 
. 50,000 (. 1,000 x . 50). A year later, one dollar is worth . 48. At that point of time, one ounce of gold will be worth . 57,600 (1,200 x . 48). This would mean a gain of . 7,600 (. 57,600–. 50,000) or a gain of 15.2% (. 7,600 expressed as a percentage of . 50,000). So even though return in dollar terms is at 20%, the return in rupee terms is rather limited at 15.2%. Of course, an appreciating rupee will limit gold returns, but that does not mean that gold is not a good investment bet. "

So here we have it : 

The governments of nations constantly print currency notes to keep an economy running. The idea was and is that with more money in the financial system, banks will lend more. The increased lending will help people buy more goods and services which, in turn, will benefit companies and thus generate more employment and hence more consumption.

However, when anything is suddenly available in excess quantity, it tends to lose value. So, if the US government prints dollars, as it has in the recent past, the dollar will lose value against other currencies. This, in turn, means that other currencies will appreciate or gain value against the dollar, as the Indian rupee has over the past two years. 

Consequently as more and more currency across the world is printed, all the smart investors will head towards gold, driving up prices of the yellow metal.

P.S: This post has been inspired by the "GOLD VS DOLLAR" ARTICLE that showed up in ET a few months back.

Investment Guide - for "Fresh off The Boat" Investors

Alright...the world economy no doubt is going through a bad patch; in fact a really "dismal" phase of cluelessness, commotion and intonation. With the news of US Debt Crisis, and it's projection as the one event that could show the world what intense recession meant or the ongoing Domino EU Debt Crisis that is just not ready to cease; the world market is just not ready to stabilize.

Unstable share prices, unstable sensex, unstable foreign exchange rates et al; the modern day investor is just not ready to decide what to expect out of the market or how to choose an investment portfolio that would minimize his/her risks and guarantee an equally healthy return on investment.
The coeval investor is just not ready to see his/her hard earned money lose its value. Let's see what investment options we have in the current day scenario :

• Share market ( way too risky)
• Govt. Bonds ( a safe bet, but not so lavish returns)
• Debentures ( naah..I don't think they are in a state of safe level)
• Mutual Funds ( alright...not an unsafe bet..you have your set of marketing gurus to invest your money)
• WHAT ABOUT GOLD ??!! Strange is it..or is it the safest investment commodity ?

Well, let's see what GOLD can actually do to your investment ! Let's analyse the graph ! (goldprice.org)

What does the increasing graph connote ? Perhaps gold price in 1990's was much less than what it is today, signifying a clear increase in the price exponentially.  A comparison shows that if the price of gold (USD/oz) in 1990 was around $490, it today is close to $1700; a whopping 257% increase in the price. One more thing worth noticing in the graph is it's close to stable increase, without any drops or lows.

The interpretation : 

A person who invested INR 1000 in gold in 1990, would have got close to INR 3570 in 2011; and the return on investment just doesn't stop rising; making INVESTMENT IN GOLD one of the safest investment options in today's 'not so stable' economic scenario.

Invest a currency note in gold; and the market will ensure that you get a bigger currency note in the future in return !!

THE REASON FOR THE EVER RISING PRICE OF GOLD WOULD BE DEALT WITH IN MY NEXT POST !

P.S : All my posts are my personal interpretation of the current economic scenario. Any discrepancy if noted can be intimated without hesitation.

Economic Overhaul or Economic Downturn - 2 August 2011 THE 'D-DAY'

Alright, 2nd August 2011 is definitely going to be remembered as either the day that marked the downfall of a colossal economy like the USA or the reference day that saved the world from a massive economic recession.
Whichever be the reason, one thing's for sure; the world's trust on an economy which maintained a 'AAA' rating ever since its constitution and an economy that has so long acted as the beacon of world trade; the economy that gave the world the priceless DOLLAR; UNCLE SAM'S UNITED STATES OF AMERICA , is surely going to weaken.

The hyper links regarding the reason for this debt crisis have already been given in my previous post. But to briefly explain the "hows and whys"..let's take this example :

Your parents have set a certain limit within which you can borrow money from them as and when needed in a month, and of-course this money you refer to as the palatable pocket money. Let's imagine that that you spend all the money and are about to exceed your limit ; what are your options now ?

• Ask your parents to increase your pocket money limit or "CEILING".
• Cut down on your expenditures and save more money to never exceed the set limit.

The above example when considered keeping in mind the state of affairs in the US has given rise to a DEBT CRISIS. 

USA had a fixed debt ceiling and when the ceiling was reached things started getting murky. The govt's vault has little money left to pay back the debts, to pay the dues and to run the economy.

SOLUTION : Well the Republicans and Democrats of the US Senate are not ready to arrive at a common consensus.

The Republicans want Obama's government to cut their expenditures to pay back the debts.

Whereas the Obama administration thinks that increasing the debt ceiling is the only viable option out.

RESULT : 2 August 2011 has been predicted as the day when USA will face default ( inability to pay back debts); leading to grave outcomes for both the US and the world economy.

To wind up, the internal commotion in the US Senate has jeopardized the world economy. with half the world economies losing faith in the state of affairs of the US.  

Just 2 more days and the result will be in front of us. 

Vive la WORLD ECONOMY !!

PS : Being a 4th year engineering student, the placement season for me is just about to begin. And frankly if at all the world enters the gloomy recession, I'll cuss MR. OBAMA for the rest of my  life.

Debt Crisis : THE WEEPING GREEKS & THE SMUG UNCLE SAM

With the world economy in a state of shock or perhaps a state of mutely heading into a state of the "Stygian Recession", yet again...
Here are the 2 most easily understandable articles that can bring things in perspective..perhaps make you understand how we have again reached a stalemate when it comes to saving the world economy :

• GREEK DEBT CRISIS : What led the EU into its current state of economic affairs 
• US DEBT CRISIS : The rise & fall of an economic giant

PS : Sticking to my colloquial approach, I have tried to find the articles that explain the subject matter in the simplest of ways possible.

Debt Instruments

Debt instruments ?! Well if not the same, you all must have heard about BONDS and DEBENTURES !
And that's what will be dealt with here.

Alright..let's suppose a poor yeoman wishes to construct his house in village. His modus operandi would be to first check his pocket and borrow the rest. Upon scrutinization, he realises that he has fallen short of Rs.10K.
So he goes to a nearby moneylender to borrow this sum at a specific interest.

Now in economics terms; the money lent by the lender is an investment for him, because the borrower will return the principal with an additional interest. When this transaction is written on a contract, it becomes a debt instrument, where the lender becomes an "investor" and the borrower becomes the "issuer".

On a gargantuan scale, the term BOND is used for instruments that are issued by state or central governments ( like the ones issued by the GREEK Govt., which has led to the Greece Economic Crisis) or PSUs, while the term DEBENTURE is used for instruments issued by private players.

The written contract will specify 3 key details :

1. Rate of interest : rate @ which money is borrowed

2. Maturity : date on which the principal will be repaid

3. Principal : the money lent

Depending on a person's risk tolerance, a person can decide on what bond or debenture to invest in. The main risk lies in the fact that the company or institution that is the Issuer, becomes bankrupt or shuts down abruptly. Here comes the role of CREDIT RATING COMPANIES like CRISIL ( in India) and STANDARD & POOR'S ( on the global scale). 'AAA' rating means the highest safety and 'D' means that the company is in default ( citing: GREEK ECONOMIC CRISIS).

A general principle in investment: "Higher the risk, higher the interest that the company will pay, on the other hand a safer company will provide a lower rate, but will ensure that your money rests in safe hands." Thus the safest kinds of debt instruments are the ones issued by the state or central govts., because the govt. itself guarantees the returns.

All About Mutual Funds

So..when was the last time you saw a 'disclaimer' crop up in a television commercial quoting a trite statement "Mutual funds are subject to market risk. Please read the offer document carefully before investing." ? Perhaps yesterday..or may be an hour back.

So what does this statement connote ? Well the answer will be dealt with in the next few lines. Read on...

Suppose a middle class service man with a monthly income of around Rs.25K, thinks of investing in the share market, with the inherent fear of the stocks crashing and him losing his hard earned money. Such investors whose "risk tolerance" is low retort back to a well diversified investment portfolio. It is this diversified investment portfolio that brings MUTUAL FUNDS ( also called ASSET MANAGEMENT COMPANY [AMC] ) in the picture.

WHAT IS AN AMC ?

An asset management company pools money from investors and invests it in a portfolio on behalf of the investors. The money pooled in is the "mutual fund", which is invested in various asset classes like equity, bonds, debentures (to be explained in the next few posts).
The AMC is responsible for investing the pooled money into specific securities. The AMC constantly tracks and monitors the market trends and manages the funds, leading to low risk and hopefully quashing the fear of losing ones money in the "not so predictable" market.
ICICI Prudential Asset Management Co. Ltd., is an example of an AMC.

Different kinds of funds are available viz. Hedge funds, sector funds, debt fund etc, the details of which are beyond the colloquial approach that I'm sticking to !!

Understanding FDI & FII

Ever since I started digging deep into the XYZs of understanding the world economics; I felt the urge to at least start reading about the basic terminologies and fundamentals; a plenitude of which was always present in all papers, books, journals et al. One thing that immediately caught my eyes and ears was the frequency of the usage of this "FDI & FII" thing everywhere. So here's a post that will try to keep things in perspective. Read on...

With liberalization of economies of the world and the rapid  globalization, markets are opening up for direct investments from companies and firms of different countries to spur economic growth in the receiving market / economy / nation. And this is what has given rise to the terminologies FDI & FII.

Take for example; a company based in Germany buys a stake in an Indian company leading to a rather fast pace development and revenue generation, benefiting both the organizations. This is what we call FDI or FOREIGN DIRECT INVESTMENT.

Buying stakes doesn't entitle the investing company to take over the parent company; rather the parent enterprise is the plenipotentiary in all matters. And this investment in an aborigine company by a foreign company gave rise to the term Multi-National Company (MNC).

Example of such a collaboration is BAJAJ-ALLIANZ ( Bajaj being the parent company and Allianz being the German financial services giant).

Some of  the primary advantages of FDI are:

• International Trading by transfer of knowledge, expertise & skills.
• Plays a catalytic role in the development of both the enterprises and the parent economy.

Sectors attracting high FDIs are IT, TELECOM, PHARMACY, REAL ESTATE, AUTOMOBILE INDUSTRY etc.

MORE THE FDI, MORE WOULD BE THE SANGUINENESS OF AN ECONOMY.

Coming to FII; the starting 'F' and the ending 'I' connote the same idea as in FDI; the difference being only in the middle 'I', that stands for INSTITUTION, making FII = Foreign Institutional Investment, where the Institution/Investor is a registered operator in a country other than the one in which it is currently investing.

Such investors include Insurance companies, mutual funds etc.

Such companies invest in the parent economy's finance markets; with constant regulation by some regulatory authorities in the receiving end economy. Example of such a body in India is SEBI = Securities & Exchange Board of India.

I hope the next time you witness these words anywhere, you'd be able to construe the ideas more clearly.

Economics aka The Dismal Science - A Preface

Wikipedia says that, "Economics is the social science that analyses the production, distribution and consumption of goods and services", and so does every other online dictionary and information portal.
So how would a non-commerce, non-economist someone like me or may be you understand the depth of such hefty definitions ?
Well keeping in mind the answer to the aforesaid question, a pellucid and colloquial approach will be followed while writing up the posts on this blog.

So in layman terms, Economics can well be understood as  the science of earning, buying & selling of different things. It's the "different things" on a micro level and a macro level that have made economics the mainstay of today's household and the world economy.

Daily news updates about the markets going up, going down, prices rising, defaults occurring...blah blah blah...can well be understood by the people who already have at some point of their lives gone through the fundas of economics, or perhaps are into the working industry for quite some time. But what about the faction with the phobia of economics, or may be the ones who want to dig deep into the understanding of the global economy but somehow can't find the right way to begin.

Well this blog is finally the panacea for all those people who want a simple-term, interactive and interesting understanding of this sombre science that makes the world go round and round. I'll be beginning with basics and slowly and steadily we'll reach a stage where even a primary school kid would be able to understand the news broadcast by the different economics giants, be it print media or the visual media.

But before I  begin, I feel the urge to introduce myself. Don't confuse me with someone who has done a major in economics or perhaps someone who has done a vast study of this science since the beginning of time.
In-fact I'm a 3rd year engineering student from New Delhi, who has developed a strong penchant for economics ever since I read my first economics article that explained the 'Global Recession of 2008'.
That article made me think and delve into the xyz's of the world economy, and finally, here I am, writing about & explaining the THE DISMAL SCIENCE.