The Paradox of Thrift!!

What would life be devoid of any ironies or paradoxes. Quiet lackadaisical I presume. The textbooks would be quiet skinny and straightforward then.

Let us look at this paradox- that hits us most in these times; especially since we are in India where profligacy is abandoned and thrift is espoused.

How many of us invest in shares or mutual funds vis-a-vis how many of us have parked our cash in the savings account? How many of us save a pleasant day today for a bright future years ahead? For most of us its innate to play safe and saving is the order of the day. The credit crisis in US further validates our conservative spend designs. We scoff at people (and rightly so); who take credit of many many times more than they earn without realizing that one lifetime would not be enough to payback. We live lives in our dreams which we hope might come true in the distant future. Right from the grandma's tales , panchatantra, Aesop fables, to "dont count the chickens before they are hatched"; we are conditioned to be conservative and save our resources; be it time, money or breath.

Thrifty is not being stingy, but being provident. Whats wrong in being thrifty?? Nothing. and I am not writing to even try and metamorphose what seems to be a congenital trait in most of the denizens of the Indian subcontinent..(including me)

But this paradox which I am going to write on; seems ineluctable at the current recession times. Suddenly you see the regular itinerant- reluctant to plan his next trip; or the avid book reader- substituting documentaries and the idiot box for books or the self proclaimed gourmet sticking to home food(he claims that his recent abstemoius ways are more to do with the recent doctor's call). Its happening all around us and we are suffering the recession long before it reaches us. Even that is fine; we love suffering (see history, movies, your neighbors) and you know what I mean.

My concern is are we begetting recession and worsening the current economic plight. The paradox of thrift states just that.

Lets all start saving. We buy lesser, forcing companies to produce lesser; thereby decelerating economic activity; inducing downturns-slowdowns-downsizing; leading to reduction of incomes - leaving even lesser amount with us for discretionary spending and this vicious circle goes on...Keynes multiplier works but in the reverse spiral.
And the economic activity retracts further ; worsening the crisis.
Well we may not realise this at the individual level but this would be the aggregate picture
Thats why the central banks use an expansionary monetary policy reducing bank and reserve rates; thereby increasing money supply in the market to reverse the multiplier in the positive direction. And so do governments increase fiscal spending to drive employment and infrastructure growth- capital formation.

Keynes was a great economist and he was particularly right in elucidating this paradox.

Critics of this paradox had pointed out that saving in banks in turn leads to loanable fund which in turn leads to more credit and investment + growth. Well they are only partly right. In the current credit crisis, lowering of rates or mere increase in bank deposits have not lead to a proportionate increase in the banks lending credit. On the other hand , banks have tightened their approval policy and rightly so post the sub-prime.
With the reserve bank and govt' playing their roles- what do we do. We do what we would ideally like to do


Plan a travel itinerary, read new books, check out the latest movies, restaurants, join more clubs, buy more(of course within our credit limits). Whats more there would be better than ever sales and offers in these times.

Well thats enough motivation for me to go out and splurge. Nice food for thought for this Holi season. The Diwali sales dipped hugely last year- but its festive time again. It feels good to see that every rupee spent might be a good thing for our economy. Afterall each drop makes an ocean!!!

Happy holi!!

Consumer:To spend or not to spend?
Bank: To lend or not to lend?

Consultant Keynes:
Too much of providence
begets too less of economic action
Enhance Your spend tolerance
and alleviate the crisis fraction by fraction

Chilling Out!!!(Literally)

The winter has finally set in the Northern Plains. With a mild winter during December, many were disappointed especially those who yearn and crave for the Winters--ones relegated down to the south .
However the New year doesn't just rekindle new hopes and wishes; it begets changes starting right from the clime with a sudden fall in temperature and nil visibility to more visible signs later(I hope). The effect is more dramatized when you crave for winter and then it sets in after a prolonged hiatus. But it comes in all its fury accompanied by fog..Well people in higher forties and mid fifties(am talking abt latitudes ;)) would think that this winter is trivial; compared to their snowy winters even at sea level.. The truth ain't that however, tropical winters have an effect even greater than the temperate and sub-Arctic winters. You get locked inside your offices and homes avoiding the loo in summers and the chill in winters--which is a starking contrast.

But what I fail to understand is- why do some of us yearn for the chill, the winters-isn't it more uphill to do things in winters all across rich, poor, students, adult workers etc..I have my answer below(You may choose to differ)

The first chilly wind of the season
drives an inner happiness -no reason
You pine for more of this chill
for the weather to become ; like up there in the hill

The sweet frost bite sets in;
While the sun navigates to some far away land
The moon looks at us with a victorious grin

The fog pushes the moon-out of sight
Sets and engulfs ; forming a thick layer
With low visibility outside admist this fight
Its the perfect time to look within; or for some prayer

The far unknown mysterious tempest
soars the chill to its crest.
Winter says its my time again
the conquest is over and its my reign

The thrill sets in with the chill
Even though life gets a little more uphill

There is a latent spirit that rekindles
as the cold season loom over
The external juxtaposition is visible
as the fog clouds hover

Like the two parallel rail tracks intersect
at the major junction
The external realm crosses over
without any noticeable compunction

The alien and disconnected world just existed before
but now its visible in its crude and pure

Suddenly the circle around life expands
and the lines of separation fade into the horizon
The "nature" get enmeshed seamlessly
One interacts with the bios without deception

This demystifying external power enthralls you
The cosmos gets connected to you
There is some faint distant nebulous force
That guides a river and determines its course
Or influences man and shatters the over-confidence
Or overwhelms man in his cocky pretense

To be a part of the huge cosmos
Trivialised the past gain or loss
Helps appreciate the creation around
the diverse yet eclectic bios abound

Now I know why I crave for the cold season
The rendezvous gives me a redefined vision
The dark days shed the light
on the larger self and the "overall" might
Winters are beautiful, marvelling and yet ironic
crushing or tempering mankind- like sinking of the titanic
I feel happy within with the thought
There are many far away who would determine the plot
Neither should I take full credit nor full blame
When I realise that its a much more complex game

Months pass and I pine again
for the cold to arrive
for the part to know the whole
and this connect to "revive"

chill out completely till the dark cold prevails:)

Saurabh

History Repeats itself...

Things were falling apart,
Like pointed arrows always missing the dart

Trusting others was not the question
when the soul itself was shaky
Nebulous was the past and the current
and the future looked equally quaky

That was the time when the slightest doubts were quashed
Negative reactions, utter callousness and brash expressions unabashed

The time you need them most
Like the sea struck ship..far away from the coast
Akin to the wailing infant looking desperately for the mother
Or reaching the dead end of the road--and you cannot go any further

In fullest form--they give it back to you
Your beliefs and expectations shattered- no cause, no clue
The law of extremes follows --the bad turns worse
You are at the receiving end of some long awaiting curse
Alone , unanchored you stand--more devastated than before
Lost in the dismal abyss-with nobody to nurse

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But post the catharsis you gather
It was all good for you--rather

The few people, beliefs and interactions
help you in your resurrection
You come closer to your soul
Which now defines your each moment, each role and every goal

Post the self discovery
easy streaming to your recovery
your mind str4eams get their new way
Your life is no longer in a disarray

Sunny days are back..
The ship has survived the potential shipwreck
The infant smiling on the mother's lap
Where is the dead end--your soul is your guide and map

Those people remain the same--but times change
Afterall--nature's law states that nothing is immutable
Ofcourse you knew it all , its neither absurd nor strange
This Reality has always been depicted in every raconteur's fable

You smirk at those shallow cow-hearts-with their souls totally camouflaged
You suddenly feel a new calm-There's no reason for you to get enraged

Looking at them and reflecting-- you feel like laughing aloud
You raise your hands to almighty-standing out of that crowd
You thank him very deep from your heart
As History repeats itself but now you deftly play your part