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Next Elections Next Month

By Dr. Khalil Ahmad

February 13, 2011

Then there was the Raymond Davis episode that proved to be a blessing in disguise to each and everyone fond of trying his / their hands at politicking. Both provincial and federal governments are making political hay while the Raymond Davis’ sun shines. This long queue also includes so many of those who are determined to fight and defeat US the Super Power in Lahore. What a great opportunity they have got to wage the 3rd World War against the last Super Power! (These politicos plan to be the next themselves!)

The Cruelest Tax Of All

By Sarel Oberholster 

January 31, 2011
 
The zero-interest-rate policy deserves closer scrutiny. Would a saver willingly agree to an economic environment of zero interest rates? Certainly not. Would a debtor prefer a zero interest rate? Absolutely. The saver and the debtor would, under normal, willing-economic-participant conditions, negotiate a "price" for the use of money saved. That price for the use of funds is interest.
 
The central bank enters the negotiation between saver and borrower, and by counterfeiting money it destroys the negotiating base of the saver. Counterfeiting money through policies of unlimited liquidity provision is a "price control" over interest rates, instituted to force interest rates down and eventually spiral them downwards out of control to zero. The interest income of the saver is eventually taxed to extinction at zero interest rates.

Natural Gas: Need For Price Rationalization

January 26, 2011 

By Ali Salman
 
The multi-pronged strategy of the government to make up for the gas deficit does not consider price rationalization in its policy mix. In presence of wrong price structure, supply side measures like exploration and conservation are likely to meet with failure. 

Monetary Policy: The Right Increase

By Ali Salman 

January 22, 2011
 
The State Bank’s decision to increase the discount rate seems justified to counter the rising inflation, a negative real interest rate and increased government borrowing.
 
When real interest rates are negative, there is no incentive for lending and saving. In such an inflationary environment, every individual would rationally spend her money today rather than save for tomorrow. This would further deepen the inflationary spiral. 

The Fatal Folly Of Protectionism

By Farooq Tirmizi 

January 18, 2011
 
In a nutshell, protectionism is when a government restricts the flow of goods in or out of the country – either through tariffs, quotas or outright bans – in order to protect either local producers or consumers of the good in question.
 
Yet, since 1929, the world’s economists have, by and large, agreed that protectionism is damaging to both the country that engages in it as well as the rest of the world. This is because protectionism was the leading cause of the Great Depression.

Anarchy Or Rule Of Law

By Dr. Khalil Ahmad

January 13, 2011

There are anarchists in every society,it is for the state to control them through law and force!

Trade Deficits And Fiat Currencies

January 11, 2011 

There is a definite connection between fiat currencies and trade deficits. Critics of the Federal Reserve are right to blame it for distorting trade flows and setting the US economy up for an inflationary crash. However, a trade deficit per se is not a sign of a bad economy. Indeed the trade deficit might blossom if the US ever returned to the gold standard, though it would be due to a productive net inflow of producer goods.

Sense Of Direction

January 3, 2011

With JUI (F), MQM, and PML (Q) once again out to test their gamesmanship, and ANP, PML (N), the Army, and the political-religious parties outside waiting in the wings, it seems Pakistan is all set to brace for another bout of political crisis - leaving us the people bewildered what the hell is the direction they are all moving Pakistan into!

This Bread Is Mine

December 25, 2010

What Smith, Ricardo, and Marx have done, and what the followers of the latter two continue to do, is to confuse the meanings of two important words: cost and value. While it may be true in the above instance that it might cost five dollars to produce the lumber from a given tree, the value of the lumber from that tree has no immediate relationship to cost.

Rewarding Market For Disclosure

December 17, 2010 

Adapting existing social contracts for business transactions hold the answer towards documentation; not levy of more taxes.

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