The Rupee needs a symbol, the Euro needs believers - The Honest Truth By Ajit Dayal
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The Rupee needs a symbol, the Euro needs believers A  A  A
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25 JUNE 2010


Having exhausted all their energy on drafting and re-drafting the Direct Tax Code, one would have thought that the Ministry of Finance would have wanted to take a break from their thankless task.

But, no such luck. Parallel processing is second nature to our bureaucrats just as parallel processing wealth for themselves and their family and friends is second nature to our politicians.

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Over a year ago, they were parallel processing the symbol search for the Rupee with the stimulus package to revive the Indian economy - not having realised that the Indian economy needs less government interference to reach its full potential, not more.

The Ministry of Finance wanted a symbol to "represent the historical and cultural ethos of the country as widely accepted across the country" and one that should be easily used on the standard computer keyboard.

A year later, a news item on www.NDTV.com suggests that the Cabinet has been presented with a choice of new symbols for the Indian Rupee.

The NDTV website reproduced these 5 short listed symbols.

Source: NDTV.com

Sadly, my recommendation of a "Z" has not made it to the list.
There goes my chance to win Rs 2.5 lakh and put it all in the stock markets and in gold as I had indicated in my earlier column on March 4th, 2009.

Z would really have been perfect, I think, for all the following reasons that I had listed in the earlier Honest Truth:

Z represents the sound of sleeping "zzz".
What Indian politicians have done for decades.

Z also represents the emotion that is stirred when we hear our politicians speak. They will tell us what a great country India is and how we must carve out our rightful space in history. Meanwhile, they are carving out their rightful share of some shady deal.

Z also represents the most important agenda item on every politician's list: how to secure a "Z" level of security assignment for their sacred bodies and for their families.

And Z stands for a person who is unable to stand up for anything. Like an "S" he is crooked, and bends easily.

And Z can also be seen as a palm on top of a table and a palm underneath the table and the diagonal line that connects them is the wire transfer to the UBS Bank account.

On the computer keyboard, the "Z" is near the shift button to show the "shifty" nature of this alphabet.

And Z also represents what can happen to a country if it is run by selfish, tin-pot politicians. We end up like Zimbabwe and a currency like the ZAR. Worthless.

But there is a certain positive finality about "Z".
It is the ending of a sequence.
It is the sign that enough is enough.
We won't take this nonsense anymore.
And come April and May we will show you what we mean.
It has boldness to it.
A definite response, the last word.
So, let's use it - and use it well.
So, there it is: my vote and nomination is for a "Z".


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The Euro needs believers
But the winning symbol has to reflect the sound of "Ra".
And, as one comment already sent to ndtv.com questioned, why are we obsessed with Hindi? Why should the new symbol represent an area that cannot even vote in a Prime Minister anymore?
All valid points, indeed.

Meanwhile, the Europeans are in a crisis.
Well, yes, they are all being knocked out of the World Cup like pinballs either by the Africans, the South Americans, the Central Americans, or the Asians.
But, while that is a problem for their egos and their history, they are also being beaten up on their currency.

The famous investor George Soros says that Germany is threatening the very existence of the Euro and the "European project" (as he calls the creation of the Euro) is in jeopardy and could fail.

But why blame Germany? Because, apparently, the German government believes that it is their god sworn duty to kill any signs of inflation. And they are doing this by spending less, reducing deficits, and ensuring that the economy remains dull. That sounds pretty rational to me.

The French, of course, don't like the idea at all. Hey, who needs discipline? Ask the French football team! They know about the lack of discipline. A European football fan told me that the French stars were flying in from their training camps to attend parties in Paris. Live the good life, why bother about these silly rules that focus on the long term. And so the French believe that their job as a government is to spend and spend till the world economy is forced to recover.

The US, of course, is the leader of the "spend now" pack. President Obama said he "will tolerate debate but not division" when he sacked his too outspoken military commander in Afghanistan. Well, there is no real debate in the US about government spending, that's for sure. There are no voices in government asking for less spending. "Run the printing presses" is the battle cry.

And so they made everyone in the US who did not really want a new car, go ahead and buy a new car. Till that clunker car programme ran out of cash.

And they gave everyone some tax money to buy new homes, till that money died out.

No, they will not let the banks who bought Greek debt (as if it was as safe as German debt) go bust.
They will not let the speculators who financed Spanish vacation and retirement homes (for the English) go bust.

Nope, the people in high finance have high connections.

Instead, the governments want to print more money to save them.
So you see record profits at Wall Street firms and record bonuses.
Job offers are back with big buck bonuses.

But a few governments are taking what I think is a rational approach.

The Germans are saying, "Enuff is Enuff, this madness must be schtopped".

Slovakia says they will refuse to pay their share of the bail out package and suggest that Greece be thrown out of the Euro zone for mis-managing its public finances.

With all this cross-fire, it is little wonder that the Euro - with a symbol that looks pretty solid - is on shaky ground.

So, while governments are busy looking for symbols, keep looking out for their actions. These are unusual times, indeed. The objective of government policy in much of the western world is to reflate and inflate back to the go-go days of the past two decades. The Germans are the exception - though even the British have recently announced cuts in spending.

In all this madness, India will do well over the years. Yes, we have our share of internal problems (recall why I like the symbol 'Z') and yes we will get a little stirred by the events in the West. But there is internal growth and that makes me happy with the long term buy on Indian stocks. And, who knows, even the Rupee may strengthen over time.


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Disclaimer: The Honest Truth is authored by Ajit Dayal. Ajit is a Director at Quantum Advisors Pvt. Ltd and Quantum Asset Management Company Pvt. Ltd. The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and has not been authenticated by any statutory authority. The author, Equitymaster, Quantum AMC and Quantum Advisors do not claim it to be accurate nor accept any responsibility for the same. Please read the detailed Terms of Use of the web site. To write to Ajit, please click here.


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3 Responses to "The Rupee needs a symbol, the Euro needs believers"

RAVIKUMAR

Jul 15, 2010

We need a symbol only and not the intrinsic value. We will always teetoe U.S. and peg the currency much lower than others (but for Lira and Yen and perhaps Sri Lanka). The English gave us the language, unbreakable bridges and rail lines. Don't worry our politicians will take everything away and leave us with nothing.

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Gaurinder Rana

Jun 26, 2010

Mr Ajit, as always you have been honest,apt,concise in your thoughtprocess and in complete harmony with what you write/share at various forums.It requires immense amount of courage to do that.I wish you success in your noble crusade against bad goverance and lipservice so that...mera bharat becomes mahaan and not confused.

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Mamraj S Chahar

Jun 25, 2010

Hi Mr Ajit. When I met you in Singapore (Investors Workshop by CA at hotel four seasons), I observed you emphatically lambasting politicians and your current article with valid and vivid comments about our so-called political leaders inspired me to endorse your views.

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