Once there was a little island country. The land of this country was the tiny island itself. The total money in circulation was 2 dollars as there were only
two pieces of 1 dollar coins circulating around.
1) There were 3 citizens living on this island country. A owned the land. B and C each owned 1 dollar.
2) B decided to purchase the land from A for 1 dollar. So, now A and C own 1 dollar each while B owned a piece of land that is worth 1 dollar.
* The net asset of the country now = 3 dollars.
3) Now C thought that since there is only one piece of land in the country, and land is non producible asset, its value must definitely go up. So, he borrowed 1
dollar from A, and together with his own 1 dollar, he bought the land from B for 2 dollars.
*A has a loan to C of 1 dollar, so his net asset is 1 dollar.
* B sold his land and got 2 dollars, so his net asset is 2 dollars.
* C owned the piece of land worth 2 dollars but with his 1 dollar debt to A, his net residual asset is 1 dollar.
* Thus, the net asset of the country = 4 dollars.
4) A saw that the land he once owned has risen in value. He regretted having sold it. Luckily, he has a 1 dollar loan to C. He then borrowed 2 dollars from B
and acquired the land back from C for 3 dollars. The payment is by 2 dollars cash (which he borrowed) and cancellation of the 1 dollar loan to C. As a
result, A now owned a piece of land that is worth 3 dollars.
But since he owed B 2 dollars, his net asset is 1 dollar.
* B loaned 2 dollars to A. So his net asset is 2 dollars.
* C now has the 2 coins. His net asset is also 2 dollars.
* The net asset of the country = 5 dollars. A bubble is building up.
(5) B saw that the value of land kept rising. He also wanted to own the land. So he bought the land from A for 4 dollars. The payment is by borrowing 2
dollars from C, and cancellation of his 2 dollars loan to A.
* As a result, A has got his debt cleared and he got the 2 coins. His net asset is 2 dollars.
* B owned a piece of land that is worth 4 dollars, but since he has a debt of 2 dollars with C, his net Asset is 2 dollars. * C loaned 2 dollars to B, so his net asset is 2 dollars.
* The net asset of the country = 6 dollars; even though, the country has only one piece of land and 2 Dollars in circulation. .
(6) Everybody has made money and everybody felt happy and prosperous.
(7) One day an evil wind blew, and an evil thought came to C's mind. "Hey, what if the land price stop going up, how could B repay my loan.
There is only 2 dollars in circulation, and, I think after all the land that B owns is worth at most only 1 dollar, and no more."
(8) A also thought the same way.
(9) Nobody wanted to buy land anymore.
* So, in the end, A owns the 2 dollar coins, his net asset is 2 dollars.
* B owed C 2 dollars and the land he owned which he thought worth 4 dollars is
now 1 dollar. So his net asset is only 1 dollar.
* C has a loan of 2 dollars to B. But it is a bad debt. Although his net asset is still 2 dollars, his Heart is palpitating.
* The net asset of the country = 3 dollars again.
(10) So, who has stolen the 3 dollars from the country? Of course, before the bubble burst B thought his land was worth 4 dollars.
Actually, right before the collapse, the net asset of the country was 6 dollars on paper. B's net asset is still 2 dollars, his heart is palpitating.
(11) B had no choice but to declare bankruptcy. C as to relinquish his 2 dollars bad debt to B, but in return he acquired the land which is worth 1
dollar now.
* A owns the 2 coins; his net asset is 2 dollars.
* B is bankrupt; his net asset is 0 dollar. (He lost everything)
* C got no choice but end up with a land worth only 1 dollar
* the net asset of the country = 3 dollars.
************ **End of the story; BUT ************ ********* ******
There is however a redistribution of wealth.
A is the winner, B is the loser, C is lucky that he is spared.
A few points worth noting -
(1) when a bubble is building up, the debt of individuals to one another in a country is also building up.
(2) This story of the island is a closed system whereby there is no other country and hence no foreign debt. The worth of the asset can only be calculated
using the island's own currency. Hence, there is no net loss.
(3) An over-damped system is assumed when the bubble burst, meaning the land's value did not go down to below 1 dollar.
(4) When the bubble burst, the fellow with cash is the winner. The fellows having the land or extending loan to others are the losers. The asset could
shrink or in worst case, they go bankrupt.
(5) If there is another citizen D either holding a dollar or another piece of land but refrains from taking part in the game, he will neither win nor lose.
But he will see the value of his money or land goes up and down like a see saw.
(6) When the bubble was in the growing phase, everybody made money.
(7) If you are smart and know that you are living in a growing bubble, it is
worthwhile to borrow money (like A) and take part in the game. But you must know when you should change everything back to cash.
(8) As in the case of land, the above phenomenon applies to stocks as well.
(9) The actual worth of land or stocks depends largely on psychology (or speculation)
Wednesday, December 10, 2008
Wednesday, December 3, 2008
Violent India
Well thanks to all the violence happening around country, I decided to write something here. Some random thoughts coming in to my mind finding way here.
So its about end of year. Still few days to go and I dont want list to grow any more. We witnessed violence all over. In Maharashtra over Bihari issue. In Bengal over Nano issue. In Assam, Delhi and other parts over terrorism. And just when we thought worst is over, Mumbai attacks happened. Sad sad year for Indians. I am not going to talk about terrorists, Pakistan, Raj T, Mamta Banergy and others who might have invoked this violence on innocent people. I want to talk about you and me. Victims, observers. People who want to do something but either just rant about it.
In school we were taught the national pledge. We used to take everyday. I know it still in Marathi. How many of you know it? Doubt even 1% know it once they graduate from school.
There are few things in the pledge.
1. India is my country -
India is "my" country. When something is mine, I have the responsibility to make it better. I dont know how many of us really understand this. Even I am not sure how to make it better. All I know is if I work hard some how it is going to help my country. If I dont do anything thats against law, against general moral/ethics, I will be helping my country. Even jumping a red light is not helping my country. Do I need to do any thing more to help the country. I can. But even if I am the most selfish person to walk (or blog :-) ), I feel if I can do what is bare minimum required of me, then thats enough.
2. All Indians are my brothers and sisters -
Now this is reciprocal relationship. For me to consider some one as my brother or sister, said person need to reciprocate the feeling, right? Sadly this is not happening in India. Bihari's want Bihari's railway. Marwari's wants marwari's as assitants. Marathi's want marathis in jobs. Is this how its supposed to be? I am fine with financial corruption. I really dont care. For me it even keeps the money flowing in the country to some extent. But moral/ethics corruption is far more dangerous. As most often or not, people will fight against each other when things go out of hand. Moral, ethical corruption always lead to bloodshed. This has been proved for years. Mahabharata did not happen because of land. It happened because there was deep moral corruption. It was not about greed of a man or group of men. It was about society which was getting corrupted. Sadly there is no Lord Shri Krishna on the scene now to help us out, or is there one?
3. I am proud of its rich and varied heritage
This is still so true. Only thing is now these cultures are fighting against each other. Raj T incident has had so deep reaching impact on my mind that its unbelievable. After Mumbai attack we mind less group of people start forwarding SMSes, where was Raj T and his good squad when mumbai burnt? Where were Marathi NSG commandos. All NSGs were from delhi and punjab. And what not. I read these SMSes just as I walked past hoarding saluting people like Karkare, Chitte, Dhobale. I havent cried in last 10 years but that day I did. We have become such mindless group as a country. We just need one reason to pelt stone at each other. I don't care what Raj T thinks and does. I hardly support in extremists. But when you forward SMSes like this you are becoming one of the extremists. Dont you think? You call politicians Thugs, Gundas, Opportunists. Didnt you also proved you are opportunists?
4.To my country and my people, I pledge my devotion.
To my country and my people I pledge my devotion. Hardly we do this. Muslims, biharis, bengalis, gujrathis, marathis, South Indians, north Indians. All are fighting against each other. Over land, jobs, women, water. Day by day we are going closer to separatism. As a large community with varied cultures, languages we are going further are further away from each other. It feels like Communal riots of 47 were like big bang which put in place the momentum to take us away from each other.
5. In their well being and prosperity alone, lies my happiness.
What can I even say about this. All we are worried about is me, myself and I. I will bash some one as everyone is doing that. So it makes me look good. We dont care to even think beyond news paper headlines as to what is going on. No one cared enough to go to Singur and talk to villagers there. But we were all bashing Mamta in the dirtiest language possible. No one tried to find out truth behind Raj T and anti Bihari acts of his. No one tried to see whats happening in Gujrath, who killed those Hindus but all were burning down Muslim houses. We are so angry, so worked up. Some people show it through physical violence some show it through online violence. Fuck, asshole have been cult words. I even read an article about how people should shove up the candles they were lighting in the memory of dead in Mumbai attacks, up their ass. I really dont know what kind of Sanskar this guy had when he was growing up.
What we need to do as a nation? Are there any straight answers? Something tangible
we can do?
All I decided to do was -
1. I will never hate anyone. Be it Raj T or be it Mamta Banergy. Be it muslim, chirstian, bihari, marwari, marathi.
2. I will be responsible about what I say and what I do. That much I owe to my country.
3. I will make sure I one statement does not create hatred in my friend who might be from some other culture.
4. I will make sure I create atmosphere on unity around myself. If everyone tries doing that, I am sure we can achieve unity all around.
5. I will not say anything out of emotion, out of hatred, out of rage, out of ignorance.
6. I will not tolerate violence on street. If some one is beating some one with out reason. I will try to stop violence. No longer will I be a mute observer.
7. I will work hard. I will work harder every day till I die. I will contribute in every way Lord Shri Krishna has enabled me to help my country and my country-people.
8. I will spread love. Love for even those that you think should be despised. That is what Mahatma taught us and that is what is the only way for better humanity.
9. Most importantly I will not be divided. I will treat everyone marathi, bihari, marwari, punjabi, male, female everyone the same.
I remember once my mentor told me that there wont be world war now in nations. Villages, towns will fight against each other. I know he meant it when he said that. I just wish it does not happen. I wish we grow up. I wish there comes some one like Gandhi/Tilak/Savarkar/Patel who can again lead us. Who can again channelize our energies.
Love,
Sushrut
So its about end of year. Still few days to go and I dont want list to grow any more. We witnessed violence all over. In Maharashtra over Bihari issue. In Bengal over Nano issue. In Assam, Delhi and other parts over terrorism. And just when we thought worst is over, Mumbai attacks happened. Sad sad year for Indians. I am not going to talk about terrorists, Pakistan, Raj T, Mamta Banergy and others who might have invoked this violence on innocent people. I want to talk about you and me. Victims, observers. People who want to do something but either just rant about it.
In school we were taught the national pledge. We used to take everyday. I know it still in Marathi. How many of you know it? Doubt even 1% know it once they graduate from school.
There are few things in the pledge.
1. India is my country -
India is "my" country. When something is mine, I have the responsibility to make it better. I dont know how many of us really understand this. Even I am not sure how to make it better. All I know is if I work hard some how it is going to help my country. If I dont do anything thats against law, against general moral/ethics, I will be helping my country. Even jumping a red light is not helping my country. Do I need to do any thing more to help the country. I can. But even if I am the most selfish person to walk (or blog :-) ), I feel if I can do what is bare minimum required of me, then thats enough.
2. All Indians are my brothers and sisters -
Now this is reciprocal relationship. For me to consider some one as my brother or sister, said person need to reciprocate the feeling, right? Sadly this is not happening in India. Bihari's want Bihari's railway. Marwari's wants marwari's as assitants. Marathi's want marathis in jobs. Is this how its supposed to be? I am fine with financial corruption. I really dont care. For me it even keeps the money flowing in the country to some extent. But moral/ethics corruption is far more dangerous. As most often or not, people will fight against each other when things go out of hand. Moral, ethical corruption always lead to bloodshed. This has been proved for years. Mahabharata did not happen because of land. It happened because there was deep moral corruption. It was not about greed of a man or group of men. It was about society which was getting corrupted. Sadly there is no Lord Shri Krishna on the scene now to help us out, or is there one?
3. I am proud of its rich and varied heritage
This is still so true. Only thing is now these cultures are fighting against each other. Raj T incident has had so deep reaching impact on my mind that its unbelievable. After Mumbai attack we mind less group of people start forwarding SMSes, where was Raj T and his good squad when mumbai burnt? Where were Marathi NSG commandos. All NSGs were from delhi and punjab. And what not. I read these SMSes just as I walked past hoarding saluting people like Karkare, Chitte, Dhobale. I havent cried in last 10 years but that day I did. We have become such mindless group as a country. We just need one reason to pelt stone at each other. I don't care what Raj T thinks and does. I hardly support in extremists. But when you forward SMSes like this you are becoming one of the extremists. Dont you think? You call politicians Thugs, Gundas, Opportunists. Didnt you also proved you are opportunists?
4.To my country and my people, I pledge my devotion.
To my country and my people I pledge my devotion. Hardly we do this. Muslims, biharis, bengalis, gujrathis, marathis, South Indians, north Indians. All are fighting against each other. Over land, jobs, women, water. Day by day we are going closer to separatism. As a large community with varied cultures, languages we are going further are further away from each other. It feels like Communal riots of 47 were like big bang which put in place the momentum to take us away from each other.
5. In their well being and prosperity alone, lies my happiness.
What can I even say about this. All we are worried about is me, myself and I. I will bash some one as everyone is doing that. So it makes me look good. We dont care to even think beyond news paper headlines as to what is going on. No one cared enough to go to Singur and talk to villagers there. But we were all bashing Mamta in the dirtiest language possible. No one tried to find out truth behind Raj T and anti Bihari acts of his. No one tried to see whats happening in Gujrath, who killed those Hindus but all were burning down Muslim houses. We are so angry, so worked up. Some people show it through physical violence some show it through online violence. Fuck, asshole have been cult words. I even read an article about how people should shove up the candles they were lighting in the memory of dead in Mumbai attacks, up their ass. I really dont know what kind of Sanskar this guy had when he was growing up.
What we need to do as a nation? Are there any straight answers? Something tangible
we can do?
All I decided to do was -
1. I will never hate anyone. Be it Raj T or be it Mamta Banergy. Be it muslim, chirstian, bihari, marwari, marathi.
2. I will be responsible about what I say and what I do. That much I owe to my country.
3. I will make sure I one statement does not create hatred in my friend who might be from some other culture.
4. I will make sure I create atmosphere on unity around myself. If everyone tries doing that, I am sure we can achieve unity all around.
5. I will not say anything out of emotion, out of hatred, out of rage, out of ignorance.
6. I will not tolerate violence on street. If some one is beating some one with out reason. I will try to stop violence. No longer will I be a mute observer.
7. I will work hard. I will work harder every day till I die. I will contribute in every way Lord Shri Krishna has enabled me to help my country and my country-people.
8. I will spread love. Love for even those that you think should be despised. That is what Mahatma taught us and that is what is the only way for better humanity.
9. Most importantly I will not be divided. I will treat everyone marathi, bihari, marwari, punjabi, male, female everyone the same.
I remember once my mentor told me that there wont be world war now in nations. Villages, towns will fight against each other. I know he meant it when he said that. I just wish it does not happen. I wish we grow up. I wish there comes some one like Gandhi/Tilak/Savarkar/Patel who can again lead us. Who can again channelize our energies.
Love,
Sushrut
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