[Saanil]

Originally Posted by lapis_lazuli

The dollar is close to 81INR. It is appreciating, globally, it seems.

The country which is going through unprecedented levels of inflation, sees its currency appreciate. Someone please explain how and why this is the case, in layman terms. On the other hand, Venezuela again going through runaway inflation has its currency not worth any more than toilet paper. This country has a lot of oil, too.

I would advise you to read about the "Dollar Smile" theory in order to understand this.

[Durango Dude]

Originally Posted by SmartCat

That's because US treasury bonds are now yielding 4% pa

Attachment 2360961

This is risk free returns. As an added bonus, USD appreciates against most or all developing country currencies (eg: approx 4% per annum against INR over long term). So whenever US interest rates are raised, money rushes into the country from all over the world and strengthens the currency.

Indian bonds yield higher but no one wants it! Whatever the Indian economy may perform and growth rate may be 7% YoY for the next decade never will the rupee come to even 30 to a $ because at that rate it will not be a competitive exporter so will always be the 'chowkidar' of the $ till kingdom come and will always be the underperforming currency of Asia...No wonder every one wants to go and settle in the US.

[SmartCat]

Originally Posted by Durango Dude

Indian bonds yield higher but no one wants it!

That's because Rupee depreciates against USD. If an American investor invests in 10 year Indian Govt bonds offering 6.5% pa, his net returns after 10 years might be just 2% pa.

Eg:

- Let's say $10,000 is invested in 10 yr Indian Govt bonds in 2022
- 1 USD equals Rs. 80. So Rs. 8 Lakhs is invested.
- After 10 years, Rs. 8 Lakhs becomes Rs. 16 Lakhs @ 7% pa
- But in the year 2032, 1 USD might be equal to Rs. 120 (assume 4% pa depreciation)
- So our American friend takes home just $13,300 (16 lakhs divided by 120)
- $10,000 to $13,300 in 10 years works out to be just 2.8%

So 7% pa Indian bonds offers lower returns than 4% pa US bonds.

[Durango Dude]

Originally Posted by SmartCat

That's because Rupee depreciates against USD. If an American investor invests in 10 year Indian Govt bonds offering 6.5% pa, his net returns after 10 years might be just 2% pa.

What I'm coming to say is that even if India out performs all it's parameters at say 7% YoY for next 10 years also we will never be able to get close to the $ because it's the reserve currency against which all other currencies derive their value. We'll still be depreciating in value go to 100 or beyond to the $ never will we be able to go to 30 to a $. We will permanently be beggars, visavis the $, paying huge taxes (which are used to reimburse companies tax holidays, incentivize with lowered power tariffs, etc) to attract investments and saddled with a ever depreciating currency and see our savings evaporate during our sunset years. We're not attracting investments by merit but by dangling a carrot at the expense of the Indian citizens who get very less in return.

[Samurai]

https://www.nbcnews.com/news/world/b...cuts-rcna49549

I think UK PM requires some help in understanding economics. Giving tax cuts to rich has never resulted in boosting the economy. They will just pocket the money and don't invest back in the economy. It is the poor and the middle class who spend the excess money.

Abstract
The last 50 years has seen a dramatic decline in taxes on the rich across the advanced democracies. There is still fervent debate in both political and academic circles, however, about the economic consequences of this sweeping change in tax policy. This article contributes to this debate by utilizing a newly constructed indicator of taxes on the rich to identify all instances of major tax reductions on the rich in 18 Organisation for Economic Co-operation and Development (OECD) countries between 1965 and 2015. We then estimate the average effects of these major tax reforms on key macroeconomic aggregates. We find tax cuts for the rich lead to higher income inequality in both the short- and medium-term. In contrast, such reforms do not have any significant effect on economic growth or unemployment. Our results therefore provide strong evidence against the influential political–economic idea that tax cuts for the rich ‘trickle down’ to boost the wider economy.

Source

[ValarMorghulis]

Originally Posted by Samurai

...I think UK PM requires some help in understanding economics. Giving tax cuts to rich has never resulted in boosting the economy...

Oh I think she knows. Ms. Truss was aptly schooled by Mr. Sunak during the debates but she simply turned a blind ear to him.

[AZT]

Originally Posted by Samurai

https://www.nbcnews.com/news/world/b...cuts-rcna49549

I think UK PM requires some help in understanding economics. Giving tax cuts to rich has never resulted in boosting the economy. They will just pocket the money and don't invest back in the economy. It is the poor and the middle class who spend the excess money.

Source

Trickle down economics never works. But big corporate donors need their pound of flesh for their patronage and the UK is no different from India when it comes to that.

[Jeroen]

Originally Posted by AZT

Trickle down economics never works. But big corporate donors need their pound of flesh for their patronage and the UK is no different from India when it comes to that.

In the UK, political party donations over UKP 7500 need to be made public, so all political parties report on this. How does it work in India, can you donate large sums of money, without the general public knowledge?

Personally, I find this whole tax relief program in the UK a joke. They reduce the lowest tax bracket by 1% and do away with hé second tax bracket of 45% all together. The sad truth is, that the 1% is applicable to the vast majority of UK income earners. Who desperately need some financial relief. Whereas the 45% is applicable to a very small percentage of income earners, who really don’t need it.

I don’t belief in this trickle down economy, not sure if I have ever come across well documented cases where this worked.
Thanks
Jeroen

[Sran]

Originally Posted by Jeroen

In the UK, political party donations over UKP 7500 need to be made public, so all political parties report on this. How does it work in India, can you donate large sums of money, without the general public knowledge?

Anonymous donation limit is under INR 20,000 anything above that political parties have to show it to Election commission.

The donation is 100% tax free under IT section 80GGB.

[AZT]

Originally Posted by Jeroen

lHow does it work in India, can you donate large sums of money, without the general public knowledge?

As mentioned above, you can break up massive donations into hundreds or thousands of donations of 20k and it becomes anonymous. There’s also a lot of black money cash that needs to converted to legit money so normally a month or 2 before the FY end date (31st March), you have political party middle men where you can make any donation you want and they will keep a small commission (say 6.15%) and give you the rest money in cash.

You get a receipt and can claim deduction on 100% of the amount donated to a political party under Section 80GGC. The entire contribution is allowed for a tax deduction if it is not more than the taxable income of the eligible taxpayer.

[carboy]

Originally Posted by Jeroen

In the UK, political party donations over UKP 7500 need to be made public, so all political parties report on this. How does it work in India, can you donate large sums of money, without the general public knowledge?

A huge majority of political funding in India is in cash & undocumented. So it never gets reported.

[Gansan]

Originally Posted by AZT

Trickle down economics never works.

In trickle down economics only the first five letters are true - "trick".

[Samurai]

Liz Truss finally did a U-Turn after realizing her proposal will never pass in the House of Commons. When I look at the tax slabs, I am really wondering why it was so hard for her to make the right choice.



If she had tweaked the bottom slabs, like raising the 0% slab until 15K or changing the 20% slab to 15%, it would have garnered huge support from the masses. Also, those are the people who will immediately spend that extra cash back into the economy. Instead, she wanted to make her donors happy, by plugging into the failed trickle-down economics of Reagan/Thatcher era.

The Rich don't really need the government to help save taxes. They can hire wealth managers or tax experts to help avoid taxes using various loopholes and Tax haven that always exist.

[V.Narayan]

https://m.economictimes.com/news/eco...w/94682613.cms

World bank has knocked a whole 100 basis points off our expected GDP growth this year. At 6.5% it will not be much to preen about. While 1% drop is not much visually think of it as a reduction of the $ growth by 13.3% or ~$30 billion of growth going missing. That is like the whole economy of Zambia or Iceland knocked off our growth. In PPP terms it is worse. And in terms of job creation even more worse. Next years budget by definition will be a populist one high on subsidies and freebies and low on investment incentives, weak on fiscal discipline and so on. Which means more uncertainty for GDP growth in 2023-24 - my premise, I hope I'm wrong.

[thanixravindran]

Any views or opinions about Ben Bernanke getting Nobel prize for economics?

https://www.moneycontrol.com/news/in...05701.html/amp