Why Do I Consider Frequent Rate Control Exercise By the Reserve Bank Not Good?

I presume that you have some idea about the basic functions of a central bank in any economy or country. In India it is called the Reserve Bank of India or RBI while in the United States of America it is called the Federal Reserve System and in the United Kingdom it is the Bank of England. There is no standards as to how a central banking organization of a country is to be named and these institutions are known differently in different countries or economic regions.

Essentially, the central bank functions more or less independently and its main function is to control or direct the country's economy properly with various monetary measures or policies adopted from time to time. The central banking system though may be called independent of the government, it is not practically so always. The government does have influence on its functioning, though exercised by indirect means and methods.

The central banking system uses its powers vested on it by appropriate legislation or laws for framing and implementing the monetary policies of the country. Just as individuals deposit money in commercial banks or take loans from them, the central banking system functions as a banking system for the banks. In other words, banks can maintain an account with the central bank and they get an interest for their deposits and they are charged for any loans they take. 

The interest rate at which the central bank lends money to the commercial bank is called the Repo Rate while the interest rate they obtain on their deposits is called the Reverse Repo Rate. The central bank can mandate how much money that the individual banks need to deposit with it at any time. This is called the Cash Reserve Ratio (CRR). Thus the Repo Rate, Reverse Repo Rate and the CRR are often used by the central bank authority for exercising controls on the economy by changing those appropriately. These are like the accelerator, brake and steering of a car!

A car driver can use the pedals and the steering for controlling the speed and direction of the car the way he wants. In a similar way, the head of the central bank ( e.g. the governor of the Reserve Bank of India) can use the control tools for giving direction and speed of the economy.

But a passenger sitting on a car may not feel comfortable when the driver uses his pedals and steering quite abruptly or irrationally or too frequently. We call such a driver a novice who does not know how to drive properly. The car drive could be chaotic and may even prone to accidents. The passengers would be scared for their lives by sitting in such a car. The behavior of such a driver becomes too unpredictable when he happens to drive in a crowded place with narrow roads. His chaotic drive becomes too panicky if he happens to have a master who scolds him too often.

Same applies in the case of the head of the central bank as well. The economy becomes chaotic and unpredictable when such a head cuts rates or enhances rates abruptly or too frequently. The people who happen to be in such an economy become too panicky and confused not knowing what to do next. They may curse the fellow who creates this mess or may even try to jump out of the economy.

When a novice driver starts behaving unprofessionally, there appears many bystanders who cries out various instructions to the driver from the outside for various reasons. Some want to see the fun. Some wants to see and accident taking place. Some may even want to make some money out of the chaos by crooked means.

In a similar way, when an economy starts behaving chaotically under the chaotic policy steps too frequently implemented by the head of its central bank there could be outsiders who start giving directions from outside for their own vested interests. They may be the media, the representatives of business entities, the politicians or even the general public!

When an economy is in an unsteady equilibrium its dynamics becomes unpredictable. In such a situation some people make windfall gains while the majority make huge losses. It is always the uninformed masses that suffer the most. When an insane driver drives the car in a crowded place, it is always the innocent bystanders who get affected adversely!

In short, such a situation takes out the confidence of the people in the economy and the policy makers that drives the economy. More than the certified driving skills, it is the confidence of the passengers that makes a driver more desirable!

And public confidence is the most important thing for a stable and progressive economy. Public confidence comes when the economy is in a steady state of progress that is more or less predictable. Measures taken to control inflation might cause deflation too quickly in an unpredictable economy and frequent happenings of these situation further worsens the situation. Peoples' confidence in monetary policies deteriorates and people begin to bypass the governmental systems in their own manner. And that is not good for any nation!

When an unsteady behavior sets in for an economy, any quick action to set it right could further enhance the instability. That is the general rule for any control system, applicable for the economy as well.

The way the RBI tries to control the Indian economy is causing worries though the media bystanders are extending all praise. ( News-1 / News-2/ News-3) 

My worries are on account of the following:

1. The Indian stock market cannot ensure safety of savings of the majority public as the Foreign Institutional Investors can suck out public money at periodic intervals of their choice making the uninformed public helplessly watching their savings evaporate suddenly without any notice. Stock market investments are subject to risks and therefore there should be dependable investment options with reasonably good returns such as the bank fixed deposits. The monetary policy makers should not do their acts without addressing this issue.

2. The government has washed its hands from the responsibility of paying pensions to the retired people. Neither the government nor the private organizations now has any guaranteed pension scheme which offers some reasonable income to the retired population. Even the present savings linked pension plans are mere brainwash systems which are too poorly managed causing great sufferings to its members. When pension funds are invested in equities, the same money sucking by the FIIs keep happening which the government nor the RBI can prevent. What the people want is guarantees to their savings!

3. A growing economy in paper with macro economic data do not necessarily safeguard the interests of the individual citizens. When jobs or incomes from employment are proceeding towards the no guarantee mode, how can people take long term loans from banks? If long term loan EMIs to work, it is essential that long term fixed deposits with guaranteed returns also should work simultaneously.

4. Floating point interest system is essentially a cheating system. It is not market driven or based on ethical practices. Once the people understand it well, the confidence in banking system would diminish. It is neither good for the banks nor for its customers in the long run.

5. Unsteady monetary policies help only some individuals to make huge money by way of corruption and it does not ensure good governance.

6. Indian business houses that make huge profits from low interest regime do not pass on the benefits to the general public or even its employees. Neither they do any thing to enhance employment opportunities.

Let me stress this once again. Confidence in the economy and its monetary policies are more important and that cannot happen when the policies change too rapidly and too irrationally without due consideration of ground realities of the nation.

My Answers to Some of the Pertinent Questions that You Have in Your Mind: Question-2 About Eating Meat!

Your Question: I hate the non-vegetarian people and those involved in killing animals and eating their flesh deliciously. I do not understand how modern humans be so cruel? I believe in ahimsa and wish to practice it as taught by the great religions of India, Hinduism, Jainism and Buddhism. Moreover, it has been scientifically proven that meat eating is not good for health. Humans have no right to take away other lives. That is what our scriptures teach us. So both on religious and health counts, governments should take all steps to promote vegetarianism as an accepted culture and ban all kinds of non-vegetarian practices. What do you say?

My Answer: I do not know how much you have learnt or understood from your own sacred texts such as the Mahabharata or the Upanishads. Before I give my own thoughts in to the subject matter, I would like to recall a story from the great epic of the Hindus, the Mahabharata. I have simplified it by omitting much of the details and the style of text for better comprehension.  (You may go to page giving the English translation of Mahabharata that depicts this story in detail by clicking this link!)

Once the great Pandava King Yudhishthira wanted to know about human virtues and morality and asked this difficult question to the great sage of wisdom, Markandeya.

" Oh! Great Saint! I want to know about the subtle truths about morality" the king requested the saint.

In response, Markandeya told the king a story about what a simple housewife taught a wise ascetic named Kausika. This learned Brahman saint Kaushika was a scholar and a principled yogi. He had great abilities enriched with the power of asceticism and devotion to the study of the Vedas, Angas and the Upanishads. 

One day this great saint was sitting under a tree and was reciting the sacred texts in order to enhance his priestly power. A female crane sitting on the branches of the tree happened to drop her excreta just at that time which fell on the body of the saint making the Brahman feel polluted and unholy. He became very angry and looked up to see the bird. His angry stare powered by his yogic capabilities caused the poor bird to die and fell down to his feet immediately. Seeing the dead bird, the Brahman for a moment felt remorse because his anger now had violated the principle of ahimsa (non-violence). 

" I had done a bad deed out of my anger" he kept repeating this in his mind.

Anyway, he proceeded walking to the village nearby. He felt hungry and thirsty and he needed something to eat and drink. As it was the practice for the yogis to seek alms in such times of bodily needs, this saint then proceeded to a village home of a peasant. He found the housewife alone there and asked for alms from her. 

The simple village woman showed all respect to the saint and requested him to stay till she made the food to satiate his hunger. 

At that very moment her husband, the farmer entered the house after the day's hard work at his field. The obedient housewife immediately went to attend her husband momentarily forgetting the saint waiting for food and water. Seeing the poor village woman ignoring his saintly presence and needs, the Brahman felt highly angry once again. But the lady remembered about the waiting saint just the moment she had satisfactorily attended to the needs of her husband. She then proceeded to the saint and requested him to be patient for some more time for her to do the needful.

The saint now had been fuming from anger because this village woman had dared to ignore an accomplished saint like him. His hunger added oil to his anger from his hurt ego. He stared at the woman reflecting his annoyed face. Then the lady said to him humbly:

" Sire, please forgive me. I got a bit delayed because I had to attend to my tired husband. My husband is my supreme god. He came hungry and tired and it was my duty to attend him. But now I am free and I will attend to your needs."

Hearing this, the Brahmana's anger exceeded and he retorted like this:

" You ignorant village woman! How dare you ignore esteemed Brahmans like me? Do you not know the manners? Do you not know that we are like fire when we are angry? Do you not understand that our anger can even destroy the whole earth?"

" But I am not that she-crane, my lord!" the woman replied.

The egoistic Brahman was stunt. He became speechless. How come this simple village woman came to know about the incident that happened some time ago? Surely, she must be some goddess living in disguise. The Brahman thought. His anger began to fade out to awe!

" O! learned Rishi ! Remove your anger which is arising out of your ego.O you the spiritually enlightened! It had been said that the study of the Vedas, tranquility of soul, simplicity of behavior, and repression of the senses, constitute the eternal duties of the Brahmana. Those full  with virtue and morals have said that truth and honesty are the highest virtue. But, it seems to me that you with your highest learning has not comprehended what virtue really means. If you are interested in knowing what virtue really is, I advice you to go to the city of Mithila in search of the virtuous butcher. He would teach you what it really is". The lady advised the saint.

The Brahmana, now humbled by this lady then proceeded in search of the butcher to learn about the reality of virtue. He began to meditate on the subtle ways of morality and virtue and decided to go in search of the virtuous butcher of Mithila about whom the village woman told. He went in search of him and finally reached him.

Seeing the saint, the butcher acknowledged that he knew why the saint traveled this much in search of such a man like him who butchered animals and sold their meat to people to eat. But the Brahmana at heart was dejected by the profession of this man and so he said:

" Why do you do such a cruel trade? Do you not realize the fact that killing is a sin? This profession does not fit you. You should look for some other noble job instead". 

Hearing this, the butcher told the saint humbly like this: 

" O spiritually exalted Brahman! This profession I am doing is the only work I know. This has been the work of my parents and my forefathers. Perhaps this is the job ordained to me by God. I am only doing my job dutifully. But I always speak the truth, never envy others; and give to the best of my power. I live upon what remains after serving the gods, guests, and those that depend on me. I never speak ill of anything, small or great."

As Kausika was too willing now to learn from this meat vendor, the latter gave him a long sermon on the various aspects of human virtues and morals.His sermon covered the real meaning of ahimsa (non-violence), the food habits of people and about meat eating that some of the Brahmans considered as unholy and sinful. The following are some of those things that this man doing an unholy profession told Kausika who had been of the thought that he was the wisest and the most virtuous one:

"Those animals that are slain by me and whose meat I sell, also acquire karma, because with their meat, gods and guests and servants are provided with tasty food. It is said authoritatively that herbs and vegetables, deer, birds and wild animals constitute the food of all creatures. And, O Brahmana! king Sivi, the son of Usinara, of great forbearance attained heaven, which is hard to reach, giving away his own flesh. And in the past, O Brahmana! two thousand animals used to be killed every day in the kitchen of king Rantideva; and in the same manner two thousand cows were killed every day and this king Rantideva acquired  reputation by distributing food with meat every day. For the performance of the four monthly rites animals ought to be sacrificed daily. 'The sacred fire is fond of animal food,' this saying has come down to us. And at sacrifices animals are invariably killed by spiritually elevated Brahmanas, and these animals being purged of sin, by chanting of hymns, go to heaven. If, O Brahmana! the sacred fire had not been so fond of animal food in ancient times, it could never have become the food of any one. And in this matter of animal food, this rule has been laid down by Munis:--Whoever partakes of animal food after having first offered it duly and respectfully to the gods  is not polluted by the act."

"And, O good Brahmana!, knowing this to be the consequence of my own actions, I obtain my livelihood from this profession. Forsaking  one's own occupation is considered to be a sin and the act of sticking to one's own profession is without doubt a meritorious act."

"Agriculture is considered to be a praiseworthy occupation, but it is well-known that even there, great harm is done to animal life; and in the operation of digging the earth with the plough, numberless creatures in the ground as also various other forms of animal life are destroyed. Don't you think so? O good Brahmana! the seeds of rice and other such cereals are all living organisms. What is your opinion on this matter? Men, O Brahmana! hunt wild animals and kill them and eat their meat; they also cut  trees and herbs; but, O Brahmana! there are innumerable living organisms in trees, in fruits, as also in water; don't you think so? This whole creation, O Brahmana! is full of animal life, sustaining itself with food derived from living organisms. Do you not notice that fish preys upon fish, and that various species of animals prey upon other species, and there are species the members of which prey upon each other? Men, O Brahmana! while walking about here and there, kill many creatures in the ground by trampling on them, and even men of wisdom and enlightenment destroy animal life in various ways, even while sleeping. What have you to say to this?--The earth and the air all swarm with living organisms, which are unconsciously destroyed by men from mere ignorance. Is  this not so?"

"The commandment that people should not do harm to any creature, was ordained of old by men, who were ignorant of the true facts of the case. For, O Brahmana! there is not a man on the face of this earth, who is free from the sin of doing injury to creatures. After full consideration, the conclusion is irresistible that there is not a single man who is free from the sin of doing injury to animal life. Even the sage, O good Brahmana! whose vow is to do harm to no creature, does inflict injury to animal life. Only, on account of greater considerations, the harm is less." 

The butcher further gave a lengthy discourse on many other aspects to Kaushika. 

King Yudhishthira listened to the detailed story as told by Markandeya. in response to his doubts on human virtues and morality.

My dear friend! I hope you could find the answer to your thoughts about animal slaughter, non-vegetarianism, etc from the brief narrative I reproduced from the story given in the Mahabharata, the sacred text of the prominent religion of India. 

I think it important to give another quote from my favorite book of life guidance, in this context:

"Adam and Eve and their first generation of children did not use the flesh of animals for food. They subsisted wholly upon "the fruits of the trees." After the first generation all of the descendants of Adam began to partake of dairy products, but many of them continued to follow a non-flesh diet. Many of the southern tribes with whom they later united were also non-flesh eaters. Later on, most of these vegetarian tribes migrated to the east and survived as now admixed in the peoples of India." ( The Urantia Book 76:4.4)

To conclude this discussion, I would say this. All living beings need energy for living. The higher order living beings (the immortals) have been provided with the ability to absorb energy directly from the universal energy circuits just as the plants take sunlight and convert it in to chemically stored energy such as the carbohydrates for the lower order animals to sustain. Similarly lower order animals eat the chemically stored energy and convert it into concentrated energy source such as the complex fats and proteins in the form of flesh which are used by still higher forms of animals. Some animals including humans can use both stored up energy of the plants and the animals for their own energy needs. And all these systems are divinely created for a purpose. It is not necessary that all humans have the mind capacity to understand all the secrets of divine creation.

What you eat or relish is according to your anatomy and that keeps changing or progressing according to divine plans. Thus a discussion on the superiority of any kind of eating habit is of no special use. Only stupid humans with lower mind capacities could become boastful of their superiority on account of any of their physiological or mental or spiritual qualities. Humans do differ and that difference is for serving each other and not for establishing overpowering superiority over others!

But in the due course of time, humans would advance further biologically and spiritually. In those times, the human capacity to transform energy for self sustenance would also increase many fold. Perhaps then, humans no longer need to eat concentrated energy source such as animal flesh. Their liking for such foods naturally vanish.

But till such times, it is better that we refrain from judging our fellow beings on account of their eating habits.

While non-violence is the best policy, humans are not to be foolish adherents of non-violence when the world is yet to become a perfected abode. Problematic life forms need to be tackled!

But it is of a greater problem when humans kill each other in the name of ahimsa, meat or beef eating, spiritual beliefs, etc. Do you think God would ever favor a person who resort to violence for the sake of his own erroneous ideas about his own religion? Do you think humans know more than God? Do you think God needs human protection?

I earnestly hope you understand what I wanted to say.

My Answers to Some of the Pertinent Questions that You Have in Your Mind: Question-1 About God!

Your Question : I am getting confused now-a-days. People around me say there is God. I don't see Him around, but sometimes I reason that there should be some one who is behind everything. But at times I also get carried away by the rationalist thoughts expressed by some of our learned scientists and thinkers who say there is nobody called God. I am not able to make up my mind. Is there any God really out there? If so, what is He like?

My Answer: I too had gone through this stage of confusion for many years when my mind was in the process of learning and analyzing. But eventually I came to the conclusion that it is very much rational and logical to believe in the existence of God rather than to deny that fact. 

Slowly I learned more about God which I had shared with my readers some time ago in this blog-Know More About God. 

Remember that God is the Supreme Creator and therefore the Supreme Father of the Universes and as a Father, God loves all His Creations. 

Many people among us have a tendency to reject the idea of God when we begin to be a bit scientifically oriented. As we progress in scientific knowledge, our faith in God is likely to get enhanced. 

Ideally our faith in God should logically progress to such levels that we no longer would reject God's love! 

Many of you may be confused with the ideas about God that are propagated by the leaders and followers of our established religions. While I do not reject all those ideas as wrong per se, it is essential to remember that no human being can ever give a complete picture or description of God any time because God is the Infinite Creator and eternally existent Personality beyond the reach of our intelligence to comprehend! (You may read this blog about God and religion that I shared some time ago). 

When I say that God has created us all, some of you might get a kind of pleasure to make me cornered by asking the childish question - who created God? Should I stress again that it is too childish a question?

Many religions have traditions that are involved in pleasing God with various rituals and sacrifices. All these originate from the human concept of pleasing an angry God. The underdeveloped human mind awfully fear power of destruction rather than the power of love! Even now, many of us respect a boss or father who does not hesitate to use his power upon you mercilessly rather than the one who hesitates to use his power upon you on account of his loving mercy! It is very difficult for the immature human mind to accept that the all powerful God hesitates to destroy wrongdoers mercilessly with immediate effect! It is very much within the acceptance of the immature human mind to visualize an angry God who gets pleased by persistent prayers for mercy!

If you happen to have a reasonably developed mind that ask questions on such things that your mind does not fully accept, I do not say that you are going against God. On the contrary, God would be pleased with those of his lowly intelligent human creations when they use their God-provided intelligence properly in the right direction. God has given intelligence to his creations for using it rather than keeping it aside and behaving like a stupid fellow!

As the Creator of the universes God indeed should have willed or planned something great for all his creations. The intelligent created beings like us should live according to that will as far as we understand that. Asking questions to explore possible answers is an act of creativity in which our Creator would definitely be pleased. And if that is so, God, the Supreme Intelligence of the Universe, would not be pleased with those humans who refuse to advance and progress in mind! Sticking stupidly to the traditions of their ancient under-developed ancestors without analyzing those with the intelligent logical mind is indeed something that God does not like of human beings!

It is not difficult for any logical mind to conclude that the concept of God getting pleased with blood sacrifices is essentially an erroneous notion! Does the all powerful God require your support and help? Think about it with your open mind! 

I feel it quite logical and essential that we have religion. But then religion should be essentially concerned with our faith in God and our reciprocating love towards Him. Rituals, in my opinion, are not to be considered as real worship, though we have been doing rituals as part of our worship for long. Religious rituals are not essential for us to love God. 

Nevertheless, if some underdeveloped humans still want to continue with some worship rituals, let them do so till such time the individuals concerned attain desirable levels of mind progress to understand the futility of such rituals. 

I consider religion as a universal binding force. Religion should bind humans in universal brotherhood through the fatherhood of God. Religion is not something that should divide humans. Unfortunately our religions are divided as of now and they are no unifying force at present. Varying degrees of understanding in humans make them differing in their religious opinions and thoughts. When self righteousness is added to it, the differing opinions become agents of conflicts! Rigid opinions give rise to fanaticism. Religious fanatics and zealots cannot tolerate what this author expresses here or elsewhere even when such opinions are merely harmless views!    
I do not consider it appropriate for any of our conventional religions spending their energies in converting others to their fold. 

While discussions about various view points and concepts among people about God may be good for them to understand truths and untruths in their concepts and ideas, it may not be good to argue over a topic about which they have no absolute knowledge or full comprehension. 

It is unfortunate that ignorant humans keep fighting among themselves in the name of God and religion! 

But this phenomena would cease sometime later when the average mind of humans develop above a certain level. 

Many ardent followers of religions believe that there is some negative power that works against God and call it the evil or Satan. For them what they follow is of god while others are of Satan. The pity is that they all point their fingers to others as satanic that eventually make all them accusing each other as satanic. In this process they fail to recognize what is divine and what is devilish! 

I would like to assert this: there is no power in the universe as equal to God. But at the same time there are creations of God with free will like us who, due to the free thinking mind, might act against the will of God. Such creations of God that work against the will of God could either be humans or even superior intelligent creations of God. 

The possibility of such intelligent but clever beings influencing other gullible intelligent beings cannot be overruled. 

To understand the implications of that we should know more about the spiritual evolution of mankind. 

Many among us pray and worship for gaining wealth, money, power and importance during our short lives on earth. We say that it is a blessing from God. Is it really so? 

In reality this is our greatest conceptual blunder and this concept among people is augmented by clever manipulations from invisible powers that are willfully against God. 

God does not give extra favor to any one for his sycophantic prayers or worship. 

Sycophancy is a nature that is essentially anti-God or evil. Unfortunately, this evil is predominant in the world today. This also would gradually vanish in the future when humans become more mature in mind. 

And remember this- if God has planned something, it would happen at some time now or later. 

God has a purpose and whether we agree or disagree it makes no difference! The will of God would prevail. 

God is no respecter of persons that it is necessary for Him to give satisfactory answers to his maturing children always, though He does so often out of his love to his creations! 

Also remember this. If the question about God has arisen in your mind, that itself is a good sign of the possibility of you becoming aligned with God sooner or later. 

Keep nurturing your thoughts towards God and love Him as your invisible but all powerful loving father who knows all about you and your needs. When you really understand God, you will learn to live a life on earth that is most rewarding and meaningful, devoid of all anxieties and worries! 

May God bless you!