June 13, 2008

World 2050

I have presented a critique of the world order in the year 2050A.D. This might hurt you more than just a bit if you stand for capitalism, nuclear non-proliferation, market controlled economy and other evil things on earth.
An article from a leading daily in the year 2050 A.D…

Sub-Prime Marriage Crisis rocks the world….(11.06.2050)
Sub-Prime Marriage is a highly complex financial instrument which had entered the stock markets recently. The sub-prime marriage loans were widely given to Americans who wanted to get married without having enough cash on hands to ring their wedding bells. The couples agreed to pay a fixed interest to the bank as long as they stayed in the marriage without getting divorced. However the problem started when the banks lent these loans to unscrupulous couples who had no intention of staying together for long. The banks started making heavy losses when most of the marriages ended in divorce prematurely. This forced the clever banks to shift their losses to the people and markets by making complex instruments called Credit derivative obligations (CDO) out of the pre nuptial agreements.

These ‘sub-prime’ loans were unfortunately given ‘AAA’ (the best rating possible) by the credit rating agencies like the Poor &Very Poor, MoodyRaters and others without reading their recklessly written pre-nuptial agreements. Thus many investors believing them to be promising investments invested their hard earned cash. When the marriage-linked financial instrument started failing, the markets went bearish and the economy went into recession. The Central bank chief Mr. Bumbake urged Americans to stay in their marriage for long to help their country bail out of recession.

The chief of Banks’ association who did not admit that sub-prime Marriage stocks were an example of the failure of Capitalism retorted angrily that it was in fact a different form of socialism in which the ‘profits are privatized while the losses are socialised’.

US prez replies to subprime- Marriage Crisis ( 12.06.2050)
... Uncle Sam blamed the developing nations - especially India and China for the present recession in the world. He pointed out how the people of these two nations were eating a lot which resulted in spiraling of world prices. He also pointed out that the world must learn to live like his countrymen who use minimum resources for their living. When a reporter interrupted the president and informed him that it was his honorable country men who used papers right from sneezing to shitting which caused enormous pressure on the tress of the world, the president cut the reporter short by saying “Those trees are got from Africa where dragons fly and humans don’t live anyway”. He was greeted by a wide round of applause.
The President continued his speech by saying that the hike in world prices of oil is due to the uranium enrichment programme carried out in the ‘secret establishments’ of the oil-and-gas-rich-yet-impoverished state of Mamalia in the sub-saharan Africa. He said Mamalia was posing a grave threat to humanity and it must immediately discontinue its uranium enrichment program. It is pertinent to note that the UN has released its AYCR (As if You Care to Read) document promptly to condemn USA’s intention. The President however asked his army to be ready to save the motherland from the enemy.

Mamalia’s Response (13.06.2050)
The oil-and-gas-rich-yet-impoverished state of Mamalia had replied that its top bureaucrats had heard of the name ‘Uranium’ only once before the US President had accused Mamalia of enriching it -in a spielberg movie. The Mamalian president who had recently won an election without even participating in it angrily shot back at USA by saying ‘USA will bite dust if they war with us’. He admitted that if Mamalia had enough money to buy uranium its citizens would give themselves a good shave everyday.
The Mamalian president replied irritatingly to a question on how he won the election without competing in it by saying “Mamalia has its own form of democracy in which the opponents to the ruling party lose everytime.”

13 comments:

Sharmila said...

Hi Vikki,
A post after a long, long time. Is it also a coincidence that I was looking at your blog after a long, long time? :)

Anonymous said...

Hey thanks for posting! Good one..."profits are privatized while the losses are socialised"! lol :D.. Nice way to package your thoughts/views - funny and subtle sarcasm!

vikraman said...

Thank you Sharmila!
May be u shud check it frequently :)

vikraman said...

Thank you. May i know your name?

Anonymous said...

I'm Asha :)

vikraman said...

Asha of SRM? or is it someother person. Thanks for your comments eitherways.

Sriram said...

I'm amused by how the media (and to some extent the Indian government) has spun Bush and Rice's original remarks at Missouri.

If you read the original in context, it is pretty apparent that he wasn't 'blaming' anyone.
He was discussing economics at Missouri and he was mentioned increased food demand in India as being a direct result of prosperity of India and how the rest of the world will have to adapt. No one seems to mention the full content of what he said next

quote

“Worldwide, there is an increasing demand. There turns out to be prosperity in the developing world, which is good. ...It also, however, increases demand."

endquote

That statement is completely accurate! I'm unable to understand how we somehow got 'offended' due to that statement. He goes on to mention how there's pressure on the developing countries' governments to keep more food in the country - which is exactly what has happened to Indian grain export over the years.

I also find it sad that the media seems to have conveniently skipped over the major theme of his speech - that the world is changing and people need to adapt, by alternative agricultural, by alternative fuels, etc. Most of his talk was about how food prices were high due to fossil fuels and how moving away from fossil fuels is the right answer.

But I guess making fun of Bush talking about fossil fuels is much harder and doesn't make for nice headlines.

vikraman said...

Sriram,

I think i haven't interpreted that quote wrongly. In effect the US prez means that it is the developing nations (read india
and china) who are increasing the demand for commodities which have inturn increased global food prices - That is not the truth. The global prices have risen due to the following reasons.

1. Diversion of corn produced in the USA for the production of ethanol (a substitute fuel), which leaves very less to fatten beef.

2. Successive years of draught in the Australian 'downs' which produces huge quantities of wheat for exports.

So this present world price hike is not due to demand of developing nations. On the contrary it is the developing nations which are affected by the bad policies of the west. Consider this.

One of the main reasons for an increase in inflation in India and in other developing worlds is due to the rise in oil prices. The third oil crisis is here and will stay for sometime. Oil which costed a mere $60 an year back costs more than $140 now. how?

Did you know that USA, in the Jeddah conference recently, blamed increasing demand in the developing nations to be the reason for this scenario ? But the truth for such a drastic increase of oil in such a short time is due to futures trading in oil by speculators from US and other developed nations. After the sub-prime crisis, the investors have chosen oil as a prospective commodity to invest. This is the reason for infationary pressures in the entire world. US and other countries must immediately ban futures trading in oil, but they wont- It is easy to blame the developing countries than to correct themselves.

Sriram Krishnan said...

Ethanol as fuel is far from being mainstream and is little more than a glint in the eye of Khosla right now. Do you have any data to back up the claim that the corn->ethanol is of any significant quantity so as to affect global prices so drastically?

Blaming the oil prices on speculation is an easy way out. The root problem is that this was coming for a long time and the cause is the world's dependence on fossil fuels.

If you want evidence of India's growing consumption , look no further than http://query.nytimes.com/gst/fullpage.html?res=9E0CE6D81538F930A25751C0A964958260. As a country, we've gone from exporting large quantities of grain to importing them. And it's not life our grain producing capacity dropped sharply over the last decade.

I fail to understand why people become indignant when Indians are said to be eating more. It is a sign of prosperity and points at other good things happening.

vikraman said...

1. The corn->ethanol problem is well established and well documented. Not even the US refutes it.
http://sununu.senate.gov/pressapp/record.cfm?id=297265

2. True India imported wheat last year, but it was not because of an increase in demand. It was because of poor procurement of Food Corporation of India last year. check this link http://www.indiatogether.org/2006/may/opi-wheatin.htm
".... Wheat imports are being resorted to, not due to shortages. With increased output, there is a good stock in the country. "


3. "The theory of increasing demand" is an escapist phlosophy of the developed nations. Are you saying that the demand has increased so much in one year for the oil prices to more than double?

On the other hand, the time line of oil price hike perfectly matches with Iraq occupation (check the pre-Iraq oil prices) and sub prime crisis. It is not me but the saudi arabian king who says that futures trading is the reason for this unprecedented hike. Despite pumping out huge supplies of oil, the prices are not falling!
Only speculation can defy demand-supply logic.

4. why we become indignant when the US president says indians are eating more and that he is happy with our prosperity? ....

In the world of diplomacy there is no spontaneity. No leader makes a casual remark about his own country, let alone oher countries. This comment was made with a deliberate intention of conveying the message that the global price hike is due to increased demand of developing nations and not becuase of bad policies like Iraq war, subprime crisis, diversion of corn etc..

vikraman said...

The oil prices have come down to less than $60 per barrel now. Have the Indians and chinese started eating less?

Anonymous said...

Umm - drawing simplistic conclusions and twisting words out of context aren't exactly the best way to make a point. You know as well as anyone else that the reason for the oil prices falling is because of the global economic downturn.

To use your own argument against you, I don't think the US is using less corn for ethanol or that the Australian draught's effects have just disappeared.

Sriram

vikraman said...

All i wanted to convey in my post was the marginally increasing demand in the developing world is not the reason behind the price hike. I will be happy if that point is taken.