Why crude-oil prices are rising (29-May-2012) No.2

May 29, 2012

https://www.facebook.com/mehtarahulc/posts/337173763022547

6 Why crude-oil prices are rising
(may-29-2012)
Rise in rupee-m3 manufacturing and increase in import of "luxury" items --- are the only reasons why petrol and other prices, such as land prices, are rising in long term

And law-drafts solution I propose to non-NaMo-bhagats are : Right to Recall PM (see section-6.6 of http://rahulmehta.com/301.htm for draft ) , Right to Recall Finance Minister , Right to RBI Governor (section-23.8) , Citizens' Legal Tender System (section-23.9) , steps to reduce petrol import and other imports (chap-43) etc

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Questions
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Answer to "what is rupee" is necessary to understand "why we need more rupees to buy liter of petrol" i.e. "why petrol prices are rising" . OR why all prices such as land prices are rising. So if you want to understand economics of pries or rather politics of rupee-manufacturing.

I request you all to give me appox but LEGAL definition of word rupee. OR you do remember ever reading legal definition of rupee in any textbook or magazine or newspaper? OR , are you sure that word rupee has no legal definition in Constitution of India or any other law? Please ask ANY lawyer or judge or any economics professor to show you exact LEFAL definition of rupee and see how he fails. Can you tell me if as per Indian law, is gold part of rupee anymore? Is silver part of rupee anymore? After all, the word rupee comes from rupu = silver. Does RBI need gold to print currency notes these days? Who decides how much new rupee notes should be printed? What is the basis to print rupee notes? Are there rupees which are NOT currency notes? Or what % of rupees as defined by Indian law are currency notes and what % are not currency notes? Pls ask 5 economics professors to get you answers of these questions within 1-2 day after searching any books they want and whole internet. And see how they all get an F-.

Forget answers. I bet, many of you heard these questions for the first time.

Aside : one advantage you will have if you read my status once a week. I write only 1-2 statuses a day and in them you will come to know relevant important questions that paid-mediamen and paid-textbook-writers never brought to you. And also answers to these questions along with law-drafts to reduce the problems. After all, we at Right to Recall Groups dont just ask questions, we also try to give answers and law-drafts that can reduce the problems.

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Legal definition of rupee
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RBI and Finance Minsitry are the Govt agencies in-charge of rupees. The RBI-Governors and FinMin, including MMS, have refused to create and give exact verbal deifinition of the word "rupee" !!! So, there is no legal definition of the word "rupee" till date in India !! So much for "rule of law". And since there is NO formal definition of word rupee, I decided to derive the definition from how RBI officers "count" and report amount of rupees in their weekly report. Pls seehttp://rbidocs.rbi.org.in/rdocs/Wss/PDFs/WSS140510F.pdf . This document is released by RBI-officers once a week. Whatever definition RBI-officers take, based on that, they calculate amount of rupees in India and print that number in Table-7, Row-1. Pls see Table-7, Row-1 of above link.

So a legal defintion of rupee I have decided to use : Rupee is rupee as defined by RBI-officers to calculate the numbers in row-1 of Table-7 of RBI bullitein weekly supplement.

Now if RBI-officers change way to calculate and number differ for same date, then definitions would differ.

Each and every paid-ecnomists and paid-economics-professors have opposed this definition for rupee I have given. So if anyone disagress with my deifintion, I openly dare him to first give us a BETTER or less bad legal definition of rupee. And then tell us if that definition is used by RBI-officers and if yes, pls show us the RBI-document showing that definition.

Now RBI also calls its rupee in Table-7 as M3. So henceforth, I will use the word rupee-m3 instead of rupee and I request you ALL to use the word rupee-m3 and not just rupee.

The legal definition that RBI-officers use to calculate the rupee-m3 is

(1) all cash notes manufactured by RBI, minus cash notes in bank vaults
(2) deposits made with RBI
(3) all current/savings bank deposits
(4) all fixed deposits and accrued interests.
(5) coins printed by Finance Ministry

IOW, to get rupee-m3 as defined by RBI-officials, pls add up all the cash notes and coins, in pockets of all inidviduals, add all bank accounts and all FDs with accrued interest. Thats what is what is rupee-m3 .

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So what is per capita rupee-M3
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Let me give you two numbers which mean one and the same

(1)Total rupee-m3 in India as on apr-2004 was Rs 20680,000 crore
(2)Total rupee-m3 in India as on apr-2010 was Rs 55,80,000 crore

(1A) Total rupee-m3 in India as on apr-2004 was Rs 18,900 per Indian citizen
(2A) Total rupee-m3 in India as on apr-2010 was Rs 47,000 per Indian citizen

Here, (1) and (1A) and mean the same
and (2) and (2A) and mean the same

Which numbers are easier to understand? (1) and (2) or (1A) and (2A)

Obviously, (1A) and (2A) are easier to understand and compare. Because number is small and resembles day-today use.
Despite this, the corrupt-RBI-Governors have flatly refused to issue per-capita east to understand numbers and insist only on using large total numbers. The reason is that corrupt-RBI-Governors and paid-economics-professors do NOT want citizens to understand rupee-m3 manufacturing process and so their give large numbers only.

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Who\how\why rupee-m3 is manufacturing
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Since around 1990, about 20% of rupee-m3 is maufactured by RBI and remaining 80% of rupee-m3 is manufactured by banks such as SBI, BoB, HDFC, ICICI etc. Yes, in India, only 20% rupee-m3 is manufactured by RBI and rest is manufactured by SBI etc with permission granted by RBI under RBI Act passed in 1931 and approved by Parliament in 1951. So there is nothing "illegal" going here. The RBI issues licence to banks to manufacture rupee-m3 , and they are called licensed banks (or scheduled banks). The rule RBI has made, with tacit approval of Finance Ministry and PM, is that for Re 1 currency note held by RBI, SBI etc can manufacture Rs 5 and add it to the passbook of their client in form of loans. The paid-economics-professors make cock-and-bull story of money multiplier.

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The most important reason why petrol and all prices are rising
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Pls note following numbers.

(1) Total rupee-m3 in India as on apr-2004 was Rs 18,900 per Indian citizen
(2) Total rupee-m3 in India as on apr-2010 was Rs 47,000 per Indian citizen
(3) Total rupee-m3 in India as on apr-2012 was Rs 61,000 per Indian citizen

sources : all from RBI websites ....
http://rbidocs.rbi.org.in/rdocs/Publications/PDFs/69110.pdf , page-11
http://rbidocs.rbi.org.in/rdocs/Wss/PDFs/WSS140510F.pdf , Table-7, row-1
http://rbidocs.rbi.org.in/rdocs/Wss/PDFs/WSS220512SN.pdf , Table-7, row-1

and by using population numbers fromhttp://rahulmehta.com/data.001.pdf

So RBI and banks have manufactured rupee-m3 so much, that today, it is almost 220% times higher. While GDP has not increased by 220% -- it has increased by some 80%. So more rupee-m3 chasing lesser goods and so prices have increased.

So law-drafts solution I propose to non-NaMo-bhagats are : Right to Recall PM (see section-6.6 of http://rahulmehta.com/301.htm for draft ) , Right to Recall Finance Minister , Right to RBI Governor (section-23.8) , Citizens' Legal Tender System (section-23.9)

The other reasons are

1. Due to US Military's strength, oil wells of Iraq, Saudi Arabia, Kuwait, Dubai and now Libya are under control. So American companies have oligopoly over oil drilling in areas which supplies largest amount of crude oil to the world. So they have raised the prices. Solution I propose is that we need to raise our own Military powers to kill oiligopoly of USA in middle east. see chap-24 for how we can improve Military.

2. The rupee declined against dollars as Govt of India is allowing imports of many items like expensive cars, olive oil and ... list is endless. In return, we dont have much to export. So more imports, less exports and so rupee falls. Solution I propose that Govt should impose import duty of 300% on all imports except natural resources so that manufacturing in India increases. see chap-43 for what can be done to decrease imports and promote local manufacturing at the same time.

3. The Ministers and IAS have systematically ruined public transportation and also also decreased excise etc taxes on vehicles. So public transportation has worsened and people have been "forced" to use private transport. This has further increased petrol consumption and increased imports. Solution I propose is Right to Recall over Chairman of public transport bodies so that public transport improves. And see chap-43 for steps to reduce petrol imports

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And solution I propose to NaMo-bhagats is : make NaMo PM of India, and petrol prices will reduce. Right or wrong, a true NaMo bhagat will never ever accept any other solution or even a co-solution. So this is the ONLY solution I can offer to NaMo-bhagats, because thats the only "solution" they would see.