The market economy cannot do many things. They cannot reach education to the poor. They cannot reach medical care to the poorest.

They cannot feed those who cannot buy food. However it can do many things…and if you read this article you will be somewhat convinced that they need the stock market…so here it is read on:

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  1. “They cannot reach education to the poor. They cannot reach medical care to the poorest”

    says who?infact it is the only medium which has done so far.
    everything is available appropriate for its price.the schools of the poor might not be an airconditioned ‘public school’ or a taxpayer funded IIM,but parents in slums prefer to send their children to hole in the wall ‘english rapidex teaching school’ rather than govt schools.
    ditto for medicine.

    the poor dont need the equity market.this is a lie repeated by equity fund managers .
    the poor man needs to be protected from theft-the theft of inflation -which gold once did admirably.equity is a tough school and no paradise.some people make money,most lose theirs. it is for sharp people with a stomach to withstand gyrations caused by money printing of the govt.
    why does the poor man need to play investor? investing is for people with surplus capital.not for people living hand to mouth.for such people,sound money is more important,

  2. nice argument Pravin. To say they need protection against inflation and not say how is a typical political ploy. Give 5 steps of protecting against inflation without being in a volatile asset class. A good index fund has zilch risk over a 10, 12 year time frame. The hole in the wall schools are run by goons who do not do any value add. Schooling, and medical has to be provided by the state or by the types of Aga (Thermax).

    the poor need an index fund SIP over a 10 year period. They need term insurance, medical insurance, and an accident insurance. The index fund should accumulate funds for creating an annuity for their old age, and other big expenses like buying a house, and for other events like children’s eduation / marriage, etc.

  3. Subra Sir, what is your view on website? is it worth becoming a paid member to this website?

  4. shankar bhatt,
    volatility is caused because money is centrally planned.i am not giving any wishy washy answer. there was almost zero inflation in the 1700-1910 era under a gold standard in the US. because gold simply holds its value and the free market does the rest -ie increases purchasing power of everyone ,especially of the poorest of the people.

    today,by centrally planning money supply,interest rates and a lot of things monetary,the govt is forcing people into investing into shares -without knowing what it entails in most cases.that is why most people lose money in the share markets.

    inflation is not caused by poor rains or greedy is caused by central planning of always has been the case.obviously this is not the prevailing dogma amongst keynesians.

    the hole in the wall is preferred by the poor over govt schools because they are affordable to them and provide value to them
    it takes immense arrogance to judge the choice of the poor sitting from our comfortable position.
    you cant wish away scarcity by waving a wand.poor people similarly have their children working early -because it makes good sense to them and not because they are monster parents.

    the poor need sound money. sound money means money which holds its value and doesnt lose it to inflation.obviously today the poor HAVE to invest in equities because the govts/central banks of the world have made it their policies to goose up equity markets thru quantitative is their stated policy.but it is gambling nevertheless.gambling on the whims of wise men sitting in the central bank

  5. Mr. Pravin, your observations and arguments are very much valid in favour of ‘sound’ money (i.e. a generally accepted definition that such money that doesn’t lose value over time). However, you need to realize that sound money puts immense constraints on borrowing and related capital formation due to borrowing. As money remains ‘sound’, its relative value with respect to other goods and services in the economy rises and this puts immense pressure on the borrower, since he now has to repay back a capital that has appreciated over the term. If this becomes the norm, then there will be no capable borrower willing to step forward to borrow and capital formation for the purpose of real growth will be totally constrained.
    It is not without reason that some of the greatest inventions, discoveries, innovations, and improvements in standards of livings happened in the 20th century, the century of paper or ‘unsound’ money. ‘Unsound’ money basically unleashes human ingenuity and resourcefulness on a massive scale, as an entire population now has access to cheap capital as well as the need to deploy it(since if you sit on your bum doing nothing, your money *will* depreciate).
    Having said that, we are now likely hitting the wall in terms of resource availability (can we continue feeding/clothing 7 billion and rising population with earth’s limited resources?). Hence, a return to sound money to consolidate the gains made in the previous century may not be a bad idea for humanity and environment as a whole. And, as you may be aware, it won’t come without a conflict. We may be looking at a severe contraction in the human population due to voluntary or involuntary means as we scale back environmental destruction and return to sound money.

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