It is all fake!

Have you heard of an organization making 15,000 Crore profit with a capital base of 5 Crores?

If not welcome to the world of deceit.

The immediate question that must have come to your mind is how can a company make 15,000 Crore profit with just an investment of 5 Crores? Well, if the company is RBI (Reserve Bank of India), it surely can.

Any commercial organization produces goods and services and then sells them to the buyers in the open market. In this case RBI produces bank notes in its security presses at a cost of 4.5 Rupees for every 1000 rupee note and then gives this note to the banking system.

The banking system in turn lends this money to people like you and me and charges interest on such lending. It in turn pays the RBI for the money it has borrowed. Thus RBI is able to generate profit all most out of thin air.

What are the consequences of such operations? Well anytime the banking system requires more money to lend, RBI prints some more. This is very much in line with international practices. Even the Federal Reserve has been doing this and its chairman Ben Bernanke is called Helicopter Ben for dropping tons of currency where ever he sees a troubled bank or financial institution.

In terms of plain economics, when the supply of money increases in the system, there will be more money chasing less products and services. Prices will rise till an equilibrium is reached. Therefore the real cause of inflation is not rise in oil prices but rise in money supply in the system.

Which brings me to the headline. When you produce something out of thin air, without any asset to back it up, the currency can at best be termed fake!

Personal and Impersonal Crimes

In a recent conversation with one of my friends from the Mumbai Police, I asked him are we over policed or under policed? His reply is something that we all must ponder upon.

He said we are mis-policed. According to him there are two broad types of crime, personal and impersonal. Therefore when some one picks your pocket, he is committing an impersonal crime, the thief does not know you neither is he aware of the amount of money that you are carrying. For him you are a random target he has chosen based on some social engineering skills that he possess. Same is the case with vehicle theft. The car thief is not targeting you because he wants to take some revenge, his decision is based purely on the logistics of stealing the vehicle and its apparent market value. He said that the stolen vehicles are often stripped at the scrap shops and as these scrap shops fall in the police beat, the officers of the local police station may be on the take. Even if a stolen vehicle is recovered, no one is interested in taking it back. As the stolen vehicle has to be in police possession as case property till the time a judgment is passed in favor of the vehicle owner or the insurance company, the condition of the vehicle becomes such that it is practically useless for anyone. While in the police custody, the vehicle is often stripped for essential spares leaving it in a run down condition. Given the delays in deciding the case one way or another, by the time the case is over, the vehicle is just scrap.

So I asked him what would make it possible for the police to get interested in tracking and recovering stolen vehicles given the fact that such vehicles are being used in terror related crimes?

He pointed out that a vehicle which is owned by a person residing at Borivili may be stolen at Colaba and may end up in Dombivili (for those not familiar with Bombay topography, each of these places are about 60 to 90 kilometers apart forming a triangle of sorts). This leads to multiple police stations being involved in solving the crime. As such crimes generally have very low detection rates they do not really reflect on the success record of the police station or its officers. Add to this the fact that three police stations would need to coordinate to successfully solve this crime, the chances become far more remote.

He pointed out that on an average around 7 to 8 vehicles are stolen in Bombay everyday. Estimating a value of about 3 Lacs per vehicle that translates to 24 Lacs per day and about 90 Crores per year. The insurance companies are paying off these claims every year. If the insurance companies were to institute a reward of even half this amount payable directly to the police officers who recovered the vehicles, it would translate into a saving of around 45 crores to the insurance companies and a direct reward of 45 crores to the detecting officers. He was confident that if such a scheme is implemented the vehicle thefts will fall to almost nil and the detection rate will be almost 100%.

Therefore the thing to keep in mind for protecting your asset is to remain ever vigilant and installing anti-theft devices in your vehicle. Similarly, it would help if people were discreet about their wealth and avoided showing off in public. Otherwise you may too become target of an impersonal crime.

As for his remark on being mis-policed, he clarified that the seniors of the force were busy fighting amongst each other. This was leading to turf wars and camps amongst the juniors of the force. More time was being wasted on these things rather than on detecting and preventing crime. The politicians in no way helped the cause as they were responsible for starting the whole internal fight by taking sides and hoisting chosen officers in chosen posts.

Sensitive issues like housing, medical, leave and other personnel issues were being sidelined. The alarming rise in HIV+ cases pointed to a deep malaise in the force. In adequate training coupled with extremely poor infrastructure was leading to extremely low morale in the force. And he was in complete sync with the recent supreme court observation that 'Even God can not help this country'