Prof. M. L. Thangappa, a Tamil scholar equally proficient in English from Puducherry, recognized at long last

When I was getting ready to start for the University my youngest daughter gave a ring and informed me that Prof. M. L. Thangappa has been showered the National Bal Sahitya Puraskar Award for 2011. When I heard this my joy knew no bounds and I virtually saw ten thousand daffodils fluttering and dancing in the breeze before my eyes. It is just a coincidence that Thangappa’s writings I was going through in the last one week. The same thing happened when Prof. Paul Krugman got Nobel Prize in 2008. On that morning I was going though the “Return of Depression Economics” written by him although there was no specific purpose to read that book for classroom lecture.

Prof. M. L. Thangappa started his career as a school teacher and ended up as a Professor in a college. Long ago he worked in our Government High School. At that time I was not his student. Later we became colleagues while working in college in the Union Territory of Puducherry. To my knowledge he is one of the outstanding scholars in Tamil poetry, having proficiency and expertise in English, leading to his critical capability to translate the ancient Sangam Literature and Vallalar’s “Song’s of the Grace” into English. I have had several occasions to interact with him. The essence of his writing shall be summed up in a single line we are born here only to love the fellow human and without any inflated ego or arrogance we must lead a simple life and render service to humanity in whatever way possible.

I found out his landline number from old diary and immediately spoke to him and expressed my heartfelt appreciation for getting this award belatedly. Readers can remember his letter to me which I had posted in my blog some time ago. His Tamil poetry writing dates back to 60s’ and 70s’ and I don’t know to what extent people in Delhi and other committee members are really aware of his literary excellence as they were written in traditional form. He has lived his life, closely aligning himself with nature without expecting any reward or award in his life. Indeed in my own self interest I want him to live for a longer time in order that he will give a lengthy introduction to what all I will publishing during my retirement days which would start from 2013 May.

I have not had any goals in life but I want to read more and write more not just economics alone but a variety of things which I have experienced, suffered pleasantly in my life. We don’t know our expiry date. There is a lingering desire to live for some more time with reasonably good health and leave behind something substantial about our footprints. There are many scholars like Prof. M. L. Thangappa and I am very happy that he will be collectively representing all those who have gone unnoticed and unhonoured by the authorities but getting themselves into history through cosmos. I am proud to be a Tamil although of late. I have considered myself not just an Indian but a world citizen having an endless love and boundless energy to do something at least to think about the downtrodden in all parts of the world.

I cannot quarrel with Prof.Paul Krugman, being his Fan. However, I might differ with Him

Prof.Paul Krugman in his recent article has argued rightly that although American economy is in a state of mess, the grounds on which the S&P rating agency has downgraded the U.S is fundamentally flawed and that some $2 trillion error has also taken place in their calculations. I am a fan and ardent admirer of Paul Krugman. Indeed after Harrry.G.Johnson , I have developed a spontaneous affection for Krugman although I like many economists like Ronald Mc Cannon, late Dorn Busch, Schiller, Roubini, Joseph.E.Stiglitz and many others. In my blog, posted yesterday I had revealed my happiness over the downgrading of U.S by S&P, not because the latter was right but mostly because many things have gone wrong with U.S for so long and that U.S is still thinking that it can enjoy an unlimited credit card at a ridiculously low rate of interest on its treasuries. The difference of opinion or rather contradictory perspectives between Krugman and me are only are only notional and marginal and not real. I never had any respect for any rating agencies in the financial world. Krugman also observed in his latest article that S&P continued to give a high rating to Lehman Brothers even one month before its demise .The president of the U.S is also optimistic that fiscal situation is sustainable and that U.S will continue to serve as a safe haven over international investors. In the last forty years of my academic life, I have heard enough of this music and I am tired of it . In the recent times perhaps the political differences over the debt ceiling and the consequent downgrading by a rating agency may have caused the current Dollar crisis . Even Krugman argues that with huge debt Japan continues to enjoy a low rate of interest .It is high time that economists and top politicians in the world listen to the noise of the Gold, which has become so nasty from the common man’s perspective .From $35 per ounce Of Gold in 1971 Gold has moved to more than $1650 per an ounce, giving a clear red signal that the faith in the fiat currency is fully eroded and Dollar cannot that easily regain the confidence. There are speculative tendencies that gold price will escalate still further and that does not augur well for the inflation front. Continuing asset bubbles in real estate and gold market are clear indications that we have lost control over money and that the absence of an anchor currency will unleash a lot of misery to the vulnerable population of the entire world .Tackling recession, very deep recession by Keynesian spending cut has not solved the problem for again, as Krugman ha pointed out in one of the recent articles that rate of unemployment is high in U.S. One can very well imagine the condition in poverty stricken countries of Asia and Africa .

In a globalised environment, financial markets do more mischief and they spill over into real sector. In the near future there is no alternative to fiat currency excepting a commodity called gold , whose monetary status was eliminated long ago . Ever since Asian financial crisis ,we have been talking about reconstructing international financial architecture but very little is done on the practical side . This vacuum is understandable. Now there is not just crisis in macro economics but there is a real, deep crisis in politics, environment and the very economics itself . Indeed it is very much distressing that, many are not aware of the grave danger lying ahead.

Gold alone will glitter when fiat currencies collapse

Yesterday and today the business news papers , including the electronic media are filled with sensational news that credit rating of U.S.A has been downsized from AAA+ to AA+, indicating that the policy of the American president is less stable and less predictable with regard to the management and containment of spiraling U.S debt . Depending upon the vested interest- the pro and anti U.S. attitudes, editorials and the articles will be written either to subscribe to the news of rating agencies or attacking them as the prime villain of the piece. Being one of the serious and sincere students of international finance and breathing the nature and intensity of the Dollar crisis for more than four decades I feel vindicated that the world economy has started testing the U.S turbulent economic waters. It is my misfortune that I could not write more in the recent times although I articulated more about the ailment of Dollar in 2003 itself.

At this moment I would like to recollect the conversation that I had in a more relaxed atmosphere with my Professor, Bokil . at IFMR in the early 80’s. Ina lighter vein he asked me whether we could suggest to write off the U.S debt. That was a period when many poor Latin American countries were suffering from debt problems. I told him that the U.S being a major key currency country under floating exchange rate must generate more export revenue through the depreciation of the Dollar and also it should manage its budget well. U.S. could not be treated as a third world country. In the last three decades the U.S debt problem has intensified to an unsustainable level. Huge amount of current deficit mirrors the image of current account surplus in Asia. By treating U.S as a safe haven, both the governments and international investors had given an undue respect to the Dollar, which it does not deserve. Gone are the days when the U.S could seduce and fool the world economy by selling treasuries at ridiculously low interest rate. I have articulated this view point in many articles in Business Line way back in 2003.

At long last I am happy that U.S will be made to behave as a normal economy in a distant future. Neither the U.S economy not the Dollar will die quickly. Now, the countdown has begun for the U.S to put its fiscal house in proper order. Regardless of any kind of supportive arguments for the U.S and against credit rating agencies, one thing is sure enough, U.S cannot continue to travel on the road accustomed to it. It has to now travel on the road less travelled by. That alone can make a difference in future. All over the world, countries suffer under the weight of the debt. The confidence on the fiat currency has been fully shaken. Everything is reflected in one single yellow metal, which is not money now but only a commodity, but having the capacity to derail all the monies under the Sun .

The present is tense, future is uncertain and Dollar and other weak currencies are really thrown in to vortex of unknown. Even God cannot save this flat world, dominated and frustrated by fiscal irresponsibility on the part of many government and rampant corruption, making all the inroads in to the vitals of the system effortlessly. Criminality and venality in the corporate sector, combined with crisis of leadership in many Asian countries will compound the crisis. Excepting the oil, (black gold and the yellow metal, the super commodity called gold there is nothing in the system today which can put any effective control. Many countries will be tempted to inflate away the debt by printing money. If that happens that will be the greatest disaster far worse than any nuclear catastrophe or God’s tsunami. Rating down the U.S is just a beginning in a series of humiliation and economic confusion that are going to follow close on the heels of a series of Dollar crisis which are going to visit at discrete time interval.