[FONT=Bookman Old Style]Our economy has so much boosted that today we have shortage for evening printing currency notes. This is the reason our new currency notes have become small in size in line with international trends. Though the new currency notes are fine in size an design but these lack the reality. The Rupee 10,000 new currency note should have photograph of MQM Chief Altaf Bhai on whose move from his chair to left side dis-balances our existing governments and move to right side gives a booster doze of strength to the rulers. On currency note of Rupees 5000 photograph of General Pervaiz should be while on that of Rupees 1000 of Shaukat Aziz. On notes of Rs. 500 photographs of Dr. Sher Afgan, Aftab Sherpao, Shaikh Rashid etc should appear in recognition of their national services. There is no need of changing photographs on rupee one hundred, fifty, twenty and ten notes as with the speed we are economically progressing remain by the end 2007 we would not need any more these currency notes.
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Re: New Pakistani Notes
Hamari economy boost nahin kar rahi, belkeh afraat-e-zarr hadd se ziyada bharr gaya hai.
Re: New Pakistani Notes
^^^
It was amusing to read that, it is not the economy (Mayeeshat) booming but inflation (afraat-e-zar). Its nice inflation where money in the country is increasing in big way and prices are following, without economy booming, still exchange rate is constant. Maybe Pakistan has learned something mysterious. Probably it is Shaukat Aziz banking experiences that is doing magic, who knows.
If reason for increase in money supply is only inflation and not booming economy then it seems that for no logical reason and beyond any economical sense, Pakistan currency is holding its value. Especially when Rupees exchange rate is freely floating exchange rate.
Normally when economy does bad, apart of high inflation and high cost of things, currency devalues in big way. Only reasons for currency to hold its value is when inflation is low and economy is doing reasonable, or economy is booming with moderate inflation. Any economist that knows the subject would consider it magic (that means something impossible) if economy is not booming, inflation is high, still currency is holding its value, especially in a country where natural mineral resources do not play significant part in economy.
In 1982 when rupee was controlled floated, open market rate for dollar was around Rs 12.00. When Zia died in 1988, open market rate was around Rs. 20.00. Thus, during 6.5 years of controlled floating exchange rate of Zia time, open market rate devalued by around 67 percent.
That comes to open market devaluation of rupees by around 8.5 percent a year (accumulative devaluation of 67 percent, from Rs 12.00 to Rs 20.00), from 1982-1988 (6.5 years) during Zia rule, while rupees was floating.
When political thugs (NS and BB) merry chair started in 1988, dollar was worth Rs 20.00 in open market. At one time in 1998 dollar went to over Rs 67.00 in open market (and at places things was so bad that dollar was trading at over Rs 75.00 while people were speculating that dollar would pass Rs 100.00 by end of year 2000).
Regardless, to be fair, before Pakistan detonated nuclear device in May 1998, rather even in Jan-Feb 1998, dollar was trading at around Rs 47. When Musharraf came to power in Oct 1999, dollar open market rate was around Rs 55.00. Thus, during 11 years of rule by political thugs (NS and BB), depreciation was 175 percent.
That comes to open market devaluation of rupees by around 9.5 percent a year (accumulative devaluation of 175 percent, from Rs 20 to Rs 55), from 1988-1999 (11 years) during political thugs (Nawaz Shareef and Bai-Nazeer Bhutto) rule, while rupees was floating.
When Musharaf came to power in October 1999, dollar rate was Rs 55.00 and at present, in November 2006, dollar is around Rs 60.50. That is a depreciation of around 10 percent in 7 years.
That comes to open market devaluation of rupees by around 1.37 percent a year (accumulative devaluation of 10 percent, from Rs 55 to Rs 60.5), from 1999-2006 (7 years) during Musharraf rule, while rupees is floating.
Now, tell how it is possible that inflation is too high and growth is negligible when Rupee did not heavily depreciated, something impossible without booming growth and controlled inflation.
You should know that if what you said were true, then soon Pakistan would have enough rupees in the economy (due to inflation) that, if a Pakistani rupees earning is converted to dollars, every Pakistani would be earning in dollars, as much as people in America (assuming that inflation rate is very high and no devaluation of rupees). Does it look logical to you?
[Same is true regarding Karachi stock market index that has increased by around 1000 percent in last 7 years of Musharraf rule (1999-2006), from around 1200 to present peak of around 12000. Stock market is nerve of economy and it could not show such increases if economy was not booming. Same is true about external trade (import and export) that increased threefold during last 7 years, from around 17 billion dollars to present 45 billion dollars.
How surprising, that everything positive is happening in Pakistan without economical boom. Seems some magic is going on in Pakistan or lot of lies floating around by people doing propaganda that there is no economical boom happening in Pakistan]
Actually, it is possible that Pakistan wages equals American wages, if economy keeps growing at around 7 to 10 percent for next 40 odd years, regardless of inflation rate or population increases.
Re: New Pakistani Notes
Can you also bring into picture the prices of goods people actually buy on street for their daily lives? How much has been the increase in prices of such products during past regimes? Dollar is not the only scale for inflation.
Re: New Pakistani Notes
^^
I used dollar because every one can find (or knows) the rupees value of dollar during different time. Thus, since dollar is also commodity (a very important commodity) that one uses rupees to buy so that goods can be bought using dollars (from international market), it is good reference for prices.
Just imagine that a person is importing sugar at two dollars for 5 Kg. Now if dollar exchanges at Rs 60, sugar would cost 24 rupee per Kg (Rs 120 per 5 Kg) to the importer. Thus, cost of that commodity (sugar) will relate somehow to 24 rupees in open market. If dollar exchange rate increases to 100 rupees, import price of sugar would be Rs 40 (two dollars or Rs 200 for 5 Kg) and thus price of sugar in open market would reflect that.
It applies to all commodities. Thus, I believe that once dollar exchange rate is holding, prices cannot increase too much, other then if there is booming economy that increases the labour cost that reflects in price increases (and that is call, positive inflation as certainly when economy is booming, people should benefit and thus their real wages increases too, effecting prices, as it should :)).
Even local manufacturers, producers, and providers of goods and services like to value their output at international prices (and that is fair too). Thus, their hard work also has some relevance with world prices that is in dollars and thus related to the dollar exchange rate.