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  • Recently the following story in quotes has gone viral on Facebook. How far is it true ? An Advice to all who are worrying about fall of Indian Rupee Throughout the country please stop using cars except for emergency for only seven days (Just 7 days) Definitely Dollar rate will come down. This is true. The value to dollar is given by petrol only.This is called Derivative Trading. America has stopped valuing its Dollar with Gold 70 years ago. Americans understood that Petrol is equally valuable as Gold so they made Agreement with all the Middle East countries to sell petrol in Dollars only. That is why Americans print their Dollar as legal tender for debts. This mean if you don't like their American Dollar and go to their Governor and ask for repayment in form of Gold,as in India they won't give you Gold. You observe Indian Rupee, " I promise to pay the bearer..." is clearly printed along with the signature of Reserve Bank Governor. This mean, if you don't like Indian Rupee and ask for repayment,Reserve Bank of India will pay you back an equal value of gold.(Actually there may be minor differences in the Transaction dealing rules, but for easy comprehension I am explaining this) Let us see an example. Indian petroleum minister goes to Middle East country to purchase petrol, the Middle East petrol bunk people will say that liter petrol is one Dollar. But Indians won't have dollars. They have Indian Rupees. So what to do now? So That Indian Minister will ask America to give Dollars. American Federal Reserve will take a white paper , print Dollars on it and give it to the Indian Minister. Like this we get dollars , pay it to petrol bunks and buy petrol. But there is a fraud here. If you change your mind and want to give back the Dollars to America we can't demand them to pay Gold in return for the Dollars. They will say " Have we promised to return something back to you? Haven't you checked the Dollar ? We clearly printed on the Dollar that it is Debt" So, Americans don't need any Gold with them to print Dollars. They will print Dollars on white papers as they like. But what will Americans give to the Middle East countries for selling petrol in Dollars only? Middle East kings pay rent to America for protecting their kings and heirs. Similarly they are still paying back the Debt to America for constructing Roads and Buildings in their countries. This is the value of American Dollar. That is why Many say some day the Dollar will be destroyed. At present the problem of India is the result of buying those American Dollars. American white papers are equal to Indian Gold. So if we reduce the consumption of petrol and cars, Dollar will come down The Above Details are translated originally from Telugu Language to English by Radhika Gr. Kindly share this and make everyone aware of the facts of American Dollar V/s Indian Rupee. And here is a small thing other than petrol , what we can do to our Indian Rupee YOU CAN MAKE A HUGE DIFFERENCE TO THE INDIAN ECONOMY BY FOLLOWING FEW SIMPLE STEPS:- Please spare a couple of minutes here for the sake of India. Here's a small example:- At 2008 August month 1 US $ = INR Rs 39.40 At 2013 August now 1 $ = INR Rs 62 Do you think US Economy is booming? No, but Indian Economy is Going Down. Our economy is in your hands.INDIAN economy is in a crisis. Our country like many other ASIAN countries, is undergoing a severe economic crunch. Many INDIAN industries are closing down. The INDIAN economy is in a crisis and if we do not take proper steps to control those, we will be in a critical situation. More than 30,000 crore rupees of foreign exchange are being siphoned out of our country on products such as cosmetics, snacks, tea, beverages, etc. which are grown, produced and consumed here. A cold drink that costs only 70 / 80 paise to produce, is sold for Rs.9 and a major chunk of profits from these are sent abroad. This is a serious drain on INDIAN economy. We have nothing against Multinational companies, but to protect our own interest we request everybody to use INDIAN products only at least for the next two years. With the rise in petrol prices, if we do not do this, the Rupee will devalue further and we will end up paying much more for the same products in the near future. What you can do about it? Buy only products manufactured by WHOLLY INDIAN COMPANIES.Each individual should become a leader for this awareness. This is the only way to save our country from severe economic crisis. You don't need to give-up your lifestyle. You just need to choose an alternate product. Daily products which are COLD DRINKS,BATHING SOAP ,TOOTH PASTE,TOOTH BRUSH ,SHAVING CREAM,BLADE, TALCUM POWDER ,MILK POWDER ,SHAMPOO , Food Items etc. all you need to do is buy Indian Goods and Make sure Indian rupee is not crossing outside India. Every INDIAN product you buy makes a big difference. It saves INDIA. Let us take a firm decision today. we are not anti-multinational. we are trying to save our nation. every day is a struggle for a real freedom. we achieved our independence after losing many lives. they died painfully to ensure that we live peacefully. the current trend is very threatening. multinationals call it globalization of indian economy. for indians like you and me, it is re-colonization of india. the colonist's left india then. but this time, they will make sure they don't make any mistakes. russia, s.korea, mexico - the list is very long!! let us learn from their experience and from our history. let us do the duty of every true indian. finally, it's obvious that you can't give up all of the items mentioned above. so give up at least one item for the sake of our country! We would be sending useless forwards to our friends daily. Instead, please forward this to all your friends to create awareness. — with franklin and gandhi.

  • Answer:

    The story is a load of bull crap a) It is simply not true that Indian rupees can be redeemed for gold at the RBI. The Indian rupee is not on the gold standard, neither is any other currency in the world today. b) There is one and only reason for a currency to keep losing value against another in the long run....  namely the difference in interest rates.....   The rupee is losing value against the dollar because the nominal interest rate in India is much higher than the nominal interest rate in the US....    This in turn is because:   i) The rupee is being printed at a greater rate than the dollar which causes higher inflation and   ii) India is perceived (rightly) as a risky country to invest in which causes investors to demand a higher real rate of return.   The solution is trivial.... Stop inflating the rupee and make Government policy more business friendly.    Protectionism will not help one bit. India was among the most protectionist countries in the world till 1991 and yet, the rupee kept falling against the dollar throughtout the period until 1991... It actually did  all right in the period from 1991 to 2007 when it looked like socialism was on the decline.... and started falling again with the revival of license/quota raj in UPA2.

Yogishchandra Kamath at Quora Visit the source

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You observe Indian Rupee, " I promise to pay  the bearer..." is clearly printed along with the signature of Reserve  Bank Governor. This mean, if you don't like Indian Rupee and ask for  repayment,Reserve Bank of India will pay you back an equal value of  gold.(Actually there may be minor differences in the Transaction dealing  rules, but for easy comprehension I am explaining this) I stopped reading this story right after this line. Because this statement is factually incorrect. This what I found on the Wikipedia page for the Indian rupee. https://en.wikipedia.org/wiki/Indian_rupee#Convertibility There is some confusion regarding the interchange of the currency  with gold, but the system that India follows is that money cannot be  exchanged for gold under any circumstances due to gold's lack of  liquidity, therefore, money cannot be changed into gold by the RBI. India follows the same principle as Great Britain and the U.S. Reserve Bank of India clarifies its position regarding the promissory clause printed on each banknote: "As per Section 26 of Reserve Bank of India Act, 1934, the Bank is  liable to pay the value of banknote. This is payable on demand by RBI,  being the issuer. The Bank's obligation to pay the value of banknote  does not arise out of a contract but out of statutory provisions.The  promissory clause printed on the banknotes i.e., "I promise to pay the  bearer an amount of X" is a statement which means that the banknote is a  legal tender for X amount. The obligation on the part of the Bank is to  exchange a banknote for coins of an equivalent amount." Now, I do not know if I have misread the whole thing, and I'm spouting nonsense, or if I'm correct. So do correct me if I'm wrong. But what I interpreted was "You can tell the RBI to give me 500 rupees worth of gold in exchange of a 500 rupee banknote". This cannot be done. The RBI will NOT give you gold, because they, or frankly anybody else in the world, are not using that system. They can only give you 500 rupees worth of coins. Try lugging that around in your wallet, for some change (pun unintended). This pretty much destroys any credibility that the whole story had for me. Even if the remaining part of the story is true or even plausible, I do not know it, since I wouldn't bother to read after such a glaring error, as I would be wasting my time possibly being taken for a ride.

Harshit Jain

Because of poor public transport, it may not be possible. If possible please suggest to take one week leave in case it will help. Since facilities and jobs are not available in neighborhood, people are travelling from one cornet of city to other corner and wasting precious petrol and damaging environment. There are various other means to develop the economy. integrated townships with jobs, education, healthcare, and other infrastructures are need of hour. Modi's vision to develop 40 modern cities may help the situation

MV Saxena

I am not surprised. In an earlier answer of mine, I did say something like : I don't want to cause any alarm, but we do live in pathetic times. I am not an economics expert, but I would like to remind everyone that people have written books saying economics is BS. I even saw a book with a strange cover image. The cover image was a book titled economics and it was melting like candle. People have already said that the very fundamentals are wrong, or the superstructures built on top like macroeconomics on top of micro one are downright shaky. My understanding is based on common sense. Since the Reagan years in USA, they have clearly said that "gambling" has entered the capitalist domain. Hence Michael Douglas movie Wall Street with Gordon Gekko character saying "Greed is Good." I am sorry, but Gandhi said human needs will sustain this world, not greed. I am no fan of Gandhi either nowadays, but when someone is right I have to acknowledge it. This is called Hindu Dharma. Aamir Khan calls this Satyamev Jayate. Let me make my understanding of life very clear here -  whether we like it or not, in the ultimate analysis thats whats gonna happen. That is why religions talk about morality and book keeping, accounts, good and bad, merit, heaven and hell, and of course, above all, Karma. Also, when banks crashed in USA in 2008, they went on and on about Vikram Pandit, the bandit of Citibank and others; complex formulae based on derivative and integral calculus and other intellectual stuff.  Well, my neighbors son had a mental breakdown because he could not understand an iota of Calculus. Obviously Calculus is not for everyone. LOL. But seriously, I suspected there was some sort of intellectual obfuscation going on in the world. Sadguru Jaggi Vasudev youtube video says, we are still profiting from the great deeds and merit acquired by our sages of yore. People can laugh at me now, but this really worries me. Of course it is true that commerce is driving human potential nowadays. It is obvious even to an uneducated man. Today morning  I was taking my mom to the doctor, and the auto driver just unleashed verbal fury. He has given up farming and migrated to city. No profits in farm sector, excessive taxation, can't make ends meet, can't get kids married, curse the politicians and the economics geniuses, etc., Finally, he asserted, we are moving towards DOOM! So I joked, I agree, may be in future, people will have to consider eating cement and drinking petrol, because all around I see more and more construction. More interested in one more "floor" rather than bread making "flour", I guess. I am referring to us humans losing touch with soil, the ground realities, earthly affinity, etc., In school, my telugu teacher said let the education get to your head, keep money in the pocket. Nowadays, people with no education, and I mean REAL EDUCATION that builds human character, are not only making tonnes of money, but it has also got to their heads. Vroom...Vroom...Vroom..Doom ahead! I will give my AP understanding. Chandrababu Naidu sold capitalism in late 90s and early noughties. Farming died. So YSR came and sold a strange mix of theology, selective capitalism, and communism for poor. Now after bifurcation, KCR wants to sell - i don't know - feudalism perhaps, while Naidu says he learnt his lessons from past and will now do the balancing act. People are like," Whatever dude. We are getting zombified here." And by people I mean the REAL, REAL, aam admi, not the khaas admis pretending to be aam admis. As far as the OP question is concerned, people have regularly used the word petrodollars. No big surprise. Some History, probably forgotten: Middle Ages or Dark Ages were about crusades, then West met East, and Renaissance and SciTech happened. Trade (Wink!Wink!) flourished like never before due to Industrialization and Modernity. So what is the big surprise if Western Civilization is calling the shots on a global scale today? They had a head start didn't they? They obviously want to be Roger Federers on global stage like forever I guess, so they made sure that they made the rules, decided different types of courts like grass, clay,etc., and finally sat on that high stool thing with an umbrella on top to play the referee. So I agree that the OP story has truth. By Western Civilization, I do not mean geography or a race of people. I mean all people who think," we are actually progressing at a rapid pace and it is for the greater good."  I would like to ask them where? Quote: Ambition without knowledge is like a boat on dry land. Mr. Miyagi to Hillary Swank in Next Karate Kid. He is saying you go nowhere in life this way. You are stuck. I add, speed without direction is but a scalar quantity. Magnitude, but no direction. Velocity has both. One netizen has wisely said, we as a species are racing ahead in a clueless manner, without any direction whatsoever. Humans can't do that in my humble opinion. So, I came up with the following metaphor, I think. May be others did before I don't know: Metaphysics is like compass on the Ship called Science. Ship gets lost without compass. Metaphysics is about Truth. Science is about facts. The Truth is out there said Mulder and Scully on X-files TV show. Well, The Truth is in here too, as I point my index finger towards my chest.

Gopi Krishna

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