Shyam Saran in his article “The coming global crisis: Is India ready?” (September 21) impressively recounted the events of the last three years, but failed to give any solution. The truth is that there is no solution to a sharp devaluation of the dollar or the withdrawal of the euro as a currency. Both these currencies do not belong to us but to a bunch of politicians in the US and Europe for whom our economy is not even a consideration.
There are simply too many dollars floating around in the world to do anything about them. QE1 and QE2 resulted in even more printing of dollars that led the US’ investment banks to chase commodities and stocks all over the world, giving us the inflation of the past two years.
If the amount of dollars in circulation has to go down, the steep values of many assets around the world that are bought with these dollars (stocks, property and commodities) have to crash before we can start rebuilding. This rebuilding will have to have a stiff caveat — the new world reserve currency(ies) will have restrictions on being printed at will and American banks will have to follow the Glassman-Steagall Act.
Saurabh Sharma, Chennai
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