Gold

Sovereign Gold Bonds are a great idea that won’t work in India

gold
On November 5, 2015, the Prime Minister Narendra Modi launched the sovereign gold bonds. On the occasion Modi said: “India has no reason to be described as a poor country, as it has 20,000 tonnes of gold. He said the gold available with the country should be put to productive use, and these schemes show us the way to achieve this goal.”

Our fascination for gold has led to a situation where we have managed to accumulate 20,000 tonnes of gold over the years. To understand how big this number is, consider the following point made by the World Gold Council. As it points out: “At the end of 2014, there were 183,600 tonnes of stocks in existence above ground. If every single ounce of this gold were placed next to each other, the resulting cube of pure gold would only measure 21 metres in any direction.”

What does this mean? India has 20,000 tonnes or around 10.9% of the 1,83,000 tonnes of gold in existence. The tragedy is that India doesn’t produce almost any gold. In fact, in 2013-2014, we produced 1.4 tonnes of gold.

And how much did we import? The minister of state for commerce Nirmala Sitharaman(independent charge) in a written reply in the Lok Sabha had pointed out that Indian import of gold in 2013-2014 had stood at 638 tonnes.

So India produced 1.4 tonnes of gold and imported 638 tonnes of gold. Interestingly, the import of gold in 2013-2014 fell by around 25% from 845 tonnes in 2011-2012. In 2011-2012, India had produced 1.59 tonnes of gold. Hence, we practically import all the gold that we consume.

And this creates major macroeconomic imbalances. Gold is sold internationally in dollars. When India imports gold it needs dollars, which need to be earned through exports. When India imports gold, it pushes up the demand for dollars in comparison to the rupee and the value of the rupee starts to fall. A depreciating rupee is good for the exporters because they earn more. But given that our imports are more than our exports it hurts.

Other than practically importing all the gold that it consumes, India also imports 80% of the oil that it consumes. A depreciating rupee means that the oil marketing companies which import oil have to pay more for oil in rupee terms. In the past, the government did not allow the oil marketing companies to pass on this increase in cost to the consumers totally.

Only recently diesel prices have been freed and are determined by the price at which oil marketing companies are able to buy oil internationally. Oil marketing companies still suffer under-recoveries every time they sell kerosene and domestic cooking gas.

The government has to compensate the oil marketing companies for these under-recoveries. Up until last year, the oil prices were very high. And when gold demand went up, the rupee depreciated and this pushed up the total amount of money oil marketing companies had to pay for oil. Since they were not allowed to totally pass on this increase in price to the end consumer on the oil products they sold, the government had to compensate them.

When the government compensated them, the expenditure of the government went up and so did its fiscal deficit. Fiscal deficit is the difference between what a government earns and what it spends. This meant higher borrowing by the government.  A higher borrowing led to crowding out, where the increased government borrowing did not leave enough on the table for the other borrowers. This, in turn, pushed up interest rates. And so the cycle worked.

Let’s look at this in another way. In 2013-2014, the gold and silver India imported, formed around 7.1% of the total commodity imports. In 2012-2013 and 2011-2012, the number was higher at 11.3% and 12.5%. For a commodity which is pretty much useless from an industrial point of view that is a huge proportion.

In 2013-2014, gold worth $28.7 billion had been imported. Now compare this to India’s IT and IT enabled services exports which during the same period stood at $86.4 billion. So, one way of looking at it is that one-third of dollars earned through IT and IT enabled services exports were used up to buy gold.

In fact, the situation was even worse in 2012-2013, when the gold imports were at $53.7 billion. The IT and IT enabled services exports were at $76.5 billion dollars. Hence, more than 70% of dollars earned through IT and IT enabled services exports were used up in buying gold. For 2011-2012, the proportion was even higher at 81%.

Once all these factors are taken into account the sovereign gold bonds sound like a fantastic idea. As a RBI notification dated October 30, 2015, points out: “The Bonds shall be denominated in units of one gram of gold and multiples thereof. Minimum investment in the Bonds shall be 2 grams with a maximum subscription of 500 grams per person per fiscal year (April – March).” The bonds shall also pay an interest of 2.75% per annum.

So anyone looking to buy gold instead of buying actual physical gold can buy these bonds. The value of these bonds will be linked to the price of gold. As the RBI notification points out: “The redemption price shall be fixed in Indian Rupees on the basis of the previous week’s (Monday – Friday) simple average closing price for gold of 999 purity, published by IBJA [Indian Bullion and Jewellers Association].” The bonds can be held on paper as well as demat form.

When an investor invests in these bonds he will not buy physical gold. This will help in reducing gold imports and the entire cycle, which I have explained above, will not play out or play out to a lesser extent. The RBI and the government will not get a macroeconomic headache because of our fascination for buying gold. At least, that’s the idea.

Of course I am assuming here that investors will move from buying physical gold to investing in sovereign gold bonds. Nevertheless, will that happen? Paper and demat gold has already around in the form of gold mutual funds and gold exchange traded funds(gold ETFs). Gold mutual funds invest the money that they collect into Gold ETFs.

These funds haven’t really taken off. This tells us that the Indian investor has an aversion to paper and demat gold and likes to hold real gold.

The advantage in case of sovereign gold bonds is that the investor along with getting gold returns also gets 2.75% as interest on the initial amount he invests. Is that lucrative enough to get him to move from physical gold to paper/demat gold? I don’t think so.

And that’s basically because there are other factors at play. Investing in gold is a lot about touch and feel. Indians are emotionally and culturally attached to the gold that they buy. Further, as I mentioned in the Friday edition of The Daily Reckoning, many Indians buy gold to store their black money. A lot of money can be held by buying a small amount of gold. These individuals are likely to continue to buy gold in physical form. The reason is straightforward. They are not going to buy paper/demat gold because it would be establish an audit trail and lead to problems for these individuals.

Also, those interested in getting gold jewellery made will get gold jewellery made and not buy sovereign gold bonds instead.

Due to all these reasons, I think the sovereign gold bonds are unlikely to take off. Indians will continue to buy gold in physical form. But that shouldn’t stop the government from trying.

The column originally appeared on The Daily Reckoning on November 10, 2015

Recover black money from India first, Modi. Instead of making noises about what lies in Swiss banks

Vivek Kaul

Narendra Modi and his government have had quite a fascination for the black money that leaves the country. Black money is essentially money that has been earned, but on which a tax has not been paid.
During the electoral campaign for the 2014 Lok Sabha polls, Modi promised that all the black money that had left Indian shores would be recovered and Rs 15 lakh deposited in the bank accounts of every Indian. Later Amit Shah, the president of the BJP, dismissed this as a chunavi jumla.
In the budget presented in February 2015, the finance minister Arun Jaitley focussed on black money and said: “The problems of poverty and inequity cannot be eliminated unless generation of black money and its concealment is dealt with effectively and forcefully.”
At the same time Jaitley unleashed a series of measures to counter the menace of black money leaving the shores of this country. “Concealment of income and assets and evasion of tax in relation to foreign assets will be prosecutable with punishment of rigorous imprisonment upto 10 years,” was one of the measures that Jaitley spoke about during the course of his speech.
Recently, the Income Tax department issued new income tax forms which asked for a plethora of information from individuals travelling abroad. This was again seen as a step to curb black money. These forms had to be withdrawn after a wave of public protests.
As per the Global Financial Integrity report titled Illicit Financial Flows from Developing Countries: 2003-2012, around $439 billion of black money left the Indian shores, between 2003 and 2012. What is interesting is that in 2003 the total amount of black money leaving India had stood at $10.1 billion. By 2012, this had jumped more than nine times to around $94.8 billion. In comparison, the money leaving China during the same period grew by less than four times during this period.
Given this, one really can’t blame the government for being overtly worried about the black money leaving the country. Also, black money that remains in the country has some benefits. Cambridge University economist Ha-Joon Chang explains this in his book Bad Samaritans—The Guilty Secrets of Rich Nations and the Threat to Global Prosperity, in the context of a minister taking a bribe (which is also black money, given that the minister is not going to declare the bribe as an income).
As he writes: “A bribe is a transfer of wealth from one person to another. It does not necessarily have negative effects on economic efficiency and growth.” If the minister taking the bribe decides to spend/invest that money in the country, it has a positive impact on economic growth, as the spending creates economic demand and the investment creates jobs. At least in theory, the idea seems to make sense.
In comparison, the black money leaving the country is a total waste. As Chang writes: “A critical issue…is whether the dirty money stays in the country. If the bribe is deposited in a Swiss bank, it cannot contribute to creating further income and jobs through investment—which is one way odious money can partially ‘redeem’ itself.”
Once we take this factor into account Modi government’s crackdown on black money leaving the shores of the country starts to make immense sense. But the question is how good are the chances of recovering the money that has already left the shores?
There is a great belief in India that all the black money is lying with banks in Switzerland. But this belief is incorrect. As Chang writes: “Switzerland is not a country living off black money deposited in its secretive banks…It is, in fact, literally the most industrialized country in the world.”
Data released by the Swiss National Bank, the central bank of Switzerland, suggests that Indian money in Swiss banks was at around Rs 14,000 crore in 2013. In 2006, the total amount had stood at Rs 41,000 crore.
The reason for this fall is simple. Over the last few years as black money and Switzerland have come into focus, it would be stupid for individuals or companies sending black money out of India, to keep sending it to Switzerland.
There are around 70 tax havens all over the world. And so this money could be anywhere. Getting all this money back would involve a lot of international diplomacy and cooperation. Also, the question is why would tax havens return this money. The economies of many tax havens run because of this black money and no one undoes a business model that is working.
An estimate made by the International Monetary Fund suggests that around $18 trillion of wealth lies in international tax havens other than Switzerland and beyond the reach of any tax authorities. Some of this money must have definitely originated in India.
Long story short—it would be next to impossible to get back any of this black money.
Now let’s get back to domestic black money. As per Chang this money if invested properly can create jobs as well as economic growth. In the Indian case a lot of this money gets invested into gold and real estate. Money going into gold does not create any jobs. And money that goes into real estate has driven up home prices in particular, all over the country, to extremely high levels. Most middle class Indians cannot afford to buy a home now.
Given this, it makes tremendous sense for the government to crack down on domestic black money, instead of making noises about recovering black money that has already left the shores of this country. Further, focus should be on ensuring that the number of people paying income tax goes up in the years to come.
In short, the black money menace first needs to be tackled domestically.

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)

The column originally appeared on DailyO on Apr 27,2015

Why politicians love paper money

3D chrome Dollar symbolMoney makes money, and the more money that money makes, makes more money—Benjamin Franklin


John Maynard Keynes was the most influential economist of the twentieth century. Keynes really came into his own in 1936, when his magnum opus The General Theory of Employment, Interest and Money was published.
One of the core points of the book was that when it came to thrift or saving, the economics of the individual differed from the economics of the entire system. For an individual to save by cutting down on expenditure made tremendous sense. But when a society, as a whole, began to save more, there was a problem.
This was because the expenditure of one person was the income for another. Hence, when expenditure began to go down, incomes would fall too, leading to a further reduction in expenditure. And so the cycle would continue. The aggregate demand of a society as a whole would fall in the end, leading to either lower prices or lower production or both, thus impeding economic growth and causing economic contraction.
As per Keynes, the way out of this situation was for someone to spend more. Citizens and businesses were not willing to spend more, given the state of the economy. So, the only way out of this situation was for the government to spend more on public works and other programs. This would act as a stimulus and thus cure the recession.
This has been standard prescription given by economists when countries are not doing well. Having said that the basic idea put forward by Keynes had been known for a very long time. Even Roman kings had practised it.
As Kabir Sehgal writes in Coined—The Rich Life of Money and How Its History Has Shaped Us: “Julius Caesar left his stamp on Roman monetary history by using the gold treasure he pillaged from Gaul to increase the quantity of the aureus in circulation…These new coins helped Rome cope with a financial crisis of 49BC.” So, even Julius Caesar had used Keynes’ prescription of increasing government spending during recessionary times and thus helped revive the economy.
Caesar’s successor Augustus followed the same prescription in order to revive the Roman economy when it was suffering from a depression, during the course of his rule. As Sehgal writes: “Augustus used loot captured from Egypt to spend lavishly on civil projects and enhanced welfare programs…In time…the economy recovered.”
Interestingly, the rulers that followed Julius and Augustus, followed their model. One such ruler was Nero who ruled Rome between AD 54 and AD 68 and had to face a depression in AD 62. In AD 64, a fire blazed through Rome and this created further problems. But Nero got through this by increasing “food subsidies for the public” and “spending on civil projects like canals”.
But along with following the Keynesian model, Nero did something else as well. He started reducing the quantity of metal in the Roman coins. Nero reduced the silver content of denarius (a silver coin) by 10%. He also reduced the gold content of the aureus by 10 percent in AD 64. By reducing the metal content in coins Nero was able to produce more coins. In the modern sense, he was thus able to increase money supply by around 7%.
What was the idea behind this debasement of metallic money? “The story goes that with more money flowing through the economy, prices will rise to reflect the reduced value of the currency, which will spur individuals and businesses to spend now rather than later, leading to a bump in economic activity,” writes Sehgal.
Nero was the not the first ruler to practice this strategy. Neither was he the last one. This is a practise that has been regularly resorted to by kings, queens, dictators, general secretaries, and politicians ever since.
In fact, Nero couldn’t have gone about it as well as politicians and central bankers do, in this day and age. The reason for this lies in the fact that during Nero’s time Rome used gold and silver coins as money. As Sehgal writes: “Nero was unable to affect uniformly his entire currency at once. When he issued a new batch of debased coins[i.e. coins with lower metal content] there were still high-grade coins{i.e. the coins that had been issued earlier and had a higher amount of metal content in them] in circulation. The value of these high-grade coins would appreciate, yet it would take time for them to be hoarded and removed from circulation.” They would be hoarded because they had more metal in them than the new coins.
But with paper money there are no such problems. When a central bank issues more paper money it “adjusts the overall money supply” and “affects the value of all notes simultaneously”. “Today it’s still common practice for central banks to adjust the supply of money to abet political goals,” writes Sehgal.
Take the case of Bank of Japan—the Japanese central bank is mandated to print 80 trillion yen annually so that it can create some inflation in Japan and get people to spend money (as explained above) and in the process create some economic growth. The idea also is to drive down the value of the yen against other currencies so that Japanese exports pick up. A paper money system gives the government and the central bank this kind of flexibility. This is something that would not be easily possible in a metallic based system. In order to flood the financial system with more gold or more silver, more gold or silver would be required. Unlike paper money, metallic money cannot be created out of thin air.
Also, history has shown that debasement of currency leads to inflation as more and more money chases the same amount of goods and services. And inflation benefits borrowers as they repay money they had borrowed with money that is less valuable than it was before. Further, governments run by politicians are themselves big borrowers. Hence, inflation ends up benefiting governments as well.
It is much easier to create inflation with a paper money system than with metal based currencies. In fact, a few years back I spoke to Russell Napier of CLSA who made a very interesting point: “The history of the paper currency system, or the fiat currency system is really the history of democracy… Within the metal currency, there was very limited ability for elected governments to manipulate that currency. And I know this is why people with savings and people with money like the gold standard. They like it because it reduces the ability of politicians to play around with the quantity of money. But we have to remember that most people don’t have savings. They don’t have capital. And that’s why we got the paper currency in the first place. It was to allow the democracies. Democracy will always turn toward paper currency and unless you see the destruction of democracy in the developed world, and I do not see that, we will stay with paper currencies and not return to metallic currencies or metallic based currencies.”
And this best explains why politicians love paper money.

The column originally appeared on The Daily Reckoning on April 16, 2015

Dear Reader, are you still invested in gold?

gold
In my previous avatar as a full time journalist working for a daily newspaper with a very strong business section, I happened to interview many gold bulls. This was primarily during the two year period between September 2008 and September 2010, in the aftermath of the financial crisis that broke out in mid September 2008.
I got a lot of predictions on what levels the gold price would run up to in the years to come. Almost each one of these bulls agreed that gold will cross $2,000 per ounce (one ounce equals 31.1 grams). Some of them thought gold would touch anywhere between $5,000 and $10,000 per ounce.
The highest prediction I got for gold was $55,000 per ounce. The trick with all these forecasts was that none of these gentlemen predicting the price of gold, gave me a date i.e. by such and such date, the price of gold would be at this level. All of them just gave me a price.
Interestingly, more than four and a half years later, gold prices have not gone anywhere near the levels the gold bulls had predicted. The logic offered was very straightforward—with all the money being printed by central banks all around the world, very high inflation would be the order of the day.
And in this environment people would do what they have always done—buy gold. This expectation drove up the price of gold and it touched around $1,900 per ounce, sometime in August 2011. After this, the price fell and currently stands at around $1,220 per ounce. In fact, the price of gold never even crossed $2,000 per ounce, let alone crossing $5,000 per ounce.
There are important lessons that emerge here. As Humphrey B. Neill writes in The Art of Contrary Thinking: “The whole field of economics remains a “guessy” one. Little, if any, progress has been made over the years in attaining profitable accuracy in economic forecasting. And, mind you, this condition still exists, notwithstanding the extraordinary volume of statistics that is now available…which was not known to former forecasters.”
The Art of Contrary Thinking was first published in 1954 (even though I happened to read it only over the long weekend and I really wish I had read this book a decade back), and what Neill wrote then still remains valid.
Another interesting point that Neill makes is that people love opinions and forecasts which are definitive. Almost every gold bull I have interviewed over the years has told me with great confidence that the price of gold is going to explode in the years to come. And it’s the confidence with which they spoke that made their forecasts believable at the point of time they were made.
As Neill writes: “Forcing oneself to be definitive and specific can cause more wrong guesses and forecasts than anything I can think of. It has given rise to the cynical expression: “Often in error, but never in doubt.” It is this writer’s contention after over 30 years’ acquaintance with, and observation of, economics and Wall Street that being positive, specific, and dogmatic is about the most harmful habit one can fall into.”
What was true in the mid fifties when Neill wrote the book is even more true now, in the era of television and the social media. When you have to voice your opinion in 30 seconds or write everything that you know in 140 characters, there is no opportunity to be nuanced. You have to be as definitive as you can be, because that is what people love and there is no space for a detailed argument.
But as we have seen very clearly in the case of gold this clearly does not work. “The fault likes (1) in the pernicious desire of writers in the financial economic field [like yours truly] to forecast—to be oracles. Once bitten, it is difficult to effect a cure! Readers (2) are equally at fault in expecting that anyone can predict economic or market trends accurately and consistently,” writes Neill.
The gold bulls have been way off the mark in their predictions until now. One reason for this lies in the fact that all the money printing carried out by central banks hasn’t led to much conventional inflation. The reason as I have explained (you can read the pieces here and here) in the past lies in the fact that people haven’t borrowed and spent money at low interest rates, as they were expected to. Given this, a situation where too much money chases too few goods and leads to inflation, never really arose. Though a lot of this newly printed money found its way into financial markets all over the world.
The broader point here is that it is very difficult to predict human behaviour. As Neill writes: “you may have all the statistics in the world at your finger tips, but still you do not know how or why people are going to act.” And given this, just because people have borrowed and spent money when interest rates were low in the past, doesn’t mean they will do so again.
Where does that leave gold? Will gold prices go up again? The answer is kind of tricky. Let me quote Nassim Nicholas Taleb here. As Taleb he writes in Anti Fragile: “Central banks can print money; they print print and print with no effect (and claim the “safety” of such a measure), then, “unexpectedly,” the printing causes a jump in inflation.”
James Rickard author Currency Wars: The Making of the Next Global Crises says the same thing: “They can’t just keep printing…All major central banks are easing…Eventually so much money will be printed that this will lead to inflation.”
What no one knows is when this will happen. And a forecast which does not come with a time frame is largely useless. What this also means is that if you are still betting your life on gold, please don’t. Okay, I think I am making a forecast again. Let me stop here.

Disclaimer: This writer has around 10% of his portfolio still invested in gold through the mutual fund route.

The column appeared on The Daily Reckoning on Apr 7, 2015

Don’t blame Rajan: It’s time the interest-rate-wallahs stopped punching the RBI

ARTS RAJANVivek Kaul

It fashionable these days to criticize the Reserve Bank of India at the drop of a hat. The senior columnist Prem Shankar Jha is the latest person to join this bandwagon. The newest interest-rate-wallah on the block in a column in The Times of India held the RBI responsible for India’s slow economic growth over the last few years. As he writes “[The] Indian economy is not on the road to recovery. The reason is the sustained high interest rate regime of the past four years. Industry has been begging for cuts in the cost of borrowing since March 2011… On August 5, RBI governor Raghuram Rajan surprised the country by announcing that he would not lower interest rates, because at 8% consumer price inflation was still too high.”
I guess Jha must have among the few people surprised by Rajan’s decision given that among those who follow the workings of the Indian central bank closely, almost no one had expected Rajan to cut interest rates.
The premise on which interest-rate-wallahs work is that at lower interest rates people will borrow and spend more, which will lead to economic growth. But the entire premise that low interest rates will lead to a pick up in consumption and hence, higher economic growth, doesn’t really hold. (As I have explained here).
The other big reason offered is that companies can borrow at lower rates of interest. The bigger question that interest-rate-wallahs tend to ignore is how much control does the RBI really have over interest rates that banks pay their depositors and in turn charge their borrowers? Over the last few weeks, banks have cut interest rates on their fixed deposits. The list includes State Bank of India, Punjab National Bank and Central Bank of India. (You can read about here, here and here). The Indus Ind Bank also cut the interest it pays on its savings account to 4.5% from the earlier 5.5% for a daily balance of up to Rs 1 lakh, starting September 1, 2014.
All these cuts in interest rates have happened despite the RBI maintaining the repo rate at 8%. Repo rate is the interest rate at which the RBI lends to banks. So what has changed that has allowed these banks to cut the interest rates at which they borrow?
Let’s look at some numbers. As on October 3, 2014, over a period of one year, the loans given by banks rose by 9.87%. During the same period the deposits raised by banks rose by 11.54%. How was the situation one year back? As on October 4, 2013, over a period of one year, the loans given by banks had risen by 15.18%. During the same period the deposits had grown by 12.9%.
Hence, the rate of loan growth for banks has fallen much faster than the rate at which their deposit growth has fallen. Given this, it is not surprising that banks are cutting fixed deposit rates, given that their rate of loan growth is falling at a much faster rate.
As Henry Hazlitt writes in Economics in One Lesson “Just as the supply and demand for any other commodity are equalized by price, so the supply of demand for capital are equalized by interest rates. The interest rate is merely a special name for the price of loaned capital. It is a price like any other.”
As Hazlitt further points out “If money is kept…in…banks…the banks are eager to lend and invest it. They cannot afford to have idle funds.”
Hence, given that the rate of loan growth is much slower than the rate of deposit growth, it is not surprising that banks are cutting interest rates on their fixed deposits. Given this, the impact that RBI’s repo rate has on interest rates is at best limited. It is more of a broad indicator from the RBI on which way it thinks interest rates are headed.
Further, it also needs to be remembered that financial savings in India have fallen dramatically over the last few years. The latest RBI annual report points out that “the household financial saving rate remained low during 2013-14, increasing only marginally to 7.2 per cent of GDP in 2013-14 from 7.1 per cent of GDP in 2012-13 and 7.0 per cent of GDP in 2011-12…the household financial saving rate [has] dipped sharply from 12 per cent in 2009-10.”
Household financial savings is essentially the money invested by individuals in fixed deposits, small savings scheme, mutual funds, shares, insurance etc. It has come down from 12% of the GDP in 2009-10 to 7.2% in 2013-14. A major reason for the fall has been the high inflation that has prevailed since 2008.
The rate of return on offer on fixed income investments(like fixed deposits, post office savings schemes and various government run provident funds) has been lower than the rate of inflation. This led to people moving their money into investments like gold and real estate, where they expected to earn more. Hence, the money coming into fixed deposits slowed down leading to a situation where banks could not cut interest rates., given that their loan growth continued to be strong.
What also did not help was the fact that the borrowing requirements of the government of India kept growing over the years.
The RBI was not responsible for any of this. The only way to bring down interest rates is by ensuring that inflation continues to remain low in the months and the years to come. If this happens, then money flowing into fixed deposits will improve and that, in turn, will help banks to first cut interest rates they offer on their deposits and then on their loans.
The government needs to play an important part in the efforts to bring down inflation. In fact, it has been working on that front. In a recent research report analysts Abhay Laijawala and Abhishek Saraf of Deutsche Bank Market Research write that the “the government is firmly ‘walking the talk’ on fiscal consolidation” through a spate of “recent administrative moves on curbing food inflation (such as fast liquidation of surplus foodstock, modest single-digit hike in MSPs, an effort to eliminate fruits and vegetables from ambit of APMC etc.)”
To conclude, RBI seems to have become everyone’s favourite punching bag even though its impact on setting interest rates is rather limited. It is time that interest-rate-wallhas like Jha come to terms with this.

The article originally appeared on www.FirstBiz.com on Oct 22, 2014

(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)