In my earlier post today, I take issue with Krugman's "Global Warming Explains It" logic. However, I have another question: If Global Warming is the cause of food prices going up, then why are commodity prices rising, too?
Krugman's standard answer is that economic activity elsewhere is driving up the prices of oil and various metals. In other words, because Krugman supports the Fed's policy of throwing dollars everywhere, he is never going to admit that maybe, just maybe, throwing more and more dollars around the world might have an impact on commodity prices.
Of course, if you say that, then you are just another evil right-winger.
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47 comments:
Prices rising is never the fault of the government or the central bank, according to statists like Krugman. It's always "exogenous" factors, or "emerging markets", or "speculators". It has nothing to do with inflationary monetary policy and the decreasing faith in the value of the currency that eventually accompanies that policy. As Peter Schiff recently wrote in an article, it's like blaming the Hindenburg crash on bad piloting, bad weather, and overly emotional journalists while ignoring all the metric tons of flammable hydrogen gas that the ship held in its structure.
If Global Warming is the cause of food prices going up, then why are commodity prices rising, too?
Except that is not even what he says - your blog fails again and again even to properly describe his argument, and all you offer is straw man rubbish.
Krugman says that a global harvest failure has been caused by climate/weather factors that are to be explained by anthropogenic global warming (AGW).
Even if he is completely wrong about AGW, the fact remains that a number of natural disasters have affected supply.
A look over the factors shows the surge in commodity prices is a combination of factors:
(1) Demand from developing nations (including China);
(2) supply shocks due to natural factors;
(3) use of biofuels;
(4) commodity market speculation.
But, of course, when you live in an idiotic Austrian dreamland, facts don't matter - everything is the fault of the "evil" Fed or central bank monetary policy in general.
The floods and cyclonｅ in Australia, which has hit production of coal and sugar cane, for example, must be the fault of the Fed！:
http://www.theaustralian.com.au/business/queensland-commodities-hit-by-double-whammy/story-e6frg8zx-1226000448164
In other words, because Krugman supports the Fed's policy of throwing dollars everywhere, he is never going to admit that maybe, just maybe, throwing more and more dollars around the world might have an impact on commodity prices.
You don't need the Fed to cause surging demand for commodities in China, buddy - Chinese growth rates of 10% and 11% in a country with the world's largest population can do that perfectly well. But I guess Chinese growth must be the fault of the evil "Fed" too, right?
"You don't need the Fed to cause surging demand for commodities in China, buddy - Chinese growth rates of 10% and 11% in a country with the world's largest population can do that perfectly well. But I guess Chinese growth must be the fault of the evil "Fed" too, right?"
ROFLMAO. There was no Chinese Central Bank and even if there was, it was not inflating the supply of money in China and the Chinese banking system was not expansing credit like there was no tomorrow. Out here in India where I live, the Central Bank (RBI) has been busy increasing the money supply so much that it has more than doubled in just the last 4-5 years.
Keynesian economic ignoramuses and economic historians never understand this simple point.
"There was no Chinese Central Bank and even if there was, it was not inflating the supply of money in China and the Chinese banking system was not expansing credit like there was no tomorrow."
And no billions pouring in via foriegn direct investment? And no deficits financed by borrowing from private markets?
"Austrian" economic ignoramuses never understand this simple point.
Keynesian idiots do a really admirable job of shooting themselves in the foot. And where did all those billions pouring in via foreign investment come from? Genuine voluntary savings or money creation by Central Banks and the banking system? And how did they become investments in the Chinese or Indian economies without commensurate inflation by the Chinese or Indian Central Banks?
Bala
I love the way Keynesians blame speculators for rising prices, as if they were a natural force like bad weather. Why would a speculator buy a commodity, if not because he thought it was going to go up in value versus what he is trading in for the commodity, namely, freshly printed out of thin air dollars, euros, and other fiat currencies? You want to stop people from trading in more and more dollars for what other people need, like food and fuel? Then stop manufacturing so many dollars and they won't. It is that simple.
Another factor is overlooked in the battle to point out to the oblivious Fed that it is causing starvation in poor countries. Agriculture is very energy intensive, both in growing crops and transporting them. Consider the supply side of oil. If you were the Saudi oil minister, how much oil would you want to produce and sell? When you sell it, what do you get? Dollars. And what can you do with them? Unless you want to speculate, US Treasury paper, that pays next to nothing. So why go out of your way to sell more oil and help bring the price down? All you will get is increasingly worthless dollars that the Fed keeps counterfeiting. Isn't it better to leave a real asset, oil, in the ground, rather than trade it in for something increasingly bogus that brings no return?
Let the Fed (and other central banks) stop counterfeiting, and let short term interest rates rise to their natural level, and watch the oil producers gladly trade in the oil for dollars. That would lower the cost of energy to farmers and allow them to sell at lower prices and still make a living.
LK,
The value of the money relative to a commodity is also dependent on the supply and demand of money. That should be added to your list of factors.
Speculation IMO should be removed. That is inherent in any market where money and commodities are exchanged for each other.
Bala,
Out here in India where I live
Will you please stop eating so much food over there in India, you are impeding our recovery! :)
Daniel Hewitt,
ROFLMAO. Believe it or not, but a highly regarded (in India) economist who is also the Deputy Chairman of the Planning Commission actually proclaimed that rapidly rising food prices are an indication of greater prosperity. These Keynesian idiots (sorry about the redundancy) never cease to amuse.
Bala
And where did all those billions pouring in via foreign investment come from? Genuine voluntary savings or money creation by Central Banks and the banking system?
The usual ignorant rubbish about the money supply and inflation.
Typically, you don't even understand the Austrian theories of inflation properly.
It is clear that Mises Ludwig von Mises in The Theory of Money and Credit (1912) does NOT object to a rising money supply per se:
“In theoretical investigation there is only one meaning that can rationally be attached to the expression Inflation: an increase in the quantity of money (in the broader sense of the term, so as to include fiduciary media as well), that is not offset by a corresponding increase in the need for money (again in the broader sense of the term), so that a fall in the objective exchange-value of money must occur.
See also N. Cachanosky, 2009, “The Definition of Inflation According to Mises: Implications for the Debate on Free Banking,” Libertarian Papers Vol. 1, Art. No. 43.
This view is transformed by ignoramuses into the view that ALL expansion of the money supply is "evil".
Bala,
Speaking of Planning Commissions, there is another important factor for LK to add to his list - the amount of government control over agriculture.
As Milton Friedman said, "If you put the federal government in charge of the Sahara Desert, in 5 years there'd be a shortage of sand." Even Krugman concurs to a degree, by acknowledging that corn as vehicle fuel is wasteful.
The value of the money relative to a commodity is also dependent on the supply and demand of money. That should be added to your list of factors.
The purposes to which money and credit are put are fundamnetal factors in economies and always have been:
"Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation."
You don't need an "evil" central bank for damaging asset bubbles to happen - Australia's 1890s bubble with money coming in via the capital account is proof of that.
Your Austrian economics is absurdly flawed by its vehement laissez faire demand that people can do anything they want with money or credit - the very thing that will lead to the excessive speculation that causes bubbles.
"Genuine voluntary savings or money creation by Central Banks and the banking system?"
How would you know that % of money coming into China is savings?
Unsupported ideological rubbish.
"And how did they become investments in the Chinese or Indian economies without commensurate inflation by the Chinese or Indian Central Banks?"
A non sequitur. Action by Chinese or Indian Central Banks does not stop savers bringing in their savings via the capital account to speculate on commodity and asset markets or FDI.
LK:
"Free banking gone awry: the Australian banking crisis of 1893"
by CHARLES R. HICKSON and JOHN D. TURNER costs $30 to download. I'm not inclined to spend that money for nothing.
Why not explain if that Australian system did or did not require 100% reserves in specie and if not, how much in reserves were actually on hand when the crisis hit.
As Ron Paul explained in "End the Fed":
The core of the problem is the conglomeration of two distinct functions of a bank. The first is the warehousing function, the most traditional function of a bank. The bank keeps your money safe and provides services such as checking, ATM access, record keeping, and online payment methods. These are all part of the warehousing services of the bank, and they are services for which the consumer is traditionally asked to pay (unless costs can be recouped through some other means). The second service the bank provides is a loan service. It seeks out investments such as commercial ventures and real estate, and puts money at risk in search of a rate of return. People who want their money put into such ventures are choosing to accept the risk and hoping for a return, understanding that if the investments do not work out, they lose money in the process.
The institution of fractional reserves mixes these two functions, such that warehousing becomes a source for lending. The bank loans out money that has been warehoused — and stands ready to use in checking accounts or other forms of checkable deposits — and that newly loaned money is deposited yet again in checkable deposits. It is loaned out again and deposited, with each depositor treating the loan money as an asset on the books.
http://mises.org/daily/3687
Which system was in place in Australia in the 1890s and EXACTLY what precipitated the crisis?
Ha Ha Ha!!!
"that is not offset by a corresponding increase in the need for money (again in the broader sense of the term)"
And what IS "need for money"? The demand for credit? ROFLMAO. It's the demand for cash balances, stupid.
"How would you know that % of money coming into China is savings? Unsupported ideological rubbish."
You certified idiot!! That was a question, not an assertion. For a change, learn to read.
"A non sequitur."
Once again, you idiot, that was a question, not a conclusion for you to call it a non sequitur.
"Action by Chinese or Indian Central Banks does not stop savers bringing in their savings via the capital account to speculate on commodity and asset markets or FDI."
It does, you idiot, because they need to exchange their freaking dollars or euros for renminbi or rupees before they can invest it in the Chinese or Indian economies. As far as I know, the Indian Rupee is not convertible on the capital account, you blathering fool.
"Why not explain if that Australian system did or did not require 100% reserves in specie and if not, how much in reserves were actually on hand when the crisis hit."
The anti-fractional reserve banking argument is not even supported by all Auatrians.
The reason? Voluntary FRB (as in the case of Australia in the 19th the century and many other countries) is neither fraudulent nor anti-free market:
http://socialdemocracy21stcentury.blogspot.com/2010/06/fractional-reserve-banking-evil.html
FRB banking is totally consistent with the free market.
Prohibition of it by some libertarian law code (privately enforced) would be a gross violation of private freedom and private contract.
The anti-FRB Austrians are inconsistent, contradictory and would be violators of private freedom.
So complaining about its presence in Australia is a total waste of time - it won't get you off the hook of explaning how asset bubbles can happen quite easily in free markets.
It does, you idiot, because they need to exchange their freaking dollars or euros for renminbi or rupees before they can invest it in the Chinese or Indian economies.
So? That would happen under a gold standard too, idiot.
"As far as I know, the Indian Rupee is not convertible on the capital account, you blathering fool."
You are (1) a complete idiot or (2) a contemptible ignormamus:
"In recent years India’s economic policymakers have confronted a similar phenomenon. A once-sheltered economy is now increasingly open to foreign capital, which rained down on the country in 2007, only to evaporate last year."
Oct 29th 2009
http://www.economist.com/node/14753808
Which is it??
"So? That would happen under a gold standard too, idiot."
And I never spoke of a gold standard you brain-dead monkey.
"A once-sheltered economy is now increasingly open to foreign capital"
Send me your postal address and I'll send your certificate of idiocy. The Indian Rupee was convertible on neither the current nor the capital account till 1991 and has since been made convertible on the current account alone. FDI and FII money still has to get RBI approval and be converted into Rupees. You are just confirming what a freaking retard you are by spraying your nonsense for all to see.
LK:
Reading the tea leaves, I take your response as "No, Australia did not require 100% reserves in the 1890s."
Here's where we stand:
1. I say (along with Rothbard and Ron Paul) that FRB is fraudulent, evil, legally and morally incoherent and will invariably lead to malinvestment, bank runs, panics and maybe even jock itch and psoriasis.
2. LK says that FRB is perfectly marvelous and ok, but leads to bank runs and panics.
3. Even though I am a staunch opponent of FRB, bank runs and panics caused by FRB are nevertheless all my fault.
For you "free banking" types, what is the legal language written on your favorite FRB negotiable bank note concerning EXACTLY what it is that the bearer is entitled to and when.
I don't think LK's statements with respect to voluntary FRB are all that outrageous. Yes, the contract agreement would certainly read different that what we see on notes today.
What I would be interested to see is evidence that "free banking" in Australia really was free banking. The "free banking" era in USA was certainly not!
I repeat my question: What does the negotiable FRB note say regarding the bank's obligations to the bearer of the note? Is there a BIG WARNING indicating that the money might not be there because it might be loaned out? Why can't I make $10 million loans at 10% interest using as reserves the 96 cents my daughter had in her bank account when she came home from college?
I don't see this as an "economics" question at all. It's a purely legal and legal drafting question.
Further, since I oppose FRB, why am I blamed for the consequences?
Straw man:
"LK says that FRB is perfectly marvelous and ok"
Wrong.
My position:
"The 19th-century fractional reserve system was not usually regulated (or regulated very poorly), had no deposit insurance, and sometimes no central bank as a lender of last resort. This meant that the 19th century saw repeated and endemic financial crises and panics that set off severe recessions or depressions. Thus the 19th-century business cycle was frequently marked by speculative asset bubbles in boom times that collapsed in bank runs and crises setting off contractions in the real economy. Fractional reserve banking requires careful financial regulation, separation of commercial and investment banks, and a central bank. Without these interventions it is a potentially dangerous system."
http://socialdemocracy21stcentury.blogspot.com/2010/06/fractional-reserve-banking-evil.html
Contrast my view with that of the free banker George Selgin:
"As for fractional reserve banking, I think it’s a wonderful institution and that it’s crazy to argue that we need to get rid of it to have a stable monetary regime. Those self-styled Austrian economists, mostly followers of Murray Rothbard, who insist on its fraudulent nature or inherent instability are, frankly, making poor arguments. I don’t think the evidence supports their view, and that they overlook overwhelming proof of the benefits that fractional reserve banking has brought in the way of economic development by fostering investment"
http://www.richmondfed.org/publications/research/region_focus/2009/winter/full_interview.cfm
Bala
I’ve never laughed so hard reading this forum. Stop it you killing me here!
I feel like I am watching a cat toy with a smug mouse convinced of his superiority because all the other simpleton rodents in his pack concur with him.
Bala the cat.
"Bala the cat"
The kind of "cat" who makes idiotic statements like this:
"As far as I know, the Indian Rupee is not convertible on the capital account",
when 5 minutes of internet research shows that India's capital account allows considerable capital inflows and outflows:
"Massive capital inflows could mean authorities might have to consider requiring that 10 percent of the funds be deposited with the Reserve Bank of India for one year, S.S. Tarapore, who does not speak for the central bank, told a risk management seminar."
http://in.reuters.com/article/2007/10/16/idINIndia-30019820071016
"from March 2009, [Foreign Institutional Investors]... resumed pouring money into Indian stock markets. This has pulled up stock market prices, although they have not touched pre-crisis levels yet. Chart 2 shows that the rupee has been appreciating against the dollar since March 2009 with the central bank having virtually stopped buying dollars (in net terms) since October 2009."
"India has been liberalising its capital outflows and has gradually lifted the cap on capital outflows from both resident individuals and corporate entities. While further relaxations are possible, the impact will be limited in the present situation of a fragile global economic recovery."
http://www.eastasiaforum.org/2010/05/21/capital-controls-the-way-forward-for-india/
Hey LK here is the thing (and none of your pseudo-intellectual codswallop or internet searches and citations will serve to refute).
You are essentially a statist as are most that subscribe and advocate your particular economic philosophy. You don’t respect liberty and sovereignty of the individual as applied to ALL aspects of life. You don’t respect the integrity of money and how average people desire it to be a store of value, for their labor and efforts. You think it is just another ingredient in a chemistry experiment. It’s not. Its people’s lives. You believe that a small group of elites need to force their “wisdom” on the ignorant unenlightened masses for their own good.
Those of us that subscribe to the principal of liberty and individual sovereignty, acknowledge that the systems consistent with them are not perfect and not always pretty. But they err on the side of the right of the individual and not the state. And for that reason alone, they are just.
So go ahead and make fun of me. I don’t care. You and your fellow useful idiots for the court intellectual crowd can continue on with your academic circle jerk.
This reminds me of Pep and Suspiria in the Second Life General Discussions forum. This is not the highest praise a discussion could receive.
"You believe that a small group of elites need to force their “wisdom” on the ignorant unenlightened masses for their own good."
Given that the vast majority of people reject libertarianism and Austrian economics, this statement applies precisely to people like you and other Austrians - a small, cultish group who want to force their “wisdom” on the masses for their own good.
If people shared your cult-like rubbish, they would vote for Ron Paul en masse. If so, he would be president now.
Here's a little bit of google research on the question "Is rupee convertible on the Capital Account?"
http://tinyurl.com/5vrgfkm
http://tinyurl.com/62z44x6
Idiot.
All these links refute you, you fool.
"A frequently discussed question is about Capital Account Convertibility (CAS), i.e. when is India going to move to full CAC? As you are aware, we have already liberalized and deregulated a whole host of capital account transactions. It is probably fair to say that for most transactions which are required for business or personal convenience, the rupee is, for all practical purposes, convertible. In cases, where specific permission is required for transactions above a high monetary ceiling, this permission is also generally forthcoming. It is also the declared policy of the Government and the RBI to continue with this process of liberalization."
http://www.banknetindia.com/banking/jalan2.htm
Your statment, now totally refuted:
"As far as I know, the Indian Rupee is not convertible on the capital account"
Congratulations on providing links that refute your own statements.
Why why why why why do I have to see the comments section here?
People are rude, have absolutely no manners, berate each other, and don't even try a serious discussion.
"It is probably fair to say that for most transactions which are required for business or personal convenience, the rupee is, for all practical purposes, convertible. In cases, where specific permission is required for transactions above a high monetary ceiling, this permission is also generally forthcoming."
Please note the use of the words/phrases "for all practical purposes", "where specific permission is required", "this permission is also generally forthcoming". All these imply that permission is required. That automatically means that the Rupee is NOT fully convertible on the capital account because full convertibility requires the complete absence of a requirement of "permissions". For instance, I do not need anyone's, least of all a Central Bank's permission to go to almost any country in Europe, presenting a USD bill to buy clothing in a shop and get back change in Euros and Euro Cents. Try using USD bills in any shop in India and you will see how quickly you are refused.
The point remains that "fully convertible on the capital account" means the lack of a requirement of permission for ANY transaction whatsoever. That we need permissions negates the claim that the rupee is in fact convertible on the capital account.
Further, that I need to go to the RBI and change my dollars into rupees before I spend the money in India still supports my basic point that the RBI creates new rupee bill to match the USD inflation by the Fed. That is apart from the inflation it engages in anyway to help the Indian government bridge its gargantuan deficits.
Stop clutching at straws like "for all practical purposes" and try a real argument this time.
And do you know who the "Jalan" who wrote that? The former Governor of the RBI. That explains his "for all practical purposes".
Fractional reserve banking requires careful financial regulation, separation of commercial and investment banks, and a central bank. Without these interventions it is a potentially dangerous system.*
It gets even better from the real Keynes:
The theory of aggregate production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state [eines totalen Staates] than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire.
Better yet, each person should be assigned his very own Gestapo agent to make sure that he never commits any errors in judgment about anything. Like eating the wrong food.
*This system provides the added rhetorical advantage to the statist allowing him to describe this profoundly interventionist system as "the free market" and, when things invariably go off the track, to blame the bad results on "the free market" and "deregulation".
"at automatically means that the Rupee is NOT fully convertible on the capital account because full convertibility requires the complete absence of a requirement of "permissions".
Look at your original statement:
"As far as I know, the Indian Rupee is not convertible on the capital account"
You said "not convertible on the capital account", not "fully convertible" - your latest comment is pretty much full surrender.
Cheers
"You said "not convertible on the capital account", not "fully convertible" - your latest comment is pretty much full surrender."
Nonsense. Either it is convertible or it is not. If it requires permission, it is not convertible. If it can be done without permissions, it is convertible. Since changing dollars into rupees on the capital account requires permissions, it is not convertible. If this is not clear to you, you are contemptible or in fact beneath contempt.
Further, you are still stubbornly (and fairly dishonestly) refusing to acknowledge my original point that the Indian and Chinese central banks were engaging in as much or more monetary inflation as the Fed. Capital account convertibility is in fact a point completely unrelated to the discussion on the existence of central bank led monetary inflation all over the world. It is also completely unrelated to the primary discussion of the relationship between inflation (an increase in the supply of money) and a steady rise in prices (what you dishonestly call inflation).
Therefore, your point that Prof. Anderson is falsely blaming central banks for the current rise in prices stands completely negated.
I'm staggered that people get so aerated by clowns such as Lord Keynes. Agenda-followers such as him only infect 'opposite camp' threads because they're so roundly ignored in the real world (even in their 'own camp'.
So c'mon, some sympathy please folks - everything they thought they knew has been turned on its head so a period of adjustment will be tough for them.
Either it is convertible or it is not. If it requires permission, it is not convertible.
Another desparate attempt to backtrack and ignore your own comments above.
A currency might be fully convertible, mostly convertible, moderately convertible, partly convertible, or not convertible.
Saying "either it is convertible or it is not" is utter rubbish.
Therefore, your point that Prof. Anderson is falsely blaming central banks for the current rise in prices stands completely negated.
Anderson's one sided "blame-the-Fed-for-everything" is utterly false.
As I said above, there are 4 obvious factors that have caused surges in commodity prices:
(1) Demand from developing nations (including China);
(2) supply shocks due to natural factors;
(3) use of biofuels;
(4) commodity market speculation.
While (1) can no doubt be related to the ZIRP that has been going on in many countries, factors (1), (2) and (3) are not caused by the Fed.
Anderson fails even to admit that recent natural weather factors have reduced supply.
And your position is also a gross oversimplication of Austrian position on changes in the price level:
While increases in money supply (i.e., inflation) are likely to be revealed in general price increases, this need not always be the case. Prices are determined by real and monetary factors. Consequently, it can occur that if the real factors are pulling things in an opposite direction to monetary factors, no visible change in prices might take place. In other words, while money growth is buoyant – i.e., inflation is high – prices might display low increases.”
http://mises.org/daily/908
Prices are determined by "real and monetary factors" - not just by monetary factors, as in the ignorant, oversimplified view you have.
LK said: “Given that the vast majority of people reject libertarianism and Austrian economics, this statement applies precisely to people like you and other Austrians - a small, cultish group who want to force their “wisdom” on the masses for their own good.”
Moronic parroting. You really don’t have a clue about the concept of liberty.
You believe those that advocate liberty, individual sovereignty and a return to the principles of the Constitution are members of a cult? Thank You for admitting your statist beliefs. Pathetic.
LK said: Prices are determined by "real and monetary factors" - not just by monetary factors, as in the ignorant, oversimplified view you have.
And your criticism of this point is ignorant and oversimplified. Yes “prices” are determined by real and monetary factors. But prices are not inflation. They are evidence and effect.
If because of monetary factors the price of X would be up 5% other things being equal, but because of other real factors the price of X remains unchanged, you would say there is no inflation. Yet but for the monetary element the price of X would be down 5%. Therefore even at no change in price I am paying 5% more than I should but for monetary factors. I have been denied the opportunity to pay less for X because of bad monetary policy.
Yet but for the monetary element the price of X would be down 5%. Therefore even at no change in price I am paying 5% more than I should but for monetary factors. I have been denied the opportunity to pay less for X because of bad monetary policy.
There is no reason why such things would not happen under a gold standard - in fact the gold standard saw inflation in some periods too.
So under your own logic, a gold standard could deny you "the opportunity to pay less for X".
If that is a serious objection to a monetary system, then the gold system could be just as immoral as any fiat system.
LK at what point did you stop thinking and convert to parroting? I never suggested that distortions would not occur under a gold standard or any other honest money standard. The distortions would be less because there would be less interference by statists. A monetary system that is free of monopolistic dictates and open to choice cannot be immoral. BTW you ignored the point I made and just chose to attack gold. Pathetic.
If you had a supply of gold coins, which you exchanged to buy another commodity, you would probably find that the amount you could buy changes slowly over time. Oil is not expensive at $100 a barrel is gold is $1400 an ounce.
Ha Ha Ha!!
"A currency might be fully convertible, mostly convertible, moderately convertible, partly convertible, or not convertible."
When a former governor of the Central Bank has to say that "for all practical purposes", it is convertible, it obviously means that my explanation that it is either convertible or it is not is valid. It takes tremendous dishonesty to say otherwise. It looks like you have it in tons.
That apart, are you claiming that some among 1, 3 and 4 were not caused by Central Bank monetary policy? If so, I'l stop the discussion on grounds of your complete ignorance of economics (just taking it as further evidence).
Just reiterating...
"It is probably fair to say that for most transactions which are required for business or personal convenience, the rupee is, for all practical purposes, convertible."
If you note what Jalan said, up there, he says "It is probably fair to say that.....". That means that whatever follows, while not factually correct, is a reasonably plausible interpretation drawn based on the facts available at hand. The important point is that what follows is not factually correct.
Note also the statement "..... is convertible". He is not talking of "partial", "moderate" and all that other nonsense that you insist on inserting.
All this is apart from the point that your denial of Central Bank guilt is most laughable.
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