Growth & inflation – two sides of the same coin

Liquidity in the economy is a double-edged sword. Policy makers stimulate growth, as well as arrest inflation using it. The expected results are to be achieved by sustaining the abundance / crunch in liquidity. The initiative starts with printing more currency notes; bond buybacks & Long-Term Repo Operations (LTRO) are frequently used methods to infuseContinue reading “Growth & inflation – two sides of the same coin”

Sussing ‘Stances’ & ‘Operation Twist’

Any stance is always interim. No government can continue with a stance for more than a stipulated period. Periods of “accommodative stances” foster growth and inflation. To extenuate the later “Calibrated tightening” is adopted. Eventually, growth in the economy gets hit, unemployment and deflation get upped. Again, the stance gets changed to “accommodative”.

Divide, decide & diversify

Diversification is predominantly a risk mitigation tool rather risk aversion. A pre-eminent rule of investment quotes, risks correspond rewards. With a greed for optimum returns, we tend to fall for the bait. Even falling for the bait, has become an implicit rule of investment. A justice weighing scale (in a courtroom) stays put balanced. ToContinue reading “Divide, decide & diversify”

Deceptive prominence of annualised yield

Have you come across “annualised yield” in FD (Fixed deposit) advertisements? A granular search for the term would make you find it, at the bottom of the notice, printed in miniature font. Lets’ ponder on what is deceiving with the term’s usage in advertisements. Annualised Yield draws its foundation from the concept of compounding. So,Continue reading “Deceptive prominence of annualised yield”

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