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Central bank being a private one

On Tue, 25 Aug 1998, Kush Khatri wrote:

> That might be true of Hongkong.  However, the question is can you use
> that as a model for a country like India?  I do not think so.

There is nothing surprising about private banks issuing currency. That
system, by the way, is far far better than the Fin. Min. of India
borrowing hugely to create massive inflation whenver revenues run short of
grandiose "plans" in which a bulk of money will in any case be
misappropriated. There is little accountability in today's system of
currency. That is one reason why the rupee has become practically a
worthless piece of paper over the past 50 years.  

My request: let us not rush to judgment on such issues. There is MUCH in
favor of private banks issuing curreny in India, and railways being
privatized completely, etc. Let us study an issue and if we find it is
worthwhile to recommend a private effort then let us do that. 

There is nothing that can run in Hong Kong successfully that cannot run in
successfully in India. Are we deformed/ morons/ idiots and are the HK
people all brilliant/ honest/ whatever? Why do we eliminate good models?
Why can a thing that runs successfully in HK not run in India? 

I am not saying that we follow the HK model; but let us never rule it out
without a very strong justification, particularly since that model has
created huge amount of wealth for that nation.

Let us discuss your justification in ruling out HK so summarily.


> ---Suresh  Anand <sanand@writemail.com> wrote:
> > >Ash:
> > 
> >  Currency is NOT necessary to
> > be issued by a government. Private banks have done that earlier and do so
> > today (in Switzerland?(THEY DO IN Hong Kong). In fact, government entered
> > this business much later. Government is not required - by some essential law - to enter into
> > >social welfare or economic development. Much of these things are recent
> > >developments. Roads/ canals/ railways/ telephones have in many cases been
> > >successfully run by private interests. (THIS IS SO IN Hong Kong)

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