PANORAMA
DECCAN
AN HERA
RALD
Tuesday
November 5, 2019
Negatiiveinterestrates,helicoptermoneytopepupdemand?
ALOK RAY
C
urrently, all the major economies
of the world are slowing down and a
global recession in the near ffu uttu
ure is
considered a real possibility ty. The ‘inversion
of the yield curv
rve’ (meaning long-term in-
terest rates going below short rt-term rates)
—consideredbymanyasanindicatorofthe
financialmarketexpectingarecession—has
recentlytakenplaceintheUS.
Among the policy instruments being
talked about, the most puzzling (for the
layperson) and controversial (for policy-
makers) is monetary policy in the form of
negative interest rates. Though one would
fi
findnoreferencetonegati tiveinterestratesin
macroeconomicstext xtbooks,atleastintheir
earlier editions, this is an import rtant partrt of
currentglobalreality ty.
It started in 2014 with the European
CentralBank(ECB)adoptinganegativein-
terestratepolicy,tobefollowedbySweden,
DenmarkandSwitzerland.Then,inJanuary ry
2015, Bank of Japan (BOJ) J) went down the
samepath.Curr rrently,thoughshort rt-term
rm in-
H-KprotesterscallforUS
help,Chi
hinaseesaconspiracy
The United States, viewed as a champion of democracy, occupies a sym
protests. Activists now want President Trump to tak
EDWARD WONG
T
he Hong Kong protests at times seem like
lovefestswiththeUnitedStates.Depending
ontheday,demonstratorswaveAm American
ffllagsorUncleSamrecru ruitm
tmentposters,andeven
dressasCaptainAm America,completewithshield.
TheUnitedStatesrepresentsdemocracy,and
the activists hope that maybe, just maybe, it will
saveHongKong.Fivemonthsin,theyaretry rying
harder than ever to draw the United States into
theirmovement.
The protesters are pressing Hong Kong of-
ficials and their overseers, the authoritarian
Communist Part rty leaders of China, for greater
democratic rights and rru ule-of-law in the auton-
omous territory. As they see it, the Trump ad-
ministration might be able to make demands of
ChineseleadersorHongKongoffi ficials,especially
becausemembersofelitepoliticalcircleswantto
maintainaccesstotheUnitedStates.
Also, they note, the trade war with China,
started by President Donald Trump, is adding
pressureoverallonPresidentXi Xi Jinping.
FortheUSgovern rnment,theprotestsaremore
complicated—apotenti tialpolicydilemmabutalso
a potential point of leverage with Beijing and a
waytochannelUSvaluestotherestoftheworld.
“The United States should continue to deter
Beijingfrromuseofforce,maintainanunblinki king
eyeonHongKong,andmakeBeijingpayaheavy
reputati tionalcostforcurt rtailingtherirightsandfrfree-
doms of Hong Kong citizens,”said Ryan Hass, a
formerStateDepart rtmentandNationalSecurity
CouncilofficialnowattheBrooki kingsInstitutution.
Yet, he added, “I worry ry that the protesters in
HongKongriskmisinterpretingAm Americansym-
pathyandsupport rt oftheircauseforexpectation
thattheUnitedStateswillshieldthemfromBei-
jing’sheavy vy hand.”
If the protesters are sending out a siren song,
someUSofficialsandlawmakersareanswering
it,eagertoshowtheircommitmenttothecause.
MembersofCongresshaveappearedinHong
Konginpublicdisplaysofsolidarity ty.Lastmonth,
Sen.TedCru ruz,R-Texas,donnedanall-blackout-
fit,whileSen.JoshHawley,R-Mo.,postedphoto-
graphsfromaprotest.
In Washington, Nancy Pelosi, the speaker of
theHouse,hasmetwithacti tivists,pro-democracy
politi
ticiansandJimmyLai,apublisherconsidered
radioacti tivebyBeijing.VicePresidentMikePence
singled out Hong Kong as a beacon of libert rty in
a speech, saying, “We stand with you; we are in-
spiredbyyou.”
An
Andversionsofabillthatwouldgivesupport rt to
theprotestersaremovingthoughCongresswith
bipart rtisanbackiking.Thelegislation,amongother
things, would allow the United States to impose
economic sanctions and a travel ban on Hong
Kong officials deemed responsible for human
rightsabuses.
“We hope this bill will pass,” said Selina Po,
a 27-year-old protester wearing a mouth mask
in the Admiralty ty neighborhood as she held up
asignwiththebill’sname,theHongKongHuman
OUR PAGES
50 YEARS AGO: NOVEMBER 5, 1969
Show-causenoticeserv
rvedonPM
NEW DELHI, November 4.
CongressPresident Nijalingappa serv rved
a show-cause notice on Prime Minister
Indira Gandhi yesterday as to why
disciplinary
ry action should not be taken
against her and Mrs. Gandhi, in her reply
tonight, contemptu tuously brurushed aside
thedemandandinsteadcounter-charged
the President with flflouting the will of the
majority
ty in the part
rty and acting illegally.
The escalating crisis will reach its
climax on November 13 when the work-
ing committee is expected to suspend
the Prime Minister from the parlia-
mentary congress party ty to elect
a new leader.
terest rates are still in the positive territory
ry,
long-term 30-year interest rates are nega-
tiveinGermany.Accordingtooneestimate,
about half of government debt today, if one
leaves out US debt, bears negative interest
rates. Recently, US policymakers have also
begun to give it a serious thought, in case
anotherrecessionhitsthecountry ry.
Howdoesitworkandwhatareitslikely
costsandbenefi fits?
The basic logic behind negative interest
rates is that this would induce people to
spend, rather than save and earn negative
interest rate on bank deposits. Banks, too,
would find it profitable to lend money to
businessesandconsumers,insteadofpark-
ing surplus fufunds with the central bank at
negativeinterest.Al Allthesewouldstimulate
aggregatedemandandproductionofgoods
andservrvices,whichistheneedofthehour.
Inaddition,negativeinterestrateswould
discourage capital infl flow from abroad and
encourage capital outfl flow, thereby depre-
ciatingdomesticcurrencyandboostingnet
exportrtsthroughcheaperexport rtsanddear-
er importrts. The negative interest rate may
ymbolic role in the
ake a tougher stand against Beijing.
vy
A rally calling for the US Congress to pass the Hong Kong Human Rights and Democracy Act in the Central district of Hong Kong,
ty
R
RiightsandDemocracyAct.“It’sourhopeforwin-
ningthiswar.We’retry ryingallwecan.”
ButUSofficialssaytheUnitedStatesneedsto
weighitsmovescarefu fully.
GreaterinvolvementbyAm Americanscouldgive
Beijing more ammunition in its propaganda ef-
fort
rt toport
rtraythepro-democracymovementas
onestokedbyforeignforces.
The Chinese government and state-ru run news
organizations talk about “black hands” behind
theunrestandspreadconspiracytheori ries,includ-
ingonecenteredonaUSdiplomatinHongKong
whowasphotographedwithactivistsinthelobby
oftheJW JW Marriott tt Hotel.
Astheprotestspersist,USofficialsarewatch-
ingforsurgesinviolenceandtracki kingthemove-
ment of People’s Liberation A Arrmy soldiers into
HongKong.Somearebeseechingdemonstr
to stick to nonviolent tactics, even in the face of
police crackdowns and attacks by people sym-
pathetictoBeijing.
On Sunday, at least six ix people were injured,
includingadistrictcouncilmember,whenaman
with a knife believed to be against the protest
movementatt ttackedafamilyatashoppingmall.
“We’retellingevery ryonethatweinteractwith,
wedon’twantviolence,”Secretary ry ofStateMike
PompeosaidWednesday.“Wethinkthereshould
beapoliticalsolutiontotheconfl flictthat’staki
placethere.”
Wh
W hether the United States takes greater ac-
OF HISTORY
25 YEARS AGO: NOVEMBER 5, 1994
Nominationsof174
can
andidatesrejected
BANGALORE, Nov 3.
Nominations of 174 candidates for the
fort
rthcoming Assembly elections in the
State were rejected aft fter scru
rutiny today,
the second step for the ttwwo-phase polls to
be held on November 26 and December
1. According to official sources a total
number of 6,506 nominations were
cleared byretu turning officers in their
respective districts. A total number of
219 nominations had been rejected in the
1989 elections. Of prominent leaders of
all part
rties, viz., the Congress (I), Janata
Dal (JD), Karnataka Congress Part rty
(KCP) and the BJP.
11
recession,as as inJapanforalongperi riod).AlAlso, and minus 0.1% interest rate (that Bank of assetportrtfoliosanditmayfailtoincreaseex-
if the currency is expected to appreciate at Japanhas).Buttheimpact,bothpositi tiveand penditu
tureongoods.Inthecaseof‘helicopter
a sufficiently high rate, capital infl flow may negative, would be more pronounced if the money’,itwoulddirectlysti timulatepri rivateor
takeplaceevenwithnegativeinterestrates. value of the negative interest rate becomes publicexpenditu ture.
Thedownsideri riskisthatnegati tiveinterest bigger. In fact, ECB has very recently re- But,again,therearequestionmarks.Itis
ratesmayfu furrtthersqueezethespreadbetw tween ducedinterestratestoaslowasminus0.5%. possiblethatinarecessionary ry situ
tuationpeo-
borrrrowingandlendingrates(as as itisveryry diffi
fi- A
Annother new idea being fl floated around plemaysave,ratherthanspendthewindfall,
culttoattttractdepositorswithnegati tiverates) istheinjectionof‘helicoptermoney.’Milton especially when they k kn
now it is not going to
and hence profi fits of already str
tressed banks. Friedmanfirstintroducedthistermtorefer berepeatedinfu futtu
ureandthereisalwaysthe
Banksmayalsoberequiredunderlawtohold to a hypothetical exercise where additional possibility
ty oflossofjobsandregularincome
cert
rtain percentage of aasssets in govern rnment notesaredroppedfromahelicopter,picked inthecomingdays.
bondseveniftheinterestrateisnegati tive.Al
All upbypeopleandspentongoodsandserv rvic- One can also argue that if ‘helicopter
these may force the banks to lend less to the es.Basically,itsuggeststhatthecentralbank money’isusedtofinanceadditionalgovern-
pri
rivate sector than before, in which case it shouldputnewmoney directly inthehands ment expenditu ture, then it is a combination
alsobeasignallingdevicetothemarketthat wouldbecounterp rproductitive.Infact,instead ofthepublicorthegovernmenttospend.It of monetary and fiscal expansion. In that
the central bank is willing to do anyt
ything to ofdepreciati ting,theyenhas as actu
tuallyappreci- maytaketheformofsendingabonustax ax re- case, even if it becomes successfu ful in stim-
stimulate demand and prices, thereby cre- ated,relatitivetomanyothercurr rrencies,inthe ffu
undchequetotax axpayersorawindfallcredit ulating expenditure, the credit should go
ating positive expectations. Expectations post-negati tiveinterestrateperi riod. in everyone’s bank account, or the freshly to expansionary fiscal policy, rather than
about the ffu uttu
ure play an import
rtant role in Thetru
ruthisthattheprolongedslowdown printed money may be used by the govern- monetary ry policy. Furt
rther, additional fiscal
infl fluencingthecurrenteconomicdecisions inJapanandmanyEuropeancountrieshas menttofinanceadditionalexpenditu ture. deficit would create problems of debt ser-
ofpeople. notreverseddespitenegativeinterestrates This is believed to be a surer way of in- vicing later, which is the major reason why
Note, however, that even with negative and no one knows how the consequences creasing aggregate expenditure than in- most countries have withdrawn their fiscal
nominal rate, real interest rate (equal to wouldunfoldinfu futtu
ure.Alotmayalsodepend jecting liquidity
ty by the central bank buying stimulus,despitetheprolongedslowdown.
nominal interest rate minus the rate of in- onhownegativetherateis.Thereisvirt rtually bondsfromthepublic.Inthelatt ttercase,one
ffllation)canbepositivewithfallingprices(or nodifferencebetw tweenzero(whichhasbeen kiindoffinancialasset(money)isbeingsub-
k (Thewriterisaform
(T rmerprofessorofeconomics
‘negati tiveinfl
flati
tion’whichoft
ftenaccompanies thecaseformanycountriesforalongtime) stitu
tutedforanotherki kind(bonds)inpeoples’ atIIM-Calcutta)
Thedangersof
B12deficiency
T
ADITI GIRISH PARANJPE
he medical world has
branched out into various
specialisations. This has
withmovement,delaysinreach-
ing the ttyypical developmental
milestones, and megaloblastic
anaemia.
Sources of Vitamin B12 are
advantagesbutthenalsoleadsto
ttu
unnelvision.Doctorswholook
foundnatu turallyinawidevariety
of animal foods, dairy
ty
ry products
at a patient as one whole entity
are few and far betw
ty
tween. This
and eggs, and is added to some
fort
rtiffiiedfoods.Plantfoodsdonot
is especially tru
rue with regard to havethevitaminunlesstheyare
the nutrition status of the pop- fort
rtified. Even if you are takiking
ulation. enough B12 containing foods,
Nutritionisavastsubject,but thebodymaynotbeabsorbingit.
it is import
rtant for the reader to The following tests are re-
considertheroleofvitaminsand quired to properly diagnose de-
their deficiencies, especially Vi- ficiency 1)Holotranscobalamin
tamin B12. In some situations, test. This is more effective than
vitamin B12 deficiency is also the total B12 seru rum estimation
known as pernicious Anemia. test commonly carried out.
Some recent studies estimate 2)Homocysteine test
the prevalence of vitamin B12 3)Methyl Malonic Acid MMA
deficiencyinIndianpopulations test ideally in a urine sample
at47.19%. 4) Complete blood count for
the statu tus of the red blood cells.
Function of Vitamin B-12 5)Vitamin D3 profile .
Vitamin B12 is a nutrient that 6)Thyroidfu functiontest.
helps keep the body’s nerve, Often even if the tests show
blood healthy and helps make normal levels of total serum
DNA,andiscru rucialtothenorm rmal B12, the patient may still have a
ffu
unctioning of the brain. Every ry hiddenB-12deficiency.
cellinthebodydependsonvita-
minB12,asitenablestherelease T
Tyypes of treatment
ofenergyinthebody.Redblood You cannot overdose on B-12. It
cells cannot multiply properly is a wrong belief that just a mul-
without vitamin B12. A An
naemia tivitamincapsulewillerasedefi-
can occur if the red blood cell ciency. The reality
ty is that intake
count drops. Vitamin B12 is in- B-12isgovernrnedbymanyfactors.
volvedindirectly,intheeffective Injectionsarerequiredtolift ft the
functioning of the thyroid, and B12levelofapatient.
preventsheart rt disease. These may be once a week or
The recommended daily re- thrice a week or even daily, and
quirementofB12foradultsis2.4 these may have to be continued
microgramsperday.Deficiency for 2 to 3 months. Recently oral
ofthisvitaminisnotmarkedwith dissolvable tablets – sublingual
October 14, 2019. THE NEW YORK TIMES specific symptoms, rather they tabletshavebeenseentoobtain
arenon-specific.Sometimesthe better results than plain B12
tiononHongKonghingesontheunpredictable Hua Chunying, lashed out, saying, “It is precise- symptomscouldbethepointers capsules. Other methods of
rump.Administrationoffi
Tru ficialsandUSlawmak- lybecauseofthenakedcover-upandconnivance to a dangerous deficiency that treatment include IV infusion
erstalkopenlyaboutchecki kingtheauthoritarian of ext
xternal forces such as Pelosi that the violent could spell disaster for the pa- ofB12,skikinpatches,nasaldrops
impulses of the Chinese Communist Part rty. But anti-lawforcesareevenmorefearless.” tient if ignored. In many cases, andoralsprays.
the president rarely, if ever, mentions human “Nomatt tterhowyoureyesareblindedbyprej- thedeadlyprocessofdestr tructi
tion
rights and democracy, and he has not made udice,nomatt tterhowyourheart rt isfilledwithevil, ofthenerv rvesheathshasalready A forgotten illness
strongstatementsonHongKong. Hong Kong is China’s Hong Kong,” the spokes- startrted. Currently, vitamin B12deficien-
Heisatransactionalpresident.InJune,hetold womanadded.“An AnyattttempttointerfereinHong Such patients are misdiag- cyhasbecomeanalmostforgot-
Xi
Xi onacallthathewouldstayquietonHongKong Kongaffairswillnotsucceed.” nosed as having a neurological ten illness. The outcome of this
aslongasWashingtonandBeijingweremaki king Many demonstrators want US intervention or psychological disease such neglectresultsinahugeburden
progressontradetalks,accordingtoaUSofficial andarefocusingtheiratt ttenti
tiononthelegislati tion. as clinical depression, or Par- ofexpensebornebythepatient.
whospokeontheconditionofanonymity ty. ThemerethreatofUSsanctions,theysay,would kinson’s disease, dementia, or Consideringthehugeburdenof
IntheeyesofBeijing,therehasbeennoshort rt- givethemovementgreatervoicewithBeijing. then multiple sclerosis or nerv rve erroneously treating patients
ageofprovocationsbyUSpoliticians.OnOct.22, OnOct.14,thenightbeforeavoteonthebillin disordersandunfort rtunatelyare with unnecessary expensive
PelosipostedonTwitt tteraphotographofherself the House of Representatives, protesters held a treatedwiththewrongdru rugsfor drugs, the government would
onCapitolHillwiththreepro-democracyfigures rally in the Central district to call for its passage. alongperi riodwhenalltheymight dowelltodothefollowing.
—Lai,Mart rtinLeeandJanetPang. Tens of thousands att ttended, many of them car- have needed was to correct the 1) Train medical person-
trators “Myfu
fullsupport
rt andadmirationgoestothose rryyingUSfl flags. B12deficiency. nel to diagnose and treat
whohavetakentothestreetsweekaft fterweekin SomeUSofficialssaythebillcouldharm rm Hong A deficiency of vitamin B12 B12 deficiency effectively.
nonviolentprotesttofightfordemocracyandthe Kong residents if the United States determines could appear as, as tiredness, 2) Educate the public,
rru
uleoflawin#HongKong,”shewrote. thattheterritory ry nolongerqualifiesasanauton- sleepiness, tingling sensation in about this deficiency.
OnWednesday,Pelosislammedthedecisionby omousentity ty.Butthebill’sproponentsdefendits handsofhandsorfeet,hairloss, 3)Fortrtiffiicati
tionoffoodswithB12.
HongKongofficialstobaractivistJoshuaWong practicalandsymbolicvalue. depression, forgetfulness, con- 4) Ensure that all neurologists,
from rruunning in local elections. She said it was The bill passed the House by unanimous vote ffuusion, inability
ty to think clearly, psychiatrists, as well as related
“another blow against rru ule of law in Hong Kong last month. Though the Senate majority ty leader, unexplainedboutsofdiarr rrhoea, specialists start rt with testing for
and the principle of ‘one countryry, ttw
wo systems,’” Mitch McConnell, has not scheduled a vote yet, constipation,soretongue,aches this deficiency before they con-
referring to the foundation for the policy of au- the measure is expected to pass that chamber and pain, or even post-part rtum siderotherdiagnoses.
tonomy that Britain and China agreed would be easily, with a veto-proof majority ty. Then Tru rump depression amongst mothers
king usedtogoverntheterritory ry. wouldhavetodecidewhethertosignitintolaw. whohaverecentlygivenbirt rth. ((T
The writer is a senior research
PelosimetWonginWashingtoninSeptember. In infants, signs of a vitamin fellow at the Institute of Social
A Chinese Foreign Ministry spokeswoman, INTERNATIONAL NEW YORK TIMES B12deficiencyincludeproblems andEconomicChange)
OASIS ADOLF WASHINGTON
Blessingsindi
disgu
guise
“W
W
hy should a ‘good God’ the rifl
fle for a few furlongs is wounded. Let go, lest pray for the rains to cease; a poor
allow suffering?”is a ques- into the forest. The Rabbi evil befalls us”. farmer prays for rains.
tion that has eternally pulled the trigger. He The king headed You pray for relief from the scorch-
rattled the human mind. Yet there heard a scream. He acci- straight to the Rabbi ing sun; the farmer prays for sun to dry
are so many incidents in our lives that dentally shot the king’s in the dungeon and his grain. You pray for a salary-raise; a
appear bad but turn out what we call “a arm. The King’s respect said, “holy Rabbi! If youngster is praying for employment.
blessing in disguise”. In some ways, it turned to rage. He had you didn’t shoot me, I You pray for a better house; a refugee
does answer that eternal question. the Rabbi thrown in the wouldn’t be alive”. prays for a land to call his own.
A king enjoyed the company and darkest dungeon. He elevated the Rab- Though mysterious, God’s ways
the wisdom of Jewish Rabbis as much With a wounded bi to the highest ranks serve a loving purpose. “For he makes
as he did his forest jaunts. As a treat, arm, the adventurous king ventured of advisors. But the Rabbi said, “Thank his sun rise on the evil and on the good
he took a Rabbi with him into the again into the forest. Danger struck. you Sire. I would have been eaten by and sends rain on the just and on the
forest and encouraged him to try his cannibals captured him. His soldiers those cannibals if you didn’t throw me unjust” (Mathew 5:45) and ‘all things
shooting skills. escaped. in this dungeon.” work together for good, for those who
The Rabbi said, “sire, I am only a He was sure to be eaten, but the When you truly love God, good love God’ (Romans 8:28).
Rabbi. I haven’t held a rifl
fle all my life”. cannibal chief screamed, “Look. We things happen even when you can’t With real Faith, you can count your
After much prodding, the Rabbi took have a bad omen. This creature’s body comprehend divine providence. You ‘blessings in disguise’.