India Can Grow for Many Years

The air is so hot and humid, here in Mumbai, you can boil an egg in it.

Last night, we ventured out of the hotel for an authentic Mumbai experience. We went out the front door, around the corner, and a half block down the street to a restaurant called Indigo.

We would have taken a taxi but the only thing worse than walking in Mumbai is taking a cab. Taxis are everywhere…small black and yellow cars. They are banged up veterans of many years on Mumbai’s chaotic roadways.

If the car doesn’t break down or get in an accident, you merely suffocate.

This morning, our driver sounded his horn, then started the engine. Cars are never taken in for repair in India unless the horn doesn’t work. You can drive without brakes, but not without a horn. Maybe that’s why 110,000 people die on India’s roads and railways every year.

We were on our way to CNBC, where we were being interviewed. For some reason, your editor has achieved minor celebrity on the subcontinent. The announcer told his audience that we were a “venerated western economist.” Other interviewers ask for autographs. Many have read our books. All want to know what we really think.

This is probably because our views flatter them. Unlike the US, India is not at the end of a 50-year credit expansion. It’s only at the beginning. Investors might look forward to many years of growth.

“In the West, the situation is very different,” we explained. “The Western economies – especially the Anglo-Saxon economies, and particularly Britain and America – have been on a spending binge for many years. That reached its zenith in 2005-2006; now, it will be very hard for these economies to grow. They can’t do it by expanding consumer spending and consumer credit. In the first place, consumers already have too much stuff. In the second place, the consumer has neither the income nor collateral to justify more debt. So, the economy needs to find a new model to move forward.

“In India, on the other hand, people don’t have so much stuff. There are people sleeping on the sidewalk outside my hotel room. They have nothing except the clothes they are wearing. And they certainly don’t have credit cards and home equity lines. So India can grow for many, many years simply by providing basic goods and services to its own people. And the nice thing about it is that India doesn’t seem to be capable of central planning…or any planning at all. The country can expect a long spell of prosperity, until the central planners get in position to lead. Then, you’re in trouble.”

CNBC didn’t like what we had to say. Even if we were generally optimistic about India, we were definitely not cheerleading for world economic growth. And CNBC…along with most of the other mainstream financial media…like to keep viewers smiling.

“Sorry that you are so gloomy,” said the interviewer, adding to the audience that “those are just his views.”

Of course, dear readers know we’re not gloomy at all. Around the office they call us Mr. Sunshine. Why? Because we welcome a depression in the economy like we welcome a hard freeze in the winter; it kills off the parasites.


Bill Bonner
for Markets and Money

Bill Bonner

Bill Bonner

Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.
Bill Bonner

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3 Comments on "India Can Grow for Many Years"

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Speaking of basic commodities – I would ask you take a long hard look at India’s food supply outlook Bill. I have read all sorts of gloomy outlooks on India’s ability to feed itself long term and, if even half true, I am not sure what an economy does when people are hungry or even starving. We have very little surplus food buffers worldwide. A couple of black swans and we could easily see major blocks of the poor unable to feed themselves and India is over represented in this area. Do poor people just go off and quietly fade… Read more »
Farmer Charlie
Oh please, stop all the food crisis bulldust. India will do what any sane person would expect and go buy some food from the millions of underpaid and overworked farmers around the world who are currently facing yet another dip in prices to uneconomic levels. As they say the best cure for high prices is high prices. Food prices everywhere have slumped due to OVERPRODUCTION!! The world can produce much more food than it currently does, take note that the Chinese are pretty much net exporters these days due to the influence of western genetics in their plant and animal… Read more »
Hmmm – I think you missed the point Charlie and just saw the theme “food crisis”. It’s not. The point is that if there is a bit of a glitch in food production then is everyone worldwide just going to let food be exported to the highest bidder? Markets will just keep o rolling? Just like with widgets? I was wondering aloud IF there are ever problems with food supply WHAT happens to the economic structure. You only answered the initial postulation by denying it’s possibility. You didnt look at the actual question which I think is a really big… Read more »
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