Battle of Plassey - Drawing A Line In Monetary Policy History
When we encounter deceit and betrayal from others, it's natural to feel adrift, either way we try to change the life track or get into some sort of back-doors arrangements to satisfy ourselves by keeping our bad-wishers down. However, whatever means we adopt to overcome we cannot bring that glory or that scale and sooner or later we need to come-up with new things and new ideas to advance further which may become a great success if we put it in a great way. This is all about today’s modernity and sometimes we can learn from a great lesson in the history and incident of Battle of Plassey is one of them where we can connect our dots to groom our life.
In a short span of life, there are valuable lessons to be learnt from the historical events like the famous Battle of Plassey which took place in 23 June 1757 in Plassey now Palashi is a small town on the east bank of Bhagirathi River, located approximately 50 km north of the city of Krishnanagar in West Bengal, the eastern state of India. The battle of Plassey reminds us of the decisive victory of British East India Company which led to the British establishment in Bengal and then advanced to all over the subcontinent.
As my professional space focus on the various aspects of monetary policy operations to assess the next move in the foreign exchange market which can be right and sometime be wrong (I am more happy to be wrong to get the scope of more improvements) but certainly has allowed me to connect the dots between the central bankers pretends and financial markets reactions and my takeaway from the lesson learnt from Battle of Plassey.
Good News :
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Brief History of Battle of Plassey :
Coming back to the Battle of Plassey which was famously known the fight between Robert Clive who lay the foundation of East Indian Company and the last Nawab of Independent Bengal Siraj-ud-Doula's rich Kingdom which was based in Murshidabad (a city in West Bengal highly known for the famous Himsagar and Kishan Bhog mangoes which are mostly loved across India and overseas as well.) Despite all equipped resources - with nearly 50,000 soldiers, 40 cannons and 10 war elephants got defeated by Robert Clive with hardly 3000 soldiers.
What went wrong at the Battle of Plassey was a web of intrigue and betrayal, orchestrated by Mir Jafar, Siraj-ud-Doula's uncle. Mir Jafar, crucial to the Nawab's military might, unexpectedly switched sides during the battle, paving the way for Clive's victory. In the end, Clive executed Siraj-ud-Doula and placed Mir Jafar on the throne under East India Company's influence. However, Mir Jafar's rule proved short-lived, as he failed to appease the very power that had propelled him to the throne.
Conclusion :
Much like the Battle of Plassey, the world of finance and monetary policy has its own hidden complexities. The story of monetary policy operations mirrors this historical intrigue. While the fame surrounding monetary policy innovations often centers on institutions like the Federal Reserve, the true origins of these concepts often lie elsewhere. In the 1830s, the Bank of England pioneered open market operations on a large scale, a practice of buying and selling securities for monetary policy purposes. This laid the groundwork for the effective management of policy rates.
However, it was the U.S. Federal Reserve that is credited with modernizing these operations in the 1920s. The concept of open market operations became a cornerstone of predicting monetary policy decisions and stabilizing financial markets, especially in the aftermath of the Lehman crisis.
The significance of open market operations in the Federal Reserve's toolkit cannot be overstated. It added credibility to their monetary policy decisions. But just like the Battle of Plassey, where the spotlight was stolen by Clive and Mir Jafar, the true genesis of these financial mechanisms lay with the Bank of England. They had laid the foundation for what would later become a global financial practice.
It took over 200 years to de-colonize India from the day of Battle of Plassey but the real invention and the real work always captured the spotlight despite it being suppressed for long.