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A Man Who Bestowed Upon You the Power to Hold Globe on Your Palm

A Man Who Bestowed Upon You the Power to Hold Globe on Your Palm

“Three apples have changed the world. One seduced Eve, second awakened Newton, the third one was in the hands of Jobs.”

Much before embarking on the path of giving the world iconic products like Mac computers, iPod music players, iPhone mobile phones and iPad tablet PCs, this cult figure of the world of technology came to India in early 70s in search of enlightenment or ‘nirvana’ and went back unsatisfied.

He found India far poorer than he had imagined at that time and, ironically, years later in mid-2000s, when he thought of setting up a facility for Apple’s Mac computers, India appeared to be much less cost-effective to do business.

But, it was his unsatisfactory India visit of early 70s that could have been one of the major reasons for Jobs’ focus on the world of technology and eventually the setting up of the company called Apple.

His biography, titled ‘The Little Kingdom — The Private Story of Apple Computer’ quotes Jobs as saying that “It was one of the first times that I started to realise that maybe Thomas Edison did a lot more to improve the world than Karl Marx and Neem Kairolie Baba put together.”

Photograph of Steve Jobs

Neem Karori Baba was the guru that Jobs, then 18, visited in India along with his college friend Dan Kottke. The American duo had come to India after they dropped out of college and Kottke eventually joined Jobs as the first employee of Apple.

“The hot, uncomfortable summer made Jobs question many of the illusions he had nursed about India. He found India far poorer than he had imagined and was struck by the incongruity between the country’s condition and its airs of holiness,” author Michael Moritz wrote in Jobs’ biography.

The book quoted Jobs as saying: “We weren’t going to find a place where we could go for a month to be enlightened” and said that by the time he returned to California “he was thinner, thanks to a bout of dysentery, had closely cropped hair, and was dressed in an Indian attire…”

Years later in 2006, there were talks about Apple mulling over a 3,000-strong workforce centre in Bangalore to support its Mac and other products and it was said that the company even hired an initial team of 30 people. But, the plans did not fructify and reports said that the company did not find India as cost-effective as it had thought it to be.

Ironically, Jobs died on a day when Indian government unveiled its own answer to iPad, with a price tag much lower than that of the iconic brand, in the form of Aakash, the world’s cheapest tablet PC.

Apple on Wednesday announced the death of its visionary co-founder Steve Jobs.

“We are deeply saddened to announce that Steve Jobs passed away today,” the company’s board of directors said in a statement.

Steve’s brilliance, passion and energy were the source of countless innovations that enrich and improve all of our lives. The world is immeasurably better because of Steve.”

The Silicon Valley icon who gave the world the iPod and the iPhone resigned as CEO of the world’s largest technology corporation in August, handing the reins to current chief executive Tim Cook.

Jobs had battled cancer in 2004 and underwent a liver transplant in 2009 after taking a leave of absence for unspecified health problems. He took another leave of absence in January, his third since his health problems began, before resigning as CEO six weeks ago. Jobs became Apple’s chairman and handed the CEO job over to his hand-picked successor, Tim Cook.

The news Apple fans and shareholders had been dreading came the day after Apple unveiled its latest version of the iPhone, just one in a procession of devices that shaped technology and society while Jobs was running the company.

Jobs started Apple with a high school friend in a Silicon Valley garage in 1976, was forced out a decade later and returned in 1997 to rescue the company. During his second stint, it grew into the most valuable technology company in the world with a market value of $351 billion. Only Exxon Mobil, which makes it money extracting and refining oil instead of ideas, is worth more.

Cultivating Apple’s countercultural sensibility and a minimalist design ethic, Jobs rolled out one sensational product after another, even in the face of the late-2000s recession and his own failing health.

He helped change computers from a geeky hobbyist’s obsession to a necessity of modern life at work and home, and in the process he upended not just personal technology but the cellphone and music industries. For transformation of American industry, he ranks among his computer-age contemporary, Microsoft Corp. co-founder Bill Gates and other creative geniuses such as Walt Disney that left an indelible imprint on the world. Jobs died as Walt Disney Co.’s largest shareholder, a by-product of his decision to sell computer animation studio Pixar in 2006.

Perhaps most influentially, Jobs in 2001 launched the iPod, which offered “1,000 songs in your pocket.” Over the next 10 years, its white earphones and thumb-dial control seemed to become more ubiquitous than the wristwatch.

In 2007 came the touch-screen iPhone, joined a year later by Apple’s App Store, where developers could sell iPhone “apps” which made the phone a device not just for making calls but also for managing money, editing photos, playing games and social networking. And in 2010 Jobs introduced the iPad, a tablet-sized, all-touch computer, that took off even though market analysts said no one really needed one.

Steven Paul Jobs was born Feb. 24, 1955, to Joanne Simpson, then an unmarried graduate student, and Abdulfattah Jandali, a student from Syria. Simpson gave Jobs up for adoption, though she married Jandali and a few years later had a second child with him, Mona Simpson, who became a novelist.

Steven Paul Jobs was adopted by Clara and Paul Jobs of Los Altos, Calif., a working-class couple who nurtured his early interest in electronics. He saw his first computer terminal at NASA’s Ames Research Center when he was around 11 and landed a summer job at Hewlett-Packard before he had finished high school.

Jobs enrolled in Reed College in Portland, Ore., in 1972 but dropped out after a semester.

“All of my working-class parents’ savings were being spent on my college tuition. After six months, I couldn’t see the value in it,” he said at a Stanford University commencement address in 2005. “I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out.”

When he returned to California in 1974, Jobs worked for video game maker Atari and attended meetings of the Homebrew Computer Club with Steve Wozniak, a high school friend who was a few years older.

Wozniak’s homemade computer drew attention from other enthusiasts, but Jobs saw its potential far beyond the geeky hobbyists of the time. The pair started Apple in Jobs’ parents’ garage in 1976. Their first creation was the Apple I – essentially, the guts of a computer without a case, keyboard or monitor.

The Apple II, which hit the market in 1977, was their first machine for the masses. It became so popular that Jobs was worth $100 million by age 25. Time magazine put him on its cover for the first time in 1982.

During a 1979 visit to the Xerox Palo Alto Research Center, Jobs again spotted mass potential in a niche invention: a computer that allowed people to access files and control programs with the click of a mouse not typed commands. He returned to Apple and ordered the team to copy what he had seen.

It foreshadowed a propensity to take other people’s concepts, improve on them and spin them into wildly successful products. Under Jobs, Apple didn’t invent computers, digital music players or smartphones – it reinvented them for people who didn’t want to learn computer programming or negotiate the technical hassles of keeping their gadgets working.

“We have always been shameless about stealing great ideas,” Jobs said in an interview for the 1996 PBS series “Triumph of the Nerds.”

The engineers responded with two computers. The pricier one, called Lisa, launched to a cool reception in 1983. A less-expensive model called the Macintosh, named for an employee’s favorite apple, exploded onto the scene in 1984.

The Mac was heralded by an epic Super Bowl commercial that referenced George Orwell’s “1984” and captured Apple’s iconoclastic style.

 

In the ad, expressionless drones marched through dark halls to an auditorium where a Big Brother-like figure lectures on a big screen. A woman in a bright track uniform burst into the hall and launched a hammer into the screen, which exploded, stunning the drones, as a narrator announced the arrival of the Mac.”

There were early stumbles at Apple. Jobs clashed with colleagues and even the CEO he had hired away from Pepsi, John Sculley. And after an initial spike, Mac sales slowed, in part because few programs had been written for the new graphical user interface.

Meanwhile, Microsoft copied the Mac approach and introduced Windows, outmaneuvering Apple by licensing its software to slews of computer makers while Apple insisted on making its own machines.

Software developers wrote programs first for Windows because it had millions more computers. A Mac version didn’t come for months, if at all.

With Apple’s stock price sinking, conflicts between Jobs and Sculley mounted. Sculley won over the board in 1985 and pushed Jobs out of his day-to-day role leading the Macintosh team. Jobs resigned his post as chairman of the board and left Apple within months.

“What had been the focus of my entire adult life was gone, and it was devastating,” Jobs said in his Stanford speech. “I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.”

He got into two other companies: Next, a computer maker, and Pixar, a computer-animation studio that he bought from George Lucas for $10 million.

Pixar, ultimately the more successful venture, seemed at first a bottomless money pit. Then came “Toy Story,” the first computer-animated full-length feature. Jobs used its success to negotiate a sweeter deal with Disney for Pixar’s next two films. In 2006, Jobs sold Pixar to The Walt Disney Co. for $7.4 billion in stock, making him Disney’s largest individual shareholder and securing a seat on the board.

With Next, Jobs was said to be obsessive about the tiniest details of the cube-shaped computer, insisting on design perfection even for the machine’s guts. He never managed to spark much demand for the machine, which cost a pricey $6,500 to $10,000.

Ultimately, he shifted the focus to software – a move that paid off later when Apple bought Next for its operating system technology, the basis for the software still used in Mac computers.

By 1996, when Apple bought Next, Apple was in dire financial straits. It had lost more than $800 million in a year, dragged its heels in licensing Mac software for other computers and surrendered most of its market share to PCs that ran Windows.

Larry Ellison, Jobs’ close friend and fellow Silicon Valley billionaire and the leader of Oracle Corp., publicly contemplated buying Apple in early 1997 and ousting its leadership. The idea fizzled, but Jobs stepped in as interim chief later that year.

He slashed unprofitable projects, narrowed the company’s focus and presided over a new marketing push to set the Mac apart from Windows, starting with a campaign encouraging computer user to “Think different.”

“In the early days, he was in charge of every detail. The only way you could say it is, he was kind of a control freak,” he said. In his second stint, “he clearly was much more mellow and more mature.”

In the decade that followed, Jobs kept Apple profitable while pushing out an impressive roster of new products.

Apple’s popularity exploded in the 2000s. The iPod, smaller and sleeker with each generation, introduced many lifelong Windows users to their first Apple gadget.

ITunes, in 20XX, gave people a convenient way to buy music legally online, song by song. For the music industry, it was a mixed blessing. The industry got a way to reach Internet-savvy people who, in the age of Napster, were growing accustomed to downloading music free. But online sales also hastened the demise of CDs and established Apple as a gatekeeper, resulting in battles between Jobs and music executives over pricing and other issues.

Jobs’ command over gadget lovers and pop culture swelled to the point that, on the eve of the iPhone’s launch in 2007, faithful followers slept on sidewalks outside posh Apple stores for the chance to buy one. Three years later, at the iPad’s debut, the lines snaked around blocks and out through parking lots, even though people had the option to order one in advance.

The decade was not without its glitches. Apple was swept up in a Securities and Exchange Commission inquiry into stock-options backdating in the mid-2000s, a practice that artificially boosted the value of options grants. But Jobs and Apple emerged unscathed after two former executives took the fall and eventually settled with the SEC.

Jobs’ personal ethos – a natural food lover who embraced Buddhism and New Age philosophy – was closely linked to the public persona he shaped for Apple. Apple itself became a statement against the commoditization of technology – a cynical view, to be sure, from a company whose computers can cost three or more times as much as those of its rivals.

For technology lovers, buying Apple products meant gaining entrance to an exclusive club. At the top was a complicated and contradictory figure who was endlessly fascinating – even to his detractors, of which Jobs had many. Jobs was a hero to techno-geeks and a villain to partners he bullied and to workers whose projects he unceremoniously killed or claimed as his own.

Unauthorized biographer Alan Deutschman described him as “deeply moody and maddeningly erratic.” In his personal life, Jobs denied for two years that he was the father of Lisa, the baby born to his longtime girlfriend Chrisann Brennan in 1978.

Few seemed immune to Jobs’ charisma and will. He could adeptly convince those in his presence of just about anything – even if they disagreed again when he left the room and his magic wore off.

“He always has an aura around his persona,” said Bajarin, who met Jobs several times while covering the company for more than 20 years as a Creative Strategies analyst. “When you talk to him, you know you’re really talking to a brilliant mind.”

But Bajarin also remembers Jobs lashing out with profanity at an employee who interrupted their meeting. Jobs, the perfectionist, demanded greatness from everyone at Apple.

Jobs valued his privacy, but some details of his romantic and family life have been uncovered. In the early 1980s, Jobs dated the folk singer Joan Baez, according to Deutschman.

In 1989, Jobs spoke at Stanford’s graduate business school and met his wife, Laurene Powell, who was then a student. When she became pregnant, Jobs at first refused to marry her. It was a near-repeat of what had happened more than a decade earlier with then-girlfriend Brennan, Deutschman said, but eventually Jobs relented.

Jobs started looking for his biological family in his teens, according to an interview he gave to The New York Times in 1997. He found his biological sister when he was 27. They became friends, and through her Jobs met his biological mother. Few details of their relationships have been made public.

But the extent of Apple secrecy didn’t become clear until Jobs revealed in 2004 that he had been diagnosed with – and “cured” of – a rare form of operable pancreatic cancer called an islet cell neuroendocrine tumor. The company had sat on the news of his diagnosis for nine months while Jobs tried trumping the disease with a special diet, Fortune magazine reported in 2008.

In the years after his cancer was revealed, rumors about Jobs’ health would spark runs on Apple stock as investors worried the company, with no clear succession plan, would fall apart without him. Apple did little to ease those concerns. It kept the state of Jobs’ health a secret for as long as it could, then disclosed vague details when, in early 2009, it became clear he was again ill.

Jobs took a half-year medical leave of absence starting in January 2009, during which he had a liver transplant. Apple did not disclose the procedure at the time; two months later, The Wall Street Journal reported the fact and a doctor at the transplant hospital confirmed it.

In January 2011, Jobs announced another medical leave, his third, with no set duration. He returned to the spotlight briefly in March to personally unveil a second-generation iPad .

In 2005, following the bout with cancer, Jobs delivered Stanford University’s commencement speech.

“Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life,” he said. “Because almost everything – all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important.”

 

 

 

Always Yours —- As Usual  —- Saurabh Singh

Send your comments at  managementteacher@gmail.com

Note: It includes information from numerous sources, and I thankfully acknowledge them as it would have, really been tough to complete this comprehensive information, without their contributions.

 

 

 

 

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A FICTION: NOT FAR AWAY FROM RECENT FUTURE REALITY

A FICTION: NOT FAR AWAY FROM RECENT FUTURE REALITY

In late evening, when I had just pressed the shut down button of my workstation, a colleague of mine entered the office chamber (Officially allotted to me to work).Hello, was the first word uttered out by her and before I could ask the purpose, she herself expressed that she planned to have my company while walking back to home, at least the part of distance that was common to we both. I welcomed the idea and also thanked her for the same. Thus the journey homewards started. While on walk the momentary silence was done away by my colleague, when she requested the permission to ask question that was coming to her mind. I agreed to help her to the limited capacity of mine.Image- Bricks of Gold

 Probably it was the prices of yellow metal that were troubling her and my colleague wanted to know, where the prices are expected to move in future and why. This I am inferring from the talks that continued.

She started the conversation by posing her curiosity as ahead: “Where do you see the price of gold going in the days to come?”

Since, at that moment, I was not exactly focusing on ‘investment advisory’, so I responded by saying that “on a broad level, the price are supposed to continue their northward journey.”

It seems that my response confused her a bit, as she soon came up with another question that “what I mean, when I say a broad level.”

I got the point and then explained to her that “the prices of any commodity do not move in a straight line. When I say on a broad level, it means that the prices will keep moving northwards, but in between they may drop as well, but they will pick up again, and thus will continue to scale up.”

It seems, that she was not ready to buy anything that I said, therefore, she questioned that what lay behind my confidence, which she visualized while I was answering her first curiosity.

Suddenly I realized that majority of investors; rarely scan the external and vital economic variables that are often of political nature. This made me aware that now I need to go bit detailed and also in a manner that she could easily comprehend.

“Well, I was just reading through some material and I realized that there is another solid reason for gold prices to go up,” I told her.

“Is it something other than all the money printing that is happening and is likely to happen in the days to come, all around the world?” she asked.

“Yes”, I answered.

“So what is this new reason?” she was now more curious.Image - Gold with a Medival Painiting in Background

Now I started by posing a question as ahead “Ever heard of Hugo Chavez?” Pat came the reply, “nope” with a supplementary question that now who’s he?

He is the President of Venezuela, a country in South America.”                                

Probably she got a bit more confused and said that she knew that, but expressed her surprise on the issue that what “Venezuela” has got to do with the price of gold.

This made me aware that now my job was to explain history, international polity, and international trade, cost of transaction and accounting to her, and all this in very limited time of few minutes. I knew that I may be bombarded with whorls of questions.

 I started with letting her know that Venezuela has the 15th largest gold reserves in the world amounting to 401.1 tonnes. A lot of this gold is lying abroad in bImage - Golden Fairyanks in New York, London and Zurich.

“But why will a country keep its gold overseas?” she interrupted.

 I started to introduce her with history. I said that “a part of the reason comes from history. Till August 15, 1971, the world was on a gold standard. Paper currencies were ultimately convertible into gold. This meant that countries had to settle their deficits in gold.” I followed this by giving an instance from international trade. I asked her to assume that England and Germany are exporting and importing goods from each other. At the end if France exports more to England than England to France, there is a deficit.” This means that England had to pay France. This payment was to be made in gold. A look at her face made me feel that she has now started picking up what I was attempting to explain. I carried on by adding that “now this meant that gold had to be physically moved from England to France, which of course was a pain. Movement meant cost of insurance as well as security.”

Image - Gold being Transported via Air

She was prompt in asking that “what was the way out?”

 I added for these reasons “a lot of this gold is simply stored overseas at the Federal Reserve Bank of New York (a part of the Federal Reserve of the United States, the Central Bank of the US).”

“How do you think this is going to help?”

It’s simple; I added and just narrated what Peter Bernstein writes in his book “The Power of Gold”. For example, if England lost gold to France, a guard at the Federal Reserve had merely to bring a dolly to England’s closet, trundle the gold to the French closet, and note the change in the bookkeeping records.’

She got the point, and allowed my request to take her back to Hugo Chavez.

The deliberations continued further, certainly with some statistical inferences. Estimates suggest that nearly 211 tonnes of the 400-odd tonnes of gold that Venezuela has are with banks abroad. Chavez has asked this gold to repatriated back to Venezuela.”Image - Hugo Chavez Nationalises the Gold Mines

Now this brings a twist in the story, and the discussion to follow will also attempt to answer possible reason for Hugo Chavez’s such an act.

 “Chavez has had an anti-US stance for years and may feel that because of that Venezuela runs the risk of its gold being seized.”

“Gold Seized? Why would such happen and does the possibility of such an act exist?” was the latest in series of questions.

“It sure is. I explained the same by making her aware of the ongoing Libyan foreign exchange reserves crisis, which happens to be an outcome of its foreign reserves being seized by allied nations with declaration of war earlier this year.”

 “But what has all this got to do with the price of gold? To me it’s as simple as me wanting to have gold in my own locker rather than the bank locker.”

I agreed to her statement, while continuing to explain by adding that all is not that straightforward as concluded by her, though to some extent she was correct. The straight forward part of transaction would be limited to 99 tonnes of total 211 tonnes lying abroad, as this 99 tonnes are deposited with the Bank of England in London. Repatriating that back to Venezuela would be a straightforward process.”

Image - Gold Jewellary at Display

 Now comes the not so straight forward part, which happens to be of the tune of 112 tonnes of the gold and same is lying abroad with what are known as bullion banks. J P Morgan is one of them. Estimates suggest that Venezuelan gold worth $807 million (or around 450,000 ounces of gold) is lying with it.”

 She was instant, and argued that this should also be as straight forward as it is in the case of Bank of England, London, while simultaneously her facial expressions conveyed me that she wanted to know, if I dare to differ from her opinion. Certainly, I had to differ, and added that things are not always as simple as they seem to be. The statistics again came handy in quoting that “estimates suggest that the total amount of physical gold with J P Morgan currently stands at around 338,303 ounces (1 troy ounce equals 31.1 grams).”

Now, it seemed that she was out of reasons, as she expressed her ignorance about having to come across any news in media regarding, such a huge bank robbery in which approximately 1,11,697 ounce or 3473.8 kilo grams worth gold was looted.  I had to instantly chip in by saying that, this is not a case of bank lifting, but a way of functioning of financial system in general and banking sector in particular. Let me add an example to illustrate it? I sought her permission. The phenomenon goes as explained ahead [the attempt was to explain the process by making it as easy as possible, so that even a novice can understand].Image - Gold of Merchants in Various Weights put at London Central Bank

“Central banks around the world had a huge amount of gold lying in their vaults, not earning any return. The end of 2007 witnessed the stock of gold with central banks around the world rising to 32,000 tonnes of gold.”

 I requested her to be more attentive to whatever I was going to add now. Out of the 32,000 tonnes gold held, the Central Bank lent approximately 14,000 tonnes to Bullion Banks like J P Morgan. James Turk and John Rubino in their coauthored book The Collapse of the Dollar, have argued that “lending, for instance, involves the central bank transferring gold to a major private bank, known as bullion bank, which pays the central bank a small-but-positive interest rate, then sells the gold in the open market.”

In this manner “central banks convert the gold into cash and then deploy this cash, somewhere to earn some positive rate of return. This based on a very fundamental assumption that idle assets provide no return, and there is fair possibility that such assets may ultimately add up some cost to the holder.” These costs may range from cost of storage to cost of security. As per meaning conveyed by the operative word “lending”, since the gold has been lent, therefore, the central banks have all the rights to, and can demand it back, whenever they want.

She chipped in by adding that probably “this is what Venezuela is doing right now”; and thus conveyed me a feeling that she was sincerely following the every single word uttered by me. 

 I nodded in agreement and continued further by adding that, since, the bullion banks have promised to return the borrowed gold to the central banks so they will have to return the same. In prevailing situations these bullion banks are not having the volume of gold that was lent to them by Central Bank. In financial and monetary world, this position is conveyed by the term ‘short’, and this means that these bullion banks are ‘short’ gold.

Now comes a significant turn in events, that may work as catalyst to force the prices of gold to break the roof. As the situation deliberated above suggests that, in case, sometime in future, these bullion banks are asked to deposit the volume of  gold lent to them by central bank, they will be left with no choice and would be obligated to buy gold in order to repay the central banks’.”

“So, as I can get, it goes like, that in such a scenario the bullion banks like J P Morgan will now have to buy back gold from the market in order to repay the Venezuelan government, given the situation that Venezuela has around 450,000 ounces of gold deposited with J P Morgan, whereas J P Morgan at present has only 338,303 ounces of gold in its accounts/ record books,” she added.

Exactly, I said in agreement, and carried the deliberations forward by adding, that this buying will lead to the price of gold rising further. I knew that now she has got answer to her question, but then too, I continued it by saying that this is only one part of the story.

Much like a child, who is curious to know about everything, she was now eager to learn that what the remaining part of story was now. She requested me to unfold the other part of the story.

I continued by giving her a reference of a report titled “Thing That Make You Go Hmmm” , and told that this report points out, ‘Chavez’s move could set in motion a chain of events whereby Central banks who store the bulk of their gold overseas in ‘safe’ locations scramble to repossess their country’s true ‘wealth’. If that happens, the most high-stakes game of musical chairs the world has ever seen will have begun’,” I said.

“This sounds very scary”, she added.

Image - Gold derails the US $ and US Economy“Yes, you are very much correct while mentioning that the report further states that ‘any delay in repatriating Venezuela’s gold could potentially start a frantic scramble by central banks to claim their physical. God save the scenario, but if it actually happens, rest assured that gold price will be on fire. A scenario will take place, which has neither been seen in past, nor even imagined.

It will give birth to an economic tsunami of magnitude, which will turn the great economic recession witnessed by world or even the jasmine revolution and contribution of social media to same to seem dwarf.

Don’t be surprised if I that there is enough in media to believe U S Govt. Manufactured Fake Gold

Perhaps, there are only few who can imagine the magnitude of risk, specifically if they are not linked to foreign trade. Let me illustrate it. It’s one thing to counterfeit a twenty or hundred dollar bill. The amount of financial damage is usually limited to a specific region and only affects dozens of people and thousands of dollars. Secret Service agents quickly notify the banks on how to recognize these phony bills and retail outlets usually have procedures in place (such as special pens to test the paper) to stop their proliferation.

Image - U S Government Manufactured Fake Gold

This is the most sacred of all commodities because it is thought to be the most trusted reliable and valuable means of saving wealth.

A recent discovery — in October of 2009 — has been suppressed by the main stream media but has been circulating among the “big money” brokers and financial kingpins and is just now being revealed to the public. It involves the gold in Fort Knox — the US Treasury gold — that is the equity of our national wealth. In short, millions (with an “m”) of gold bars are fake!.Who did this? None, but the United States Government, as claimed by Chinese Authorities.

Background
In October of 2009 the Chinese received a shipment of gold bars. Gold is regularly exchanges between countries to pay debts and to settle the so-called balance of trade. Most gold is exchanged and stored in vaults under the supervision of a special organization based in London, the London Bullion Market Association (or LBMA). When the shipment was received, the Chinese government asked that special tests be performed to guarantee the purity and weight of the gold bars. In this test, four small holed are drilled into the gold bars and the metal is then analyzed.

Officials were shocked to learn that the bars were fake. They contained cores of tungsten with only a outer coating of real gold. What’s more, these gold bars, containing serial numbers for tracking, originated in the US and had been stored in Fort Knox for years. There were reportedly between, 5600 to 5700 bars, weighing 400 oz. each, in the shipment!

At first many gold experts assumed the fake gold originated in China, the world’s best knock-off producers. The Chinese were quick to investigate and issued a statement that implicated the US in the scheme.

 

What the Chinese Uncovered

Roughly 15 years ago — during the Clinton Administration [think Robert Rubin, Sir Alan Greenspan and Lawrence Summers] — between 1.3 and 1.5 million 400 oz tungsten blanks were allegedly manufactured by a very high-end, sophisticated refiner in the USA [more than 16 Thousand metric tonnes]. Subsequently, 640,000 of these tungsten blanks received their gold plating and WERE shipped to Ft. Knox and remain there to this day.

According to the Chinese investigation, the balance of this 1.3 million to 1.5 million 400 oz tungsten cache was also gold plated and then allegedly “sold” into the international market. Apparently, the global market is literally “stuffed full of 400 oz salted bars”. Perhaps, its worth is as much as, 600-billion U S dollars.

Always Yours — As Usual — Saurabh Singh

 RELATED LINKS FOR READERS WHO WANT TO GO IN MORE DETAILS TO BEFORE COMMENTING ON STORY
  1. http://etfdailynews.com/2011/08/17/venezuelan-president-hugo-chavez-sends-precious-metal-etfs-a-wakeup-call-gld-iau-slv-gdx-agq/
  2. http://philosophers-stone.co.uk/wordpress/2011/08/hugo-chavez-gold-runs-bank-runs-and-bank-holidays/
  3. http://profit.ndtv.com/news/show/chavez-officially-nationalizes-venezuela-s-gold-industry-174207
  4. http://notime4bull.com/aggregator/sources/13
  5. http://mikepiro.com/blog/as-chavez-pulls-venezuelas-gold-from-jp-morgan-is-the-great-scramble-for-physical-starting/
  6. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/traders-brace-for-venezuela-gold-transfer/article2134031/print/
  7. http://www.bighaber.com/haber/chavez-to-nationalize-venezuelan-gold-industry-1072000.html
  8. http://www.advisorperspectives.com/commentaries/global_082611.php
  9. http://americasfinancialmeltdown.blogspot.com/2010/11/below-is-antiwar_4391.html
  10. http://mikepiro.com/blog/ron-paul-audit-federal-reserve-gold-stores/
  11. http://www.freedomsphoenix.com/News/061976-2009-11-26-us-govt-manufactured-fake-gold.htm
  12. http://www.the-boondocks.org/forum/index.php?t=msg&&goto=157202#msg_157202s

WILL The Buck Stop — May be This One Works

Olympic Gold Medalist of Corruption in recent olympics Mr. Suresh Kalmadi-led CWG fiasco became India’s shame; A Raja will have made the CWG affair look petty if it turns out that he has indeed caused national loss and brought global shame for India in the 2G scam as charged. Now B S Yeddyurappa and Janardhan Reddy are BJP’s A Raja, standing accused of being the shameful faces of mafia-like corruption. Now is the time to ensure that buck must stop.

The good news is that citizens are finally refusing to accept corruption as routine anymore and are demanding immediate accountability from those who they elect. Today, for the first time in independent India’s history five corporate CEOs, one IAS officer and several senior politicians find their new address as Tihar Jail No. 1. This could well be dubbed as India’s second  independence struggle, but this time it’s not against foreign rule, but for for freedom from corruption by our own rulers, and has begun in right earnest in 2010.

There are four immediate steps, which can be taken to control corruption.

First, the government must notify the rules for the confiscation of assets of corrupt officers in the Benami Transactions (Prohibition) Act, 1988. This will allow the state to confiscate properties into an escrowed account where no claimant shows up, and if he does, then the tax laws can be invoked to inquire into the source of income for purchase of the property.

 Second, India must enact strong anti-perjury laws to stop frivolous, false complaints under oath; this would be a necessary step to prevent witnesses and complainants from frequent retractions which one currently observes in court.

Third, reversing the onus of proof. The accused must demonstrate why illegal cash
or real estate suspected to belong to them is not theirs or face confiscation. Today, the standard of evidence followed is cumbersome. Taking cues from the US system, one must trace the money trail rather than paper trails of files of decision-making.

Lastly, posting the right man for the right job. When one outstanding officer, Bishwajit Mishra, was posted in Bellary, he disciplined Reddy’s minions and recovered dues of Rs 20 crore in 10 days flat before he was transferred out.

Justice Santosh Hegde, U V Singh, Vipin Singh and their team have done yeoman service. They have painstakingly sifted through voluminous bank records of over 40 lakh entries, reconciling millions of transactions from one benami account to the other, one benami company to the other, till it reached the eventual beneficiary, as is shown in the report.

It recounts how Reddy started the ‘zero-risk system’ whereby he would use government officers to procure permits for other mining companies, ensuring safe transport of illegally mined ore to a destination of their choice. For a payment of 40% of the prevailing global market price of iron ore or sharing an equal amount in volume, he had created a different kind of single-window system – for bribes!

Companies that initially refused were later forced to sign zero-risk contracts with Reddy. Rs 40,92,88,860 was the amount paid as ‘risk amount’, Rs 62,92,36,810 was paid for illegal iron ore trading and about Rs 2,46,62,377 was paid to 617 officials in just five years.

This apart, the report says Rs 4,79,03,917 was paid to “G J Reddy Sir” by cheque (and many times more by cash). Now, the time has come to use the fullest extent of various penal provisions of the law to recover the money. Thus, perhaps for the first time, actual value has been imputed to the extent of bribery in just one sector of the economy, that too in one state.

It also appears from the report that Yeddyurappa brought enormous transparency into bribe-taking by having his sons take the bribe by cheque into a family trust, turning a blind eye to the rape of the treasury by his colleague and his own family.

He was clearly told in writing on file by his outstanding team of officers including the chief secretary and others that denotifying land after a Section 16(2) stage of Land Acquisition Act is violative of Supreme Court judgments. Yet, he brazenly went ahead, denotified it, sold it back to the same mining company and received a ‘donation’ by cheque! Despite L K Advani’s repeated sane counsel and warnings, the misdemeanour continued for he thought the buck would never stop. But it did.

 It remains to be seen that India’s second war for independence would spread further or soon the principal culprits will be forgotten, witnesses will be purchased or will ‘voluntarily’ withdraw their statements, bail would be granted by friendly judges, back-door deals for mutual protection will be struck across party lines, some elections will be won, and the same people will be back in power. And show  must keep going on and on.

These view reflect the agreement with views presented are vies of the author.

Always Yours — As Usual — Saurabh Singh

 

OIL POLITICS, SPECULATION, CHAIN REACTION AND MANAGEMENT

It requires quantum of intelligence, to infer from what is happening in the markets, or politico-socio-economic across the globe, to why it is happening. Things are never as simple as they seem to be. This would become comprehendible and evident as soon as one reads, relates and analyses the instances mentioned hereunder:

Crude oil prices peaked to US $ 100 – 115 a barrel in April and May 2011 and moved downwards after that to touch a rate of US $ 90 – 92 per barrel in June 2011. In such a scenario, price increase by the Union Government should have been announced in April – May 2011, but the same did not occur. The Government found June 2011 to be the auspicious time for announcing price hike when the prices had nearly normalized. What could have been the motive for doing so? Simple answer is that April – May 2011 was the time when five states were going to elect the assembly members. The states being, West Bengal, Tamil Nadu, Assam, Kerala and Puducherry.

If one goes by what the campaign managers of Congress had to say on the Rahul Gandhi’s much publicized kisan padyatra-(which as claimed was undertaken to champion the cause of the farmers of the region) –  was conceived to detract the public attention from the issue of hike in petroleum products and their possible spiraling effect on inflation. This yatra detracted the lot of electronic media attention from the campaign that opposition forces such as BJP and Left were seeking to build up on the oil price hike related issues.

Since the Oil shock of 1973, USA strategically took measures to control the oil market by keeping continued focus on West Asian Region. In 1980, Jimmy Carter, the then President of USA declared Persian Gulf an exclusive zone of American influence and created a rapid deployment of forces, which latter turned into what is known as US Central Command or CENTCOM. 

As is being believed by majority that skirmish in Libya is behind recent spurt in prices, should correct their facts. Libya produces less than 3 per cent of global petroleum output. Where as Saudi Arabia has already made up for the current shortfall and its excess stocks are more than that of Libya and Algeria put together. In fact in present situation too oil production at many of Libyan facilities continues even in civil war there.

The argument being forwarded by few is that rising demand from China and India has forced an upward trend in oil prices is also unjustified. Though these two countries do account for growing share of global demand, but then same is counterbalanced by slower demand from USA and Europe.

There is still a wide spread perception that cartel of Oil Exporting Countries can manipulate and influence the prices by changing the level of their supplies. Reality today is much different. The OPEC has turned from being a cartel to being a minor player today. Non OPEC countries now account for increasingly significant proportion of global supply. Russia has already snatched the title of being largest supplier of crude oil from Saudi Arabia since 2009. 

Many more such instances may be quoted. It’s not being quoted in anticipation that the variety of above instances is good enough to comprehend that nearly none of the factors assumed or arguments forwarded are capable of forcing any kind of hike in prices of the crude oil.

 

Then what is it, which is responsible for hike in crude oil price?

 

…….any guesses, if not, then storm your grey matter and keep visiting this place in hope of getting answer to this simple question.

 

Always Yours — As Usual —- Saurabh Singh

 

 

IFRS ——- What is IFRS ?

IFRS for SMEs  — What is IFRSs and IFRSs for SME

Scope of IFRS All International Accounting Standards (IASs) and Interpretations issued by the former IASC (International Accounting Standard Committee) and SIC (Standard Interpretation Committee) continue to be applicable unless and until they are amended or withdrawn. IFRS sets out recognition, measurement, presentation and disclosure requirements of transaction and events in general purpose financial statements. IFRSs apply to the general-purpose financial statements and other financial reporting by profit-oriented entities i.e. those engaged in commercial, industrial, financial, and similar activities, regardless of their legal form. Entities other than profit-oriented business entities may also use IFRSs with certain changes in terminologies. General purpose financial statements are intended to meet the common needs of shareholders, creditors, employees, suppliers, government and the public at large for information about an entity’s financial position, performance, and cash flows. IFRS apply to consolidated as well as separate financial statements. If an IFRS allows both a ‘benchmark’ and an ‘allowed alternative’ treatment none of them is preferred treatment. However, in developing Standards, IASB intends not to permit choices in accounting treatment. Further, IASB intends to reconsider the choices in existing IASs. IFRS presents fundamental principles in bold face type and other guidance in non-bold type (the ‘black-letter’/’grey-letter’ distinction). Paragraphs of both types have equal authority. IFRS does not prescribe as who should apply IFRS. It left upon the national standard setters to decide which entities would be bound to comply with IFRS. The focus of international standard setting is on profit-oriented reporting entities, including non-corporate entities such as mutual funds. Despite concentrating on profit-type entities, the IASB envisages that non-profit entities in the private and public sectors may nevertheless find its Standards an appropriate basis for financial reporting. The specific needs of the public sector have been acknowledged by the International Federation of Accountants (IFAC), whose Public Sector Committee has on its agenda the preparation of standards based on IFRS, for use by public sector entities. However, a non-profit entity that states compliance with IFRS should comply with IFRS in full. A profit-oriented reporting entity is one that reports to users, who rely on the financial statements as a major source of financial information about the entity. Financial Statements are directed to the information needs of users such as investors and potential investors, employees, lenders, suppliers, creditors, customers, governments and the public at large. The term financial statements refer to statements that display different aspects of the entity’s financial performance and position. Financial position is reflected in the statement of financial position and a statement of changes in shareholders’ equity (excluding transactions with shareholders). Financial performance is reported in the income statement and liquidity position in the cash flow statement. These statements are supplemented by a series of detailed notes. Some Standards permit different treatments for certain types of transactions or events. One treatment is designated as the benchmark treatment, and the other the allowed alternative. Neither is designated as the IASB’s preferred approach. The Board intends to develop future Standards that require similar transactions and events to be accounted for in the same way. The IASB intends to reconsider the choices given in current IFRS with a view to reducing and potentially eliminating them. Structure of IASB The IASB is organised under an independent Foundation named the International Accounting Standards Committee Foundation (IASCF). That Foundation is a not-for-profit corporation created under the laws of the State of Delaware, United States of America, on 8 March 2001.

Components of the new structure of IASB are as follows:

1. International Accounting Standards Board (IASB) – has sole responsibility for establishing International Financial Reporting Standards (IFRSs). 2. IASC Foundation – oversees the work of the IASB, the structure, and strategy, and has fundraising responsibility. 3. International Financial Reporting Interpretations Committee (IFRIC) – develops interpretations for approval by the IASB. 4. Standards Advisory Council (SAC) – advises the IASB and the IASCF. 5. Working Groups – expert task forces for individual agenda projects. 6. Monitoring Board of Public Authorities- effective 01.02.2009 Accounting Standards in India are issued by Accounting Standard Board (ASB) of Institute of Chartered Accountants of India and are largely based on IFRS. However, India has not been able to keep pace with the amendment and additions made in IFRS from time to time. This is largely because of its sensitivity to local conditions including the conflicting legal and economic environment. However, with the opening of Indian economy in near past, the convergence to IFRS has become unavoidable. Keeping this in view, ASB decided to form an IFRS task force in August 2006. Based on the recommendation of this task force, the Council of ICAI, in its 269th meeting decided to fully converge with IFRS from the accounting periods commencing on or after 1st April 2011. At initial stage, this convergence will be mandatory for listed and other public interest entities like banks, insurance companies, NBFCs, and large sized organizations with high turnover or annual income.

Why this convergence?

Converging with IFRS will have multiple benefits for Indian entities especially those who aspire to go global. Some of the benefits of convergence with IFRS are explained below:

a) Accessibility to foreign capital markets

The force of globalization has enabled the concept of ‘open economy’ and increasing numbers of countries has opened doors for foreign investment and foreign capital. Many Indian entities expanding and making their presence felt in international arena. Huge amount of capital commitment are required in this process for which entities have to list their shares in various stock exchanges around the world. Majority of stock exchanged either require or permit IFRS complaint accounts. Adaptation of IFRS will enable Indian entities to have access to international capital markets.

b) Reduced Cost

At present when Indian entities list their securities abroad they have to make another set of accounts which are acceptable in that country. Convergence with IFRS will eliminate this need for preparation of dual financial statements and thereby reduce the cost of raising capital from foreign markets.

c) Enhance Comparability

If the Financial statements of Indian entities are made in lines of IFRS, they will have greater comparability and will enable foreign companies to have broader and deeper understanding of the entities relative standing. This will also facilitate mergers, amalgamation and acquisition decisions.

d) Boon for multinational group entities

Entities in India may have a holding, subsidiary or associate company in some other nation. Compliance with IFRS for all group entities will enable the company management to have all the financial statements of the group in one reporting platform and hence will facilitate the consolidation process.

e) New Opportunities for the professionals

Migration to IFRS will not only be beneficial for Indian corporate, it will also be a boon to Indian accounting and other associated fields. India is a country with immense human resource. With knowledge of IFRS Indian professional can immerge as leading accounting service provider around the globe. This convergence will also open the flood gate of opportunities for valuers and actuaries as IFRS is fair value based accounting standard.

What is IFRSs?

 International Financial Reporting Standards comprise: – IFRSs – standards issued after 2001 – IASs- standards issued before 2001 – Interpretations originated from the International Financial Reporting Interpretations Committee (IFRIC) – issued after 2001 – Interpretations of Standing Interpretations Committee (SIC) – issued before 2001

Effective IFRSs as on date

• No of standards issued – effective 29 (total 41) IASs , 8 IFRSs • No of interpretations – effective 15 (total 18) IFRIC Interpretations, effective 11(total 33)SIC Interpretations • No of Financial Reporting Standards in force as on date – 63

 Grouping of IFRSs into eleven parts:

 1. Preface and framework

 Preface a. Objectives of the IASB b. Scope and authority of IFRSs c. Due process d. Timing of application of IFRSs e. Language

Framework a. Introduction b. Qualitative characteristics of financial statements c. The elements of financial statements d. Recognition of the elements of financial statements e. Measurement of the elements of financial statements f. Concepts of capital and capital maintenance

2. Other literature

 a. IASC Foundation Constitution b. Due process Handbook of IASB c. Due process Handbook of IFRIC d. Glossary

3. Presentation of Financial Statements

 Standard Number Standard Name IAS 1 Presentation of Financial Statements IAS 7 Statement of Cash Flows IAS 33 Earnings Per Share IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors IAS 10 Events after the Reporting period IAS 21 The effects of changes in foreign exchange rates IAS 29 Financial Reporting in Hyperinflationary economies SIC 7 Introduction of the EURO IFRIC 7 Applying the restatement approach under IAS 29 Financial Reporting in Hyper inflationary Economies

4. IFRSs on Interim Financial Statements

IAS 34 – Interim Financial Reporting

 5. IFRSs on Group Reporting Standard

 Number Standard Name IFRS 3 Business Combinations IAS 27 Consolidated and separate financial statements IAS 28 Investment in Associates IAS 31 Interest in joint ventures

 6. IFRSs on Assets

 Standard Number Standard Name IAS 2 Inventories IAS 16 Property, Plant & Equipment IAS 40 Investment Property IAS 38 Intangible Assets IAS 32, IAS 39, IFRS 7 Financial Assets / Financial Instruments IAS 41 Biological assets IFRS 5 Non-Current Assets held for sale & Discontinued operations IAS 17 Leases IFRS 6 Exploration and Evaluation of Mineral Assets

 7. IFRSs on Expenses and Liabilities

 i. IAS 19 – Employee Benefits ii. IFRIC 14- IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction iii. IAS 37 – Provisions, Contingent Liabilities and Contingent Assets iv. IFRIC 1 -Changes in Existing Decommissioning, Restoration and Similar Liabilities v. IFRIC 5- Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds vi. IFRIC 6- Liabilities Arising from Participating in a Specific Market – Waste Electrical and Electronic Equipment vii. IAS 12- Income Taxes viii. SIC 21 – Income Taxes – Recovery of Revalued Non-Depreciable Assets ix. SIC 25- Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders x. IFRS 2- Share-based Payment xi. Financial liabilities / Financial Instruments a. IAS 32 Financial Instruments: Presentation b. IAS 39 Financial Instruments: Recognition and Measurement c. IFRS 7 Financial Instruments: Disclosure

 8. IFRSs on Income

 i. Construction contracts (IAS 11) ii. Revenue (IAS 18) iii. Agriculture income (IAS 41) iv. Service concession arrangements – IFRIC 12 & SIC 29 v. Customer loyalty programmes – Customer reward credit or points IFRIC 13

 9. IFRs on Disclosure

 A.  IAS 24 Related Party Disclosures B. IFRS 8 Operating Segments

 10. IFRSs on Industry

 i. IFRS 4 Insurance Contracts ii. IAS 26 Accounting and Reporting by Retirement Benefit Plans

 11. IFRSs on First time adoption – IFRS 1

 IFRSs for SME

 History

 In Sept 2003: World Standard Setters survey n June 2004: Discussion Paper (117 comments) n April 2005: Questionnaire on recognition and measurement (94 responses) n Oct 2005: Roundtables on recognition and measurement (43 groups) n Feb 2007: Exposure Draft (162 comments) n Nov 2007: Field tests (116 real SMEs) n Mar – Apr 2008: Board education sessions n May 2008 – Apr 2009: Redeliberations n May 2009: Near-final draft posted on IASB website n 1 June 2009: Ballot draft sent to the Board n 9 July 2009: Final IFRS for SMEs issued

Why IFRSs for SME

A. Topics not relevant to SMEs are omitted. B. Where full IFRSs allow accounting policy choices, the IFRS for SMEs allows only the easier option. C. Many of the principles for recognizing and measuring assets, liabilities, income and expenses in full IFRSs are simplified. D Significantly fewer disclosures are required. E the standard has been written in clear, easily translatable language.

 What is SME as per IFRSs

 SME Small and medium-sized entities are entities that:  Do not have public accountability, and o Publish general purpose financial statements for external users. Examples of external users include owners who are not involved in managing the business, existing and potential creditors, and credit rating agencies. General purpose financial statements are those that present fairly financial position, operating results, and cash flows for external capital providers and others. An entity has public accountability if: o Its debt or equity instruments are traded in a public market or it is in the process of issuing such instruments for trading in a public market (a domestic or foreign stock exchange or an over-the-counter market, including local and regional markets), or o It holds assets in a fiduciary capacity for a broad group of outsiders as one of its primary businesses. This is typically the case for banks, credit unions, insurance companies, securities brokers/dealers, mutual funds and investment banks.

 Contents of IFRSs for SME – divided into 35 sections

 1. Small and Medium-sized Entities 2. Concepts and Pervasive Principles 3. Financial Statement Presentation 4. Statement of Financial Position 5. Statement of Comprehensive Income and Income Statement 6. Statement of Changes in Equity and Statement of Comprehensive Income and Retained Earnings 7. Statement of Cash Flows 8. Notes to the Financial Statements 9. Consolidated and Separate Financial Statements 10. Accounting Policies, Estimates and Errors 11. Basic Financial Instruments 12. Additional Financial Instruments Issues 13. Inventories 14. Investments in Associates 15. Investments in Joint Ventures 16. Investment Property 17. Property, Plant and Equipment 18. Intangible Assets other than Goodwill 19. Business Combinations and Goodwill 20. Leases 21. Provisions and Contingencies 22. Liabilities and Equity 23. Revenue 24. Government Grants 25. Borrowing Costs 26. Share-based Payment 27. Impairment of Assets 28. Employee Benefits 29. Income Tax 30. Foreign Currency Translation 31. Hyperinflation 32. Events after the End of the Reporting Period 33. Related Party Disclosures 34. Specialised Activities 35. Transition to the IFRS for SMEs Glossary Derivation Table Basis for Conclusions – published in a separate booklet Illustrative Financial Statements and Presentation and Disclosure Checklist – published in a separate booklet

 Omitted topics in IFRSs for SME The IFRS for SMEs does not address the following topics that are covered in full IFRSs: n Earnings per share n Interim financial reporting n Segment reporting n Special accounting for assets held for sale

 Examples of options in full IFRSs NOT included in the IFRS for SMEs n Financial instrument options, including available-for-sale, held-to-maturity and fair value options n The revaluation model for property, plant and equipment, and for intangible assets n Proportionate consolidation for investments in jointly-controlled entities n For investment property, measurement is driven by circumstances rather than allowing an accounting policy choice between the cost and fair value models n Various options for government grants.

 Conclusion

 To conclude IASB put lot of efforts in coming out IFRSs for SME. IASB has received 162 comments on Exposure Draft for IFRSs for SME. IASB follows transparent approach for formulation of standards.

Always Yours —- As Usual — Saurabh Singh

Will Inflation Turn in Gamble in Fortune by Farmers

I was going through an article published in Sunday Economic Times [May 01, 2011 to be precise] which was titled “Will inflation turn out to be a game-changer in India?”

It was nicely crafted and argued article by T K Arun, and all the arguments look relatively on rational side, but I have my apprehensions, which may be dubbed as irrational or idiotic.  But I feel like sharing.  The below is article I am talking about.

Will inflation turn out to be a game-changer in India?

If the RBI decides its foremost task is to stamp out inflation, never mind if it flattens the growth rate also in the process, that would be change we don’t want. However, inflation can also drastically change the rural landscape, boosting farm output and delivering millions out of poverty-provided the right policy initiatives are forthcoming.

Inflation is driven by, even if not confined to, food, particularly superior food: vegetables, egg, meat, milk, fish and lentils, vegetables and protein, in other words. Nor is this confined to India. Over the past 10 years, the least developed countries as a group have grown at an average rate of 7% a year. All of them witness a spurt in the demand for food. And for a variety of reasons ranging from prolonged drought to excessive rains, supplies have been disrupted, raising food prices across the board. Of course, the huge expansion in liquidity unleashed by the US and other developed countries, pumping speculative capital into all commodity markets, adding a thick layer of froth to the real pressures pushing prices upwards, plays its role as well. The net result: Thomas Malthus, who made the dire but fortunately erroneous forecast that the human race would proliferate faster than food production can grow, is back in fashion.

Beating Malthus is fait accompli. People not only have proliferated with abandon but also enjoy ever-improving standards of living, instead of straining hollow eyes into a darkening future of dwindling food supplies. However, beating Malthus promises to rise as a fresh challenge, an enormously profitable one. India has varied agroclimatic regions, capable of producing a great variety of crops. The challenge is to harness the potential and boost India’s farm output to feed not just a burgeoning India but also the rest of the world. It looks daunting but is, in fact, eminently doable.

Agricultural economist Ashok Gulati reports that the largest boost to farm income comes from investment in rural roads compared to other forms of agri-related investment. This offers a key insight that our policymaking obsession with the technical means of raising yields has ignored: farm production, too, is determined by the market. If you provide farmers easier access to markets for farm inputs and output, they would make use of that access to raise output and incomes. If the best seeds and fertiliser boost production in an interior village which cannot evacuate the surplus harvest to a market outside, the only result of the surplus would be to depress local prices and farmers’ incomes. On the other hand, if farmers can take their produce to buyers outside, their income would amplify.

A primitive system of state-mandated monopoly denies Indian farmers the freedom of choice in whom they sell to. The Agricultural Produce Marketing Committee Act must be scrapped. An organised, efficient supply chain must link farmers with urban consumers. This is what organised retail would do, if it is allowed to. Amul achieved this in the case of milk. New farmers companies or cooperatives should now be catalysed to accomplish this for other produce.

Observation of and by Blogger:

Please do not get surprised as reality is rarely known. People know, what I will call as a sucessfull propaganda, turning in Fad, leading to creation of a Mirage which looks like a Panacea to a very long [nearly seeming to be perpetual] Problematic Issue.

These days every body keeps talking about what ever he/ she feels will sell, without any consideration on its merit. Be it Organic Farming, Growing Jatropa for Bio fuel, Setting up of private mandies or scrapping of APMC Act.

Would someone like to comment on the situation that forced a Nation’s Goverment and its legislatures to formulate, pass and implement APMC Act, that today every one says should be scraped.

Inplace of just talking of implementing what the columnist T K Arun has argued in his article “Will Inflation Turn Out to be A Game Changer in India”; I would like to take my audiences a step ahead and deliberate on one of such models.

On the same lines as mentioned in paragraph above lets have some discussion on a very popular model — Acclaimed by Corporates as a Great Success Story. I do not think that every individuals who talks about it and considers it as a success has gone deeper in search of reality. So here it starts:

E – Choupal of ITC

Widely acclaimed as an ICT success story, it typifies the complete corporatization of the social enterprise model.

An initiative seeking to become the Wal-Mart of rural India, e-Choupal is a gateway to an expanding spectrum of  commodities leaving farms and also selling to rural India urban oriented goods and services like FMCG, consumer durables and insurance services (Gurumurthy, 2009; Prahalad, 2006).

Based on a business model providing connectivity and services to a closed network of farmers through an entrepreneur whose role, interestingly, is projected by ITC as a “public office”, e-Choupal exemplifies the win-win problematique (Gurumurthy, 2009; Prahalad, 2006).

However a closer study of the model, from a development perspective, unpacking the socio-politics of the e-Choupal ecosystem, indicates a monopolistic control over the entire local agriculture ecology by a transnational corporation through the use of a captive ICT infrastructure, with minimal regulation and competition.

The e-Choupal hubs serve as sales outlets for agriculture and other products and services. Cutting off alternative systems, local middlemen and government services, e-Choupal locks in a large number of farmers into its network.

While the project has resulted in some increase in rural agricultural incomes through privatization driven efficiency improvements in the supply chain, e-Choupal underscores ‘trickle-down’ and individual enterprise at the village levels (Gurumurthy, 2009; Prahalad, 2006).

The average village shopkeeper/entrepreneur is bound to get affected as local demand for goods and services shifts to ITC and Choupal sagars. Needless to mention livelihood of traders/middlemen whose livelihood has been squelched through this model.

Further, the ‘DNA’ profile of the farmers acquired during the registration of e-Choupals has allowed ITC to determine and understand their buying behavior very closely.

This has allowed targeting, positioning and delivering goods and services to match their needs and wants continuously, succinctly called Customer Relationship Management (CRM) in marketing parlance.

This makes them more vulnerable to a shift from the present more or less sustainable existence to materialistic consumerism. Little awareness of their (farmer’s) rights may not guarantee total protection of the database and its unethical usage. This is where the government is expected to protect its citizens from such transactions.

However, the government has been changing slowly but surely towards a free market economy.

[The blogger, here is not arguing against or in favour of India moving towards a market economy. The above discussed issue has to do with not only business but ethics, morale, privacy, awareness and many other social issues.]

The information above has been picked from a Research Paper Titled E – Choupal – Hope or Hype. The Same can be accessed by Clicking here. ]

The Rest of the article continues……

Farmers require investment in infrastructure, not subsidy. Politics must shed its love for doling out subsidy and invest massively in harnessing water, roads, power and scientific storage of farm produce.

Policy must change, too, in allowing farmers access to global markets. The short-term distress this creates would be more than removed by the rise in incomes and employment that would result.

Farming would cease to be a punishment and become the biggest fighter against poverty. Inflation is indeed a horse that India’s beggars could ride their way out of poverty

Always Yours — As Usual — Saurabh Singh

Sahara India Commercial Corporation (SICCL) — A MYSTRY — AN ENIGMA — OR — A LOOT

2.6 m Shareholders, but Sahara Co Still Unlisted

Sahara India Commercial Not on Bourses Despite  3,000-cr Issue

In October 2009, Sahara India Commercial Corporation (SICCL), part of Sahara Group of Companies, decided to issue shares to a bunch of investors. While the size of the share issue— 3,000 crore—was substantial, what was really startling was not the amount, but the number of shareholders who were allotted shares: 2.6 million. Even if this were the only share issue by the company, it would make it the third-largest company in the country today in terms of number of shareholders—behind Reliance Power (4.9 million shareholders as of December 2010), and Reliance Industries (3.5 million). That share issue by SICCL placed it far ahead of other stellar names of India Inc such as Tata Steel and NTPC, in terms of the shareholder base.

But here’s the real surprise. Despite the share issue, SICCL is not listed on any stock exchange. According to filings by the company with the registrar of companies, West Bengal, the company issued 30 crore shares with a face value of 1, at a premium of 99, on October 29, 2009. The number of allottees were 26,89,935. The company has also uploaded, on the RoC site, a long list of the share allottees. The shares have not been listed on any exchange. “The companies act and SEBI regulations are clear,” says Tejesh Chitlangi, a senior associate with Finsec Law Advisors: “Section 67 of The Companies Act construes an offering of shares or debentures to 50 or more persons as an offer or invitation to the public, for which norms listed out in SEBI Regulations would need to be followed. These include issuing of prospectus, compliance with the procedures and other disclosure norms.”

In response to a questionnaire sent by ET, Sahara spokesperson, Abhijit Sarkar said: “SICCL is an unlisted public limited company and does not intend to list its shares at any of the stock exchanges as decided by the board of directors of the company. Compliances with the SEBI Regulations are applicable for the listed companies as well the company who intend to get their shares listed on the stock exchanges.”

He said necessary board and shareholder approvals were taken. Further, the fact that the return of allotment was duly approved by RoC West Bengal was evidence that “required compliances for allotment of equity shares by the company are fully complied with”. According to Sahara, an approval from the RoC was given in September 2010.

Staying Away from the Street Sahara arm not listed on any stock exchange
The company: Sahara India Commercial Corporation

Business: Real Estate and infrastructure

No. of shareholders: 2.6 million Funds raised: Rs 3,000 crore

Type of company: Public, but unlisted

•Third-largest company in India today in terms of number of shareholders—behind Reliance Power and Reliance Industries

• As of March 2009, SICCL posted a loss before tax of Rs 449 cr, on revenues of Rs 1,600 cr
• Its balance-sheet size, as of March 2009, was Rs 8,591 cr. Over 80% of this, Rs 6,922 cr, was raised through OFCDs Two Share Allotments

Says Jayant Thakur, a chartered accountant specialising in securities law: “When a company raises funds from more than 50 people, it does not remain a private placement, but is a public issue. For this, listing requirements, as well as other SEBI norms must be followed.” SICCL, according to other filings with the RoC, is primarily a real estate and infrastructure developer. Documents filed by the company describe it as ‘perhaps one of the largest infrastructure and housing development company in India.” As of March 2009, the company posted a loss before tax of . 449 crore, on revenues of . 1,600 crore. SICCL’s balance-sheet size, as of March 2009, was . 8,591 crore. Of this, . 6,922 crore (over 80%) was raised through the issue of optionally fully convertible debentures, or OFCDs. OFCDs are bonds, which on maturity, and at the option of the investor, can be converted into equity shares.
Between March 2009 and June 2010, SICCL completed two share allotments—one for . 3,000 crore to 2.6 million investors, and the other of . 2,000 crore, done on June 30, 2010, to five private limited companies. Thus the total amount of shares issued by the company, as a result of these two allotments, was . 5,000 crore. It could not be ascertained whether the two share allotments arose as a result of the conversion of OFCDs, issued earlier by the company, into shares or whether these were standalone issues of shares to investors. Sahara Group did not give details about the circumstances under which the shares were issued.

According to SICCL’s debenture prospectus, shareholder approvals for OFCDs were given at seven different meetings held between 1998 and 2005 and were to be on private placement basis to “friends, associates, group companies, workers/employees and individuals having their association with group companies”. The OFCD issue opened on July 6, 1998, and closed on June 30, 2008. According to the debenture prospectus, the total size of the issue, spread over five types of bonds, and 10 years, was . 17,250 crore. The funds raised were to be used to finance a number of projects, including the development of the Aamby Valley project.

Late last year, the Securities and Exchange Board of India (SEBI) had banned two other Sahara Group companies—Sahara India real estate corporation (SIRECL), and Sahara Housing Investment Corporation(SHICL)—from raising funds from the public through the issue of OFCDs, without going through the necessary approvals and procedures required. The two companies claimed that they had not made a ‘public offer’ (defined as an offer to more than 50 investors), as claimed by SEBI, but had placed the debentures privately and among a few friends, associates and others close to the group. Therefore, the companies claimed, SEBI had no jurisdiction. The market regulator, disagreeing with the claim of a ‘private placement’, had imposed the ban.

The SEBI ban on the other two Sahara companies was stayed by the Allahabad High Court but the stay order was lifted earlier this month. SEBI has filed a caveat in the Supreme Court against the issuance of any ex-parte orders in the case (which are issued without one of the parties being present). Sahara is reported to have filed a special leave petition in the Supreme Court as well, though this could not be confirmed.

Always Yours — As Usual — Saurabh Singh

My Journey on Path of E-Commerce: A Recollection

The effort here is not to deliberate on the History of Computers and or Internet, but since it turns out to be a brief but vital component of total deliberations if any is being made on providing or seeking or exchanging any product, service, information etc. using Internet as a medium.  Instead of starting the sentence “long long ago….”, like in many other field, here story starts with the set words “In very recent past….” .

The deregulation of Internet and it’s use for Commerce is recent as just four decades. Today it would not be wrong if one makes an inference that it happens to be largest market place. It has also succeeded in turning itself near to indispensable and a good number of people can not imagine their daily life in its absence. As a tool of exchanging information and thought, it has even left behind the devices like telephone, fax, mobile telephony etc. by miles. Even we have the examples, though of very recent nature, that few less popular national government, when faced by some kind of event which was called by media as uprising, made internet their first target to breakdown the communication flow taking place in citizens. The case of “EGYPT” and “LIBYA” are a burning and recent example of this.

Initially there was some sense of fear amongst the people who were stakeholders in business. These stakeholder can never alone be the Business Men, they also included the beside established business houses, the Entrepreneurs,  students of business, the academic and scholarly community dealing with issues related to the domain of business, the customers around whom business revolves, and certainly a few more individuals who comprise those who thought it to be fad and expected it to die an immature death.

Here, the stage is ripe for sharing few anecdotes especially Indian to give a practical understanding of how these developments moved from nearly nowhere to everywhere. Prior to starting on it, Helpman and Trajtenberg (1998) were of the opinion that “In any given era there typically exist a handful of technologies that play a far reaching role in widely fostering technical change and thereby bringing about sustained and pervasive productivity gains.” On the similar lines Norman (1999) said that “The goal is to move from current situation of complexity and frustration to one where technology serves human needs invisibly, unobtrusively: the human centered and customer centered way.”

Now coming to Anecdotes:

1. It was perhaps Year 2000 or 2001, when I happened to give entrance examination for pursuing Ph. D. Program at Indian Institute of Information Technology & Management, Gwalior, when it was still functioning in old building. Till then I was not aware that I would be lucky enough to make my career in academics, scholarly and research work, and also in transfer of technology to masses, though I wanted to do it.

They used to conduct a written test followed by interview for admitting research scholars. Luckily or otherwise, I cleared the written test to qualify for next stage, that was personal interview. There I was interested in pursuing my research in E- Commerce. That was also a time when an e-Commerce initiative with the help of internet initiated by Shoppers’ Stop had met a debacle. All through the interview while I was trying my best to convince them that e-Commerce was the very near future, the interview board was interested in making me believe that penetration of computer required for that would never happen in India and they topped their argument by quoting the example of debacle of Shoppers’ Stop. Besides it the board also wanted to convince me on importance of bandwidth and its importance for e-Commerce, suggesting me to work on it, as it was a must for success of the concept I was arguing, but then I was least interested as it was a work for a Technical Degree Holder and not my cup of tea with MBA preceded by ZBC. Ultimately we could not land on a common platform and it could be said that they rejected me or I myself worked to get rejected.

Nearly the same got repeated at NITIE Pawai Mumbai same year. I would elaborate on it next time when I get chance to further elaborate on it. Its late night and I plan to close writing at this moment. hope spelling mistakes if any would be pardoned.

 

Always Yours — As Usual —- Saurabh Singh

 

 

Happy Holi to All who by Design or Accident Visit this Page…suppoted by a small deliberation on ‘We’or ‘You’

HOW 2 CRE8 A NEW U THIS HOLI

Human Body in itself has a few limitations only but the opportunities possessed by it are numerous. Yet we find ourselves crowded with fears of sufferings, few of which are like wearing out of body [in language of accounting, the process is known as depreciation, i.e., loss in value of an asset due to wear and tear], aging [not in positive terms of learning by curiosity supported by experience leading to enlightenment but as increase in rate of catabolism over anabolism], sickness [as compared to not sending the vehicle to servicing when due] and fear [whereas it’s a clear fact that out of hundred per cent events that you fear may happen, out of them eighty per cent never happen in your life time Pareto’s law].

In all this we tend to forget on what should have been central to our existence, that is, our quest for creativity, curiosity, freedom, enlightenment and probably salvation. We get attached to what in real sense we cannot withhold due to being mortals.  At other times we are busy thinking that we happen to be CEO or this world [which itself is an Illusion] and have responsibility to solve all issues, except for which we are responsible and accountable. We are aware of all the mis-deeds committed by other and seem to be doing same when it’s our turn. Why do we want to correct all except us who happens to be at the pivot of all problematic issues.

Buy my words, and correct yourself, and I assure you of a better world that you will enter into, much better than the imagination that you might have about heaven. The elements of nature are here to provide a synergistic relationship, the moment you focus on changing yourself towards better. These elements make the life possible on earth. Never try to deceive them, as they individually have power, to make life extinct from the planet. These elements as per my limited awareness happen to be five as mentioned ahead: (i): Sky; (ii): Earth; (iii): Air; (iv): Water; and (v): Fire.

Think on facts and you can really be rewarded by not alone creating a new you but altogether a new world.  Remember that you are not mortal as soul, it your physical body that is mortal. You should be aware of the fact that, you may lose your mortal body by passage of time but not you. It’s simply like changing cloths, you are assured of getting a new mortal body, so keep on working towards good cause, not due to fear of being sent to hell but due to fact that within some time you will revisit the planet with new body. It’s just like going for a while to buy new cloths. What you have created will there when you come back [creation here means the contribution you made to this world where life exists]. While performing some task do not be attached with results basically material ones, may be they are there waiting for you when you revisit. In simple terms do remember that your body is nothing more than an illusion.

The fact that you are soul within your body and not the body itself should be remembered by you, even in most testing times. It is energy inside that makes life possible and not the physical body. If you start lacking energy or soul your body will not come to rescue.

If you are fearful of aging, please buy my words, time has never been enemy to anyone, irrespective of anything. It has been the directed efforts of individuals, societies, or nations [perhaps unknowingly] that made time their enemy. Time happens to be an artificial quantity. As we all believe or are made to believe that Supreme Power is eternal or resides in eternal plane, would anyone like to tell me that after how many tomorrows that eternal will come. Probably, eternity is never going to come even after infinite tomorrows. To me it seems that you need cross the boundary line that lies between temporal and non temporal world. So, how could an artificial thing be your enemy? You know that time could be suspended or at least manipulated.  Scientifically you would be aware of the fact that people in spacecraft age much slow as compared to their counterparts on the earth. On the other side we have learned the story of saints who used live for thousand years. Perhaps it was a result of their pious soul, will power and mental state that they were capable of suspending the time.

Remember that, as said in earlier paragraph, that it is the pious soul, will power and mental state of individual that can suspend time. On the other side if you get blocked in physical limits of your body and think that your body by itself is a physical object, then you are cooperating with destructive forces like ageing, feeling that change towards better can never happen, while at the same time on opposite extreme you develop a feeling as said earlier that you are eternal along with your body and it is you who is CEO of this world. How do you feel? Are these not the two opposite principle that you are trying to act upon? Take some time and think for and by yourself and let me how much on the wrong side I am.

If you still want to create a new you in you, then please do become conscious that you are not alone the body rather you should believe that body is very insignificant but important thing. Your intentions, thought, feeling which get transferred to brain are there to consequently impact all your cells in the body and also suck the energy out of you. Thus, the option is to have altruistic intentions, act towards minimizing the suffering of the humanity; believe that you are accountable for acts of yours and finally a new you can make a real and significant development on how the life on this planet shapes up. If you are working alone on self interested materialistic objectives alone, then please do not rate you self on the scale of human, lower order animals are much better at it than you. It is the intentions, acts, thought, and attributes like sacrifice, altruism etc that differentiate you from lower order animals.

 

ALWAYS YOURS — AS USUAL — SAURABH SINGH

”Kayani feared condemning Guv murder may endanger army unity”

Pakistan”s army chief Ashfaq Parvez Kayani, who had “declined” to publicly condemn the January killing of Punjab Governor Salmaan Taseer, had told Western envoys that there were “too many soldiers” in the ranks who “sympathised” with the assassin, a noted author has claimed.

Punjab's Slain Governor Salmaan TaaseerFor its part, the army has so far failed to express regret on either Minority Affairs Minister Shahbaz Bhatti”s murder or Taseer”s, Lahore-based author Ahmed Rashid, also a senior journalist, wrote in ”The New York Review of Books”. Both Bhatti, the only Christian member of the Pakistani Cabinet, and Taseer were killed for opposing the controversial blasphemy law.

Kayani “declined to publicly condemn Taseer”s death or even to issue a public condolence to his family. He told Western ambassadors in January in Islamabad that there were too many soldiers in the ranks who sympathise with the killer,” Rashid wrote.

Photo of Pak Army ChiefThe army chief showed the envoys “a scrapbook of photographs of Taseer”s killer being hailed as a hero by fellow police officers. Any public statement, he hinted, could endanger the army”s unity,” Rashid said.

Behind this silence lies “something more sinister,” he wrote. “For decades the army and the ISI have controlled the extremist groups, arming and training them in exchange for their continuing to serve as proxy forces in Afghanistan and Kashmir. But in recent years, the army has lost control of them and they are striking targets of their own.”

“Yet the army has refused to help crack down on its rogue proteges despite the fact that extremists have increasingly attacked the army and the ISI itself,” Rashid said.

This is all the more ominous in view of the resources the military commands: half a million men, another half a million reserves, 110 nuclear arms, according to US media estimates, and one of the largest intelligence agencies in the world, the ISI, which has an estimated 100,000 employees, he noted.

“If the army has now surrendered any willingness to take on the extremists, the political establishment had already given up long ago,” Rashid wrote.

President Asif Ali Zardari, the husband of slain PPP leader Benazir Bhutto, is no stranger to extremism himself and his populist base has traditionally voted for the party”s “anti-mullah, anti-army and pro-people policies,” he said.

“Unfortunately those principles were abandoned by a series of corrupt and ineffectual leaders, and the PPP today is not even a shadow of what it once was,” he said, while noting that Zardari has also “backtracked” on foreign policy goals such as improving relations with India and Afghanistan.

Pak-army-Parvez with next in Command Kiyaani

“The security agencies have unleashed Lashkar-e-Taiba (LeT) — the largest and most feared extremist group in Pakistan, which was behind the 2008 Mumbai attacks — on to the streets of Lahore,” Rashid said.

“Right now Pakistan is becoming a place where there is an army without a country,”  wrote Rashid.

Always Yours — As Usual — Saurabh Singh

Source:http://news.in.msn.com/international/article.aspx?cp-documentid=4994774

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