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Category Archives: Polity & Intl. Relations

CHINDIA – AS I SEE

The news of Chinese Army PLA moving, 19 kilometers deep, inside the Indian territory is old one. Now the new and important development is that since 1930 Hrs IST they started vacating their positions and till now (i.e., when you may be reading this article) would have nearly vacated.

I was always certain and specially turned more confident of my views on CHINDIA since 2001 onwards.  I saw the fact as if it were the destiny that were conspiring to keeps these two nations on the same side.

Though, I am not going to write much, so I am just attaching three separate comments and analysis I presented in response to two news items published 11 days ago, and one just 03 days ago. I knew that masses will not agree with my view point, but then this has been a history now. On the other side masses have never agreed with any one individuals. My comments/ analysis are serially numbered (in the way they were posted) at news sight:

 1.

Sometimes I doubt that Chinese army really has any bad intentions towards India, as this is something that will prove costly and lasting adventure for PLA. As India despite of lack of very good connectivity to borders via road and rail has the capacity to surprise Chinese Forces by its huge number alone, though cost of transportation may be higher for Indian when compared with that of China. The important aspect and insight that I am getting is, is that Chinese now want to block the infiltration of Uyghers and other trained militants from Pakistan. If this is the case then they should take Indian authorities into confidence and ask for a safe passage to execute its intentions. Any kind of mis-understanding would not alone dent Chinese Might (roughly 2/3 of India) and USA and Pakistan will stand to gain from it. If the issue is something else then I need to analyze further. Consequently one of its allies North Korea too will be slaughtered by South Korean Forces with various kind of aid from USA. Chinese should try to considered the border pact that too place between Indians and then Chinese Emperor in 1840 (approx). Hope Chinese are not deaf and idiots at same time. If they are then they should have an emergency plan (in case their forces engage with India) to take care of democratic revolt that would get a unfettered access and control at Tianmaan Square.

 2.

The militants trained by Pakistan after having turned Frankenstein monster for them, have also attempted to threaten Chinese sovereignty, specially vides on an ancient trade route connecting Ladakh to Yarkand in Xinjiang, China. Now its better for China to seek India’s co-operation in controlling the religion of terrorism and militancy, than thinking itself to be almighty to do what they want. Those 50 malnourished men of PLA are not being made to land in Jails in India for ever ( I do not suggest shooting those 50) due to patience and also due to it being a responsible power. As Chinese army (approx 8.5 in number) is no match for India’s (approx 16 soldiers). Anyway I do not want to talk this language till all the options are not exhausted, as even sacrifice of our one soldiers life is much costlier to their 50 and is no match in value terms. Chinese may be fed up with their population but Indians are not. I suggest them to recall preachings of their scholar who earned knowledge from Nalanda and Takshshila besides preachings of Prince Mahendra and Princess Sanghmitra about Buddhist ways of life.

 3.

Though it would be better for the Government of India starts considering bilateral relations between India and China in present context. If required Salman Khurshid should cancel his proposed visit citing the posture of PLA as reason. Government may further consider about not allowing the Chinese Premier enter into Indian Airspace or Ground Location based on such developments. It would be better to communicate it to Chinese at earliest time. Please do not use force immediately, as tensions between India and China on border issues will give USA Army and Navy a good advantage in case when it comes to tackling by North Korea, creating advantageous position in Yellow Sea, beside providing them with opportunity to promote and protect the heirs of Chinese Emperor (who was forced to flee by PLA in 1948) and provide them with all the support required to take control at least of Taiwan and Hong Kong. This would be in addition to funding of support required to be extended to Democratic Movement in China. China will automatically learn that how international diplomacy is handled.

I would love to hear the comments from audiences…

 

                                                                                                             …………… Always Yours — as Usual — — Saurabh Singh

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India and Italy – Taking a New Shape

Italian foreign ministry’s announcement on Monday, March 11, 2013, that the two individuals belonging to its marine corps (Massimiliano Latorre and Salvatore Girone, who had shot dead two unarmed Indian Fishermen in Cold – Blood perhaps for adventure  and were facing trail in India Court on the Charges of Murder) would not return to India once their leave expires in view of a “formal international controversy” between the two countries. This is a response to a humane and goodwill gesture shown by Indian Court, which permitted them a leave so that they can go to their country to cast their vote. Indian court had at an earlier occasion permitted the duo to visit their home for Christmas Celebration, after availing which they reported back.

Italian Government and its citizen have always been found grossly lacking in integrity and morality. This can be inferred from a  number of instance where Indian authorities were deceived and cheated by them. If one starts from issues, that probably one that could be easily recalled by masses, one can start with role of Italian businessman Ottavio Quattrocchi during Bofors gun contract in 1990  where kickbacks were paid to earn the contract, the same was followed by a recent deal in which Chief Executive and Chairman Giuseppe Orsi of Italian defence group Finmeccanica has been found to have paid kickbacks worth $68 million to secure the contract for the sale of 12 Agusta Westland choppers to India in 2010.  This has been followed by a very serious breach of integrity by act of Government of Italy, where the government of Italy has back tracked from its own guarantee or promise that it made to Indian Supreme Court in present case where its two mariners were being tried for murder committed by them of two unarmed Indian fishermen in coastal waters of India.

Probably – Indian authorities and Public too, would have learned till now that any and every kind of interaction with Italy has, irrespective of being business or political has caused a great deal of embarrassment to the country. So why do they repeat it? Italian Government and Citizens (as Government represents them) both lack seriously on the scale of integrity. Such country needs be socially politically and economically outcast by world community. One can understand when Terror Groups back track on their promise, but here this Country is behaving worse than terrorists. Now I comprehend why Roman Empire got lost into oblivion. I expect that Consequences as told prime minister will turn visible both to Indian Citizen as well as International Community. “Our government has insisted that Italian authorities… respect the undertaking they have given to the Supreme Court and return the two accused persons to stand trial in India,” Mr. Singh said in Parliament on Wednesday. “If they do not keep their word, there will be consequences for our relations with Italy,” he added, as lawmakers cheered.

At some points I feel that Indian Constitution by the way of providing Three Pillars for having Check and Balance over each other’s powers was really a very well thought of work, at least till time Indira Gandhi had not succeeded in snatching all the powers of decision making from The President of India or to say before turning the office in just a rubber stamp which needs to be put on legislation to accord them status of being Act. But then it were, the citizens, who permitted her to do this by giving her a majority of more than two – third.

Now as a consequence of legislature being fragment it’s the Judiciary that has got some breather to act in an independent manner. They are luckily not failing in their duty and are showing the courage to let the national and international community learn that it’s the constitution that is supreme in India and promises made by any authority are meant to be kept and not broken, meaning thereby that breach will not be tolerated.

The Supreme Court of India sought to restrain Italy’s ambassador from leaving the country in response to Rome’s declaration that two Italian marines will not return to India to stand trial on murder charges. The pair are accused of shooting and killing two Indian fishermen off the coastal state Kerala last year. They deny they committed murder. Italy and India disagree over where they should stand trial, an issue that has triggered a diplomatic dispute and polarized public opinion in both countries

In January, India’s Supreme Court said the two men, Massimiliano Latorre and Salvatore Girone, will face trial in a special court in Delhi. A month later, the court agreed to an Italian government request to allow the two men to leave India and travel to Italy for four weeks to vote in elections. At the time, Mr. Mancini, the Italian ambassador to New Delhi, guaranteed to the court the marines would come back to India.

In a notice, the court said Italian Ambassador Daniele Mancini is not allowed to leave India without its permission, said India’s attorney general, Goolam E. Vahanvati, in an interview. Some individuals doubt the court’s move to be compatible with the terms of the Vienna Convention on Diplomatic Relations, an international treaty that grants diplomats immunity from criminal, civil and administrative jurisdiction in the country that hosts them.

But the case here is very different. It is Mr. Daniele Mancini (who somehow happens to be Italian Ambassador to India) who stood in court as Guarantee to the court regarding the marines returning back to India after casting their votes. There court has asked Mr. Daniele Mancini to stay put in country till mariners do not return to stand the trail as he stood the guarantee. Court never wants’ the Italian Ambassador to India stay put. But certainly court is not interested in allowing Mr. Daniele Mancini to use his position of being Italian Ambassador to India to work as camouflage in escaping from his promise by forwarding the Vienna Convention in his defense. In fact there is no need to be worried about Vienna Agreement as Italy has itself by its act of not standing to promise made has violated more than a single international pact. If Indian Government feels like, it has all the freedom to launch a military offensive on Italy, as India needs to make sure that in and around Asian continent, rogue states and elements do not dare to raise their heads. Though I am not recommending a military action on Italy, here I am just talking about the rights of India to deal with a Rouge Government or a Government which fails in keeping its promise

Any way Diplomatic immunity is for crimes punishable with fine like parking, not for crimes punishable with jail terms. So there is no diplomatic immunity for the Italian ambassador in the Italian marine bail application. By subjecting himself to the Indian court jurisdiction Mr. Ambassador loses his stand as ambassador and has a role only as a foreign citizen.

                                                                                                                  ————— Always Yours — As Usual — Saurabh Singh

Source:[Website]

Venezuela in transition: What Next after Hugo Chavez

“Chavismo” – Its Meaning and Interpretation

During the fourteen years of Hugo Chavez’s Presidency, Valenzuela was country driven by his personality more than his policies. This gave birth to a term called “Chavismo”, normally used by political commentators and contemporary historians.

In attempt to describe the meaning contained in word “Chavismo”, I would say that Chavismo didn’t encompass the political machine alone , but also a leftist ideology that, prioritized the redistribution of oil wealth to the marginalized and valued, sovereignty as something to be protected from “imperialist” powers.

Now which path will “Chavismo'” will tread can not be predicted with certainty. This is not for the first time that a powerful leader has departed. History of serious geographies are full the incidents in history. As per the testimony of History, it can be inferred, that as many other powerful leaders who departed creating a vacuum have seen their ideologies live on, though not without change.

Professor Javier Corrales, a professor of political science at Amherst College who studies Venezuela expresses his opinion with words as in quotes ahead “there is a trade-off between the degree to which a government centers, on one person, and the strength of that country’s institutions. ” Perhaps due to it being a complete sum, i.e., one, the stronger the central figure will turn, the weaker will be the fortunes of institution. It has been observed over the years, in history of nations, that any society or nation lands in crisis if it were being ruled (or governed) more by the personality of the leader than his policies and ideologies.

Hugo Chavez, a democratically elected, had to face the accusation of being authoritarianism, as his style of governance made his opponents feel that he is attempting to consolidate all the power in the presidency.

Hugo Chavez’s transformation into Everlasting Personality

The world has seen many able and honest administrations and rulers (some elected democratically, some princely in origin, some who took power with coercion, and many more of the kind ), but not all of them achieve a status of hero or legend. Such leaders are rare, but once they are there, the people do not let them go in their life time. This is irrespective of the policies adopted by such rulers.

Policies of such leader may not stand the test time, economy, prudence and other such words; despite of this such leaders have longer reigns (tenure) as compared to rulers whose policies may best fit the tests mentioned at the start of this sentence.

Perhaps, it were one of his most criticized policy by economists, who went even to the level of dubbing it as unsustainable, that earned him the status of Hero and further metamorphosed in what is now known as “Chavismo”.

It was Chavez’s dedication to putting the nation’s poor at the forefront of his policies, which made him a hero among a large sector of the population. His opponents criticized him for his freewheeling spending of oil wealth of the nations, but Venezuela’s poor saw results and elevated Chavez to hero status.

Millions of poor saw and found hope in Hugo Chavez, as they believed that this man can make earn a decent life. This hope and expectation of million of people of Venezuela is looking into the void that has resulted due to departure of their most cherished leader.

The issue haunting the ruling class, opposition and others in Venezuela most is: 1) that who will appropriate his image, 2) how his image can be used beneficially. Probably it seems that the Venezuela’s opposition may attempt to retain some aspects of legacy that has been left by Chavez and claim it to be their own. This inference is being drawn based the way opposition designed it’s last year’s electoral campaign where they promised that social missions initiated by Hugo Chavez will not be undone, they will just be fine tuned to make them more efficient and effective.

One can also deduce the same if (s)he has monitored or followed the tweets from Luis Vicente Leon, Director, Daranalisi (a polling firm). He too predicted similar thing in his tweets even prior to Hugo Chavez’s Death.

Such status, specially in Latin America means a lot. It is something that never disappears with the person who has earned such status but lasts much longer due to the weight it carries. Often it has been seen that politicians normally manipulate memories of such individual leaders, to serve their political purposes and benefits, and same may turn out the fate of Hugo Chavez too in very near future. What ever may be the fate of legacy earned and left behind by Hugo Chavez, but his memory would be a lasting one in the hearts and minds of people of Venezuela.

Two other individuals (leaders) who earned such Status in Latin America. though are no more but they are still present in the memories of people and also in expressed ideologies of some political parties (may be for their own political benefit than anything else).

Sandinismo: Augusto Sandino was the leader of a rebellion in the late 1920s and early 1930s against an American occupation. Years after Sandino was killed, Nicaraguans used his image as a symbol in their own rebellion to overthrow a dictatorship. A movement, the Sandinista National Liberation Front, was born. The current Sandinista president uses the same symbol and movement, though it has been manipulated from earlier Sandinismo.The Sandinistas are in power even today in Nicaragua, under President Daniel Ortega, though the movement has little to do with its origins. it can be inferred that this movement in Nicaragua has survived over the years and is still in vogue.

Peronism: Peronism is a movement named after Argentine President Juan Peron. Juan Peron was one of Former Presidents of Argentine. His legacy has been claimed and manipulated over the years by parties both on the political right and left.

Fidel Castro: Change in Cuba was more subtle after the passing of the torch from Fidel Castro to his brother Raul Castro. The Castros share their communist views, but after the younger Castro took office, he purged some men and has since pursued policies to somewhat open up Cuba.

It seems that in the Popularity of Hugo Chavez combined with the outpouring of tributes in the wake of his death, make a Chavista victory likely in the new elections that must be called. Maduro was named by Chavez as his preferred successor and could easily win the election, but he will have to put the movement’s unity as his priority.

There are divisions within Chavismo that have come to light as Chavez’s health faded. Some stand behind Maduro, who is close with the Cuban regime, while others side with Diosdado Cabello, the National Assembly president who is more of a nationalist. Because Chavez was never sworn in for his latest terms, there is even a debate Maduroover which of the two, constitutionally, should be the interim president.

Indian Presence at the State Funeral of Hugo Chavez: India was represented by Mr. Sachin Pilot, Union Corporate Affairs Minister at Caracas.

Probably this too is one of things that make world go round………….

                                                                                                                      ————— Always Yours — As Usual — Saurabh Singh

Source: ViewsNext.Com

One Percent versus Ninety Nine Percent: A Debate

INDIA DOESN’T NEED FDI IN RETAIL TO GROW — Joseph Stiglitz

Nobel Laureate of 2001 in Economic Joseph Stiglitz (who shared it with two more), presently Professor at University of Columbia, is  credited with starting the “1% versus 99%” debate. The Columbia University professor talks about his latest book, “The Price of Inequality”, in which he argues that economic inequality leads to instability

• The title of the book reflects a view that counters the right-wing argument that inequality may be a bad thing but to do anything about inequality is to kill the goose that lays golden eggs. Inequality is bad for economy, democracy and society. Much of the inequality in the US arises out of rent-seeking —monopoly, exploitive practices by banks and corporate exploitation of public resources. In the Indian context, you will call it corruption but we call it corruption American style, where you give away natural resources below market prices. India is doing it now but America has a long history of doing this.

There is a clear association between inequality and instability. People at the top don’t spend too much, they save a lot but people at the bottom spend everything. So you redistribute income from the bottom to the top and demand goes down. That makes an economy weak. That is what happened in the US. We would have had a weaker economy, but the Feds stepped in by creating a bubble that created more demand to offset the demand that was going down. Of course, creating a bubble was creating instability.

• Stiglitz confessed that both the IMF and the UN commission that I chaired came to the conclusion that inequality was one of the major causes for the crisis. It is not the direct, precipitating cause that bad lending was, but bad lending was a result of deregulation and the interest rates that were itself a result of inequality. If we don’t improve inequality and don’t do something else, it is going to be hard to get back to robust growth and prosperity. We are likely to have another housing bubble.

• He further opines, that in the presidential debates none of the candidates have mentioned the word ‘inequality’ as American politics is money-intensive and money-driven. Each of the candidates is expected to spend a billion dollars. When you spend so much, you have to go where the money is, and money in America is at the top. Therefore it is not a surprise that in the campaign you don’t hear a lot of discussion about inequality and the 1%. You don’t bite the hand that is feeding you in the middle of an election.

• He say that this debate may last or  may remain a phrase, he is not sure of, but it will be a part of America unless the problem of inequality gets addressed. It is just not that the top 1% get three to four times more that what they got in the 1980s, but the middle class today is worse off. When you have this degree of stagnation in the middle, there will be an expression through the political process.

• Stiglitz feels that GDP is not a real measure (or say per capita income) of development. he says that, I haven’t looked at India exactly, but it has strong implication for every country. In the case of China, if you take into account the environmental degradation and resource depletion, growth is much less than what it seems. You need that debate in India. Your GDP is going up, you have per capita highest number of billionaires but at the same time you have many people in poverty. So the GDP per capita doesn’t capture what is happening. In India, the progress in the middle and at the bottom has been less than what GDP in itself would like you to believe.

• When asked about the current issue in Indian Economy, that is FDI in retail, he puts it this way.  The advocates of FDI have probably put too much emphasis on it. India is in a different position than a small, developing country. You have a large pool of entrepreneurs. They are globally savvy, have access to global technology and they have a lot of wealth. So, if there were large returns to large-scale supermarkets, the domestic industry would have supplied it. Not having access to FDI is not an impediment in India. Wal-Mart is able to procure many goods at lower prices than others because of the huge buying power they have and will use that power to bring Chinese goods to India to displace Indian production. So the worry is not so much about the displacement of the small retail store but displacement further down the supply chain.

When an argument that ‘But big chains may create more jobs’; he told that  some of the profits of companies like Wal-Mart come from free riding on our society. They don’t provide healthcare benefits and assume that the spouses of the workers get healthcare benefits from their other employees or through some other mechanism. They might not be a good employer.

Always Yours — As Usual —- Saurabh Singh

Source: TOI

सियासती खेल

एक अरसे के बाद कांग्रेस पार्टी को सियासती खेल खेलते देखा. पिछली बार तो लगा था की कांग्रेसी नेताओं में सौदा (दिमाग) नहीं है I अमूमन तो कोई भी मजहबी अतिवादी या ऐसी ओर्गानैजेसन के मेम्बरान इतने हलके धमाके नहीं करते की वो जिस साइकिल पर वो बोम्ब रखा था उन्हें भी ख़ास नुक्सान नहीं हुआ I दहशतगर्द इतना तो ख़याल रखते ही हैं की इन धमाकों से अगर इंसान कम भी मरें, तो भी किसी भी हाल में जख्मी होने वालों की संख्या ज्यादा से ज्यादा हो I

मजहबी अतिवादी या ऐसी ओर्गानैजेसन के मेम्बरान बेकार में ही ऐसा जोखिम नहीं उठाते I इसका मतलब है की ये धमाके सियासती तोहफा थे, और मीडिया मैनेजमेंट काबिले तारीफ़ था की इन धमाकों की चर्चा मीडिया में भी ज्यादा न होकर बमुश्किल दो दिनों में ही ख़त्म हो गयी I इसके पहले भी तीन ग्रिडों का फेल होना महज इत्तेफाक नहीं हो सकता, और गर हुआ भी हो तो वह ४ – ६ घंटों में दुरुस्त नहीं किया जा सकता I अबकी कांग्रेसी सरकार ने अरविन्द केजरीवाल और टीम को सियासती दावों से मात दे दी I इतने ज्यादा और इतने सनसनीखेज इवेंट्स में मीडिया इनके इन्कलाब को तरजीह नहीं दे पाई I

खैर अछ्छा है की अरविन्द केजरीवाल, मनीष सिसोदिया, और किरण बेदी को समझ में आ गया होगा की, सियासत क्लर्क की नौकरी (जिससे उन्हों ने इस्तीफा दिया है) जितनी आसान नहीं है; वर्ना हर क्लर्क, क्लर्क बनने के बजाय मंत्री या बादशाह बनता I ये विचार मैंने किसी सियासती या मजहबी ओर्गानैजेसन के खिलाफ या सपोर्ट में नहीं, बल्कि सियासती चालों की समीक्षा के मायने से लिखे है

Always Yours — as Usual — Saurabh Singh

……..and Markets Came Tumbling Down ……..an attempt to explore the Cause..

……..and  Markets Came Tumbling After

Perhaps, both Dr. Manmohan Singh as Leader of Ruling Party in Power and Mr. Pranab Mukherjee, as Finance Minister went up there, this budget session, to specially put the Indian GDP in higher growth trajectory. Probably all went in vein. All accepted; but then what could be the reason at the route of it? Is anyone interested and involved in finding out the route cause or all are merely trying to make the smart, logical and rational guesses.

Many experts have been found blaming it on the variety of issues, and the sum of these issues is much larger number than all the experts giving their opinion put together. It signals an impression that now a doctoral thesis should be presented on ways of identifying that the individual, who is well dressed and has somehow made it to a position of power and claiming to be expert of domain, is really an expert or a garbage vomiting biological machine.

Pictorial Representation Market Crash

Market Crash of Two Different Centuries     1930 — &–2008

The reasons forwarded by expert for any wanted or unwanted oscillation in the national economy has as much probability of being found in few phrases mentioned below, as much is for any oscillation happening in mood of markets, in next day trading session.

An Attempt:

1. Probably this is an outcome of policy paralysis at the level of Government…

2. It is due to fear being felt by FIIs due to the possible provisions of GAAR on P- Notes…..

3. This is being reflected as the Rupee is getting weaker……

4. It is due stubbornness being shown by RBI Governor by not easing interest rate…

5. It is an outcome of inflationary pressure…..

6. Because European markets opened on lower side…

7. Euro zone crisis is having its impact felt… as all the economies are networked these days….

8. Prices of Crude Oil are moving northwards due to possible stance of USA on Iran’s nuclear issue..

9. The monsoon has cracked a joke on us….

10. The quarter -1 , 2, 3, 4 data for industrial output were not promising….

11. There is a growth being noticed in unemployment rate in USA….

12. Forecast of Chinese economy has taken the fizz out of the market….

13. All this is due to the nation’s money lying in the tax heavens abroad….

14. The growing fiscal deficit is responsible for it….

15. It is the burden of subsidy that is killing the government…..

16. Investors’ are fearful of risky assets and they going for Cash or preferring cash..

17. The Greece crisis has taken its toll….

18. The Spaniards are going uncontrolled……

19. It is due to the Vodafone issue..Where FM wants to put a tax with Retrospective effect..

20. Rupee falters on rupee outflow fear…..

21. Now markets are waiting for first signal of Mr. Hollande, the new President of France.….

…..

 

 

,,,,

 

                                                                                                                   

////

 

 

…..

N. The grocery seller was saying that Fed is in for an interest rate hike…..

N+1. I heard my taxi driver telling to someone that it is being stage managed by the government…

N+2. There is a foul smell of some foreign hands behind it…….

This is not the end of the list, and therefore just an illustrative one has been put up. Please feel free to add your suggestions. The names will be sent to Nobel Committee which supposed to announce the Current Years’ Nobel Prize Winner in Economics by conducting a free and fair lucky draw from it…..

                                                                                                                     Always Yours— As Usual —– Saurabh Singh

DELIBERATIONS ON POLITICAL ECONOMY BY A NON ECONOMIST

In the world, where knowledge domain of Economics has over simplified postulates and assumptions at it’s foundations where everything boils down to human rationally and self interest, you can certainly afford to enjoy the luxury of not being an Economist.

This helps in letting your thought process turn human. It has the liberty to be logical till things work that way and turn lateral the moment things go the other way. Your inner self will not force you to accept the postulates on which economists base their decision.

Another over simplified assumption, that ‘maximization of self interests will cumulatively lead to maximization of social interest’, has now turned man eater. Its hunger for blood has now started erupting at shorter intervals of times and subsides by sucking more blood than the previous encounter.

The attempt here is not to advocate socialism or oppose capitalism as a better and brighter school of thought or vice – versa. The efforts are being put with a wish to succeed in convincing people on existence one another ‘—ism’, which much different but nearer to truth than any of the existing ‘—isms’, be it capitalism or socialism.

‘Realism’ is a concept that is much easier to understand when compared with any of the complex fictions wrote to date and which have succeeded in convincing the humanity.

Perhaps, a student of standard five or junior school can get his curiosity satiated by getting convinced from few postulates, as mentioned below:

1. In a situation of panic people often turn dumb or even turn statue. It seems as if any ‘vacuum’ has replaced the whole thought process. In such a situation an assumption of people being logical or rational or self interested is in itself an illogical and irrational assumption. In other words, you can say that any situation that leads to getting your thought process can be said as a situation of panic.

2. It is the ‘investment’ that increases the productivity thereby leading to a surge in consumption and thus paves the path of economic development. Economic well being of society can, never ever, in long term be ensured by increasing the consumption or maintaining a status quo in the consumption level. In the long run, sustaining or increasing the consumption levels without any increase in investment, will lead to much grave consequences as it will get the economy more leveraged.

3. The state of ‘self – denial’ can never let any individual score victory over ‘death’; i.e., say save from facing the eternal truth of human mortality. State of self – denial is first symptom of the fact that individual has lost the battle and is now turning ostrich.

4. Components of any system, which are termed as sub systems, maximize their interests only to the levels where maximization of their self interest is in congruence with the goal of system and not beyond. Else the system will collapse. This leads to the inference that maximization of self interest would converge into maximization of social interest only till a limit. If the same is pursued beyond those limits, it’s bound to turn fatal for society and will even endanger its existence.

[Neither Postulates Nor Discussion Is Over – But Is Enough For The Day – More At Next Encounter]

                                                                                                         –Always Yours — As Usual — Saurabh Singh

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

US Prez Barack Obama as well as The rest of the world, too, is having nightmares about a possible US debt default

Last Seven Sleepless Night of United States President Mr. Barack Obama

The Reason Behind the Phenomenon has been detailed below in Issue and It’s possible reason Format.

What is the crisis about?

Since 1917, the US Congress has stipulated that there has to be a statutory limit on US public debt (debt of US federal govt). This limit has been periodically raised and now stands at $14.3 trillion (95% of the US GDP). The US will hit this limit on Tuesday, Aug 2, unless Congress approves a fresh hike. But the Republican-controlled House of Representatives and Democrat-controlled Senate haven’t been able to work out a consensus

Why are they fighting?

The Republicans want any debt limit hike linked to deep cuts in govt spending. They want the increase to be effective for a year, with fresh discussions after that. The objective is obviously to make it an issue ahead of the 2012 presidential elections. Democrats favour tax increases and a one-shot raising of the ceiling. They are also opposed to any cuts that could jeopardize the economic stimulus and welfare payments

What happens if debt ceiling is not raised?

US govt can’t pay     employees, social security benefits, defence contractors, medical insurance bills and interest to lenders. Credit rating will plunge from top ‘AAA’ to bottom D’
What will be the global impact?

Govts, investors and businesses across the world will stop investing in US bonds. There will be panic in financial markets globally, with investors exiting equities for safe havens like liquid cash and gold

Does it affect India?

Indirectly, though much less than countries/blocs with big trade and debt dealings with US, like EU and China. Still, a worldwide downturn could hit Indian exports and FDI flows

When did this debt accumulate?

 Barack Obama (fighting recession, wars in Afghanistan and Iraq) $2.4tn

George W Bush (wars and tax cuts) $6.1tn

Bill Clinton $1.4tn

George Bush $1.5tn

Ronald Reagan $1.9tn

Earlier $1tn

Whose money has the US taken?

Foreign countries (including China $1.2 tn) $4tn

US public and cos $3.6tn

US federal system $6.2tn

 

Always Your — As Usual Saurabh Singh

FEELING HEAT ON US DEBT : EARNINGS AND INDEX POISED TO EXHIBIT UNWANTED OSCILLATIONS

Wrangling over the US debt ceiling and questions marks over corporate earnings mean markets are unlikely to get a break any time soon.

Wall Street is set to close its worst three months in a year as July draws to a close next week after a roller coaster ride for markets. Whacked out fund managers hitting the beach in August may find themselves fiddling with their BlackBerrys more than the little umbrella in their cocktails.

“I need a vacation, man. After all the stuff that’s happened in the last three months I’m pretty much shot, I’m getting weird,” said one New Jersey-based fund manager, who was packing his bags for a destination in the Caribbean as temperatures topped 100 degrees Fahrenheit in New York City.

With euro zone leaders having reached a deal for yet another bailout for debt-laden Greece, investors will be free to chew over the rancor in Washington with even more attention.

Negotiations between President Barack Obama and the top Republican in the House of Representatives, John Boehner, still looked far from a deal to avert a looming US default, lawmakers said on Friday, raising the likelihood of more volatility next week if no solution is reached over the weekend.

“It’s likely an agreement in any form will cause a relief rally for equities,” said global head of sales trading at Dahlman Rose in New York.

“Coming on the heels of overall pretty good earnings numbers and some sort of resolution in Greece and that could make for a rally in the market,” he said.

But on the other side of the coin, the prolonged and partisan dispute over solving the country’s debt crisis means there is still a big downside risk.

“Who knows where that is going to go,” as per an analyst at MF Global in Chicago. “We’re vulnerable to a buyers’ strike if we don’t get any news.”

In addition, the corporate earnings season suggests other risks could dog the market. Despite generally good results so far, there have been some worrisome signs. The S&P 500 rallied 6% in the run-up to reporting season, but earnings misses from big industrial names like Rockwell Collins and Caterpillar Inc weighed on the Dow and S&P 500 on Friday.

Earlier in the week several big consumer names such as Whirlpool and Pepsi warned about sluggishness in developed markets, sending their shares sharply lower.

“The market still has a high degree of skepticism in it,” said the analyst, summing up the earnings season so far.

As per him, he will be closely following earnings from sector and economic bellwethers next week. Those include the package delivery company UPS, chipmaker Texas Instruments, and online retailer Amazon.

Around 30 percent of the S&P 500’s USD 12.3 trillion market caps have reported earnings so far. They have outpaced consensus estimates by 3.8%, and only 7% have missed estimates, according to data from Morgan Stanley.

But share prices of those that have fallen short of estimates have taken a severe beating. Given the fragile sentiment a few more prominent misses could derail the market.

“The market is punishing these misses more than it is rewarding beats, an asymmetry we have been calling for and we forecast will continue,” wrote Morgan Stanley’s US equity strategist in a note to clients.

“Our view remains that first half of the year numbers are achievable but the second half of the year looks challenged,” he said.

Next week is also a big week for economic data. Fears of a slowdown in the economy have been a large driver of market volatility over the last few months, and the coming releases will be parsed very closely.

They include early regional manufacturing data from Chicago and New York, a reading of consumer sentiment, and a first reading of US growth for the second quarter, expected to show the economy grew just 1.9% in the period.

Bob Doll, chief equity strategist at Blackrock, one of the world’s largest fund managers with around USD 1.6 trillion of equities under management, said this week that the US economy is at a critical juncture.

Doll points out that since 1960 every time year-on-year growth has fallen under 2% the US economy has gone into recession.

“Our bottom line view is that investors should maintain a reasonably constructive bias toward risk assets, but should also be prepared to scale back exposure if evidence of economic growth acceleration does not materialize.”

Always Yours — As Usual —- Saurabh Singh

Note: Compiled from published News and Views

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