Instead of having a set of policies that are equipping people for the globalization of the economy, we have policies that are accelerating the most destructive trends of the global economy.” ~ Barack Obama, US President.
Who better else can put US perspective than their president himself? I did a research after I’ve received a forward on “a tale of two economies: interesting insight into the US economy” by economist Nouriel Roubini. Its quiet amazing that we tend to miss that the apocalypse is actually being unfolding right in front of our eyes and the timeline would be in coincidence with the Mayan calendar or earlier.
Though, there is a great hope and reverence to the current Obama administration, I still doubt if they’ve the capacities to control a snowballing storm about to unfold due to the accumulated past miseries. We all know how the US is being funded by the rest of the World through their investments in US Treasury bonds. And the latest turmoil in their financial system only cracked open the various weaknesses, pitfalls and huge un-chartered risks.
Increasingly the dollar has been under tremendous pressure at an unprecedented level and the questions perking up on the risks in being association with it. As policy measure the Reserve Bank of India has been reducing its exposure to US bonds and this creates for lesser vulnerability in the days to come as US $ faces strenuous pressure. The latest data shows that India has the least exposure among the BRIC nations as against their forex reserves with just 14.79%. And as a whole BRIC nations conjure for close to 37% of total US Bonds.
The unofficial news that China runs the show is being credited as the facts indicate as 38.36% of its total forex reserves of $ 2,272bn are in US bonds. All the big banks and Insurance cos like Citi and AIG never had any dearth for assets but they’re all long-term supposedly secure US bonds while they’d a huge credit crunch i.e. short term money/cash. For now they’re saved by US govt at its own peril.
The Mayan calendar is ticking and ticking pretty fast on US, only some very drastic measures would save it and the world subsequently as we’ve not yet found any better medium for US$ yet. There sure is a rush to acquire Gold and we would witness the Gold scampering to new highs that we’ve earlier witnessed in Oil as most central banks are hedging their risks in Gold. I'm not a torch-bearer for the Gold Standard to return, but seriously Gold is in the reckoning.
There may be a situation not far from here, that hedging investments would happen in Indian bonds something like that was witnessed during post 70’s of Japan. But, the silver lining of depreciating Dollar is that it only makes US competitive (after a certain point) as imports become costlier and probably set reduction in US consumption i.e. their dependence upon imports might come down which inturn kicks in local production triggering for more job creation.
This will call for a natural cycle which will create enough pain and sorrow on the lines of apocalypses and an ultimate change of order on the way world trades. But, knowing the US arm-twisting whether to create/erase protectionism on trade, environment or any other issue, the natural cycle could be ruled out which only worsens the total scenario.
“We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much” ~ Ronald Regan.
Who better else can put US perspective than their president himself? I did a research after I’ve received a forward on “a tale of two economies: interesting insight into the US economy” by economist Nouriel Roubini. Its quiet amazing that we tend to miss that the apocalypse is actually being unfolding right in front of our eyes and the timeline would be in coincidence with the Mayan calendar or earlier.
Though, there is a great hope and reverence to the current Obama administration, I still doubt if they’ve the capacities to control a snowballing storm about to unfold due to the accumulated past miseries. We all know how the US is being funded by the rest of the World through their investments in US Treasury bonds. And the latest turmoil in their financial system only cracked open the various weaknesses, pitfalls and huge un-chartered risks.
Increasingly the dollar has been under tremendous pressure at an unprecedented level and the questions perking up on the risks in being association with it. As policy measure the Reserve Bank of India has been reducing its exposure to US bonds and this creates for lesser vulnerability in the days to come as US $ faces strenuous pressure. The latest data shows that India has the least exposure among the BRIC nations as against their forex reserves with just 14.79%. And as a whole BRIC nations conjure for close to 37% of total US Bonds.
The unofficial news that China runs the show is being credited as the facts indicate as 38.36% of its total forex reserves of $ 2,272bn are in US bonds. All the big banks and Insurance cos like Citi and AIG never had any dearth for assets but they’re all long-term supposedly secure US bonds while they’d a huge credit crunch i.e. short term money/cash. For now they’re saved by US govt at its own peril.
The Mayan calendar is ticking and ticking pretty fast on US, only some very drastic measures would save it and the world subsequently as we’ve not yet found any better medium for US$ yet. There sure is a rush to acquire Gold and we would witness the Gold scampering to new highs that we’ve earlier witnessed in Oil as most central banks are hedging their risks in Gold. I'm not a torch-bearer for the Gold Standard to return, but seriously Gold is in the reckoning.
There may be a situation not far from here, that hedging investments would happen in Indian bonds something like that was witnessed during post 70’s of Japan. But, the silver lining of depreciating Dollar is that it only makes US competitive (after a certain point) as imports become costlier and probably set reduction in US consumption i.e. their dependence upon imports might come down which inturn kicks in local production triggering for more job creation.
This will call for a natural cycle which will create enough pain and sorrow on the lines of apocalypses and an ultimate change of order on the way world trades. But, knowing the US arm-twisting whether to create/erase protectionism on trade, environment or any other issue, the natural cycle could be ruled out which only worsens the total scenario.
“We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much” ~ Ronald Regan.
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