Deathstar
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Manipulate interest rates thus conttollico flow of US dollardHaldiram ji, could you elaborate what kind of manipulation does US fed do? do they devalue usd like china does?
Manipulate interest rates thus conttollico flow of US dollardHaldiram ji, could you elaborate what kind of manipulation does US fed do? do they devalue usd like china does?
Every country does the normal buying and selling of forex of other currencies, but the weapon that the US has which other powers don't is that it has fused the fate of its $ with oil, since the $ is the default currency in which oil can be bought. They provide military protection to the Sauds to use it as a leverage to increase or decrease oil production to control its own currency's valuation in the open market. And then they pump the money back in their own economic machinery.Haldiram ji, could you elaborate what kind of manipulation does US fed do? do they devalue usd like china does?
I am really amazed and awesteuck at the depth and variety of topics you have mastered. You are probably one of the most valuable members on DFI now.There are certain sectors which are linked to the core soul of the economy (metals, energy, forging, transport) where there is no scope for a drastic increase in efficiency and therefore no change in their cycle length. A nation's economy pegs its growth rate to whichever sector it relies most on. Oil producing Muslim nations have pegged to the 50 year value cycle of oil which is coming to an end now (hence the frantic run to invest their money in India). Manufacturing nations like China are pegged to a 15 year cycle. Service/consumption based middle rung economies like India are pegged to a 5 year cycle of consumption of low ticket retail items. Our cycle length will change (increase) as we are moving to make manufacturing our core base.
The petrodollar will continue to hold weight but as our output grows, we will also end up accumulating more of it in our purse by virtue of our exports. In one way or another, it will alter the power dynamics between nations, even if the dollar is not destroyed. We'll just have more of the same $ purchasing power that the US bullies others with and going by oil's price trends, it may touch 38$/barrel in 5 years. More $ reserves and cheaper oil = the death of petro $'s bullying power.
Oil is showing signs of peaking out and reverting to its long term mean (so the $ pegged to this commodity will also shed its importance in proportion) :
The production is artificially made to peak out, i.e a production limit is decided by oil producing members in OPEC meetings with a direct intention to curtail the supply to increase the profits that accrue from it. One need not worry about them producing "too much oil" because the agenda of OPEC is basically to bully each other into producing less and less to maintain artificial scarcity of oil so that the price remains high. There's always behind-the-scenes string pulling from the US. Each oil producing country keeps an eye on the other's production and snitches if someone produces more than the agreed quota.does crude oil production ever have a peak?
If there are layoffs people will blame govt only. Auto industry doesn't have to fight election .Had enough of automobile industry acting like a crybaby and pinning the blame on govt...
Govt should turn the tables, and ask a reverse question. Some thing like “auto industry is one of the major drivers of employment and economy in India, what did the sales forecast of auto sales indicate and what did auto industry do about it?
If auto industry says “we didn’t foresee this?” Govt can say “if you are can’t forsee this, you are being irresponsible with your big player status and you need to have a relook at your forecast methodology”
If auto industry says “we did forsee this and we did nothing about it”, govt can say “law is required to release yearly half yearly and quarterly forecasts publicly so that shareholders are more aware of their investments”.
@Haldiram
Yup, and I am saying transparency should be a matter of policy.If there are layoffs people will blame govt only. Auto industry doesn't have to fight election .
Anyway the real pressure auto industry faces is from there shareholders. Which will definitely ask tough questions.
On one hand we have Kia seltos selling like hot cake on another hand we have slowdown.
Industry wants to sell outdated products ( alto , swift etc ) or extra expensive products ( Toyota ) .
People want something new design , updated equipment at decent prices.
Change is required.
Had enough of automobile industry acting like a crybaby and pinning the blame on govt...
Govt should turn the tables, and ask a reverse question. Some thing like “auto industry is one of the major drivers of employment and economy in India, what did the sales forecast of auto sales indicate and what did auto industry do about it?
If auto industry says “we didn’t foresee this?” Govt can say “if you are can’t forsee this, you are being irresponsible with your big player status and you need to have a relook at your forecast methodology”
If auto industry says “we did forsee this and we did nothing about it”, govt can say “law is required to release yearly half yearly and quarterly forecasts publicly so that shareholders are more aware of their investments”.
@Haldiram
New numbers have been released today.........Look at the last month sales figures of compact SUV, i shared overall figure of sales few pages behind. Maruti Brezza sold more cars compared to July but half the volume compared to last year ,
Aug-18 and Aug-19 the numbers are almost identical . Both at 26,000 cars for compact SUV , But every brand is having negative growth . Why because of Hyundai venue had taken the numbers from other brand and added 9000 cars to it numbers and so does XUV 300 which had taken numbers from Nexon and Ecosport and Brezza .
View attachment 38348
The Auto industry had record breaking sales in 2018. They exhausted their inventory like a clearance sale and went into preparation for BS6 in 2019. It's not a surprise for them. It's only being politically magnified now. The "high base effect" of comparing with record breaking sales makes the low sales now seem "record low". They aren't making new ones, just selling out whatever inventory remains so even they know sales are supposed to be low.Had enough of automobile industry acting like a crybaby and pinning the blame on govt...
Govt should turn the tables, and ask a reverse question. Some thing like “auto industry is one of the major drivers of employment and economy in India, what did the sales forecast of auto sales indicate and what did auto industry do about it?
If auto industry says “we didn’t foresee this?” Govt can say “if you are can’t forsee this, you are being irresponsible with your big player status and you need to have a relook at your forecast methodology”
If auto industry says “we did forsee this and we did nothing about it”, govt can say “law is required to release yearly half yearly and quarterly forecasts publicly so that shareholders are more aware of their investments”.
@Haldiram
Mr. Muthoot also said the company had abandoned its plans to have its new headquarters in Kerala because of frequent strikes and business losses. The company had 3,000 employees in Kerala.A section of the 600-plus employees in its home state of Kerala, belonging to the trade union Muthoot Finance Employees' Union (MFEU) and supported by the left wing Centre of Indian Trade Unions (CITU), is on an indefinite strike from August 20
I'm satisfied with how the gormint has handled everything. They kept inflation below 3% for 5 years so that commoners didn't face the heat of the trade war. They didn't allow the corporate vultures to get bailouts from tax payer's money. They auctioned their ill-gotten wealth using the new IBC law and got the money back. Now we are in a liquidity surplus. Still people be blaming FM for no reason. European economies were not about to come out of liquidity crunch in 10 years. We came into liquidity surplus within 6 months of a liquidity crunch.Yup, all 'liquidity' measures >>
They pumped 70k crores into ailing PSUs for credit liquidity.
In addition to that >>
For purchase of high-rated pooled assets of financially sound NBFCs, amounting to a total of Rupees 1-lakh crore, or Rs 1 trillion, during the current financial year, Government will provide one time six months' partial credit guarantee to Public Sector Banks for first loss of up to 10 per cent.
And the rest of the money will come from the selling of stake (promoter share reduction from 75% to 65%). This 10% amounts to 2.5 lakh crore of money at current valuations.
They are basically telling companies >> "if you want money for expansion, raise the funds from the markit and give the citizens a respectable stake in your equity in return for their money. You are not entitled to get low interest rate lending from the Bond markit".
To loss-making companies >> "if you want money to cover your NPAs, sell your land and assets and settle your debts. We will not use taxpayer money to bail you out."
This is a very balanced strategy. What the corporates were asking was to reduce lending rates so that they could borrow our money at cheaper rates, but if interest rates were lowered, which retail investor would want to lend his money to corporates via an FD/Bond that yields 5%? The bond market would have collapsed.
Conversely, if they increased Bond yields, then more people would be tempted to park their money in Bonds instead of spending that money and jumpstarting the economy. So the gormint had to strike a balance between savings versus spending. They need us to save in Bonds so that that money can be lent to companies to start their the CAPEX cycle for the long term, but they also want us to spend so that the economy doesn't stagnate in the medium term.
They made sure our tax money was not misused for bailing out corporates for free*. It's still our money that will be used to revive the economy, but, in return, the companies are being made to give us a stake in their companies. And if they need more money, they can borrow from the Bond market at 7%. The citizens are happy to lend their money for nation building provided they are being made stakeholders in future profits and not just current losses. << That is the punchline of the budget.
They have acted in good faith. No defaulter was spared. No free bailouts were granted. Taxpayers weren't made to bear the burden of the NPAs created by irresponsible NBFCs. I feel satisfied.
In my next post I'll post a list of defaulters who have been made to sell off their assets to settle their debts.
Our government is fast asleep. Other, smaller South Asian countries are offering tax breaks and other incentives to woo US companies.4. The ongoing US China spat should be seen by the Government as a once in a life time opportunity, with a large number of American companies looking for alternative bases to hedge their bets vis-à-vis China. We should be rolling out the red carpet for them and not smothering them with our bureaucracy.
This is the panacea!!!!!!!!!!!!!!!!!!!
India plans to offer incentives to companies moving from ChinaOur government is fast asleep. Other, smaller South Asian countries are offering tax breaks and other incentives to woo US companies.