Reading the tea leaves

Going through the international events, it is very difficult to understand the why's and the long term / short term goals and strategies of the parties involved. Obviously, the game plan is secretive. 
It is indeed like reading the tea leaves to make sense of it.

Few international events of current month:
1. Russian jets entering the air space of Estonia

2. Russian drones entering Poland

3. Israel attacking a place in Qatar

4. Israel apologising to Qater for the attack

5. Thoughts behind the Pakistan - Saudi mutual protection agreement

Multiple unchartered risks - All at the same time

The world today is going through multiple unchartered risks, all at the same time.

Finance:

1. US debt gone to unsustainable levels that multiple people have commented on the sudden fall of the US economy and the US Dollar. Ray Dalio calls it the economic heart attack. We haven't seen anything like this after world war 2 where an empire is coming down. USSR was a breakage. This is different.

2. Japan has continued the zero interest policy causing massive borrowings in Japanese Yen and conversions to USD and investments in treasuries. The increase in the Japanese interest rate would easily cause the mass selling of the USD and the treasuries to pay back the Japanese borrowings. For the first time, the Japanese central bank is at risk and a Central bank at risk has never happened before.

3. France and UK have worsening finances and are expected to go to IMF next year for debt restructuring. This is the first time, giant western economies are under so much financial stress and IMF is small to carry the load of these economies. A first again.

4. Global finance decentralisation and derisking - From Asian countries planning alternate payment mechanisms to SWIFT, multiple countries decreasing their assets of US treasuries, most countries buying physical gold, BRICS discussing a new currency, bilateral trade in some countries being done in each other's currencies. A first again.

Trade:

1. Decades of established specialisations is being turned useless with unexpected turmoil by illogical tariffs by the US Administration.

Wars:

1. No one expected a physical war in Europe when Russia attacked Ukraine. A first of its kind since world war 2. And continuing so long? That is something no one can even fathom.

2. The Israeli massacre of the starving people asking for food aid is cruelty of another era, of the bygones, or so we thought.

3. USA threatening Venezuela with war (as if we need another US based forced leadership change after so many of them)

4. 19 Russian drones in Poland shot down as on 10 Sep 2025. (Start of NATO-Russia war leading to world war 3?)

Technology:

1. AI is disrupting human work. The future of many works remains uncertain.

2. AI - singularity, where it gets smarter than millions of humans together can break human superiority and become the apex controller and the humans the slaves/ pets/ prey. Humanties' first instance of more intelligent life.

Unemployment:

1. Tariffs and geopolitical disputes (US tariffs, Bangladesh-India, Russia-Ukraine war) causing industries to rupture and unemployment to increase.

2. AI bringing more unemployment its own way

3. US cutting down departments and uncertainty of outsiders in USA by creating visa issues and even threatening green card holders.

Countries standing up:

1. India and Japan standing up to the bullying of the US

2. France being the first western country to recognise Palestine as a state

Each of the above are volatile enough to cause a cocktail of furious unexpected events to happen in multiple domains of finance and/or economic turmoil each affecting the other one and our lives in unexpected ways.

But with all these risks running simultaneously, I think the world is in the most dangerous phase I have ever witnessed in my lifetime.

Any month could be our last (in case world war 3 happens).

From allies to individuals

Idealogies and what they stand for are getting split decade by decade:

Once upon a time, the West included USA, the Eurozone, Israel.

Then USA, Europe, Israel and the UK post the Brexit.

Now, after the Israeli non-stop attack on Gaza, France is the lone 'West' country that has come in support of Palestine.

So, USA, UK, Israel, Europe (excluding France) & France.

On the other side of the world too, the bonds are breaking.

India-Russia relations are lesser.

USA-India strategic relationship against China (and USA military sales) are now down and USA and India are more self interested.

The trend is reversing only in small places. North Korea-Russia relations have improved. India-Philippines relations against the bullying of China.

On again-off again relations are continuing. USA-Pakistan, India-Maldives-China, India-Sri Lanka-China.

Conflicts & Conflicts of Interests

The world has never been this multi-polar as ever before.

Many countries are working with countries who are fighting against each other pursuing their own agenda.

Lets have a look.

USA working with both parties of India - Pakistan conflict

China working with both parties of India - Pakistan conflict

China working with both parties of USA - Russia conflict

China working with both parties of USA - North Korea conflict

India working with both parties of Russia - Ukraine conflict

India working with both parties of Israel - Iran conflict

Azerbaijan working with both parties of Israel - Pakistan conflict

Turkiye working with both parties of NATO - Iran conflict

Taking any side is very difficult in this multi-polar world.

Will India negotiate PoK from Pakistan?

Strategies in war are not clear upfront. The winner usually uses an element of surprise (timing, new paths, new technologies, new combinations, new allies, new fronts) that the enemy has not thought of or prepared for.

Similarly, a few statements now and then my the Indian establishment didn't reveal the strategy till substantial dots are there to make sense of the pattern.

The few dots:
1. Indus Water Treaty being suspended, (not cancelled)

2. "Picture toh abhi baaki hai", tweet from Former Chief of Army Staff Naravane after the initial night strike of the 9 terrorist camps.

3. Today's message from PM "Talks would on terrorism and PoK"

Can we now link these three points and see the pattern emerging?
India would resume the Indus Water Treaty only when Pakistan gives back Pakistan occupied Kashmir.

Is this what we are looking at or aiming at?

If so, this is very thoughtful, strategic and absolutely amazing!

Far more nail-biting than IPL!

This IPL season, there is one real nail biting and interesting match I am eager to witness.

The real India Pakistan match.

And how India is going to thrash the Pakistani military and its puppet govt.

India will go with Military action this time too. The question is when? Tonight or tomorrow night or day after night? The bets are on!

India has already flooded a district of PoK last night.

What is different this time is the context.

External to both these countries, the state of the 2 biggest associated countries - China and USA and the 2 running wars.

China usually supports Pakistan militarily and has been against India in multiple fronts including the trade front. But this time, if India gains some key areas in PoK, the China invested area in PoK for the Belt and Road Initiative would be for India to destroy or overtake. This would be interesting to see how China would respond: Whether it would ask India to not destroy their investment or to deter India, start a parallel military campaign on India-China border. The other change this time is China's slowly warming to India after many years of the military standoff as its trade war with USA is raging.

USA this time is very different than all the historical USA. With an indifferent Trump at its President who has very weird goals, (like making Gaza a tourist spot) and not getting USA into any new war and trying to end the Russia-Ukraine war. But, unfortunately, as usual, USA has supported Pakistan again and given USD 400 million aid to Pakistan to sustain its F-16s. Mostly, USA wants to watch the 'fun' from the sidelines and then ask India to invest more into its Apaches, AWACs, F-35s and other military platforms.

Wars are not anathema in today's world. The Russian war on Ukraine saw the first fulls scale war in history in Europe after 60+ years. The Israel-Palestine war is also running. People are not so against war and reasonably expect it in case of retribution.

This time, the Indian govt. is more determined to take action than the previous govts and is willing to make use of all the historical mistakes it has done previously and turn it around.

Best case scenario: 

1. Breakup of Pakistan into an independent Balochistan (40% of Pakistan territory) and the rest of Pakistan

2. Retaking of PoK by India

3. Destruction of China's investment in PoK worth billions and stopping China in its tracks

Only if Pakistan was not nuclear armed, all this could have been achieved with much ease.

Fingers crossed and waiting to read the books on this war and the strategies employed a few years from now.

Can one person change the world?

It is difficult to fathom that in today's world of democratisation of internet and communication where anything secret or plan or thoughts can be dissipated to millions in minutes, with so much interconnectedness with all things and anything can come back and bite you immediately, that one person can overcome all these and get do something unexpected again and again.

With so much interconnectedness and checks and balances and democracies, it should have been almost impossible for someone to change the world's dynamics so fast.
Yet, Donald Trump did it.

Many of the countries of Europe after millenia of fighting against each other and USA came to the mature conclusion of not fighting with each other and rather saving the millions of national resources to better uses like education, lifestyle enhancement, technology and progressed substantially after world war 2 until 2023.

Now, all of a sudden, 1 man is creating havoc almost on a daily basis and causing distrust among things that were built layer on layer for so many decades of trust and effort.

Surely, many would be in disillusionment as was all these years of trust and work just a fake and was it worth it?

The same kind of disillusionment that happens when trust is broken with someone for selfish reasons.

How would humanity look upon this 100 years later? Does this instance change of course of history forever where no country would trust another or just a blip in the overall maturity of having more non-fighting friendly relationships?

Budget Trip to Bhutan

We (My wife and I) travelled to Bhutan during Apr 21 to Apr 28, 2014 from Hyderabad, India. The place had fascinated me ever since I heard about it from my two classmates in Philippines. The place has many unique things to its credit.
1. A place still ruled by the king and the queen and has democracy
2. A landlocked country
3. Beautiful clean places with its own unique culture of clothes, food, games, traditions and beliefs
4. A unique ecosystem of plants and animals
among other things.

I will give a brief of the plan followed by details to help you plan your trip.
Hyderabad --> Bagdogra --> Phuentsholing --> Thimphu --> Paro --> Phuentsholing --> Bagdogra --> Hyderabad

Day 1: Early morning flight from Hyd to Kolkata, Stopover for 2 hrs at Kolkata, Connecting Flight from Kolkatta to Bagdogra. Reach Bagdogra by afternoon, take a prepaid taxi to Phuentsholing and stay at Hotel Sinchula (http://www.tripadvisor.in/Hotel_Review-g469428-d456013-Reviews-Hotel_Sinchula-Phuntsholing_Chukha_District.html).
Day 2: Get immigration formalities done, get a prepaid sim card, take a bus to Thimphu. Saw Buddha statue at night and night view of Thimphu from near Buddha statue. Stayed in Peaceful Resort (http://www.tripadvisor.in/Hotel_Review-g293845-d1943683-Reviews-Peaceful_Resort-Thimphu_Thimphu_District.html) for the night.
Day 3: Saw the Takin preserve, roamed around Thimphu market (meant for tourists), Bought souvenirs, went to Choki Traditional Art School, Saw Thimphu Dzong (from outside), Visited the local football stadium and stayed at Peaceful resort.
Day 4: Travelled by taxi to Paro, enroute visited Tachogang temple (on a hill after crossing Paro river), Checked into Rema resort in Paro (http://www.tripadvisor.in/Hotel_Review-g321541-d2166460-Reviews-Rema_Resort-Paro_Paro_District.html), Visited the Paro musuem, the Paro Dzong, did archery for an hour and rested at Rema resort for the night.
Day 5: Trekking Tiger's nest (Paro Taktsang), booked bus tickets for travel next day to Phuentsholing .
Day 6: Travelled to Phuentsholing, took Bhutanese bus from Phuentsholing to Siliguri and stayed at Sevoke Valley Residency (http://www.tripadvisor.in/Hotel_Review-g659786-d4606812-Reviews-Sevoke_Valley_Recidency-Siliguri_West_Bengal.html) in Siliguri, West Bengal.
Day 7: Auto from hotel to Bagdogra airport and afternoon flight Bagdogra-Kolkata-Hyderabad with a layover at Kolkata. Reached home in Hyderabad at night.

The detailed plan of the above with associated costs, distances, mode of travel, review of places is hereunder:
Day 1: Reached Bagdogra at around 1 pm and took a prepaid taxi at a prepaid taxi stand to Phuentsholing. Enroute the driver stopped for lunch at a restaurant. The cost of the prepaid taxi was Rs.2,263 for an Indica. You can get Indicas and Innovas from the prepaid taxi stand with payment and receipt.

We reached Phuentsholing around 7 pm.
You know you are entering Bhutan when you see the welcome board:

We put our stuff at Hotel Sinchula and though we could have ordered food in the hotel, we walked back to India for dinner as we wanted to explore the border area. The hotel is 5-10 min walk from the border. We had dinner at a vegetarian hotel (tried their unique delicious Bhutanese dish called Kewa Datshi - A dish made of Potatoes, Cheese and chillies, Photo below)

There are restaurants around in the Indian side and food should not be a problem. They serve both Indian and Bhutanese dishes on both sides of the border.
Dzong next to Hotel Sinchula:

Night stay at Hotel Sinchula.

Day 2: We started at around 9 am for and went to the immigration centre after having breakfast. We filled up the application forms for visitor visa along with the 2 photographs and passport and submitted it. We had to wait for about 45 min to get our application processed along with our photo taken and get the permit. (You are only allowed to travel to some distance in Phuentsholing without the permit)
With the permit to enter Bhutan, we photocopied a couple of copies of the permit. We bought ourselves a local sim card (http://www.tashicell.com/prepaid-mobile for latest call rates) from the Tashi complex which is the office of Tashi (a popular mobile service provider) and is 5 min walk from the immigration office.
There is a park with a Dzong nearby which can be checked out if time permits.

We comfortably checked out of Hotel Sinchula (check out time is 12 pm or so) and took a cab to Phuentsholing bus stop (around a km away. We paid Rs.50 for taxi). We bought bus tickets to Thimphu (Rs.230 per head) and it took close to 6 hrs to reach thimphu. We reached Thimphu bus station around 6.15 pm. We took a taxi to take us to Peaceful resort (Taxi fare Rs.100 after bargaining. 5 km distance. Rs.20/km seems to be fair although they demand more). My friend came to the hotel and picked us up for dinner. Post dinner, we went to see a big Buddha statue in Thimphu and the night view of Thimphu from the same hilltop. It is advisable to see the Buddha statue during the day although the night view of the city from the hilltop is mesmerizing.

Day 3: My friend picked us up at the hotel and we visited the Takin preserve which is very close to the peaceful resort. The takins were unfortunately a little far away that day from the enclosure boundary and we didnt get a very good look at them. They are very lazy. After that we went to the tourist area with lots of souvenirs/handcrafts for tourists to buy. We then went to the Thimphu main post office where we bought a souvenir of the Taktsang monastry magnet which is the cheapest here (Rs.500). One can also get their photo taken in the post office and get custom stamps made with your photo at this place. Unlike in India where your customised stamp has a photo alongside the regular stamp, here your photo is the main part of the stamp. A set of 4 stamps can be done for around Rs.350. Later, we took leave of our friend and we had hired the same taxi of the previous night for the rest of the day (Rs.800 post negotiation). We went to Choki Traditional Art School (it is north of Thimphu and the route can be a little back breaking as there is no proper road in the last few kilometers). The entrance of the school is mesmerizing with the large art work:

Embroidery of Goddess White Tara being made. It takes close to 4 months to get this embroidery from start to finish.

 Wood carving being done at one of the classrooms.

En route you will crossing the Thimphu chu (Thimphu river) and you can get a few good photographs along the river front.

We saw the Thimphu Dzong in the evening and were late for the ceremony which starts at 4.30 pm or so. We later went to the nearby football stadium and went back to our hotel.

Day 4: We checked out of the hotel (Peaceful Resort) and travelled to Paro with the same taxi driver (Rs.2000 for the entire day). On the way, we visited Tamchogang temple. It is temple on top of a hill which can be reached after crossing the Paro river. There are 2 parallel river crossings - one metallic thrilling one and another less thrilling one.

The drive from Thimphu to Paro is around 1.5 hr excluding the small trek and river crossing to Tamchogang temple. We arrived at Rema resort which is 1.5-2km from central Paro and is situated alongside Paro river at around 1 pm. The view from the resort is good, but the service is the worst ever. We had lunch (with bugs in it - one of the many reasons for poor service of this hotel) and visited the Paro museum and Paro Dzong. The Paro museum has an entrance fees of Rs.50 for an Indian couple or so. The museum has a wide variety of things - masks used for festivities, stuffed animals (especially lots of birds) specific to Bhutan area, mineral samples with a small area on geology, Pottery, how to make buttered tea, etc. It is an interesting museum to see. Cameras and mobiles need to be submitted at the entrance.

Paro Dzong is situated along the Paro river and has a breathtaking panaromic view of the entire Paro valley.

Dzongs were once military areas but are now administrative areas of Buddhist temples and have paintings/sculptures and Buddha Statue/other gods inside.

Inside Paro Dzong:

We later went to an archery range in Paro and did archery. One side of this range has professionals and the other side is free for amateurs to try archery (Rs.100 per head/hr). 

We booked a driver with the help of the reception at the hotel for a hotel pick up and drop to the base of Taktsang monastry for the next day.

Day 5: It takes about 45 min to reach the base of the monastery from Paro (Taxi charge of Rs.700 for pick up and drop). There are two options: trekking or hiring a horse and trekking only the last part. We trekked the whole way. We were slow and it took us about 3 hrs to reach to the top. Almost 1 hr looking around and resting and about 2 hrs on the way down.

Photo of monastery from base. The little while thing in the mountain in the below photo is the monastery.

The real size is revealed as you get close to it.

There is a restaurant in the middle of the way to eat, but it is quite expensive at Rs.450 per head for a vegetarian buffet.

On the way back to the hotel, we bought bus tickets for the next day from Paro to Phuentsholing (Rs.220 per head) as there are only 2 morning buses daily. One is at 8.00 am which we took. Another costlier alternative is to hire a sharing taxi which can charge around Rs.600-Rs.800 per head (dont remember the exact figure) or hire a full cab for Rs.3200 or so.

We reached Phuentsholing bus station at 1 pm and booked the Bhutan bus to Siliguri from Phuentsholing for Rs.132 per head (yes, it is that cheap). The Bhutan bus is faster and reaches Siliguri in 3.5 hrs or so compared to Indian buses which start from Jaigoan (Indian side of Phuentsholing) and take over 5-6 hrs to reach Siliguri. Another costlier alternative is to hire prepaid taxis to Siliguri or Bagdogra. We had enquired on day 2 we while leaving Phuentsholing to Thimphu and they said the bus to Siliguri would start at 2pm. It was supposed to be a tight schedule from Paro but the departure bus timing (not sure if the time was revised) was 3 pm from Phuentsholing. We reached Siliguri at around 7 pm (post a tyre change enroute) and took a share auto to reach Sevoke Valley Residency hotel.

Day 7: Checked out of the hotel at around 12 pm, caught an auto (Rs.300) to Bagdogra airport and caught flight back to Hyderabad with layover at Kolkatta.

Some interesting things discovered about Bhutan:

There is only one traffic junction in Bhutan which is there in Thimphu. This is yet to have an automated traffic signal and there is a traffic police directing traffic at this one junction.

Television was introduced in Bhutan only in 1999.

Although notes above Rs.100 are forbidden to be taken or used in Bhutan, people arent against it as it helps them trade more easily with Indians across the border.

Indian currency works easily in Bhutan as the people want more of Indian currency and it costs the people to get Indian currency for buying things.

Archery is their national sport.

Terracotta Buddhist Vortive miniature stupas can be found a plenty in mountain crevices.

More on these here: http://papyri.tripod.com/buddhist/introsealings.html

The culture of Buddhism does not allow killing of animals. But, the modernisation of the country is expanding non-vegetarianism.

The various key costs of our trip are as follows:

Flight                  - 26248

Road transport   -   8933

Food and drinks -   3200 (We did pack in quite a lot of ready to eat items for the journey)

Hotel           - 15065 (Hotel Sinchula: Rs.1240 (1 Night); Peaceful resort: Rs.8385 (2 N); Rema Resort: Rs.3780 (Paid for 1 Night although stayed here for 2 nights as the service was so bad I demanded refund of 1 night and I got it); Sevoke Valley Residency: Rs.1610 (1 N); Remaining tips)

Misc                           -  1247

Gift/items/Souveneirs-  3478

Total                          - 58171 (door to door from Hyd)

Hope this information helps all of you to make your own travel plans to visit and enjoy beautiful Bhutan.

Cheers.

P.S: Updated on 1 Apr 2016:
A good post on travel to Bhutan is mentioned in the below link which I have not covered.
http://blog.byond.travel/index.php/cocks-kings-an-honest-travel-companys-guide-to-bhutan/byond/

Giants do their own thing

The giants of the world - USA, China, Russia do what they please. It seems that they are all in a cartel. Whenever they want to attack, block, intimidate, loot, capture, bomb, takeover, harass, overthrow dictorial/ democratically elected governments/leaders, assassinate or buyout, etc. any territory, resources, country or person, government, group or leader etc., they do so without giving a damn of what the others will say/do. How else, can these giants take unilateral action against so many sovereign nations?
USA did it to Iraq, Afganistan, Many south American countries, etc. (the list is long)
China does/did it to Tibet, Taiwan, Spartly islands
Russia is doing it to Crimea region of Ukraine.
There is one big exception though - India.
Its useless politicians/ political parties/ bureaucrats are not able to defend the countries' face against the smallest of neighbours like Maldives and Sri Lanka despite years of relationship. They are not able to provide modernisation of weapons to its army and navy assets and with the likely non-sense that has happened so far, it is very difficult to see India being able to do anything unilaterally even if it wants to.

An interesting way to learn/test history is to do the following match the following puzzle:

Country| Did this                 | To                            | Motivation              | Reason claimed
USA      | Attacked                | Tibet                        | Annexe Territory       | Remove Dictator
China     | Harrase(d)             | Georgia                   | Kill competition         | Give democracy
Russia    | Bombed                | Iran                         | Oil resources              | Remove WMD
India      | Looted                   | Libya                       | Strategic trade route   | Give Independence
NATO   | Overthrew             | Nicaragua                | Other resources          | Destroy Terrorism
UK        | Captured                | Philippines               | Take Revenge
France   | Intimidated           | Bangladesh              | Nullify future threat
              | Occupied               | Dominican Republic  | Show military might
              | Gave Indepedence | Haiti                          | Force trade
              | Forced Exile          | Mali
              | Assassination      | Panama
              | Fought                   | Mexico
              | Intervened militarily| Honduras

Political war of words

Over the last 2 months or so the war of words between Congress-BJP and BJP-JDU have increased, even more so after Modi has been named as the chairman of the election campaign committee. The politicians have been bickering between bad, worse and worst with their rhetorics and idiotic statements which are nowhere near ground realities (A meal at Rs.12/Rs.5/Rs.1). They have tried to compete with each other in making more outrageous and stupid remarks. Probably, the noise in the media (read television news channels, digital newspapers and printed newspapaers) will get even more and become unbearable as the elections due next year come closer.

But, what I am wondering is how much of all this noise actually reach the majority of the voters in the rural areas. How much of it will they hear and how much will they read/hear about and consider it considering the following factors: illiteracy, availability of newspapers, power for viewing televisions, interest in national politics, considering that in villages the head of the village or the head of the house decide which party to vote to power, big political parties throwing money and liquor at the villagers to buy their votes.

Is all the noise generated worth it?

Chicken Republic

It is ironic that the relation between many top Government people and the people they are ruling is almost equivalent to the owner of a chicken farm and the chicken.

The society's people are treated the same way as the chickens are. The mighty/owner can do what they please irrespective of whatever the chickens do. The chickens can keep clucking, eating, sleeping, shouting, but the owner does what he pleases. If the chickens irritate him too much, he can put them elsewhere, shut their mouths with tapes, jail them in small cages in unhygienic conditions without food or water and even kill them. What can the chicken do? Cluck again? Maybe poke/bite the owner. Well, next thing, the owner blunts the beaks of all the chicken with hot iron rods. Meaning, more pain for all the chickens, including some who didn't do anything in the first place.

From the perspective of the owner, the chicken's only reason to live is to serve the owner by laying eggs and giving its body to be relished on the owner's dining table. Much the same way, many politicians in many countries view their own public. They use and abuse the people only to make gains at their costs. The only human aspect of intelligence they use is worse. They lie to the public by saying that they are doing is good for the public. They further prop up their loyal corrupt breed in key positions and control all the news the people hear by owning the media. They further make profit by setting up companies for which they illegally give inherent advantages (mining licenses; spectrum at throw away prices; by blocking and losing other people's applications; by changing rules to favour their favourite company; make even more money on the side betting on the companies they are going to favour; buying out lands initially where they are going to have some development; by taking name of free market whenever it suits them, else favour socialism if that is the garb by which they are going to make more money; bribes for taking a decision and more bribe for the decision taken in someone's favour). The politicians are going to keep getting stronger as they work day in and day out on how to build competitive advantages over the public to keep them controlled. The same way the owner keeps so many under chicken under control.

P.S: By no means this post is trying to demean the public as having a chicken-ish attitude. Instead, it wants to show how normal humans tend to become powerful relative to the people who they rule, that the difference between them is more like the owner and his chicken.

What this means is that: The day the chicken are truly free and are no longer prisoned, killed and eaten is the day I can expect to find a way to break the reckless politicians' agenda and expect a more just, ideal world this planet to have.

Economics is Child's play

12 year old Canadian Victoria Grant on Banks and Govt.s are in cahoots to loot the public:

Its getting worse by the day

The Govt. of India's or rather India's problems are getting worse by the day. One of them being inflation.

If it was not enough that inflation has been high in double digits for so long is not enough and all the economic govt. authorities (Mr.Kaushik Basu, Chief economic adviser; Mr.Rangarajan, head, Prime Minister Economic Advisory Committee; Mr.Subbarao, Governor, RBI; and Mr.Montek, Planning Commission Deputy Chairman) have been shooting arrows in the dark about when the inflation would come even close to the target rate. They have (including Pranab da, Finance Minister) have been directly and indirectly saying that inflation will come down in the next few months for over a year. And yet, they have all been wrong or have been lying.

To make matters worse, they continue to say the same without looking at the ground realities.

1. Everybody says food inflation is due to supply side problems. Yet. there has been no major policy changes to increase production of goods that are needed. In an ironical step, Minimum Support Prices(MSP) have been raised drastically over the last two years which has increased the overall cost of buying all the grains for everyone. Whats very depressing is that some of the policies that have traditionally caused farmers to increase wheat/rice/pulses by having MSPs, have caused more grains to be grown than can be stored in warehouses leading to huge losses of grains. This subsidies/incentives are skewed in such a way that even if there is demand for vegetables/fruits, many farmers will continue to grow certain grains as it is more profitable because of the subsidies/incentives. Why is the govt. sleeping?

2. There is also a case that the MGNERA has given a lot of money to the villagers and this is increasing demand for goods which previously did not exist. A report I read says that there have been hardly any  productivity changes due to the scheme. Meaning, that most work is namesake and no real useful work has been accomplished with so much money being given.

3. Petrol prices are going up continuously and there are indications that even diesel prices may rise. If diesel price rise, the whole of India will undergo another level of price rise as most things in India are transported by trucks. A multiplier effect will increase inflation more.

4. Many coal power plants are running on 4 to 7 day stock of coal (norm:21 days) and are lacking coal. Many power plants in India were designed and viability studies assumed that they would import Indonesia's coal which used to sell it at a discount to international market at large. The recent law in Indonesia to sell its coal at an international rates has made the power plants unviable and the companies are asking the govt. to increase the rate at which they sell the power to the govts. 

5. The state electricity boards(SEBs) have run up losses of Rs.80,000 crore (and counting) as they have been inefficient and many have not increased electricity prices for years together. With the power ministry proposing to ask the state govts. to write off all the losses and start the SEBs with a clean slate, where are the state govts. to get so much money? Also, even after this is done, unless the SEBs increase the rates of electricity substantially (many times over in some states), the SEBs will again start going into losses.

6. There is a proposal of a food subsidy bill to be introduced. Where is the money for it? Unless the govt. starts saying things like 2 grains of rice per person per day is enough to fill hunger (like the Rs.32 a day is the Below Poverty Line), where is the money?

7. With the downgrade of the State Bank of India by Moody's, the govt. has shown some hurry to infuse ~8,000 crore into SBI with an overall of ~14,000 crore into all public sector banks, within this year. (Increased from the budgeted 6,000 Cr)

8. Oil prices are still high and any number of reports in the global arena do not predict oil prices to fall to any meaningful lower level in a permanent way. This means India's import bill is only going to rise in the coming years. And the govt. will need more money to buy the imports.

9. Some specific national liabilities like the Air India are contingent liabilities which will need more money in the future from the govt.

All the above imply only two things directly: Prices are going to stay up/rise and govt. is in need for a lot of unplanned money. If the govt. starts borrowing more, rates are further going to go up and would make further investments in new projects unviable (which are supposed to increase supply). The second would only reinforce the price inflation permanently.

Oh, and there is one more thing. Inflation measures prices year-on-year and even if the govt. claims victory over inflation once it reaches a target rate of say 5%, inflation has remained high for so long that these rates are year-on-year. Meaning that the price rises have become permanently embedded. Unless there is a price deflation, things are bad and permanently.

You don't need to be an economist of calibre to predict (wrongly again and again) that inflation is going down. The truth is prices are going to remain high and may further rise, irrespective of whatever the above  economists mentioned say/lie. In effect, the Govt. is screwing all its citizens very well.
P.S: The high impact of inflation is given here: http://www.firstpost.com/investing/govt-is-ruining-your-savings-and-the-rbi-shouldnt-let-it-124932.html

World's natural resources

5 reasons why US is going to go downhill

Frequent International Interferences

The frequency with which US is involved in fighting other countries since 2001 is very high. Iraq, Afganistan, Pakistan and now Libya. The costs are huge, but the benefits in terms of oil is greater for USA. But the skepticism of the world on its activities is increasing all the while. The conspiracy theory on the attack on the pentagon, the non-provability of Weapons of Mass Destruction in Iraq, Contradicting claims of the US and North Korea on the torpedo that sunk the South Korean ship, Doubts if Osama Bin Laden was actually killed by a US raid,etc are helping build the skepticism on what US says.

Spill Out of Crises

The European debt crises in Ireland, Greece and expected crises in Portugal and Spain have brought the attention of the economists to the debt amounts of the countries and see a realistic picture of US debt. They have started questioning the assumptions and no longer see it as rational in blindly justifying US debt as something godly and always safe. The US crisis itself has forced the US economists to relook at the US debt and justify themselves being called rational. S&P's negative outlook on US sovereign debt is just the beginning of being rational. Faith of and on the dollar has diminished and is expected to further diminish. No one has yet able to think a perfect currency/thing which can be used to measure against all other currencies. The only possible solution that seems close to come to place in a few years time maybe the equivalent of the SDR(Special Drawing Right) of the IMF. It is equivalent to the basket of freely convertible currrencies. But in the coming scenario, Yuan may be added to this basket sometime in the current decade when China allows complete convertibility. The complete faith on the US Dollar is going to come down. The draw down of the US Dollar forex reserves is also going to play a major role in the downhill of US.

Internet

More internet availability and accessibility in the world in helping others know of the torture faced by US victims in Guatemala and the killing of two unarmed Pakistanis by a CIA contractor. Not to mention, the widespread news of wikileaks and videos of violent human rights violations by US soldiers in Iraq is there for all to see. Add to this, the ease and fastness with which conspiracy theories  are spread.

Weapons Technology

One of the main strengths of US has been its military muscle. The world's dependency on that is reducing. China is growing rapidly in weapons technology with the development of the anti-satellite missile, the anti-aircraft carrier ballistic missile, the stealth aircraft and of course, their own aircraft carriers. Japan has initiated developing its own fighter aircrafts and it is expected to reach the market in the coming years. India is planning on ICBMs(Intercontinental Ballistic Missiles) and the Brahmos is world's leading cruise missile. The FGFA program with the Russians for the development of the fifth generation fighter aircraft is also supposed to be leading edge. With money always acting as a crunch to all the countries, most of these countries will be willing to sell the products to 'their' allies. The market share of US is going to go down. Compared to the other countries, US cannot fight on price too.

Rising Developing Countries

The rise of the BRICS countries and their collective power to say 'No' to US to bulldoze its way in trade agreements and climate change conferences at the cost of others shows reduced US ability to force others. The recent mention of British PM David Cameroon wanting the next IMF head to be from Asia also shows the way things are going in the world.

Incredible Iran?

According to International Monetary Fund (IMF) figures, Iran is the sixteenth largest economy in the world, consistently enjoys healthy growth rates and trade balances, and has a low national debt burden. While Iran's real growth rate of around five per cent a year for close to a decade has far outpaced that of Western economies.
Despite having had one of the youngest populations in the world for the past two decades, the Iranian unemployment rate has stabilised at around 12 per cent since approximately a decade ago.

The country's economy is also one of the most diversified in the region, second only to that of Turkey.
Iran's petrochemical exports have grown 15-fold since 2000 and her steel and car manufacturing industries are the largest in the region with outward investments in several countries.

More importantly, Iran is among only a few countries learning to master high tech areas such nanotechnology, nuclear technology and space exploration. In addition, it has one of the most sophisticated military industries in the region, despite having one of the lowest military budgets.

The 2007 US sanctions against Iranian banks ironically ensured Iran's immunity from the global financial crisis that was about to explode. Moreover, and despite the sanctions, the net flow of foreign direct investment (FDI) into Iran has grown steadily too, save for the 2008-2009 blip. The EIU estimates that Iran's net FDI will rise by 100 per cent within the next four years.
Iran was among the few major economies in the world not to be severely affected by the crisis. Smaller banks from emerging economies, Islamic banking and less formal means of cross-border payments, including cash and 'hawala', provided the best protection for those who were kept out of the ailing Western banking system as a form of 'punishment'.

Iran's exports grew from $8.5bn in 1987 to $70bn in 2006, representing an 824 per cent increase.
Iran's exports have continued to grow since. According to the Economist Intelligence Unit (EIU), they are expected to reach $82bn this year.

Iran's largest export market is Iraq, followed by China. As irony would have it, Iran's trade with both countries has grown exponentially since the US invasion of Iraq in 2003. The United Arab Emirates and Singapore have emerged as two of Iran's largest trading and foreign investment partners, although European countries as a group also form a substantial trade partner.

The Iranian government has responded to the increased costs by reducing other transaction costs for Iranian exporters. These include reduced freight costs and taxes for certain types of goods and greater use of expanded and improved free trade zones and special economic zones.
Iran has also set some ambitious targets for elevating her 'ease of doing business' ranking in the region. The index is a World Bank tool for comparing business environments across various countries, and Iran currently ranks in the mid-range compared to other countries in the region.

http://english.aljazeera.net/focus/2010/05/201052271814825709.html

Keep those flight tickets

When you get so much free spaces on emails, spare some space for those old emailed flight tickets in your inbox. You never know when it will come in handy.

Take for instance, my aunt's case. She has travelled to UK a few times to meet her son who lives there. And then one day, she lost her passport in India. She applied for a new passport and got it and applied for a new visa for seeing her son in UK. The UK visa team rejected her application on the basis that they were not sure whether she returned back to India during the vaildity of the visa term or stayed back as an illegal immigrant after the proposed visa duration stay as the new passport lacked the immigration check seal of departure from UK. Although the UK's immigration department has details of my aunt's checking out of UK, the country's system puts the onus on the foreigner to prove that they left the country in time and didnt violate any rules. This is one of the ways the government tries to permanently avoid other people coming into their country.

To top this, the British Airliner says they keep information of passengers for only three months and since the travel was beyond that period, they cant give them a copy of the ticket or the confirmation of travel. I wonder how these same airlines and airports would have all the required information and recorded video of the passengers if the enquiring people were some anti-terrorist detectives.

The saving grace was that my aunt's son had a email copy of the ticket lying somewhere in his inbox which he found out.

Moral of the stroy: Despite feeling sometimes that an email/document(air tickets, bank accoubnt closing letter, bank account statements after closing a bank account) is a piece of junk i have to live with, one may never know when it will be a life saviour and where.

Microsoft indirect work culture

People cribbing about work should read this:
http://www.dailymail.co.uk/news/article-1266643/Microsofts-Chinese-workforce-tired-stay-awake.html

Sports as a stimulus

Considering the amount of money that is being spent on the common wealth games to be held in New Delhi , India and the amount of business the Indian Premier League (IPL) is doing, I think the governments can definitely consider putting some money into sports during recession as part of the stimulus package. The multiplier effect of this is enormous: More drinks, eateries, logistics, advertisements, merchandise,etc.

In fact, IPL 3 is expected to have revenues of $1billion or Rs.4,600 crore for a period of just 45 days.

http://timesofindia.indiatimes.com/iplarticleshow/5718982.cms

Dirty politics

Members of Parliament (MPs) and the Members of the Legislative Assembly (MLAs) are corrupting the democracy all for their own benefit. They will pass only those bills that will benefit them get more votes or get more money into their pockets. All those bills that will provide benefit to the people at no benefit to the elected people or those policies that make the government transparent, convict criminals and sieze the corrupted properties are never done. Surprisingly, the same is happening in India and the UK despite years of difference. I wonder how China works...the corrupt people who were caught infamously were hanged till death... Any lessons for the other countries from this? Even terrorists are not hanged till death in India....Are you keeping them for being blackmailed for their release? US even hanged Saddam Hussain in a year or so after capturing him. I just wonder...