"Landlords, like all
other men, love to reap where they never sowed."
—Karl Marx (German
1818-1883)
Word for the day
Pugnacious (adj)
Inclined to quarrel or fight
readily; quarrelsome; belligerent; combative.
(Source: Dictionary.com)
Malice towards none
Death of Jyoti (aka
Nirbhaya) changed a few things.
What will Rohith's death
change?
First random thought this morning
The conflict over entitlement of women to enter places of worship
in India is reflection of a bigger multifaceted social struggle.
Right to temple entry has historically been a manifestations of
the caste discrimination, gender discrimination and economic inequalities.
Recently, a new dimension, i.e., challenge to the outdated
socio-religious traditions and beliefs, has been added to the conflict.
The state here has two options: (a) take the popular path or (b)
or take the road less travelled.
Take the path less travelled
In recent months, China has repeatedly bothered global markets. A
hard landing in China has become the worst nightmare of market participants.
The next move of PoBC on CNY value adjustment (devaluation if you like it that
way), is widely anticipated as Fed's next move on rates. The Chinese equities
are amongst the worst performers globally. The fabled BRICs are no longer
mentioned together.
In the meanwhile, the global commodities have crashed to cycle
lows, to account for loss of the Dragon's hitherto insatiable appetite.
Exchange rates for commodity and emerging market currencies
relative to reserve currencies (e.g., USD, JPY, GBP and EUR) are also at their
lowest ebb.
Unprecedented US$2.5trn worth of bonds are trading at negative
yield. And there is no sign of this anomaly being corrected in near term. On
the contrary, we are hearing credible murmurs about more monetary easing by ECB
Chief Mario "Whatever it Takes" Draghi. Many believe, US Fed's
chairperson Janet Yellen might also have to stay or even reverse Fed's decision
to end ZIRP regime.
The global trade has virtually stalled. Most economies are just
managing to avoid technical recession in headline numbers. Otherwise, the
sentiments and disaggregated data is almost recessionary.
Given this grim scenario, it is normal for any finance minister to
compromise on fiscal discipline and make proactive efforts to encourage
domestic growth and make exporters competitive.
Governor Rajan does recognize this like everyone else. Therefore,
he is right in advising the political establishment to refrain from any fiscal
profligacy at this point in time. I am sure, besides poor manufacturing and
agriculture growth, a busy election season ahead will also be on the back of
his mind while cautioning the government.
In my view, it is a defining moment in Indian economic history.
Choosing the right path could lead India into a golden period of sustainable
growth and prosperity. One mistake here could drag us back by couple of
decades.
I might be a small insect, completely oblivious of the global
economic realities, and foolish enough to comment on this subject. But on the
basis of whatever information I could get, I firmly believe that China is
definitely going the Japan way. It is not going anywhere for next decade or may
be two. It is certainly not collapsing either. In next 6-12 months, the global
investors may realize this and move on.
If India could show some character by keeping a strict fiscal
restraint and allowing the private enterprise to flourish, in next two decades
we may have a different growth path than Japan, China and Brazil. Otherwise, we
may be heading towards a precipitous stagnation; remaining a low middle class
economy perhaps forever.
More thoughts on this later this week.
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