"Tell him he can have
my title, but I want it back in the morning."
— Jack Dempsey (American,
1895-1983)
Word for the day
Endsville (adj)
Most wonderful or exciting,
e.g., a rock band that was regarded as Endsville in the late fifties.
Malice towards none
Subramanian Swamy shall be
there in Rajya Sabha till 2022 - whether you like it or not, hardly matters.
First random thought this morning
In a first, the sitting prime minister gave interview to a private
Indian TV channel. The interview adequately touched upon most current issues, some
controversial and some not that controversial. This interview shall settle many
public debates, besides starting a couple of fresh ones.
Now since the government has decided to raise the bar, it would
only be appropriate that PM Modi sets a traditions of making of a quarterly
official "State of the Union" address to the nation, that may cover
important current issues. That should save the nation lot of time and energy
that we waste on inconsequential debates.
Blind Men and the Elephant - 2
In the late summer of 1998, I was sitting with a group of business
managers in a cafeteria of Berkeley University, California. We all were
attending a short duration program in marketing. The topic of the discussion
was Y2K. A majority of group members portended disaster for the global economy.
They were confident that a majority of the global businesses and financial
institutions will not be able to "transit" their systems in time to
avoid the crash as the new millennium rings in.
The streets of the California were filled with Indian IT workers,
many of them with just three month certificate in C, C++, Java coding or
something like that. They all were brought in to work on Y2K projects. The
panic was palpable.
However, high on the GreenSpan steroids, the global markets were
not looking worried. Even the impending impeachment of the president Clinton
over Monica Lewinski issue did not bother markets.
Eventually, Y2K event passed off peacefully. No satellite crashed.
No ATM refused to tend cash. No lift in the building stalled. No power cuts. No
plane crashes. No payment delays. No nuclear accidents. Nothing.
The current debate over Brexit reminded me of that 1998 summer. I
find that the debate, both political and economic, suffers from multiple
limitations.
It is a common knowledge that the global economy is critically ill
and put on the life support system (read trillions of dollar worth of free or
negative rate debt supported by the liquidity created by the central bankers).
Psychologically, under these circumstances usually no one would be inclined to
try a new line of treatment, even if the patient is not responding to the
current line of treatment. Brexit is just another line of treatment, that
people are scared to try out. It's suitability or otherwise is not tested yet.
Secondly, we need to consistently remind ourselves that a positive
vote in UK referendum is a consequence of poor economic conditions and rising
inequalities in Europe. It is not a pre-curser to the decline of UK or EU
economy. As of today there is nothing to suggest that conditions post Brexit
would be better or worse, as compared to what these conditions would have been,
had UK remained within EU.
The argument that UK exiting EU will terminate the process of
globalization and push Britain back into 19th century also sounds rhetorical
exaggeration. This view clearly ignores the fact that British traders and
government were globalized much before anybody dreamt of a unified Europe. It
would be reasonable to assume, with the benefit of hindsight, that UK, perhaps
along with or without many other European countries, may perhaps lead a larger
union of business partners that may include some larger economies outside
Europe.
Weakness of GBP may also be hypothetical at this point in time.
How could one completely rule out GBP emerging as a safe haven just like CHF or
JPY a few years down the line....to continue
No comments:
Post a Comment