Do it yourself

I returned to my desk after a 10-day Diwali break. As I opened my overflowing mailbox, I realized a lot might have changed in the meantime. Nifty50 is flirting with its all-time level. INR has regained some of its lost ground. Precious metal prices have cooled after a sharp upmove. There is a conspicuous thaw in the Indo-US and Sino-US relations. Prime Minister Modi, who hardly missed an opportunity to represent India at various global forums, has missed the ASEAN summit after missing the UNGA annual session, arguably to avoid a one-on-one meeting with President Trump. However, what caught my attention was a large number of notes, reports, messages alluding to the unsustainable $38trn US government debt, and how the US government and the US Federal Reserve are conspiring to dissipate this mountain of debt by manipulating the prices of gold and cryptocurrencies (especially Bitcoins). Most messages are arguing that 2026 could be a 1933 and/or 1971 redux, when USD was devalued 69% (1933...

  Last week the benchmark Nifty50 crossed the 25000 level for the first time ever. Statistically speaking, it’s just a number and does not mean much in the broader picture. Nonetheless, it is noteworthy in the current context, because this milestone was crossed amidst a flurry of news flow which calls for closer attention of investors. BoJ rattled the markets by deepening commitment to normalization First of all, the Bank of Japan hiked the policy rates by 15bps to 0.25%. Governor Kazuo Ueda committed that if the economy and prices move in line with our projection, we will continue to raise interest rates. BoJ does not see 0.5% as any key barrier when raising rates; clearly indicating that the shift in BoJ’s monetary policy is definite. A steeper hike by the BoJ, than currently estimated, could present several short-term challenges for the global markets. A stronger yen on rising JGB yields could (i) adversely impact Japanese exports; (ii) worry the JPY borrowers who may have...