Perspectives on the global economic meltdown- (Nov 28 2010)

TSJones · Post by **TSJones** » 13 Aug 2013 20:41

Austin, i wasn't aware tha Snowden had released espionage cables. Lets see them. Your sources that you have listed are a joke and obvious mis-information campaign by the russians whom you love to quote. Got anything hat's been released in anybody's court system?

Again, let's see those cables he's released?

Austin · Post by **Austin** » 13 Aug 2013 20:43

TSJones wrote:Austin, i wasn't aware tha Snowden had released espionage cables. Lets see them. Your sources that you have listed are a joke and obvious mis-information campaign by the russians whom you love to quote. Got anything hat's been released in anybody's court system?

Again, let's see those cables he's released?

Ok every thing is a joke , US does not indulges in Economic Espionage then what about CIA director James Woolsey who acknowledges that US did conduct economic espionage against its European allies , or even he is just a joke planted by Russians ?

member_27444 · Post by **member_27444** » 13 Aug 2013 20:46

I strongly protest Jones is not jokes occasionally he may jest be

TSJones · Post by **TSJones** » 13 Aug 2013 20:50

here is another tidbit quoted by one of your sources, global research.ca, by islamists;

http://www.islamtimes.org/vdcgnq9x3ak9yt4.5jra.txt

Every bit of it is a lie.

death squads? yeah you believe it because global research said so, right?

Ru Today is just the same.

Najunamar · Post by **Najunamar** » 13 Aug 2013 21:21

[quote="TSJones
Please cite where a US company has outright stolen from a foreign company. Please don't don't cite Steve Jobs of Apple stealing his ideas from Xerox because Xerox is another US company, not foreign. It figures that you would consider the US to be morally equivilent to China. So far the US government does not indulge in economic espionage. We don't have to.

It's not just shale that the US can develop but also the mandated MPG efficiency Detroit is under for its cars by 2021 or 2022. It's our quest for tech efficiency that will get us there.[/quote]

Perhaps this will also be whitewashed by the Khanates but a certain diversified US conglomerate did brazenly steal from Siemens AG (in wind turbines) and was aided in that exercise by the state machinery to boot. Of course, it is all fine when US does it and not so for others....

TSJones · Post by **TSJones** » 13 Aug 2013 21:31

Najunamar wrote:[quote="TSJones
Please cite where a US company has outright stolen from a foreign company. Please don't don't cite Steve Jobs of Apple stealing his ideas from Xerox because Xerox is another US company, not foreign. It figures that you would consider the US to be morally equivilent to China. So far the US government does not indulge in economic espionage. We don't have to.

It's not just shale that the US can develop but also the mandated MPG efficiency Detroit is under for its cars by 2021 or 2022. It's our quest for tech efficiency that will get us there.

Perhaps this will also be whitewashed by the Khanates but a certain diversified US conglomerate did brazenly steal from Siemens AG (in wind turbines) and was aided in that exercise by the state machinery to boot. Of course, it is all fine when US does it and not so for others....[/quote]

Was this actionable in court? If not, why not? Care to cite a source? Besides RuToday or Global Research.CA?

Siemans is a big operator in the US, they got lawyers out the ying yang.

Austin · Post by **Austin** » 13 Aug 2013 21:42

You still havent explained the BBC report I quoted US CIA Chief James Woolsey, in an article in March for the Wall Street Journal, acknowledged that the US did conduct economic espionage against its European allies, though he did not specify if Echelon was involved.

Thats not RU Today or some other website but US based WSJ quoting CIA Chief ?

Any ways I dont want to drag this issue and its wrong thread too....The point being even the US spies on every body including its allies as part of larger Economic Espionage to benefit its own company.

There is no denying Chinese also do that and so does Europeans or Russians ....thats how the game works. The only issue is US is being hypocritical in saying we dont but others do and playing the victim card.

TSJones · Post by **TSJones** » 13 Aug 2013 22:03

Austin wrote:You still havent explained the BBC report I quoted US CIA Chief James Woolsey, in an article in March for the Wall Street Journal, acknowledged that the US did conduct economic espionage against its European allies, though he did not specify if Echelon was involved.

Thats not RU Today or some other website but US based WSJ quoting CIA Chief ?

I didn't see any BBC report. Please post it. You do realize that the US government conducting espionage favoring one US company over another US company would cause a number of problems? A problem that any number of congressional lobbyists and lawyers would love to get a hold of? Most US companies use consultants and congressional lobbyists. The Japanese also hire US consultants and lobbyists. It's about the only legal way to do economic espionage in the US. Any other way and you can get some serious legal trouble.

Austin · Post by **Austin** » 13 Aug 2013 23:22

Well it isnt that hard to find

http://news.bbc.co.uk/2/hi/820758.stm
http://www.heise.de/tp/artikel/6/6662/1.html

TSJones · Post by **TSJones** » 14 Aug 2013 01:21

^^^^contract negotiations with foreign governments are not the same as stealing a company's technical and manufacturing intellectual property rights.

panduranghari · Post by **panduranghari** » 14 Aug 2013 07:43

Theo_Fidel wrote:TSJ,

Not recent, but when the USA was going through its similar industrialization moment it stole freely from the IP of European countries. Recollect what happened to the Diamler patent, Oil refining patents, etc. So no angels the USA, but the difference is that the USA also gave back so much to the world. This is where the Chinese IP stealing is truly odious, to take so much and refuse give back……

I have interacted with a few Chinese who originated from HK and Malaysia, so not the mainland nationalistic ones. But they said the stealing of secrets is ok for Chinese because they believe china has given a lot to the world when it was a big civilisation. I do not disagree with the sentiment.

Right now Chinese are stealing, but in a few centuries they will be giving back.

I do however question your assertion - US also gave back so much to the world.

I say they did not give anything back for free like say we gave zero away for free? Everything given back was with strings attached.

Lets take a very well documented example. The Panama Canal was built by US know how within a sovereign country called panama. When the national elected government decided to nationalise it, the US govt through CIA assassinated the president and installed a dictator. They gave huge loans to panama to improve infrastructure though panama never asked for it. Panama thought it was paradise. A fully built and operational Panama Canal bringing lots of forex which costed just human life to build and now these huge WB loans over many decades to develop infrastructure. They then called in the loans. Of course panama could never repay. They then took over the management of the canal until panama repays the loan. Now is that giving back so much to the world?

Austin · Post by **Austin** » 14 Aug 2013 08:32

TSJones wrote:^^^^contract negotiations with foreign governments are not the same as stealing a company's technical and manufacturing intellectual property rights.

Economic Espionage covers a wide area and not just stealing IP , So if NSA bugs EU office or internet traffic to know the negotiating position of say Airbus to gain an advantage by knowing their position its a form of Economic Espionage.

Any ways there are many report where EU have complained of US indulging in Economic Espionage.

It is just a question of what capability each country has when it comes to Espionage and they use it accordingly.

Christopher Sidor · Post by **Christopher Sidor** » 14 Aug 2013 14:08

Losing Faith in Gold From Ghana to Vancouver Proves Rout --- Bloomberg Dated 13-Aug-2013

A memorable quote from the article

“We’re holding trash bags,” said Philip Mann, 53, who with his wife put about $160,000, half their retirement savings, into gold and silver coins starting in 2009. They’re now worth at least 40 percent less, including sales mark-ups, he said.

Gold in India has rise in Rupee term because of the falling currency. It real terms it would not be surprising if we were to find out that gold actually generated negative returns this year.

Austin · Post by **Austin** » 14 Aug 2013 17:36

I doubt any thing in India in the past 1-2 years has generated negative returns except perhaps the stock market.

Europe exits recession

Theo_Fidel · Post by **Theo_Fidel** » 14 Aug 2013 19:29

SENSEX gave a return of 25.7% in 2012.

http://www.financialexpress.com/news/in ... ey/1080607

I asked my dad about this and he says that since 1990 the Sensex has returned just over 16% annually. And also about 2% in dividends.

Rs 1 lakh invested in 1990 would be worth about Rs 60 lakh +/- today, assuming dividend reinvestment. A lot of gains come in the last few years. That 2% dividend means a lot per the math. Difference between 35 lakh vs 60 lakh.

Austin · Post by **Austin** » 14 Aug 2013 23:19

^^ I think that depends on the shares you invest in , its not a general rule that if you invest 1 lakh Rs in some share today it would be worth Rs 60 lakh. If depends on the average basket some might give good returns , some marginal and quite a few in red.

May be for institutional investors those figures you quoted might be valid but for individual it may not be the case.

Theo_Fidel · Post by **Theo_Fidel** » 15 Aug 2013 00:09

Well, it works just fine for me. It worked even better for my DAD.
I have said many times that Indian stock market is the greatest wealth generator on the planet right now. Get in early and stay in folks.

My view is that this growth happened because the Indian GDP went from approx $300 Billion to $2 Trillion from 1990-2013. I'm very confident that even at 5%-6% growth the economy will Sextuple again between 2013-2035 to about $12 Trillion. So if you are younger investor, get in and stay in looong term.

Abhijeet · Post by **Abhijeet** » 15 Aug 2013 02:00

Note that Rs. 1 lakh in 1990 = $7K @ an exchange rate of Rs.14/$.
Rs. 60 lakh today = $100K

So about a 14x appreciation for a 7x increase in GDP, which is reasonable if you were good at picking companies that outpaced GDP growth.

For comparison:

Sensex in 1990 = 1000
Sensex today = 20,000

Austin · Post by **Austin** » 15 Aug 2013 13:32

The key is to pick up the right companies that can assure reasonable growth and assuming you have to stomach to keep the money that long. For most common people in India it might be wise to keep money in FD or some Postal Saving Scheme that can guarantee assured returns over medium and long term. Investing in stocks would not be high on priority.

Hence the so called great gains from stock market have mostly benefitted by Institutional Investors and people who have money and stomach to play with risk and play it long.

Austin · Post by **Austin** » 15 Aug 2013 13:34

Fitch Affirms Russia at 'BBB' with Stable Outlook

Fitch Ratings has affirmed Russia’s long-term foreign and local currency Issuer Default Ratings (IDR) at ‘BBB’ with a stable outlook, the international ratings agency has reported.

Fitch also affirmed the country’s short-term rating at ‘F3’ and the country ceiling at ‘BBB+’, the agency said in a statement Wednesday.

One of the reasons for the affirmation is that Russia has strong sovereign and external balance sheets.

“General government debt ended 2012 at just 10.4 percent of GDP, the lowest ratio in the 'BBB' category, while sovereign net foreign assets were 24 percent of GDP,” Fitch said.

“The Central Bank of Russia's (CBR) international reserves exceed USD500bn (24 percent of GDP). Sovereign wealth funds (the Reserve Fund and the National Wealth Fund) held USD171bn (8.5 percent of GDP) in June, providing a buffer against external shocks,” it said.

Although inflation exceeds the upper limit of 6 percent set out by the Central Bank, largely on non-monetary factors, it is now lowering toward the target, the agency said.

“The CBR has prioritized lowering inflation over stimulating growth, and while Russia's track record on inflation is weaker than peers, it is improving. The CBR has minimized intervention in the ruble and is allowing a freer float, allowing the exchange rate to absorb external shocks, which Fitch views positively,” it said.

Austin · Post by **Austin** » 15 Aug 2013 13:42

I think in India too we need to maintain a seperate fund call it Reserve Fund or something thing else where a certain percentage of forex in mixed currency is stored for fullfill future social obligation like pension etc just keep it as our long term saving independent of Forex Reserves.

Many countries do that including China
http://en.wikipedia.org/wiki/Sovereign_wealth_fund

Christopher Sidor · Post by **Christopher Sidor** » 15 Aug 2013 13:57

^^^
Never ever underestimate the capricious nature of Indian politicians. The very same people who saw us through the BoP crisis in early 1990s, today have sleep walked into looming BoP crisis. Why is it a BoP crisis, because even after having more than 200 billion USD in reserves, Indian Rupee still depreciated by approximately 50% in the years after the Lehman crisis. When the writing was on the wall, instead of getting our house in order, these so called dream team of economics will probably demit office leaving a mess.

Theo_Fidel · Post by **Theo_Fidel** » 15 Aug 2013 19:59

FD & Postal savings are not risk free. Over the long term I'm very certain their rates will come down dramatically. There is also the opportunity cost. In the above calculation a saving account at 8% would have earned you exactly 6 lakhs from 1990-2013. Literally 1/10th the value from the SENSEX.

Right now India is short on investment capital but has plenty of investment options and lots of labor so interest rates are high and people are saving a lot. But this will change, soon we will have a lot of capital chasing investment options. Interest rates will come down. In fact the banks are now flush with liquidity even if it is relatively high cost liquidity. Just to give a comparison, with an investment rate of 32% India is saving and investing about $700 Billion every year. In 15-20 years at an investment rate of 30% and a GDP of $10 Trillion India will be saving and investing $3 Trillion every year. Think about that for a second. In 30 years at that rate we will invest $100 Trillion!! Our capital stock should increase by an equivalent amount. In fact a quick calculation shows that in the next 20 years we will invest a sumptuous $37 Trillion!! Another quick calculation shows that this is 3-4 times our present capital stock! I realize this may not be a linear process but in the next 20 years where you see 1 bridge now you will see 4. Where you see 1 power plant you will see 4. Meaning power generation capacity will go from 250,000MW or so at present to 800,000 MW or so. Where you see 1 highway you will see 4 when this process is done.

No, if you are a young or middle aged pappu looking to save for retirement, put it in a broad SENSEX low cost investment fund, maybe one of the many ETF's out there. No need to pick and chose winners. This advice would go to all foreign NRI types as well. If you are looking out 15-20 years, the returns in the SENSEX will beat anything in the West or Japan. Greatest wealth generator on the planet right now. Even with any rupee depreciation factored in.

I have often said this that the only reason people look down on the Indian economic growth is because of the China numbers. In any other age the rapid growth and industrialization of India would have spread shock waves through the planet.

Austin · Post by **Austin** » 16 Aug 2013 09:34

The good things about FD and Postal is that it assures guranteed return and predictability over stated period and in case of postal thats are quite a few interlinked schemes that can give you around ~ 8 % every year , so its more like crefree investment that you dont have to bother and are happy with moderate guaranteed returns.

Stock market is for people who want to take risk from low to high and who understands how this thing works .... Most common people in India dont understand it and are risk averse specially if that is your hard earned money after spending on personal/family needs and other obligations and little you can save .....there are many cases where people have lost their hard earned money in Stocks and commited sucide something you dont hear with FD or Postal.

So invest in Stock only if you understand it or you know some one reliable who can make you understand the pro and cons of the game ..... Just going by mombo jumbo of today it is $ 100 billion and 20 year down the line it will be $7 trillion will lead you no where.

Best bet is to spread out your investment and put a certain % in stocks and that certain % is individual risk appetite ...... so its more of guranteed return and predictability over the period of time in FD/Postal/Govt Schemes/Physical Gold ( PPF etc ) versus gains over short/medium in stocks ........that is what my advise would be.

Personally I had my fair share of Good Returns and Burnt my fingers while investing in Stocks

vic · Post by **vic** » 16 Aug 2013 16:08

1990 was low end and 2007 was high end, therefore one gets 20x returns. Now if we compare 1995 and 2009 then we get only 3x returns from Sensex in 14-15 years.

Austin · Post by **Austin** » 16 Aug 2013 19:30

A question on Debt , We have something called as Public Debt which is what the Government owes and Gross Debt which includes Corporate Debt and Government debt.

So is Gross Debt something Immaterial to the Debt Debate as that is something a company may have borrowed from external creditors and that is the look out of the comany and not really the Government or Public should be bothered with.

Put it simply Gross External Debt is immaterial to the country since its not its headache no matter how high it might be ?

Gross External Debt : http://en.wikipedia.org/wiki/List_of_co ... ernal_debt
Public Debt : http://en.wikipedia.org/wiki/List_of_co ... ublic_debt

Theo_Fidel · Post by **Theo_Fidel** » 16 Aug 2013 21:35

SENSEX was 3000+- in 1995, does that not make it 6x. Yes there will be ups and downs. Some sectors will do better than others but show faith long term and the market will reward you. You can always find a shortened time series that shows what you want to show. But if you keep pushing the length of time the market return becomes steadier and steadier and more probable.

Austin · Post by **Austin** » 16 Aug 2013 23:10

Germany likely to overtake US as world’s No.2 exporter this year ( via RT )

Germany could overtake the US to become the world’s second-biggest exporter this year, Reuters reported, citing the Association of German Chambers of Industry and Commerce. Europe’s biggest economy, currently the world's third-biggest exporter after China and the US, has seen its share of world trade fall to 7.5 percent by last year. The association sees Germany's share slipping to 7 percent this year and in 2014. A post-German unification peak of 11 percent was in 1991-92.

Austin · Post by **Austin** » 16 Aug 2013 23:11

US initial jobless claims fall to 320k - best since late 2007

The number of Americans filing new claims for unemployment benefits fell to a near six-year low last week, Reuters reported. Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 320,000, the lowest level since October 2007, the Labor Department said on Thursday. The drop in both new applications and the four-week average offered hope of an improvement in labor market conditions after hiring slowed a bit in July.

TSJones · Post by **TSJones** » 17 Aug 2013 03:09

Debt is not a sole determining factor. Is the economy growing? Is infrastructure being created? Is trade being promoted?

It's a mix of factors.

Austin · Post by **Austin** » 17 Aug 2013 18:38

Russia’s ‘Black August’: 15 years on, ruble risks much reduced

Fifteen years ago, the ruble suffered its worst-ever devaluation in what became known as “Black Monday.” But now, while ordinary Russians still fear devaluation, experts say the country’s finances are much better able to weather global economic shocks.

On August 17, 1998, the ruble plummeted against the dollar in the blink of an eye, after Russia’s government said it couldn’t meet its key debt obligations and would end massive currency interventions. In about six months, the Russian currency nosedived from six to 21 to the dollar. In the aftermath inflation skyrocketed and many enterprises and banks across the country collapsed, leaving Russians without their livelihood.

Some warn that today, the alarm bells are ringing in a similar way. Russia’s currency has recently been losing steam, as economic growth is disappointing and the government still needs to eradicate a budget deficit. The euro is close to 44 rubles, while the dollar is fluctuating around the 33-ruble mark. Russia’s Central Bank is again steadily announcing record high currency interventions to keep the ruble stable. In the meantime, the results of social research show that a majority of Russians fear that a new currency default could be on the cards sometime soon.

However, Moscow financial experts who experienced the 1998 crash are sure that this year the ruble won’t repeat the “Black Monday” crash it suffered then.

Natalya Orlova, Alfa Bank’s chief economist since 2001, joined the bank as a financial analyst six months before the August 1998 devaluation.

“The domestic state of Russia’s economy is incomparable with 1998,” Orlova told RT Business. “The level of state and private debts is much lower, and economic growth, though recently slowing, remains in place.”

Another seasoned Russian analyst, Irishman Chris Weafer (currently senior partner at consultancy Macro Advisory) came to Moscow to work as Troika Dialog’s chief strategist in the summer of 1998, just before the crash.

Though further devaluation is possible now, Weafer told RT Business that this time around it would be much smoother and on “a controlled steady basis rather than a sharp fall.”

“Currently the ruble is weakening because traders expect the Central Bank to start lowering interest rates from September and, in addition, they expect to see the government add more stimulus measures to try and boost flagging economic growth,” Weafer wrote in an e-mail. "Such actions always lead to a weaker currency. This is exactly what happened to the US dollar in 2009 when the US Federal Reserve Bank started to cut rates and add stimulus.”

Oil, a backbone of Russia’s economy, is much higher today that it was 15 years ago, Orlova pointed out. In 1997, the oil price stood at $25 to $28 a barrel, and on August 18, 1998 it plummeted to $7.80. Today, benchmark Brent crude is trading at above $110.

However, oil remains the “wild card,” Weafer said. “If the price of oil trades up towards $115 or $120 per barrel, then this will provide better support for the ruble and prevent much further weakness. But without high oil, we can expect the rate cuts and deteriorating economy to start pulling the ruble lower in the autumn.”

Increasing pressure on the currencies of emerging economies is a huge drag on the ruble, said Yaroslav Lissovolik, chief economist at Deutsche Bank. “Investors seem to be shifting their bets to the developed world,” he told RT. “The recent success stories in China and the US, as well as a turnaround in the Eurozone, have inspired investors that developed economies might be back on track.”

Orlova said investors are now hastening to buy enough dollars before the US caps its monetary stimulus. “They are buying up greenbacks now, giving emerging economies their domestic currencies back,” she said.

Experts predict that the ruble could end 2013 somewhere between 32 and 35 to the dollar.

TSJones · Post by **TSJones** » 18 Aug 2013 10:28

India's PM says no way is India going back to 1991:

http://finance.yahoo.com/news/india-pm- ... 14056.html

vishvak · Post by **vishvak** » 18 Aug 2013 11:23

^That we are not going back to 1991 crisis is a nice thing to note. However the global financial troubles have not subsided with discovery of shale reserves that could provide huge buffer to US economy for it could help dominant position of US economy in the world. Then there is also occurance of Iranian nuke weapon issue along with sanctions on Iranian petroleum industry- and no other Iranian export/import industry - coinciding with global financial troubles, as also global rise in terror or even front line NATO ally on terror paki's cross border terror - Indians have a lot on the plate to chew on really.

Austin · Post by **Austin** » 18 Aug 2013 17:20

Sharpe Ratio Flags Yuan as Best BRIC Carry Trade

panduranghari · Post by **panduranghari** » 19 Aug 2013 17:54

The video basically states that the US (and thus UK) economy will dip down into next year rebound and then get absolutely slaughtered at the end of 2015.

This isn't going to end well. And the thing is, when we implode, we will be alongside most other western countries. France, Germany, Japan and the US are either following us down into the Sovereign debt crisis pit, or are ahead of us.

Christopher Sidor · Post by **Christopher Sidor** » 19 Aug 2013 19:49

^^^^
Scary part at 12:21, "India is basically where Japan was 4 years before its peak".

SwamyG · Post by **SwamyG** » 19 Aug 2013 19:51

Some of the posts lead me to believe that the World as we now know it is going to end next year....economic collapse again in USA, Europe etc. Real Estate prices are starting to go up in USA, and things are not so much of Doom & Gloom. So why is the D&G being predicted? Any pointers or simple explanation to understand what the gurus are seeing.

Theo_Fidel · Post by **Theo_Fidel** » 19 Aug 2013 21:40

My own view is that it is bleed over of the christianist ‘end of days’ phenomenon. The religious right is obsessed with projecting the, ’repent for the end is near’ phenomena as it helps recruit clients who can then be parted from their money. I find it very very odd for the presumably non-christian Indian right wing folks to be pushing it, but I’m not surprised.

The truth is these folks do not understand what the end of civilization will be like. There will be NO survivors. Gold, freeze dried potatoes, .50 caliber guns, grenades, RPG, nothing will matter. When Sumeria fell, the population of Babylon fell to zero. When the Indus civilization fell, as far as we know there were no survivors. No one using their technology, or language, or script, or city design or even their sewer system survived. Zero.

TSJones · Post by **TSJones** » 19 Aug 2013 23:12

If I may humbly disagree with the Bane of Paper Traders, but the US is not imploding any time soon. There was much wasteful unemployment and hunger during the 1930's in the US and Keynes was fighting a hard battle to get his ideas accepted and still the US didn't collapse in spite of conservative efforts to kill any social help for the poor.

It will not happen now that we understand the proper application of Keynesian economics. There will be no banking panics in the US. Can Black Swan events still happen? Of course they can, but our systems are resilient. They proved that in 2008 when a collapse in the housing mortgage derivatives market was stopped cold in its tracks.

India has its problems but it is not because its economists don't understand Keynesian economics. I'll bet there won't be any banking panics. India has a lot of restrictive laws that the US doesn't have but there is a reason for that, mainly a vast poor population that the US doesn't have. And India has come a long, long, way in the last 20 years. It needs to make adjustments, but it will make them and move along. Trade and growth are mandatory and it has a huge population that is waiting to participate.

Austin · Post by **Austin** » 20 Aug 2013 16:23

panduranghari wrote:
The video basically states that the US (and thus UK) economy will dip down into next year rebound and then get absolutely slaughtered at the end of 2015.

This isn't going to end well. And the thing is, when we implode, we will be alongside most other western countries. France, Germany, Japan and the US are either following us down into the Sovereign debt crisis pit, or are ahead of us.

Thanks for posting , Very interesting views on China based on his personal experience.

Japan and UK will be the two most interesting countries to watch out in the future as their Debt has grown many times over their GDP