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Thursday, September 22, 2011

The World is Not Enough

Interesting times we live in.Is the US in double dip?Is The EU finished?What will Greece do next?Is Germany faltering?Is the Indian Rupee back to is familiar level after half a decade?

These and many other questions have roiled the experts and cast an uncertain net over global economies.The Political will and talent to face the crisis and resolve is missing unlike 2008 and that seems to be the biggest impediment.I do not see inflation going down quickly as the population explosions of the last two decades have created strong demand pressures and it seems the Keynesian policy of curbing money supply isnt working any more.

2011 has been a year of natural disasters viz.earthquake in Japan and these have added to economic burden on the respective economies.What surprises me is how quickly the experts predict that the worst is over and the minute the markets fall they assume the worst.

Europe is bad and will remain so for some time,USA will grow like a tortoise.South American and African economies will take time to create an impact.What is China doing?For 3 months their manufacturing index has been in the red.But I do not seen an implosion in China and that leads me to believe that there will not be any explosions in world economies.

For India-natural resource(and I have talked so much about this in previous posts)remain the key and any fall in the commodity cycle bodes well for us.Our exports are now majorly out of the US-EU bloc so the danger of a slowdown is exaggerated.

The Banking segment in Indian equities has seen a 30% correction and at current levels most of the private sector banks are an 'investment'buy,not so much the PSU banks that have the burden of "priority sector lending" and various other government provisioned schemes.

Unlike experts I believe we will remain in flux in this decade with problems of finding new technologies,resources,medical advancements and finding clean fuel to run the world.With sundry 'Arab Springs' across the world,politically it will be interesting to see how the new blocs shape up and like a post-USSR world we might just see one post-NATO.