Our great growth period

Starting from 2002 to 2008, the whole world showed high economic growth which was not seen ever by humanity. The governments all around the world, printed a lot of money, which lead to economic growth. Productivity increased around all economic sectors, steel and cement production increased by 3-5 folds, new infrastructure in terms of rail, roads, bridges were made. The number of cars on the roads doubled. Wages also doubled in few years time.

This money was entered through the banking system by credit expansion. Banks were lending like anything, this led to cities getting overpopulated and towns underpopulated. Lot of money printing led to rising commodity prices, real estate prices and stock prices. This was a time when speculators earned more than real hard working people. Every fifth person was speculating and every third person was a property broker in these times.

Everybody was happy to earn money, and also too see their house price inflate. Companies added extra production capacities. Most other companies speculated by buying smaller companies to increased production. This also lead to and M&A boom.

This time became a me-me-me generation for status-seekers. It was a time of new-breed of millionaire. Everybody looked intelligent in those times. Everybody had too much to make and too much to spend. Mobile phones, Internet made people believe that we are entering a new modern era which will be much better than those sci-fi movies had shown.

This was a time, when too much money was chasing too few assets. Real estate boom went on all over the world. Mortgage industry flourished. Higher home equity, and more money in the system, made people happier to worry less about the future and spend more.

Globalization got its true sense, just 20 years back when people were living and closed communities will all their relatives in the same city/village. This time people thought about World tours, living in 10 cities for a life time. One leg on Dubai, other in Singapore and third in London. Unachievable prosperity was achieved. Humanity felt proud of it. Capitalism was appreciated like never before.

It was all about Growth. Everybody business dreamed to grow 10 times. It was a time when Money was everything. Amount of optimism in everybody was unimagined. It was, as if we are going to grow forever, without ever coming back.

It was also a time of exceptional me-me-me success stories. Absolute assholes of the world, speculated to earn millions. This was a time of success stories, everyone grew their businesses n-folds. Everybody was proud of their achievements.

But in real,

Real estate and house rents were appreciating faster than the real wages. Food prices were going off the roof, because they cannot be mass produced like mobile phones, cars or textiles. Even in textiles, cotton clothes were getting expensive because cotton cannot be mass produced, but polyester can be. Especially, the poor was not even able to afford everyday food and a 25 sqft. space to sleep, but mobile phones and nice clothes, didn't made him feel like poor anymore. Poor was also proud and happy.

The situation of educated youth was even more pathetic. In 1990, we were facing problems of employing our men, now leave men, women employment rate was also high. It was impossible for the youth to afford metro cities life, without a working spouse. The real wages though rising in currency terms were actually shrinking, now two people have to work to run a household, instead of one. And i am not talking about extra luxuries, just a normal household, with a secure neighborhood, hygiene, education for the kids, and healthcare for the rest of family. Leave cars and air conditioners. Every housewife, was trying that extra arrangement for little extra money.

Businesses and people with real hard work and no speculation didn't made much. It was always about the extra arrangement ( jugad) which made businesses running.

Everybody will realize by 2011 or 2012, that our real wages are shrinking. But if you realize, it so late, you will loose a lot.

Capitalism vs. Communism

I read some newspaper article defending Communism and saying this is the systematic collapse of Capitalism. Also, quoting the famous Marx argument that "Capitalism will produce internal tensions which will lead to its destruction".

My thought is our idea of socio-economic system is totally wrong. Let me explain.

The capitalist system, uses human greed as the building block of a system which is supposed to create prosperity for all. However, American dominance of the world tweaked the system design such that it creates prosperity for America. How much ever resources or hardworking men or capital other countries get, prosperity will always be with America. This is called American Hegemony.

Capitalism has a systematic flaw, that humanity will create so much production, and capitalism has no way to destroy excess capacity except by killing people using a war.
Communism has a systematic flaw, that humanity will not have enough motivation to create things, because benefit finally goes to the community or the society.

Whether Capitalism fails or not, but it definitely gave us a wonderful time with lots of ups and downs. I don't think that Communism was a great socio-economic system either. Communism would have failed badly and humanity could have never come close to the kind of development Capitalism could achieve.

What is the best socio-economic system, which is self sustainable, is not prone to systematic flaws ?

There comes the idea of Religion. A system above all socio-economic system, tried and tested, without systematic flaw.


When human beings feel intense heat from the sun, Capitalism suggests human beings for invention of Air Conditioners. However, Religion suggests reaching such spiritual levels in mind, that you do not feel the heat anymore. Capitalist system is materialistic, where body is cooled down when it feel the heat. Religious system are spiritualistic, by cutting of the pointer in mind which sends the sensation that body is feeling heat. I will leave it up to you to decide which one is better.

Materialism and Spiritualism are similar to idea of accessing things via value and access via pointer in C/C++ respectively. We need to fill our material desires by taking the pointer to that desire and pointing it to NULL. Instead of creating random things to fill that material desire.

Under capitalism, we have become such mother fuckers that we are fucking up our mother nature in a 6 billion people group orgy. Why do you need a dining set which defines you as a person ? Why do we need to have perfumes and watches to differentiate ourselves ? Why do you
want to roam around the world ?

We have become obsessed with these material desires to obtain such things. And after obtaining frustrated to maintain such things. After frustration, fearful of losing such things.
We have researched all the wrong things. It is time to research our minds. It is the time for the world to leave its materialism and start moving towards spirituality. This financial crisis will mark a lot of things. The crisis has just begun.

Inflation going Hyper !!

This post explains you why inflation will go Hyper.

Assume that current monetary easing leads to mild inflation in India and China. India and China, already have a high base effect of last year. A 5-10% inflation again will lead to havoc in the economy. Initially, governments will try to control inflation by monetary tightening, but their is so much amount of money already in the system that monetary tightening is not going to work (as it was not working in May, June, July when inflation finally peaked at 13%)

Bond markets are already showing signs of a bubble bust, so governments which have screwed up their finances will find it problematic to raise money, and hence will resort to printing money.
Eventually, India and China will have to intervene in the currency markets, to prop up their currencies. This will lead to inflation in US, as dollar will lose value, when these two countries intervene directly by selling dollars out of their forex reserves. US will not like it, and will probably piss-off India and China, by ordering them not to intervene in the currency markets directly.

If, India and China, are successful in the currency markets, the inflation will be exported to US. That means, inflation has gone global. Now, all global commodities will start rising. This again leads to higher inflation in India and China.

If, India and China, are unsucessful in the currency markets, they will hyperinflate. That means, half of the world population is facing high inflation. This will make things even more worse, because it will definitely lead to a massive social unrest and a war.

I know, you did not got it all, but atleast keep 1 year of food stored at your home. Live life the old way, when people used to buy 500 kg of wheat/rice at the time of harvesting season and consume it for whole year. Also, now people have guest room, childrens room, living room, dining room but they have forgotten the significance of store room. Have a store room at your home.

Understand that we are not that modern, appreciate the old ways, for they have seen more than you to make something a part of the culture. To understand what exactly is going to happen, just imagine a 1-year curfew is taking place, and how should you be prepared. Things will get worse from as early as 2010. You still have good 9 months to think, watch, but once you are sure, take action. Watch commodity prices at your grocery store or a commodity market website, and make your own inflation index. Buy equities and gold, they will be safe and liquid heavens to preserve your wealth against rampant inflation. Buying realestate will also be good, but ill-liquidity will be a problem.

China and the US

In an earlier post, Rise and Fall of US, i talked about how other countries will ask for their money back which will lead to busting of the consumption boom. Today, China did that in an indirect manner, China Urges New Money Reserve to Replace Dollar.

Earlier also Iraq asked for money back in 2003, but they were forced to live with the current system again. But this time it is the Roaring Tiger of the World. I just want to see, how US will suppress China's voice.

As Keynesian economic theory suggests, War is a good way to get out of worst economic crisis.
If we have a war which looks like an highly improbable scenario right now. The war front is little bit clear except for the role of India and Japan.

AXIS : China, Russia, Pakistan.
ALLIES : US, Britain, France, Australia, Germany, Italy, Canada.

Seventies Show

The seventies, in US, along with it brought high inflation, gas shortages, fresh food shortages. The economic growth, after the 1973 oil shock slowed down. Inflation started. Comparing life from 70's will be good enough case to study, if you think next 10 years will be a high inflation period. This was just a mild inflation, interest just jumped up to 22.5%. If you however believe in the severe Wienmar German sort of inflation, you should refer to the earlier post The American Hyperinflation.

Here is a little description of seventies.

1. Lot of people started growing vegetables in their backyards. The Beach Boys stopped singing about cars and started singing about vegetables. The unfortunate thing for now is, now people live in flats and have no backyards. So, be prepared to stop eating fresh vegetables/ fruits. You will not be able to afford it. But, you can get the beach boys song "Vegetables" to remind you of the good times.

2. Bigger the city, bigger the problems. The social unrest, fresh-food shortages were more seen in bigger cities rather than small town. Small towns closer to agricultural lands had less social unrest. Agrarian villages were in best shape.

3. Gas was not available easily. Most gas stations only served to regular customers. Cars suddenly lost their coolness, were not important at that time. Bigger the car, more people hated it. So, in current times, it will be SUVs and hummers which will be out of the picture. If things get very worse, cars will some luxury, which we will get at an amusement park for $2 a ride.

4. Restaurants turned a luxury normal people could not afford. The scenario was grow your own food, cook it yourself, eat it and sleep. Or become a hippie and smoke pot and rock-n-roll. No wonder, most of the population chose the latter.

5. Fashion changed every fortnight. People were awesomely crazy in those times, everything weird was cool.

6. People liked to listen to Osho talking about how great the word fuck is. But they did not wanted to listen to any motivational talks. It was a life which had no tomorrow, just have enough resources to live till the end of the night. When Socio-economic boom is prevalent is a great time to start your own company, but Socio-economic problems are prevalent in the economy, is a great time to start your own religion. Believe me, having your own religion is much better than having your own enterprise.

7. That was the time when the rule was, Money does not always rules.

Wealth Preservation

This is ideal example of wealth preservation, above all common beliefs.

Suppose you are an astronomer, and you get to know that a massive meteorite will strike Earth, which would destroy half of our population. You know, that you cannot help the world, but right now you have 10 million dollar to help yourself. What do you think will be best and worst thing to buy with your money, assuming that you will live at the end of the massacre ?

Post your comments, and i will tell you, at the end of it what is the ideal thing to do.
Keep the format of your comment as,

Best : Food, Gold, Keep the rest of cash.
Worst : Equities, Realestate.

Stupid Assumptions

Here are a lot of our common beliefs with reasons that they are wrong.


Wrong Assumption 1 : Price is about quality of the product.
Take this fundamental law, price is always about supply and demand and has nothing to do with the quality of a product. Price (Salary) of a man does not depends on his intelligence. Price of a product not on its quality.
In 1800-1900's, Elephants were used as a mode to travel. Then came the Car, it was a luxury, it had speed, it had the power, it carried a high price tag also. Today, in 2000's Elephant is expensive than a car. The elephant is slow, has less power, smells bad, does not have an air-conditioner in it, still it is more expensive than a car. This is just because there are more cars and less elephants. Rare coin, however ugly will have more value than a not-so-rare coin.
Always keep rare things with you, don't keep what is ample.

In 1900s, big landlords and farmers, were rich guys. Then came the period where industrialists were rich. Then rock-n-roll guys were in the hall-of-fame. Then again industrialists. Then the technology champs. Then the Oil Barron's. Then the Wall-Street guys. Then ...

Wrong Assumption 2 : Equities cannot rally without a rally in corporate bonds.
A wrong argument is, if the price of corporate bond is falling, it indicates debt-holders do not trust corporate, so equities cannot rally until the trust is back.
However, if there is high inflation, corporate bonds will continue to loose value, however equities will be rallying. The trust has nothing to do with it.

Wrong Assumption 3 : Price of an underlying asset has nothing to do with money supply.
Price is more about money supply rather than supply-demand of the asset itself. If governments increases money supply, the price of the asset has to rise.

Wrong Assumption 5 : I am safe to keep my money in a 8% FD/bond/ NSC certificates.
The inflation that our government reports is never close to reality. The inflation number reported is the inflation for labor class. The average inflation for the Indian middle class in last 5 years, was well above 15%. The average inflation for a Indian upper-middle class in last 5 years was above 20%. Price of everything doubled in last 5 years. Whether it was a pair of jeans, the rice-wheat you eat, shampoo, doctors fee, medicines, condoms, edible oil, a car, a bike. Take anything you wanted to buy from your money and look at the price change between 2003 and now. So effective if you invested in NSC certificates, you made a overall purchasing-power terms loss. This was because, money supply was increased, so everything increased in price, except for your bonds.

Wrong Assumption 4 : People always burn hands in equities, commodities but they are still in it.
Take any five year horizon, assets will outperform cash or bonds. Even if you take peak and trough points in a 10 year period, assets will outperform cash or bonds. Don't worry about the daily euphoria, about everyday price changes, about market crashes, in a longer time period it will always be better to be in well-diversified equities/commodities/realestate rather than cash or bonds.

People live with their wrong assumptions, until they realize they are severly wrong. I want you to think rationally, and change your wrong assumption before you go severly wrong.

Brutal Markets

Disclaimer : All the data and facts are taken from random websites and might be wrong.

The worst economic crash in human history, is not the Great Depression. But, the crash of 1340. The crash after which Black Death followed. Here are some interpretations of what happened.

1200-1340 was like a golden age for man. The economic boom which existed during those times was big. Silk, Cotton clothing were discovered. Shipping industry boomed and trade around the world started. That was the time, when the principles of free trade and free markets flourished. The world got globalized, Silk Route became famous. Civilizations interacted. Trade flourished.

Venice was like the trading hub of those times, the equivalent of New York or London. Fortunes were made at Rialto in Venice, the Wall Street equivalent of history. Whole bullion trade was globalized from Venice.
Gold was the currency primarily in India and China. Silver was the currency in most of Europe.

The inherent behavior of currency is, since it is the sole thing to keep, it is always overvalued.
Although, taking positions against overvaluation of a currency is a stupid thing to do, but it is always overvalued. Since, Silver bought everything in Europe, it was overvalued in Europe.
Gold bought everything in India and China, gold was overvalued in those countries.

Venetians discovered this great trade, and brought gold to Europe and sent Silver to India.
Mongols also looted Gold from India and China, and sent it to Venice. Venice, changed the currency standards in some European dynasties from Silver to Gold.

This led to oversupply of Gold in Europe. This oversupply lead to loss in value of Gold in Europe. But, how do you define Gold lost value, since it was their currency. Gold loosing value means, everything else increased in price including all important food items. Prices continuously rose from 1290-1340 relative to Gold and Silver in all of Europe, India and China. High inflation period started, because Europeans took too much Gold in their system, without increasing the productive output. This looted wealth, did not created prosperity in Europe but caused high inflation.

People started dying from Hunger. Rodents obviously spread on dead bodies, leading to a plaque called Black Death. Horrifying Black Death spread all over, killing 33% of the European population.

This thirst for Gold, eventually led to destruction of whole Europe. Remember that Wealth should never be accumulated, it should be distributed. But Mongols, wanted the Gold from everywhere. If you accumulate, all the gold in the world, you will not end rich, because gold will loose its value.

To Sid, With Love

This post will explain you that, why this period will not be of subdued economic activities. This will be worse, besides good economic activity.

I liked the golden words from Sid, "The monetary supply, to maintain balance, must grow at a rate which approximates the growth in productive output, otherwise the money system will eventually starve itself of liquidity". This is perfectly right.

But my question is, What happens if the money supply increases without productive output.
People have gone crazy these days, they are hoarding on to cash as the best investment. If people keep the cash with them, the system will starve from liquidity. So government will have to inject more cash in the system. But, people will hoard all that cash again. Government print more and injects more.

Its sort of government is trying to unclog the credit system, by throwing cash. But people with all their belief that this is the end of 50 year long Kondratiev_wave, keep on hoarding cash. This creates a oversupply of cash in the system. Though, it will not look like it, because people are hoarding cash. But what happens when all this cash comes out to buy something.

My golden words are : "If majority understands the system and take action against it, the system changes itself".

Banks, whose primary duty in the system is to lend, are refraining from lending. People are so sure that this is great depression, they are keeping their cash at home. Everybody is cutting on those new purchases, because they think, they will be able to buy cheaper later on. Governments to stop the world from severe problem, are printing money, cutting rates, providing liquidity.

My view is also the same, that it will be very long slump in global economy, it terms of productivity. But, governments printing money at an insane rate to keep the system intact, are doing wrong. In dollar terms, it will be period of growth. People around will have a more terrible life, but Dow Jones Industrial Average will make new highs. Wages will be less, but not in money terms, but only in terms of things they can buy with it.

Kondratiev Wave, wiki page says this, "The business cycle is supposedly more visible in international production data than in individual national economies. It affects all the sectors of an economy, and concerns output rather than prices (although Kondratieff had made observations about the prices only)."

This is precisely my argument, the real economic output will be far less, but prices will be far more. When the cash which is being hoarded upon, comes out to buy something, things will appreciate in price. If prices of essential commodities doubles from here, the money system will ask for more money to buy essential things. This will lead to governments printing more, essential commodities rising more, money system starves again from liquidity and so governments print even more. Positive feedback loop of price rise begins.

I hope i made some of your questions clear, and planted new questions.

Culture and God

Long before, India accepted that growth and economic upliftment means westernization. Westernization of our thoughts, westernization of language, westernization of lifestyle.
China and Japan, sort of proved that growth and economic prosperity can be achieved without following the western culture.

Every single human obsession to spend, creates jobs for other people. If you have too many gods, and different ways to worship them, too many festivals, too many rituals, too many customs, all these create jobs. A festival increases the velocity with which money changes hands. A marriage season increases economic activities across all sectors.

If you think about it, Diwali became a big festivals, why not Janmastmi. It was not because Ram was more important than Krishna. The primary reason was because it was coupled with the Kharif crop harvest, at that time of Diwali our ancient agrarian economy had more to earn and more to spend. The velocity of money ( the rate at which money changes hands) increased during those times. That lead to people spending more for Diwali and lesser for Janmasthmi, and Diwali became a bigger festival. Same is the reason for Holi becoming a big festival because of the Rabi crop harvest.

The outsourcing boom and investment inflows, together increased economic activities independent of our festivals. Money was coming not just through our economy, but from outside. So, the importance of these festivals and the monsoon on economic activity was diminished. Now, in this economic downturn the importance is back. If you run a factory in India, you could see a clear change in orders, even from a small festival like Sankranti on your sales.

For Christmas, Santa Claus was created because Jesus was not able to increase much economic activities. People needed a red-dressed gift-delivering symbol of god, for Christmas shopping.

World will learn some day, that it is not possible to run economy with just one god, you need a whole family of gods. Also, you need to celebrate all your Gods birthdays, marriage anniversaries and other godly achievements. All this is nicely binded into our culture, we have 1066 festivals, 330 million gods. We celebrate, Mahashivratri, Ganesh Chaturthi, Janmashtmi, Ram Navmi, Diwali, Tulsi Vivah, Holi, Gurunanak Jayanti, Id, Christmas, Raksha Bandhan, Onam, Pongal, Lohri, Navratri, Mahavir Jayanti, Bhuddha Purnima, and a hell lot many more.
Just think about these festivals, and imagine the economic activity each one of them create.
These festivals are very important to run our economy. So, next time you get stuck in traffic because of Ganesh Chaturthi, don't get pissed off on those people, look at the economic activity which is being created. This economic activity is helping you to earn money, in some or the other way.

Westernization is killing some of our culture, but we must preserve it. Culture preservation is not just some bullshit, which governments try to do. It makes deep economic sense to preserve it.

Brutal System

One of my friend told me, that stock market is too brutal. This post shows you that every system, when it comes to teach you for the things you did in a wrong way, it teaches brutally. Systems are purely rational, they are emotionless. When system comes to teach you, of something bad, it will teach you in a wild, uncontrolled and savage manner.

Around 1985, a technology came to India that was more wonderful for people. They were very happy to see this technology work. It was admired more than TV or Radio. It was called Sex-Identification before birth. People used it terribly, to get the female child aborted and fill their obsessions about the male child. People produced 4-5 male child, after getting 3-4 female child aborted. They were pretty happy, that they will command fat dowry when their male childs grow. This lead to a shortage of female child.

God never reacted to the bad. No thunder showers or lighting happened when the female child were killed. The system was looking, it was silent.

Twenty two years later.

In year 2008, there is a terrible shortage of females, especially in small village areas. People are offering reverse-dowry to the female's family for getting their male kids married. Some people with 4-5 male child, cannot afford to pay the females family and cannot even manage to get all their male child married. This is not that brutal.

The brutality is with the villages in Rajasthan. They produced too many male child, and because of terrible sex ratio's nobody want to get their female child married in those villages.
This will lead to no new families, who will be male-child-obsessed. Some, want to try to sell their land and move to other villages, where people like to get their female-child married, to get their sons married. But, nobody wants to buy land in those villages, even at super-cheap rates. Many of the male child ran away, from their families, to get married. Most of them stole and took all family jewelery along with them. The system, will teach them brutally by wiping out the complete villages out of the landscape, they will make their sons die unmarried. This is evolution. The brutality is totally worth it.

The system, destroyed the wrong. System will always teach you for the wrong deeds, in the same lifetime. If the system is silent, don't think you are right.

Creative destruction

Destruction is also sometimes a creative thing to do. Creative Destruction is like a reboot, to start a hanged system again. Creative Destruction is like a war to start creation again.

If value, cannot be created by the economy, destroy the current value, so that the economic engine runs again. Keynes, in his theories clearly pointed out, that wars act as a great economic stimulus. Now, if you read Classical or Neoclassical economics you will feel like laughing at it. But Classical and Neoclassical theories were proven as terrible failure only after we saw Great Depression. Now, everybody believes in Keynes. Deficit spending is done by every government as a counter-cyclical measure to beat the economic boom-bust cycle. Don't you think Keynes will also fail some day.

So, if a theory fails so easily, after perfectly working for some years . Then, the theories which are written in our oldest Veda's must be right. For they would have seen all the conditions and must have been modified for all scenarios, they would have evolved above failures.

Its written in RigVeda. Fear Debt, for it will land you to biggest problems later on.

U.S. has engaged in many wars, precisely when its economy was in problem. World War II was the basis of taking the world out of the Great Depression. The solution to systematic problems will be found by the system itself.

World War I caused German Hyperinflation. The German Hyperinflation led to rise of Hitler. Hitler in search of food, attacked France. The World War II started, the economic engine started running again. The world was out of the Great Depression. This cycle took in all ten years. The thing to note is that the system, finds out a solution for its problems automatically.

If you have severely, faced bad-luck for most of your life. Then your prosperous time will be starting soon. However, if you have been a lucky all your life, good-luck will say you goodbye. This is theory of Luck. Luck never stays with one person for a life-time. The feedback loop has to do something with it. If you have been too lucky, you start behaving like an asshole, and luck goes away. This can be called feedback loop of assholism.

These systematic forces will always be working. The feedback loop will be always at work. However, big the problems human being landed into, the solution will automatically be found by the system itself. The system may take time, but at the end things will become better.
Be patient with the system, for justice will be done by the system itself, for wrong ideas of the human being. Probably, these systematic forces at work, would have made the human being to believe that there is something out there which sets everything right, which the human beings called God.

If you do positive things, positive feedback loop will be formed. If you do negative things, negative feedback loop will be formed. What is positive and negative, can be taken from the principles of Dharma.

India 2025

I know, all the factors i listed down in my earlier post, were already existing forever for India. But the good new factor is, the whole world is going into a recession for a pretty long time. Only one thing that can revive the world back is domestic demand of India and China.
We will get super-cheap commodities for a long time. Super-cheap oil. Super-cheap metals. Super-cheap machines. Super-cheap anything we want from the rest of the world.

Japan, never exported to grow. It started exporting after the crash, because there was no domestic demand left. Crash of US will happen within a year. Millions of NRIs with billions of dollars are going to comeback to India. They are going to add to the domestic demand.

I don't claim that great American companies will not remain after the crash. Some American companies have made world class products. Those companies are the only hope for America.
But lot of companies which just exist because US is booming will downsize or go bankrupt. Subways, PizzaHuts and Starbucks will find it difficult to make bucks. Lot of crappy books written by great American businessman's will never be read again.

People will now be reading stories of India. Great Indian leaders will be born.
If you become a CEO of some Indian company and take it to great heights, you must remember that it is not just your efforts which are working here. You must admire everyone, you must remember the positive feedback loop.

Everybody was running this race. Race for economic growth. Everybody was running like a hare. We were the tortoise. At the end of it tortoise always wins.

India is decoupled. We don't need FII investments. If Crude prices are at 30$ compared to 70$ over last year. That is equivalent to savings of 40$ per barrel of crude. Our daily crude consumption is 2.4 million barrel per day. That make an annual savings for @(70$-30$) equal to 35 billion$. This is just crude. Rest of the savings will come to be much higher than the FII investments over the complete year.

We will continue to grow. Grow at the speed of tortoise and we are going to beat all those hares.
Our domestic savings and investments will lead to our growth.

Only way Gulf can manage to get crude prices up are not production cuts, but they should learn that instead of spending their money on their useless infrastructure projects and havoc sized malls in Dubai. They should start investing in India's infrastructure. They should probably gift a car to every poor Indian families. Crude is going down below 25$ according to my new prediction.

India 2025 will be much bigger than what people would have ever thought.

It will be much easier to do business in India. Every business in India will grow. India will have a big consumption boom. We will be exporting lifestyle and food to the rest of the world.

When somebody gets rich, people start to listen to them. We were listening to US. We suddenly out of nowhere started liking their junk food and their life style. When India goes rich, people will start to become obsessed about yoga, about our classical music, about our life style.

I don't know what we have to teach to the rest of the world. But when we grow rich, we will definitely find a lot of things.

Ofcourse, be intelligent and become the part of the boom. Don't be part of a busting economy.

Incredible India !!

For quite a long time, i was looking at signs, whether its India or China or Brazil or Russia.
I was clear it cannot be any developed countries.
Now, looking at these final changes in the world economy. I am clear now, its not China, Japan, Korea, Taiwan, Russia, Brazil or the rest of Europe. Ofcourse, its not America.


I am talking about the next biggest consumer of the world.
The next biggest economy of the world.
Celebrate resilient, redoubtable, incredible India !!

We have the the Youth to work.
We have the population to consume.
We have the best possible climatic conditions to grow food.
We have the sunlight for energy.
We have a resilient financial system.
We are least dependent on the rest of the world.
We have the savings.

We are the next !!

1950-1987 : It was Japan, Japan Economic Miracle
1980-2008: It was America.
2003-2025 : It is India. The next Economic Miracle.

I will write about what are the changes that will happen to India, when we become the next.
I will write about 'India 2025', in my next post.

Getting a MBA ?

With just 7 years of prosperity you have lived in from IT crash to subprime crisis, you are also a believer in the boom. You also believe that your salary is going to rise at 10-20% per annum for next 30 years.
Such assumptions at the times of boom has always landed human beings to worst financial crisis, especially when they leveraged and bought a house, under such assumptions. World is not so flat. You just cannot predict next 30 years of your life. You have seen too less. Life at the end of it, will teach you a lot, and most of it will be taught to you by supply and demand equation of the world.

Every boom has been followed by a bust, but nobody believes this one will bust ever.
Money has always changed hands, much faster than anybody imagined.

It never changes for people, just their price changes. We saw a technology boom, so price of technocrats was high. Every middle class parent was beating his child, to become an engineer.
This remained high, until the world produced so many technocrats, that they were not required anymore. Then people were required to manage those technocrats so the price of manager was high. Then people started to believe that managers will always remain in demand, they ran to get an MBA, for a high flying career. This belief produced so many manager, that they were not in demand anymore, their price goes low. Now, even a cashier at a bank is an MBA, people who pain you with those telemarketing calls are also MBAs, people sitting at Airtel counters are also MBAs. MBA became a worthless degree after all.
Then people believed Investment bankers will remain in demand. They ran to get CFAs, MS in Financial engineering until they realized they are not required anymore. People realized that artists are getting payed high. They ran to Arts school to learn Dance and Music, at that time every middle class parent was beating their child for reading about maths and physics, and were forcing them to become Artists. Big corporations were made, which hired artists, made them sit in a cubicle and draw paintings all day. Until that boom again busts. Then people realized that Farmers are getting paid high, they were beating their child for studying, and not doing physical exercise, so that he can become a good farmer.

Whenever you choose a career, which has existed for less than five years, then think again whether it is a boom or is it a sustainable long term career. Look at at least 10-15 years of performance across market cycles, then only you can choose a company/sector both for career or buying its stock.