Saturday, February 13, 2010

the crash of the Euro - predicted 7 years ago - and now at hand?

The question - have consistently raised over all these years is: how long will the German taxpayer continue to pay for the Euro?

It looks as if the Germans are finally going to withdfraw the carpet from under the Euro

Expect initially a devaluation of the Euro, then of the PIGS currencies as well as of the Chinese

Expect all commodities (including gold) to decline substantially following the Chinese currency down, and loss of demand

At present, it is difficult to see where stability is to be found.

What comes to mind, as - have said rarlier, is the dollar, the Swiss Franc and perhaps the Indian Rupee (possibly also the British Pound - though the decline of the Euro may happen too fast to really benefit it). Sphere: Related Content

Friday, February 12, 2010

Dr Arun Gadre wins this year's Maanav Adhikaar Paaritaushik (Human Dignity Award)


The winner of this year's Maanav Adhikaar Paaritaushik (Human Dignity Award) of Rupees One Lakh in memory of Professor M. M. Guptara, is:
Dr Arun Gadre, of Pune, Maharashtra.

Arun Gadre is a doctor and a writer.

The citation reads:

"Dr Gadre worked for some 20 years in a rural part of Maharashtra as a gynaecologist: instead of working in a major city where he would have received a reasonable income and a comfortable quality of life, he chose rather to invest the best years of his life to helping rural women. As the only MD within a radius of 50 km, in a draught prone and poor area, with much more irregular electricity than in our cities, with scarcity of water, paucity of trained assistants, no blood transfusion facilities, and no one to assist, he conducted around 5500 deliveries as well as other major surgeries.

"In spite of his heavy duties in the challenging environment, Dr Gadre somehow found time to exercise his gift for writing, to produce in fact many different books. Two of them are due to be published soon, one on ante-natal care and one on HIV/ AIDS counselling. However, he has 14 books which are already published - three for semi-literate people on medical subjects, two medical textbooks, one on premarital counseling, one is a work of philosophy, one is autobiographical, and six are novels.

"Many of the books have won awards. His philosophical work, BHAVA PESHI, won the Shenolikar Puraskar for the best book of the year in philosophy from the Maharashtra Sahitya Parishad Pune, as well as the Marathwada Sahitya Mandal Puraskar. His novel, EK HOTA FENGADYA, won the Shankar Patil Puraskar for the best novel of the year, from the Maharashtra Sahitya Parishad, Pune. His novel GHATACHAKRA won the H. N. Apte Puraskar from Maharashtra State as well as the VS Khandekar Puraskar for the best novel of the year from the Maharashtra Sahitya Parishad Pune. His latest novel, VADHASTAMBH, won the Vikhe Patil Puraskar, as well as the Vaman Malhar Joshi Puraskar for the best novel of the year from Maharashtra Sahitya Parishad Pune. His latest book, a biography of the (now practically unknown) founder of modern India, William Carey, has just been published under the title: “Ase Hote William Carey” (Rajhans Prakashan, Pune).

"We probably have many people in our country who have put in decades of medical work in poverty-stricken, resource-poor and ill-connected rural areas, but there are hardly any who have combined that with outstanding literary work– and all of Dr. Gadre's works, whether philosophical, biographical, fictional or medical, provide evidence of a deep commitment to humane values which seem to be under threat in our world. We hope that the award will inspire many people to follow Dr Gadre's example of self-sacrice, and of the triumph of the human spirit over adverse circumstances, and that it will therefore inspire even more people to serve our rural areas with distinction".

Dr Gadre is the second winner of the Maanav Adhikaar Paaritaushik (Human Dignity Award). The first winner was Dr John Dayal, a Member of the Indian National Commission for Minorities.

Recognising that the award is only a token, the Guptara family deeply appreciates Dr. Gadre's lifetime of outstanding service to our country.

Dr Gadre is available for interview. Please email Professor Prabhu Guptara for contact details. Sphere: Related Content

Tuesday, February 09, 2010

Having seriously damaged its own economy, the UK ....

is now being encouraged to resist global initiatives to prevent continuing such damage, both in the UK and in other countries:

in a report published today, the European Union committee of the House of Lords (the upper chamber of the British Parliament) has urged the UK to withhold its consent to European Union rules regulating the hedge fund and private equity industries!

I hope that the House of Lords will have the good sense to reject such moves, which will only add to pressures that are steadily taking us towards increasing the likelihood of wars around the world, if globalisation continues to unravel. Sphere: Related Content

Saturday, February 06, 2010

visit to Shanghai and Changxing

Shanghai: the temperature is only 7 degrees but does not feel too cold as there is hardly any breeze

We landed, were greeted, whisked through customs, and escorted to a small 11-seater bus, two side-by-side, with an aisle down the middle, each seat with a foldaway tables, except for the front seat which has a spacious fixed desk in front of it to signal the importance of the Leader

The smooth and swift drive to Chongxing takes about 2 hrs though we are fogged out throughout - maximum visibility about 400yds, but most of the time more like 150yds

Our translator is from another province, with the first foreign language French, but quite competent English

In the translator's generation there is the beginning of a move now away from the larger cities to smaller cities, on the basis of better quality of life in the smaller cities, but I wonder whether the rwality in China is not rather that everyone has to work equally hard in every part of the country

In any case, I am interested to learn that the translator orders clothes on the internet and gets them 2 or 3 days later; and that, according to the translator, one should be able to get delivery evem in the remotest parts of China in 4 days: the delivery cost is about 6 Yuan in this part of the world, and about 10 Yuan for the remotest parts

Apparently, two months ago a drunken driving rule was introduced throughout the country - penalty 2 weeks jail - but perhaps the rich may still find that money facilitates a way out?

On arriving in Chongxing, we are taken to a huge hotel of the sort that one might have in Delhi or Agra: it is almost empty

the Tea Tribute Tea House from the 8th century, restored to its former glory recently, has to be specially opened for our small delegation - the advantage of being official guests!

Why is everything so deserted? Partly because this is winter: most Chinese and most foreigners prefer Chongxing between Spring and Autumn. And yes, they do get plenty of national and foreign visitors apparently. The newly built Exhibition Cente is very appropriate both for its scale and for its technical wizardry in view of the purpose for which it is designed: impressing foreigners so as to attract investment as well as impressing the best-qualified Chinese so as to attract them here as workers. The descriptive plaques here are in Mandarin, though the Tea House has everything in English as well

I am interested that in the hotel's welcome fruit basked there is a rather outsize (from the Indian point of view) version of a wild fruit that we call "Baer" in Hindi; this Chinese version may be cultivated?

On the tour of the Exhibition Centre, there is more than one reference to a "golden spike" which, I discover, refers to "the only standard of global stratigraphic division and correlation in in chronostratigraphic research". It is not golden, and it is not a spike in the normal sense of that word....

Changxing is still a relatively sleepy little town becuase most of the land around was occupied by the army. For some reason the army appears to have relinquished this land and moved elsewhere, when leases were taken by unknown (to our colleagues) parties, who developed the land in cooperation with the government which built the school, hospital, administrative centre, roads and high-speed railway (the last to be completed end-2010). The privately-developed houses, buildings and flats are available for sale to private individuals or western companies (though land itself cannot be sold in most or all of China). How much of these developments in China have actually been sold or rented cannot be discovered so far with any degree of reliability.

This applies also to the highly-impressive area of Pudong in Shanghai, which continues to become even more impressive each year. Though rumour has it that the buildings here are sinking because the land is marshy, that rumour is also impossible to establish or refute. Perhaps, to play safe, anyone who is interested in seeing this modern wonder should haste here in case it becomes like Venice. We don't get much time to be tourists, but the Bund is certainly a most interesting viewing platform to look on to Pudong. However, we do have time to look at one of the more fashionable bars and one of the most impressive restaurants, and I can assure my readers that Shanghai is as "cosmopolitan" (or "decadent", depending on one's point of view) in terms of culture, design and lifestyle

The city bustles away, very much on the make, with a population that apparently tops 20 million. In spite of that, traffic moves impressively swiftly on all the new roads that have been built.

There seems to be some competition between Shanghai and Beijing, in the same way as there is between Oxford and Cambridge, or between New York and Washington DC: when the 2008 Olympics were held in Beijing, there was no reference to them in Shanghai; and there is no reference in Beijing to the 2010 World Expo being held in Shanghai!

We visit one university, which is most impressive for its size and facilities. The city as a whole appears to be doing its best to maintain green spaces inside the city (much better than the smaller Swiss towns seem to be doing on that matter!).

Fascinating mixture of architectural styles, from some (too few!) traditional buildings, through the lovely the French-style colony called the French Concession, and early 20th century buildings (e.g. the neoclassical HSBC Building and the art deco Sassoon House) to the more eccentric modern buildings.

Too short a visit, but it is always most interesting to return to a city that has grown and grown since the 90s, and seems to be continuing to grow apace inspite of the current crisis. Sphere: Related Content

Tuesday, February 02, 2010

President Obama's Proposals for a Second Fiscal Stimulus

President Obama's budget for 2010-2011 proposes a US$200 billion fiscal stimulus focused mainly on small businesses.

Does the proposal stand up to scrutiny?

Well, if one considers that it will put the American government (and therefore the American citizen) deeper in national debt, it is of course not a good idea.

However, the fact that such a "second stimulus" package has been proposed acknowledges that the first stimulus has not worked.

As I had predicted, it has placed a "floor" under the crisis so that there is not a complete collapse, but it has not and it cannot sort out the mess, let alone provide a substantial basis for growth; meanwhile, the propoganda machinery is in full swing trying to pretend that real growth is taking place in China - when that bubble is pricked, it will be terrible; but let us return to the topic of this post.

My reading of the situation is that the US Government now recognises that the effectiveness of the earlier stimulis package is coming (or will soon come) to an end, and that is why this second stimulus is needed.

The problem is that President Obama and the US Congress are focusing on the buzzwords "job creation" and trying to get the 2nd package through on that basis.

Job creation is of course very good in itself in nearly all circumstances, provided it is the creation of *real* jobs and not merely make-believe jobs.

The problem is that the 2nd stimulus package is unlikely to lead to the creation of even make-believe jobs.

What the 2nd stimulus package will do (assuming that the President can get at least this proposal successfully through the labyrinth of government) is that the package will provide at least some further minimal stabilisation for the economy, and particularly for that very important part of the economy (small- to mid-size companies) which have already suffered so hugely and will come under even more pressure before there is any chance of this current crisis passing.

So the package is at least some minimal good news for the economy and for the small business sector.

The package is, however, bad news for the small-business sector as a whole, bad news for the economy, and bad news for President Obama.

Why bad news for the sector as a whole? Because it is not enough to prevent the sector going down, and because it will therefore politicise the sector: if there is not enough money to go around, someone (read: someone in political power, and therefore a political appointee) will have to decide who gets the money and who does not, with consequences that are clear to see (politicisation of the small business sector)...

Why bad news for the econmy as a whole? Because increasing the public debt sizably while not really sorting out the crisis means that its net contribution to sorting out the crisis will be pretty close to zero.

And finally, why bad for President Obama? Because he is already being perceived as an "empty suit", having ducked the opportunity for genuine global leadership with the issue of climate change, and having failed with the issue of healtcare reform, he has now nailed his flag to the mast of job creation - which is precisely what will not be delivered by a mere 200 billion.

Of the 8 million jobs which have been lost during this recession in the US alone, President Obama would have to "bring back" if not all 8 million, then at least 4 million, or even 3 million to claim any reasonable degree of credit.

The $200bn in the 2nd stimulus package should certainly staunch the losses, so that the rate of loss does not get any worse. It may even improve that, so that the further losses will not be steeper. Will the package actually "recover" any of the jobs? Perhaps. I certainly hope so. Will the package recover 8 million jobs, or 6 million jobs, or 4 million jobs, or even 3 million jobs? I seriously doubt it.

Most small companies which get any financing as a result of the 2nd package are going to do exactly what the big companies have done as a result of the 1st package: in order not to run into bankruptcy, they are going to bolster their credit position and their ability to trade; adding jobs will be their last priority.

I seriously hope that I am totally wrong and the President Obama's will be able to add not merely 3 million jobs, or 4 million jobs, but 8 million jobs, or even more.

But if any of that happens, it will happen not because my (rather superficial) analysis above is wrong. It will happen not because the 2nd stimulus package has been up to the job. It will happen only because of a divine miracle.

As a follower of Jesus the Lord, I pray for a divine miracle, which is the only thing that can save that many jobs.

I pray for a divine miracle which is the only thing that can prevent the slow slide into much worse economic, social and political trouble (which I have written about elsewhere).

And I pray for a divine miracle which is the only thing that will save Obama's term as President from becoming wholly ineffective and at least partly tragic.

Is there anything short of divine miracles which will be good for job creation, good for the small business sector, good for the economy as a whole, and good for President Obama?

Yes, the creation and implementation of global standards in health and safety, pensions and environmental standards for industry and commerce. That will mean the creation of a genuinely level playing field at least in these matters.

A fully level playing field may be too much to hope for, because that would also involve imposing fiscal and monetary guiidelines for admitting countries to the WTO - and that may be too much to hope for. But if at least the minimum can be achieved, there is some hope.

Failing even that minimum, it does not matter how many "stimulus packages" are produced out of the thin air, the US will continue to lose investments and lose jobs - at present, primarily to China. Sphere: Related Content

Euro breakup chances

I am interested to see that Professor Nouriel Roubini has now joined the debate regarding whether the Euro might break up.

Someone who has been following my lectures, broadcasts and writings may perhaps care to inform him that I have been consistently pointing out over the years that the Euro is a historically unprecedented and untested currency. It has escaped testing till now because of the artificially-induced boom into which the Euro was born. Now it is starting to face its first real test.

No one sensible builds in an unsound way or on unsound foundation. The Euro is a child of the same kind of thinking that produced the boom of the last couple of decades.

Dr. Roubini points out that Greece is merely a "problem" for the eurozone, because it is a very small economy. But what is bigger than a mere "problem" is Spain, the Eurozone's fourth-largest economy, which has an unemployment rate just shy of 20%, and a domestic banking system much weaker than that of Greece. "The eurozone could drift essentially with a bifurcation, with a strong center and a weaker periphery and eventually some countries might exit the monetary union", he opines.

This is the most positive possible outlook. It ignores how the market would respond to even the smallest country exiting the Euro. Further, it ignores the fact that the Euro has basically been paid for by the German taxpayer, and that it remains to be seen how long the German taxpayer has the ability and willingness to continue to fund this Frankensteinian creation. Well, I am being ungenerous. In spite of its defects-at-birth, the Euro has played a very positive role (not least for German industry). The question is: are we now at the start of the historical time-frame of its demise. Sphere: Related Content