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International Market: Where World Economy Going On ?

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International Market: Where World Economy Going On ?

Last updated: May 23 2012
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  • Re : International Market: Where World Economy Going On ?

    Predictions, theories and real(i)ty..

    To startwith, there are people here selling their own ideas/ predictions whether out of vested interests or because its their pet theory and can go to any extreme to (use their imagination) to build up their case.
    But the truth, as economist says is in the middle.

    and their is a bit of luck factor as well. to give an example there was a sweepstakes for the football WC in my workplace in glasgow(where football is most popular sport) where the person with the lowest knowledge in football being me. and guess who won ?
    it was me

    Sometime reading some of the posts we almost forget its a RE forum. If we needed to know about FII and movement of commodities i'm sure we can get lots of articles & data from loads of professional people from online magazines etc. _ the key i feel is the link to realty and reality which is missed in some/most of the exhaustive posts.

    think of it - who makes money in real estate business in india ?- are they MBA holders who can string up lots of data from US financial position to China's GDP ...no its the people who are streetwise and most of them cannot tell the difference between debt and equity. the quite known successful Annai builders owner said once ...that when he went to buy land he used to have a yellow-bag(cant think of a better way of saying it..) and slightly dirty clothes and walk to the place ... and he would say the quoted price would be very different from if he used his car and went in his normal attire - the point is people who get their hands dirty (in more ways than one) are the ones who make money.

    regarding inflation/deflation - its a measurable quantity and can be backed-up be statistical data. The so-called predictors of RE can get away with it because its difficult to prove the movements of RE in chennai - So someone can be predicting 50% fall or 100% rise for the last 3 years and can talk their way out of it. ie. keep denying it went down or went up...

    in this forum when someone predicts deflation (but are clever enough not to give a timeline or say the actual predited figure)
    we can find out if they know what they are talking about (ie writing about) - judging by this sample i would be justified to conclude its half-baked knowledge and not anything more...

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    • Re : International Market: Where World Economy Going On ?

      I just came across this article. Very interesting about currency wars.

      The looming fake currency war

      Thanks,
      Sridhar

      Comment


      • Re : International Market: Where World Economy Going On ?

        Returning after an year or so

        I'm returning to this blog after an year.

        Wiseman who predicted a crash, down turn and what not starting 2010 seems to have extended his crash time line to 5 years!!!! In the meantime Indian stock market and property price in Chennai has gone up.

        Economist & co who kept saying truth is in the middle is coming out wise.

        Very interesting !

        Comment


        • Re : International Market: Where World Economy Going On ?

          Welcome back ...

          Originally posted by blogger View Post
          I'm returning to this blog after an year.

          Wiseman who predicted a crash, down turn and what not starting 2010 seems to have extended his crash time line to 5 years!!!! In the meantime Indian stock market and property price in Chennai has gone up.

          Economist & co who kept saying truth is in the middle is coming out wise.

          Very interesting !

          Welcome back Blogger.

          Read it from the start. The timeframe has always been 2012-14 (or longer, if the Govts and Central Banks of the West keep prolonging and worsening the situation with continuing money printing and currency debasement with successive "Quantitative Easing" programs.

          Please backcheck my posts on any crash timetables I have given less than 2012, if you have the time. And let me know.

          Btw, the timeframe has only shifted from second half of 2010 to early 2011 which is excusable given the difficult task of precise timing of such a huge and complex thing as the world's economy, coupled with the added confusion of meddling of it's working by various Western Central Banks.

          Since the time you went away (Rip Van Winkle style), things have gotten worse in reality while the Govt and media have made it look better with so-called recovery. When the Volvano is boiling and letting off lava and ash, its very dangerous to cover it with a lid and make it look like the problem has gone away. The pressure only builds up faster and higher till, one day it blows the lid away - and the neighborhood as well!

          An year back the problems were not so severe and global in scope. The biggest change has been the switch from Private and Corporate Debt crisis to Sovereign Debt Crisis. When Banks and Corporates started going insolvent due to too much debt, Governments (wrongly) came to their rescue with $Trillions (instead of letting the weak die). Now this only made it a bigger issue now with the same Govts going into too much debt. Who will rescue them?! And do you know the effect of Govts going bust? The riots in Greece and France will look like a picnic in comparison. Public backlash is just starting.

          The second crisis is the coming Food Crisis. With increasingly wild weather, food worldwide is getting scarce and prices are already up hugely (30% - 50% or more) this year itself for staples like wheat, corn, etc). In an already weak fiscal position (again too much debt), its going to be hard for technically bankrupt Govts to keep subsidising rising prices. Janta will revolt one of these days and you will have bread strikes reminiscent of the French Revolution (already started in Paris for some other reason).

          The Pension Crisis - more about this later.

          As you can see, many of these will definitely have serious ramifications even in India despite our best efforts to keep chanting "ALL IZ WELL!" and hoping things will correct themselves automatically and we can all get back to the wildly increasing salaries and wild spending forever!

          A simple example that all can easily understand. It is widely accepted that, despite the $ being the reserve currency of the world, the way the US is printing it up, its bound to keep declining in relative value. From a Dollar Index (relative) value of 160 back in 1985 (its peak) it has declined so far to around 77 today. Expectation is, it will (after swinging around for a while), eventually decline to anywhere from 60 to even 40. This means that, assuming Rupee remains as strong as it is today (high hopes), we will go down to around 35 to the $ or as low as 25 to the $. Have you any idea what it will do to our Oil import bill and our export profits? When $ came down recently from 48 to 44, saw how exporters howled? What will happen when it declines to 35? Think about it. salaries (40-50% of total expenses as we are still coolie-style companies) will take significant hits. Couple this with strong inflation in essentials like food and fuel and pretty soon, EMI paying ability will start taking big hits. Where do you think RE prices will go then?

          And some serious guys are starting to talk about the US commencing on its Hyperinflationary journey sometime between mid-2011 to early 2012. MAin effect of this would be the destruction of the Dollar. A side effect would be the rapid multiplication of value of g.old in dollars. Will create a fairly disruptive situation in world currency markets which will impact trade significantly. Though no one expects it of US$, let us see the effects of hyperinflation of a currency due to its destruction by too much printing (as happened in Germany 1921-23 and Zimbabwe 2001-09) . See attached charts ...

          Simple and direct effect of any of these going off the deep end will be the immediate pullout of all that excess liquidity from Emerging markets. Remember when Lehman collapsed and a few billion (10 if I remember right) were pullled out of our markets in a jiffy Sensx went all the way down to 8000 levels. Last 3 months alone FIIs have pumped in around $25 Billion. Before than much more. Have any idea where the market will go if around $30 Billion is pulled out in a renewed crisis? And this will also effect RE market as a lot of this money is propping up that market as well.

          Let us not kid ourselves that we have suddenly become a strong and prosperous country just because others have started collapsing and we look relatively better off. Our Govt is still spending way too much and going deeper into deficits and we are in the same catch-22 situation of "if Govt does not spend economy slows down and if it spends, deficits and sovereign debt goes up. And last 2 years, much of the growth has been due to Govt spending, not Private Sector. We too are sinking slowly. But since others are sinking faster, we look like we are rising!

          Lets keep fingers crossed, not jump wildly in jubilation too prematurely. Until these Crises are well and truly past us for keeps. Which should take around the timeframe I was talking about (or longer).

          But lets keep the discussion on with variety of views

          cheers
          Attached Files
          Last edited October 31 2010, 01:16 AM.

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          • Re : International Market: Where World Economy Going On ?

            Originally posted by blogger View Post
            I'm returning to this blog after an year.

            Wiseman who predicted a crash, down turn and what not starting 2010 seems to have extended his crash time line to 5 years!!!! In the meantime Indian stock market and property price in Chennai has gone up.

            Economist & co who kept saying truth is in the middle is coming out wise.

            Very interesting !
            My guess is around last quarter of 2011 to 2012 will be the triggering point. Also waiting for the 2G Scam exposure and the TN Elections.

            After a thorough round up with Chennai RE, I feel most of the Apartments are booked by the so called Investors and 80% of the project have completion date after late 2011 to 2012-13, during which we will have too much supply of vacant apartments and things will stagnate, unless the salaries rise by more than 100% and the interest rates are down to 7-8%.

            Comment


            • Re : International Market: Where World Economy Going On ?

              FDI Flows in India

              http://dipp.nic.in/fdi_statistics/in...August2010.pdf

              check out II. FINANCIAL YEAR-WISE FDI INFLOWS DATA: (on page 4)

              It's the FDI which is being misquoted for 9% growth in India since 2005.
              It is not the real growth of India.

              50% of FDI is coming from Mauritius which is a tax haven and most of the money flowing from Mauritius is Black/Illegal/Mafia's Money.

              If India really has an Intrinsic growth, then INR should have been revalued to Rs 20 - Rs 25 to 1 USD, which got devalued during 1991 Indian Economic Crisis and had free fall from Rs 17 to 1 USD.

              Whatever the economic growth we are seeing is momentary driven by external factors and people are becoming insane due to easy money access.
              Attached Files
              Last edited October 31 2010, 10:36 PM.

              Comment


              • Re : International Market: Where World Economy Going On ?

                Where to park the money ?

                I understand that it is not advisable for youngsters to get a huge amount of loan and invest on RE .But what is the experts advise to preserve the wealth for those who are cash rich ?

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                • Re : International Market: Where World Economy Going On ?

                  My picks ...

                  Originally posted by Srinidhi View Post
                  I understand that it is not advisable for youngsters to get a huge amount of loan and invest on RE .But what is the experts advise to preserve the wealth for those who are cash rich ?

                  - G.old, first and foremost (in investment grade coins, bricks, etc)
                  - Stocks when they fall to levels which look cheap by comparison to today's
                  - Short/Medium term debt instruments (since you want to take advantage of interest rate rise in the medium term future)
                  - Land, specifically in prime areas which have clear title and easily saleable and paid for fully in cash

                  At least 3-6 months expenses in actual cash in savings ot sweeping accounts

                  cheers

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                  • Re : International Market: Where World Economy Going On ?

                    Originally posted by wiseman View Post
                    Welcome back Blogger.

                    cheers
                    Kelambeetan yaa, Kelambeetan.

                    Now Zimbabwe, Nalaiku Liberia, aparum Congo.

                    Puraliya Kelapa, Room potu yosipangalo?

                    Comment


                    • Re : International Market: Where World Economy Going On ?

                      Originally posted by wiseman View Post
                      - G.old, first and foremost (in investment grade coins, bricks, etc)
                      - Stocks when they fall to levels which look cheap by comparison to today's
                      - Short/Medium term debt instruments (since you want to take advantage of interest rate rise in the medium term future)
                      - Land, specifically in prime areas which have clear title and easily saleable and paid for fully in cash

                      At least 3-6 months expenses in actual cash in savings ot sweeping accounts

                      cheers
                      Even blind Freddie can see is over valued and has peaked.

                      Hi what about investing in candle and match boxes - when the dooms day hits there will be no electricity.

                      What about stock piling canned foods.

                      INR notes can be exported to colder countries for burning as chimney fuel when the doom day hits.

                      Comment

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