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Indian Foreign reserves rose $932 mn during the week ended June 26, partly on account of cross currency revaluation and also some mop up of inflows by the central bank. While the government has vacated their ways and means advances (WMA) with the central bank. So foreign institutional investor's are showing confidence in indian economy amidst economic crises.
According to the latest data released by the Reserve Bank of India in its weekly statistical supplement (WSS), total foreign exchange reserves including gold and special drawing rights (SDR - currency with the International Monetary Fund) rose $932 mn to touch $264.58 bn during the week ended June 26.
Almost the entire growth in reserves was on account of the rise in foreign currency assets, which went up $924 mn, while the reserves with the IMF rose $8 mn.
Friday, July 3, 2009
Forex reserves rises by $932 million
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INDIA + CHINA = More than 2,4 billion people
INDIA has its toughest decision ahead.A huge impact decision on future events that will determine the next hegemony period in the globe.
The decision to take is very clear:
INDIA..., Are you going to join CHINA in your future developments , ... or are you going to lean on US as your ally,... or in a third place, you are going to decide to continue to run the race to world´s most powerful country, independently ???
A) Joining CHINA:
INDIA+CHINA would be the end of US power, not only as the biggest economy on earth, but militarily, socially, and politically.
USDollar would lose its status as the reference currency in worldwide markets, and a new ASIAN power would emerge.
Tight collaboration between INDIA and CHINA is not an easy task. Obviously, the beginning would be in economic terms, that is, to become the world biggest "outsourcing" area.
Second, and very obvious, the highest domestic market in terms of consumer rates, 2.4 billion people is a much bigger chunk than any other individual market in the world.
Big international corporations would be interested in playing their strategies there, and obviously, the jobless claims in these 2 countries would fall to minimums, allowing a much better domestic consumer performance, and the erradication of poverty and transition from countryside to cities, with almost no public spending from these 2 governments, would be a fact.
CHINA has made the first step in this idea, asking INDIA to share the prominent and lucrative OUTSOURCING market.
INDIA is the OUTSOURCER by excellence. Good engineer schools, meaning an incredible added value to big decentralized foreign corporations, depending on INDIA as its main OUTSOURCING supplier.
b) US as an ally:
US cannot lose this train.
USSR cold war is over, but a fiercest one is beginning. The battle to determine who is going to become the next most powerful nation during the next centuries.
This is a democratic battle. A social, political and economic battle, in a now bipolar world.
JAPAN will soon lose its position in the ranking, and CHINA, INDIA will be running behind US .
US will have to use PAKISTAN matter to get closer to INDIA. But, I think this will not be enough. There must be more joining agreements in terms of manufacture, defense, IT, and infraestructure projects.
US must use all its influence power to convince INDIA they must run this race together.
c) INDIA running independently:
INDIA has also the choice to continue developing its economy, serving either CHINA and US as main and preferred customers.
It can become the referee of the "2 big" match.
INDIA alone has 2,1 billion people. So, it is not a little market to feed. And it is not a little market either to focus on its domestic consumer rates future evolution.
INDIA has shown the world why BOLLYWOOD produces now more films than US HOLLYWOOD STUDIOS, it has also shown us the incredible MUMBAI development in terms of financial and industrial power, the high class ENGINEER SCHOOLS, the steel industry, the technology-edged IT companies born in the last 5 years, etc...
A good engineer work base, value added workers, and a political change in the horizon.
Farewell to the old politicians, let´s welcome the "blackberries" !!!. Rahul Gandhi, is the best example of this new generation of politicians, that in 5-6 years, will be ready to lead.
Till now, indian politicians have been well above 70 year old average, INDIA must change this issue to really launch itself into the race of the world hegemony.
INDIA needs young politicians, with global ideas and perspectives, people with foreign studies that have lived and worked in other countries or cities, have shared other religions and bureaucracies...
This is another big decision for INDIA. Maybe the critical one.
Tough decisions ahead for ... That for sure, will determine who will be the next emerging power.
Jose Luis Revilla Escudero
Chairman & CEO
WWShares, Inc
-Global Wealth Management-
www.worldwideshares.blogspot.com
miércoles 1 de julio de 2009
1st ATTACK to the US DOLLAR
CHINA and BRAZIL announced yesterday that from now on, their trade relations will be held not in dollars, but in their respective currencies, according previously a fair change rate.
YUAN first appearance in an international trade agreement seems not to scare US dollar.
Nevertheless, this fact has, according to my view, an incredible psychological impact on the future trends....
BRAZIL is the main latinamerican economy. CHINA is the main economy in ASIA, together with JAPAN.
Then, two of the main economies in the world are ready to trade without the arbitrage of US Dollars.
The ALBA ( the populism movement in South America ) leaded by Chavez, Venezuela president, is ready to do the same with oil and other raw materials exports.
Once again, the future impact will depend on the capacity of CHINA economy to reduce exports to the US and begin serving its domestic demand. Analysts say this won´t happen till 2015.
This BRAZIL-CHINA movement is the 1st attack to the DOLLAR hegemony as a reference currency and therefore, as an arbitrage currency for foreign commercial agreements.
CHINA has to go planning the YUAN international show up to the world.
But, as usual, CHINA manages things their way, just like Frank Sinatra... CHINA will begin trading with those countries key for its economy, and step by step, it will be going out of its yuan fixed rate by billateral compromises.
In the middle of a global economic downturn, this is not good news for US Dollar. Since, and although americans want a weak dollar to begin exporting again,... we must not forget that the US is moreover an importing country.
If CHINA goes reducing its exposure to US exports, the US will have problems to stabilise its currency.
EURO seems to be absent from this battle, but obviously EURO has nothing to offer to the world, since EUROPE remains as a dead continent, only healed some times by Germany auto and heavy manufacturers, Italian fashion and car industries, and France, or Spain touristic acceptance.
I forecast a volatile currency market for the next 6-12 months, and a huge risk on US dollar stability. Therefore, my advice for EURO holders resides on keeping the EURO exposure vs USDollar and wait for future events.
Nevertheless, something with stronger impact seems to go rooting in the horizon. And it is not obviously green ...
The huge Public spending of OBAMA policies, the forecasted high inflation rates for the next 2 years will not help a lot.
Jose Luis Revilla Escudero
Chairman&CEO
WWShares, Inc
-Global Wealth Management-
www.worldwideshares.blogspot.com
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