Analyzing the past; Anticipating the future


 
PAST:
1 1.       India Shining: Since 2002 till at least 2010 we were under the impression that India is shining, growing at 8-10 % and that we are special. Is that the reality?
Yes India was shining but not because it was a Diamond.
It was reflecting the light, of Global Liquidity.
The easy money policies of the developed economies of the world(US, EU, Japan)  lead to a flood of liquidity ( carry trade) into the emerging markets (BRICS) leading to rise / bubble in Commodities and Emerging Equities.
2 2.  My skills made me make a killing in the Stock market.
More than skills it was being in the right place at the right time that helped stock investors see mind boggling returns. More than skills you have to thank your luck (and Alan Greenspan, Ben Bernanke, QEs and LTROs) and the tide of liquidity that raised the equity boat to new highs.

Future:
1   1.  The carry trade has to reverse. The flow of Liquidity has to reverse. Indian Rupee, emerging equity and global commodities will turn weak. To quote Warren Buffet  ‘Its only when the tide turns that you come to know  who was swimming naked’. The process of withdrawal of money is on. The wild fluctuations in the markets, the sharp rise and gradual falls, like paroxysmal tachycardia, signify that smart money is getting withdrawn ( and novices are sucked in)
     2.       2008 was US Crisis, 2010 was EU crisis, 2012 will be BRICS crisis
     3.     Sensex will go minimum to 12 to13,000 ( Read blog dated: Sensex bottom target : UPA gap dated 13/09/2011)
4.       Below 5% GDP growth, in India there will be large scale social unrests and new Godhra’s  ( Read blog GDP growth and Sociopolitical revolution dated 12/09/2011)
5.       Pre world war we lived in a Multipolar world and age of Industrialization, Post World war we had a Bipolar world and Cold war, Post the fall of the Berlin wall we had a Unipolar world dominated by America, Telecom revolution and Globalization. Following the collapse of Lehman Bros (Signifying the evils of products of engineering of the Financial kind, the derivatives , the weapons of financial mass destruction according to Warren Buffet) we enter the post America age. What will be its nature is difficult to predict now.

Will India not shine then?
It will definitely not shine by reflecting others light.
It can shine if it turns into a diamond by undertaking the difficult path of structural reforms (read blog dated: 21/09/2011; Liberalization 2.0)
India has a world class Diamond cutting and polishing industry.
Will it cut corruption, avoid crony capitalism and polish structural reforms is a difficult call to take.
I was doctorparagshah.blogspot.com
I turned to doctorcassandra.blogspot.com
I hope I do not turn to doctor gloom and doom

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