Market Seizure.. Updated!!!

US versus China

When last we looked the United States was putting in unwanted pressure on the Chinese architecture and economy wise tightening their claws to curtail whatever money China was earning.

The reality of the truth well on the other side is that China holds such a huge population and pegging itself t the dollar at a constant value since 2008 it has not got many options to enjoy when price modulation is concerned. More or less whatever margin China gets on the goods that is sold is nothing but a meagre 2 percent. This means that in the United States if the bill is passed and the strong regulations are being applies on the Chinese economy then the exporters would be driven to the ground and the cushioning effect that the China had been downplaying since years would be devastated.

United States has a previous experience of such regulation when it has destroyed foreign economies to give boost to internal production. Something of this sort happened in 1990s around when goods that were imported from Japan were made very costly so that the simultaneous American goods can also become competitive.

As can be seen both the House Democrats and the Republicans are fixed on their point to pass the bill as according to them the curtailment of Chinese hands is an important agenda but time will tell what is bound to happen.

With the American economy completely broke and still waging war in Asia and the Middle East it becomes complicated to trust motives when things do tend to seem otherwise too and China vetoing whatever it can with the 54 African votes in the United Nation against any American imposed restrictions in Iran situation is pretty dim.

The situation however becomes even more gruesome with the sudden ascent of Chermany and not in the most positive way. Speaking of intentions some intentions have still not become clear as what the countries exactly want from the on going crisis that is pulling everyone into it.

This is the third time in a row when the fiscal tightening has forced the masses of the Greece on the streets while on the other side more sophisticated European nations are discussing how to do away with the need to sponsor a bailout for the bankrupt nations.

Germanic Intentions

Mr Schäuble, German finance minister addressed his critics by declaring Greece’s crisis had shown it was “obvious” that the 16-nation eurozone’s rules were “incomplete” and unable to deal with situations long thought “inconceivable”.

His argument comes after days of vigorous debate within Germany, and with other European Union partners, with some questioning the timing of the initiative and others the need for an alternative to the International Monetary Fund.

The Bundesbank, Germany’s national central bank, this week signalled its opposition to any proposal that might distract eurozone governments from the more immediate task of bringing Greece’s public finances under control.

Axel Weber, Bundesbank president, described as “not helpful” discussions about the “institutionalisation of emergency help”, which he said could prove “counterproductive” given that eurozone countries were currently helping Greece.

Greece even though being a paramount question need proper thought is saving it worth the cost for Germany.

If we go by the words of Mr Schäuble there can only be one thing that might come out clear and that would be that Germany is looking at options for a safe exit from Euro zone as far as the currency binding is considered while planning a bailout too.

The Boasters

Chermany as has the name been coined denoted the two of the world’s biggest exporters governing whatever the world eats. China and Germany are, of course, very different from each other. Yet, for all their differences, these countries share some characteristics: they are the largest exporters of manufactures, with China now ahead of Germany, they have massive surpluses of saving over investment; and they have huge trade surpluses.

Both also believe that their customers should keep buying, but stop irresponsible borrowing. Since their surpluses entail others’ deficits, this position is incoherent. Surplus countries have to finance those in deficit. If the stock of debt becomes too big, the debtors will default. If so, the vaunted “savings” of surplus countries will prove to have been illusory: vendor finance becomes, after the fact, open export subsidies.

China is already clawing the possibility of financing every spending of USA but considering the consumption of European Union is considered if Germany were to sponsor Greece bailout or for that matter any other bailout it would choose to leave the Union while doing that or force the weak nations to do so.

The situation is like Germany no longer wants to be associated with its weaker counterparts but seriously wants to help them. It is still playing with its cards till the time when the exact structure of European Union future would be decided for that would decide how the pegging of currencies would occur.

The time is like when financing counterparts is more like making them eat more and in doing so fuelling the market of the country itself. A kind of symbiotic foothold so that the eating and consuming cycle goes on, however this complicated cycle of Euro common currency is restraining countries as they are economically pegged to each other.

More to come.........

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The Cuban Missile Crisis of the 21st century

While history will remember the 20th century for the nuclear arms race, the 21st century might be remembered for the missile defence arms race. About 20 countries now possess missile defence systems, but more than 40 states are expected to have them by midcentury. In fact, by 2050 an entire coordinated system will appear of ground-based, sea-based, air-based and possibly even space-based missile defence elements.

At the same time, the United States and its NATO partners are trying to downplay the negative consequences that missile defence will have on international security, saying it is purely defensive in nature. The standard explanation is that the missile shield will consist of 40 ground-based interceptors positioned on the territory of the continental United States and several dozen more interceptor missiles deployed on the territory of NATO member states and on war-ready battleships.

The spread of U.S. and NATO missile defence systems to many regions of the planet will inevitably lead to an increase in missile defence development-related expenditures. In fact, the current rate of spending will soon outstrip total U.S. outlays for missile defence for the past 25 years combined. Washington spent $132 billion on missile defence over the past quarter century, but now the Pentagon plans to invest $50 billion on such programs over the next three years alone. In addition, the U.S. missile defence program will receive $7.4 billion in budgetary funds in 2010, and the White House is planning to ask Congress for $9.9 billion in 2011.

Interceptor missiles have steadily become more effective as both their accuracy and range have increased. This enables the United States to convert the existing tactical missile defence system in Europe into a strategic system capable of striking and taking out intercontinental ballistic missiles during all three phases of their flight — boost, midcourse and re-entry.

Washington’s development of a new program to “reconfigure missile defence” will be linked to the strategic and tactical nuclear capabilities of the United States, Britain, France and a range of other NATO member states, as well as to space-based weapons that the countries of the West might deploy in the future.

The result is that the “new missile defence architecture” announced by U.S. President Barack Obama last year might turn out to be a dangerous undertaking that could lead to a breakdown of strategic stability in the world. The United States has yet to convince Moscow that this undertaking will not undermine Russia’s national security. Moscow officials are now wondering if the West isn’t leading the world toward another Cuban missile crisis.

One of the paradoxes of the 21st century is that while there is near parity between U.S. and Russian offensive strategic nuclear weapons, there is a significant imbalance between not only the number of interceptors in the two country’s missile defence arsenal but the geographic configuration since Russia has no missile defence elements deployed outside its national borders.

While the number of strategic nuclear weapon are decreasing — and rightfully so — the missile defence elements deployments are increasing along with their effectiveness, and this is a dangerous trend. Understanding that this trend destabilizes global security, many nations are proposing a pact that would limit the deployment of a nation’s missile defence system to its home territory only.

If this agreement cannot be achieved, we will be faced with both a missile defence arms race and another offensive arms race as well.

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Market Seizure

With the fact clear that Google is coming out of the Chinese market sooner than the financial birdwatchers have forecasted there lays a dense fog on Sino American relationship on what is to happen next. With 400 million Chinese markets still under the assumption that Google is being pushed out of the country because of its vulgar and explicit sexual content the far outcry of heavy censorship is going to affect both Google and Chinese economy as a whole.

With America not in favour of any of what China is pertaining to do and its policies tightening around the dragon’s neck what is next in line is the new bipartisan bill to curb Chinese made imports in the US. China long since mid 2008 kept a constant Yuan to dollar value pegged at a number 6.83 which is causing a lot of problems. With the great slump in the American market and no remuneration for internal American producer from the government due to lack of fund the internal produced goods are not at all competitive in the market.

Chinese goods are highly competitive in the market owing to their cheapness. This cheapness comes from the undervalued Yuan which China has no interest of changing. China hold seventy percent of its foreign reserves in the American treasury Bills hence forth is able to command a constant currency ratio.

Being a communist regime what it does it forcibly brings down the standard of living of the people and dictates their low standard of living there by converting the solid gains and selling the products into foreign exchange reserves. Hence forth it has been able to generate reserves to the tune of ten times what it had in 2003 in the last seven years.

On the other side of the world where that American economy is trying to fight the biggest slump it is being pestered by the Chinese policies which include this constant pegging to the dollar. Internal production is vandalised because of the non competitive China driven market. Only if the China re values its currency and rises it against the dollar then only the internal market would become competitive.

Recently two bills have been brought up in American Congress for the same and most probably would pass. Both of them are pointed to pressurize China to rethink over its decision to increase the value of Yuan against the dollar. First of all there was the Job Bill that is focused at proving new entities with subsidies for opening new business and simultaneously there is this Bipartisan Bill wherein the Republicans and Democrats both are saying to increases taxes on imports from whatever is brought from China.

The consequence of the bipartisan bill is going to be single fold. First of all due to sudden rise in the prices of Chinese goods in the American market the American made internal goods might become competitive in the market and this would give boost internal producers. This bill is going to pressurise the Chinese government to rethink its proposal to continue with its constant pegging on the Dollar or draw a midway with the American counterparts. What is clear that America would not risk the possibility of job creation through this hence it is in favour of increasing the prices of Chinese goods?

But the other part of the story remains that with interest level at near zero and no plan of the American government to alter it is it the right time to bring a costly expensive market to the American consumer. American consumer knows what consumption is but with the slump and whatever small amount of jobs being created would it be viable to introduce this inflationary change.

The situation on the other side of the Atlantic is equivalently gruesome. With Chinese export driven funda there is another country that still stands on the green fields but is feeling the heat of being green. Germany is another mass exporter for whom a constant cheap foreign export is likelihood and the only means of sustenance.

People talk about the rise of the G2 or Chimerica, people talk about the rise of Chindia but now the people are talking about the Chermany, a composite of the world’s biggest net exporters: China, with a forecast current account surplus of $291bn this year and Germany, with a forecast surplus of $187bn.

A just question how America can curtail the hands that feed it. Whatever new bills it applies in the end the situation would revert back to it as controlling the consumption is not a means neither is bring a catapult change in its internal market production. Why is America not thinking that it has no internal market left and if it has to compete with China it will have to do it right from the scratch?

More to come.......

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Turkish rift..

The Turkish Empire standing on the offset of the Anatolian peninsula adjoining both Europe and Asia has enjoyed an exemplified location since ever. Standing between the resource rich Mediterranean and the Black Sea it has enjoyed a strategic location by being a NATO partner in the Middle East. Turkey has been an important hand of the US that has been deployed in the region. Its reach in the Iraqi war and the possible check of growing Russian hands in the adjoining nations of Georgia and Azerbaijan have been instrumental.


However tiffs started last year when anti Muslim sentiments were accepted as a mandatory part of the NATO regime. Due to the rising unrest of the Islamic insurgents right from China across India Afghanistan to the West the word Muslim has got entangled with being a militant. What more was to happen - minarets were simultaneously banned in Switzerland as possible militant hideouts and turban which is considered as important Muslim attire was banned to be worn in France. To the extent where human right violation was consistent all these acts of the Western world was unacceptable.


First of all pointing out fingers to the entire community is wrong when only some of them are wrong and doing so would lead to further alienation of the people on moral grounds. Then next question to be put up was -why would a country like Turkey which has a near hundred percent Islamic population stand next to NATO allies wherein the liberties of Muslims are being curtailed?


Well if this is not enough the entire picture of ethnic clashes and liberty curtailment is by and large much bigger. On one hand with Islamic dominion in the Turkish estate the Armenian fraternity is being pushed aside by the Turks. Armenia has been an obvious Turkish enemy since 1915 over a number of issues and this fight has turned ripe with sudden US support to the Armenian cause.

Armenia is a small country landlocked and even being a Russian ally it is surrounded by two anti Russian countries of Azerbaijan and Turkey. Turkey and Armenia never had a relationship of goodwill and trust. It began with during the end or closing of the First World War when ethnic cleansing was in progress and the entire Ottoman Empire was breaking up into nation states. A large chunk of Christian ethnic Armenian population that lived in countries like Bulgaria, Romania, Anatolia, Greece, Georgia, Azerbaijan were forcibly moved from their territories to foreign lands. Many of them were driven towards the southern Syrian deserts and left to die. Many of them slaughtered and butchered on large tracts of wastelands before they could make their way past Anatolia into Armenia.


All this came to be known as the Armenian Genocide of which Turkey still take no acceptance of carrying out.

It is widely acknowledged to have been one of the first modern genocides, as scholars point to the systematic, organized manner in which the killings were carried out to eliminate the Armenians. Indeed, the word genocide was coined in order to describe these events. It is the second most-studied case of genocide after the Holocaust.

The starting date of the genocide is conventionally held to be April 24, 1915, the day that Ottoman authorities arrested some 250 Armenian intellectuals and community leaders in Constantinople. Thereafter, the Ottoman military uprooted Armenians from their homes and forced them to march for hundreds of miles, depriving them of food and water, to the desert of what is now Syria. Massacres were indiscriminate of age or gender, with rape and other sexual abuse commonplace. Turkey however openly denies any such incident and openly says that nothing of that sort happened.


The latest Turkish-American rift over the Armenian question—after a congressional committee voted on March 4th to recognise the killings of 1915 as genocide—looks wider than some previous ones. It coincides with a general scratchiness between America and its ally. Turkey is reluctant to slap sanctions on Iran. Anti-Americanism is running high among Turks. Some suspect that Barack Obama retains his view (expressed as a senator in 2008) that “the Armenian genocide is not an allegation…but rather a widely documented fact.”


Still, the chances are that after a deep sulk, Turkey will send its ambassador back to Washington, and the administration will persuade legislators to avoid a vote in the full House, for fear of wrecking an important relationship—and worsening the fading prospects for reconciliation between Turkey and Armenia. A tired diplomatic ritual will play out once again.


Can any actor in this sorry drama do anything to improve the script? One day a Turkish leader will be statesman enough to see that national dignity is better served by acknowledging the sins committed on Anatolian soil than by suppressing debate and punishing truth-tellers. Such a leader could decouple relations with Armenia from Ottoman history. In any case the country that has lost faith of nearly all its allies is America itself.


America- Broke and mass murderer but not going strong anymore. Turkey is an important foothold because of its strategic position on the head of the globe and loosing it would cost the entire Caucuses.

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Australia - Land of Racism??

The Australian image has been blemished by numerous stains of racism in the recent past. The reputation earned by Australia of a popular and responsible tourist destination and an education hot spot has taken a blow due to such repeated abominable incidents or more appropriately accidents.

The racist behavior of few Australian cricketers on the field towards some Indian players had once dominated the critic circle of the commentary world, and had tarnished the reputation of the then No. 1 cricket team in the world.

Though such cricketing incidents have taken a back seat in the present but these racist attacks on the Indians could prove to be the vicissitudes of fate for the global image of the land of kangaroos.

The foreign minister of Australia Mr. Stephen Smith had a mammoth of a task up his sleeves when he was on a long tour to the India and was engaged in the alleviation of the public angst over the racist attack on the Indian students studying in Australia. He has assured to bring the guilty to book. He has pledged whole hearted support to the family of the victims and has repeatedly emphasized the Australian policy of zero tolerance on racism.

If such racial maniacs are let loose then they could hamper the growth of a responsible and profitable relationship between the two countries. The Australian government has got to nip the people responsible for such attacks in the bud before they turn out to prove themselves to be the Frankenstein’s monster.

The strong bond between the two countries has as its supporting pillars – Trust and Responsibility. Few racial maniacs should not put the relationship between the countries in jeopardy. For who knows these maniacs could possibly turnout to be the Gen-next terrorist because after all like terrorists they too derive their roots from the sewer of race, caste and color based differentiation of people. This turn of events could have far reaching consequences on the relationships between the two countries.

Such accidents should not preclude the two nations from holding further talks, because we already have in front our eyes a live example of a political stale mate between two nations one of which, sadly, is our own country. The peace process between India and Pakistan is stuck into stalemate because of India’s persistent demand for Pakistan to take effective actions against the terrorist who are responsible for the Mumbai attacks and Pakistan’s consistent failure to do so. If events turn out to be sore and India had to put similar demands in front of Australia, we could not rule out the possibility of another stalemate.

The two nations have to build up an atmosphere of cultural and technical cooperation and hence to build a stronger and safer world and have to prevent any such iniquitous events from hampering the relationship between them.

All possible measures to curb such incidents are now mandatory to ensure the safety of Indian residents in Australia and hence are mandatory to enhance the positive growth of the region. The Australian foreign minister has take a head start in this direction by involving the Indian Australian businessmen  well settled in Australia to come forward and interact with the suffering Indian community and win them over again by making them trust the Australian government which has provided them always full support and protection.

We expect more such measures by the Australian government to clear itself of the blame it has received from the world community of being not able to ensure the safety of its residents and we should hope for the end of such racial attacks very soon.

 

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