Tears of happiness.

"Federal Reserve Chair Jerome Powell cautioned...that persistently elevated inflation will likely delay any Fed interest rate cuts until later this year, opening the door to a period of higher-for-longer rates." "In the past several weeks, government data has shown that inflation remains stubbornly above the Fed's 2% target and the economy is still growing robustly." PBS. "Financial stress has become a significant part of life in this decade, with 70% of Americans saying they feel 'very or somewhat stressed' about their personal finances right now." "Of those earning less than $50,000, which includes Americans at poverty level, 55% report more financial stress than pre-pandemic." And even, "46% of households making $100,000 a year or more report feeling stressed." yahoo. Why" Because, "In the 12 months through March, the CPI increased 3.5%, the most since September." Reuters. In India, "Annual retail inflation in March was 4.85%, lower than 5.09% in February," and "Food inflation, which accounts for nearly half of the overall consumer price basket, rose 8.2% in March, compared with an 8.66% rise in February." Reuters. In India, "Spending on food fell to 46% of monthly consumption for rural consumers from nearly 53% in 2011-12, while in urban areas it fell to 39% from 43%." Reuters. Whereas, "Americans are spending more of their income on food than they have in 30 years. That's according to the latest data from the USDA, which shows that US consumers spent more than 11% of their disposable income on eating - whether at home or at a restaurant - in 2022." CPI inflation is expected to decline to 2.4% this year. yahoo. Americans spend only 11% of their income on food and they are feeling distressed, while Indians spend over four times as much on food and food prices went up 8.2% in March. Are Indians in any distress? Nope. "Summarily dismissing India's 126th rank in the World Happiness Index and accusing the report of 'overlooking persistent issues prevailing in many better ranked nations', a report by SBI Ecowrap stated that India should have in fact been ranked 48." TOI. In its kindness, the SBI (State Bank of India) has pushed the US up to 2nd position from 15th in the report. Happiness depends on social relations, "which in India are much broadened and altruistic than any other country in the world". Indians can socially hold hands and sing "O jaanewaale babu ek paisa de de" (O passing sir please spare us a penny)", while 35.5% of children, who are stunted due to malnutrition (TOI), can dance with happiness. Brings tears to our eyes.    

Good news or headache?

"Consumer prices in the US rose faster than expected last month," as "Prices rose 3.5% over the 12 months to March, up from 3.2% in February, the US Labor Department said. Higher costs for fuel, housing, dining out and clothing drove the increase." BBC. "US retail sales increased more than expected in March amid a surge in receipts at online retailers," prompting "economists at Goldman Sachs to boost their gross domestic product (GDP) growth estimate for the first quarter to a 3.1% annualized rate from a 2.5% pace. The economy grew at 3.4% rate in the fourth quarter." Reuters. "Production at US factories increased solidly in March as output at motor vehicle assembly plants and elsewhere rose," so that, "Manufacturing output rose 0.5% last month after an upwardly revised 1.2% rebound in the prior month, the Federal Reserve said." Reuters. "Employers in the US added more than 300,000 jobs last month - the biggest gain in almost a year," as "The jobless rate fell to 3.8%, as most sectors, including health care, construction and the government added roles, the Labor Department said." BBC. "The first definition of full employment would be the situation where everyone willing to work at the going wage rate is able to get a job." "Generally, an unemployment rate of 3% or less would be considered to be full employment." Economics Help. Another definition of full employment would be a Non-Accelerating Inflation Rate of Unemployment, or NAIRU, which "is the level of unemployment below which the rate of inflation is expected to rise." According to these definitions the US has almost achieved full employment with tolerable inflation, though still higher than the 2% target, thus leading to higher sales which, in turn, has led to higher manufacturing and more jobs. This is the classical virtuous cycle. Dictionary. In December 2023, "Even in the face of rising prices and inflation, consumer spending has kept the US afloat, staving off a recession. That spending, in turn, is fueling the retail industry and feeding a virtuous cycle that benefits both global and local economies alike." Politico. Consequently, Federal Reserve Chair Jerome Powell said that "monetary policy needs to be restrictive for longer and further dashing investors' hopes for meaningful reductions in borrowing costs this year." Reuters. "Yields on benchmark 10-year Treasuries hit five month highs," as "The yield on 10-year Treasury notes was up 13.5 basis points at 4.634%." ET. "The dollar went up 1.6% against a basket of six major currencies last week after a small but unnerving upside surprise in US inflation cast doubt over bets on US rate cuts." ET. Higher yields might tempt foreign investors to shift funds from Indian bonds to US Treasuries and a strong dollar means higher costs of imports putting upward pressure on prices in India. Hence, "Interest rate cuts in India are 'off the table' in fiscal year 2024/25 given the change in the Federal Reserve's policy path and strong growth in the South Asian nation, analysts at Morgan Stanley said." Reuters. Good news for the US. Could cause headache for India.

A gold alert.

"After a relatively subdued start to the year, gold prices started gathering steam in early March. By April, the precious metal had breached the $2,300 per ounce mark for the first time ever," and "as of 9 April, gold had made fresh life-time highs for eight straight sessions," wrote Abhishek Mukherjee. "Goldman Sachs has raised its gold forecast to $2,700 per ounce by year-end as against a target of $2,300 previously," driven by "EM Central Bank accumulation as well as Asian retail buying." Mint. "Gold traditionally has an inverse relationship with stocks." But in FY24, "the Nifty 50 index logged to the tune of 30% rise whereas the BSE Sensex shot up 27% this time." The small-cap index jumped nearly 62% while the mid-cap index sky-rocketed nearly 65% in FY24. Returns on gold were nearly 13.5%. Mint. "Gold experts say gold and equities moving in conjunction is a central bank triggered phenomenon." In 2022-23, "central bank purchases stood at 1081 tonnes and 1037 tonnes respectively," The People's Bank of China (PBoC) bought 225 tonnes in 2023, taking its gold reserves to 2,257 tonnes. The PBC's hunger for gold is driven by its desire for de-dollarization. In January-February 2024, the Reserve Bank of India (RBI) bought "0.43 million troy ounces, equivalent to 13.3 tonnes of gold, from the market. This represents over 80% of the total gold purchases made by the central bank in 2023, which amounted to 0.52 million troy ounces." TOI. The RBI's total gold reserves stand at 817 tonnes which "reflect a strategy aimed at diversifying its foreign exchange reserves and mitigating risks associated with currency fluctuations and economic uncertainties." ET. Why are central banks buying gold? What are they hedging against? Previously, gold hit lifetime highs in - "1970s (after the 'Nixon shock' ended the convertibility of the US dollar to gold); 2008 (global financial crisis); 2011 (European debt crisis) and 2020 (covid-19 outbreak)." Is another financial crisis in the offing? Not certain, but if there is one, markets will plunge and millions of retail investors in India will get badly hurt. There were nearly 161 million registered investors in the BSE and 79.2 million investors in the Systematic Investment Plan (SIP) in mutual funds. ET. "Unlike most financial assets, driven at their core by currencies whose supplies can be, and are, continuously increased through a couple of keystrokes on central bank computers, supply of gold in limited and constrained." "There is a small, if fanatical, group of 'experts' and financiers united by their deep distrust of modern central banking." Cryptocurrencies are extremely volatile, so "As an alternative to fiat currencies, that leaves gold - stable, trusted, liquid and non-fiat," wrote Somnath Mukherjee. A married woman in India can possess only 500 gm of gold ornaments, which are not of 100% gold (Kotak Life), but the government buys bullion in tonnes with our money and without any explanation. Luring people into gambling in stocks and increasing the number of dollar billionaires from 169 to 200 (ET). Gold is yellow. Perhaps it indicates a yellow alert. Will it turn red? We don't know.  

The difference.

"Now that the quid pro quo in India's opaque electoral funding has been exposed, electronic voting machines are the next port of call for judicial scrutiny. And rightly so." "Western democracies, having flirted with technology, have mostly decided against surrendering the act of recording a citizen's most profound electoral choice entirely to machines. In 2009, Germany's constitutional court declared computer-aided voting unconstitutional for failing to meet standards of public scrutiny." In February, "India's Supreme Court ...scrapped a seven-year-old election funding system that allows individuals and companies to make unlimited and anonymous donations to political parties, calling it 'unconstitutional'." Reuters. These were the infamous 'Electoral Bonds'. Total value of Electoral Bonds sold amounted to Rs 165.18 billion of which the BJP received Rs 82.518 billion, more than the combined amount received by the Congress in second place with Rs 19.52 billion and the TMC in third place with Rs 17.05 billion. The Wire. "A modest overhaul of a controversial surveillance program foundered in the House of Representatives...after Democratic and Republican critics, including Donald Trump, said it gave the government too much power." Reuters. In India, on the other hand, "The state has used almost every opportunity to appropriate superior rights under the pretext of national security or economic imperatives." "The Indian citizen's individual rights are enshrined in the Constitution, especially in Articles 19 and 21." But, "Clauses permitting preventive detention constitute a glaring contravention of basic democratic rights and civil liberties that has been carried forward from a colonial regime to a modern day republic," wrote Rajrishi Singhal. "What is worse? Police flouting all mandatory procedures while arresting and gathering evidence, or the government lawyer, an officer of the court, asking judges to overlook this conduct?" "The police is the repressive arm of the state. That's how it was conceived of when the British ruled over us," and "No government is going to let go of its most potent weapon against the people," wrote Jyoti Punwani. "Apple Inc has warned its users in  India and 91 other countries that they were possible victims of a 'mercenary spyware attack' dropping the word 'state sponsored' it used in its previous alerts," "after it repeatedly faced pressure from the Indian government on linking such breaches to state actor." Reuters. To shut any critics abroad, "An organisation targeting critics of Indian Prime Minister Narendra Modi was set up and is being run by an officer of India's top spy agency, the Washington Post has claimed." Dawn. The US Constitution guarantees freedom of speech, right of property and freedom from unreasonable arrest. wikipedia. Indians have virtually no rights. The US is rich and strong. We have 813.5 million people receiving free food grains. pib.gov.in. An imprisoned people will always be impoverished. That is fundamental to being human.  

A humanitarian conflict.

"Iran has launched dozens of aerial drones and missiles at Israel, marking a widely anticipated reprisal attack." "It is the first such direct clash between the two enemies," and "The Israeli military said Israel and other countries had intercepted dozens of cruise missiles and drones, mostly outside Israeli airspace." BBC. "The US has shot down Iranian drones headed to Israel after Iran launched its retaliatory attack." "Other nations including France and Canada, have also condemned Iran and expressed support for Israel." BBC. On 1 April, "Suspected Israeli warplanes bombed Iran's embassy in Syria," following which, "Iran's Revolutionary Guard Corps said in a statement that seven Iranian military advisers died in the strike including Mohammad Reza Zahedi, a senior commander in its Quds Force, which is an elite foreign espionage and paramilitary arm." Reuters. "Airspace closures through the Middle East grounded and diverted flights on Saturday (yesterday) as Iran launched drones towards Israel." Israel, Jordan and Iraq closed their airspace. "It was not clear when flights would resume." NBC. Iran's attack should be a big respite for Israel, even if temporary. On 25 March, 14 of the 15-member UN Security Council voted a resolution, with the US abstaining, calling for an immediate ceasefire in Gaza, (UN) which would have given Hamas a golden opportunity to get a fresh supply of weapons from Iran. France went even further. "France's foreign minister said...that pressure, and possibly sanctions, must be imposed on Israel to open crossings to get humanitarian aid to Palestinians in Gaza." The Times of Israel. How would they have stopped Hamas fighters from keeping the greater share for themselves? "Yemen's Houthi rebels launched multiple drones at Israel in coordination with Iran, security firm Ambrey says, adding that the projectiles were likely timed to reach Israel simultaneously." TToI. Five days back, "The US Central Command said on X its forces had destroyed an air defense system with two missiles ready to launch, a ground control station in Houthi-controlled areas of Yemen and one unmanned aerial system launched by the Houthis from Yemen over the Red Sea." Reuters. Clearly, the US action is inadequate and ineffective. Two days ago, "Dozens of Russian military instructors have arrived in Niger as part of a new agreement with the country's junta, which has cut links with the West. State media reported that they arrived along with a state-of-the-art air defence system." BBC. Just four days back, "Israeli Prime Minister Benjamin Netanyahu's approach to the war in Gaza is a 'mistake', US President Joe Biden said in an interview." Reuters. Biden does not understand that Israel cannot run away in total disarray as the US forces did from Afghanistan under Biden's watch. BBC. Israel understands what woke Americans don't: Islamists kill for pleasure. No human being should be capable of what Hamas did to ordinary Israelis on 7 October 2023. AP. Iran, Russia and China versus the West. No time to be woke.   

What will happen, will happen.

"The Index of Industrial Production (IIP) in India rose 5.7% in February as against 3.8% in January, revealed the data provided by the Ministry of Statistics and Programme Implementation (MoSPI)." ET. "The HSBC India Manufacturing PMI rose to a 16-year high of 59.1 in March, from 56.9 in February." "India's manufacturing output rose for the 33rd consecutive month in the final month as growth quickened across consumer, intermediate and investment goods sector." ET. "India's dominant services industry grew faster in March amid strong demand, according to a private business survey that also showed employment increased at the fastest rate in seven months and export business expanded at a record pace. The final HSBC India Services Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 61.2 last month from February's 60.6." Reuters. "Gross GST collection in March 2024 jumped 11.5% year-on-year (YoY) to Rs 1.78 lakh crore (Rs 1.78 trillion). Total gross collection for FY24 stood at Rs 20.18 lakh crore, surpassing the revised budget estimate, compared to Rs 18.10 lakh crore in the previous financial year, showed official data." BT. Since the goods and services tax (GST) is based on consumption this would seem to indicate a booming consumer demand. But, since GST is a percentage of the price of goods and services, it might also indicate rising prices. However, consumer price index (CPI) inflation is coming down. "India's retail inflation eased to 4.85% in March as against 5.09% in the previous month." "The inflation in the food basket was at 8.52% in March, down from 8.66% in February." ET. This 4.85% rise is on top of a 5.7% rise in March 2023, 7.0% rise in 2022, 5.5% rise in 2021 and a 5.8% rise in March 2020. RI. India's foreign exchange reserves increased by $2.98 billion to an all-time high of $648.56 billion as of April 5, according to the Reserve Bank of India (RBI). ET. If consumer demand is strong, both manufacturing and services sectors are growing strongly, CPI inflation is coming down and our forex reserves are at record level, why is the rupee getting weaker? The exchange rate of the rupee against the dollar is at a record low of 83.61 this morning. xe.com. It ended the day at 83.4250 against the dollar on 22 March (Reuters) and fell to 83.46 against 1 dollar on 3 April (Forbes). Probably because, "Consumer prices in the US rose faster than expected last month," as "Prices rose 3.5% over the 12 months to March, up from 3.2% in February, the US Labor Department said." BBC. The price of oil has crept up, with Brent crude quoting at $90.45 per barrel this morning. oilprice.com. US markets fell as hopes of a rate cut in June were dashed by the high inflation number. The Dow Jones Industrial Average fell 475.84 points or 1.24%, the S&P 500 fell 1.46% and the Nasdaq Composite fell by 1.62% yesterday. CNBC. Rising oil prices with a stronger dollar could raise the price of fuel in India which will feed into inflation by increasing transport costs. The wars in Ukraine and Gaza are still raging. Que sera, sera, what will be, will be. dictionary. Let's enjoy the present.

Illeism is the clue to the future.

"Today, there is a strong Modi government, hence terrorists are killed in their turf," said Prime Minister Narendra Modi while campaigning in Uttarakhand. ET. Mr Modi was using 'Illeism', "which is the act of referring to oneself in the third person instead of first person." "Deepanjana Pal of Firstpost noted that speaking in the third person 'is a classic technique used by generations of Bollywood scriptwriters to establish a character's aristocracy, power and gravitas'." wikipedia. Earlier, "Defence Minister Rajnath Singh...said if needed, India will enter and strike, while responding to a media report that said the Indian government was allegedly behind the killings of almost 20 individuals in Pakistan that the intelligence officials deemed a threat to the nation's security." ET. When asked about the killing of Hardeep Singh Nijjar by Indian agents, PM Justin Trudeau said, "The killing of a Canadian citizen on Canadian soil is something we all should take extremely seriously." ET. India rejected Canada's allegations as "absurd and motivated". Mint. Unfortunately, dozens of Indians have paid an enormous price because of India's bellicosity. "Canada has recently decreased the number of Indian staff members in its diplomatic missions across India due to a shortage of Canadian personnel necessary for the effective management of in-country operations. This move comes in response to India's expulsion of 41 Canadian diplomats last year." ET. On the other hand, "An intelligence operative has been removed from his position and several others were reshuffled following an investigation into US claims of an alleged plot to kill Khalistani leader Gurpatwant Singh Pannun." "The investigation concluded 'rogue operatives not authorized by the government had been involved in the plot'." HT. So, ridicule Canada, threaten Pakistan to show how tough you are, claim to kill terrorists "in their turf", which could mean in other countries, while humbly trying to pacify the US with a quick 'investigation' and transfer of officials. A classic case of having your cake and trying to eat it  (wikipedia). To create an illusion of a fair election the BJP "has sent invites to political parties of 25 countries around the world". "Political parties of around 15 countries have confirmed the participation," including "Sri Lanka, Bangladesh, Tanzania, Mauritius among others." ET. The BJP may co-opt parties of other nations but many Indians are fearful. Finance Minister Nirmala Sitharman's husband, economist Dr Parakala Prabhakar asserted that "these elections encapsulate 'Modi-BJP versus Indian citizens',"  "Modi government is 'not democratic at all' and if Mr Modi wins this election "this would be the last election of the country. The map of India and the Constitution will be completely changed." DH. "The 675-mile-long mountain range that cuts through central India is no longer just a geographical divide." States to the south reject Mr Modi while his control of the impoverished north may win him the election, wrote Andy Mukherjee. Uttar Pradesh and Bihar send 120 MPs to the Lok Sabha while the 5 southern states of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and Telengana send a total of 129. wikipedia. If Mr Modi wins he will increase seats of the northern states through delimitation to give permanent control to the BJP. The South may want to secede. Will Mr Modi use the army against the South? Will the Indian army shoot Indian citizens? We can only wait..