Where will we hide?

"If I had to pick a single company I would like to buy, it would probably be an Indian company," said investor Jim Rogers. "But history is pretty clear that Japan is going to have problems in the next few decades. India has a better future than Japan and America in 2021." "When the next problem comes in the markets whether it is this year or next, I am sure that people are going to race to the US dollar because they think it is a safe haven." "I do not particularly like what is happening in Delhi, these guys are spending a lot of money and borrowing a lot of money." "Union finance minister Nirmala Sitharaman on Sunday said the government was well aware of fiscal management and would keep finances in healthy condition and not leave them unattended." "In India, because of accumulated debt, interest payments are the single biggest item of government expenditure and eat up more than 40% of total revenues, leaving that much less for spending on growth enhancing sectors like education, health and infrastructure," wrote Duvvuri Subbarao. Rich countries are suffering from secular stagnation because their populations are growing older and consuming less but the median age in India is 29 years which means economic growth leads to rising consumption and rising prices. He should know because he was Governor of the Reserve Bank (RBI) from 2008-2013 when average retail inflation soared to as high as 12.11% in 2010. Long term weak growth of economy is known as secular stagnation. Economist Larry Summers explains it as "imbalance resulting from an increasing propensity to save and a decreasing propensity to invest. The result is that excessive saving acts as a drag on demand, reducing growth and inflation, and the imbalance between savings and investment pulls down interest rates." According to data from the Center for Monitoring Indian Economy (CMIE) the total number of employed people was "407.3 million in 2016-17 and then fell to 405.9 million in 2017-18, and to 400.9 million in 2018-19", wrote Udit Misra. Around 20 million people "enter the working age population of 15-59 years" every year. India has a labor force participation rate (LFPR) of just about 40% which means that only 40% of that 20 million is actually looking for a job. Growth will come from consumption and investment, wrote Madan Sabnavis. Consumption cannot grow without more jobs which will come from economic growth. "The second engine is investment which has lagged with gross fixed capital formation falling to a low of 24.2 percent in 2019-20 (that is before the coronavirus lockdown) from 34.3 percent in 2011-12." "Most economists expect inflation to resume an uptrend in February and March with the base effect likely to fade going ahead." Oil Minister Dharmendra Pradhan said that "reduced fuel production and oil-rich nations seeking more profits are the primary reasons behind spiralling petrol and diesel prices in the country". Which is as barefaced as it can get because "just before Modi came to power, petrol was selling at a bit above Rs 75 while crude prices were as high as $110 a barrel; but now local prices are in the high 80s and 90s despite crude prices hovering just above $60". The reason is extortionate taxes. Bond yields have risen suddenly in India and he US indicating inflation expectations. Rising inflation, rising dollar, falling employment, a perfect storm is coming. No safe haven for Indians.