Think about Israel.

The divided opposition in Syria has at last chosen a common leader in a get together in Qatar going on for over a week. The chosen one is Moaz al-Khatib, former Sunni Muslim imam of the Umayyad mosque in Damascus. He is said to be a moderate and is said to have argued for peace talks with Bashar al-Assad. He will have 2 moderate Vice Presidents, a prominent dissident, Riad Seif and a leading secular activist, Suhair al-Atassi. The new body will be called the National Coalition for Opposition Forces and Syrian Revolution and will have representation from Kurds, Christians, Alawites and women's groups. Turkey and the Gulf Arab states have an open interest in combining a Sunni opposition to the Alawis, an offshoot of Shia. What role western powers such as the US, UK and France have played behind the scenes and what inducements, in the form of heavy weapons and anti aircraft missiles, have been offered we do not know. Britain is already rumored to be ready to supply arms to the rebels which will take the war in Syria to a new level. The new leadership provides a fig leaf to western powers to once again interfere in the affairs of a Muslim country even after the getting bloody noses in Iraq and Afghanistan and leaving behind a divided Libya, a fertile hunting ground for Al Qaeda. The world should not be fooled by the moderate nature of the leadership. A similar moderate leadership was cobbled together to justify the murder of 30,000 Libyans and is now confined to Tripoli while armed militias rule various parts of a divided country. The Egyptian revolution, which led to the fall of Hosni Mubarak, was led by mainly secular groups but has yielded a government by the Muslim Brotherhood. The Brotherhood was formed in Egypt in 1928 and has spread to most countries of the middle east and north Africa. It has been periodically persecuted by various leaders such as Gamal Abdel Nasser of Egypt and Hafez al-Assad of Syria, late father of the present president. In 1982 a Brotherhood uprising in the city of Hama was brutally put down with the loss of up to 40,000 lives. Thus, the Brotherhood knows how to wait to grab power as it has done in Egypt. Once Assad falls and elections are organised the Brotherhood will quietly take over the government because it has an efficient organisation on the ground. The Brotherhood is leading a series of protests in Jordan and is slowly trying to grab power in that country. If it succeeds Israel will be completely surrounded. In the west it has Egypt, to the south east there is Jordan, to the north east Syria and to the north Lebanon, with the dangerously armed Hezbollah. The only escape is to the north west into the Mediterranean sea. Netanyahu is exercised over Iran possessing nuclear weapons when danger is brewing just across its borders. The US should be alarmed.

Power is addictive.

Last Tuesday we witnessed the US elections which may or may not have changed the balance of power in Washington. At least it was a spectacle, full of surprises and extremely enjoyable. Depending on what you read, left wing or right, there are detailed analyses of the role played by enormous amounts of money, minorities, women, young people, older people, working class whites and strategic mistakes by the parties. Another so called election is going on in China where a party Congress, consisting of over 2000 delegates will select the next Standing Committee of the Politburo and the General Secretary who will then go on to become President of China. Everyone knows that it will be the present Vice President, Xi Jin Ping but we have not been told of the names of the others although this has been decided behind closed doors long ago. The outgoing President, Hu Jintao spoke of the importance of increasing democracy at the local level and the dangers of corruption to the party. He strongly urged that corruption must be stamped out or the Communist party will be in danger. But will it? It was shocking to see the previous President of China, 87 year old Jiang Zemin arriving with Hu, shaking hands with those on the dais and then occupying a front row seat, his face creased in a permanent rictus. It is said that he has been working behind the scenes, criticising the present leadership and working to get his nominees into key positions. Why should anyone give up power and the perks that go with it? Local officials become enormously rich grabbing land from the poor in the name of development, controlling industries and banks and the money that comes from the center. They become very wealthy with expensive cars, designer clothes and mistresses to enjoy life. It is one thing to talk about eliminating corruption but will it ever be possible? After all, the extended family of the present Prime Minister, Wen Jia Bao is said to have assets in excess of $1.3 billion. While China has one party and the US has only 2 India has a multitude of parties vying for positions of power. Most parties are headed by a family and all members work to protect and enhance the family because that is the source to wealth. With so many parties coalitions are common which is where a small party can reap rich rewards by getting hold of key ministerial portfolios. The DMK's control of telecom is a typical example. Everyone in the party gets a share of the loot that follows. However even with over 39 ministers, as in UP, not everyone can be accommodated which leads to lots of heartburn. So politicians start whining for smaller states which will allow more governments, many more ministers and myriads of opportunities to loot. Uttarakhand is a vivid example where so much black money has been generated that land prices are comparable with Delhi. It is not just that power corrupts, which it does, but that criminals are naturally attracted to it. Term limits are a must.

A black day for India.

Yesterday Diageo, a British company bought 53.4% of United Spirits from Vijay Mallya for a sum of Rs 111.66 billion, giving it full control of the company. With it foreign companies now control 80% of the drinks market in India and will be able to repatriate hundreds of billions of dollars. Prices will go up and the poor will be forced to drink illicit locally brewed hooch increasing the incidences of poisoning. This is how the British sneaked into India through the East India company, proceeded to conquer the whole country and plunder it for over 200 years. To be sure Mallya made some mistakes, probably through hubris. He should not have borrowed money from banks against personal assets to finance his airline venture. He should have bought planes, using them as collateral for his loans, and allowed banks to repossess them if they so desired. Still, it should never have come to this. Last year the total debt of Kingfisher Airlines amounted to Rs 40 billion which is nothing in the Indian context. Highly corrupt Air India has debts of over Rs 500 billion with accumulated losses of Rs 290 billion and is still in operation. Top 4 pilots at Air India earn more than Rs 10 million a year each. More than 15 employees earn more than Rs 9 million/year each while 65 earn more than Rs 8 million/year each. The Comptroller and Accountant General said in a report that the Ministry of Civil Aviation and Airport Authority allowed DIAL, the consortium running Delhi Airport, to make undue profit of Rs 34.15 billion by allowing it to levy a development fee on passengers in violation of its contractual agreement. To allow DIAL to increase its profits airport charges at Delhi have been increased by 346% and all passengers, including those arriving and transiting through the airport are charged, making it the most expensive airport in the world. Construction companies are allowed to charge toll on highways even before completing their work and charges are increased regularly to increase profit margins. The government could easily have restructured Kingfisher loans and deputed an officer to restructure its board and management. Instead every opportunity was shut off and the airline was not allowed to return the planes it had hired on lease. This meant lease charges, interest on loans and penalties were increasing daily until it went over Rs 70 billion forcing Mallya to his knees. In 1757 Robert Clive easily won the battle of Plassey against Siraj ud Daulah because Mir Jafar betrayed him by taking the bulk of the army away from the battlefield. We do not know who was the present day Mir Jafar. Was it a single person or a political party but what we do know is that India has been betrayed again. No wonder Paul Walsh, the CEO of Diageo was smiling when he was interviewed on CNN yesterday. He could turn out to be today's Clive.

Money works in India.

Americans are complaining about the cost of the recent elections which cost a total of $6 billion or Rs 300 billion in Indian money. Former wrestling executive, Linda McMahon, a Republican from Connecticut spent $100 million of her own money for 2 attempts for a seat in the Senate and lost both times. nytimes.com, 8 November. Obama had to face $386 million worth of advertising against him by super PACs and other outside groups. " Unlimited contributions and secret money in American politics have resulted in the past in scandal and the corruption of government decisions," said Fred Wartheimer, President of Democracy 21, a watchdog group." This will happen again in the future." However, this is just peanuts. In 2009 the Congress alone spent more than Rs 1 trillion bribing voters when they increased civil service salaries by 80%, forgave all loans to farmers and started the MNREGA scheme which pays villagers for fictitious work for 100 days a year. Tamil Nadu promised color TVs, mangalsutras and goats, UP promised free laptops while Punjab promised free electricity to farmers. While the money in the US came from personal accounts of rich people here politicians were merrily spending taxpayer money to win elections. The result is a fiscal deficit of 5.6%, Current Account Deficit of 4.9%, Public Sector banks have bad loans of around Rs 3 trillion and state electricity boards have debt of Rs 2 trillion. God alone knows how much debt is being carried by the various state governments. More money was extorted from businesses to pay for helicopters and fleets of cars for campaigning and to distribute bottles of cheap alcohol to men and saris to women to buy votes. While in the US there is some accounting of the amount of money spent no one here knows how much money goes down the drain during elections. While in the US money did not make that much difference, here all the scoundrels are back with big smiles and garlands around their necks. Bob Perry, a Texas homebuilder spent more than $21 million through super PACs on 2 Republicans fighting Senate battles in Florida and Virginia. Both lost narrowly. Sheldon Adelson, the casino magnate, spent a record $60 million supporting 8 Republican candidates. All 8, including Mitt Romney, lost. " Money is a necessary condition for electoral success," said Bob Biersack, a senior fellow at the Center for Responsive Politics, which tracks campaign spending," But it's not sufficient, and it's never been." Try telling that to our lot. Sadly we have no neutral think tank which analyses campaign spending and the source of money. This explains why the Reserve Bank has capitulated under intense pressure and promised to reduce interest rates in January. The hope is it will increase property prices and the black money that goes with it. General elections are in 2014. Expect a flood of money.

Bleeding us dry.

Taking advantage of the cancellation of 2G licenses by the Supreme Court the government thought that it would extort billions out of telecom firms by auctioning the licenses again. They set the base price at Rs 140 billion and were going to auction CDMA and GSM licenses separately to maximize profits. Too much greed leads to failure. There are no bidders for CDMA licenses after Tata Teleservices pulled out of the auction. Earlier Videocon had also pulled out leaving only Tata in the field. " Now there is no bidder left for CDMA. We have to take a call on what to do," said a senior official who naturally did not want to be named. Only 6 companies, Airtel, Vodafone, Videocon, Telenor, Tata Teleservices and Idea have applied for GSM licenses but not one company has applied for a pan India license. Reliance Industries and Russia's Sistema have not applied at all. Airtel and Videocon are bidding for additional spectrum in select circles and Videocon, Idea and Telenor are bidding for new circles and additional spectrum. Not only that, the government is going to levy a one time charge of Rs 309 billion for spectrum on all telecom companies. MTNL and BSNL being government companies their contribution will not add to the loot but private companies will have to shell out Rs 191 billion. The government's argument is that spectrum belongs to the people and private companies should pay to profit from national assets. The trouble is that telecom companies will pass on the extra cost to consumers in the form of higher charges. Just 20 years back there was only landline and there were only 2 phone companies in India, MTNL and BSNL. These being government companies the service was absolutely lousy, the employees were incredibly rude, you had to wait 4 years to get a connection and the cost of a call from Delhi to Mumbai was Rs 100/minute. Today anyone can buy a handset and get a SIM card from anyone of a million shops for as little as Rs 2000. The line will be activated within a couple of hours and the same call between Delhi and Mumbai costs as little as Rs 1.50/minute. This has meant that the poorest person is now able to afford a cell phone and, according to activists, this increased connectivity has resulted in increased earnings and well being of the poor. Just as the poor are unable to fly or afford cars because of huge taxes so increased charges will mean that the poor will have to give up their prized cell phones. Yet there is a way to earn from natural assets. Instead of auctioning spectrum or mines you auction profit sharing. The company which offers the maximum share of profits will be awarded the contract. That way companies do not incur huge costs up front and competition ensures low prices. However, with this system the payment gets staggered over many years and the Congress cannot wait. They need money now to bribe the electorate for the election in 2014. They will bleed us till not a drop is left.

Character is superfluous.

Although a few states, including Florida, are still to declare their results Obama is already across the magic figure of 270 needed to assure a second term as president. Already analysts are looking at demographic patterns, hurricane Sandy which interrupted Romney's momentum, the latest figures showing a slight improvement in the economy and Obama's campaign organisation which was able to get individual voters out to vote. What no one is talking about is whether Romney deserved to be the president of the country. It is not just that Romney came across as a shifty person for hiding his money overseas and refusing to reveal his tax returns but that he would say whatever it took to please his audience, frequently contradicting what he has said before. To call him a flip-flopper is to trivialise his instinct to do whatever it takes, no matter how devious, so as to achieve success. He is a Serial Liar. Maybe that is why he was so successful in business. To have a thick skin with no sense of honor must be a great asset to have in the cutthroat world of private finance, which was Bain Capital. Buy up a company in distress, strip out the best assets and sell them off for profit and then junk the rest along with the workers who lose their jobs and livelihood. Ruthless and unscrupulous. And this was what he was offering the country. Reduce taxes for the rich and cut Medicare, Medicaid and welfare for the poor. His comment about how 47% of the people see themselves as victims and are dependent on government handouts was not a gaffe as he made it out to be but something he truly believes.  Economists say that the economy is going to grow at 4% in the near future and unemployment will fall to 6%. Provided Europe does not collapse or China does not go into a recession. That is what Romney was banking on. He kept repeating the same mantra of reducing taxes, increasing military spending and balancing the budget by cutting expenditure without going into specifics. Just win the election somehow and then take credit for economic growth which would take him smoothly into a second term. One man who recognised the danger is Bill Clinton who wants his wife Hilary to stand for president in 2016 and so he campaigned vigorously for Obama till the end. It is no wonder that people the world over have developed a revulsion for politicians. In India too the Congress inherited a booming economy due to reforms by the BJP and easy liquidity globally. They used that growth to allow trillions to be looted and spent trillions to bribe the electorate to win a second term. Now they blame external factors for growing inflation, expanding deficit and a threat of credit downgrade to junk status. To cover up their crimes they have increased taxes to such levels that growth is being choked off. The only remedy is to have severe punishment for economic crimes. But who will bell the cat?

We pay to fill the gap.

The Central Vigilance Commission has found tax evasion of Rs 10 billion by government departments and private contractors in carrying out projects for the Commonwealth Games. However, this is just an attempt to muddy the waters because the Delhi government had a budget of Rs 700 billion and we still do not know how much was skimmed off the top as the central government has hidden the Shunglu Committee report. To combat malnutrition in children the government supplies midday meals in schools under the Integrated Child Development Scheme. As per Supreme Court ruling of 2004 these meals have to be supplied only by self help groups, village communities or mahila mandals ( women's groups ) who will purchase the necessary provisions. Contractors are specifically barred from this scheme. However a report by the Supreme Court Commissioners' Office says that private contractors have managed to corner Rs 80 billion worth of this scheme in Maharashtra, UP and Meghalaya. HT, 3 November. In 2009 the Maharashtra state government changed the rules to allow not just community based organisations but " women's institutions ", a deliberately misleading vague term, to bid for these contracts. Private contractors then floated 3 companies with women as board members which then went on to corner all the contracts to buy supplies for the entire state worth Rs 10 billion. The women on the boards of these companies were all relatives of the contractors. UP and Meghalaya do not comply with the 2004 orders. The report says " a close nexus between politicians, contractors and bureaucrats has allowed the active subversion of the letter and spirit of the SC orders ".  Nutritional standards of children in Maharashtra, a rich state, has declined to the level of Odisha which is much poorer. According to official data, 40% of children are underweight and 50% of all childhood deaths are attributed to malnutrition. Powerful politicians in Maharashtra are involved in robbing children of food. That is why politicians and civil servants love social schemes and that is why they never talk about reducing the numbers of children. However, all this looted money has to be filled in from somewhere which is why taxes in India are indiscriminate and extortionate. In 2002 oil companies introduced premium petrol and diesel which had special additives which increased mileage, enhanced pick up, cleaned engines and produced less emissions. These were priced Rs 1.50 higher than ordinary fuel. In 2009 this Finance Minister levied special duties on premium fuels which increased the difference to Rs 2.50. From 2007 to 2012 the sale of premium petrol decreased by 72% and that of diesel by 95% so oil companies are going to discontinue production of these fuels. And this fellow talks about growth. What a joke.

The taxes we pay.

The Reserve Bank of India wants the government to balance its books by cutting expenditure instead of by raising taxes, as it has done. TOI, 2 November. The Governor of the RBI, D Subbarao said," All of us - not just RBI, but all stakeholders in the macroeconomic management - are concerned about quantum of fiscal adjustment and also the quality of fiscal adjustment. International experience shows that fiscal adjustment that comes from expenditure compression is more sustainable than one that comes from tax increases. In our own country, we achieved consolidation in pre-crisis period largely due to tax increases. It will be worth our while to focus on expenditure compression to manage credible and sustainable fiscal consolidation on our way forward." What the Governor is saying is that tax increases are bad for the economy. Last year exports were just above $300 billion and imports were $485 billion with a trade deficit of $185 billion. Thus our economy is not dependent on exports to other countries but on internal consumption and extortionate taxes hurt the economy by reducing consumption. A European or an American earning the same amount of money as an Indian appears to be much richer and is able to spend much more. The reason is that they are assured of government services for the taxes they pay. There is social security, state pension on retirement and assisted healthcare for all, but in India the politicians have segmented the population into various groups based on religion, caste, urban or rural address and perceived poverty depending on profession. Thus a Hindu of higher caste earning a salary of Rs 25000 a month will receive no aid even if he is in real hardship having to look after aged parents and a sick brother. Indians are reluctant to spend, electing to save over 30% of income for emergencies and retirement. The stock market is highly manipulated so most Indians tend to shun that. Property prices are doubling every 3 years and rent is an absolute waste of money. Indians put their money in fixed deposits in banks but since the rate of inflation is higher than the rate of interest on deposits most Indians are getting poorer everyday. The freeloading press gloats over the high savings rate because this gives banks cheap funds to lend but, with a poor industrial base, banks have few avenues for useful lending. A few years back banks were enthusiastic lenders to infrastructure companies. No more. All such companies are running huge losses as Indians are unable to pay for expensive power and high tolls on roads. That is why banks have been lending to property construction companies but property prices are so high only those with enormous black money can afford to buy properties. The RBI is asking the politicians to stop wasting taxpayer money and reduce taxes to stimulate spending which will stimulate industry and genuine growth. Politicians want to throw money to win elections which will give them the power to loot. Why else are they in politics?

Cloud cuckoo land.

In the middle of April, 2012 Finance Ministry officials made an hour long presentation to S&P Credit Analyst, Tokahiro Ogawa supporting a credit upgrade for India. They pointed out economic growth prospects, growth in revenues and the government's efforts to control fiscal deficit through increasing tax collections. Mr Ogawa listened politely giving no sign of what he was thinking. A few days later, S&P downgraded India to BBB- which is just above junk grade. " We were not expecting the downgrade," said one official. " We made a presentation arguing India's growth prospects, tax-GDP ratio, efforts to fix the fiscal deficit are quite genuine and deserve better ratings than countries like Tunisia," said another. What these people do not understand is that no one believes them. Not even the RBI. Couple of days ago Finance Ministry officials were certain that the RBI was going to reduce interest rates and when that did not happen the sense of betrayal was acute. Our most revered Finance Minister echoed a song by Tagore when he said that he is " walking the path of growth alone ". Apparently officials have been working on a plan for fiscal consolidation for the past fortnight. " We were all ready for a rate cut after all the plan was approved at the highest level," said a senior official. TOI, 3 November. Which probably means the World Famous Economist, the man who has had 8 years to improve the economy but has only succeeded in bringing us to the edge of collapse. The reason why no one believes them is because growth prospects cannot improve unless government spending is drastically reduced. Spending cannot be reduced because rise in civil servant salaries, MNREGA Scheme and written off debt of farmers cannot be taken back. Trying to reduce deficit solely by savagely increasing taxes on everything contributes to inflation and reduces growth by reducing spending.  What is really worrying is that it is not just woolly headed thinking but a complete lack of understanding for reasons of stagnation. What is concerning the RBI is a rise in core inflation from 5% in March to 5.6% in September. Core inflation strips out food and measures the rate for metals, cement, iron, chemicals, textiles and transport machinery. wsj.com, 3 November. Robert Prior-Wandesford, economist at Credit Suisse in Singapore says," I am not surprised they ( RBI ) are worried. I have myself been surprised by the stickiness of core inflation despite weakness in industrial production as well as weakness of ...... international commodities which have traditionally been an indicator of core inflation." So, it is not the weather or Europe that are to blame but government policies which are causing inflation even though global commodity prices are weak. Making policies in cloud cuckoo land. Terrifying what?

A mouth watering promise.

In a meeting to welcome the same old faces after the so called cabinet reshuffle our most revered Finance Minister is supposed to have confessed that the economy is in dire straits and the only way to avoid a rating downgrade to junk status is to bring down the fiscal deficit. TOI, 3 November. Our most revered Prime Minister kicked off proceedings by saying," Of particular concern is the fiscal deficit, which is too high and acts as a deterrent for domestic and foreign investment. These issues have a rippling effect across the economy." Oh boy! After 8 years of rule by the Congress, led by the World Famous Economist, the only things that are rippling are fiscal deficit, double digit inflation and falling growth rate. The Finance Minister made a strong pitch for attracting Foreign Direct and Institutional Investment. " Foreign investment is not an option, but an absolute necessity." True, but how? His predecessor, who is now swanking about as the President, brought in the General Anti Avoidance Rules which sought to tax corporate deals retrospectively going back to 1960. The Supreme Court has cancelled 2G licenses, 122 in all, because of corruption and he is going to auction them again. Foreign companies and governments naturally see this as paying twice for the same license, which is grossly unfair, when they were not responsible for the initial corruption. The man responsible, A Raja is happily back in parliament. The Finance Minister also asked for aggressive fiscal consolidation through controlling expenditure, especially subsidies, and by raising more resources through disinvestment in the remaining 5 months of the financial year. What a joke! He is the man who wasted trillions in 2008 when he increased civil service salaries by 80%, forgave all bank loans to farmers and started the MNREGA scheme which pays villagers to do nothing, to win the elections in 2009. Reducing subsidies will increase prices which are rising everyday because of inflation and extortionate taxes. People are having to reduce expenditure which is impacting growth. He wants to raise Rs 300 billion through disinvestment, or sale of shares of public sector companies. The last such attempt to sell shares in the oil company, ONGC was a big flop and the government forced LIC to buy up over 90% of shares with the life insurance money of the public. He has promised a " good budget " next year if all goes according to plan. This is terrifying because we do not know what diabolical schemes he has in mind to bribe the electorate like he did last time. The Congress is bent on passing the Food Security Bill which promises cheap food to 70% of the population, which will cost Rs 1 trillion, and free cell phones which will add another Rs 70 billion. Junk grade is nothing. A total collapse awaits us.

Power comes from suppression.

On 21 February 5 members of a punk rock group called the Pussy Riot staged a performance inside Moscow's cathedral of Christ the Saviour. They were stopped by church wardens but later released a video of a song " Punk Prayer - Mother of God, Chase Putin Away." Sadly their prayers went unanswered. Putin is very much there but Christ could not save them. On 17 August, 3 of the 5 were convicted of hooliganism motivated by religious hatred, 2 fled Russia for safety. One was later released on parole but the other 2 have been sent to forced labour camps. Yesterday a court in Greece freed Costas Vaxevanis, editor of Hot Dog magazine from charges of violating privacy laws. Vaxevanis had published a list of names of 2059 Greeks with accounts in the HSBC bank in Switzerland amounting to about $2.5 billion. Known as the Lagarde list, because it was given to the Greek government when Christine Lagarde was the Finance Minister of France, it was suppressed by the Greek government. Lagarde is now the chief of the IMF. Vaxevanis published the list of names without accusing anyone of tax evasion but the government was deeply embarrassed and acted out of vengeance. After his acquittal Vaxevanis told reporters," There are political motives. You see most of the names on the list are friends of the political system." A former Greek minister, Leonides Tzanis, whose name appeared on the list, committed suicide because he could not bear the humiliation of being publicly accused. We Indians are not so lucky. Not one of our villains will ever dream of committing suicide because they have absolutely no shame or honor. In 2009 Germany forwarded a CD containing the names of 50 Indians with accounts in Swiss banks. The list has been completely suppressed and no action has been taken to find out if any tax was evaded. This is just the tip of the proverbial iceberg because it is estimated that up to $1.6 trillion have been salted away by Indians in Swiss banks alone. There are other tax havens so God alone knows how much money is lying hidden in off shore accounts. Of course, all the names on the list have had enough time to close those accounts and move their money to new accounts. Yet if you try to open a bank account with legitimate money in India you have to provide photographs, a photo identity to prove you are who you say you are, a proof of address and your Permanent Account Number with the Income Tax department. Is it any wonder that some 60% of Indians do not have any bank account? If you dare to expose a crime by any politician he or she will deny it angrily, will refuse to resign and will use the official investigative agencies, financed by our taxes, to bring a series of false charges against you. Since our esteemed judges continue hearings for decades you will be spending time and money defending yourself till you die. Like Satan, our politicians are indestructible.

Inclusive growth is not possible.

Centuries ago the world had a feudal system wherein powerful barons claimed large areas of land and the right to tax peasants living on and farming that land. However, there was a limit to how much peasants could pay and drought, flood or epidemics caused large scale deaths reducing numbers paying taxes. The only way was to conquer more land. Europe, which is poor in natural resources and is covered in snow for part of the year, saw regular wars between states which induced a demand led improvement in arms, body armour and armed ships. Europeans conquered large areas of the world. Large areas of South America speak Spanish, Brazil and Angola speak Portuguese,  north African countries speak French and vast areas speak English following trends left by the conquerors. Germany had colonies in Africa and Indonesia was under the Dutch. The industrial revolution allowed European countries to loot resources and sell finished products to their colonies making them enormously rich. However, riches went to a few while the vast majority lived in poverty. In the US the whites grabbed all the land restricting native Americans to reservations, owned large farms and developed natural resources which is abundant there. However, farms required back breaking manual labor while mines and industries were often dangerous. Thus they needed cheap and disposable labor in the form of slaves. American ships raided west Africa and transported people in chains to work as slaves, while the British used " indentured labor " to build railroads and to work on sugarcane farms. Sadly for them, you cannot enslave people for ever so they started fighting again resulting in the First World War. This was followed by the great depression of 1929 leading to the Second World War. This also coincided with nations fighting for independence. Realising that colonialism was going to end they perpetuated their power by grabbing all the international institutions such as the IMF, the World Bank and the UN Security Council. With this power they set about supporting dictators in various countries so as to continue to loot resources. The US concentrated on South America and the Europeans looked Africa and Asia. This allowed them to become rich and, for the first time in world history, to set up a social welfare system to look after the sick, the elderly and the unemployed. China followed a similar path by grabbing land for development, forcing a one-child policy and buying up mines in other countries. Commodity prices have boomed as nations have realised the value of their resources. Now the US and European economies are in serious trouble and China has 1000 protests everyday. So, when the Congress talks about " inclusive growth " it means extortionate taxes on us to give handouts to the poor to keep them poor forever. Growth without exploitation can only come with fall in population reducing pressure on land and resources. Anything else is a lie.

Tip of the iceberg.

Seems that restructured loans for Public Sector or government banks was Rs 2.18 trillion in the last financial year, up by 58.48%  compared to 31 March 2011. TOI, 31 October. Banks restructure loans by extending the time limit for repayment by giving new loans to cover old ones. This hides the extent of Non Performing Assets, or bad loans in bank-speak, on their books. PS banks have restructured 5.7% of their loans as against 1.6% by private banks. Till 30 June 2012 the Corporate Debt Restructuring cell, a bankers' forum which decides on restructuring, received 400 applications for restructuring loans amounting to a total of Rs 2.27 trillion compared to Rs 958.2 billion as on 31 March 2009. Loans have been given against dubious collateral such as personal guarantees, brand value or trademarks which will be hard to collect. The ratings agency Crisil warns that restructuring will add another Rs 500 billion to NPAs. Government debt stood at Rs 39 trillion in the last quarter, up 3.6% compared to the previous quarter. The Current Account Deficit was a record 4.9% in the June to September quarter. The combined budget deficit of state and central governments is about 9% of GDP. This may explain why the Reserve Bank did not reduce interest rates at its meeting yesterday. The RBI wants the government to reduce spending and limit indiscriminate corporate borrowing. What no one talks about is the gigantic property price bubble hanging over the economy. Mumbai has Rs 1 trillion of properties lying unsold. Reducing interest rates will inflate the bubble by increasing property prices thus adding to the black money and inflation. This also explains the howls of anguish by politicians and business fellows. Politicians want a huge amount of cash to campaign for the coming general elections and business fellows want to unload their stock of over-priced properties on the gullible public. Former Finance Secretary, Vijay Kelkar said," Last year we had fiscal deficit of 5.8% of GDP and CAD of 4.2%. If this continues the CAD would go up to 4.3% and fiscal deficit to 6.1%this year. So options are either we boost exports, draw down our reserves or borrow from the world. At CAD of 4.3% we would need to borrow $80 billion alone. Then short term debt will need rescheduling which would need further refinancing. Such a trend would be unsustainable." ET, 1 October. He then says,' The Gangotri of growth deceleration and macro economic problems is the continued high fiscal deficit which also leads to high inflation. So we need to take corrective action swiftly." In short the World Famous Economist has made a massive cock-up of the economy. On the other hand, maybe the RBI is waiting to reduce interest rate by 0.5% in the next quarter to allow the government to borrow massive amounts in the next years budget to bribe the " vote bank " and go for elections in 2013. Any skullduggery is possible.  

What they mean.

The Reserve Bank of India has shown real guts today by holding interest rates steady while reducing the Cash Reserve Ratio by 25 basis points to increase liquidity. There has been enormous pressure on the RBI from politicians, business fellows and foreign fund managers to reduce rates despite crippling inflation. Each of these groups has its own profits in mind, let India go to hell. Foreigners want share prices to increase so that they can show large profits when they close their books at year end, earning fat bonuses. Business fellows have borrowed vast sums from banks to build apartment blocks and want people to borrow to buy over priced properties, to multiply their money 10 times. Some have borrowed from foreign investors through Foreign Currency Convertible Bonds and are unable to pay back because of the fall in the value of their shares and the rupee. They would like to borrow cheaply in India to pay back their foreign loans. Politicians want growth because, according to them, that will help the poor. What they actually want is for share prices to rise so that they can make huge amounts of money, through sale of shares in Public Sector Undertakings, and increased tax collections which they will then use as bribes to win the elections in 2014. If they really wanted an end to poverty they would use all their energy in bringing down population, increase quality of education and get rid of black money by bringing down property prices by 80%. That the economy is floating purely on hot air was proved when the share market jumped by more than 1000 points on announcement of so called " big bang " reforms. What reforms? Diesel and cooking gas prices were raised to reduce subsidy adding to inflation. Had petrol price been reduced by the same amount so that diesel and petrol reached parity, like in other countries, that would have been true reform. Allowing 49% foreign ownership in insurance, airlines and in multi brand retail is pure rubbish. Insurance companies already have foreign partners and if they put more money into these companies that will not help the economy except for slightly reducing the Current Account Deficit. Companies like Walmart and Tesco will not be able to establish hyper markets in cities because of unreal land prices. At best they might set up small stores with Indian partners or large stores far away from cities where they will serve more as wholesale shops for small shopkeepers. All airlines in India are poison because of sky high taxes on aviation fuel, passenger tickets and airport charges. Ticket prices have doubled in the last year. This allows the new Railway Minister to announce an increase in rail fares for air conditioned travel while keeping cattle classes and commuter tickets the same. Everything to win the next election to continue looting. The rape of Mother India continues.

Italy and India are so alike.

Last week Silvio Berlusconi, former Prime Minister of Italy, was at long last convicted of tax fraud and sentenced to 4 years in prison which was immediately reduced to 1 year because of some amnesty rule. In 1990 he was convicted by an Appeal Court in Venice of giving false testimony in front of a court in Verona in 1989 but got away because of another amnesty rule. There have been allegations of mafia collusion, tax fraud, corruption and bribery of police officers and judges against him but he has always managed to wriggle out by  amnesty laws and statute of limitations, some of which were enacted while he was the Prime Minister. Indeed he entered politics to escape justice, using his enormous wealth and control of TV channels to win elections. Berlusconi is also famous for his appetite for underage girls and for inviting an underage prostitute, Karima al Mahroug to bunga bunga parties. Another former Italian Prime Minister, Bettino Craxi fled to Tunisia where he died in exile on 19 January 2000.  He was sentenced to 27 years in prison for corruption which was reduced to 9 years and 8 months. Giulio Andreotti has been investigated many times including for involvement in the murder of a journalist, Mino Pecorelli in 1979 who had exposed his links to the Mafia. Andreotti was made Senator for life which gives him lifelong immunity from conviction. The similarity with Indian politicians is stark. Our lot are a bunch of criminals and crooks who have entered politics for the protection it affords and have managed to win elections with black money, guns and goons. The cabinet reshuffle at the center yesterday is a vivid example. The same old ugly faces or the children of the old ugly faces have been made ministers in a game of merry go round. The fellow who threatened to kill India Against Corruption activist, Arvind Kejriwal has been made Minister of External Affairs. He will be able to gel with the Italians very well. On 15 February, 2 unarmed Indian fishermen were shot to death off the coast of Kerala by 2 marines aboard the Italian ship MV Enrica Lexie. The Italians claim that the murders happened in international waters so the marines should be allowed to go free as if that is some kind of amnesty. After all the Italians allowed Amanda Knox, affectionately known as Foxy Knoxy to her friends, to walk free of a charge of double murder. Knox happens to be an American and is now happily enjoying her life in the US of A. In April the central government told the Supreme Court that the 2 marines should be allowed to go free because the murders did not happen in the country's territorial waters and questioned the right of the Kerala Police to hold the 2 marines. The Supreme Court said," We do not expect such a stand of the central government. It is unfortunate when persons killed on February 15 were within Indian territorial waters." Seems that Italians are ruling this country, does it not?

Elections are unfair.

George W Bush left the country in an absolute mess. The sub prime crisis had brought property prices crashing, banks were left with massive bad loans and the US was involved in 2 wars, in Iraq and in Afghanistan. Obama steadied the economy by recapitalising banks, restructured the car companies and got out of Iraq to concentrate on Afghanistan. He has succeeded in killing Osama bin Laden in Pakistan and Anwar al Awlaki in Yemen but his reliance on drones has resulted in  indiscriminate killings, creating more terrorists for the future. The economy grew by 2% in the third quarter, up from 1.3% in the second quarter, and unemployment has fallen to 7.8%. Experts predict that growth will continue, the economy will be growing at 4% in the next 4 years and unemployment will fall to 6%. That makes this election a must win one. If Romney wins he is assured of a second term because no president has lost with a growing economy. That is why the Republicans are using every means, fair or foul, to win. Romney keeps saying that he will boost the economy by cutting taxes, increase military spending and balance the budget by cutting expenditure but he refuses to give any details or actual figures on how he is going to do it. He says that his presence in the White House will increase investment by increasing business confidence because of his experience as a successful businessman. He is content to be vague because he knows that economic growth, resulting from Obama's policies, will increase tax revenues and help reduce deficit and he will be able to claim credit for the recovery. The Democrats know that if Obama were to lose, the White House will be out of their hands for the next 8 years. Bill Clinton is especially conscious of that. He wants his wife Hilary to be President in 2016 and that is why he is working very hard to make sure that Obama wins. Obama cannot run for a third term so Hilary Clinton will benefit from economic growth. The BJP lost the general elections in 2004 in spite of a booming economy, due partly to reforms induced by the BJP and partly because of the excess liquidity in the global economy. The Congress thought that reforms would be bad for reelection and decided to bribe the electorate massively in 2008 to win in 2009. But economic crimes rarely go unpunished in these days of globalisation. India is now in the grip of rising inflation, rising fiscal and current account deficits and diving growth rates. With elections in 2014 the Congress is desperate to find more money to bribe the voters once more but the economy is in such dire straits that it will collapse if they commit the same crimes again. They have made a few cosmetic changes and are shouting that these " reforms " will increase growth. However, they need not worry. People are stupid and they will fall for the same lies every time. Only a few of us will suffer the agony of knowing the truth.

Mobility leads to idiocy.

One politician is in hot water with feminists for saying," What are the girls missing without mobiles? Did our mothers, sisters......die without mobiles during their time?" This has been interpreted as saying that cell phones should be available only for boys and men to protect girls from going astray. Examples such as Occupy Wall Street and the Arab spring, which were facilitated by Twitter, have been cited to show that cell phones are helpful. No one is denying that, although both the Occupy movement and the Arab Spring did not achieve their objectives and can be deemed to have failed. Those of us who had no alternative to government controlled BSNL and MTNL just 20 years back think that cell phones are heaven sent. In those days a call to another city was called a " trunk call " and cost Rs 100/minute. Today a similar call costs Rs 1.50/minute and even the poorest people carry cell phones with them. However, there is no doubt that there are serious problems with the use of cell phones. It is extremely annoying when someone starts talking on a phone in the middle of  a conversation leaving you staring at a wall for half an hour, waiting for the person to finish. In 99.99% of cases the call is entirely trivial and could have waited for a later time, or even for next week. This uncontrollable urge to answer a call is also extremely dangerous. You will see men and women on motor bikes talking on a mobile with one hand while driving with the other or driving along with head on one side with the mobile wedged between head and shoulder. Not only are they poorly balanced but they are oblivious to traffic around them and do not seem to hear warning blasts of car horns. Women are especially in danger from this stupidity. It is usual to see a man talking animatedly on his mobile while driving his motor bike with his wife and baby seated behind. Children are easily distracted and play games on their phones in class. Giving mobiles to children affect their study and bring down their performance. Children are also very affected by pornography which can be accessed from phones. To see how cell phones are destroying human brains all you need to do is travel on a train. Previously people used to read books, newspapers or magazines to while away their time. Today only a handful of people read. You see people hunched over their mobiles playing stupid games or listening to ring tones. At times it seems that the entire carriage is full of monkeys hunched over in their seats. We do not know if evolution goes only forward or whether, given the right circumstances, it can regress. However, logic says that if something moves in one direction it can move backward. There seems a real possibility that cell phones will result in human beings gradually regressing to monkeys. Will the feminists be happy to be sitting in trees talking on mobiles?

Whiter than white.

Couple of weeks back there was enormous commotion when it was revealed that Mr Robert Vadra, only son in law of Congress President, Ms Sonia Gandhi, had bought land and apartments worth hundreds of millions of rupees at throwaway prices from the construction company, DLF. There was speculation as to what riches DLF were given in return. The suspense is over. A group of 12 Deputy Commissioners of Gurgaon, Faridabad, Palwal and Mewat were asked to investigate documents registered by Mr Vadra and his companies, either as buyer and seller, from 2005 onwards. TOI, 26 October. Guess what? Mr Vadra has come out squeaky clean. Even more. " In one deal, Vadra paid more than Rs 221 thousand as stamp duty for buying 9 acres of land, though he was liable to pay only Rs 67,500," said one officer. Wow, what sacrifice! He actually paid Rs 153,500 more than was necessary. Does that make him a saint or merely foolish? There were 11 registrations involving 52 acres related to Vadra companies in Faridabad district. " There was not even a single case of undervaluation or theft of stamp duty," said another official. Brings tears to our eyes, what? Of course, we have to remember that Haryana has a Congress government led by one Mr Bhupinder Singh Hooda and we must remember that to rise in the Congress party one must know how to lick. The better the licker the higher he shall rise. Meanwhile the entire business community in India is in a state of shock at the news that Mr Rajat Gupta has been sentenced to 2 years in prison on charges of insider trading. What is the point of being an insider if you cannot trade on it? What is especially shocking is that Mr Gupta merely discussed confidential information with his friend Mr Raj Rajaratnam, founder of the Galleon hedge fund, who is serving a 11 year sentence, and had no interest in any personal gain. This is terrifying stuff. Firstly, this means that anyone wanting to do business in the US has not only to be honest but can be locked up for passing on interest stuff to friends and cronies to make a few bucks on the side. What is capitalism if cronies cannot gain from it? Secondly, if similar laws were to be introduced in India life would become really difficult. No one would be able to manipulate the stock market and even the most ordinary Ms Ram Dulari would be able to make profits if she is clever enough. Life would become very difficult for  children of businessmen who would not be able to enhance their pocket money with an occasional flutter. But business fellows now have a role model in Mr Vadra. Just follow his saintliness and rejoice.

Does it matter to us?

The debates are over, there is wall to wall advertising and both candidates are rushing around trying to drum up last minute voters. The pundits give 2% lead to one candidate and then to the other with the caveat that this is within the margin of error. After the party conventions Obama was in the lead, mostly because of the old Clinton magic and Clint Eastwood holding a muddled conversation with an empty chair. The first debate was a disaster for Obama but he came back stronger in the second and the third debates. Romney clutching " binders full of women " became a point of discussion and Obama's sarcastic " horses and bayonets " riposte to Romney's charge of a weaker navy has become the basis of endless jokes. However, Americans are much less concerned about foreign policy than they are about domestic policies, especially the economy. If the experts are to be believed the result on 6 November hinges on 9 swing states. Apparently Obama is already assured of 237 electoral college votes and needs another 33 to reach the magic figure of 270 while Romney has 191 and needs another 79. Obama is ahead by 2% in Ohio which gives him 18 votes and by 3% in Wisconsin which gives him another 10. Romney is ahead by 6% in North Carolina which gives him 15 votes, by 2% in Florida getting 29 votes, in Colorado it is Romney 47.8% to Obama's 47.6% giving 9 votes to Romney and in Virginia there is a dead heat at 48% giving Romney 13 votes. Obama has the lead in a number of small states such as Iowa with 6 votes, Nevada with 6 votes and New Hampshire with 4 votes. According to these projections Obama gets 44 votes in the swing states while Romney gets 66 and Obama wins by 281 to 257 electoral college votes. Thus Obama can scrape through if he loses Wisconsin, which is the home state of the Republican Vice Presidential Candidate, Paul Ryan, but if he were to lose Ohio he is dead. With this system Romney could win by huge margins in the southern states and thus have a larger total of popular votes but still lose the election, much as Al Gore lost to George Bush in 2000. Does the result matter to India? We already know what Obama is about. He is good at speeches but has done little to improve relations with India. While he is conciliatory towards China he has increased visa fees, hurting our main export in IT services. Romney says that he will brand China a currency manipulator on the very first day which will surely precipitate a trade war with China. That may help us and, if he is tougher on terrorists, we would gain. Thus we have nothing to gain from Obama and nothing to lose from Romney. We can sit back and enjoy the fun.

Degrees of filth.

Today's TOI features details of dubious business dealings of BJP President, Nitin Gadkari. TOI has uncovered that Mr Gadkari's driver, Manohar Panse is a director of 5 of Purti Power and Sugar ltd investor companies and a director of 6 other companies, floated by Mr Gadkari, between 2009 and 2011. Mr Panse is apparently unaware of his position as director of so many companies as is his wife. Rajesh Khanzode,an employee in Purti's bakery unit and Vishnu Sharma, an astrologer from Mumbai are also directors of 2 companies in Purti group. Not being experts of company law we are unable to understand how Mr Gadkari gains personally from having his driver or a bakery employee as directors of his companies unless he is using them as fronts for money laundering or for diluting his tax liability. Mr Gadkari is said to have been given a loan of Rs 1.64 billion by on Dattatray P Mhaiskar whose family runs a construction business. Apparently this company was given contracts worth Rs 600 million when Mr Gadkari was PWD Minister of Maharashtra between 1995 and 1999. That is just peanuts compared to the amount of the loan given to Mr Gadkari's companies. The maths just do not add up but since we do not have any knowledge of how corruption works in India we are unable to make any sense of the allegations. Meanwhile Mr Vir Bhadra Singh, Congress nominee for the post of Chief Minister of Himachal, has threatened to break the cameras of journalists for asking him about charges of massive accounted wealth. Mr Salman Khurshid has threatened that Mr Kejriwal will not return alive if he is to visit Farrukhabad. Mr Khurshid also said that we should listen to what he has to say and not ask any questions because he knows how to work with blood. Mr Vadra, son in law of Ms Sonia Gandhi, opined that we are " Mango people in a banana republic " when questioned about properties worth billions owned by companies owned by him. He has not explained why the properties are owned by 4 or 5 companies. Surely if the deals were kosher one company would have sufficed. While we see the joke in " mango people " which is a direct translation of aam aadmi for which the Congress bleeds, it is because of terrible crimes in the 8 years of Congress misrule that India is now a banana republic. Politicians are so accustomed to looting our money that they become enraged at being questioned. The press being Congress agents will try to muddy waters to confuse people. However, crimes of another person do not condone crimes by Congress. It only confirms our belief that politicians are scum.