Digital has no substance.

"De-dollarisation was one of the most-discussed topics ahead of the 18th BRICS Summit in New Delhi. However, like previous summits, BRICS did not come up with a proposal for a common unified currency. Instead, the grouping encouraged the New Development Bank (NDB) to expand financing in local currencies." News18. Central banks have been reducing their dollar holdings anyway. A survey by the Official Monetary and Financial Institutions Forum (OMFIF) found that, "More of the world's central banks plan to cut dollar allocations than increase them in the coming decade as political risks associated with the US currency rise." But, "There is no clear alternative to the dollar and it has rallied 3% this year, driven by higher US interest rates, a thirst for US assets and a flight to safety sparked by the US-Iran war." Reuters. The value of the dollar is rising because of the US attack on Iran, increasing the price of oil and causing global inflation. What an irony! However, "Over the past few years, central banks have been quietly buying up significant quantities of gold," "led by Russia, China, Turkey, India and Kazakhstan," and now hold "more than 36,000 tonnes." The Conversation. France and Germany transferred their gold back home from the US, while "The Dutch sold about 59 tonnes in New York and then bought more stocks in London," which they stored in the Bank of England. BBC. To reduce dependence on the dollar, "India is likely to pitch seamless cross-border digital payments and greater adoption of central bank digital currencies, or CBDCs, among BRICS members at the summit." India does not favor a BRICS currency to replace the dollar. ET. Recently, "Finance Minister Nirmala Sitharaman urged the Reserve Bank of India (RBI) to further advance its wholesale and retail digital rupee pilots as adoption of tekenisation gains ground in the financial markets." ET. CBDCs are issued by central banks and, "Unlike cryptocurrencies, which are decentralized and volatile, CBDCs aim to provide stability and are government backed." "Privacy is one of the most significant drivers behind cryptocurrency. CBDCs would require an appropriate amount of intrusion by authorities to monitor for financial crimes." "Cryptocurrencies have been the target of hackers and thieves. A central bank-issued digital currency would likely attract the same crowd of thieves." Investopedia. "Hackers thought to be for the North Korean regime have successfully converted at least $300 million of their record-breaking $1.5 billion crypto heist to unrecoverable funds." "Experts say that the infamous hacking team is working nearly 24 hours a day - potentially funnelling the money into the regime's military development." BBC. Will the RBI guarantee a full refund if someone's account is hacked? In April, "The central bank is seeking to rein in rupee volatility through enhanced oversight of foreign-exchange markets and by tightening norms governing banks' participation in the non-deliverable forward (NDF) segment." "Traded mainly in financial centers such as Singapore and London, rupee NDF contacts are settled in dollars between non-resident counterparties, limiting the central bank's ability to directly influence volumes, pricing or positioning." ET. If an Indian company pays for imports with a large amount of rupee CBDC how will the RBI control what the foreign company does with it? Finally, what happens if Iran, a member of BRICS, insists on paying for imports at the official exchange rate of the rial instead of the market rate through its CBDC? While the official rate is 1.375 million Iranian rials to one dollar (Paytm), the market rate is 2.305 million to one dollar (Alanchand). CBDC has no substance. Junk it. Dollars are real. Stick to it.  

Back to normal.

India hosted the 18th BRICS summit in New Delhi on 12-13 September. "Today BRICS comprises 11 countries: Brazil, China, Egypt, Ethiopia, India, Russia, Saudi Arabia, South Africa and the UAE. Collectively, these members represent 49.5% of the global population, 40% of the global GDP and 26% of global trade." pib.gov.in. Of all the members, China's economy, with a GDP of $20.85 trillion (IMF), is greater than the other 10 combined, and, at 2,889.5 million, the combined populations of India and China  (worldometer), is greater than all the rest combined. "Chinese President Xi Jinping told PM Narendra Modi the current momentum in bilateral ties anchored in resumption of institutional exchanges, expanding cooperation agenda and increasing trade is hard-won and deserves to be cherished." TOI. Of course he would cherish it because, in 2025-26, India's exports to China rose 36.62% to $19.47 billion while imports rose 16.03% to $131.63 billion, giving a difference of $112.16 billion in favor of China. ET. Despite a wide difference of opinions, India succeeded in getting a joint declaration which condemned the Pahalgam attack without naming anyone responsible, called for restraint in the Middle East, opposed tariffs and carbon tax and asked Israel to withdraw from Lebanon. India Today. So anodyne that no one can find a flaw. Photos of Delhi's makeover have gone viral: "recliner lounges with no rush, market corridors clear of hawkers for the first time in years, curated regional gifts for delegates. But behind the wonder is a sharper, more familiar Delhi question - why does the city only look this good when the world is watching?" News18. It is not the whole city, only highly selected areas where foreigners will be shepherded. Come to the middle class area of Vasant Kunj, South Delhi, a 20-minute drive from the airport, and see broken roads, piles of strewn garbage, and uncontrolled, dangerous extensions to buildings everywhere. While delegates were receiving curated gifts, "A YouTuber in Uttar Pradesh's Bijnor was allegedly thrashed and chased down after  he posted videos highlighting the condition of roads and other civic issues in a village. The victim claimed the attack was carried out by the husband of a village head and his supporters." HT. Villages are administered by an elected body known as the Panchayat and one-third of the seats are reserved for women by law. ECI. However, women are put forward for show while their husbands run the Panchayat in the backward areas of north India. "This phenomenon, described as the 'Pradhan Pati' (husband of the chief) or 'Mukhiya Pati' practice (where husbands of women village heads do proxy governance for their wives), has long been explained as a distortion expected to recede as representation deepens." SAM. Foreigners know the real state of India. If BRICS "becomes an effective group at all, it is likely to become one that China will use to promote its interest and isolate India, and to undermine India's interest in the Indo-Pacific." "India's interest thus lies in sabotaging BRICS to the extent it can, lest it becomes a juggernaut that flattens India's interest," wrote Rajesh Rajagopalan. Not to worry, BRICS is just a talking shop with numerous photos of Prime Minister Narendra Modi with heads of governments. "What does BRICS do? "Mostly, it is a messaging platform. Countries use it to signal to the US and the West. Where a member can negotiate with Washington, it negotiates, bilaterally and quietly. Where it does not agree, cannot agree, or will not agree, it comes to a forum like BRICS and makes a polemical statement," wrote Happymon Jacob. While the gala dinner hosted by Mr Modi, skipped by Xi Jinping (TOI), was in progress, "Amid a high alert in Delhi, more than 20 men went on a late-night rampage in northeast Delhi's Nand Nagri, pelting stones and opening fire at three or four houses before damaging vehicles and fleeing the area." India Today. Now that the furriners have left, Delhi can go back to being the filthy, crumbling, lawless, violent, brutal and uncivilized city that it actually is. Phew, what a relief!   

Xi Jinping and Putin were smiling.

"The desperate pleas for air cover from Yemeni generals started coming mid-morning on Thursday (10 September). An advance by the Iran-backed Houthis toward Yemen's strategic port city of Mocha was in full swing," but the air support never came. "Hours later, on Friday, the Houthis captured another key coastal asset, Perim Island, at the mouth of the Red Sea. The island splits the Bab al-Mandeb Strait in two, giving Tehran de facto control over another key shipping route." CNN yesterday. Two days previously, "Stepping on to the Yemeni island of Perim is to relive history." "For Perim Island sits in the Strait of Bab al-Mandeb, a geopolitical pinchpoint that's taken on an outsized importance since US President Donald Trump's war with Iran effectively shuttered the Strait of Hormuz." CNN. While the Americans and the Saudis seem to be completely clueless against an armed Shia militia group whose total membership was around 350,000 in 2024 (wikipedia), "Israel's military says it has destroyed a large underground complex operated by Hezbollah in Southern Lebanon." "The blast triggered seismic activity equivalent to a magnitude 4.1 earthquake, according to the US Geological Survey." The tunnel "included a command center used by Hezbollah's Badr unit and contained dozens of rockets, missiles and unmanned aerial vehicles, as well as anti-tank weapons, mines and explosives." Israel lost 40 soldiers and four civilians in the fighting. BBC. Hezbollah is a Shia militia group in Lebanon (Britannica) which, like the Houthis in Yemen, is a proxy for Iran. Three weeks ago, "Iran has warned the United States that it would respond forcefully to an Israeli offensive on a mountainous ridge in Southern Lebanon where Iranian military personnel are holed up alongside Hezbollah fighters." Reuters. Not any longer. Israel has cleared the rubbish out. A ferocious Israeli revenge has left Hamas, the perpetrators of the surprise, unprovoked attack on Israel on 7 October 2023 which killed 828 civilians (including 36 children) and 367 members of the armed forces, while 251 people were taken hostage (wikipedia), are a much depleted group. "Gaza is destroyed. The movement's leaders have been targeted. Its military structure has been badly hit. Its ability to govern has declined." But, "Hamas has come out of this war as a different movement: weaker militarily, heavier politically, and more dependent on its ability to survive than on its ability to govern." MEM. In short, it is just a criminal gang now. Meanwhile, "Iran has resumed its production of ballistic missiles using stockpiled components and working in underground facilities," despite the fact that "The US and Israel severely diminished Iran's missile program early in the war with thousands of strikes." "Satellite imagery shows that Iran is rebuilding everything from bridges and roads to production sites at a pace that is worrying Israel." WSJ. At the same time, "ordinary Iranians who are already struggling with a plunging currency, worsening joblessness and rising prices for everything from food to trash bags," have also to pay higher prices to fill their cars as, "the government doubled some gasoline prices to the equivalent of $0.04 a liter. Filling a tank after the cheapest rations are exhausted could now cost $2 for a car and $5 for a truck, a drain for Iranians." WSJ. Since the beginning of the war, 18 US service members have died and 757 injured (CNN), not because of any heroic attacks on Iranian positions by US troops, but because they were killed or injured by Iranian missiles and drones while hiding in bunkers. US generals seem terrified of involving soldiers in any fighting and rely solely on indiscriminate bombing which kill civilians and destroy infrastructure while leaving Iranian underground facilities intact. So, US soldiers are sitting ducks. Now, "Things have gotten so bad that the Pentagon has transferred weapons stored in Asia and Europe stockpiles in the Middle East." cfr.org. No wonder both Xi Jinping and Vladimir Putin were smiling broadly in Delhi yesterday (NDTV). Israel lost 40 soldiers to defeat Hezbollah and Iranian army personnel. The US lost 18 soldiers and 757 injured doing nothing. The regime cannot afford to lose. It will try to kill as many as it can. Hiding in bunkers is no solution. Ask Israel. It knows how to win.    

It's not Putin, or Trump.

"President Donald Trump said he did not regret going to war against Iran despite the impact the conflict may have on the November US midterm elections." "Trump reiterated his thinking the war will end immediately after the midterm elections." ET.  "Global markets came under renewed pressure...as a sharp jump in oil prices intensified inflation fears, pushing bond yields higher and raising expectations that central banks may be forced to keep interest rates elevated for longer." Brent crude futures surged nearly 6% overnight to $109.97 a barrel." News18. Yield of US 10-year Treasuries jumped to 4.965, perilously close to 5%. Investing.com. "Indian government bonds plunged in opening deals today," as "The 10-year benchmark 6.94% 2036 bond yields hit 7.0211% after closing at 6.9762% yesterday." ET. That is a spread of just over 2%, or 200 basis points (bps) with the US. In its July meeting, the Federal Open Market Committee (FOMC) kept its benchmark interest rate fixed at 3.50%-3.75%, while, in its August meeting the Reserve Bank of India (RBI) followed suit by keeping its policy rate fixed at 5.25%. Forbes. That is a spread of 150-175 bps. The bond market is hinting that interest rates need to rise. Governments sell bonds to finance their fiscal deficit. "Foreign fund flows into Indian bonds have reversed after an unprecedented spike three months ago, reflecting the combined impact of persistently high global yields, Bloomberg's move to defer inclusion of local debt on a key gauge, and increasingly shortened odds on a rate hikes." ET. "The rise in bond yields is a global phenomenon," as "Investors are selling bonds, pushing prices lower and yields higher." "Bond yields set interest rates across the economy, and a steep rise in yields can raise the cost of mortgages, auto loans and student borrowing." CNN. "The US, UK, France and Japan now confront elevated sovereign bond yields." India seems quite safe. India's overall public debt is at 81% of GDP, the combined fiscal deficit of States and the Centre is at 7% of GDP, economic growth is strong and foreign exchange reserves are adequate. We should guard against fiscal dominance, encourage private investment and R&D and remember that the "current ability to borrow should not be confused with tomorrow's capacity to service debt comfortably," wrote Anoop Singh. This year's budget targets revenue deficit at 1.5% of GDP in FY 2026-27 and fiscal deficit at 4.3% of GDP. Those figures seem comfortable but , worryingly, "Interest payments account for 26% of total expenditure, and 40% of revenue receipts"  (PRS). India's real GDP grew by 7.8% in the first (April-June) quarter of FY 2026-27 compared to last year. Using new methodology the nominal GDP, or GDP at current prices, for 2025-26 was reduced from Rs 86 trillion to Rs 80 trillion but, the Ministry of Statistics and Programme Implementation (MoSPI) said that real GDP, or GDP at constant prices, was Rs 81.36 trillion this year over Rs 75.46 trillion last year. Mint. Some of the growth could be due to base effect. On 28 February 2026, the RBI held a record Rs 21.34 trillion of government paper compared to Rs 15.58 trillion in March 2025. This is "tantamount to deficit monetization," wrote Madan Sabnavis. Also, the RBI transferred a record Rs 2.87 trillion as dividend to the government from its surplus this year. Kotak Neo. Indian banks have borrowed $127 from non-resident Indians (NRI) but "have left much of their future interest payments on overseas FX deposits unhedged, creating a source of potential dollar demand that could compound depreciation pressure in a rupee-weakening scenario." ET.  The fact that India is borrowing a huge $127 billion at very high interest seems to be a red flag. All because the RBI refuses to raise its policy rate. Don't blame Putin. Or Trump.  

Waiting to collapse.

Three days ago, on 6 Sepetember, "Rescuers are digging through the rubble a day after a residential building collapsed in the Indian capital, Delhi, killing at least, seven people." "Authorities have confirmed 12 people were taken to hospital and that seven died while others are receiving treatment." "Building collapses are relatively common in Delhi, with more than a thousand recorded in the past three years causing dozens of deaths, according to fire department figures." BBC. On 30 May, "A building near Saket Metro station collapsed, killing six people, including five doctors preparing for FMGE and NEET-PG exams." On 3 June, "Fire at Flourish Stay B&B in Malviya Nagar claimed at least 23 lives." "Magisterial inquires into a series of deadly building collapses and fires in Delhi have repeatedly flagged regulatory failures, negligence and lapses by multiple govt agencies. The subsequent actions, however, have largely been directed at junior govt officials and engineers." TOI. Illegal, unsafe construction generates enormous amounts of bribes, which go right to the top, votes for the government and employment for the great unwashed. "Around 4 million residents of Delhi are living in unauthorized colonies. Besides, absence of approved building plans, these colonies suffer from other inherent problems of haphazard growth, lack of public amenities and infrastructure, unsafe structures and unhygienic conditions." And so, under the PM-Uday scheme residents of these colonies were given ownership of their properties so that they can get parks, playgrounds and community facilities. dda.gov.in. This is called Regularization. "Regularization is the process by which a state government or local authority retrospectively grants approval to a building. It applies to buildings built without the requisite permissions or in violation of the approved building plan." Propote. Why allow people to live in unsafe structures? Because it creates a 'vote bank' (wikipedia). Also because authorities do not have the means to provide alternate accommodation to the people if the unsafe buildings are demolished. Public land would have been grabbed by a crony of politicians who would have sold parcels to these people. Naturally, politicians and officials would get their cuts. After agriculture, the construction sector is the second largest employment generator in India, employing some  71 million of the workforce in India, 81% of whom are unskilled labor while 19% are skilled. ET. It provides a fallback to the rural landless in between harvesting and planting. Between 2021 and 2025, 179 bridges collapsed killing 202 people and injuring 441 across India. "The Ministry of Road Transport and Highways reported only 42 collapses between 2019 and 2024. An analysis of media reports suggests 2024 alone saw 48 collapses, more than the ministry's five-year count. Newslaundry. The problem is that owners of almost all legal buildings in Delhi have added illegal extensions without extra support. In April 2025, "The urban development department informed Delhi Assembly that the 12 zones of Municipal Corporation of Delhi registered 76,4765 cases of illegal constructions in 10 years - form 1 January 2015 to 17 March 2025 - but enforcement action was initiated in only 35,842 cases." ET. Gross underestimate. No  details of what 'enforcement action' were revealed. Unless the minister in charge and senior officials are severely punished this will continue. Delhi is in a high-risk seismic zone 4. TOI. At a guess, over 90% of buildings in Delhi will collapse in the event of any significant earthquake. Casualties will be in millions. Life has no inflation. It remains the cheapest.          

Supposed to be an economist.

"Investors are showing signs of diversifying away from US Treasuries as global debt levels hit a record of nearly $353 trillion by end-March, a report by the Institute of International Finance found." "Looking at key debt ratios, global debt stood at 305% of world economic output, broadly stable where it had been since 2023. However, debt ratios followed a similar pattern as debt levels - trending lower in mature markets and rising steadily in emerging economies." Reuters. On 23 August, "US national debt has topped 40 trillion." "America's debt burden is rising faster than estimates just a few years ago, exacerbated by persistent deficits and soaring interest payments." At a spot price of $4,600 a troy ounce, the US debt is "More than the total value of all gold ever mined." CNN. Regardless, Trump has been busy. On 1 February 2025, the US levied 25% tariffs on all imports from Canada and Mexico, except oil and energy, which were taxed at 10%. Canada retaliated with 25% tariffs on US goods. wikipedia. Early this year, "Trump announced 'major combat operations' against Iran on Feb. 28, with massive joint US-Israeli strikes targeting military, government and infrastructure sites." Yesterday, the US destroyed five Iranian oil tankers while Iran fired missiles towards US bases in Jordan. ABC. The price of crude oil has jumped, with the benchmark Brent crude selling at $99.06 per barrel this morning. oilprice.com. In the last week of August 2026, "Canada's chief US trade negotiator is disputing claims made by Americans officials about why trade talks fell apart last week, namely that the Canadian side brought forward last minute-demands on autos and that US negotiators weren't interested in French language discoverability rules. CBC. Yesterday, "Canada imposed tariffs of 15% to 50% on hundreds of products from the US, as Canadian Prime Minister Mark Carney bets that standing up to Trump will eventually help Ottawa's negotiating position with its biggest trading partner." The Japan Times. In retaliation, "The latest US measures will hit Canadian alcohol, dairy products, motorcycles and mopeds, while Canadian goods will also face restrictions in some major US government contracts." These measures are due to start on 29 September. TOI. In US dollars, from January to July 2026, Canada exported 233,665.4 million to the US and imported 205,475.7, for a trade surplus of 28,189.7 million in Canada's favor. Canada enjoyed a surplus of 48,302.3 million in 2025, 61,166.0 million in 2024 and 78,333.4 million in 2022. census.gov. In 2024, trade with the US constituted 62.22% of Canada's total trade, the Indo-Pacific was a distant second with 17.40% and Europe and Central Asia contributed 11.99%. wikipedia. The US has a GDP of $32.38 trillion, while Canada's GDP is $2.51 trillion. Worldometers. Mark Carney is the present prime minister of Canada and was the governor of the Bank of England (July 2013-March 2020) (Britannica) when Britain exited the European Union, known as Brexit (wikipedia). Britain with a GDP of $4.26 trillion chose to give up free trade with the European Union, with a combined GDP of $21.24 trillion, just across the English Channel (World Bank). Ten years on, Britain has probably lost 3% to 8% of economic growth due to Brexit, while "The most recent study by the NBER takes account of population growth and says the UK lost 6-8% of per capita output. BBC. Even with a ringside seat, Carney seems to have learnt nothing. He, like Iran, is probably calculating that the mid-term elections to the US Congress in November will bring a Democrat majority in both the House and the Senate, which will reverse Trump's policies. Even if that happens Trump will still have veto power till 2028. Cutting off one's nose to spite one's face  is silly. The economy could tank. And Carney is supposed to be an economist. Legacy of failure. 

It's nothing personal.

India's sovereign credit rating by the US agencies are at investment grade, with S&P (BBB) and Moody's (Baa3) rating it at one notch above investment level and Fitch (BBB-) just above speculative level. The Global Economy. There are 25 countries rated BBB by S&P, including India with per capita GDP at $2,810 and British Virgin Islands at $46,710. Brazil rated BB has per capita GDP of $12,335 and Vietnam rated BB+ has per capita GDP of $5,300, but are both rated below India. Even CareEdge Global Ratings currently rates India at BBB+ with a stable outlook. Mint. Just recently, "The Government of India welcomes the decision Of Japan Credit Rating Agency (JCR) to upgrade India's Long-Term Foreign Currency and Local Currency Issuer Ratings by one notch from 'BBB+' to 'A-', while maintaining the Stable Outlook. JCR also raised India's country ceiling by one notch to 'A'." pib.gov.in. Does this mean that the JCR is fair to India while the US companies are biased? Firstly, it is not clear whether the currency and country ratings by JCR are the same as the sovereign credit rating. Secondly, US foreign portfolio investors (FPI) hold 41% of India's equity and debt markets. "In absolute terms, US based FPI holdings increased from Rs 29.5 trillion in January 2025 to Rs 32.1 trillion in January 2026." Debt investments rose by Rs 150 billion. AngelOne. In 2024, Japanese FPI investment into India was Rs 2.06 trillion less than 3% of the total FPI investment into Indian stocks. MC. Since the exposure of US companies is more than 10 times that of Japanese companies, the US rating agencies may err on the side of caution. Also the Reserve Bank of India (RBI) seems extremely reluctant to raise interest rates to tackle rising inflation unless forced to do so. In its August meeting, the RBI "kept the repo rate unchanged at 5.25% for the fourth consecutive monetary policy review, signalling that interest rates are likely to remain stable for now," even as it increased its projection for retail inflation from 5% to 5.1%. Mint. This was expected by the markets. "Over time, a fairly settled view of RBI has emerged. It is widely seen as an institution that prefers to wait rather than tighten policy unless inflation becomes impossible to ignore or external developments leave it with little room for maneuver ." "Inflation has been rising and inflation expectations are showing signs of firming up. Yet very few analysts bet on a rate hike," wrote Puja Mehra. If prices in India are rising faster than in the US, the Indian rupee will weaken against the US dollar. In May, the Indian rupee fell to a record low of 96.96 to one US dollar "as the stalled US-Iran peace talks kept oil prices elevated, driving global bond yields higher and hurting equities amid fear of further central bank rate hikes." Reuters. The USD is trading at 94.6978 to one dollar this morning. xe.com. How did the RBI achieve this? "It turned to overseas Indians, luring them with attractive sweeteners." The FCNR (B) "might have bailed us out, but only for the moment. They have to be repaid, and in dollars." "It is a telling commentary that at a time when yields and interest rates are rising all over the world, for reasons that are far from clear, India's central bank alone seems to believe in 'Indian exceptionalism'. The world doesn't," wrote Mythili Bhusnurmath. As a result, "The gap between India's 10-year government bond yield and the US 10-year Treasury yield has narrowed sharply to levels last seen many years ago, changing the equation for the rupee, foreign investors and the RBI's monetary policy." MC. Foreign investors have to account for the falling rupee. "A total of 64.3% of India's population, which represents 940 million people, are now covered under at least one social protection benefit," according to the International Labor Organisation. TNIE. Which puts a big question mark over tax collection and fiscal deficit. The RBI may not care about Indian citizens, foreign investors are responsible to their people. Hence they rate us low. Pure economics. Nothing personal.   

Face it, it's impossible.

"After opening the door to higher interest rates,...US Federal Reserve Chairman Kevin Warsh has to decide how to follow though with actions." "In a speech to the Kansas City Fed's annual Jackson Hole conference in Wyoming,... Warsh went further than many observers expected in agreeing that higher interest rates may be needed to curb inflation that is stuck above the central bank's 2% target." "Fed policymakers will meet on September 15-16." Reuters. President Donald Trump piled on the pressure when he said, "We should have the lowest rate of any country in the world...Lower the rate or I'll stop trading with countries with which we have a deficit." Reuters. That would push inflation higher and force the Fed to raise rates, possibly by a greater amount. On 2 September, "Bond prices continued to slide in Asia and Europe, pushing borrowing costs to multi-decade highs as the Middle East conflict drives up energy prices and layers concerns about inflation on top of worries about ballooning government debt." Reuters. "In the United States, 10-year interest rates sit around 4.7%, surging nearly half a percent this year," while, "Australia's government now has to offer investors more than 5% on its 10-year bond, which hit a 15-year high after a long period of low interest rates." "US national debt has grown to more than  $40 trillion," and so, "Funding debts of this size is pushing up interest rates worldwide." The Conversation. "With benchmark Japanese bond yields breaking through a three-decade-old barrier, higher returns are starting to tease capital home." Japan "is the biggest owner of US Treasuries and one of the most reliable buyers of sovereign debt worldwide." Reuters. Why should we Indians care about what is happening in the US and Japan? "As of August 18, the two-year Treasury yield stood at 3.76%, while the 10-year and 30-year yields were 4.71% and 5.28% respectively." India will be affected as, "Sustained higher US Treasury yields could make dollar-denominated assets more attractive relative to emerging-market investments, potentially putting  pressure on capital flows into India." "Higher global yields can increase the return investors demand from Indian bonds." And, "India remains exposed to movements in the dollar, commodity prices and global trade." BT. For years, "With Japanese interest rates close to zero, hedge funds and institutional investors borrowed cheaply in yen and invested in higher-yielding assets -- from US Treasuries and AI stocks to emerging-market equities." That is the yen carry trade. Although Japanese investors hold a small amount of Indian equities, Indian markets could still be affected as other foreign investors divert funds from India to safer markets. MC. The Reserve Bank of India (RBI) has taken preemptive action. "India attracted a much larger-than-expected $136.38 billion through special foreign-currency mobilisation schemes," as "Indian banks raised $127.23 through non-resident foreign currency deposits, with additional inflows coming through external commercial borrowings and overseas foreign-currency borrowings." "India's banking system liquidity surplus jumped to Rs 9.7 trillion ($102.76) as most banks have swapped their dollar inflows with the central bank." ET. This money does not come free. At 6.50% rate of interest (IDBI Bank) $127.23 billion will grow to $153.69 billion compounding for 3 years and to $174.32 billion in 5 years, which banks will have to repay. The RBI will have to pay a bill of about $10.6 billion for protecting banks from rupee depreciation. ET. The rupee has strengthened due to all this inflow of foreign exchange which could bring inflation down by making imports cheaper. That would allow the RBI not to increase interest rate and help the government to borrow cheaply. Foreign investors aren't fools. The RBI may be able to control interest rates, borrow capital to manage capital flows but it will not be able to control foreign exchange rate. wikipedia. It's impossible. The cost could be enormous. For us.

Still in sixth.

India's Real GDP, or GDP at Constant prices, grew at 7.8% to Rs 81.36 trillion in the first quarter (April-June) of FY 2026-27. Nominal GDP, or GDP at Current Prices, grew at 10.3% to Rs 88.27 trillion. pib. gov.in. Former Finance Secretary, Subhash Garg, said that this is because the government reduced last year's first-quarter GDP from Rs 86 trillion to Rs 80 trillion, which has raised the year-on-year rate of growth. He said the production at current prices remains fixed. So, where did Rs 6 trillion go? he asked. The Federal. "Govt strongly defended the sanctity of GDP data," saying "the revision was consistent with the new methodology. The base year has changed, the use of producer price index provides more granular information, and more data is available." TOI. "The base year is revised periodically to reflect structural shifts in the economy," to account for "expansion of renewable energy and digital services, alongside changes in consumption pattern and investment behavior." pib.gov.in. "On price adjustments, the government's April-June deflator was 2.3%, significantly less than retail inflation of more than 4% and wholesale inflation over 9%." Prof Raghuram Rajan asked "why the robust GDP growth figure is not showing up in stronger results for job creation, domestic investment and foreign portfolio inflows." Reuters. This government is not trusted because of what transpired right at the beginning, in 2015. "Immediately after the GDP series was released in early 2015 (with 2011-12 as its base year), economists and policymakers began questioning the accuracy of the numbers, as it seemed to contradict other economic indicators." "Around this time, the Niti Aayog got involved in reviewing the GDP methodology and in the preparation of a back-cast series." Niti Aayog "corrected" (decreased) the growth rate of the previous regime, wrote Pramit Bhattacharya. In 2019, "The only two non-government members of the National Statistical Commission, including its acting chief, have quit over 'disagreements' with the government on the release of jobs data and concerns about it being buried in election season." NDTV. JP Morgan chief economist Sajjid Chinoy said that the high rate of growth is because of an enormous fiscal stimulus. Direct tax rates were reduced in February last year, consumption taxes were cut in September and interest rates have come down by 1.5% over the last year. Exports have jumped 12% despite tariffs as the rupee has fallen by 15% against the dollar and global demand has been strong. BBC. "The UK has seen years of slow growth, although the economy expanded by 1.2% in the first six months of this year, according to official figures." BBC. The GDP of the UK was $4002.588 billion in 2025 while that of India was $3956.067 billion in 2025, according to the World Bank. If India's GDP has grown 7.8%, it should now be $4264.653 billion while a 1.2% growth should take the UK economy to $4050.63 billion. India should rise above the UK to fifth in ranking. But the IMF projects the UK economy at $4264.794 billion and the Indian economy at $4153.191 billion in 2026. wikipedia. Which means the IMF is projecting a 5% growth of Real GDP in dollar terms. The festive season started with Janmashtami, the birth of Lord Krishna, on 4 September. (wikipedia). Prices of sugar and onions have more than doubled. India Today. A valuable source of protein, "Egg prices have risen sharply across India over the past year," as "more maize is diverted to ethanol production, poultry farmers are having to compete for the same crop. Feed accounts for more than 70% of the cost of producing an egg." HT. Sugar cane is also a source of ethanol. Instead of this asinine celebration of some dubious statistical growth, the government should concentrate on policies that are good for the people. Not on single or double deflator. India is still in sixth position. That's real.