A stranglehold on a pillory.

 "US President Donald Trump in his State of the Union address to a joint session of the Congress...said that he prefers to solve the confrontation with Iran diplomatically," but "dubbed it 'world's no 1 sponsor of terrorism', adding that...he cannot let them have nuclear weapons." HT. Fresh protests have erupted in Iran as Trump's "special envoy Steve Witkoff has said that Trump is 'curious' as to why Iran has not 'capitulated' and agreed to curb its nuclear program, as rallies have taken place at universities in the Iranian capital, Tehran." CNN. The Iranian regime cannot compromise, not because it is a matter of principle, as according to Supreme Leader Ayatoallah Khamenei, "its nuclear program is for peaceful purposes only, nuclear enrichment is a right." DH. It is the classic dictator's 'pillory' (wikipedia), wherein any loss of power could result in swift retribution and even death. In the January protests the regime issued orders to kill. "The new thing I have seen in these protests, something we have not seen before, is that starting on the night of January 8, the regime issued shoot-to-kill orders to the IRGC, the Basij and the riot police, authorizing direct fire," said journalist Fatemeh Jamalpur. As of 25 January, the Human Rights Activists News Agency claimed 5,848 confirmed killed. Fox. According to the Iran International, up to 12,000 civilians were killed and the massacre was conducted by the Iran Revolutionary Guards Corps (IRGC) and members of the Basij militia. wikipedia. These people would be terrified of trials and executions and may rise up in revolt if the regime shows any sign of weakness. The regime is in a straitjacket. On the one hand it cannot be seen to be weak and, on the other, its economy will continue its collapse if it does not reach some sort of compromise with the US. On 19 February, the market rate for the Iranian rial was between 1, 637,000 and 1,646,500 to one dollar. The government rate is at 1.28-1.29 million rials to one dollar. A worthless currency means an inflation rate of 50%-60%, with families struggling for food, fuel and medicines. ET. In 2024, the ministry of social affairs reported 57% of Iranians suffering from some form of malnutrition and unemployment at 50%  among males between 25 and 40 years of age. wikipedia. However, it is not just the US, the regime is directly responsible for the collapse. "Late last year, Ayandeh Bank, run by regime cronies and saddled with nearly $5 billion in losses on a pile of bad loans, went bust. The government folded the carcass into a state bank and printed massive amount of money to paper over the red ink." The currency collapsed and, with it, the economy. So, what are the options for the US? Any attack would give justification for the regime to resist, either directly or by using its proxies. In 2022, Houthis in Yemen hit Saudi Aramco's oil storage facility in Jeddah (Reuters) and in 2019, Houthi drones attacked oil processing facilities in Abqaiq and Khurais in eastern Saudi Arabia (wikipedia). Any major attack on Arab oil facilities, avoiding direct attack on US or Israeli forces and inviting reprisals, could send crude prices soaring, hitting the global economy. Alternatively, the US could continue its stranglehold, almost completely cutting Iran off from the world and wait for it to implode. It would cost a lot of money but could be safer. A stranglehold on a pillory. Probably impossible for the regime.    

A lawless bubble, or a human village?

"India AI Impact Summit 2026 concludes at Bharat Mandapam in Delhi...with strong Global Endorsement of India's responsible AI vision." "Electronics and IT Minister Ashwini Vaishnaw said the Simmit has been a grand success on many fronts," and "investment pledges have crossed $250 billion for the infra-related investments and about $20 billion for the VC deep tech investments which have been committed by investors." newsonair.gov.in. In this year's Union Budget the government has set aside Rs 10 billion, or about $120 million for its AI mission. But, "One Nvidia H100 GPU, which is essential for modern AI costs about $30,000 to $40,000." The US CHIPS Act provides $52 billion while the EU support is 1 billion euros. "Running a 100-megawatt AI facility will cost Rs 6 billion to Rs 8 billion a year just for electricity." Almost the entire AI budget, wrote Arindam Goswami. Google has just released its artificial general intelligence (AGI), Gemini, to rival OpenAI, as well as its latest Ironwood Tensor Processing Unit, capable of 4,614 T flops of peak computing power and 192GB of high-bandwith memory, wrote Nilesh Jasani. AI is a major bubble "going back to gold in the 1970s and the internet boom of the late 1990s." US "households hold 52% of their wealth in stocks, which is higher than the peak in 2000 and far above levels in EU (30%) Japan (20%) and UK (15%)." "This time, the debts are building on the govt ledger, thanks to record deficits - a major risk." "The result is a strange new animal: a fully invested bear," wrote Ruchir Sharma. "The kind of software presently called AI, more technically referred to as 'machine learning'," "is making unscrupulous use of vast troves of human behavior collected by 'social media' and equally lawless appropriation of copyrighted cultural material." The Chinese are using AI for "social control intended to make Chinese Communist Party authoritarianism absolute and permanent." Instead, "We need fully open, user-enabling AI applications that serve humans rather than replace them," wrote Mishi Choudhary & Eben Moglen. "Humans reason morally within shared systems of values shaped by history, culture and social interaction. Machines, by contrast, simulate responses based on patterns in training data." "However you look at it - it takes a village," soothed Celeste Rodriguez Louro. The real danger is that, "In 2024, India's data centers consumed an estimated 150 billion liters of water. By 2030, that figure will more than double," wrote Arunabha Ghosh. India's population is expected to be around 1.477 billion in 2026 (worldometer) and to rise to nearly 1.7 billion in 2050. With 17% of the world's population, "India has access to only 4% of global freshwater resources." TOI. "Excessive groundwater extraction in India, over 25% of world's total, has thrown the planet off balance, literally shifting it from its axis, says a new study." News18. AI may be safe but a human village needs freshwater. Who wins?  

Need to borrow their god.

"In a swift reversal of fortunes, countries that had been hardest hit by US President Donald Trump's tariffs have emerged as the biggest winners from the Supreme Court's decision to strike down his emergency levies." ET. On 2 February, "India and the US agreed on an interim trade deal under which US tariffs on Indian goods were reduced to 18% from 25%." On 21 February, Trump announced the rate would be raised to 15% (from 10%), subject to the 150-day statutory limit." ET. Still it is a 3% advantage for India. But, "Nothing changes. They'll (India) be paying tariffs, and we will not be paying tariffs." "I also stopped the war between India and Pakistan. As you know 10 planes were shot down," said Trump. This is a little jibe against India where Prime Minister Narendra Modi has claimed a great victory against Pakistan in Operation Sindoor (pib.gov.in). He then said "I think Prime Minister Modi is a great gentleman, a great man actually." Whether this was intended as a balm, or tongue in cheek, is left to our imagination. However, other pressure points seem to have been activated. "The US Securities and and Exchange Commission has asked a US court for helping in serving summonses upon Indian billionaire Gautam Adani and group executive Sagar Adani over alleged fraud and a $265 million bribery scheme, filings show." Reuters. In addition, "Adani Enterprises said...that a US agency is conducting a civil investigation into the company's transactions that may have involved Iran or parties subject to US sanctions." Reuters. This is following "allegations cited in a Wall Street Journal report published in June last year," which "had claimed that Billionaire Adani was attempting to persuade officials in the administration of US President Donald Trump to drop bribery charges against him." ET. Mr Modi's friendship with Mr Adani is common knowledge, with Congress leader Jairam Ramesh claiming that "the real equation to consider is "Modi+Adani=Modani". TOI. "As early as 2015, a prominent Indian newspaper reported that everywhere Modi went 'Adani was sure to go'. This support has not always helped India. On the contrary, by brazenly promoting the oligarch's ambitions, Modi has sometimes hurt his country's relations with her neighbors as well as other countries." Adani Watch. Meanwhile, Nikhil Gupta has confessed to a conspiracy to assassinate Khalistani Gurpatwant Singh Pannun and named former India's intelligence officer Vikash Yadav as his handler in a New York court. There is a US arrest warrant for Yadav. The Wire. The Indian government cannot hand over an intelligence operative to another nation, so what happens now? More sanctions? As long as voters don't know, who cares. So, the government's "User Manual for Sahyog (meaning 'collaboration') Portal (IT intermediaries)" "makes it clear that orders are unilateral, and a direct correspondence between government agencies and intermediate platforms like social media and telecom providers. The content excludes journalists or content creators from the definition of 'stakeholders'." The Wire. Fascism works at home. Not in other countries. However, as long as there is an army of deluded Bhakts, with heads full of dung, the vote bank is rock solid. Perhaps, we should borrow America's God in whom they trust.           

Don't hold your breath.

 "India's year-on -year retail inflation rate, based on the Consumer Price Index (CPI), based on the revised base year 2024, stood at 2.75% in January 2026, compared to January 2025, according to data released by the Ministry of Statistics and Programme Implementation (MoSPI)." "The CPI base year has been revised from 2012 to 2024 using data from the Household Consumption Expenditure Survey (HCES)." The new series starts at 100 from 2024 and ensures that "the index remains representative of current household consumption patterns, price structures and the evolving nature of the Indian economy." ddnews.gov.in. The percentage of different items in the CPI basket has been adjusted to reflect the differences in spending by households between 2012 and 2024. Weight of food and beverages have been reduced from 42.62% to 36.75%, because of lower spending on food, while spending on Housing, water, electricity, gas and other fuels, Health, Transport, Education Services and Restaurants and accommodation services have exploded. Yet their weights have been increased only slightly. Finshots. While spending on restaurants and entertainment may be optional, housing, energy, health, transport and education are obligatory. Shouldn't they have higher weights? This government first came to power in 2014, with 282 seats (272 required for majority) in the Lok Sabha. wikipedia. Since then average inflation per calendar year has run at over 4% annually. rateinflation,com, CPI inflation is a comparison with the previous year's prices. This is the 'base effect'. Investopedia. CPI inflation was 4.98% last year and has fallen to 2.75% this year. This does not mean that prices have fallen but that they have risen 2.75% on last year's prices. So, inflation compounds over time. Core inflation leaves out volatile food and energy prices and perhaps gives a truer picture of the burden of rising costs on people. Investopedia. The government does not release the core CPI data but according to CEIC, core CPI inflation was at 3.375% in January 2026 over 4.98% in December 2025 and has averaged 5.362% from Jan 2012 to Jan 2026. CEIC. Which means that anything which cost Rs 1,000 in Jan 2012 would cost Rs 2,077 now. investor. gov. It would be helpful to be told the CPI inflation using the new basket of consumption as well as the old one so that we can compare, without the circus in 2019 when the government was suspected of massaging GDP back series data to show a higher growth rate compared to the previous Congress-led government. Acting chairman of the National Statistical Commission (NSC), PC Mohanan and member of NSC, J Meenakshi resigned in protest. Reuters. Prof Kaushik Basu, former Chief Economic Advisor to the Government of India, has recently visited various schools in Purulia in Bengal, Bangalore and in Pune and was impressed that "The discussions were rigorous and unsparing." His last visit was to Delhi. "There pouring over the latest economic data and listening to political leaders respond to mounting challenges with familiar slogans, my optimism began to fade. India's promise is undeniable and its talent abundant, yet politics and empty rhetoric continue to undermine prospects." Mint. It's not about base year, consumption basket or household spending but about whether the figures will be actual, or just for chest thumping, which no one will believe. Better not to hold our breaths.  

A humble request.

 Delhi proposes "the rollout of an AI-powered Integrated Traffic Management System (ITMS) that will use automatic number plate recognition (ANPR) cameras, smart traffic signals and automated challans." ET. A 'challan' is a traffic citation with a hefty fine (wikipedia) to collect as much ransom from long-suffering drivers as possible. Ironically, "While global tech titans and world leaders have gathered for India AI Impact  Summit 2026 at Bharat Mandapam in Delhi to discuss the future of artificial intelligence and seamless connectivity," several people, including delegates, "were forced to walk for kilometers after the event to find a cab as the entry of vehicles on the roads outside Bharat Mandapam was barred for VVIP movement and entry to the nearest metro station was closed." DH. While people outside were badly treated, "I was sort of confused and didn't know what I was supposed to do," Open AI CEO Sam Altman said, hours after his 'no handshake' moment with Anthropic CEO Dario Amodei. Amodei founded Open AI with Altman but left to found its competitor Anthropic. "Modi grabbed my hand and put it up, and I wasn't sure what we were doing," he said. Don't worry, Sir, the whole thing was just a photo-op to showcase the Great Man at great cost, part of which may be financed by challans on people whose daily lives were being completely upset. A VVIP, or a Very, Very Important Person, (wikpedia) is a very, very special subgroup of homo sapiens whose habitat is only in India, and is higher than the more common VIP, or Very Important Person, and who can do anything with total impunity, guarded by the police and special forces, ready to shoot if any citizen should dare to protest. While a VIP can shut a stadium to walk his dog, or demand superiority over our Gods, a VVIP can, and does, halt ambulances carrying critical patients to hospital, resulting in their deaths. News18. So why is Delhi Traffic Police unable to manage traffic? Because, "Against a sanctioned strength of 6,102  personnel. only 4,901 are currently in position." Of these, "on any given day, nearly 500 personnel are on leave, another 500 are diverted for special duties and VIP deployment," and the rest are gainfully employed catching anyone without a Pollution Under Control Certificate (PUC) which every vehicle must carry,to be renewed every year for new vehicles to every three months for older ones, upon payment of a fee to augment Delhi government's coffers. ddnews.gov.in. "The India AI Impact Summit 2026 has attracted investment commitments  of over $250 billion related to infrastructure, Union IT Minister Ashwini Vaishnaw said. Humble request to Messrs Pichai, Altman and Amodei: Please stay away from India. AI will only be used to increase the powers of the VVIP coterie and enslave us, the unlucky citizens of India. We will be most grateful. Thank you. 

Friendly, but for how long?

"Washington blinks, New Delhi benefits," "giving Indian exporters an edge over competitors from Bangladesh (20% tariffs), Vietnam (20%), Indonesia (19%) and China (37%), one can visualise a surge that will speed up India's fast-moving economic engine," wrote Sreeram S Chaulia. Critics are saying that India has lost its strategic autonomy by pledging to give up Russian oil, but, "The reality is that access to US markets, capital, know-how and technology is far more important for the Indian economy (and job creation) than any savings from Russian crude oil discounts," wrote Tanvi Madan. That is the long-term wish, but what happens to short-term revenue for the government. "Petrol tax in India consists of 55% of petrol's retailing price while diesel tax is 50% of of the fuel's retail value." cleartax.in. In January, "India's average crude oil imports cost fell below $60 a barrel,..among the lowest it has been in five years despite...sanctions against three major crude oil suppliers - Iran, Russia and Venezuela." HT. The government may levy a windfall tax on "The three state-run oil marketing companies (OMCs)...which "posted a combined net profit of Rs 340.67 billion in the first half of 2025-26, a 269.4% year-on-year jump that exceeded their full-year profit of Rs 336.02 billion in 2024-25." HT. The government of course squeezes enormous dividends out of the public sector enterprises (PSE) it controls. It has already received Rs 526.67 billion out of PSEs in the financial year 2025-26, which ends on 31 March. dipam.gov.in. "Geopolitics and geo-economics both suggest that our choice in the new G-2 world is to partner either with the US (with which we have a lot in common, starting with democracy) or with China-Russia," and "China's expansionist and mercantilist tendencies should be both contained and reduced," wrote Surjit S Bhalla. Hence, a partnership with the US will protect us. Or, will it? In 2010, during Barack Obama, "In the last three years, the US has provided 14 F-16s, five fast petrol boats, 115 self-propelled howitzer field artillery canons," ostensibly to fight the Taliban. India Today. In 2019, Imran Khan, then Prime Minister of Pakistan, said that the Inter-Servicea Intelligence (ISI) helped the CIA to kill Osama bin Laden in 2011. DH. In 2012, Obama won re-election for his second term in office. wikipedia. In the 1971 war between India and Pakistan, which led to East Pakistan becoming independent Bangladesh, President Richard Nixon discussed asking the Chinese to attack India and, possibly, use nuclear weapons to stop Indian advance. Dhaka Tribune. Russian submarines and ships put the US, UK and Austrlian navies to flight. India Times. Besides, the deal was necessary only because Trump had imposed a reciprocal tariff of 25% unilaterally and a penal tariff of 25% for buying Russian oil. There is no guarantee that Trump won't increase the tariff if he is dissatisfied with India's pace of reforms, as he did to South Korea, wrote Swaminathan Aiyer. China is our existential enemy, the US is fickle but Russia has been our proven friend. We are paying the US for its deal. Let's deal with Russia as well. A friend in need, a friend forever. 

Flow of liquidity.

In its December 2025 meeting, "The Reserve Bank of India (RBI) has slashed its repo rate by 25 basis points (bps) from 5.5% to 5.25%, but in the latest meeting in February, "The RBI has kept its key lending rate, known as the repo rate, unchanged at 5.25% in the first monetary policy decision since the budget." NDTV. "Given the impending revision in two key macroeconomic numbers - gross domestic product (GDP) estimates where the base year is to be brought forward to 2022-23 from 2011-12 at present and consumer price inflation (CPI), where the base is to be moved forward to 2024 from 2011-12 now - any other decision would have risked rocking the boat," wrote Mythili Bhusnurmath. In 2025, the RBI cut its policy rate by a total of 125 bps, from 6.5% to 5.25%, bringing the interest rate down by 105 bps on fresh bank loans and interest paid on fresh term deposits by 95 bps. ET. In addition, the RBI announced a reduction in the Cash Reserve Ratio (CRR) by 100 bps from 4% to 3% in tranches of 25 bps. This was expected to release Rs 2.5 trillion into the banking system. ET. CRR is the money commercial banks must deposit with the RBI without interest and cannot be used for lending or investment. (Kotak Bank). "According to the Economic Survey, average surplus liquidity in the system was a mind boggling 117 times that of the previous year." "What is left unsaid is that, as the government's debt manager, it will manage liquidity so that the government's borrowing goes through successfully and at a low cost." In its efforts to release more money into the system, the RBI has been buying government bonds. "The RBI has already stepped in aggressively this financial year, purchasing nearly Rs 7 trillion worth of bonds, a move that helped cap yields." Mint. By taking the government's debt on to itself the RBI is monetizing the fiscal deficit (BS). Creating fresh money to finance government spending is supposed to be inflationary but the RBI is probably reassured by the CPI inflation falling to an annualised rate of 1.33% in December 2025 (mospi.gov.in). In addition, "The Centre is budgeting a record Rs 3.16 trillion in dividend receipts from the RBI and public sector banks (PSBs) in 2026-27,..helping to keep the fiscal deficit under check. TOI. Last year, the RBI dished out a record Rs 2.68 trillion (newsonair.gov.in) and in 2023-24 it was another record Rs 2.11 trillion (Grip Investment). The bond market seems unimpressed with the RBI's liquidity flood. The benchmark 10-year bond yield is at 6.754%, down a tad from 6.769% on 02 February. investing.com. India's foreign exchange reserves may have been at a record $723.77 billion on 30 January (BS), but even this may not be enough if foreign investors take fright and the government runs up a big deficit because of loss of revenue from free trade agreements. The RBI was nationalised in 1949 (rbi.org.in), so it is paying the government. It is creating a flood of money but can it control the flood? Liquidity is liquid. It may flow out..