Watching and learning.

The war in Ukraine is costing Russia $20 billion per day, "The Russian rouble plummeted from 83 to $1 just before the invasion to 133 by day 17, a decline of nearly 40%," and there is a possibility of recession, even depression, in that country, wrote Narayan Ramachandran. The central bank has increased interest rate from 9.5% to 20% and the possibility of debt default looks increasingly probable. "The US has information suggesting China has expressed some openness to providing Russia with requested military and financial assistance as part of its war on Ukraine, a Western official and a diplomat told CNN." In a meeting in Rome, US officials warned top Chinese official Yang Jiechi of "significant consequences" if Beijing offers support to Russia, HT. China's reputation was already falling before the war, wrote Prof Harsh V Pant. "For all the talk of a declining West, its unprecedented economic crackdown on Russia underscores its economic heft that Washington still wields on the global economy." "Beyond economics a strategic convergence among Western powers will reshape global geopolitics, NATO and the EU have been given a new lease of life and European nations are more determined than ever to strengthen their security structures." For the US, "Rather than a direct war, the list of sanctions imposed on Russia is going to work in favor of the US. More than before, there will be an increasing urge on part of many countries in Europe, namely Ukraine, Finland, Sweden, Moldova, Kosovo etc. to become members of the EU. Without a shot being fired, the US action will ensure geopolitical victory," wrote Profs Nilanjan Banik and Guido Cozzi. Bond yields in the US have fallen as international investments have moved to US Treasuries and exports of US military hardware will increase. So, Russia should surrender to the US? "The Consumer Price Index -- a closely monitored measure of US inflation -- gained 7.9% in the year through February, the Bureau of Labor Statistics said," BI. The Producer Price Index, which measures wholesale prices, "moved up 10.0% for the twelve months ended in February", bls. "Almost all commodities have shot up. The Bloomberg Commodity Spot Index is up 27% this year," wrote Lisa Abramowicz. The breadbasket of poor developing countries are "being bombed" by skyrocketing food, fuel and fertilizer prices, said UN Secretary General Antonio Guterres. These include Egypt, Congo, Burkina Faso, Lebanon, Libya, Somalia, Sudan and Yemen. Whether such nations blame Russia or US sanctions remains to be seen. Banning Russian banks from the SWIFT system for international money transfer, Reuters, is the financial equivalent of a nuclear attack. The US is the only nation to commit nuclear genocide of Hiroshima and Nagasaki, wikipedia. Today nine countries are recognised nuclear weapon powers, wikipedia, and Iran is racing towards making them. "More importantly, a large group of nations look to sit out the new cold war between a hastily reunited West and Russia," wrote Pankaj Mishra. "The cold warriors who insist on being 'with us or against us' have never really appreciated the transactional and shifting relationships at the heart of non-alignment." Many nations will quietly want to develop an alternative to the SWIFT system so that their economies are not vulnerable to Western imperialist attacks. And many will also seek an alternative to the dollar, maybe something along the likes of Special Drawing Rights (SDR) of the IMF, but managed by Asian or African institutions and beyond control of white supremacists. This could be the beginning of the end of colonialism. Every government is watching. And learning.    

Basket doesn't matter.

"The retail inflation rate in India -- measured by the Consumer Price Index (CPI) -- came in at 6.07% in February 2022, as per data released by the National Statistical Office (NSO) on Friday," ET. "Urban inflation in February moderated to 5.75%, down from 5.91% in January while rural inflation came in 6.38%, as against 6.12% seen in January." But, the items in the CPI basket no longer represent the consumption pattern of Indians, wrote Sachchidanand Shukla. According to the Ministry of Statistics and Programme Implementation (MOSPI) 2015, food and beverages comprise 45.86% of the CPI basket. Actually, the share of food has dropped by about 10.8% to 48.6% in rural and by 9.6% to 38.5% in urban areas. Hence, the present CPI basket tends to overestimate the rate of inflation and leads to tighter monetary policy which hurts growth, argued Shukla. The CPI basket also includes VCR/VCD/DVD players, camera and photographic equipment, radio, tape recorder, tape recorder, audio/video cassettes, etc,. which are no longer sold. This kind of analysis conveniently ignores the fact the India is one of the most unequal societies as, "The top 10% had a share of 64.64% in total household wealth, the highest since 1995," while "the bottom 50% decreased to its lowest levels since 1995 to 5.9%", HT. While the number of billionaires grew from 102 to 142 during the pandemic, "More than 4.6 crore (460 million) Indians meanwhile are estimated to have fallen into extreme poverty in 2020, which is nearly half of the global new poor, according to the United Nations (UN)," said Oxfam India. Naturally, consumption patterns vary widely with the rich not only consuming more in terms of quantity but also in quality, while the very poor are barely surviving on the cheapest non-nutritious food, Mint. The wholesale price inflation (WPI) jumped to 13.11% in February from 12.96% in January, which is 11 consecutive months of double-digit rise since April 2011, TIE. At some point, rise in input costs will have to be passed on to consumers, further aggravating retail prices. The Reserve Bank (RBI) has stubbornly kept interest rate at 4% since March 2020 in its delusion that this will somehow stimulate growth. Although down from its peak of $139 per barrel, Brent crude is trading at $101.3 per barrel today, oilprice. Because of inflation, the rupee has fallen to 76.39 to one dollar, xe. The State Bank of India (SBI) predicts the rupee falling to 77.5 to the dollar by June and inflation rising to 5% if oil is above $100 a barrel, ET. Will it? For some reason, economic projections by the government are based on oil at $70-75 per barrel, ET, which is what the RBI must be using. RBI Deputy Governor Michael Patra hinted that the RBI is likely to continue with negative real interest rate because growth may be affected by high cost of imports, ET. People, meanwhile, are being hammered by low returns on savings in banks, soaring prices of essential goods and possibly massive losses on investments in the stock market with prices of start-ups crashing by 68%, ET. High inflation means weaker rupee. Forget basket.

Longest list of duties.

"The Supreme Court on February 21 issued notices to the Centre and states in a writ petition seeking the enforcement of the fundamental duties of citizens as enshrined in the Constitution of India," TIE. "The fundamental duties were incorporated in Part IV-A of the Constitution by the Constitution (42nd Amendment) Act, 1976, during Indira Gandhi's Emergency." In stringent criticism of the Emergency, Prime Minister Narendra Modi said in 2018, "Emergency is a black spot on the golden history of the nation. Observing black day today is not just to criticise the Congress for its sin of imposing Emergency but also to create awareness of the protection of Constitution and democracy." With an absolute majority in parliament surely he should remove the "black spot" and "sin" which was never intended by the founders of our Constitution. Instead, "Soon after his spectacular victory in 2019 Lok Sabha election, Prime Minister Narendra Modi said in Parliament that there was a need for a 'paradigm shift' in India -- from the centrality of fundamental rights to the fundamental duties," The Print. A ringing endorsement of the Emergency. Again in January this year he was unhappy that citizens are "talking about rights, fighting for rights and wasting time", The Wire. The problem for us is that "At 145,000 words, it is the longest written constitution of any sovereign state in the world. The US constitution, by contrast, has only 4,400 words," weforum. "The US constitution is very difficult to change and, thanks to a religious American sensibility that treats it as a sacred document, it has simply not evolved, impervious to the changing needs of a growing and progressing nation and world. The constitution of India suffers from the converse flaw; in less than 75 years, it has been amended, at last count, 103 times," Quartz. All these laws apply only to citizens, the prime minister is exempt. For instance, in 2016, "the Supreme Court said all cinema halls across the country must play the national anthem and that those present 'must stand up in respect' to 'instill a feeling within one a sense of committed patriotism and nationalism'," TIE. However, "When in Moscow in 2015, Modi himself decided to start walking while the national anthem was being played, and had to be restrained by his Russian hosts." Twenty-seven amendments were written into the US constitution of which the 18th, relating to prohibition of alcohol, has been repealed, University of Minnesota. The very fist amendment says, "Congress shall make no law respecting an establishment of religion, of prohibiting free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." In India, "In recent years, there are signs of institutional collapse that make it that much easier for an all-powerful government to ensure a veil of secrecy over it decision making," wrote Rajdeep Sardesai. We, the people, have been beaten into submission. We need a list of duties for politicians and civil servants.       

Sanctions and secrets.

"Russia has officially become the most sanctioned country in the world, surpassing Iran, Syria and North Korea, as its invasion of Ukraine nears a third week," abc. "The country has been subjected to over 5,000 crippling sanctions," more than "Iran, Venezuela, Myanmar and Cuba combined." Switzerland has imposed 568 sanctions, EU 518, Canada 454, Australia 413, the US 243 and the UK 35 sanctions, firstpost. But, sanctions create problems. Benchmark Brent crude is trading at $112 a barrel, oilprice, after jumping over $139 per barrel on 6 March, CNBC. "Fertilizer prices continue to surge as supply upheaval from Russia leaves governments struggling to secure vital crop nutrients, adding to concerns that record global food inflation will accelerate," ET. "Parts of Africa could be plunged into hunger in as fast as three months if Russia's invasion of Ukraine lingers, says Wandile Sihlobo," CNN. White Western countries care nothing for deaths of people with melanin in their skin. After all, up to 1 million Iraqis may have been killed in the illegal US and NATO attack on Iraq, wikipedia, based on blatant lies about the presence of WMDs in Iraq and about Saddam Hussein's ties to Al Qaeda, Vox. "There are two levels of racism here -- the innate racism of Western Europe and North America towards Eastern Europe and the far more blatant racism against the 'brown skinned'," wrote Abhijit Iyer-Mitra. However, now, "Europe's reliance on energy from Russia has jacked up the odds that the region could enter a recession this year as soaring inflation pushes people to cut back spending," CNN. "Goldman's economists, led by Jan Hatzius, said the chance of a recession in the United States over the next year has risen as high as 35%." If that happens, bye, bye Democrats in November. There could be more. The US maybe trying to hide some dark, dirty secret. In October 2021, "The National Institutes of Health has stunningly admitted to funding gain-of-function research on bat coronaviruses at China's Wuhan lab, nypost. The resultant pandemic has killed over 6 million in the world so far, worldometers. Just recently US Under Secretary of State Victoria Nuland admitted in the Congress that the US has biological research facilities in Ukraine, presstv. China claims, "The US has 336 labs in 30 countries under its control, including 26 in Ukraine alone," opindia. Even after Nuland's testimony, AP is adamant that Russian and Chinese claims are "inflammatory and unsubstantiated". "Once again, not for the first time, what had seemed like a nutty conspiracy theory turned out to be true," said Tucker Carlson. "What are these labs doing with our money and in our name? And why didn't the Biden administration secure the contents of these labs before the Russian invaded?" Fox. The vicious sanctions on Russia maybe to prevent it discovering more deadly US secrets. How long will the rest of the world close its eyes? 

No time to rest.

In elections to five state assemblies, held from 14 February to 7 March, wikipedia, "The BJP has won four states, including the politically significant Uttar Pradesh (UP), in the mega elections seen as the semi-final before the 2024 national election. The Aam Aadmi Party (AAP) has also hit gold in Punjab, giving the eight-year-old outfit its second state after Delhi," NDTV. Prime Minister Narendra Modi's party the BJP won an absolute majority in UP with 255 seats out of a total of 403 in the Assembly and its vote tally went up to 41.29% from 39.67% in 2017, Zee News. The victory in UP is especially significant because "no party had managed to retain its majority in the state's legislative assembly since 1985", wrote Soutik Biswas. The average tenure of a chief minister during a five-year-term in this politically volatile state has been two years and 19 days. No incumbent chief minister has ruled UP for two successive terms since 1947." "A highly controversial figure, Yogi Adityanath (Chief Minister of UP) is loved and loathed in equal measure," wrote Geeta Pandey. "Under his five-year rule, lynchings and hate speech against Muslims routinely made headlines, the state brought in a controversial law against interfaith marriages and arbitrarily shut down abattoirs and restaurants serving meat, mostly run by Muslims." "The support of the Muslim community, which accounts for more than 19% of UP's population, was once considered crucial for any party to form the government. Not so any longer," wrote Pervez Iqbal Siddiqui. "This when there are over 120 assembly constituencies out of a total of 403 which have a sizeable Muslim population - 20% or more. In Rampur, Muslims constitute over 50% of the population. In Moradabad and Sambhal, it is 47%. Bijnor, Saharanpur, Shamli, Muzaffarnagar and Amroha have over 40% Muslims. Five other districts have Muslim population between 30% and 40%, and 12 districts have 20% to 30% Muslims." "A non-government human rights group has estimated that between January 2020 and and August 2021, Uttar Pradesh witnessed nearly 1.4 million excess deaths or nearly 60 times the state's official Covid-19 death toll of 23,382," Telegraph. If millions have been bereaved why was there no reaction? Because, "Since the start of the pandemic in 2020, the government has distributed free rations to 150 million people and helped the poorest families build thousands of homes and toilets." Who doesn't want to die in comfort? Consolidation of Hindu votes and caste have a major influence on who wins in UP, HT. "If the BJP sweeps UP's 80 parliamentary constituencies once again, a third term for Modi is almost assured," wrote Mihir Sharma. "Less than 24 hours after his party won a historic mandate in Uttar Pradesh and retained power in three other states, Prime Minister Narendra Modi was back on the election campaign trail on Friday, with a grand roadshow in his home state of Gujarat," HT. Gujarat election is not till December. Others better wake up.

Rock or iron, which one better?

Amid the ferocious racial hatred for Russians in Western countries, "China's friendship for Russia is 'rock solid' and the prospects for cooperation are very broad, Chinese Foreign Minister Wang Yi said," Reuters. "Cooperation between the two countries brings benefits and well-being to the two peoples, he told his annual news conference." China certainly benefits. "Russia has agreed a 30-year contract to supply gas to China via a new pipeline and will settle the new gas sales in euros, bolstering an energy alliance with Beijing amid Moscow's strained ties with the West over Ukraine and other issues," Reuters. Reliable and cheap energy supplies over 30 years will help the Chinese economy enormously. "China is considering buying or increasing stakes in Russian energy and commodities companies, such as gas giant Gazprom and aluminium producer United Co. Rusal International, according to people familiar with the matter," BS. Not only is China profiting on cheap energy but on cheap aluminium as well. "On the London Metal Exchange, spot prices for the metal have surged above $3,300 a metric ton for the first time since June 1988. Worse, manufacturers are paying eye-watering surcharges above the LME price to get hold of the physical metal," ET. Aluminium is "the most widely used non-ferrous metal, ahead of copper. And because it's everywhere, the price rally will hit everywhere, too, adding to global inflationary pressures and eating at the margins of many manufacturing companies." Except for the Chinese. Thus, inexplicable Western hatred for Russia is making China much stronger. Russian President Vladimir Putin must be confused as to whether "rock" stands above or below "iron brother" Pakistan. In October 2021, "Chinese President Xi Jinping...hailed relations between China and Pakistan as between 'iron brothers' in a phone conversation with Pakistani Prime Minister Imran Khan," CGTN. Khan "spoke highly of China's selfless assistance to his country". Iron maybe cheap but, "Beijing's debts are squeezing Pakistan's pinched finances as external payments are set to balloon to USD 14 billion at the end of this financial year and nearly half is owed to Chinese commercial banks, largely for the Belt and Road Initiative (BRI) related projects, a media report said," ANI. A bankrupt "Islamabad has requested Beijing to forgive debt liabilities owed to China-funded energy projects" but "China has declined to restructure $3 billion in liabilities", TOI. However, every time you point a finger at someone, remember 3 fingers are pointing back at you, pinterest. Consumer price (CPI) inflation rose to a 40-year high of 7.9% in February in the US and core inflation rose to 6.4%, the highest since 1982, marketwatch. Democrats could lose the Congress in midterm elections, Vox. "Only three midterms featured negative real income growth by Masket's metric, and all went badly for the president's party, with two being among the worst performances in modern times." "Hate, it has caused a lot of problems in the world, but is has not solved one yet," Maya Angelou. 

Growth of what?

"The Reserve Bank of India (RBI) on Tuesday conducted a $5 billion dollar-rupee swap auction as part of its liquidity management initiative, leading to infusion of dollars and sucking out of the rupee from the financial system. The central bank's move will reduce the pressure on inflation and strengthen the rupee," TIE. Or, it could be the other way round. By removing Rs 390 billion rupees from the system the RBI increased the exchange of the rupee which will bring inflation down by making imports cheaper. The rupee is trading at 76.33 to the dollar at this moment, xe, after falling to 77.02 to one dollar on 7 March, BS. Foreign portfolio investors have sold Indian stocks worth Rs 340 billion in March so far, "putting severe pressure on the rupee". From December 2019 to January 2022 our average monthly consumer price index (CPI) inflation has been 5.9%, and 5.3% in the past one year, wrote Vivek Kaul. Despite RBI Governor Shaktikanta Das repeatedly insisting that inflation is transitory and will resolve once supply side problems are solved. Das has been consistent that supporting "growth is of paramount importance", BS. He has not explained whether the RBI has taken over function of the finance ministry and the government. However, "A central bank cannot have free international movement of capital, a fixed exchange rate and an independent monetary policy, all at the same time," Kaul. The "classic external-front trilemma". "It will have to let the rupee depreciate." After World War II, global population growth doubled to 2% and "productivity growth tripled to around 2%", wrote Ruchir Sharma. Now, global population growth and productivity growth have both fallen to around 1%. India's total debt burden has "spiked from 160% to 175% of GDP". Growth in developed countries like the US "will be lucky to top 2% in this decade. Lower income countries such as India need to lower their benchmark for success from 7% to 5% or better." Inflation is very good for the government, wrote Soumya Kanti Ghosh. Because, "higher nominal GDP eats away government debt". Nominal GDP is total production of goods and services at current prices, without adjusting for inflation, Khan. Since taxes are collected on nominal GDP this helps the government. "For example, fiscal deficit numbers would look much better in FY 2021-22 and FY 2022-23, on the back of an enlarged nominal GDP," TOI. "The surge in edible and crude oil prices are bound to feed into headline inflation, which has already breached the upper tolerance limit of RBI's 2% to 6% target range," ET. High prices resulted in a fall of 2.6% in sales volumes of fast moving consumer goods (FMCG) companies, Mint. What growth does the RBI want? Prices or prosperity?

Alternatives are essential.

"US President Joe Biden on Tuesday announced a ban on Russian oil and other energy imports, a significant move in piling pressure on President Vladimir Putin to halt his devastating war in Ukraine," ET. "In 2020, the United States consumed an average of about 18.19 million barrels of petroleum per day, or a total of about 6.66 billion barrels of petroleum. This was the lowest level of annual consumption since 1995," eia. "India's oil consumption is forecast to rise from 4.8 million barrels per day (mbd) in 2019 to 7.2 mbd in 2030 and 9.2 mbd in 2050, as per the IEA's key scenario based on stated policies," ET. "India's crude oil imports in December soared to the highest levels in three years to more than 5 million barrels per day as its refiners cranked up output to meet a rebound in fuel demand," BT. However, not all of that is consumed within the country as India exports refined petroleum products. "India exported around 56,769 TMT (thousand metric tonnes) petroleum products worth $21,406 million in 2020-21 to countries like the United Arab Emirates, Singapore and China," TNIE. "Last year, roughly 8% of US imports of oil and petroleum products came from Russia. Together, the imports totaled the equivalent of 245 million barrels in 2021, which was roughly 672,000 barrels of oil and petroleum products a day," AP. As the US looks to alternative sources, such as Venezuela, the price of the benchmark Brent crude has risen to $131.4 per barrel this morning, oilprice.com. "The head of the World Food Programme, David Beasley, has warned the conflict in Ukraine could send global food prices soaring, with catastrophic impact on the world's poorest," BBC. The coverage of the war by the Western media, which was complicit when the US invasion resulted in 150,000 to 1 million civilian deaths in Iraq, wikipedia, has been abominable with filthy abuse heaped on Russians. While the death of about 400 Ukrainian civilians is tragic,inews, Western media outrage at European deaths while belittling deaths of Iraqis and Libyans,msnbc, is utterly contemptible. Inflation is hitting the US as well. "US drivers have never paid this much for gasoline. The price of a gallon of regular gas now stands at $4.17, according to the AAA," CNN. In the US, "Average rents were up 14% in December 2021 relative to December 2020, and multiple times higher than that in cities like Austin, Texas, New York and Portland, Oregon," CNBC. Russian banks have been removed from the SWIFT system, which is essential for international money transfers, Reuters, and Russian central bank assets have been frozen, Fox. In a return to common sense, Ukraine President Volodymyr Zelenskyy has said he is no longer interest in membership of NATO, which was the sole reason for the conflict, and is even ready to discuss the status of breakaway regions of Donetsk and Luhansk, BS. Even if the conflict stops quickly and prices come down, India and other vulnerable nations must now cooperate to find an alternative to the dollar and the SWIFT system to prevent being held hostage by the barbaric Western mafia. This must never happen again. 

Beware the FOMC.

"India's government instituted a 10% education-and-employment quota for Economically Weaker Sections (EWS) ineligible for the 49.5% of most public jobs and seats reserved for scheduled caste (SC), scheduled tribe (ST) and other backward class (OBC) applicants; and to qualify as an EWS candidate, the property owned by one's family had to be below certain size levels, with annual income from all sources under Rs 8 lakh (Rs 800,000)," Mint. In addition to annual family income below Rs 800,000, ownership of agricultural land must be below 5 acres and residence below 1000 square feet, cleartax. A study of data from the Periodic Labor Force Survey (PLFS) in 2018 and 2019 by Shamika Ravi and Mudit Kapoor revealed that of those households which do not belong to SC, ST or OBC categories, "99% of rural and 95% of urban homes earned under Rs 66,667 per month, the Center's EWS cap". If an average of 97% of people are economically weak because of earnings less than Rs 800,000 per year, why do we pay income tax on annual income in excess of Rs 250,000? IT Dept. After all many households have just one earning member. If millions are in the EWS category how do they choose the 10% who deserve help? Indians are going to be hit very hard financially. Fuel prices have remained unchanged since 4 November, NDTV, because of elections in 5 states between 14 February and 7 March, wikipedia. Now that elections are over, prices of petrol and diesel are expected to spike by Rs 15-22 per liter, BS. International price of Brent crude is $125 per barrel this morning, oilprice. After falling to 77 against the dollar yesterday, the rupee is firmer this morning at 76.75 to the US dollar, xe. It's a double whammy because, not only is the price of oil in dollars much higher, but since a dollar buys more rupees it multiplies the cost to us. "Western countries could face oil prices of over $300 per barrel and a possible closure of the main Russia-Germany gas pipeline if governments follow through on threats to cut energy supplies from Russia," ET. A $10 rise in the price of crude will raise retail inflation by 49 basis points (bps) and fiscal deficit by 43 bps of GDP, wrote Roshan Kishore in January. For some mysterious reason the Economic Survey 2022 based its projections assuming crude at $70-75 per barrel when Brent crude was already at around $90, moneycontrol. "The surge in edible and crude oil prices are bound to feed into headline inflation, which has already breached the upper tolerance limit of the Reserve Bank of India's (RBI) 2%-6% target range," ET. "Central banks are in a bind - if they act aggressively to contain inflation which may perhaps subside as normalcy returns, they run the risk of setting in recession," said Governor of RBI Shaktikanta Das. Of course it will, but can you wait? India's retail inflation was 6.01% in January, BS, well before the Ukraine problem started. The RBI chose to sit on a negative real interest rate of 4% in February, TOI. The price of petrol in the US is over $4 a barrel, eia.gov. The Federal Reserve Open Market Committee (FOMC) will announce their Funds rate on 16 March, Fed, which may put further pressure on the rupee. Had the RBI controlled inflation earlier there would be no panic now. Just do your job. Don't blame others. 

Trojan Horse or sacrificial lamb?

"NATO on Friday rejected Ukrainian calls to help it protect its skies from Russian missiles and warplanes, wary of being dragged into Moscow's war on its neighbor, but Europe promised  more sanctions to punish Russian President Vladimir Putin," Reuters.  "The only way to implement a no-fly zone is to send NATO fighter planes into Ukraine's airspace, and then impose that no-fly zone by shooting down Russian planes," said NATO chief Jens Stoltenberg. "If we did that, we'll end up with something that could end in a full-fledged war in Europe, involving many more countries and causing much more human suffering." NDTV. Why then did NATO egg Ukraine on? "Since NATO Summit in Warsaw in July 2016, NATO's practical support for Ukraine is set out in the Comprehensive Assistance package (CAP) for Ukraine," NATO. What do "practical support" and "Comprehensive Assistance" mean? "Putin has been clear for many years that if continued, the (NATO) expansion would likely be met with serious resistance by the Russians, even with military action," The Conversation. Why then, "In September 2020, President Volodymyr Zelensky approved Ukraine's New National Security Strategy, which provides for the distinctive partnership with NATO with the aim of membership in NATO." Is Ukraine being used as a Trojan Horse to completely destroy Russia's economy through savage sanctions, its government and its people for ever? It's not just Ukraine and Russia that are suffering. "African economists sound the alarm over a looming and likely catastrophic lowering of trade volumes between the continent and its warring partners if Russia's widely condemned incursion into Ukraine isn't short-lived," CNN. "Parts of Africa could be plunged into hunger in as fast three months if Russia's invasion of Ukraine lingers, says Wandile Sihlobo." "Wheat prices are at their highest since the global food crisis in 2008, and look as though they will exceed that level this week," ET. Other countries are restricting wheat exports which will increase shortage. In 2003, "to find non-existent weapons of mass destruction, Iraq was invaded by a US-UK led force. More than 80,000 civilians were injured and over 200,000 killed in 'direct war related' violence, revealed a study by Brown University. If the political and military leaders of the participant nations are charged with war crimes, it would perhaps support the humanitarian case for prosecuting Putin and his military brass," wrote Thomas Mathew. In 2013, "Russia has promised to reduce the price of natural gas exports to Ukraine by a third and lend it $15 billion," VOA. That's because "the IMF halted its lending in late 2010 because of Ukraine's failure to meet the conditions, including the absence of any reform of the gas sector." osw. The IMF wanted the price of gas to increase by 50% which the government refused because of elections. "Is NATO membership so paramount for Kyiv even to the tune of Ukraine's existence? NATO troops not putting their boots on ground against Moscow is enough evidence that Ukraine simply became a geopolitical scapegoat with huge human and material cost," wrote Profs Pradhan and Pattnaik. Ukraine maybe a sacrificial lamb for the US and NATO, but why is Zelensky cooperating? Does he think the price is worth paying?    

Quo vadis, whither goest thou?

"Amid the ongoing war between Russia and Ukraine, export demand for Indian wheat, corn and spices has shot up as supplies from these two nations have come to a grinding halt," DH. "The prices of wheat at the Kandla port have increased from Rs 2,200 per quintal to Rs 2,350-2,400 per quintal in the last four days," and "we think that the prices of wheat and wheat products may increase further in the next fortnight," said Sanjay Puri. Problem is, what we gain in exports we lose in imports. "The ongoing crisis in Ukraine is set to push the country's import bills beyond $600 billion mark this fiscal, given India's import dependence on crude oil, natural gas, gems and jewellery, edible oils and fertilisers, which can lead to a spike in inflation and a falling rupee, warns a report," ET.  "The report fears that the conflict can trigger capital flight from emerging markets, which can result in weakening of the rupee but it expects the higher forex ($632.95 billion as of February 18) to provide a cushion to a large extent." The rupee fell against the US dollar from an average of 40 to the dollar in 2007-08 to 61 in 2014-15, when Mr Narendra Modi became prime minister, to an average of 71 against the dollar in 2019-20, RBI. It fell sharply thereafter to over 76 to one dollar in mid-December 2021, exchangerates.org. One dollar bought Rs 76.4 this morning, xe.com. Since imports are bought in dollars, a weaker rupee increases prices for consumers in India, causing inflation. As a result, "Sales volume of fast-moving consumer goods fell 2.6% in December quarter from a year earlier, with inflation causing a sharp dip in rural demand after five quarters of positive growth, according to industry data released by NielsenIQ," Mint. Ukraine and Russia "ship more than 75% of global exports of sunflower oil," and "That's made a tight global market even tighter and sent prices of palm and soybean oil, the two most used oils, to records," ET. "India imports about 60% of its cooking oil needs." The price of crude oil has jumped, with benchmark Brent crude trading at $118 per barrel this morning, oilprice.com. "Country's crude oil import bill is set to cross $100 billion mark in the current financial year, which would be almost double that of last year's," NDTV. "India's sovereign bonds look among the most vulnerable to an oil-price shock among emerging debt markets across Asia," ET. "A sell-off in India's bond markets, including its corporate debt, is gathering pace as oil prices extended their rally above $110 per barrel." This will reduce prices of our bonds, increase yields and borrowing cost for government and companies. "The Economic Survey 2022 estimated India's Gross Domestic Product (GDP) growth rate at 8.0-8.5 percent in 2022-23, which hinges on crude oil prices being in the range of $70-75 a barrel," moneycontrol. This when Brent crude was trading at $86.51 in January 2022, countryeconomy, and Goldman Sachs was predicting oil at $100 in 2022 and 2023, in December 2021, CNBC. Even so, the Reserve Bank (RBI) is likely to take a dovish view on inflation, Mint. To that, we might ask "Quo vadis (whither goest thou)"? Collins.

The ignorance of Netflix Indians.

"The US State Department has recalled a cable to American diplomats that instructed them to inform counterparts from India and the United Arab Emirates (UAE) that their position of neutrality on Ukraine put them 'in Russia's camp', Axios, a US news outlet reported," TIE. "The cable, rated sensitive but unclassified, was sent to US embassies in nearly 50 countries represented at the UN Human Rights Council on Monday, but was recalled on Tuesday afternoon, Axios reported." If this was a genuine mistake, an act of stupidity, or a disguised warning to sovereign nations, while avoiding a risk of a hostile reaction, we will never know. Nevertheless, it shows enormous arrogance and cowardice of a bully picking on weaker nations but terrified to take on China. "China won't join the United States and European governments in imposing financial sanctions on Russia, the country's bank regulator said," ET. One month back, "Russia has agreed a 30-year contract to supply gas to China via a new pipeline and will settle the new gas sales in euros, bolstering an energy alliance with Beijing amid Moscow's strained ties with the West over Ukraine and other issues," Reuters. China had foreign exchange reserves worth $3.398 trillion as of 31 January, wikipedia. "US goods and services trade with China totaled an estimated $615.2 billion in 2020. Exports were $164.9 billion; imports were $450.4 billion. The US goods and services trade deficit with China was $285.5 billion in 2020," USTR. "As many as 3.7 million US jobs have been lost due to the US trade deficit with China since China's WTO entry, according to various estimates," HBR. "For 20 years China has dragged its feet on granting US companies access to its market equivalent the access to the United States that its companies enjoy." While sucking up to China, "The most sexless, nothing, these people," said Richard Nixon about Indians. "To me, they turn me off. How the hell they turn other people on, Henry? Tell me." To which Henry Kissinger replied, "The Indians are bastards anyway," News18. "Sending its 7th Fleet to the Bay of Bengal during the 1971 Indo-Pak war might not have been the only aggressive military action taken by the US against India in 1971," ET. "To counter this two-pronged British-American threat, Russia dispatched a nuclear armed flotilla from Valdivostok on December 13 under the overall command of Admiral Vladimir Kruglyakov," wrote Shweta Sengar. "Declassified US State Department documents on Afghanistan from late 1970s and 1980s that Washington, in agreement with Beijing, turned a blind eye to Pakistan's nuclear program in lieu of Islamabad's support to push out Soviet Union from Kabul," ET. Barack Obama repeatedly supplied F16 fighter jets to Pakistan, knowing that they would be used against India, TIE. The US has consistently supported India's enemies. Had it not been for Russia India may have been conquered. Sadly, Netflix Indians don't know the perfidies of the US and are abusing Russia. When all Russia wants is peace and security. 

Whose growth is it?

"Federal Reserve chair Jerome Powell said he is inclined to support a 25 basis point rate increase at the March policy meeting but said the central bank is prepared to move more aggressively later if inflation does not abate as expected," Reuters. Why? "The Federal Open Market Committee (FOMC) judges that inflation of 2 percent over the longer run, as measured by the annual change in the price index for personal consumption expenditures, is most consistent with the Federal Reserve's mandate for maximum employment and price stability. When households and businesses can reasonably expect inflation to remain low and stable, they are able to make sound decisions regarding saving, borrowing and investment, which contributes to a well functioning economy." The Reserve Bank of India (RBI) has a much higher mandate of 4% (+/-_ 2%) which means it can allow inflation to rise as long as it stays just below 6%, ET. India's retail inflation came in at a six-month high of 6.01% in January, BS. Despite that, "The RBI's rate-setting panel will likely continue with its accommodative stance and hold interest rates despite geopolitical risks in the wake of the Russia-Ukraine conflict as it continues to take a dovish view on inflation," Mint. Maybe it is duplicity. When prices are rising, people tend to advance their purchases to preempt higher prices later, wrote Rajrishi Singhal. "Economist John Maynard Keynes called this the Paradox of Thrift: low inflation over the long-term encourages consumers to save more rather than consume. thereby dampening aggregate demand, leading to lower aggregate output and a weaker economy." Thus, RBI is seeking to force people to spend in the hope of increasing growth rate of the economy. "Food inflation was less than 1% in September-October 2021, but shot up to 5.4% overall and 5.9% in urban areas by January 2022," wrote Prof Himanshu, and prices of edible oils have risen 24% in the last 18 months. "Even though RBI has tried its best to downplay inflationary pressures, the uncomfortable reality is that consumer prices are currently almost 12% higher than they were before the pandemic," and "it is a good time to announce that we are cleared for take-off", wrote Aurodeep Nandi. Jayanth Rama Varma, "The lone dissenter among India's monetary policy setters sees the central bank's inflation-targeting credibility at risk by keeping policy loose for too long and focusing on the effects of the pandemic," ET. "Varma cited the fan chart of RBI that shows inflation hovering around 6%- 6.5% and maybe even 7% next fiscal year." The RBI is to be complimented for tolerating inflation because the rate of inflation is not an accurate reflection of our consumption because food has a weightage of 45.86% in our consumer price index (CPI) basket whereas the National Account Statistics (NAS) showed that food had a share of 32.8% in our consumption in 2019-2020, wrote Soumya Kanti Ghosh. That is an average, which hides the fact that the poor spend a lot more on food and food inflation hurts them badly. The real reason for Ghosh's satisfaction is that "a higher nominal GDP eats away government debt". TOI. Nominal GDP is real GDP plus inflation, Investopedia. Inflation reduces government debt by increasing tax collection. The government collected Rs 1.33 trillion in GST in 28 days in February, ET. Basically, the RBI is transferring money from the poor to the government. Who is growing?

A black belt for Biden.

"Western nations are imposing increasingly severe sanctions on Russia following its invasion on Ukraine. The measures are designed to cripple Russia's economy and punish its government for taking military action," BBC. "The European Union, the United States, France, Germany, Italy, Canada and Britain agreed ... to ensure that selected Russian banks are removed from SWIFT to harm their ability to operate globally," Reuters. Japan joined Western nations in freezing Russian assets and "Apart from those held by six individuals including President Vladimir Putin and Foreign Minister Sergei Lavrov, Japan will freeze assets of Russia state-owned Promsvyazbank and Vnesheconombank, as well as the country's central bank," Reuters. The problem has arisen because of Ukraine's desire to join NATO, which is a militant association of armed forces of the US and European countries, The Print, which has fought illegal wars in Iraq, Libya and Afghanistan. Russia objects to hostile nuclear missiles right on its border. As proof of the complete control of the whole world by Western countries, "Russian teams were suspended from international soccer, including qualifying matches for the 2022 World Cup, as Moscow was pushed toward pariah status in sports for its invasion of Ukraine. World soccer body FIFA and European authority UEFA banned Russian national and club teams from their competitions 'until further notice'," ET. "World Taekwondo stripped President Vladimir Putin of his honorary taekwondo black belt," ET. The egregious attack on Libya and the murder of Muammar Gaddafi in 2011 by NATO, FP, shows the extreme power of western nations to punish anyone that they may not like. "Muammar Gaddafi's youngest son, Saif Al-Arab, and three grandchildren were killed in an airstrike on Tripoli, the government said," BS. Barack Obama still has his belt. Why this vicious reaction attack on Russia? Because of natural gas. "With the completion of the construction of Nord Stream 2 in September 2021, the US realized it had only a small window of opportunity before the pipeline got operationalized and it loses the EU's energy markets completely to Russian influence. Russia would no longer need Ukrainian transit pipelines to meet nearly 80 percent of its European energy supply obligations. And thus, America would lose a trump card it had held since 2014 when the Obama administration staged a coup d'etat and installed a pro-West far-right militia-run regime in Kyiv in a completely unconstitutional election process," wrote Lt Gen Abhay Krishna. The US has lost every war since the Korean war in 1953, which ended in stalemate, wikipedia. "The US Army has concluded that Iran was the only victor of the eight-year US campaign to remove Iraqi president Saddam Hussein and replace him with a democratic regime," Quartz. Joe Biden's disastrous flight from Afghanistan has left Taliban in complete control, The Atlantic. And now, "With US-NATO staring at Russia for the time to come, China will get a free pass in the Indo-Pacific, perhaps even allowing its PLA to indulge in some adventurism regarding Taiwan," HT. With the Taliban, Pakistan and China getting stronger, India is in more danger. If China gets Taiwan, Japan will be in danger. Perhaps, Joe Biden will also get a taikwondo black belt.    

If it ain't working.

The unnecessary face off in Ukraine will see shortage of 5 essential commodities - energy, food, transport, metals and microchips, ET. Russia is a big supplier of gas and "Global gas reserves are low due to the pandemic and energy prices are already rising sharply, impacting consumers and industry." Sunflower oil, wheat, nickel, copper, iron, neon, palladium and titanium come from Russia and Ukraine. About 90% of neon, which is used in chip lithography comes from Russia, and Ukraine and Russia are suppliers of platinum and palladium, essential for microchip production. A quarter of the global supply of wheat and a fifth of corn come from Ukraine and Russia. "Russia is also a major low-cost exporter of nearly every kind of fertilizer. It's hard to overstate how important fertilizer is to the food supply chain." India's "Food inflation was less than 1% in September-October 2021, but shot up to 5.4% overall and 5.9% in urban areas by January 2022," wrote Prof Himanshu. Within this, edible oils have risen 24% in the last 18 months and the wholesale price index (WPI) inflation has risen by double-digits for 10 straight months, thus increasing input costs. As the price of crude oil has shot up so cereals are being diverted for the production of ethanol. Benchmark Brent crude is trading at $100.99 per barrel and West Texas Intermediate at $96.49 per barrel this morning, oilprice.com. As a result, "India, which imports 85 percent of its crude oil requirements, is expected to almost double its import bill to $110-115 billion by the end of the fiscal year 2021-2022," NDTV. India's demand for crude oil is expected to hit a record 214.5 million tons in the financial year starting on 1 April, according to the Oil Ministry. "If crude oil price rises to an average of $100 ($90 per barrel) from the current average $74 per barrel, inflation is likely to increase by 52-65 bps (32-40 bps), according to a research report from State Bank of India (SBI)," TIE. The government reduced excise duty on petrol by Rs 5 per liter and on diesel by Rs 10 per liter in November, Reuters, and this could lead to a shortfall of Rs 950 billion to Rs 1 trillion in revenue collection. "India's economy grew by 5.4% year-on-year in the third quarter of the current fiscal year, data from the Ministry of Statistics and Programme Implementation showed," ET. Economists were predicting 6% growth. "At Rs 38.22 lakh crore (Rs 38.22 trillion) -- the output in the third quarter -- the GDP is smaller than Rs 38.96 lakh crore (Rs 38.96 trillion) reported in Q4FY21 (January-March 2021)," FE. Agriculture grew at 2.6% y-on-y, down from 4.5% in Q2, manufacturing was stagnant, capacity utilisation remained at around 70%, and the construction sector contracted. Private final consumption expenditure (PFCE) grew 7%, mainly due to base effect, and capital formation, which shows new investment, grew 2% despite base effect. "Inflation is getting a free pass in India," in the belief that low borrowing costs will encourage investment, create jobs and increase growth, wrote Andy Mukherjee. But higher costs are forcing small industries to close. However, the Reserve Bank (RBI) is to cling to its failed policy of negative real interest rate, to reduce the government's borrowing cost, Mint. "If something ain't working, it ain't working. You can't stick with it," thinks Amy Sherman-Palladino. But, you can stick your head in the sand. Works for the RBI.

Rise to the challenge.

Referring to the strife in Ukraine, Finance Minister Nirmala Sitharaman said, "India's development is going to be challenged by the newer challenges emanating in the world," TOI. True, but that is why we have 78 members in the Council of Ministers, of which 30, excluding the prime minister, are of full cabinet rank, India.gov, at an astronomical cost to the taxpayer. The US gets by with 16 cabinet members, including the vice-president, and 9 officials of cabinet rank, wikipedia. According to the World Bank, India's nominal GDP was about $2.7 trillion in 2020, while that of the US was about $21 trillion. The US dollar is the world's reserve currency and makes up over 60% of foreign currency reserves of central banks, The Balance. "As of 2018, the US had $1,671 billion in circulation. As much as half that value is estimated to be in circulation abroad." The US dollar is the official currency in Ecuador. El Salvador and Zimbabwe and is widely accepted in many others, Business Insider. The Indian rupee, on the other hand, is only partially convertible and Reserve Bank (RBI) permission is needed to take large amounts out of the country, BS. A fully convertible rupee would make business transactions easier but the danger is that large numbers of individuals may decide to hedge against future rupee devaluation by buying foreign currency or bonds which will lead to a fall in the rupee's exchange rate, pushing up inflation. At present, Indians hedge against inflation by buying gold, a total of Rs 3.40 trillion worth in 2021, TIE. All this means that the Indian government and the RBI should have been more protective about the Indian rupee. India's "Fiscal deficit for 2020-21 was at 9.3 percent of the gross domestic product (GDP), lower than 9.5% estimated by the Finance Ministry in the revised Budget estimates, according to the CGA (Controller General of Accounts) data," ET. In absolute terms the government borrowed Rs 18.21461 trillion that year. The fiscal deficit for 2021-22 is now expected to be 6.9% of GDP, as against 6.8% projected in the Budget, ET. A total of Rs 15.91089 trillion. The fiscal deficit for 2022-23 is projected at 6.4% of GDP, NDTV. This, despite the fact that the government earned Rs 8.02 trillion from taxes on petrol and diesel in the 3 years to 2021, the FM said, NDTV. From April to September 2021, it raked in another Rs 1.71 trillion, BS. All this extra borrowing means that the Center's debt-to-GDP ratio is 59.9% in 2021-22, while that of the states is 31%, giving a total debt-to-GDP ratio of 90.9%, Mint. In January, India's crude oil basket was at $85.6 per barrel, with Goldman Sachs predicting $100 per barrel in the 3rd quarter, HT. Brent crude is trading at $97.93 today, oilprice.com. Ignoring inflation and the rupee, the RBI has clung to an interest rate of 4% since March 2020, Fortune. A report by Nomura suggests that, because of Ukraine, inflation will rise in India, and not fall as the RBI dreams, ET. Sitharaman is wistful about lack of peace in Ukraine. What if the civil war in Yemen drags in Iran and Saudi Arabia? She would perhaps be better prepared if she thought about the nation. Wouldn't have been such a challenge.
 

A few seconds on co-location is all it takes.

As Russian troops entered Ukraine, stock market indices, "BSE Sensex tumbled 4.7 percent or 2,702 points to end at 54,530, while Nifty 50 index plunged 815 points or 4.8 percent to finish trade at 16248," FE. Investors lost a total of Rs 7.59 trillion as investor wealth declined to Rs 248.09 trillion from Rs 255.68 trillion in the previous session, News18. "Foreign institutional investors (FIIs) sold shares worth Rs 6,448 crore (Rs 64.48 billion) on February 25, and domestic institutional investors (DIIs) lapped up shares worth Rs 7667 crore (Rs 76.67 billion), as per provisional data available on NSE," BT. FIIs sold shares worth Rs 486.45 billion since 1 January this year, TIE. FIIs "have been net sellers every month since September, dumping $7.9 billion worth of local shares since," ET. Indian markets are highly manipulated. "Chitra Ramkrishna, a former chairperson of India's largest bourse - the National Stock Exchange (NSE) - was manipulated by a 'Siddha Purusha/Yogi' (an unidentified spiritual guru) and allegedly provided him confidential company information including NSE's five year projections, financial data, dividend ratio, business plans, board meetings and also consulted him on employee annual appraisals, an order by market regulator Sebi said," TOI. The Income Tax Department "is now probing possibilities of fund diversion to overseas accounts and possible tax evasion as the they found frequent personal travel to tax havens," and the CBI is "probing allegations that certain brokers were given preferential access to NSE's co-location facility". She appointed one Anand Subramanian as the Group Operating Officer of the NSE on a salary of Rs 16.8 million for working 4 days a week and his wife Sunitha Anand was appointed on a salary of Rs 6 million, which was later increased to Rs 13.4 million, BT. It is heartwarming to see our sleuths diligently sniffing out any hint of irregularities in our markets to protect the innocent investor. Alas, too late. Chitra Ramkrishna was forced to resign her post as head of the NSE way back in 2016 after complaints from shareholders of the NSE, ET. It goes even further back. "A whistleblower in 2014-15 complained to the Sebi saying some brokers in collusion with a few top NSE officials had abused the co-location facility," News18. It appears that, "the user who gets access to the system first would receive data earlier than the rest. It is alleged that OPG Securities, one of the trading members, was provided unfair access between 2012 and 2014 that enabled it to log in first to the secondary server and get the data before others in the co-location facility." Amazingly it is not illegal. The CBI has arrested Anand Subramanian claiming he is the mysterious 'Himalayan yogi' who controlled Ramkrishna, NDTV. "2021 has seemed eerily similar to 2000," wrote Shankar Sharma. "Analysis of a nearly 100-year period shows that the probability of markets delivering substantial positive returns, for a 4th consecutive year, are next to zero. Global markets have delivered excellent returns in 2019,2020 and 2021." Individual investors buy shares when markets are zooming and sell in panic when they fall, ET. When markets are so manipulated in India why do they advise people to keep investing in shares? Are they paid to mislead people? 

Dollars and oil.

Despite the global kerfuffle due to fireworks in Ukraine, "We have raised our 2022 calendar year (CY22) growth forecasts for India to 9.5% from 7%, and maintained our forecast for 5.5% growth in 2023 (CY23). This translates into 8.4% and 6.5% in fiscal years 2022-23 and 2023-2024, respectively," Moody's said in its latest Global Macro Outlook, BS. "Fitch Ratings, on the other hand, maintained its earlier projection of 10.3 percent growth in FY23 compared to 8.4 percent estimated for  FY22." Spiffing. "India's exports in January rose 25.28% to USD34.50 billion," "even as trade deficit widened to 17.43 billion, according to data released by the commerce ministry," as "Imports grew by 23.54 percent to USD51.93 billion," ET. Exports increased by 46.73% to $335.88 billion from April 2021-January 2022, while imports increased by 62.65% to $495.75 billion giving a deficit of $159.87 billion. Crude oil imports rose 26.9% to $11.96 billion in January. India's demand for petroleum fuels is projected to rise to a record 214.5 million tons in the year starting on 1 April even as the price of crude oil has closed in on $100 per barrel. India imports 85% of its oil requirements. Global benchmark Brent crude jumped to $105.79 per barrel following Russia's entry into Ukraine, before settling at $99.08 a barrel, Reuters. "The surge in oil prices is likely to have an impact on inflation in domestic markets," TOI. Domestic fuel prices have been frozen for 110 days in a row because of elections in 5 states, NDTV. "Industry officials said that retail pump prices are aligned to a price of $82-83 per barrel, and they would certainly go up once elections end next month." Although oil is bought in dollars it is sold to us in rupees, so if the rupee becomes weaker against the dollar, retail prices of petrol and diesel will rise even more. The rupee is trading at 75.31 to the dollar this morning, xe. The strength of the rupee is not wholly in our hands because the strength of the dollar depends on economic data out of the US and the response of the US Federal Reserve. Consumer prices surged by 7.5% compared to a year ago in January, the US Labor Department reported, CNBC, while the producer price index, which reflects wholesale inflation, jumped by 9.7% from a year ago, ET. "Rents have exploded across the country, causing many to dig deep into their savings, downsize to subpar units or fall behind on payments and risk eviction now that a federal moratorium has ended," AP. "In the 50 largest metro areas, median rent rose an astounding 19.3% from December 2020 to December 2021, according to a Realtor.com analysis of properties with two or fewer bedrooms." Hitting the poorer segments of society. At the moment Fed officials are ruling out "jamming brakes" through larger rate hikes, BT, but their hands maybe forced by events in Ukraine and sanctions on Russia. Our Reserve Bank (RBI) is basing its calculations on an average oil price of $70-75 per barrel in the next financial year and sees no problem with inflation. But, crude oil futures predict a gradual settling of the price from $95 per barrel in April 2022 to around $79 in June 2023, CME. What if the Fed goes for a 50 basis points hike in its Funds Rate? Double spiffing.

From JFK to Joe Biden.

"Russian President Vladimir Putin on Thursday announced a military operation in Ukraine" "to protect civilians in eastern Ukraine" and "accused the US and its allies of ignoring Russia's demand to prevent Ukraine from joining NATO and offer Moscow security guarantees", AP. "As Putin spoke before dawn, big explosions were heard in Kyiv, Kharkiv, Odessa and other cities across Ukraine." Putin's demands seem entirely logical. In 1960, President John F Kennedy declared a "quarantine" around Cuba to prevent Soviet ships from carrying missiles to the island, Britannica. To avert a nuclear war, on 28 October, Soviet President Nikita Khrushchev informed Kennedy that "work on the missile sites would be halted and that missiles in Cuba would be returned to the Soviet Union. In return, Kennedy committed the United States to never invading Cuba. Kennedy also secretly promised to withdraw the nuclear-armed missiles that the United States had stationed in Turkey in previous years." Today, "Historians tend to rate JFK as a good president, not a great one. But, Americans consistently give him the highest approval rating of any president since Franklin D Roosevelt," The Atlantic. Both FDR and JFK were from the Democratic Party, as is President Joe Biden, the present incumbent of the White House. The world has not forgotten the panicked withdrawal of US troops from Afghanistan just 6 months back, leading to chaotic scenes at Kabul Airport as the Taliban just overran the Afghan army, CNBC. "National Security Advisor Jake Sullivan said..that a 'fair amount' of US weaponry had fallen into the hands of the Taliban," Fox. To show-off, the Taliban paraded around in M117 armored security vehicles carrying American-made M4 assault rifles with M-17 helicopters patrolling overhead, CNN. This time Americans were not as terrified as when they fled Saigon from the advancing Vietcong, some even hanging from helicopter skids, CBS. In a knee-jerk reaction to the invasion of Ukraine, Biden immediately announced sanctions on two Russian banks, on the country's sovereign debt and on three individuals, CNBC. Biden announced plans to send "800 infantry soldiers and up to eight F-35 fighter jets to locations along NATO's eastern flank, a US official said, but are a redistribution, not additions", Reuters. Russia has been preparing to shield itself from sanctions since 2014 when it annexed Crimea by reducing dollars in its foreign exchange reserves and shifting its trade towards China, BBC. Problem is, "President Joe Biden may face a particular challenge no president has faced in midterms for nearly 50 years: declining incomes due to high inflation," Vox. Price of crude oil has surged with benchmark Brent crude trading at $100.04 per barrel, ET. This could feed into inflation the longer it drags on. All Biden has to do is to tell Putin that Russia is safe. Just as JFK did 61 years ago.  

Follow the rich.

"In India, the revival of manufacturing to improve its share of the economy is essential for mass unemployment and income growth," wrote Prof V Anantha Nageswaran. " The Global Trade Update published  by UNCTAD states, "During Q4 2021, trade in goods increased by almost US$200 billion to reach about US$5.8 trillion" while services increased by $50 billion to $1.6 trillion. India's export of goods was up by 25% in Q4 2021 while services increased by 7%. "The government wants to boost 'Make in India', reduce import dependence and promote exports," wrote Arpita Mukherjee. To that end, the government has started the Production Linked Incentive (PLI) scheme, rationalized the inverted import duty structure and imposed higher tariffs on imports. According to the WTO, "India has one of the highest average tariffs of 15% in the Asia-Pacific region." PLI is used to encourage production of goods for which demand is weak, but, if prices are brought down by manufacturing in large quantities, demand might increase, BS. "Generally, the benefits of a PLI scheme are passed on to the final consumers of the goods in terms of lower prices." "Advanced economies have a total debt-to-GDP (gross domestic product) ratio of 300%," so they are trying to inflate their debts away, wrote Russell Napier. "For India, it is just 176%."  Inflation reduces government debt by reducing the value of money and by increased tax collections as wages and prices rise, Kahler. "Investors are realising that the key to inflating away debt is not to produce higher inflation, but to keep interest rates low while inflation is high." "Capital so repelled will have to go somewhere. India is likely to be a key destination of such capital." Napier must have missed our news. "India's retail inflation accelerated to 6.01% in January," higher than the upper tolerance limit for the Reserve Bank (RBI) of 6%, BS, while the RBI has held interest rate at 4% since March 2020, HT, thus following the same copybook of central banks in developed nations. "India Inc is likely to give out a 9.9% salary hike in 2022 compared to 9.3% in 2021, according to AON plc," ET. This will increase direct tax collections. Gross goods and services tax (GST) collection for January 2022 came in at a record Rs 1.40986 trillion, HT, due to higher import tariffs and higher prices, because GST is calculated as a percentage of the retail price. Fuel prices have been frozen in India since 4 November because of elections in 5 states over February and early March, NDTV. Prices are expected to jump as soon as elections are over, maybe by as much as Rs 8 per liter, Print. Also, "Electricity tariffs likely to be hiked as government implements pass-through model," reported DNA. India is following what rich nations are doing. The difference is that they can afford it. We can't.