Was it only pomp?

Three days ago, "US President Donald Trump treated Chinese President Xi Jinping to a rare personal airport welcome,...kicking off a pomp-filled state visit aimed at smoothing superpower tensions on everything from AI and trade to Iran." NDTV. As Xi left Washington, "The summits between the world's two largest economies featured military flyovers, ceremonial tours and a state dinner, but left unresolved major differences over trade, AI, Taiwan and China ties to Iran." "One tangible outcome of the visit was that the US and China agreed to extend by two months a trade truce that was due to expire on November 10." Reuters. "Xi said he expects to meet Trump two more times this year. Xi extended an invite for Trump and his wife, Melania, to go to the Asia-Pacific Economic Cooperation summit in Shanzhen, China, in November." And "again a month later at the G20 summit at the Trump National Doral Miami golf club in Florida." ET. Why was this visit at all necessary? It is not as if China and the US are so friendly that the two were pining for each other, or so bad that a personal meeting was necessary to avert conflict. At 24% Trump's approval rating is the lowest ever and, at 53% to 41% (pbs.org), the Democrats are expecting to sweep both houses of the Congress in the mid term election on 3 November 2026  (ballotpedia.org). This visit is not going to help even one percentage point. "Satellite imagery and intelligence support provided by Chinese groups have helped Iran threaten ships in the Strait of Hormuz and launch precision strikes on US military bases in the Middle East." CNN. "Iran has used a barter-like arrangement to bypass sanctions on its oil sales and buy billions of dollars' worth of goods from China, including military gear," sources told Reuters. On the other hand, China helped contain the rise in the price of oil. "China sharply reduced its crude oil imports during the first half of the Iran war," as "Chinese crude imports averaged 8.1 million barrels per day in the second quarter, nearly 4 million barrels per day, or 32%, lower than in the first three months of the year." Apparently, Beijing had built its strategic petroleum reserve to around 1.4 billion barrels by the end of last year." BT. US blockade of Iranian ports has cut off its exports. "Iran's oil exports, which form the backbone of state revenues and foreign exchange earnings, fell close to zero in July after the US reimposed blockade, down from $4.5 billion in June." "Iranian oil stored at sea beyond the US naval fleet off its coast fell from roughly 180 million barrels to about 60 million in early July." WSJ. China's economy is not as hot as it used to be. "What might once have seemed unthinkable - unrelated adults sharing the same room and even their bed to save money - is emerging as a symbol of the financial pressures confronting many young Chinese." Reuters. This month, "China has imposed a range of sweeping new rules restricting travel in and out of the country in a move that observers say will give the government even more control over its citizens." BBC. Xi Jinping's hurried departure from Delhi after the BRICS summit last week gave rise to rumors that he had suffered a severe ischemic stroke." Mint. But Xi could have been afraid of a military coup back home. "News...of the ruling Politburo's expulsion of two top military leaders, Zhang Youxia and Liu Zhenli, from the Communist Party and the military, signaled the latest move in the long-running crackdown." "Initially the crackdown targeted corruption," "But increasingly it has taken on a political edge." Reuters. Since 2022, over 100 senior People's Liberation Army (PLA) officers have been purged, including 36 generals and lieutenant generals. China Power. Now, Trump is soon to become an extremely 'lame duck' president while Xi can't rest to recuperate because he is terrified of being purged. So, did Trump put on this show to make Xi look good back home, or does Xi have a plan to flood the world with oil, crashing prices and bringing down inflation which will make Trump look good. After continually asking for a deal Trump has rejected a ceasefire offer by Iran (Fox). Is that the result of a conspiracy between Trump and Xi? How will it pan out? So exciting. Suspense.  

A dupatta for protection.

"Prime Minister Narendra Modi today highlighted the achievements of Ayushman Bharat as the initiative marks eight years," and "noted that today more than 600 million beneficiaries have access to Rs 500,000 annual health cover, making it the largest healthcare scheme in the world." pib.gov.in. He forgot to mention that the rates for various procedures fixed by the government (hopehospital.com) may pay for the consumables, but not for doctors' fees and other hospital expenses, such as investigations, utilities and food. It is, therefore, a surreptitious tax on private hospitals and doctors. However, subsidized healthcare is necessary because of an explosion of violent crimes in the country. "For two hours, a Delhi-based creator," "wore a dress, got his makeup done, covered his head and face with a dupatta (a piece of light cloth women use to cover their upper body) and set out on the city streets at night - while recording the experience along the way." "By the end of the two-hour experiment, the creator says the repeated attention had left him shaken." ET. "It is not safe for girls to go out alone at night," he said. Or during the day as well. "Police in India have detained a man after footage appearing to show a car striking a female motorcyclist in the city of Gurugram near India's capital Delhi sparked national outrage." BBC. The accused, Kalyan Singh Bainsla, was arrested from Rajasthan. At the police station he said "he wanted to urinate before attempting to flee. He allegedly ran away but fell and sustained injuries before police caught him again." TOI. After the gang rape of a 17-year-old girl in a public park in Kalkaji's Astha Kunj area, "as students of gathered outside Lady Shri Ram College for Women in South Delhi to March for their own safety, many of them had wrapped dupattas and scarves across their faces or pulled on masks." They were afraid authorities might punish them. TN. Indians have to protect themselves from authorities in case the criminal is a relative or friend of a politician or a high official. "The annual summary revision of electoral rolls, an exercise that facilitates the inclusion of 18-year-olds into the electoral rolls, has been delayed past its May-June announcement deadline for the year 2026-27," despite two election commissioners Sukhbir Singh Sandhu and Vivek Joshi 'strongly advocating and urging the need' to resume the practice." The Wire. This may be because of the Cockroach Janta Party, comprised of Gen Z, protests at Jantar Mantar in Delhi in June-July which forced the resignation of the Education Minister Dharmendra Pradhan (wikipedia). "This came as the Modi government found itself besieged from multiple sides," with the protesters "shattering Modi's magic among youth through memes, parody and mimicry - so effectively that he took to Instagram at midnight in an unsuccessful bid to recover lost ground on social media." The Diplomat. If you cannot con them, disenfranchise them. There are more than 2,800 Registered Unrecognised Political Parties, or RUPPs. "A month-long BBC investigation examined six RUPPs that reported some of the largest donations in 20232-24. Together they received about 17bn rupees, despite fielding just 15 candidates in the 2024 election. None came close to winning." BBC. So, where is the money going? "Congress MP Rahul Gandhi...alleged with '100% certainty' that elections in India, including the 2024 Lok Sabha polls, were being rigged." ET. If that is true, this government is illegitimate. And passports issued by it. "Our passport is absolutely useless. Can't go anywhere good without waiting for days for the Visa or submitting a thousand pages," wrote Indian entrepreneur Jitendra Emmani on X. ET. Not surprising if we are having to hide our faces from our government. And its vicious stooges. 

Think before toasting.

"The world seems to be raising a toast to the India economy. Fitch Ratings...raised India's FY27 growth forecast to 6.9% from 6.4%, hours after S&P Global Ratings projected 7% growth, up from its earlier 6.6%. Moody's had already raised its forecast to 7% from 6% last week." ET. Great, Patiala pegs all round, except that a slew of ministers and government officials have been accusing the same three rating agencies of bias for years. In June, "The global rating agencies S&P, Moody's and Fitch have been unfair in recognizing India's economic fundamentals and potential, Commerce and Industry Minister Piyush Goyal said." DH. "India's net direct tax collections rose 12.96% year-on-year as of 17 September of financial year 2026-27, according to data released by the Income Tax Department." Net corporate tax collections rose to Rs 5.56 trillion from Rs 4.65 trillion and non-corporate tax collections increased to Rs 6.16 trillion from Rs 5.81 trillion. ET. So, people must be earning and spending more which is increasing company sales and profits. "Gross fixed capital formation (GFCF) includes acquisitions less disposals of fixed assets during the accounting period," and "is expressed as a percentage of Gross Domestic Product (GDP)." World Bank. It is an indicator of new investments in the economy. "GFCF recorded a strong growth of 11.9% in the first quarter of 2026-27." "The Centre's capex has grown by 30% in the first four months of the year." Capacity utilization in manufacturing is at 75%, bank credit to large industries grew by 18% and "The intent of the private sector to invest is strong," wrote Rajani Sinha. "India's Goods and Services Tax (GST) revenue rose 14.8% y-on-y to Rs 1998.53 billion in August 2026" from Rs 1741.16 billion last year. ET. The cuts in rates of GST since 22 September 2025 have increased the sale of entry-level cars, two-wheelers and large screen televisions. ET. If India's GDP is skyrocketing, people are buying big-ticket items and the government is raking in oodles of taxes, everything must be hunky dory, as we Indians like to say. That being the case, why was it necessary to borrow $133 billion (about Rs 12.7 trillion) in Foreign Currency Non -Resident bonds (FCNR-B) from non-resident Indians (NRI) at very high rates of interest. ET. Gross GST collections grew 3.8% in the first five months of 2026-27 compared to a growth of 9.9% last year, E-way bills, which show movement of goods across the country, grew 10.2% in the first five months of 2026-27 compared to a 14.7% growth last year, while the fast moving consumer goods (FMCG) component of the Index of Industrial Production (IIP) grew by less than 1% in the first four months of 2026-27 as against 2.6% last year, wrote Madan Sabnavis. "Consumption in India now is being rebuilt around three new pillars: 1) elite consumption is booming as a new class of owner-operators prospers, 2) middle-class consumption is now financed by credit rather than by income, and 3) the state is withdrawing from providing public services to doling out large cash transfers each year to low-income voters." "Real wages for Nifty 50 employees have been shrinking at 4% a year since FY16. Meanwhile, the true cost of a middle-class life - school fees, hospital bills, transport costs, a decent Thali - compounds at roughly 9% a year," wrote Saurabh Mukherjee & Nandita Rajhansa. "The 'octopus class', according to Mukherjee and Rajhansa, comprises nearly 200,000 families across India, in small towns as well as big cities, or nearly 1 million people, who control nearly 80% of India's wealth." ET. The government is borrowing to give handouts and the middle class is borrowing to spend. What happens when the creditors come knocking? That explains why the rating agencies readily increased our growth rate but are careful about our credit rating. Think before toasting. There's many a slip....So they say.      

Getting very strange.

"Iran yesterday said that it is ready to open the Strait of Hormuz within seven days if the US eases military pressure and lifts its blockade on Iranian ports, Reuters reported, citing a senior Iranian official." "The comments came after the Iranian military was informed that the US was planning for renewed strikes with the support of regional countries." NDTV. Just three days ago, "Iran has sent seven conditions to the US to end the war in the Middle East, which has now escalated with hostilities between Saudi Arabia and Yemen's Houthis." "Tehran's message is clear and unambiguous; if Washington has to get out of the quagmire it has created itself and not get more entangled in it, it has no choice but to accept Iran's rights and conditions," said the head of Iran's Supreme National Security Council Mohsen Rezaei on X. From seven conditions to one in three days. So, what changed during this time? While it has created choke points for oil tankers at the Strait of Hormuz and the Bab el-Mandeb, ironically Iran itself is running out of oil. ""Long lines at gas stations. Strikes by truckers. A government struggling to maintain the subsidies that had helped much of the population keep their heads above water." WSJ. Do you move food to avoid starvation or missiles and soldiers to fight the US? Even a regime that slaughtered over 30,000 unarmed protesters in January (BBC) may not want to see children dying of starvation. The problem is that Iran cannot be trusted. In July, "A ceasefire struck between the US and Iran to pause its full-scale conflict teetered on the edge of total collapse...when the US completed a second round of strikes in retaliation for Iranian strikes on commercial vessels transiting the Strait of Hormuz." Iran must give up its demand of collecting a toll on every commercial ship. Yesterday, "US President Donald Trump warned that he could annihilate Iran if there is no deal to end the war, but also suggested an agreement could come soon." Reuters. He also said that "he thought the US could make a deal with Iran after mid-term elections are held on November 3." Reuters. That is extremely curious because the Democrats are projected to win both houses of Congress in the election. The Consensus Forecast for the House is 214-201 for the Democrats, with 20 undecided, while Prediction Markets predict 231-201 for the Democrats with 3 undecided. 270towin.com. Predictions for the Senate are closer with 52.4 seats for the Democrats and 47.6 for Republicans. racetothe wh.com. The fractions are probably for seats in swing states. If the Democrats win control of both houses of the Congress they would surely vote to stop Trump from attacking Iran. Already, "The Republican-controlled US Senate has approved a measure demanding that President Donald Trump halt the war in Iran or seek congressional approval before continuing military action." BBC. The Democrats are itching to impeach him. "A large majority of House Democrats declined to follow their leaders in voting to reject an impeachment resolution targeting President Trump over his immigration enforcement policies." Politico. Why not finish the job now? Is it possible that the Hollywood US army has had enough? Maybe, the soldiers want to start preparing costumes for Halloween on 31 October. Terrify the Iranians by wearing Scream masks and shouting "Boo". All together now.

Macaulay and Nehru.

"The 18th BRICS Summit was held at Bharat Mandapam in New Delhi, from 12-13 September 2026 under India's 2026 chairship." wikipedia. As camouflage, "The city has been decked out in signs. Buildings are illuminated. And normal life has come to a near standstill." "The shanties around Munirka, near Vasant Vihar in South Delhi - otherwise known as Embassy land - are all covered up." The Wire. "Indian politicians, outside Kerala perhaps, have never been terrified of the third-rate condition of government schools in their constituencies. Nor have they been terrified by the state of government hospitals, trains, or anything voters use." "Also, where there is some intent, the school conveys India's pathological problem - it treats the poor as poor, and as a problem that must be solved in the cheapest way possible," wrote Manu Joseph. What can be cheaper than putting up screens to hide the wretched slums? When Times of India reporters visited schools ion various states they found classes being held in tin sheds, under a tree or all classes crammed into one room because a local villager was housing his buffaloes in other rooms. TOI. On 6 September, a five-floor building at Satya Niketan, Delhi, undergoing illegal extensions, collapsed, killing seven people. In June, another five-floor building at Huaz Rani collapsed killing 21 people. On 30 May, a four-floor building collapsed killing six people. TNIE. "On the way to the hill town of Ranikhet", an old steel bridge across a river has a plate which "notes the name of the engineer, and the address of the foundry in Liverpool where it was fabricated in 1927." It still carries heavy traffic, while in Bihar, "26 modern concrete bridges have collapsed over the last five years." In Dehradun, the approach road to a Rs 160-million bridge collapsed just 17 days after it opened," wrote Gautam Bhatia. "In the past year, many urban projects have raised a common question: how do designs that look obviously problematic manage to get approved and end up cast in concrete"? HT. The government has forced blending of fuel with ethanol to reduce the import of crude oil. "Ethanol Blended Petrol (EBP) Programme has emerged as a key pillar of India's energy transition. and biofuel strategy." And, "ethanol blending has increased from less than 1.5% in 2013-14 to 20% in 2025-26." pib.gov.in. "But, substituting petrol with ethanol won't make sense if the ethanol itself is imported." In 2019, the government restricted the import of ethanol. "Regardless, India remained a net ethanol importer through 2025, and almost all the imported ethanol was American." "Domestic consumption of industrial ethanol had halved during 2022-24, as distillers preferred selling to oil marketing companies that offered them assured offtake at high administered prices." As a result, "At one point, India was importing over 50% of ethanol used by pharma and chemical industries," wrote Arindam Goswami. Prime Minister Narendra Modi has been attacking India's first Prime Minister Jawaharlal Nehru (HT) at every opportunity. So what were Mr Nehru's contributions? After hundreds of years of slavery, India got a Constitution, every man and woman got the right to vote, five Indian Institute of Technology (IIT), three Institutes of Management, Indian Institute of Science, the Defence Research and Development Organisation, the Bhabha Atomic Research Centre and the Indian Space Research Organisation, to name a few, wrote Karan Thapar. Mr Modi also dislikes Thomas Babbington Macaulay, whose law on sedition against the British monarch is still being used  (SCO), and said that the use of English language is "mental slavery" to a conspiracy by Macaulay (DD News). But, Macaulay "sought equal justice and education for all Indians regardless of caste or religion." Dalits celebrate his birthday and call him "Mahatma Macaulay", wrote Swaminathan Aiyar. On 10 June 2026, Mr Modi apparently became the longest serving prime minister. (pib.gov.in). Macaulay gave us English and equality, Mr Nehru gave us the Constitution and institutions which still stand. Mr Modi has given us large screens to hide poverty and collapsing infrastructure. Hence the abuse. 

Either this or that.

India's total fertility rate (TFR) is at 1.9 which is below the replacement level of 2.1 but, if Bihar and Uttar Pradesh (UP) are removed, the TFR drops to 1.6. Worse, Andhra Pradesh and Maharastra are at 1.4, Telangana and Karnataka at 1.5, Kerala, Tamil Nadu and West Bengal at 1.3, Delhi at 1.2 and Sikkim is at 1.0, noted a working paper by the Economic Advisory Council to the Prime Minister (EAC-PM). China realized its mistake of encouraging one child per family, but it is too late. The paper said that India should end its sterilization-linked incentive payments and end "family-planning awards and campaigns framed around population control, as well as removing two-child norm disqualifications across states." ET. As of 2025, China's TFR was "below 1.0, one of the lowest in the world alongside South Korea, Taiwan, Hong Kong and Singapore." wikipedia. China's birth rate fell to 5.63 per 1000 while its death rate rose to 8.04 per 1000 people. "In 2016, it scrapped its longstanding one-child policy and replaced it with a two-child limit." In 2021, it allowed up to three children. When that did not work, "More recently, China has offered parents 3,600 yuan ($500) per each of their children under the age of three. Certain provinces are also dishing out their own baby bonuses, including additional payouts and extended maternity leave." BBC. Now, "People in China will pay 13%  sales tax on contraceptives from 1 January, while childcare services will be exempt," and "It also exempts marriage-related services and elderly care from value added tax (VAT)." BBC. "In 2021, China's official report showed a sex ratio of 112 male to 100 female births, compared to a global average of 105 to 106 male to 100 female births. This is down from a high of 118 male to 100 female births from 2002 to 2008." wikipedia. China had a GDP at current prices, nominal GDP, of $19.5 trillion in 2025, while that of India was around $4 trillion in the same year. World Bank. The mortality rate of infants per 1,000 live births in India was 23 in 2024, while that of China was just 4 in the same year. World Bank. India counts the number of girls per 1,000 boys at birth. If the normal sex ratio at birth is 105-106 boys per 100 girls, then the ratio in India should be 943-952 girls per 1,000 boys at birth. However, the ratio at birth for all of India was 929 in the National Family Health Survey (NFHS 5) 2019-21. The ratio is normal for 15 states till Nagaland at 945, and starts dropping from UP at 941 to a low of 838 in Goa. wikipedia. This is because of abortion of female fetuses despite a ban of gender detection by ultrasound. "Research by Pew Research Center based on Union government data indicates foeticide of at least 9 million females in the years 2000-2019." And 86.7% of these were by Hindus (80% of the population). wikipedia. The higher infant mortality in India compared to China could partly be because of intentional killing of baby girls. Comparing female literacy rates of states (wikipedia) with TFR shows that high literacy among women results in lower birth rates but, shockingly, Goa with a very high female literacy rate of 90% has the worst sex ratio at birth. "India is letting go between $700 billion and $1.4 trillion in economic output because millions of women remain outside the workforce, according to a study by Centre for Social and Economic Progress (CSEP)." The Print. The government must work on educating and increasing their employment opportunities if India is to become a developed country. And, if successful, the TFR will fall further and the population will shrink. All this means that you can either become a wealthy country or you can have more babies. You can't have both. As China has found.  

Social Responsibility.

"Maharashtra Food and Drug Administration (FDA) Commissioner Tukaram Mundhe has said markups of up to 2,800% on everyday medical consumables used in hospitals 'need to be explained properly'. He has asked the National Pharmaceutical Pricing Authority (NPPA) to examine whether these should be brought under price control." NDTV. "Union Minister Mansukh Mandaviya...urged doctors to commit to a 'medical social responsibility (MSR)' once a month, asserting that the medical profession is not merely a business but a responsibility towards society." The Print. What about giving up all the perks worth tens of millions of rupees that MPs and ministers get under a 'Politician Social Responsibility (PSR)'? "A hospital or a doctor cannot ordinarily refuse immediate medical assistance where delay may endanger life. The Supreme Court has treated preservation of human life as a paramount obligation flowing from Article 21 of the Constitution." Law Bhoomi. What about dignity of life, protection from criminals and the right to justice? In December 2017, "The Supreme Court has made a candid admission and said it was 'sorry' for the delay for over a decade in commencement of criminal trial due to two conflicting orders passed by a high court judge in a single day in two different by related cases." The aggrieved victim died during the delay. NDTV. "The Supreme Court has more than 96,000 pending cases, with over 10,000 awaiting disposal for more than a decade," as on 23 July 2026. ET. How many victims are dying miserably waiting for justice? Since lawyers charge per appearance (lawspot.in), it is in their interest to prolong a case as long as possible. Has anyone asked lawyers to charge a fixed amount, however long it takes under a 'Lawyer Social Responsibility'?  On 13 June 1997, 59 people died in a fire at Uphaar Cinema in Delhi. The owners of the hall had made unauthorized modifications, increased the number of seats and blocked fire exits. TOI. The case dragged on for 20 years and the millionaire owners, the Ansal brothers, had their fines reduced in the Supreme Court. Gopal Ansal served just one year in prison and Sushil Ansal was freed because of old age. BBC. Young people were incinerated, the old survived. The dreaded Contempt of Courts Act, 1971 prevents any comment in case it 'Scandalises the Court'. 'Scandalising the Court' broadly refers to statements or publications which have the effect of undermining public confidence in the judiciary." PRS. Officers of the Indian Administrative Service (IAS) get enormous salaries and perks, including free healthcare, worth millions. Anuj Jindal. They also get a Dearness Allowance which has reached 60% of basic salary. CNBCTV18. And yet, they are required to pay just Rs 350 for a medical consultation at a private hospital and the government pays derisory amounts for serious medical procedures, requiring very expensive consumable items, under the Central Government Health Scheme. cghs.mohfw.gov.in. For an extremely hazardous and complicated Pancreaticoduodenectomy (Whipple Procedure) (Jason R D'Cruz et al) which takes hours of exhausting surgery, the rate is Rs 24,995, about $260. Since hospitals dare not argue with the government they have to make up their losses from us. Surely, pampered IAS officers earning enormous salaries should pay full fees to the doctors? The FDA Commissioner is right to be concerned about hospital charges. Perhaps he should look at the real gravy train. Scandalizing, isn't it?

Ghalibaf's joke.

"Hours before the US Federal Reserve, the world's most powerful central bank, made one of its biggest calls in three years and raised interest rates by 25 basis points," the Speaker of Iran's Parliament Mohammad Bagher Ghalibaf modified a decades old Taylor Rule in economics to 'Straits Taylor Rule', meaning a rate hike is not going to increase oil supplies through both the Strait of Hormuz and the Bab el-Mandeb Strait. "You can't 25bp a chokepoint. Stay unanchored," he joked. The Print. How droll! He must have forgotten that Iranians are facing severe fuel shortages while there is no shortage of fuel, even if more expensive than before, in the rest of the world. "Transporters say they are experiencing fuel problems they didn't face during the active combat of the first month of the war with the US." The Union of Truckers and Drivers said that "they are now out of supplies for a third of every month." WSJ. "As recently as March, Iran exported 1.85 million barrels of crude oil a day, worth $191 million at international prices." Now, "The government has appealed to Iranians to do their part by limiting their consumption of water, electricity and gas." And to use public transport instead of driving. WSJ. "According to statistics from the Statistical Center of Iran, the overall inflation rate for August stood at 89%, while food and beverage inflation surged to a record high exceeding 127%." "The dollar exchange rate has surpassed the 235,000-toman mark, compounding the major shock caused by the hike in gasoline prices to 10,000 tomans." Voice of Emirates. One toman equals 10 rials, so $1 buys 2.35 million rials. Very soon people will be dying of starvation and this Ghalibaf thinks it is hilarious. Ghoulibaf would suit him better. "Iran vowed to respond to a US blockade by pushing more trade overland." But, "Hundreds of trucks drivers are currently stuck at Iran's border with Pakistan," and "The same is happening at Iran's land borders with Turkey, Turkmenistan and Afghanistan, dealing Tehran a self-inflicted blow." WSJ. In desperation, Iran is recruiting support wherever it can find. "Saudi Arabia has closed a critical oil pipeline after it was attacked by drones launched from Iraq." "Saudi Arabia has previously accused Iran-backed militia in Iraq of targeting its oil facilities." BBC. On Thursday last week, Iran's proxy militia the Houthis captured Yemen's strategic port city of Mocha. "Hours later, on Friday, the Houthis captured another key coastal asset, Perim Island, at the mouth of the Red Sea," thus "giving Tehran de-facto control over another key shipping route." CNN. Recently, "New photos...reveal for the first time the widespread damage and destruction of buildings and vehicles at multiple US positions across the Middle East, as a result of Iranian missile and drone attacks." CBS. Three days ago, "Saudi Arabia intercepted and shot down a Houthi drone south of the Islamic holy city of Mecca." BBC. Iran has a history at Mecca. On 31 July 1987, Iranian pilgrims clashed with Saudi armed forces during Hajj at Mecca. wikipedia. So, "With the US and Pakistan rejecting calls for help, Saudi Arabia has reportedly turned to Western allies, including Israel, for assistance as Houthi attacks continue to target cities and infrastructure across the country." Talks with Israel were apparently mediated by CENTCOM. News18. Ironically, "Palestinian Islamist group Hamas' Oct. 7 attack on Israel that killed about 1,400 people aimed to disrupt a potential normalization of ties between Israel and Saudi Arabia sought by Riyadh, US President Joe Biden said." Reuters. Yesterday, "A car-bomb attack on a mosque at a police compound in north-western Pakistan has killed at least 21 people and injured more than 100." The attack was blamed on Tehrik-e-Taliban Pakistan (TTP). BBC. And so, after Gaza and Iran almost destroyed, with the Pakistani army in danger of losing control inside the country and the US Hollywood army imitating sitting ducks, Saudi Arabia may reach a deal with Israel. Israel has the guts, knowledge, intelligence and experience to win the war. The US and Gulf states should give it full support. Does Ghoulibaf have a joke for that?   

Growth in rupees, GDP in dollars.

"The Federal Reserve raised interest rates...and flagged more hikes to come in the coming months," as "an energy shock following the start of the US-Israeli war with Iran, and capital spending from the artificial intelligence boom has kept price pressures intense enough that the Fed felt it needed to raise its benchmark overnight interest rate by a quarter of a percentage point to the 3.75%-4.00% range." Reuters. This had an immediate effect on India. "Sovereign bond yields surged at the open on 17 September, while the rupee tumbled past the 96 dollar mark," and "The benchmark 10-year bond yield climbed to 7.0714% in early trade, up from 7.0524% in the previous session, as bond prices fell." MC. Why does a rise of just 0.019% in government bond yields create such panic? Because, in the 2026-27 Budget, "The government has pegged India's net market borrowing at Rs 11.7 trillion for the next fiscal year, slightly below the level in 2025-26, Finance Minister Nirmala Sitharaman said." ET. If you add 0.19% of Rs 11.7 trillion to overall fiscal borrowing and the national debt it does seem like a reason to panic about. "The Indian rupee breached the 96 mark against the dollar for the first time in nearly eight weeks," but, "the currency recovered from its lows to close at 95.93 per dollar, nearly flat from its previous close. Traders said that state-run banks likely sold dollars on the Reserve Bank of India's (RBI) behalf, which helped cushion the rupee's fall." FE. "The rupee may need to depreciate further to adjust to the sustained terms of trade shocks even as the trade-weighted real effective exchange rate (REER) fell to 91.75, a level last seen during the 2013 taper tantrum, Axis Bank said in a research report. The rupee has weakened nearly 6% this year." "The RBI is estimated to have sold $250 billion since mid-2023 to defend the local currency, nearly double of the inflows seen through the dedicated dollar-inflows program run between June and August." ET. Who gains when the RBI supports the rupee by selling dollars borrowed at over 6% interest rate (IDBI Bank)? "Foreign portfolio investors (FPI) pulled out nearly Rs 51.09 billion from Indian government securities under the Fully Accessible Route (FAR) in three days through September 15, amid rising crude prices, elevated US bond yields and renewed pressure on the rupee." TT. When they convert their proceeds they get more dollars because the RBI is pushing the rupee up. So, we the taxpayers are paying usurious interest to non-resident Indians (NRI) to borrow dollars and then transferring more of those precious dollars to FPIs because of an artificially stronger rupee by the RBI. The rupee is weak because, "The gap between Indian and US 10-year government bond yields has narrowed to nearly half its long-term average, raising the prospect that a shrinking yield premium could make the Indian debt less attractive to foreign investors and add pressure on the rupee." MC. The reason for the narrow yield spread between the US and India is because the RBI cut it policy rate by 25 basis points (bps) in December 2025 for a cumulative reduction of 125 bps for the whole year, despite noting real GDP growth of 8.2% in Q2:2025-26 (July-September 2025) and projecting real GDP growth of 7.3% in fiscal 2025-26. RBI projected consumer price (CPI) inflation at 3.9% at Q1 and 4% at Q2 of 2026-27. rbi.org.in. In reality, "India's retail inflation has accelerated to 4.82% in August from 4.45% in July," while, "wholesale inflation edged up to 9.92% in August from 9.78% in July." ET. The Fed is focused on inflation, the RBI is like a deer in headlights (wiktionary). Growth is measured in rupees, while the GDP is expressed in dollars (IMF). Rupee sinks, GDP sinks. Growth stunted.     

Self before service.

"Calling upon the 'Gen Z' and 'Gen Alpha' generations to assume leadership and shoulder responsibility, Union Minister Nirmala Sitharaman...urged young graduates to put the nation first and ask what they can contribute to the country rather than asking what the country has done for them." ET. Oh please! John F Kennedy you are most emphatically not. On 20 January 1960, President Kennedy said in his inaugural speech, "Ask not what your country can do for you - ask what you can do for your country." archives.gov. Kennedy commanded Petrol Torpedo (PT) boat 109 during World War II. On 2 August 1943, PT109 was rammed by a Japanese warship and exploded. Kennedy, who had been a member of the Harvard University swim team, swam for over three hours towing an injured sailor. wikipedia. What has Dear Leader risked for India? Please enumerate. And yet, in September 2022, FM Sitharaman "found fault with the Telangana government for not displaying the picture  of Prime Minister Narendra Modi at the fair price shops where rice is distributed to the people below poverty line free of cost." HT. As finance minister surely she is aware that we taxpayers are paying for this election handout? As our children cannot contribute to the nation without education, they were protesting at Jantar Mantar against leak of exam questions when your government hunted them down with pellet guns (BBC) which cause permanent disabilities like blindness. Perhaps if the present lot step down others will get a chance to lead. Two days back, FM Sitharaman "challenged tax professionals and industry bodies to move beyond demands for exemptions and lower rates, asking them to identify provisions that no longer serve the tax system even when their own sectors benefit from them." ET. Why don't our leaders lead by example by trimming all the perks, some of them for life, that they get. Perhaps, if taxes are fair and sensible people would pay. In 2024, you forced the owner of the famous vegetarian restaurant Sree Annapoorna in Coimbatore to apologize in public because he joked, "Madam, a bun doesn't attract GST, but when cream is applied to make it a cream bun, it attracts 12% GST. Customers now say, 'You bring the bun and cream separately, and I'll make the cream bun." TOI. "A few large private banks, along with top law firms wealth managers, are ducking an unwritten ban to handhold Indian promoter and business families to set up family offices in Singapore and other jurisdictions." ET. We do not object to paying tax, but we get nothing for the taxes we pay. "If you look closely at India's macroeconomic indicators - such as the growth rate, inflation numbers, etc. - they project a story of robust financial discipline and economic growth. However, the average household budget portrays a far more fragile reality." "Families are increasingly relying on credit card debt, personal loans, and loans raised against gold to fill the gap between growing expenses and stagnant incomes," wrote Prof Deepanshu Mohan & Srisonia Subramonian. Ms Sitharaman has been finance minister since 30 May 2019 (wikipedia) when the Indian rupee was at 72.15 against on US dollar  (worldtradescanner), while today $1 buys Rs 95.87 (xe.com), a collapse of 32.875% in just seven years. In panic, the RBI has asked banks to borrow $127.2 billion from non-resident Indians (NRI) (Mint) at an exorbitant rate of interest of up to 7%. (Macroindicators). Not a proud record is it? No wonder economist Parikala Prabhakar has joined the "Zero BJP Movement". News Nine. No one likes a brutal fascist  government. Service before self, is our army's motto. The government is the opposite. It will fail.

RBI vs the Fed.

In his speech at Jackson Hole, new US Federal Reserve Chair Kevin Warsh "made two things clear: One, it is the 'Fed's job to deliver stable prices,' And two, with US inflation running above its 2% target, the central bank's 'predominant focus right now should be on prices'." "In India too, when it comes to inflation, the buck stops with its central bank under the regime we adopted a decade ago." Mint. The Consumer Price Index (CPI) inflation rate in the US was at 3.4% year-on-year in August. bls.gov. "India's retail inflation has accelerated to 4.82% in August 2026 from 4.45% in July, as food prices and other key components of the consumer basket exerted pressure on the economy." Actually, food inflation was relatively less to blame at 5.95% and could be partly caused by the transport services for goods at 14.64%. Personal care, social protection and miscellaneous goods and services went up by 15.17% while "inflation in other personal effects stood at 44.56%." ET. "India's wholesale prices rose 9.92%year-on-year in August," with manufactured products up by 8.37%, fuel and power by 22.93% and petroleum and natural gas by a whopping 34.41%. Producer prices in August rose 9.8% y-on-y, according to Reuters calculation. In the Wholesale Price Index (WPI), with 2022-23 as the base year, the weight of Primary Articles is at 22.62%, fuel and power at 13.15% and manufactured products at 64.23%. Anantam IAS. "The Producer Price Index (PPI) "reflects the cost at which goods are sold at the production level before they reach consumers. The PPI covers a wide range of sectors, including mining, manufacturing and agriculture." Bajaj Finance. If input prices as reflected by the WPI and wholesale manufactured prices in PPI are rising at near double digits its only a matter of time before retail prices rise by at least the same amount, or by even more as retailers add their own profits when selling to consumers. "There has been a growing body of evidence that wholesale inflation tends to move towards consumer inflation during episodes of divergence. And headline consumer price inflation moves towards core inflation when there is a substantial gap between the two." Core inflation was at 3.9% in July, wrote Niranjan Rajadhyaksha. The Reserve Bank of India (RBI) undertook to cover hedging costs as it asked Banks to borrow foreign exchange by promising higher interest to non-resident Indians (NRIs).  "Banks have received $127.3 billion in FCNR(B) deposits since June, marking a strong response to the RBI's scheme and taking total inflows to $136.4 billion." MC. It was necessary because, "net foreign direct investment has collapsed from $44 billion in 2020-21 to virtually zero. Foreign portfolio investors pulled out nearly $29 billion from Indian markets in 2026 alone, on top of $18 billion the previous year. The rupee was weakening fast." But, "These dollar inflows, converted to rupees, have contributed to a record surplus, close to Rs 10 trillion in the banking system. To prevent this from fuelling inflation or reckless lending, the RBI must mop it up by selling government bonds. That pushes bond prices down and yields up, raising the government's own borrowing costs, of which the interest cost is already at a staggering 40% of all revenues," wrote Ajit Ranade. The RBI's refusal to increase interest rate, to keep government borrowing costs low, has led it to such expensive maneuvers, which will lead to higher yields on GOI bonds, which means higher borrowing costs. The RBI may think it is in control but Kevin Warsh can overrule it. "The 10-year (US) Treasury yield fell slightly to 4.994% after rallying as high as 5.03%. in.investing.com. The Fed could make all RBI's efforts useless. Who will pay for this folly? The hapless taxpayer.      

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.