Daily Global Insights | Jun 17, 2021 | US News | India News | Global News | Markets

Sree Iyer: Namaskar, Welcome to Daily Global Insights with Sri and Sree. This is episode number 184. Today is June 17, Thursday. We have a lot to cover and shall jump straight to United States News.

Biden Team embraces the fringe economic theory, embracing a liberal wish list and fueling a massive debt. Namaskar and welcome to PGurus Channels Sridharji. What are your thoughts on what the Biden team is up to, sir?

Sridhar Chityala: Namaskar, good morning to everybody on this wonderfully bright, Thursday morning. What are they up to there? It is becoming very clear that they are embracing an economic model and economic theory, which means it doesn’t matter what the economic realities keep on pushing money into the system inflation, doesn’t matter, debt doesn’t matter. The economic outcome doesn’t matter. So, therefore it’s all progressive and liberal agenda. Hence let’s push more money and I don’t think this is going down very well. Only thing is to be politically correct, Janet Yellen is riding with it and the fed led by Jerome Powell is supporting with an accommodative policy. But, the general perception is this is taking the United States down in the economic tube.

Sree Iyer: 20 Democratic and Republican Senators supported bipartisan infrastructure push for roughly 1 trillion without raising corporate taxes and taxes for the wealthy individuals. Raising the prospects that there could be a deal inside. Sir, how realistic is this because he isn’t Chuck Schumer trying something on his own and isn’t Biden trying to still stick to the 2.2 trillion number.

Sridhar Chityala: So, the bipartisan team is trying to work their process whereby at least in the Senate they can put this bill to test and perhaps get it through. Okay, that will then expose, should this be vetoed by Schumer’s approach of reconciliation that there is a stark reality that the due governmental process doesn’t matter anymore. Only the agenda matters and come what may, they will use in the reconciliation or executive orders to get this done. I believe this, 20 total senators comprising update on each side coming up with a plan with a baseline of 564 or 600 billion dollars for infrastructure. But, giving you a cushion of up to 1.1 trillion dollars, I believe is a good compromise. It also reflects that there is support on either side. I think Schumer and the progressives are very clear. No one understands why this climate Accord is, but they seem to be hell-bent like everything else immigration, funding to everything else. They would like to have their own way and move forward. So the prospects of a compromise look very remote. Even if there is a compromise, the Democrats are hell-bent on pushing their way through to their reconciliation process.

Sree Iyer: In Texas, the governor commits a 250 million down payment for his own version of the border wall and announces an online fundraiser. Governor Abbott also signs a law banning the teaching of critical race theory in schools. Right from education to just about everything else, I get the feeling that something is being thrust down the throats of Americans. And why is this thing? Why can’t the school district choose their own? Why is this being made a national theory? And again, we have had our questions on it but there’s a freedom about what you want to learn, isn’t it, sir?

Sridhar Chityala: Well, there is this progressive agenda which is backed by many NGOs and many entrepreneurs such as Mr George Soros, of that ilk which believes that they have to go towards it.  Some of the things that I’ve heard in California which I don’t want to go mainline media with is just horrible, there’s no mother. It is mothering. There’s no father, it is fathering. All these kinds of terminologies that they want to bring about, I don’t know what the agenda is, but it seems like there’s A tale of two cities, here or a tale of two Nations. One is the progressive agenda, which seems to have no choice that will be pushed on your throat in the liberal states. Then, you have the red States or the Republican states, which is systematically going one after the other nullifying, all this kind of contravenes schemes that the Democrats are coming up with. You know, the border wall of 250 million is a classic example. The border wall was approved, then, they got a judgment which is to say stop the border wall is not illegal. So, what Greg Abbott is saying, ok fine, now I’ll go and put my own money and build because my state is affected. So he’s putting the wallet, he is going to get the funding. Number two. He said I’ve got a problem. I don’t have, ICE that has been removed. Okay, the CPP is inactive, this Customs and Border Patrol. Okay, ICE is immigration control enforcement. We don’t have ICE. So I’m going to now call for police, from my other red states, and they will come and restore the law and order. So, Florida has come back and said, I’m going to send the police. You’re going to see Louisiana, Nashville and other states soon, following the bill to restore the Law and Order and to come up with a bill. And also as you pointed out, Abbott has banned the racial theory, teaching in schools. So what you’re seeing is this Tale of Two Nations. One Nation is going back to the conservative values and the other part where you have the new Democratic. By the way, this hasn’t happened in any of the prior Democratic setups. This seems to be hell-bent happening under this particular regime, you have never seen such extremist policies from the past Democrats.

Sree Iyer: Michigan Senate Passes Bill to add Voter ID Requirements. Wisconsin joins other states to visit Arizona and learn about the Audit process. Viewers. I can, you know, tell you that my book is going to ask a few uncomfortable questions of all these different processes that are in place currently, and stay tuned, it is coming to an Amazon portal, near you, your thoughts, Sridharji where is this thing headed? Why the special trip to Arizona?

Sridhar Chityala: Well, I think firstly, I think it’s very good that Michigan state has passed the voter ID bill. So, anybody who has to vote, that’s a constitutional requirement has to demonstrate that he has a valid ID to vote, contrary to the progressive beliefs. What is Wisconsin? Wisconsin’ is saying, oh we have had a Georgia visit, we have had a Texas visit, we have had a Florida visits and now we should also go and see what’s happening because of the Pennsylvania visit. Remember Pennsylvania’s, the Senate passed a resolution to nullify and to bring back the whole and then the Democratic governor vetoed it. So, similarly, Wisconsin’ is saying, all these people have gone and seen that the audit process. There are some interesting results. So we need to go and talk to them and find out. So Wisconsin’, joined. You going to see most of the red States and maybe some sensitive or sane Democratic states, also going and finding out the process of audit that went on in determining, what happened in the counting of the votes in Arizona, it looks like many of the ballots, which were invalid also counted. And these things will be picked up as part of the process. Of course, you can read some of this in Sree Iyer’s book as well.

Sree Iyer: And US charitable giving has hit a record 471 billion in 2020 amid the pandemic and economic turmoil. This is amazing because I see that inflation is rearing, its ugly head and things that are normally at a certain price are beginning to, you know, inch up. I would say 10 to 20% now, a lot of things are not available and therefore it is stunning that so much money has been set aside for charity. When you know, you don’t even have money for food. Sir, your thoughts.

Sridhar Chityala: My thoughts are. This is a way by which the charity has been historical, been funded. There are tax Provisions within the charity, you can set up trusts, you can make direct contributions under 503C. So, therefore, you have a number of provisions, not surprising that. There was a big economic boom in 2020, despite pandemic within six months, we recovered the stock market had a bumper year last year, the not only the 401ks, but the personal wealth of a lot of people went up, a good chunk of money has been donated to the Charities. It’s going to be interesting to see what happens to some of these Provisions as the Biden Administration now brings about these huge do louts, that is going to dish across the country, but it’s a very good outcome because of many of the Charities. There are a lot of good Charities. Many of the Charities are reliant on this precious funding. Remember during the Covid, many institutions were shut down. So therefore there was no income coming into many of the charitable institutions through other means. so, therefore, this is, I would call it as at least, you know, people have stepped up from the income and made their contributions towards the society.

Sree Iyer:  Over 200,000, people have died of Covid in Biden’s first five months in office. Recently California, which was one of the first states to go into lockdown has removed the restrictions. However, the state continues to stay in a state of emergency, it still mandates that you use masks wherever you are going to being in Social Gathering. So there are still a few caveats, but what is your prognosis on how Covid is progressing and is a Delta wave in the offing in the United States?

Sridhar Chityala: There are essentially three components, first and foremost is the reason why we put up the number is, Mr Biden made his political campaign point that many people were deliberately being killed. He’s the guy who’s killing you, I have come in to protect that was these provocative statement made by Biden, probably a speech written by someone else for him. Very similar to the incorrect note that was handed to him when you are standing up in front of people in Russia. So, therefore in his own tenure, he has seen. So people must recognize that the Covid deaths are caused by a pandemic. People make their best efforts, doesn’t matter whether it is Trump or doesn’t matter whether it is Biden, or doesn’t matter whether it’s Obama or doesn’t matter whether it is, Clinton. They all are going their best effort to protect the lives of the people. So, therefore the point is under his own tenure in five months with a vaccine available more than 200,000 people have lost lives.

To your second question, which is namely, how are we doing with the variants? There’s a lot of misinformation and disinformation which is to say you have one set of people saying that the Delta variant or variant 3 is going in much more profuse in terms of its spread but it is less damaging in terms of the effect of the toxic nature of the Covid. So, one is expecting that having vaccinated, the impact can be better managed plus the hospitals are more organized, doesn’t matter whether it is the United States or elsewhere in the world. The only problem for outside of the main countries, like the United States and the UK, and even for that matter some of the European countries and perhaps even India, many of the other countries don’t have vaccines. You are beginning to see small countries with 50-60 million populations being highly impacted, especially in Asia. We don’t have much data on Africa but impacted as a result of the lack of vaccines. So, the vaccine is an absolute imperative.

So, to finally answer, which is to say, how are we doing? I think depending on which country are we talking about? It seems to be better managed. One good example is Japan. They are less than 1% of the population vaccinated out of that 126, they’re ramping up their vaccines now, they’re saying they’re going ahead with their Olympics. So, therefore which means that there is a level of confidence to deal with this issue. On what is not known. We don’t know. We’ll soon see.

Sree Iyer:  Sir, the Louisiana judges handed down a ruling on the pipelines and what are your thoughts on that? What is the impact? Is the Biden order to shut down Keystone pipe. Is that being reviewed? Now, what are the implications of this new order?

Sridhar Chityala: Very interesting, the Louisiana judge has passed, which is to say it’s illegal to an executive action to block oil and gas leases. So all those things should be restored and move forward. The Interior Department is reviewing this judgment and perhaps they may be forced to go back and get a resolution in the House, through a specific majority. Only when it is done then this can be implemented and not through executive actions. Biden, when he took office, he unilaterally terminated the leases including the Keystone Pipeline. Many of the people from the oil and mining industry have come up in arms, which is to say that this is nothing but political rhetoric and political gaming. If, for example, Trump had an order which says all these leases should be cancelled, guaranteed Biden administration would have said, no all these lease has to be resumed and renewed. So it seems to be a political action rather than a genuine economic or genuine climate or environment at this is the impression of the miners. You can go and Google and watch the interview of a couple of oil miners making this specific observation. To your final question, which is namely to say the internal security department is reviewing these order and appropriate action will follow in the next few days or a few weeks. But, right now, the leases at least in Louisiana are back and they are moving forward with whatever the plans are.

Sree Iyer:  So, what are the options in front of the Supreme Court of the United States for the Biden administration. Will they challenge this decision in SCOTUS and hope for a favourable verdict and thereby overturn this again, or are they going to decide to just obey what the Does Louisiana judge say?

Sridhar Chityala: The Louisiana judgement is very specific, which is to say the executive action constitution is invalid, we have to get it passed through the House, so which one they’re going to reverse? Are they going to say You know, the Constitution actually is invalid or are they saying the Judgment needs to be reversed? So the question is that you have to review it. And if the review and if they get from their Department of Justice and other places and opinion, then they can, they can contest it either in the same court, or they can take it this SCOTUS and get a different view. But I’ll be very surprised if a judge has ruled, citing Constitution as to who has the authority to make these Provisions. So sometimes these ruling are made by the president orders, and often it gets reversed and you find the reverse becomes the reality rather than the original action. So, let’s wait and see.

Sree Iyer:  We will wait and see, and viewers I’m going to show you a video now which perhaps, captures a stunning similarity between what played out in the colonial pipeline ransomware attack and how the narrative has been built up as if a variant of Covid originated in Mumbai. Sir, with your permission sir, I’m going to put a video and this video kind of captures for you, the viewer what been happening in terms of where things started and just going to pause it for a second. So I can walk you over this. So this data that I’m presenting here has been given to me by an unnamed trusted source that has given us very accurate information in the past, but this source does not want to be named. Therefore, I’m not taking any names here. I’m just asking questions here, so the questions will have to be answered. I’m sure these answers will come in due course of time.

First thing, what is the dark side? The one that had Colonial pipeline. The dark side is believed to be a group of hackers that are spread over three different countries, some East European countries, North Korea and China. Now, what happened is that again, this is a surmise. A Chinese businessman who travels frequently between the US and China. He initiated this hack order or attack saying that I will pay you so much money. If you can successfully bring down the colonial pipeline, again, this one, the money was put into the financial system of the world from a third country, which we do not know. And we don’t want to State my source didn’t want to state which country it was we know for sure it was not the United States, it was not China, it was some other country from where the money came into the Cayman Islands from there it moved into Luxembourg from there into Russia and at that point the hackers was, basically, they were being paid ahead of time for just doing this attack. Then, the code was developed and released into the Colonial service which is in the United States. And this happened the place from where this thing originated is at a place which is on the border of Russia and an East European country. We don’t know how this was found out but we do know that something like this happens because if you look at what happened after that we had the FBI, you know go back and recover and I’m going to come to that in just one second. So what was the attack? What the attack did was made it very difficult for the colonial pipeline computers to work. I mean, the straight network was completely dead. It was not allowing people to even operate their basic computer accounts. Here is the second slide, so Colonial was trying to restore from backups to the old backup so that they could continue but this virus essentially was so strong that it was slowing down the restoration process and finally after trying everything else. Again, I am connecting some dots here, Colonial decided to pay the ransom which was 75 Bitcoins worth about 5 million dollars. Now, as this was going on, the Federal Bureau of Investigation of the United States was trying to find out if there was any way they could recover this, and it turns out that they found a way to the go-to wallet. They basically, you know, Impersonator, I guess, successfully as one the hackers and they went and found that there was an unclaimed set of Bitcoins in a particular wallet and they emptied that. The amount that they recovered was not in the same range as 5 million because what happens is once Bitcoin starts changing hand the value starts eroding very quickly. They did get 63.7 Bitcoins which is almost, you know, they just lost about 10 or 12. Now what has happened is because when the tracing happened and people are starting to point fingers and they said aha, the attack originated out of Russia. So this is the point all this is, you know, things set it aside. Look at what the narrative is. The narrative is that it was perhaps done with the consent of the Russian government to try and put the Russian government under some sort of pressure. Now, we don’t know the exact truth here, but we do know that fingers were being pointed that, you know, Darkside was indeed being supported by some countries and so on and so forth. So basically questions are being pointed at Russia.

Similarly, if you look at what happened in April of 2021 when the election campaign was in full swing in West Bengal, Tamil Nadu and Kerala. There was a second wave, which was also called a double mutating virus and this originated out of Mumbai, I mean that’s what they were saying. But, essentially, there is a hanger that you should watch. I had with Mr RVS Mani when he asks, people to look at some other compelling data, that is emerging from a neighbouring country that has been hostile towards India. So again, once this thing happened and Mumbai was in the grip of the second wave, a lot of death suddenly started happening. And Delhi also got caught on the same wave. So, suddenly, the narrative changed all over the globe, suddenly they’re saying this is the Indian variant. Now, this was again a way to try and say, okay, the virus originated in India, it did not originate in China. Now, we are seeing that many countries. See once the second wave happened. India went into lockdown mode. In fact, even today, India is still in lockdown mode. You and I cannot fly to India. Unless there is an emergency and only overseas citizens of India, can fly to India and that too only in some corridors from the US Yes, but not from many, many countries. Now, what we are saying is and Sridhar, you can back me up on this. There are news reports coming off the same thing, now WHO in its infinite Wisdom changed the naming convention, they call the double mutant now Delta. Suddenly instances of Delta are showing up all over the world. This again goes back to prove that once the travel between India and other countries have been stopped, how did the Delta variant reach countries, such as Vietnam, Thailand, or Singapore and some other Asian countries. So how did it get there? These are the questions that are being asked and we hope that the truth will emerge in the days and weeks to follow. Sir, your thoughts on this and then we can go on to Indian News.

Sridhar Chityala: Echoing similar sentiments to yours Taiwan, which had almost nil and considered a better-managed country was the first to get hit. How did it land in Taiwan? It’s an interesting proposition which probably reaffirms the theory that you have laid out or the observations and research that has been done by experts that endorses this propagation theory. As Sreeji mentioned, you should listen to the video or the Fireside. I think the second is this whole set of rogue nations, which seems to be colluding with a set of people and that points to China. With no clear and no certain terms, China is the centrepiece villain of this whole Wuhan led virus and China itself is facing the consequences. Unless and until the world confronts China, and does proper independent objective research and figures out a way by which this issue is tackled this is not going to go away. This covid is not going to go away nor these mechanisms of transmission are going to go away because their information and news are very very sketchy.

So you have two major issues which Sree Iyerji covered. One is the ransomware attacks which doesn’t seem like it’s going to go away. So which means from infrastructure to your daily living is going to be impacted. Then you have this whole propagation of covid which is likely to pose a challenge and vaccines may be one cure, but how the world is going to deal with is an interesting question.

Sree Iyer: Let’s take a look at India related news. Prime Minister Modi led cabinet approves 4077 crores for deep ocean mission for exploration of ocean resources. Your thoughts on which areas are they targeting and for how many years is this 4077 crores going to be used?

Sridhar Chityala: I won’t be able to comment on the duration but money has been set aside. Usually, when capital is set aside they run the specific account for a period of time. The objective is obviously three things. One is marine life. The second is because there’s a lot of natural gas and oil exploration that is going on and India is at the epicentre of trying to minimize as much as possible. So this is one of the domains that they would target. What are the consequences that mining would have on the Marine ecosystem, which is not only a preservation of the environment but also feeds into the livelihood of many people? India is very big in the marine ecosystem with its food and fisheries Industry. So therefore I think the research is going to focus on some of these domains and India is a big signatory to the EPA so therefore they don’t want to do anything which affects the natural system.

Sree Iyer: Top Indian Banks including PSBs, that is Public Sector Banks are going to come together to implement Blockchain technology for the Trade Finance system. I have some inputs on this. Sir, your thoughts.

Sridhar Chityala: This is one of the areas that they should have done a long time ago. The experimentation happened in the United States, for whatever reasons it has not made its way further. Swift, which a payment network is very actively engaged in the Trade Finance system. Anything requires standards, acceptance, and uniform requirement. Is the technology a disabler? The answer is, no. It’s more the governance and operating and the business rules that makes or breaks any technology. That’s my observation on trade and blockchain.

Sree Iyer: Sir, as part of a startup that I was involved with, it’s the FinTech startup 2-2.5 years ago, I got in touch with some really big people in some of the biggest banks in India and especially the PSBs and private Banks too. After going through the presentation, everyone said that they are going to do this thing. But then after that, the bank’s drag their feet didn’t decide one way or the other. I also contacted some of the leading providers of technology to these Banks and one such provider had something that they boasted that they had a solution. Basically, long story short nothing ever happened. The banking industry in India is slow as molasses. They’re perfectly happy collecting their little bit of money in the arbitrage of conversion from one currency to another. I don’t see them doing anything quickly. They could have done this thing very quickly. In fact, I even approached their local branch in the United States and said, I can set up a test transfer where you can just see how efficiently this thing works for remittances and you can get a shot at the $80 billion remittances that happen into India from other countries. India has one of the largest workforces outside of India that remits regularly to India. It’s about 80 billion a year. A very, very huge number but somehow things never got off the ground. Maybe they thought that this was not the top priority for them. I’m not going to blame anything. It’s just that I just don’t see how something like this is going to take shape and be used in the longer term, especially deploying. We saw that simple thing such as automating of income tax forms has been stopped. Deployment got stopped and now they are going back to manual. Finally, it is not easy to do anything in India. They should take in the pilot project that we had suggested. It might still happen with somebody else. It’s okay, we gave the idea sometimes people run with it, whatever it is, we will be watching this and we’ll be giving you the latest update.

43% of consumers did not buy any ‘Made in China’ product since the Galwan attack which happened about a year ago. So, this is a big change in the mindset of the average Indian, sir.

Sridhar Chityala: I think it’s… You can see that people are patriotic. They do not want to be consuming products from a country that is threatening the sovereignty of the nation, which is like saying, do not hurt the hand that feeds, so that’s exactly what the Chinese attempted to do. Most of the consumption of Chinese products is done by Indians. So they came in, they decided to attack the sovereignty of the nation and the Indians have responded. You may see more and more such behaviour especially if it is under the present Administration. It begs the question, there is an Administration change whether the same perception will continue or there will be a covid variant being named as an Indian. So there will be some such massaging that would happen or curation that would happen. But at least now, the Indians have risen to the occasion and boycott it. When we get to the world news, we will come to a specific point on China as to why this thing is going to hurt China even more as we progress further in this journey,

Sree Iyer: Yes sir, I will have to pick up the pace today because we are already 30 minutes into the program. The government plans 50,000 crores credit incentives to boost Health infrastructure. Modi calls for the repair and preparation of the economy and health infrastructure. Modi woes Global Tech investors to land about $1.2 billion mobile phone manufacturing, addressing the Vivo Tech event that just concluded in Paris. Sir, your thoughts on this event. How whole effective is it going to be? In fact, India is already number two, in terms of manufacturing Cell Phones, isn’t it?

Sridhar Chityala: It is, it is, It is 1.2 billion phones rather than the dollars. He was addressing the Vivo Tech Conference in Paris, which is a big, digital Tech virtual Summit. So obviously the focus is around mobile. India is the home of Mobile. It has surpassed the United States. It’s now, as you rightly pointed out number two. It won’t far off when it replaces China because Indians are very propensity consumers of mobile devices. An average Indian has maybe three phones at a minimum.

Sree Iyer: Absolutely, sir. On a different day, I will tell you how the three phones are used. Let’s go on to Global News.

Sridhar Chityala: I’m happy with one phone. So that just takes care. I can’t do with more than one. So let’s move on. I think basically what India is doing is to say we have an economy to focus on. So, therefore, probably they will do your stimulus or come up with some kind of a program. Health infrastructure is important if we have to combat Wave 3 and future requirements. So, therefore, the money is going to be directed towards those two programs. Of course, infrastructure and defence continue in parallel. So I think India seems to have at least got their priorities right, as you point out. It’s all in execution on how the allocated capital gets executed so that the benefits begin to flow through much faster than anticipated timelines.

Sree Iyer: In Global News, Another day, another government but same action in Israel as Israel launches Air Strikes in Gaza after Incendiary balloon attacks. So this is something that we are hearing for the first time. What were these Incendiary balloon attacks? Was this by again Hamas from Gaza or was it from a different group.

Sridhar Chityala: It is an attack from Gaza and immediately Israel launched airstrikes to take out the sights from where these balloon attacks were being propagated. The objective is to show that it is not rockets that are coming. But it is these benign balloons that then happens to be loaded with other kinds of things. So that is with regard to the Hamas situation. And this is not the end. Remember that Gaza and Palestinian territories, but mostly Gaza is well funded. There’s a lot of covid money going to Gaza under the pretext of the redevelopment. Whether it is going to be redeveloped or whether it is going to be full-frontal, we will know. We also have a government that is a hodgepodge of people led by Naftali Bennett. How they are going to respond to these challenges that are likely to come out. But the government will collapse and Mr BB will be back at the helm, we’ll know soon.

Sree Iyer: Is the insane Biden plan to push for an Iran nuclear deal ahead of the Iranian elections, the right course, one wonders? Because right now there is a government and I think the elections are just around the corner for Iran. Perhaps the current government wants to show this as a success so that they can get reelected. What are the different parties that are fighting these elections? Is there a chance that a moderate would come back to power in Iran, sir?

Sridhar Chityala: First and foremost, six rounds of discussions have taken place between the surrogate US as well as whosoever is surrogate Iran in Vienna. So people are saying, it’s almost like, we want to reset the Biden-Obama administration policy and do a deal. Every person in the world thinks that this is the most unwarranted set of actions. But Democrats would not have any bar of it and they want to push forward. Whether Biden himself is controlling or whether there is a remote control controlling this agenda, one never knows. There is no moderate. There is a very clear indication that a more provocative President is likely to win the election and it is going to be even harder to contain anything that is not attainable as is right now. So their fear is to see whether you can get some… There is at least the Democrat fear that is led by Biden Administration, whether a deal would help. I don’t believe whether a deal would help. I think that they have to wait and see what happens. It is very clear that Iran does not abide by international norms and regulations. They have done what they had wanted to do. But remember again, there’re a lot of pro-Iranian groups in the United States who are not actively engaged in a policy, whether that’s going to help in Iran or help the World, time will tell.

Sree Iyer: And this might be one of the legacies of the Biden presidency. But if you look at his record up until he became President, he was more of an average Joe, if you will, I’m sorry for the pun, that he could be trusted and was reliable. He was almost always looking for the good of the United States, but somehow these first five months have been like a hurricane after the other coming and the striking US. We don’t know how history is going to judge the Biden presidency, but there are certainly a lot more questions, a lot more surprising behaviour on his part. I don’t know how you think about it, but I’m going to give you a chance to answer it after this next news item.

After gaffes and acrimonies, Putin and Biden agree to return ambassadors to respective venues and discuss Cyber Attacks. Lo and behold, here we go. This is what we talked about in the colonial pipeline plan. Sir, your thoughts.

Sridhar Chityala: My thoughts are, this was a very disastrous Summit and you made a very interesting observation of Biden’s senators and he was known to be, notwithstanding the fact he had flip-flops, but he was much more Centrist in his views and approach. What has resulted in this big change? Probably the progressives are running the agenda. Also, we have to remember Biden is advancing in age. Many of the actions that you see reflect a man who doesn’t seem to be in good health. You do not go to 3 press meets and have a set of notes that has nothing to do with the Press meet. Something is wrong here. Be it the Trump-bashing, be it the preferential list of journalists, be it his gaffe with the journalists, US journalists post Summit. All reflect that not all is well. To echo your point Mr Putin himself says, ‘hey, this guy is very timid and weak. His machoism is fake. So, therefore, I’m not going to listen to anything. This whole Summit is unimportant. Why we are meeting? I don’t know, but I’m happy to meet.’ And for Biden to hand over and say ‘here’s 12 infrastructure areas that are off-limits for your things and rest of the places, that’s okay.’ I’m not suggesting that he is implying, but to say these 12 things will warrant any disproportionate or unequal and disproportionate action from us. Giving him 12 is a reflection of weakness not a reflection of strength. In fact, Mr John Brennan National Security of Biden-Obama years has stated that Putin has figured out that Biden is fairly weak, knows very little of foreign policy and he’s a wily man. He was an ex-head of KGB, and I think it’s for the first time to me showed the United States in very soft and poor light.

Sree Iyer: China’s Defense Minister Gen Wei Fenghe told US, Japan, and ASEAN leaders that it will not when it comes to Taiwan give an inch, as well as the South China Sea, and other core interests. It is basically saying that we are going to continue doing what we are doing. Sir, this is again sabre-rattling. But we are also seeing, like we said yesterday in our hangout, that there is an island that is closer to Mainland China than Taiwan and perhaps, that is where the first action in terms of China trying to occupy might happen. Do you think this statement by the defence minister of China sort of adds more fuel to the fire?

Sridhar Chityala: Well, there is no fear. You see, the thing is, both Russia and China have collided. We have shown the photograph and we have made the comment. To me this the most provocative statement that we have seen from China in an International Meet. An International Meet where you had Defense Ministers of ASEAN plus ten other countries, including the US, India, Japan Korea, etc, etc. So, the defence minister of China, Mr Gen Wei Fenghe has stated, ‘we’re not going to accept what you say. We’re going to move forward.’ There was no leadership but it’s also a provocative statement. This is my call, in the absence of Trump, the country that is going to take China head-on is India. I don’t see any other Nation, either in the neighbourhood or in the near vicinity taking on China. China is going to attempt this on India and Indian Borders LAC and so on including CPEC. And I think India is going to take this thing head-on, as they did in Dokhlam, as they did in Galwan, as they did across the LAC. I think India is going to be the country which probably for the first time we’ll say, ‘Enough is enough. Come what may, we will tackle.’

There are some countries like France, UK. Japan is weak. Suga is struggling every day in power after Abe. But this is a big issue for the world to wake up to the reality – the vacuum of the United States. There was the US but there was no United States in the meet yesterday.

Sree Iyer: G7 and Communist party has no chemistry, and its communist command and control model offers no viable compromise. Sir, who said this thing and in what context?

Sridhar Chityala: Basically, what is happening is this is an independent and objective analysis from a bunch of Asian Commentators. You had the G7 meet, China dismissed the G7 meet as a bunch of small Nations trying to usurp. China has never attempted to patch up with G7. China has never wanted to be part of the G7. And so, therefore, notwithstanding the fact it is the second-largest economy. It has got a stabilizing power both by way of currency as well as by way of trade. But here, it is not part of it. So this prompts people to say the communist party has no mechanism to work on a consensus basis across Nations. It can only work on a consensus basis as far as choosing the CCP leading is concerned. Even that is going to be tested. Mr Xi Jinping passes 68. 68 is the age limit for a leader. Whether the CCP will abide by that or whether they will basically say Mr Xi Jinping will be a lifelong leader. We will see. So the independent commentators are saying, if you are trying to bring China to a consensus-building approach, you have no hope. That is the reason why they either ‘My way or No way’ is their way.

Sree Iyer: Let’s take a look at the markets before we wrap up this program. Sir, yesterday the Fed finished its meaning and it signalled that there could be a double hike in 2023 accepting the fact that there is a rise in inflation. I’m also going to read one of the news items and then you can comment on both. Yellen confirmed that inflation will be higher than Biden Administration’s expectation. So looking at this, what should the average investor expect? Yesterday. of course, there was a stock market correction. Going forward, do you think the market will catch its breath and then come back again. What are your thoughts, sir?

Sridhar Chityala: We have answered the question. The market is on a growth momentum because the economy is on the mend and recovery. So it’s called Recovery Economics, Pent-up Demand, etc. We have already seen and rentals go up in the United States more than anywhere in the world. So therefore the inflation is up with regard to the United States more than anywhere in the world. So the Inflation rates are up as far as the US is concerned.

India has also seen an uptick in inflation. All Asian countries will be impacted when the Fed rate is announced. Fed has effectively indicated 2023. So you can begin to see pricing build into the currencies and the price of the dollar away from the outside the world back into the United States. 2022, once we have much more defined data as we get to the end of the quarter, 2022 will be much more modest than 2021. I think we’ll begin to see the signs of fatigue in 2023. I think there is no way. The rate hike simply implies that you go back to value rather than growth. So people will become conservative. So there will be a shift in allocation and there will also be a shift in the percentage of allocation, with the rise in rates, more money going towards the fixed income type of stocks.

Sree Iyer: That brings us to a close on today’s Daily Global Insights. We will be back again, bright and early tomorrow. Thanks for watching. Namaskar.

Sridhar Chityala: Thank you. Namaskar. Have a good day.