Sree Iyer: Namaskar, Hello and welcome to PGurus to channel. I am your host Sree Iyer. This is daily Global Insights episode number 121 dated March 18th, 2021 and joining me is Sridhar Chityalaji. Sridharji, namaskar and let us get the ball rolling, sir.
Sridhar Chityala: Namaskar and good morning to everybody and we are looking forward to a very exciting Thursday having had pretty good news from Jerome Powell of the FED.
The FED sees a stronger economy and higher inflation and no rate hikes until at least 2023.
Biden says that taxes are going up for those who are earning more than 400,000. The top slab to rise from 37% to 39.6% fetching an additional 250 billion.
Blinken denounces China’s strings attached to vaccine diplomacy.
And Made in India, India-Israel joint venture rolls out medium-range surface-to-air missile kits.
In markets, the FED sees a stronger economy and higher inflation and no rate hikes until 2023. I think we mentioned this yesterday, didn’t we Sriji?
Sridhar Chityala: I think we have been referring to the foreseeable featured no rate hikes. We have also mentioned the new metric scorecards that Jerome Powell plans to use which he announced as well and that obviously being the labour scorecard rather than the conventional tools.
Sree Iyer: And the current rate of asset purchases of 120 billion per month is going to be continued for the foreseeable future. So on top of this 1.9 trillion and every other thing you’re going to tag on about 1.4 trillion every year, isn’t it?
Sridhar Chityala: At least until immediate feature because the reason is there’s no deadline set. Jerome has indicated that the FED asset program will continue but here are some important data within the context of what’s FED’s announcement is? And it’s quite astonishing but, the numbers tell a story the GDP forecast is now been revised. This is the FED which originally forecasted of 4.2% is now forecasting is 6.5%. So, which vindicates, you know, Goldman Sachs position of five to six per cent and now Goldman Sachs has further escalated into about 8%. So you’re really giving a lift off and a boost to the economy which started with an initial stimulus if you all recall the 2.1 trillion dollars which really made the V kind of shape up. The latest one the 900 million that came in and then, of course, these 2.1 trillion of which close to about 700 billion has nothing to do with the economic recovery, but having said that’s all giving especially what is left which is close to what a trillion dollars which go into the PPP as well as the direct payments programs and the child credits that directly translates into the 6.5 %. We could see even higher growth and they have indicated that 2022 will be around 3.2% and then 3.3% and 2023 will be around 2.2% and they believe after that the economy will kind of normalize itself to about 2.2%. So, these are fairly kind of good numbers adjacent to that the unemployment is currently around 6.2% is again a very good number. We were pre-pandemic at 3.5% and
Academic we kind of lifted up to almost 15% which has been brought down to 6.2% then, they expect the 2021 number to finish around 4.2% The other indicator is the inflation originally the FED had a target of 2% is the inflation now, they think that they can stretch these to about 2.2%, band. They may see that on the back of the latent demand that is arising in 2021 to touch the 2.2% and the believe the inflation will get back to 2% in 2022 and around 2.1% in 2023, given the 2.2% band that is hence the rate policy, hence the monetary policy to be aggressive and keeping the interest rates zero until or through 2023.
Sree Iyer: And in other American News the House Democrats place blame for Georgia shootings on Trump and GOP lawmakers while Biden threats coercion. When did the shooting happen sir?
Sridhar Chityala: I think the shooting happened yesterday, last night and you know though the Asian were targeted. These were in the Atlanta area by a 21-year-old and he was caught last night making his way to Florida perhaps to do something more. They attributed to you know, sexual pedigree rather than anything that has to do with the racial. Though, the Democrats would not like to miss an opportunity to blame Trump and the GOP lawmakers as people responsible.
Sree Iyer: Well, we had said this yesterday the Department of Homeland Security Chief admits mistakes were made in not testing illegal migrants for covid-19. And suspected terrorists are crossing through land border also admitted by the same DHS Chief. Sir, you mentioned this yesterday and now they are confirming it that again proves that we are at least 24 hours ahead of the news cycle.
Sridhar Chityala: Maybe they are watching PGurus Sreeji. So, therefore, then saying it out now and I’m just trying to be facetious. I think the news is filtering, they have our own kind of sources, you know, which provide the input. Again, Trump has gone on record, which is to say close to 70 nations, people are crossing the borders, along with it lot of terrorists because of this concept that that is prevalent today, which is namely what you call to arrest and release policy rather than detain policy. So therefore it is conceivable. We are not only having covid-19 victims, but we could be letting the terrorists in. I think the security threat in the next 6–9 months is going to be extremely high as a result of this highly irresponsible activity that the Biden policy is unleashing. Apparently, in the transitional hearings, Biden was warned by the transition team. Remember the transition team is established by him. The transition team warned him not to undo this immigration border policy but he has paid no heed to those pieces of advice and we could be facing the consequences. Remember also many of these children could be making it into the public education system. Wow that will affect the children is yet to be kind of assessed but this is another area that has been highlighted by the social workers and NGOs, which is to say we haven’t even quantified the impact of these people making into the system.
Sree Iyer: So, unless Biden has suddenly gone tone-deaf or deaf his own transition team told him about the consequences and yet he went ahead and acted that’s very bizarre, isn’t it?
Sridhar Chityala: Well, I think this is the progressive agenda. The progressive agenda is to have open borders. Welcome everybody, legalize the illegals and you know, possibly when you look at now, we have an assessed let the new voter legislation policy come in, which is the nationalization of the US Elections. And when that gets put on the table, we discuss it. It is far more drastic and damaging to the identity and the state of what the United States is.
Sree Iyer: Someone is remotely controlling this whole thing if that’s how it looks like to me and that someone is probably laughing his head off because there’s no responsibility there. It’s all power and its really regrettable the way this country is going to dogs in such a quick time. Anyway, I’m just getting a little carried away here unlawful.
The GOP Demands a probe into the Biden wall halt saying that 41 GOP senators are urging the General Accounting Office to investigate, why the Biden Administration has halted because that was already budgeted for isn’t it?
Sridhar Chityala: It is the government accountability organization, which is supposed to look at them, whether any of the people are violating any laws from an independent objective point of view. This is 41 Senators. 41 GOP Senators have filed that there is there should be a GAO investigation when the wall has mitigated and created a barrier and disincentive for the illegals to cross how arbitrarily this can be stopped through an executive order. Whether in the process there was any violation of the law is being assessed by the GAO. Is it ridiculous or is it looks irresponsible? Any child would tell you Common Sense would tell you it is highly irresponsible, especially now in the covid times and especially now we already have close to 11, one number is 11, another number is 9, another number is 10 Million illegal immigrants sitting in this country. So, therefore we do have a problem but it seems to be irresponsible. Now you are to a point, which you raised the question. Somebody is remote triggering this, if you go back to the Georgia state election, the Georgia senate elections. The Georgia Senate election was fought with the whole notion we have to win the two seats because if we don’t win, our progressive agenda will once again be halted. It was thwarted for the past four years we cannot afford to have the progressive agenda thwarted. For us to have an agenda through we got to win these two seats by any stretch of imagination and money was poured in and of course, you know, the Supreme Court Judge of Georgia and of course the Democratic leader in the Georgia state, you know, conveniently kind of the worked out some policies and stuff which helped stretching the election, time, verification of the ballots, you know, the whole wrapped up things that we have covered or which one is coming to light which is the Fulton County and then we also see that in Michigan the signature verification and the process involved in the counting and validation of the votes is now being considered illegal. So slowly there is a snippet feed of information that is coming through and all these points to the fact that there is not somebody but at least one ex-president seems to be involved in making sure that the progressive agenda is run. This immigration and open borders policy stretches back to the Obama-Biden time.
Sree Iyer: Now, Pelosi Democrats are pushing citizenship for illegal immigrants. And this will again make the influx grow that much faster because they feel that once we are in America it’s only a matter of time before we will be regularized. So this kind of Scorched-Earth policy does not augur well for the country because it’s not as if there are millions of jobs in the United States and plus we are in the middle of a pandemic, God only knows what these progressives have in their mind, but certainly, it’s not something that augurs well for the Next Generation. Let’s talk about the next generation. You and I Sridharji, we are done. We are almost getting ready to enter the departure lounge. We are just flagging all these red signs saying that ‘hey watch out here. There’s a problem here and I really feel sad for the Next Generation because many of them are also washed in this, ‘be liberal, be fair, be progressive’ agenda without understanding the consequences. I am done with my rant.
Let’s go on to India news. Chinese investments in Koo swallowed by eminent Indian investors including former cricketer Javagal Srinath, PGurus has a story on this to read it up for more details. India Bangladesh border saw the highest infiltration in the last two years and it is now revealed that arms were lifted-in via drones from Bangladesh into India. So this is going to present more challenges and you will see a lot of violence in the upcoming West Bengal Assembly Election because it all seems like they are trying to cause trouble there. We will just keep you posted. What are your thoughts, Sridharji?
Sridhar Chityala: Well, the whole CAA issue is around Bangladesh. We have to go back to perhaps last year August-September timeframe when we hosted the Additional Solicitor General of India who actually revealed and laid threadbare the whole legal context behind the CAA and the illegal immigrant infiltration that is actually coming from Bangladesh and changing the ecosystem as well as the ethnicity in not only in Bengal but also in Assam and causing polarizing issues within the community. So, therefore, Pakistan is hell-bent on creating a disruption. There is no doubt. Unfortunate that Bangladesh has joined the fray and you are beginning to see this progressive infiltration occurring notwithstanding the best endeavours of the government. I am told that there is a lot of work that is going on still one cannot stop what cannot be stopped if people are using latest Technologies and these kinds of tunes to our to make things happen.
Sree Iyer: India-Israel joint venture rolls out medium-range surface-to-air missile kits. When you say kits, is it like a do-it-yourself kind of kit?
Sridhar Chityala: I think that it is not fully manufactured, parts of it are sourced from Israel, parts of it is built in India. But manufacturing means, Made in India means, it’s fully assembled and can be put into the field leveraging the capabilities and the technology transfer along with the parts that are coming in from Israel.
Sree Iyer: We see Investments reach 10 billion in 2020 despite the covid pandemic. This again points to the potential of the Indian market, isn’t it?
Sridhar Chityala: It not only points to the potential of the Indian market. India, today has emerged as the fourth largest Innovation Hub attracting capital and is also home to a number of unicorns, unicorns are those which are valued at 1 billion dollar plus. So, therefore, I think whenever these left-wing pundits talk about India, they forget that India attracts inward investments in four different buckets. One bucket is direct capital, which is invested by the companies into Capital Expansion Programs. Second is programs that they are investing in for new opportunities to PLI – Program Link Investments whether shifting the manufacturing. The third is the Foreign Portfolio Investment. People are investing not only in Small-Cap but also in Mid-Cap and Large-Cap to direct investment into the programs. The fourth category of investment is Innovation. 10 billion is a big number. If you take a look within the context, we attracted close to $70 – $75 billion in the annual run rate of Investments. So that is a pretty good number.
Sree Iyer: In other news, the Chinese ambassador to France urges Fench Senator to cancel the visit to Taiwan. Russia recalls US ambassador to Moscow after Biden says killer Putin will pay the price. Why did Biden say that in your opinion, Sridharji?
Sridhar Chityala: There are two reasons why he has stated that. One, they continue to feed the information that Russia has used its forces, this is confirmed by CNN, in making sure that President Biden is maligned and the votes are swung towards President Trump. I think we discussed this yesterday. So today, in a press conference or yesterday, in a press conference he alluded to the fact that he is going to make you know make President Putin pay the price. What is this concept of ‘killer’, the word that is used ‘killer’. A question was asked to him, what does he think about the poisoning of Alexander Navalny, the opposition leader? Then, he has stated that Putin is a killer. It is in that context the word the killer was used and we will make the killer pay the price. So when you take that incident and when you also take these election allegations that are coming in, within this context he is making this statement. What did this do? Created one more foreign policy problem for Mr Biden. The ambassador was called back to Moscow for discussions and possibly he may come back a little delayed or he may come back immediately with very specific rebuttals creating potential tensions even in the UN when you need to be working. So you have China which is a P-5 member, then you have Russia which is a P5 member and Trump completely declined and made the UN redundant whereas President Biden says, ‘UN is an organization that is required for resolution. We got to be multilateral in our approach. But when you cast aspersions and start throwing brickbats like this, you ain’t going to get, for example, Iran is a specific issue. China is a specific issue. How are you going to get a global consensus to address these issues when one day one you are launching these tirades against some of these people in a very outlandish manner.
Sree Iyer: Finally, terrorism incidents are rising in the several African States; Nigeria, Mozambique, Mali and Eritrea. Sridharji, what could be the reason for this?
Sridhar Chityala: Well, it’s very clear, we have a weak administration at the centre. If you recall, most of the terrorists shifted their operations from Afghanistan to the Arabian Peninsula and a lot of activities took place in Yemen, Somalia, Mozambique and even in Nigeria with this collaboration or collusion with Boko Haram. Apparently, there are special forces of the United States stationed around the embassy in Mozambique and they are hunting for ISIS. We already talked about ISIS footprint in Lebanon, the Syrian area. We talked about the ISIS footprint in Iran. Now, it looks like there is, whatever you want to call this Arabic ISIS wing, there’s a specific name for that which doesn’t resonate in my mind immediately. So now, you are seeing the resurgence of this. Why? Because everybody is focused on China, what little resources can be put. Europe is focused on China. So the whole of the African Peninsula has been left unattended and you may see very surprising things emerging out from that area.
Sree Iyer: That brings us to a close on today’s episode. We’ll be back again tomorrow; same time, the same place. Thanks for joining and Namaskar. Don’t forget to subscribe to our Channel.
Sridhar Chityala: Namaskar and have a good day
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