Sree Iyer: Namaskar, episode 181 Monday, June 14 2021. Welcome to Daily Global Insight with Sri and Sree. Hope you had a great weekend as we move towards the United States news. Sridharji, welcome to PGurus Channel. And so what is happening with the United States news Trump urges states to resist the Department of Justice efforts to suppress accountability in the 2020 elections? A little bit more context here sir, the DOJ, what is that up to now and where do you see this thing going?
Sridhar Chityala: Good morning to everybody and welcome back on a Monday, June 14th. And as we start off another week. What Trump is basically saying hey you know, the Department of Justice is trying to place pressure on each of the state’s not to investigate and not pass changes and basically accept what went on during 2020, is the norm and normal and please resist the pressure. And as you all probably aware Pennsylvania has got investigations, Georgia has got investigations, Arizona has got investigations. Many of the states are conducting due process to assess what happened and also in anticipation of the law that is being contemplated by the Democrats at the centre. So, all with an intent, not to go back to 2020, but also to make sure that any practices that are put in place are, not going back to 2020 as a base reference case. So, this is the pressure, so there two pressures. One is political pressure and the second is judicial pressure. So, Trump is saying, hold your feet and make sure that whatever investigation you are doing, you complete and reset and make it public, very similar to what’s happened in Covid. So, Covid-19 was suppressed, everybody knows what happened in 2020. And here, this is about the election issue.
Sree Iyer: and Biden’s race-based debt relief program has been halted by a judge. This is again, something that was supposedly directed at the minority Farmers. Is that correct, sir?
Sridhar Chityala: This is directed at the white farmers and against them. This is Wisconsin State. The judges basically temporarily restrained implementation of the programs effectively saying they have a prima facie case if they take it there’s nothing that you need to do from a further hearing, other than issuing, the restraining order. They believe that this discriminatory policy will not be sustained and it will be normalized. What happens is if you have a debt, then they gave the debt relief to non-white farmers doesn’t matter whether you are black, Hispanic, Brown, whatever your category is, and they’re not only written off the loans but they gave them 125% of the loan outstanding value whereas, if you happen to be a white farmer and had a debt, you are not considered as part of the Covid relief program and this is what the white farmers are fighting.
Sree Iyer: You know, a lot of white people are democratic supporters. Why are they trying to, you know, shoot on their own foot?
Sridhar Chityala: I don’t think I can explain logically something, which is so illogical unless you are so profoundly political. There are things where you have to be political on policies, but, this is about principles, principles of Law and principles of Economics and unprinciples, fairness. And why they are just keeping quiet is just beyond my comprehension. We had again, we are not reporting it in Daily Global Insights. We are another major incident of flag burning and riot in Manhattan. But, you know why, you asked the question when it’s very obvious, why people should be against it. You raising a very valid issue on a number of issues and this is just one that has kind of propped up and caught your attention. It’s not logical.
Sree Iyer: You segued me into the next topic that we are going to discuss. Vice president Kamala Harris gets flacked for making time for gay parade, while not making any attempt to visit the Border. You have the vice president, who has never gone to the Border, you have the Secretary of Treasury who has never gone to the Department of Treasury. What is exactly going on?
Sridhar Chityala: It just is what you call is a leaderless rudderless ship, that is driven by many and multiple forces and it seems to be going on and, you know, it is self-driven. Now just to come to this particular news item, it was widely seen that she was travelling in DC, she was in the parade, her husband was in the parade smiling and giggling and going away. Do people say why she’s doing it? Because it’s political opportunism and trying to gain votes. Whereas you have a real issue on the border and they’ve been saying and she was nominated by the president to be the person who is the borders Czar to oversee these activities but thus far she has not gone.
Sree Iyer: And Chad wolf says that Harris has no excuse to avoid the Border trip, your thoughts.
Sridhar Chityala: Well, she should be there front and centre and leading the effort. Defining why there are surges. How much of the overspill, what kind of issues that the nation is going to face? You know, Trump announced in the meeting, we are seeing gangsters, we are seeing drug traffickers. We are seeing other types of traffickers, we are seeing criminals, being let into the country. We are seeing people who, we deported being let into the country for the crimes that they committed before. So, all these people are coming into the country, it is going to pose a community and security issue. Now, as a vice-president of the country, it is incumbent upon her to look at this and say, hey, you know, we got to fix it. Nobody is telling their stop your policy because that’s the Democratic policy, open the borders, allow the people to come in and, you know, that that’s fine. If that’s what their policy is. But somebody has to go as a vice president to do checks and balances. No, she will not.
Sree Iyer: Now, Texas and Arizona Governor’s call for states to send police to deal with the Border Crisis. And what you say is absolutely right, Sir, this is going to come and bite vice president Kamala Harris, should she entertain thoughts of running for president? At some point in time, it will be said dereliction of duty. The person never went there. So this is something that is strange. So, now let’s move on to something else, where the gloves are coming off as the progressives of the squad. One of those members is Alexandria Cortez, or AOC are now targeting their own Joe Manchin.
Sridhar Chityala: Well, Joe Manchin has come up for, you know, a blistering attack by AOC over the weekend. Because he remains the guy who is standing against these electoral reforms, he standing against the filibuster, he standing against this critical racial theory, he stands against the infrastructure plan, you know, getting through without the Republican support. So you have all these items you have Joe standing up and making his point, which is going against the agenda of the progressive. So, you can see who is controlling? The progressive, is controlling the agenda, who is driving them? Some invisible hand is driving them and it’s really not Mr Biden, it is not clearly Nancy Pelosi, it is not Chuck Schumer. So if somebody outside or somebody inside driving this agenda, so you have this blistering attack pop up. In fact, we also had a blistering attack on the same note progressives going after Mr Brewer, you know, the Supreme Court judge on the issue of this a specific issue that just escaped my mind that, you know, he was the focus of the target over the weekend, by the progressives. So the point is that this is the new battle that is brewing in the politics here in the United States.
Sree Iyer: And Pennsylvania Republicans introduced sweeping elections Reform Bill and the Democratic Party is a dividing line in Israeli politics, and has become a major and imminent, threat to the security of the Jewish State. I am. Sorry, I read two different news items. Let’s start with Pennsylvania, sir. We said that a few days ago that the Pennsylvania lawmakers went and looked at what Arizona was doing especially in the Maricopa County so they came back and they wanted to do a few things. So looks like this is a reflection of that trip.
Sridhar Chityala: Exactly. You have connected that the dotted lines, effectively, they said, voter ID is mandatory without voter ID, You can’t legitimize an election just because somebody has been in the United States are eligible to vote. Then, how do you deduce these voters to be, he’s been the United States, what’s the mechanism to validate or invalidate? So therefore they have come back and said voter ID is mandatory in the state of Pennslyvania.
I think that’s one of the big things that is coming out. So you asked what’s about the DOJ, the first bullet point that they talked about or the first news item that we talked about. So, where are we saying, basically this is what it is, 2020 elections in Georgia, this was the problem. In Arizona, this was the problem, in Pennsylvania, this was the problem. In Nevada, people from the dead woke up and came and voted, people from other parts of the state came and voted. Department of Justice is trying to suppress the information or putting pressure on States, not to kind of go back and put all these things back into the public. So what these Republicans are cleverly doing, they are assessing everything and they’re incorporating it into their reform process that they will now act within the respective States.
Sree Iyer: And let’s take a look at India news. India crosses 250 million doses of vaccination as the Active cases, fall less than 1 million. So, India is now well on its way to recovering from the second wave. What are you thought, sir?
Sridhar Chityala: Yeah, sorry Sree ji. I want to go back to one specific news item, which is an important news item, which is around, there’s a growing feeling that much of the results that happen in Israel can be attributed to some of the stances that have been taken by the democratic party in the United States. So people are now saying the Democratic party is the dividing line in Israeli politics which can put the state of Israel at risk. So, there are two types of Democrats. One is Democrats, who are opposing Israel and there are Democrats who are waking up and saying, no, we support Israel. So, I think there is a growing analogy, which says could these Democrats who are anti-Israel influenced, the construct of the Coalition which resulted in a razor-thin one-seat majority for overthrowing Benjamin Netanyahu. I think that’s a very significant kind of analysis within the construct of tying the US Israel politics. Sorry, I just wanted to deviate and mention that point before I go onto the India question that you have raised.
The India question is very clear. I think that they seem to have got gotten control over the whole program and I think they have also declared a fair amount of results. India has a fair amount of results around vaccines, vaccine wastage and vaccine utilization. Many of the states were crying. It’s purely attributed to mismanagement. Yes, the government had problems around Logistics, had problems around contemplating the magnitude, problems around the liquid medical oxygen, all those things they seem to be getting slowly into place and that’s visible by way of the results that are coming up. Today, I think India has got something close to about 970,000 cases. If you remember that, they were about 4 million-plus. So. it has come down to, you know, less than 4% active cases, and the death is around 1.42% around 370,000. So, I think India is slowly beginning to gain control. Sometimes, this week, we will report the number of doses of vaccine. India will bypass the United States and become the number one if it has not already bypassed as the number one country outside of China. China’s numbers, nobody knows, China’s numbers will always be number one. It doesn’t matter which field it is. They’re always number one, but let us say normalize data. So I think they seem to be in control, sir.
Sree Iyer: India is also assessing the use of drones to supply vaccines to remote inaccessible areas. In fact, this is a different line item. I don’t think we need any comment on that. We know that India is doing a good job on vaccinations and getting the Covid under control, this is the I’m just segued into a different topic. Sir, the Indian army gets specialized boats for deployment at the Pangong Tso Lake.
Viewers, remember that this is one of the lines or the bones of contention between the Indian forces and the Chinese forces. The Chinese apparently vacated, they even wiped out their map and went back from the Pangong Tso. Remember, fingers 4, 5 6 7, 8 9 and so on. So, see what is the significance of these specialized boats, Sridharji?
Sridhar Chityala: The significance is that there are two types one which can move fast in terms of potential Chas, detect and act. The second one is mobilization, which is, you know, called the transparent boats with the capacity to take about 20 to 30 people in a single trip. Basically, to mobilize a set of people and move them from one place to another. So security is the key. One is attacked. The second is to move the people and create a defensive posture opposition for the people who are going in the front line. Both have been made in India and I think it’s supplied by one by public sector undertaking another by a private from Goa. So they have been given these fast boats as well as the transportation boats which gives them that edge, that was not there in the previous instance which resulted in some of these people occupying, those positions.
Sree Iyer: Indian coast guard in that 16 Made in India advanced light Helicopters mark 3 or MK3. It again looks like this is also something that has been made in India, helicopters in India. That’s a first again.
Sridhar Chityala: Yes, helicopters. It’s made in India and again, the point here is that what you’re witnessing is they have fortified ground troops. They are fortified, the armoury, which constitutes, which makes up that defence and offence capability. If you remember the Brahmos missiles are now docked at several points in the Border. They’ve got now a full fleet up require planes doing the rounds in the Ladakh valley. There have built the infrastructure for the mobility of troops. They also prepare them for summer and winter and they said that the rotation of the 50,000 or 100,000 people, whatever the number 50,000 to 60,000, you will never get the official number. A big number, they have a rotation in place to avoid their fatigue. So then, they ordered the drones if you recall and then we talked about it in Israel show which is the retooled with spike kits, which enable various navigational, software-based location and tracking and, you know, missile-launching capabilities in Rafael out. So you can see that India views that this China border issue in Ladakh is not going to go away. Then, the on being on the naval front again order the extra harpoon missiles. So therefore when you look at this holistically rather than going item by item, is that India seems reasonably well prepared and China. China is equally well prepared and they are not in budging, an inch on the Ladakh LAC area.
Sree Iyer: India aims to increase gas production by 75% in three years, they are working to a target of 40 million tonnes of crude oil and 50 billion cubic meters of gas by the fiscal year 2024. So I think if it can produce this much volume, then they can also be able to export some of these things as a finished product, sir.
Sridhar Chityala: There are two things that are happening. One is there is a percentage whether it is 5%, or 8% or 10%, we’ll get to the numbers once we do a little more research, but they are exporting a component of it, but primarily this is for domestic consumption. India imports, as you are aware 90 – 95% of its needs and then refines it and uses it. It for domestic purpose. It used to import and export to the United States and the US in turn will then re-export it to the other countries which is the refined WTI Crude. So yes, in not too distant future this could become one of the important vehicles for exporting purposes.
Sree Iyer: The Indian Foreign Exchange Reserves are now at 605 billion and will soon be the fourth largest behind Switzerland which is at 1.070 trillion. Japan is at 1.378 trillion. Big numbers but I think India is getting there. That’s very impressive, sir.
Sridhar Chityala: It is. I think it’s a reflection of the strength of the economy notwithstanding aspersions caused by the mainstream media. It’s also a reflection that India is building a very strong reserve at par with some of the best countries. If you exclude Switzerland, China, Japan, and India, these are big economic nations in a volume context. It basically tells you that if the United States is the base currency and debt-ridden, the three Asian nations are building a very strong reserve. It also tells you that the shift of the GDP and the shift of economic development is taking place from the established economies to the more emerging economies.
Sree Iyer: Indian merchandise exports grow 70% to 87.2 billion and non-oil exports grew to 78.26 billion at 68.5% in the first quarter of the fiscal year 2022. So these are all projections, I think.
Sridhar Chityala: These are numbers are projections. These projections are by one of the leading Banks, Exim Bank – Export-Import bank, which shows that the based on the volumes. We have reported the April numbers. We have reported the May numbers. We await the June numbers, but as you rightly said, these are projections. If you ignore the percentages, whether it is 70% or 80% and look at the volumes, the volumes are a good sign for India that it is exports that are helping India to get out of the pandemic recovery while lockdowns and other things still prevail domestically.
Sree Iyer: Now let’s take a look at Global News. Naftali Bennett is the new Israel Prime Minister and he says that he will not accept a nuclear Iran and is not supportive of a nuclear deal. Netanyahu in his famous speech blasted Biden. So, again, what we said previously, just a few items ago that there seems to be the strong hand of the Democrats in the dethroning of Netanyahu. So this is now a full-blown left front war, sir.
Sridhar Chityala: It is a full-blown left front war. Have you ever seen from United States soil anti-Israel propaganda emerging? That’s the progressive group that is still continuing to launch and blast Israel. It is very unfortunate. But they have chosen Mr Naftali Bennett as the Prime Minister for the next two years, Mr Naftali Bennett immediately made two statements. One, we do not accept nuclear Iran. Number two, we are not supportive of the nuclear deal that is being negotiated in Vienna as we speak He says he is not supportive. It’s almost like there’s a forced mechanism to go back to the 2015 deal that Obama constructed which is almost to say that Obama was right. So, therefore, let’s go back. So obviously there are significant Iranian groups in the United States pushing for that. But Israel will have no bar, doesn’t matter whether it is Benjamin Netanyahu or whether it is Naftali Bennett. I think people haven’t seen Naftali. Naftali is upright. If Netanyahu was willing to negotiate a truce in Gaza. Naftali Bennett said, no truce. We have to go fully occupy and clear everything out. So here we can expect more activity should there be more skirmishes coming out of the region. Whether the government in the process is loose coalition will last and sustain that pressure remains to be seen.
Sree Iyer: Hamas honours Al-Jazeera for high professionalism in its anti-Israel coverage. No surprise there.
Let’s move to the most important item that took place last week. Sir, the G7 Summit. ‘It was an outstanding success’ says Biden and the G7 leaders’ take on China’s, debt-trap diplomacy. Sir, a little bit more context on what is China’s, debt-trap diplomacy, sir.
Sridhar Chityala: They go into a country and say we are very helpful to you. You want $400 million loans, you want a $2 billion grant, here is the collateral for you and here are the interest rate terms and we sign the deal and we give you the credit and will also provide support for which you give us this and this. That is their first footage. Second, the first time you default, you forego this and the interest rate goes up. Then the second time, you default, they stake a claim for this part of the land and the penalties are even further aggravated and they begin to dictate the policies. So there are the modalities. This is how they have begun to occupy some of the African States. And I think Sri Lanka has got itself into this unfortunate position. We don’t know much, I can’t comment on the Pakistan loan, but some of the loans have turned and it reaches a point where you cannot even pay the interest because the interests costs are so horrendously high that you won’t even be able to pay your interest leave alone paying the principal back. So this is what the G7 calls the debt-trap diplomacy So you go in and you offer help and then you put them into a position of no return.
Sree Iyer: G7 leaders demand a covid-19 origin investigation and rebuke China’s human rights record. No surprise there. G7 rivals China with a huge 40 trillion infrastructure plan. G7 also reach a consensus on the global minimum corporate tax rate. Sir, if looked together what it looks like is G7 as on one side, they think they can counterbalance China which tells you the strength of China, sir. I mean I’m just gobsmacked that they’re being viewed at that kind of power.
Sridhar Chityala: Here are my observations. My observation is it just tells you G7 is toothless and useless within the context of the present day. G7 was conceived post-world War II. It has not reformed itself. Italy, Germany, France, Canada, UK, the United States and Japan. It basically is not reflective of the new world they work with. There 4 invitees but having said that when you look at the construct. Number two, when you look at this it very much looks like the US Democratic party led policies. China, covid, infrastructure, climate accord, vaccinations and human rights. It looks very much like a mini copybook of the United States Democratic policy that you are seeing being rolled out here. Very positively received and very limited chances of success. So, this is exactly what the US mainstream media today is writing notwithstanding the fact, many of them are left-leaning are saying minimum wages, the minimum tax will not be a success. The infrastructure of 40 trillion, you will not be able to stop. Debt-trap diplomacy, you will not be able to stop. 40 trillion, you don’t have, so where’s the question. So you are beginning to see the unravelling and you are beginning to see the old ideas or the ideas of the democratic party rubbing into G7. So in my view, this is nothing more and another three days of waste of time other than people getting together.
Sree Iyer: Secretary of State Blinken stealth the United States- Russia relations at a very low point going into the Russia Summit. So, Biden is visiting Putin today in Geneva, right?
Sridhar Chityala: Yes, in Geneva on June 14th. So, therefore, they’ve set the context and Mr Blinken made the point that this is the first time our relationships are at the lowest point for us to sit down and have a meaningful engagement and outcome coming out of it. I forgot to endorse and emphasize the statement that you had made, which is that if all these nations are taking on China, you can imagine how powerful China is. China is powerful and has issued a rebuttal at the G7 and basically said, a bunch of small Nations cannot dictate what we do and what we don’t do. This is China’s rebuttal.
Sree Iyer: Beijing working to subvert UN human rights systems activists warned. So Beijing is now suddenly become the target for everyone to look at. But this is should have been done a year ago when the thing was still being on its way up everybody knew yet nothing happened, sir.
Sridhar Chityala: Four years ago, there was a man who won the presidency of the United States in 2016. He was called President Trump or Donald J Trump. And then he took on the mantle from 2017 January 20. He said United Nations is redundant. He said WHO is redundant. He said IMF is redundant. He said all these human rights bodies are redundant. He said China is the biggest threat we face. They have lumped us and dumped us with tariffs. He directly negotiated with Korea and he put the singular point of view in North Korea. South Korea has been an ally of the United States from time immemorial. They control the DMZ.
Sree Iyer: If we didn’t clarify, I assure you somebody would be saying this as if we’ve made a huge mistake in the world. Please continue.
Sridhar Chityala: Sorry, sorry. So therefore you have this thing which was well articulated and he also said the United States and many people who are involved in the covid-19 and the covid-19 cover-up and he had complete abuse for WHO. So what you are seeing is that none of the people in the world wanted to believe and accept it. They somehow dismissed him as a relegate So these guys are now reinventing and finding themselves. Now coming back to the UN Human Rights systems, which is what it is. Suddenly people are realizing, oh my God, they all over the place, you have the Chinese so therefore how can we enforce it in United Nations when there’s a whole bunch of influential people influenced by China sitting in those positions? So you will not even get, forget the veto in the Security Council we may not even get enough votes to pass the general assembly to punish on the human rights issue. So I think people have just woken up to what is an obvious fact. But to your point, China has done a remarkable job, and we will publish these results tomorrow, the pure research results tomorrow. Where China was in its perception to the world in 2010-2012 and where is it today! It has almost gone from one extreme to another extreme in terms of people’s perception. All they attribute to is this wolf diplomats of China, who have gone on an aggressive posture, and aggressive positioning. I mean, these diplomats just don’t do things by themselves, they are actually acting according to the leadership and have done a damn good job in making sure that all bases are covered and the world is facing a huge challenge.
Sree Iyer: The United States and the United Kingdom sign a new Atlantic Charter with the focus on taking on China. Sir, your thoughts quickly and then we can go on to look at the markets.
Sridhar Chityala: The UK is re-establishing. It is out of Europe. It’s Brexit. So, therefore, I think it’s re-establishing. It’s just one more extension of the deal. The UK is doing lots of deals around the world, so the US is no exception.
Sree Iyer: Now, let us take a look at Markets. Federal rates decision coming up this week. Policy announcement, inflation, retail sales, all the numbers will be out this week. The most important thing is, this is just information you can touch upon it, sir, when you respond. Bitcoin jumps on Elon Musk’s statement that Tesla will commence usage when mining becomes cleaner. That’s like never because 65% of the mining that is happening in coal-based, electric power supply generated in China. So I think this is should be taken for what it is, that it is never going to happen. That’s my look at it, sir, your thoughts.
Sridhar Chityala: First and foremost, I think what we are saying here is that we had the rates issue, we had the inflation issue because the rates are at remarkable low and inflation has been… So Fed is going to again make a very important announcement within the context of the markets. So usually we ask what can be the prediction as we look ahead. These are important retail sales. So once the retail sales numbers, it’s likely to be going up you are going to see the next trajectory of output momentum of the markets which are already reaching the end of the year levels.
As far as Bitcoin is concerned, to me, if I am just a crypto investor, I’m smiling because it has gone from 30,00 to 39,000 on the basis of Tesla statement. That simply implies that many of these very smart and very intelligent Silicon Valley Tech analyst knows how to play both sides of the game and how to make the markets move. So Musk is a big guy. He’s also your producer and he retails out his car. So therefore what he says matters. He’s also a holder of the Bitcoin currency. So he’s making a statement it becomes cleaner. What he’s basically saying is… We covered this in our fireside session. There are 8,000 different guys out of which 90% or 95% of them are grouped. There are no risk systems etc. It is the 5% that makes the difference. My read of this is that these are all cosmetic statements that are being made, but the endemic part of it is it is going to be embraced in some form. Already, one country has formally announced the legitimacy of the coin and we may have few more countries announcing very soon. It’s very interesting that El Salvador announced it because El Salvador doesn’t have a card-based or a debit or a credit card based banking system. And there’s a lot of remittances that go from the United States into El Salvador. So Bitcoin may become come a far more effective and efficient way by which all these workers who work can transport the money. So this is one of the reasons why El Salvador said that they are going to accept Bitcoins because they don’t want any of this money going anywhere else. I want it to be coming back to my country to sustain the momentum of Economic Development.
Sree Iyer: With that, we bring our today’s module to close and we’ll be back again, tomorrow, bright and early. Thanks for watching, do subscribe to our channel, do consider becoming a member. Sridharji, it was a pleasure listening to you today, sir. I’ll be back again tomorrow. Namaskar. Thank you so much.
Sridhar Chityala: Namaskar. Thank you. Have a good day.