EP 183 | Daily Global Insights | Jun 16, 2021 | US News | India News | Global News | Markets

Sree Iyer: Namaskar, today is June 16th Wednesday and Daily Global Insights with Sri and Sree, episode number 183. As always, we start with United States News. Biden was holding incorrect notes while addressing the media, and the notes were talking points on Trump-bashing. Sridharji, namaskar and welcome to PGurus channel for 183.

Sir, why is he still obsessed with President Trump?

Sridhar Chityala: Namaskar, good morning to everybody on a bright wonderful Wednesday morning here. We look forward to an exciting session. The comment that Sreeji is making about the video that you saw yesterday where you can see Biden fiddling around with some notes and looking at it and was a little bit perplexed. Now it’s come to light that those notes had nothing to do with the briefing and probably, that’s what confused him on the gaffe, You know, instead of Syria talking about Libya because he was saying, the bashing points for Trump. Now with regard to the obsession, they obsessed with Trump basically because Trump was a renegade, he was not part of the system. He was prepared to call the shots, you know, there was no simplicity’s a nicety. It was a direct confrontation, so he obviously rattles them. Snd he has rattled them, even further when he, you know, got 74 million votes. So, therefore they are afraid of President Trump, this is the Democratic party. So I’m perplexed as much as anybody as to why he was given or why he carried the wrong set of notes to such an important meeting.

Sree Iyer: And Biden Administration has come up with a new set of rules where the communities can report, their neighbours, relatives and friends, who are radicalized. I mean, if there’s qualitative filtering here, I mean, this is like big brother, isn’t it?

Sridhar Chityala: It is Big Brother as you rightly worded it. When you look at a whole range of policies coming out of the Biden Administration, it’s every day is a new puzzle. It’s almost like they have set Playbook and they want to pay out the Playbook, which is namely, you know if you have somebody doing something, report, we will take care. So it’s almost like, you know, we want to have complete control over the people. So, then there is no voice of dissent. The only voice of dissent that is acceptable is the voice of dissent as expressed by the rest of the progressive of the people. You know, cannot express dissent if they do. So then it is presumed to be radicalization. Now, assume that this is going to create nothing but chaos and disharmony in society.

Sree Iyer: And Ted Cruz steps up the ante for Dr Fauci’s resignation and Mike Pompeo lays out, extensive and persuasive data, that Wuhan is still dangerous and active and the PLA is actively engaged. Now, these kinds of statements, he has been added for a very long time now, yet, nothing seems to happen. What’s your take on this, sir? The United States needs to act as a country. Here is a former Secretary of State saying that there is a lot of evidence and that it is with the United States government among the intelligence agencies, why are they not getting off of their rather wide bottom and doing something about it?

Sridhar Chityala: There is a three-pronged attack that is going on with regard to this to Wuhan and China. First is the international Coalition which is slowly raising its voice to say that the WHO was compromised, the investigation on Wuhan was inadequate. Then, you have within the United States, the Republicans both in the Senate and more notably the Senate than in the house, you know, Ted Cruz, Rand Paul, Etc, making the claim or making the case that Fauci should resign and he should become more and more apparent. Some of the inconsistent statements are as come from Fauci, you know, only adds fuel to the fire. The person who has been very persuasive and progressively, presenting the evidence or progressively presenting the facts is Mike Pompeo. So you should see the picture, when you get a chance you should read this, there are three things that we have presented. One is Mike Pompeo standing up and making the statement and second, his assertion, that how the Fox news report carries a very segment of the gross collusiveness, but, with some of the influential people in the United States with Wuhan. So there was prior knowledge. And the third is that there is still that lab is active. So obviously, as an ex-secretary of state and government official, he probably has more information than any of us do. So that lab is active and there is still some viruses and potential for viruses to get out. And there is a collusion of the PLA, these facts are known. But, he is making it in a more explicit and persuasive Manner. And this is a worry because we are now seeing variant 1, variant 2, variant 3 is now announced, you know, South Africa has announced variant 3. I don’t know whether the UK has yet announced or the UK, there are some rumours around the UK having variant 3 and there is a variant expected in the United States, there is an early warning that it is coming to the United States and some parts of it are in Asia. So if this is the case, this can only be construed that the lab is active and this is beginning to spread. So, when does this end and where does this end, how do this end without the truth coming out and enforcement, this is going to be a problem. Will they be enforced? Very clearly, nothing is persuading us to believe that the United States is going to act. If you recall in the DGI we covered, what percentage, you think, Antony Blinken, the current Secretary of State. What percentage, do you think it originated? He said, I cannot assign a percentage but that still will be investigated. So how do you propose to enforce against China? There’s no answer. So it’s fairly clear that to answer your question based on the data. Unless there is a dramatic twist, is seen, there is going to be no action and we’re all going to suffer.

Sree Iyer: Senate progressives threatened to block bipartisan infrastructure plan and stick with their game plan namely no climate, no deal. So, is this being spearheaded by big Bernie?

Sridhar Chityala: No, the big Bernie is now what we call the coach. So, he has a good team, the squad.

Sree Iyer: Those are all congresswoman’s, so, I’m talking about Senate progressives.

Sridhar Chityala: No, I think that he is overarching. I’m trying to say is the overarching coach, he has Team A and Team B, so, therefore depends on who plays the game or which field the game is being played whether it is House or Senate. So, therefore I call all of them, part of the squad, Squad A and Squad B.  So, you have a squad A and squad B and the outside squad members, you know, they don’t make that much noise but there’s only some percentage of people within the Democratic Party both in the House and Senate. But the enough in number to twist or to shift the voting patterns, you can see what happened with Nancy Pelosi. You can see what happened with Chuck Schumer, anybody who is raising their going down the path in their own way. Okay, I mean Bernie Sanders is elder to Schumer, if Schumer thinks is part of squad A within the Senate, then you know he is another student of Mr Sanders. So this is where the Senate stuff comes from. I think that what they’re saying is the infrastructure plan includes all these kinds of bells and whistles, that includes the climate Accord. It all seems to point out there is this one huge chunk of Some money to be spent on all these illegal people who are coming in housing, voting money, dolouts etc, because the infrastructure when you break down, the cost, does not exceed more than 400 to 450 billion. Actually, even in nominating 560, the Senate, Republicans were more generous in giving their hundred billion. So there’s no way you can hide the other 1.7 trillion dollars to make up these 2.2 trillion dollars unless you add all these other benefits, they want to give.

Sree Iyer: My two cents to what you just said, Sir. Dear progressives, you will not be taken seriously, unless you can explain to America and to the rest of the world, how you’re going to contain the effects of the beef industry, which has the highest carbon footprint if you don’t have a solution to Solve that. And if you cannot persuade the world from eating beef, then you really don’t have a plan because that is a big, 800-pound gorilla in the room. So don’t try to, you know, nibble around the edges and say we are doing something on the green. This is all phoney baloney, we don’t accept it at least discerning minds such as myself and Sridhar Chityalaji. We can see through all this smoke and mirror. We can squarely tell you what the problem is. Tell us how you are going to wean the world away from beef. Tell us how that carbon footprint is going to be minimized, then we will talk climate change.

Sir, next from Arizona, Arizona attorney general wants Biden administration department of justice to stay away from election audit. Why is the Biden Administration interested in auditing? What is happening in Arizona State? Because as far as I can remember, elections are state prerogative, and the states of complete leeway in what kind of EVMs, they can use how they will conduct the election and sometimes even the counties can take their own decision. So what is this going on?

Sridhar Chityala: What is going on is the subtle pressure that is being exerted by the Department of Justice obviously the progressives and the Centrist within the Biden Administration saying, okay, elections are over, there is nothing for you guys to do, blah, blah blah. And you know, it is just a coercive pressure, that is being applied. They know that it’s not going to work the Arizona election audit points out, that there is a clear problem. In fact, the liaison officer has stated who acts between the various groups to say, there’s a whole bunch of missing ballots, even now as you complete the auditing process. So it’s very clear that the truth is going to come out. If the due process is done, then it is going to be made an way to the public, which in turn, then puts pressure on this big election reform bill that Nancy Pelosi and others are trying to enact in the House and that is why in DOJ is being used as an agent of service. If I have to use the phrase, to make sure that the states don’t do, you know what, you call information investigation and assessment of what happened, during those election periods, there’s nothing else other than that. Then, Trump went on to say, they will exercise pressure, please don’t yield to the pressure, complete the Audits and declare the information. So, the world is aware of what happened.

Sree Iyer: An email shows that Trump and the white house, administration, pressured the Department of Justice on the 2020 election, fraud claims. A little bit more context here, sir. Can you please explain was during Trump’s term, when the elections have been announced?

Sridhar Chityala: There was a question mark and the question mark has been answered, which is namely, was the Trump Administration, pressuring the DOJ to say intervene or investigate to come and assess. Whether there was, come and say, you know, there was an apparent fraud so, until the investigation is complete. We just have to hold the results, but the DOJ would have no bar of it. So they’re saying they were rare emails. They were not saying that you know, please stop the election. They were saying investigate, Trump Administration was saying, intervene, and investigate, and find out what exactly happened. Because we’re getting a lot of complaints from the Republican Party. The same argument that we applied for the Democrats, which is to say, DOJ talk to the states, will equally apply to Trump. Trump is going to say, Hey you know, so the DOJ during the Trump administration is also going to say the same thing, it’s state providence, I can’t you can tell me what you want, but I’m not going to put the pressure to inform the states, to delay the results and make things available at a later date. So this reveals that there this exchange that, occurred and that record has been set straight.

Sree Iyer: House Republicans demand that Congress review, any Iran nuclear deal, I see there’s nothing wrong in that I mean they are going to vote on it. So, is the New Deal not being placed for perusal for the congressmen and women sir?

Sridhar Chityala: it’s just a suspicion that is going on because the Vienna Discussions are going on, you know, notwithstanding the fact that there is enrichment and so on. There seems like a hell-bent that the Obama administration’s Accord has to retroactively justify that Obama was right and the Iran deal has to happen irrespective of what Iran does, that seems to be the agenda. Whether Obama himself is driving some of his ex-administration officials. We don’t know. I think this is the pressure that the Republicans are putting, but we stalled it now it has come to light, even Israelis who are badly impacted could be badly impacted as a result are saying this is not acceptable. I think that’s what is going on. They don’t trust the Democrats.

Sree Iyer: Biden administration expands eligibility for the program to bring Central American miners to the United States. This is over and above the DACA programs.

Sridhar Chityala: Yes, yes, over and above everything. Suppose I have 10 relatives, nephews who are there then, they can say my uncle is in the United States. Look, you know, I need to go and help him and there are plenty of job opportunities. By the way, people are quitting jobs and there is plenty of money coming in. So, I can go and help my auntie, I can also become part of the job. Biden administration will sympathetically consider those applications and, you know, bring them in.

Sree Iyer: Death Toll in the United States Crosses 600,000 and Brazil at 488,000 and India at 377,000, these are the death tolls from Covid and the total number of 3.82 million deaths. This just gives you an idea of the magnitude of the challenge that we are at, aren’t we, Sir?

Sridhar Chityala: one-word sir, China should be banned from any International activity and their reserves and the debt should be held back and basically told You are accountable. We are not repaying debt, you want to stop supplying to us. Good luck. Just as China today announced, it’s not going to buy Commodities because if people buy Commodities. They think it is speculation. It’s basically for them to apply the squeeze. The magnitude of the damage just from a human and emotional point of view, caused by the Wuhan virus or China virus is astronomical, I mean nothing remote has come. Even world wars have not inflicted the type of damage that this has created. It is very shameful and disgraceful on the part of China still to be hiding behind these incidents that are emanating from there.

Sree Iyer: India news, Reliance Jio starts 5G trials in Mumbai with indigenously manufactured equipment. So, India is finally dipping its toes into 5G technology.

Sridhar Chityala: They are and notwithstanding the actors and actresses and another kind of people from Bollywood, for allegedly claiming that it is going to impact their lives. The 5G  will start, the reason why it’s important to point out this is Jio was one of the companies when President Trump visited India in February 2020 raised its hand and said, if you give me the Capital incentive and tax incentive, I will come to the United States set up manufacturing and do the R&D and build the 5G as an alternative to Huawei and actually President Trump invited. So it is very good that Reliance continues on its development path, notwithstanding so many challenges that have been thrown at Reliance. I mean, that’s a topic by itself, you know, the towers and this and that and so on. But, very good that Reliance is moving forward with a 5G.

Sree Iyer: So, they say that if you can drive in Mumbai, then you can drive anywhere in the world. And if 5G can work in Mumbai, it will work anywhere in the world. We wish them the best of luck.

Let’s move on to Military Train successfully running on a dedicated Freight Corridor to boost India’s readiness and efficacy. So, this is a military train not a consumer train or not a passenger train or a goods train, right?

Sridhar Chityala: It is not. It is a military supplies train and which means they can move anything on the military side, but using the dedicated Freight Corridor. What it’s telling us is that India may not have been prepared for Covid Wave-2, but they are well prepared for the dangers lurking across its borders. So they getting the entire infrastructure ready and organized and testing and making sure that they are combat-ready. I believe there’s something that is going to happen and they are combat-ready to deal with the issue.

Sree Iyer: DRDO has developed a 2-DG drug that inhibits coronavirus multiplication and is going to probably work against all variants. So this is all in the test phase. Now that WHO has renamed it as Alpha, Beta, Gamma, Delta – I don’t know, they have to now have mapping technology to say when you say this, this is what you really mean and so on, but that would work itself out. But the good news here, the underlying Silver Lining here is that the DRDO’s drug appears to be quite effective. Your thoughts, sir.

Sridhar Chityala: I think that it’s very good that the DRDO is actively engaged in the reconstruction of the molecules and determining the appropriate mechanisms to deal with various variants that are emanating from this covid situation. So it’s big news.

Sree Iyer: Clinical trials of ‘Novavax Covid-19’ at an advanced stage of completion in India, says Dr VK Paul. If you remember viewers, we talked about Novavax yesterday, this is a new drug that is very, very inexpensive and thereby it holds a lot of promise in terms of how it can capture significant market share. Sir, your thoughts.

Sridhar Chityala: I think it’s remarkable that Novavax had some difficulties here because of the excess supply to get the same emergency use application plus if you don’t do a full course of trials then it doesn’t get easily approved through the FDA, the gestation period can be two-three years. They said now we’re going to India, India’s prepared to conduct active trials. And by the way, we have a captive market in India for vaccines at a low cost. India will also export it to the emerging Nations. So, you will see Novavax is probably making its way through India. Dr Paul has confirmed that they are in a very advanced stage of completing the trials. They will have the data certify it and start using it.

Sree Iyer: NHAI- National Highways Authority of India is likely to expand the size of the proposed infrastructure investment trust to raise up to 15,000 crores. So this is like, India is on Top Gear to build out or layout even more infrastructure under Nitin Gadkari. A very impressive feat, sir.

Sridhar Chityala: Very impressive feat. I think that this whole creation of an alternative investment Trust is a great way to raise capital and then allocate Capital towards the deployment. I think that amongst various ministers, I think two people clearly stand out in the Modi administration, Nitin Gadkari and Piyush Goyal. The transformation railways which we have talked about, single-handed credit goes to Piyush Goyal. Similarly, the infrastructure that has been built be it anywhere – air, ground, water, ports, borders, the work that’s been done by Gadkari is remarkable. He’s also been given the mandate for the MSME which makes up about 40-45% of the economic GDP in India, very similar in most parts of the world. The whole approach of how capital is raised and capital is allocated towards these programs is very laudable.

Sree Iyer: Now, let us take a look at Global News. China asserts its claim on Taiwan with 28 Fighter jets, breaching the Island’s Air Defense Zone. So with your permission, I’m going to just put up a quick bitmap here as we see that the Taiwanese island of Mutsu is closer to the Chinese Mainland than Taipei. Perhaps China is eyeing that first.

Sridhar Chityala: Well, I think, based on the dredging that is going on and it’s only 20 Nautical miles from Mainland China. So they are slowly picking away bits and pieces of the land and it is hard to see this part of Taiwan remaining with Taiwan. It is farther from Taiwan than it is from China. So that’s number one. Number two is that the air defence zone. While the G7 meeting is going on and where Taiwan was included, China is saying that it’s not going to take it lying down and it is making this provocative postures – J16s, their other types of aircraft constituting this fleet, is not a very positive sign but Taiwan is well prepared. And whether the United States and the rest of the world is prepared to deal with this, time will tell.

Sree Iyer: Vary of India’s strategic confidence under Prime Minister Modi, China and Pakistan are focused on protecting the China-Pakistan Economic Corridor about which we have been talking quite a bit, about how it is economically unfeasible, about the kind of displacement that it can do to the Pakistani population. So the renewed interest shows that perhaps China is getting nervous?

Sridhar Chityala: I don’t think China is getting nervous. They got the borders occupied. They have their stealth aircraft flying. They have fortified their positions. India has categorically told China and refused to participate in the Shanghai Cooperation Forum, basically, saying you are in Gilgit-Baltistan and we have mentioned to you that Gilgit is off. It is part of India. You cannot run the economic corridor through that passage. So, therefore, I think they’re saying ‘when India says something they hold by it. So, therefore, we now need to make sure that we are organized and we protect the CPEC project. And also the other thing that is lurking there is, whether they have their eyes in Afghanistan with the imminent departure of all the US troops. Afghanistan is wide open for the allies. So whether they want to bridge the gap, use this window to occupy and they’ve always been collaborating with the Taliban. Whether India has the wherewithal and the capacity to deal with both Western borders and Northern borders and then also to take on additional responsibilities for Afghanistan remains a big question mark. So I think China is more strategically prepared. I feel the focus is more on Afghanistan and to see what they can cherry-pick on the CPEC rather than worrying about India. They recognize that if they take India on there is going to be huge damage and India is not willing to concede an inch of its territory.

Sree Iyer: The United States USS Ronald Reagan carrier group in the South China Sea amid tensions with Beijing. We are showing the picture here, sir. It has four squares and the bottom right is where we are showing about the USS Reagan carrier group that is doing all the exercises there, and before you go ahead and comment because other things in the slide, China declares its unbreakable trust with Russia ahead of Biden-Putin Summit that is going on, it’s underway in Geneva right now. So perhaps you can give us what you think is going to come out of this Biden-Putin meet.

Sridhar Chityala: Well, it’s very interesting if you see that 5 block diagram, one of them says, in the Monday interview of which the reports came out yesterday and those who watch the interview will understand. Basically, Mr Putin said he is just a normal person, all his Macho is fake. He is truly not a combative person so therefore I can easily deal with it. So, you have that.

Then you have Xi Jinping and Putin saying we have an unshakable friendship and we are together and we’ll take you on, don’t try and muddle around with us. So, therefore, you have that part.

Then, while that goes on two things happen, one is the continued dredging in Taiwan, then the incursions into Taiwan, then you have incursions into Malaysia, then you have the stealth fighter stuff going on around the Indian border. So, when you put this together in a global strategic context and then you have the Russian Fleet both in the Indian Ocean and the Pacific Ocean. They had war drills around Hawaii. So when you put these five or six blocks together, you can see China and Russia together in a collective manner trying to combat G7. The question therefore is, is the United States as powerful as it was? That doesn’t appear to be the case when you put together all the stuff because of the provocations that are coming out of this. This is not like Trump, you have seen in four years none of these people wagged their tail. Because there is tit-for-tat stuff that is coming out. Now everybody is wagging their tail and is the United States capable enough to show leadership with the rest of the Nations? Doesn’t appear to be so. Just on the Reagan, which you see in the picture, remember it went to the Persian Gulf and it has been brought back recognizing that there is a vacuum here.

So there are a lot of missing pieces. Suga is not in a powerful position. He is facing a no-confidence motion within Japan, he is the prime minister of Japan. So the question is, how is this geopolitical tension going to be dealt with? QUAD which used to be very active has now gone to the sidelines, even the defence ministers meeting of ASEAN that was held yesterday in Singapore doesn’t seem to have come out with specific conclusions on ground rules as to how these maritime border issues will be dealt with in the South China Sea. So that in a nutshell, is what those five diagrams are in conjunction with that stealth and a couple of other diagrams that Sreeji has shared. You put this together on a wall, you can understand the pulp that the world is in on top of covid.

Sree Iyer: Australia and Britain reach a free trade deal and cut many tariffs. So, this is significant in light of the fact that the UK or Britain is no longer a part of the EU and it has done a Brexit. So now they are on their own, so Britain needs to strike all these bilateral relationships, isn’t it?

Sridhar Chityala: It is, and I think that, in my personal view, it is good for Britain, it is very experienced in managing its bilateral relationships. It has historical precedents. It can unbundle itself from all the vagaries of the bureaucracy and deal with its future much better. So I think I won’t be surprised if France does something similar very very soon.

Sree Iyer: The United States and the EU – European Union, reach a deal to end a 17-year Boeing-Airbus trade dispute. So this is been here for Donkey’s years where Airbus was fighting with Boeing and now looks like maybe this is one of the most significant achievements of the Biden group.

Sridhar Chityala: Well, time will tell because subsidies on either side block one from coming to the other and so on and so forth. It makes more trade protectionism. They seem to have even talked with. We’ll wait and see. Boeing is not in a stellar position financially either. So therefore it remains to be seen how this plays out.

Sree Iyer: Yes, indeed. And Boeing has a lot of planes that were not being taken up by the consumers or customers who placed orders with them. Thanks to Covid now, they have a surplus of planes. I don’t know what’s going to happen. How that inventory is going to be drawn down. You can’t just like that, put a plane on the market and hope for someone to pick, make a bid on eBay or Amazon. So we have to wait and see how that goes.

So moving on to markets. S&P and NASDAQ slipped from their record highs ahead of the FED decision. We talked about this yesterday, we said that perhaps the FED will have some text that tells how it is going to deal with the looming inflation. Your thoughts. Have you had any other revelation since then?

Sridhar Chityala: No. None of us will ever know. There’s no advanced notification on Fed. They keep everything tight and secret which is very good, but the perception is that they can change their word at the last minute. So the broad consensus that is obtained in the FED FOMC meetings, which is FED Open Market Committee’s meeting which looks at the economic situation, etc. But there is a sufficient indication that they will make some statement today. We will report it tomorrow.

There will be some indication that inflation is going up, maybe they will say we will completely cut the asset purchase programs. That’s an indication that liquidity is going to be, to some extent managed. But what’s astonishing is that we had the consumer prices go up. We are now seeing the producer prices go up on an annualized basis, estimating 6.6% and then, rents are going up. See, rent going up is an indication that inflation is on rising because rent is not excluded. Which one of the key drivers of inflation. It is a reflection that demand is going up. There is a lot of money in your bank account, thanks to Mr Biden. If you haven’t got it, ask him, he’ll give it to you.

Sree Iyer: I’ve tried, sir. I have not been given but that’s a story for a different day, a different time. They say that because you did not get the SBA loan, therefore you are crying sour grapes and you are attacking the Biden Administration. Nothing could be further from the fact. Now you can see even CNN beginning to say, well, what is this going on here? What is this going on?

Sridhar Chityala: You need some resistant accountant, sir. If you have an intelligent accountant, then I’m sure you will get the aid, that’s all.

Sree Iyer: Here you go. This brings us to a close to today’s program. We do appreciate your support for us today. We had very good traffic but more importantly as soon as the program starts you should help us by liking this program. After all, you do come here because you like the content, the presentation, the speed with which we cover the events around the world. Remember the DGI has a shelf life of a few hours after which news becomes obsolete. There’s something new happening. So if you can, please like the video, as soon as it starts airing, that will help us reach more users because the YouTube engine might think, ‘Oh, this is a really popular program. Let me see. More people are interested.’ So they may serve it up to more viewers. We’re just hoping here. We don’t know this for a fact, but anything, any little thing helps. Please do subscribe to our Channel. Thank you very much Sridharji, and we’ll be back again tomorrow, won’t we?

Sridhar Chityala: Thank you. We will be back again tomorrow and we have Fed news to cover. We will be showing pictures of the various combat vehicles that left China on its way to Taiwan. We will probably cover, whatever has happened in the Pacific region, in Hawaii. By the way, we will also finish the meeting between President Putin and President Biden. It’ll be interesting. If there’re video clips, we will share that too.

Sree Iyer: Thank you so much, sir, Namaskar.

Sridhar Chityala: Namaskar and have a good day.