Sree Iyer: Namaskar, today is July 2nd, Friday, and Welcome to Daily Global Insights with Sri and Sree, Episode 195. Let’s take a quick look at Cowcoin USA is one of the sponsors of this program. Cowcoin is a digital currency that is directed towards addressing Healthcare, Education and Entertainment sectors. We have a lot to cover and shall jump straight to Global News.
Sridharji, namaskar and welcome to PGurus Channel and let’s take a look at CCP, after a hundred years. A lot of killing and deceit and China has never considered the US as a friend in the past 70 years says a retired CCP Professor. Truth coming out, what do you think, sir?
Sridhar Chityala: Well, good morning to everybody on this wonderful July 2nd Friday, and then we await the July 4th and happy July 4th to everybody in the United States and looking forward to another great session.
CCP completed 100 years on July 1st, It was a celebration and we covered a bit of the topic as to Xi’s representation yesterday. So today, the messages that are coming out from yesterday, is that what is conspicuous is, its century killing and deceit, the human rights suppression as China and CCP pursued is the renewed agenda. I call as one of the greatest economies today prevailing in this universe, their process and approach may be questionable. Having said that their own CCP retired Professor is making the statement that, it was never an ally, never a friend of the United States, always the pursuit of China was for China. It never allows anybody to come in its way as it pursues this ruthless execution, very sad, but that’s the sentiment expressed by somebody from within the party itself.
Sree Iyer: Negative views of China remain at historic highs as per the recently concluded Pew Research Center that has been shared with the CCP. Was this sampling of across the world sir, or was it some specific countries?
Sridhar Chityala: The Sampling was across 76 countries I believe, if you recall we had presented again the Pew research of this skew in the last five-six years, the data some time ago as to how that curve has shifted from extreme right to extreme left, which between 15 and 20 per cent satisfaction range. The same research, the same people conducted research and present, it looks like represented many countries have been included Sweden, Finland, the United States, Koreas, Japan, many countries in EU, many countries in Asia. The conclusions come out that somewhere between 60-76% of the people have expressed dissatisfaction with the way CCP has pursued the most recent policy on a number of factors. What could also be influencing, this judgment is the Covid situation. The Covid situation has not helped in any way, despite wolf diplomats of China and despite Mr Xi Jinping and Bin Xi’s provocative statements out in the press. I think that certainly has distorted what people view of China.
Sree Iyer: Xi vows valves to crush meddling forces and any Taiwan Independence attempts. Japan and US Test air defence in Taiwan neighbourhood on China’s centennial day ruffling Xi. So, the opposition that the United States and Japan are also needling China at this point when they are celebrating hundred years. Looks like it was very intentional and purposeful, so is Biden changing tack? What’s your thought on that?
Sridhar Chityala: Well, certainly, it’s beyond rhetoric because this is not from Shintaku Islands. This is from another island, which is part of the Ryukyu Islands as they call on Nanshi Islands, you know where the US has a base and it is called the Amami Oshima base, and from where the self-defence forces of Japan, as well as the military forces, stationed, thereof the United States fired surface-to-air missiles, and also, they placed their truck-mounted anti-air missiles with an intent that in case, there is an attempted attack on Taiwan, it can be repulsed from that specific island. It’s only from 850 kilometres of Taiwan Coast, one can go back and take a look at the maps and figure this out, but it’s a very clear case that Taiwan seems to be at least has emerged as the red line for Biden and clearly, it’s the red light for Japan. And it’s also clear the red line for a number of nations in the South China Sea. But whether they will execute when the time comes remains the big question mark and I think and again, in DGI, we covered one of the Chinese generals or so saying don’t rely on the United States, there, let you down. Be organized yourself to become part of greater China.
Sree Iyer: Iran halts IAEA inspections to main uranium enrichment plant while the US and Israel issue veiled threats. Russian Domestic Security Agency says that it has foiled a plot by ISIS-linked terrorists, with plans to conduct terror attacks in Moscow and Southern Russia. It killed one suspected conspirator. With your permission sir, I will put up the first chart of Congo now, what’s going on?
Sridhar Chityala: Okay, I think if we take a look at that map in the Congo, Central African Republic’s, It is believed that Russia has got mercenaries helping the government to combat the Islamic forces, this was brought up by the US ambassador to the UN and Linda Thomas-Greenfield and said that you know Russia should not meddle and get out. The fact that there are people from this specific, ISIS Terrorists is what Russia is alleging and who had contemplated bombing Moscow and Southern Russia and the perpetrator has been killed. So, when you look at the statement, which appeared in United Nations by the US ambassador, and then when you look at what’s happening in Russia, you can tie the knots as to where some of these issues could be coming from. But, the most important point is right through the last couple of weeks, we have been covering the Sahl region including the Dar-es-Salaam entry point for China. If we take a look at every day, We have covered some issues which is the terrorist-related issue. Everybody knows about if you take a look at this map, you have the Central African Republic. Then, you have Bini, which is in the Democratic Republic of Congo, which is the Eastern side. Your mind that Islamic terrorists have killed the government forces. Again, the government forces are fighting the various terrorist groups.
Then we covered Tigre, which is further up in the border of Ethiopia, Sudan region, where again, you have these terrorist groups, fighting the government forces and you have a set of issues. So, we almost covered, when you take a look at Ethiopia, South Sudan, Democratic Republic of Congo, going up to the Central African Republic. We have covered a whole bunch of areas as you then we can push further towards the west and we can look at other places, but the fact is that you are beginning to see these incidents pop up and having whether this is going to result in a major consequence, it remains to be seen. So you have the ISIS and Al Qaeda are very active in the Sahel region, which brings us back to another map called Afghanistan, which we are not covering today, but we have covered enough, but more or less, it looks like almost the complete evacuation is complete again Al-Qaeda and ISIS are still fairly active in that part of the world. It means that we have a problem looming, very soon withdrawal of the US, EU and other forces from the region.
Sree Iyer: Let’s take a look now at the United States news, the CBO I think that’s Congressional budget office sees supercharged recovery as pandemic dissipates and also predicts High inflation in the coming months. Fed president Bullard also predicts inflation coming sooner rather than later. Trump organization CFO Alan Weisselberg predicts not guilty to tax crimes. So this is one of the big news items that coming out in the last couple of days where there was a jury that indicted the Trump organization but there is a little bit more going on than what’s coming out in news outlets such as CNN isn’t it? Can you please help us connect the dots?
Sridhar Chityala: Great. So I think just let’s dispense with inflation, CBO is predicting that you know, inflation is on the horizon, so, therefore, one should accept inflation as part of the norm. Now we have will have a separate wire side as to his whole theory between the market economies, and monetary Economist on the inflation and the market forces. So Fed Bullard as well as is predicting the inflation to come sooner.
Coming to Trump organisation, basically, the question of Trump organization especially around some of the businesses in the New York and the greater New York area, is that the business practices and the principles that the Trump organization has followed and practised, is contrary to the prevailing rules around Taxation and compliance and etc. Etc. So they went after the CFO Alan Weisselberg, who pleaded not guilty to the tax crime, but he went first, as soon as he was charged by the jury to be guilty. He went and surrendered himself and said, and his tax lawyers came and said his lawyers came and said he’s not guilty. Why I’m not guilty. Well, you know, because you are telling me that I’m guilty because I did not pay taxes. And I did not disclose it because I was given an apartment. I was given an additional facility. I was given planes to fly, my children’s education was funded and I was given a whole range of benefits for which, you know, tax needs to be paid or tax should have been paid. So, this is the basis of making me guilty.
So what is the goal? The goal is if the Democratic jury and the courts in Manhattan which are liberal friendly. We have to say that, you know, we have now courts, which are conservative-friendly. We have courts, which have now liberal friendly. Because depending on which court system you are in, accordingly, the Judgment gets appropriately dispensed. So he’s saying that if they can go after Trump’s organization, his practice is to eventually they can get to President himself as the CEO and the owner of the business. And so that’s where we are heading they are trying to figure out how to get to Trump and this is just the first, the beginning of this evolution. Just as we had four years of Investigation into the alleged, Russian interference and Russian connection between President Trump and Russia that went on for four years and probably will continue again. So you’re going to see the same thing, now happen in the business context emerging from New York.
Sree Iyer: The Supreme Court has said that ordering Charities to disclose donor, information violates the First Amendment. The way I read it, sir. Is that the Charities do not have to disclose who the donor is? Is that correct?
Sridhar Chityala: Correct, they are saying this is the first amendment, which is, I have a right to disclose, right not to disclose you Supreme Court, cannot come and tell me as a charity that I have to disclose. Because as you all are aware, if they are complying with the tax norm, they will make the declaration in the tax statement and claim the appropriate tax credit, if they don’t disclose it in their tax that means that it is not tax-deductible organizations are tax-deductible charities so that will not be accepted with the tax authorities. So, they say it is said declaration between me and tax, it’s not for me to make my declaration public.
Sree Iyer: The Supreme Court also upholds Arizona election ballot harvesting laws as illegal over a challenge by the Democratic party and this is a very significant ruling. Essentially what it says is that the State of Arizona is fully authorized to find out if there were violations. And if they have to limit ballot harvesting they can do. That’s how I see it, Sir. Please let me know if I’m understanding it incorrectly.
Sridhar Chityala: The Supreme Court in its ruling says Arizona’s laws are very clear and very specific. They have given early voting which starts 27 days before the election day. There’s sufficient time for people to cast their ballots. A sufficient time for people to put their ballots by postal or other means. So, this whole concept of someone else filling up the form for thousands and millions of people and casting it either one day before two days before, or on the day of the voting is illegal and violates the laws. So this is how the Judgment was written on a 6-3 majority. 6 being conservative, 3 being liberal. So, therefore, this is compliant with the rules enacted by the state of Arizona. So, therefore harvesting is illegal. Now, the Liberals say harvesting is legal, it is part of the norm. You call it harvesting we call it as facilitated completion of the voting. So this is where the contention comes in. So in other words, Sree Iyerji, we can have people from the Democratic party, take all electoral roles and fill up. They’re all members will have and send it or present it and say these are all registered, Democratic candidates. These are all registered, independent candidates. We have voted for them. Then why do you have a franchise to cast? So, this is the whole principle, and I think we covered this, there has to be some mechanism to change this nonsense that is going on in the United States.
Sree Iyer: Senator Cotton says, Critical Race Theory threatens cohesion in military units, while in Virginia, it was at the heart of the PTA clash. We covered it a few days ago. Immigration and Customs Enforcement Sheriffs sue Biden over unlawful border policy. California joins Oregon in giving free healthcare to illegal aliens in its budget. I don’t know what’s going on with my state. I think Gavin Newsom is trying very, very hard to retain his position. On September 14th, the state goes to poll to recall the governor. California also has one of those unique distinctions where they have, in fact, recalled their governors in the past. Gray Davis is the last one and now it could be Gavin Newsom joining the ranks of Gray Davis. So let’s see how that plays out. Sir, your thoughts. Finally, I see and Border Patrol organizations have started pushing back, haven’t they?
Sridhar Chityala: They have started to push back. Just for the benefit of the number of liberal Democratic party sympathizers, who are also part of the audience, what they are saying to us, to the state is legal aliens are irrelevant, illegal aliens are important. Remember, one of the reasons why we have Obamacare is for lack of medical insurance coverage and people unwilling to take medical insurance and they all have to be covered by somebody else paying for the Medicare system, which is why it is broken. So now we have all these people from the liberal states saying, even before they cast us questions, they have to look at their own economics, they have to look at their own rationale, you can serve the people inside, so you have a whole bunch of people coming from outside and become part of the Medicare system. Remember Medicare system is not funded by the government, it is funded by the taxpayers. There is an annuity pool, all the money goes into an annuity pool. The annuity pool forms the basis from which distributions occur to fund the system. So, you may be having youngsters you may be having a lot of people who are paying for their medical insurance but all their money is going to be taken out in dispensing the cost that is coming from various states in the medical insurance support process, especially under the Medicaid. So, when you have all these fellows coming in and being given unilateral medical access when you have existing citizens who have been denied. It basically begs the question where is the United States heading? Is it going towards ballots it is namely, everybody to be stamping Democrat or voting because you are sympathizing and giving all these kinds of things that seem to be the trend? There is no economic rationale or sense in this.
As far as the Sheriff and the others are concerned, their funding has been cut. They have been demanded to do more work. They are no enforcement rights and it is creating deaths, problems, violence and skirmishes in the border state. It’s not where Vice President Kamala Harris visits, where you have a wall in El Paso, but all the problems are in those other areas where you have unprotected borders and where you have surges happening. Live people witness these surges. So it’s very ironic somewhere at some stage, the intellectual community in the United States must reconcile and say, how we’re going to deal with this complex issue.
Sree Iyer: Next, let’s take a look at India related news. It’s time for monetary stimulus to be gone, the fiscal package is the only way to ensure healthy numbers for fiscal year 22 argue Mohandas Pai and Nisha Holla. I think, viewers, you know who Mohandas Pai is, he has been a guest on our fireside chat. So now I think he is also saying that you need to start looking at some fiscal measures such as perhaps looking at the demand side. Your thoughts, sir, as we go on to the next item, please go ahead, sir.
Sridhar Chityala: I think there are two charts that have been presented. One is a quarter by a quarter chart which basically shows the effective GDP in Indian rupees. I think viewers can see that. Well, I think first, we establish the point, the basic premise that the GDP contraction is not 8%, 9%, or 10%. The GDP contraction is 3% and he has presented rationally quarter by quarter FY 20 and FY 21 numbers. So that just gives the basis which is to say that for the economy to come back and then step past the FY 2020 numbers, we really need some stimulus. He says the time for stimulus has come but it’s more, you need a fiscal package. Fiscal package by way of not just purely instruments which give you credit but really need to begin to put some cash injection to get the momentum behind. So he has rationally argued it with numbers and numbers tell what the relative story is. You will also see the three important sectors are broken, agriculture, industry and mining and the services sector what the relative numbers across the two financial have been and what needs to be done.
Sree Iyer: Let’s get back to our main news item. Reliance joins Abu Dhabi National oil company to set up a 30,000 crores mega chemical project in UAE. And so, this is an important milestone because now India is beginning to branch out in offering its services to things like, building refinery plants, and perhaps run it for the UAE for a fee. This is exporting technology in my opinion. I think that’s a good thing, sir.
Sridhar Chityala: It is excellent. I think the Indian Refinery and petrochemical production 100% is now close to 25% to 29% is held by the private sector. So who are the big people? Obviously, some of it has been privatized where you have public participation and some of it is held by large complexes such as Mr Ambani and so on. So the fact that Reliance is now going around the world in offering its capabilities, both in the refining as well as the petrochemical projects is a very good indication that there is also a change of power taking place. Historically, it used to be the US-led initiative, but it’s all now coming to… There are only 2 major players, one is CNOOC and then you have Reliance which is an Indian private sector enterprise that augurs very well. One of the reasons why the bilateral trade between India and the United States jumped, a significant part of it comes from the energy sector is a reflection of positive strides that India is making this specific segment of the economy, not just exploration and reproduction.
Sree Iyer: India to get second homemade vaccine Zydus Cadila as it seeks regulatory approval for its three-dose Zycov-D vaccine. So this one is three doses and if I understand it correctly and we still don’t know what is the spacing between those and why 3, sir?
Sridhar Chityala: I think some of these are very protocols related. The Zycov-D is supposed to produce a structure inside which basically pretends to be what the virus is looking for and then it attacks the virus because when the virus attacks that specific molecule, then you find that it becomes the antidote for the virus to mitigate. So this is the essential principle behind Zycov D. Also, while you know that vitamin D is considered an important ingredient to battle this virus because it doesn’t resonate very well. If you recall, one of the things when the early covid virus science came out, it’s not very susceptible to heat and probably one of the reasons why certain states in the US like Florida and so on were able to combat with no masks and so on and so forth and relative places like New York. So the three doses theory will probably converge to two doses or one dose eventually as they improve the molecular structure formation inside the body to combat the virus. So that is a banker giving a biotech medical analogy to the question that you asked.
Sree Iyer: Left parties of India congratulate the Communist Party of China on its hundredth anniversary and applaud its governance. Sir, I don’t recall seeing the Chinese Communist Party congratulating Pinarayi Vijayan on his stunning success in the Kerala elections. Why should these guys bother? I mean, they’re still want to be the doormat or what?
Sridhar Chityala: I think I set the context at the beginning, which is to say that democracy has its virtues and sins, has good principles and sins. So part of the sins is part of the good virtue that comes with this. Unsolicited support has been given with the hope that there will be some breadcrumbs that would be thrown out. And so people volunteer when nobody has asked for it. So these are all the left parties that said, we congratulate you, you are our beacon and you are our icon. Marxism and Socialism – two principles where you don’t need to conduct elections and where you can a rule determined by a set of people, we applaud and you are our shining star. Because Russia has collapsed, Russia has some form of democracy. The only thing that is now left is China.
Sree Iyer: In Markets, the stock market rallied across the indices on Thursday, which spread across broad industries and energy names driving the momentum. The United States crude oil futures climbed 2.4% to $75.23 per barrel, eating fresh highs. So those of you complaining about petrol price at the pump in India, it’s only going to get worse. Today’s markets will be driven by employment numbers and gains are expected based on the market pundits. China and India join 130 other nations in signing up for Global minimum… I’ve missed that part, maybe you can fill it out. What is it?
Sridhar Chityala: Remember, Janet Yellen introduced that there should be a minimum, 15% tax, not 10% and tax waivers, and so on which basically disenfranchises or disintermediates, taxing nations such as the United States. So everybody should have a minimum tax of 15% or it can be above 15%, but a minimum 15% threshold should be maintained. How the countries will deal with remains to be seen. Remember, India, for example, has some of the tax-friendly zones where it only deducts 10% tax or even no tax in some instances, it is called tax free period x number of years. The United Arab Emirates has no tax, it’s a zero tax but there is some form of other taxes they may be coming up with. This is where all the nations have come together and said we support Janet Yellen in this minimum 15% tax.
Sree Iyer: With that, we come to an end of today’s segment of DGI. Have a great weekend. Have a happy 4th. Be careful, stay safe and also wear the mask when you are in public places. Sridharji, as always, it’s a pleasure signing off the week with you. We’ll be back, next week, bright and early. Perhaps not on the 5th, I don’t know. Are we going to be here on the fifth, sir, which is going to be Monday?
Sridhar Chityala: They would be hardly any news but we can be here on the 5th, everybody will celebrating July 4th, but the world doesn’t stop. We can take a call…
Sree Iyer: Towards the end of the week, we can do that. Yes. And thank you so much and we’ll see you again bright and early next week, Namaskar.
Sridhar Chityala: Namaskar. Thank you. Have a wonderful weekend. And again, happy July 4th.
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