EP 209 | Daily Global Insights | Jul 22, 2021 | US News | India News | Global News | Markets

Sree Iyer: Namaskar, Today is the 22nd of July, Thursday, and welcome to Daily Global Insights with Sri and Sree, Episode 209. We begin with Global News as always. Mike Pompeo speaks out against the deal, cut by Russians and Germans with tacit US Support. He speaks of the consequences and potential threats. Here is the video clip of his conversation with Maria Bartiromo. Your thoughts Sridharji?

Sridhar Chityala: Good morning to everybody and you know, looking forward to another great session and we wish you all a wonderful Thursday and those who have finished Thursday, a great evening. Mike has been very forthright and right throughout his tenure, as the Secretary of State, one can see the transparency and the clarity around the foreign policy. Now, he’s outlining, some of the issues and challenges. And clearly sees, this particular deal that’s been cut by Vladimir and Angela Merkel as a Potential Threat, should there be any confrontation that could occur as a result of this whole Flashpoint around, Ukraine, Crimea, Black Sea issues, that that we have seen prop up when NATO and its allies including the United States were making their runs around and see as a defensive mechanism. He is also made it very clear that week administration is going to struggle to even deal with issues around China. So, he says that I mean, in ambiguous terms, this is not something that should have happened and the United States should have done everything to make sure that those terms were secured and not allowed, but then that is water under the bridge. It’s done and it’s moving forward and President Biden has laid out his rationale as to why he supported this while he decided to shut down gas pipes and gas pipelines and all new leases in the United States.

Sree Iyer: One word to explain the US oil policy, bizarre, that’s my opinion, sir. To prove his point Mike Pompeo’s point Wendy Sherman Deputy secretary of state is now visiting China and will meet with Chinese leaders on Sunday and Monday, including the foreign minister Wang Yi. Two days of meetings to address issues. She is Keen to tread a softer path on Taiwan and will not support Taiwan Independence, while Japanese Deputy Prime Minister Taro Aso argued on July 5th, that in the event of an attack on Taiwan, Japan and the US will fight together to defend Japan. We seem to have translation issues. We see Sherman saying one thing. Japan is saying something else, suddenly the US will reverse itself, Jen Psaki will have something else to weigh in what is really, really going on in the event of the conflict in Taiwan? What do you think is going to happen, sir?

Sridhar Chityala: What is going to happen? That’s a great question. First and foremost, you can see, Wendy Sherman, even prior to this confirmation, was making a point that she’s awaiting a response and situation to which we reported in DGI that she was awaiting a positive response from the Chinese so that she could swing by and meet with the Chinese leadership. So, lo and behold, China has granted access and lined up a whole swag of leaders. So, while along the way, the question was posed to her which is namely, would she be asking Taiwan and what does she think about Taiwan? So this is the second leadership, within the Department of State Administration from the administration which is taking a position on Taiwan that seems to contravene with some of the stuff that is coming out from the Armed Forces. What is the position? The position is named, you know, we are concerned, and we have to understand and accept the sensitivities around Taiwan. We prefer a partnership, but we are not supporting an independent Taiwan, that actually contradicts with some of the stuff that is going on, with the Defense Forces, which is working with STF of Japan, in terms of making sure that in the event of an attack, that there is a defensive posture, the defensive mechanism in place in the support of Japan.

Japan itself has been forthright that Taiwan is a red line and they have stated that upfront and from day one. So hence the question is we having translation issues in terms of what the US, at least the state department, and possibly Biden has not made a specific statement as yet on this contradiction. But is there Reconciliation between the state department and what Japan’s aspirations are? There is confusion in this, very similar to what Pompeo laid out on the Russian side.

Sree Iyer: Brisbane was selected as host of the 2032 Summer Olympics. Tokyo Olympics grapple with Covid-19 and heat as the games kick-off. A last-minute cancellation of the Tokyo Olympics is still not ruled out. However, it looks like it is going to go on. Your thoughts, Sridharji.

Sridhar Chityala: Well, I think the Covid situation in the whole of  ASEAN and even in Tokyo and broader Japan is a cause for concern as we speak right now, the games are all set to kick-off, but who knows that you know, whether they would make a decision to cancel. Apparently, it has now, you know, they’re tightly managing the news. You know, some of the athletes who have been infected may not be many in number and some of them have been sent back.

Sree Iyer:  Covid continues to surge across Asia as more ex-pats make an exodus from Indonesia Italy, Turkey Austria, Bulgaria, and Poland will accept the vaccine passport of Japan with no quarantine. So, this Covid thing again, even in the United States, the numbers have started going up dramatically.

Sridhar Chityala: Well, I think again, you know, we have been speaking about the Active cases in the US and probably at some stage people heard that maybe Daily Global Insights our program and you know, suddenly the alarm bells started to ring and they started to focus on the numbers. The numbers have been very clear. I think the CDC has been making it a point that more than 50% of the Active cases in the United States relating to the Delta variant. In some states, More than 70% of the cases relate to the variant. In the meanwhile, we have had off the mask, on the mask on mask policy. Then, we have also have had people you know, a daily dosage of bad news around the vaccines and which has mitigated people from, you know, taking the confidence and going and getting themselves vaccinated. We have hit a hurdle rate of 55%, by now we should have crossed 70%. So we are well behind on the vaccines and we’re not too far, you know if somebody is close by and then we are not too far from slipping into fall, which is the flu season. So yes, covid is a big concern in the United States and probably the rest of the world.

Sree Iyer:   I’m seeing some input, there is some crackle on my side sir and double-checking my voice to make sure everything is okay. It appears to be fine from my side. Viewers, I don’t know why it’s happening but let’s move on. Deadly floods hit Central China as military warns of a dam collapse. Covid and North Korean food shortage turn a New Humanitarian Crisis. These floods and dams in China last year we had the same problem. They were afraid that the three Gorges could burst and caused widespread devastation. So I believe that the Chinese government went and broke some Upstream dams to take the pressure off of three Gorges. We see something like that happening again, sir.

Sridhar Chityala: Look, I think the information from China is trickle effect to these progressive and left-liberals and to all these human rights groups, China remains outside the realms of rules and governance. So therefore they don’t talk about problems that are that China is inflicting on the world and the communities around by abrasion violation of the green ecosystem laws. I mean you know you go all the way down the Brahmaputra, you are beginning to see, go all the way up your saying. So, you know, I think that this is a world that has to take cognizance of this issue rather than submit and surrender meekly to some of the challenges, only, then you will get to know what the actual truth is. Just as your witnessing in the Covid pandemic. So wherever you go, you know you look at the disturbances in terms of occupation. You look at the Ecological disaster and environmental disasters, then you look at the pandemic that has been unleashed. There is very little by way of Global Leadership and enforcement to bring China to accountability.

Sree Iyer:  So, Sridharji, Extremely destabilizing the US and Russia trade barbs over Hypersonic Missiles. Zircon, that we talked about yesterday. Biden to meet Ukraine, president next month and discuss Russia, energy, and Corruption. France Calls the Turkish move on Cypriot Ghost town a Provocative Move. EU tells the UK it will not renegotiate the terms of the Brexit deal on Northern Ireland. A lot of stuff, there are happening, First of the Zircon Missile and the UK- Russia conflict. Your thoughts, sir.

Sridhar Chityala: Well, the United States is clearly perturbed and rattled by this missile. We discussed, it’s a game-changer. Its hypersonic missiles, which can be launched from submarines, can be launched from ships, which is very destructive in nature. So given the flashpoint, in which we talked about Ukraine and given their security issues that Mr Pompeo laid out in his video, so, the United States is helpless but it’s still making a statement.

The other thing that is going on in Turkey is silently chipping away at the Mediterranean. And they are flexing the muscles in the Greek Cypriot side. These were Varosha, you know, the spot is remained, unoccupied from 1974. Now Turkey is saying this is the Turkish Cypriot side. They say that you know, they’re going to occupy and have settlement which the Greeks are opposing. When you look at the map and you’ll see it’s almost like, you know, they are adjacent neighbourhoods which potentially become can be a Flashpoint. So if you recall, France had helped Greece when some threatening posture was being taken by Turkey around the same spot. So what we are witnessing is that around the world, the flashpoints of conflict. There are also the ecological disasters and then you have the pandemic making its way around the world. And I hope people realize these kinds of activities are not very harmonious especially as we try to come out of the pandemic and push the world towards a better economic outcome and bring people back into jobs and enhance their lives.

Sree Iyer:  Now, let’s take a look at India news, India tests Fire-and-Forget Anti-Tank Missile developed by DRDO. Can you spare a little bit of detail on what is Anti-tank Missile is?

Sridhar Chityala: It is wonderful, I watch the test video of the launch. it’s basically a missile launched from on the ground and basically, it fires, it lands, it explodes, and takes the tank out. So, as they called anti-tank missile buster which takes the tanks out. So, in other words, it is loaded, fired and it lands and explodes and takes out and so it’s non-reusable and it’s done and dispensed with. So it’s new artillery or new capability that India has brought to its repertoire. It’s almost every day. There’s something coming out of DRDO, always enhancing the capability of the Indian Armed Forces which is facing threat, both in northern and western France.

Sree Iyer:  Reminds me of Ramban (रामबाण), sir, once Rama leaves his Lexus Ban go, it will not come back, it will go and get the target.

Sridhar Chityala: That’s it.

Sree Iyer:  Yes, India says Four Load dispatch Units came under Cyber-attack. We mentioned this a few months ago. This comes under the backdrop of Red Echo, a hacker group affiliated with the Chinese Government targeting India’s Power Grid earlier this year. India’s transportation sector has also been under attack. Viewers, this is now proof that you know China is indulging in warfare on a lot of fronts not just on the ground. Sridharji, how do you make sense of it? And how do you think India is going to tackle these things? Because India’s infrastructure is already under a lot of stress, whenever there are summer months, you know there’s water levels are going down, the Hydropower goes down and you know right now Chennai is having a big power cut, Tamil Nadu is having a huge power cut.

Sridhar Chityala: So I think, first and foremost will probably cover this in little more detail when you get to the US section because first and foremost, there’s a new looming threat that is coming from China. China, Iran, and Russia, which is namely that they are not using their own cyber hackers as a mechanism to attack the critical infrastructure of various Nations that they believe, pose a threat to these nations. They have now hired, you know, Tech gangsters and you know, the Cyber attackers and Outsource the work to these groups. So this particular group that we are talking about which is namely Red Echo is a Chinese fact but they could be several of them you know, which could be independent hackers working for this. So there is probably a new profession that has started. This is namely you are hired cyber hired mercenaries to launch attacks. So now consistent with what is happening in the United States. We are now beginning to hear India say that yes its infrastructure was also your target directly for either Chinese hackers or, hired hackers from China. Clearly, it is not Russia, clearly is not Iran. China seems to be from an Indian Point of View, Whereas it is very different in the United States from an Indian Point of View, they seem to be focusing on the critical infrastructure.

Sree Iyer: On similar lines, questions are being asked about Pegasus revelations. We will keep you posted on developments. India and Japan are working to launch joint projects in Russian Far-East and Pacific Island nations according to Minister Harsh Vardhan Shringla. So, India is continuing to engage with Russia on several projects, so I’m still trying to understand what is India’s stand, it’s not tilting towards the US nor is it getting away from the way from Russia. Russia’s tight relationship with China is known. What are your thoughts, sir?

Sridhar Chityala: Sir, sorry, this is India-Japan working to launch.

Sree Iyer:  India-Japan, understood sir.

Sridhar Chityala:  India-Japan working to launch projects in the Russian far-east, which is namely the three main Republics. If you recall, Dr Jaishankar had visited, you know, Uzbeks and Tajiks and so on in that part of the world. So Japan and India are trying to have a relationship with this Eastern Republic with the intent to put capital infrastructure Etc. This is also the point of Target of the Chinese. China is also trying to not only put money but also claimed part of the territory as it’s. So I think there’s a counterbalance that is going on. Same in the Pacific, there is a Pacific cable. I think they’re working closely again here, with, Japan and Australia and India are working together to expand their footprint to make sure this again, the area is not compromised with Chinese influence. Japan brings capital, Japan brings know-how, Japan brings a set of capabilities, India brings in its capabilities from Army, Navy, plus also, its engineering and infrastructure development Etc. So it makes a purposeful partnership in a mission, to develop the economics of the region but, also to make sure that there is a defensive mechanism in place. Recall they are the two along with Australia, still holding if I will be repeating this innumerable times. The remnants of what was called as Quad probably we can call it as the Triad, which is namely the tri Nations, which is Japan Australia, India probably France would be the more able fourth partner along with the UK. The UK is also maybe it becomes five countries that are still trying to make sure that there is both infrastructure, Capital as well as defensive postures to mitigate any Chinese incursions.

Sree Iyer:  Microsoft to invest 15,000 Crores to establish a large Datacenter in Hyderabad. 442 projects in Uttar Pradesh included in the 100 lakh crore National infrastructure pipeline. So, the Modi government is investing in a big way in the infrastructure, and this a great news, it is going to create a lot of high-paying jobs, Microsoft investment.

Sridhar Chityala: Clearly, Hyderabad has developed has become the second or Karnataka would debate, so Hyderabad, and Karnataka and seem to be going seamless particularly in the IT field. If you take a look at UP, its focus is around manufacturing, infrastructure, and creating alternative products, which is in tune with what UP is capable of, agriculture, farming, etc. So I think it augurs well. If UP has to be a 500 billion or 1 trillion economy, it really has to lift the game. Purely because of neglect it is a 250 – 275 billion economy. At least 10% of the GDP should come from the UP region. I think all these capabilities are directed with that purpose and objective in mind and also to uplift the per capita of UP.

Sree Iyer: As India completes 415 million first doses, and the number of active cases falls to 407,170. Indian vaccines prove effective against the Delta variant. This is a very significant development as India’s vaccines are holding their own, sir.

Sridhar Chityala: Indian vaccines are holding their own, they have lab tested and also field-tested against some of the variants. Remember India is also one of the 12 countries that are experiencing the Delta variant creeping in. So the effectiveness of the vaccines is a very positive sign as far as India is concerned.

Sree Iyer: Now let’s take a look at United States news. Chuck Schumer argues spending trillions will ease inflation pressure. Sir, with your permission, I can start putting the images here. So let me just do that. Go ahead, sir, It’s up now.

Sridhar Chityala: It’s fascinating that Chuck Schumer is making a comment that you borrow and you put more money and that will reduce the inflation pressures. You have more cash in the pockets of people and it is going to stimulate asymmetric demand and which is one of the reasons why we are beginning to see the inflation numbers here. And for him to make a rational case begs the question. But to his credit, Chuck Schumer is also using a report compiled by Mark Zandy, who is a fairly well-known figure in the US, most notably in the east coast of New York. He has written a compiled report as to how productivity will improve, poverty will be lifted, more people will have cash, more people will be having jobs, etc, etc, Thus far, more stimulus has not yielded a higher number of people coming back to employment. It has done the reverse. When Mr Biden was asked this question, he had responded with a very interesting answer. He said, increase your wages, people have come back to work. This infusion of debt and increase in wages, which Biden is persuading for only means that there is inflation, not deflation or normalization. So we are beginning to see some interesting dynamics being forced which you only see only in socialistic countries. Price discovery and wages is your Market mechanism and not a government-enforced or government-infused policy framework for the industry to follow. Industry follows tax, the industry follows governance, the industry follows the industrial policies enacted, not wage, cash, debit, and rates. Rates are set by the monetary policy side by the Fed and that wonderful form of monetary market fiscal triangulation helps your free-market economic system to work. All three are independent. We seem to be moving towards a more convoluted structure, based on all the stuff that we are now beginning to hear in a sign of desperation.

Sree Iyer: Biden’s infrastructure bill is blocked by Senate filibuster but talks continue. Pelosi moves to block Trump allies from January 6th committee. McCarthy pulls out the GOP pics from the Jan 6 panel after Pelosi blocks Trump allies. So, the constitution of the Jan 6th committee itself is now going through a fair amount of churn. One wonders what the findings will be. Because the committee itself is not seated. Why do you think Pelosi did this, sir, after all, Republicans do have a certain amount of quota for seats.

Sridhar Chityala: I think, this is a third or fourth attempt by Nancy Pelosi. She’s trying to find a way to impeach President Trump. Somehow she wants to find the right garlands by which she can garland him. Her focus is around truth as it correlates to the outcome that she has in mind. So clearly, no one is saying that she’s not in Pursuit Of Truth. She’s in pursuit of truth but Pursuit Of Truth which somehow can be linked to the consequences that she can tie to as a result of what President Trump is responsible for. So she’s saying, it could be, if you have any of the Trump allies then they may use this forum or to thwart her agenda or to come up with issues that may not allow her to pursue the outcome that she’s going after which is both true, as well as somehow linked it such that it is Trump instigated.

Sree Iyer: Fed’s detailed alleged Chinese cyber attacks on American pipelines starting in 2011. Criminal contract hackers and high-tech gangsters hired by China, Russia, Iran to launch more attacks. Chinese cyber actors pose a major threat to National Security. Sir, with your permission, I’ll put up the next slide where we can see that the colonial pipeline has been, in fact, affected by this attack since 2011. Now, the data is emerging. These have been happening since 2011, sir.

Sridhar Chityala: Yes, I think, Colonial pipeline was as you all remember, less than three months ago was the point of attack which caused huge disruption in the gas supply to the east coast. Then it was restored. Remember this is in the middle of cutting off the Keystone Pipeline etc.  And now the revelations are coming out that there have been attacks on multiple infrastructures including the pipelines dating as far back as 2011. So that’s the first observation. The second, which we touched on in the Indian segment is that China, Iran, and Russia are using surrogates basically to say it was the surrogates who launched it. We saw quite a few ransomware attacks that happened across a broad spectrum of the ecosystem, namely businesses, government, institutions, and technical points of infrastructure, including the food processing industry was under Cyberattack. So you have these three pictures basically which Sreeji is sharing with you is we continue to show data and explicit comments and explicit statements from people who matter in public life or who are in positions of power in the government basically saying well, we now have evidence that China is behind all this. The question that I have posted in my tweets is does anybody have the power? Does anybody have the will? Does anybody have the capacity to do anything about it? It’s great that you’re reporting. How is it that you are going to make China accountable? Now, this is where you go back to the global news, Wendy Sherman going and speaking with Maggie, she’s is not going to speak about Taiwan. She’s not going to Who will speak about Pandemic, she’s not going to go and speak about all the cyber attacks that are coming in. I’m sure she’s going to talk about how do we now normalize trade and how do we do things that are not confrontational and we run a better kind of relationship with China. This is one of the points that Biden has made is, we want to tell the people that we are a democratic nation and we want to have a different regime and different administration relative to the confrontational approach of the Trump administration. This is his last night’s press statement. Well, if Trump was confrontational, he was either getting a better bargain for the United States on the trade side, or he was confrontational because he wasn’t tolerating any of the global disorder that was being created.

Sree Iyer: Navy warns that it is running out of options to cut budget moves threatening readiness. So maybe the Navy also is now saying that it is not getting funding, do you think?

Sridhar Chityala: Yes. The defence has been the focus of the cuts and so, therefore, they’re saying, if you go on cutting money, there’s not much left because the reason is that much of the money goes towards what you called as the business as usual, or, ‘maintain and operate’. You have to maintain and operate various deployments around the world. So much of the budget is allocated towards ‘maintain and operate’. But if you want to expand capabilities, if you want to add and augment the resources because of the looming threats, then you need more budget rather than less budget. And this is what the Navy is pointing out. Again, same on the Cyber side, the national security has raised a big red flag which is to say, we need resources. We discussed it again in DGI that it’s great but what are the mitigation mechanisms that are being developed to repeal any of these things that are coming about or to do countermeasures to go after these people. So I think the budget cuts… Whereas you have these deficit budgets which is going towards all social programs and anything to do with the defence of the country, there seem to be more cuts. Very unfortunate.

Sree Iyer: Rand Paul says, he will seek a criminal referral from the Department of Justice over Antoni Fauci’s testimony. We talked about this yesterday. So more things coming down the pipeline on that. Your thoughts, sir.

Sridhar Chityala: Well, I think Rand Paul is not letting go. He thinks that basically, Dr Fauci has lied. So he wants to go after him with a criminal prosecution.

Sree Iyer: California Court strikes down transgender pronoun law as a First Amendment violation while upholding part of the law that allows transgender to have rooms assigned based on their preferred gender identity. Meanwhile, a federal judge blocks Arkansas’s ban on transgender surgery and hormones for children after civil rights groups went to court to overturn it. Seen together, what do you make of it, sir?

Sridhar Chityala: I think that along with Critical Race Theory, this transgender agenda has now taken the front page. I would be very cautious to say that life is about choice and people are allowed to make choices. But the subjective interpretation of the law whether you happen to be a Trump appointee or whether you are an Obama-Clinton appointee and that basically forms the basis of the decision-making process. I’m not sure how objective the legal outcome one can expect out of this. But anyway, these are two issues that we are bringing to light in conjunction with the stuff that is going on in Critical Race Theory.

Sree Iyer: In a bid to combat what Anthony Blinken describes as a failure at home, he extended unrestricted invitations to two UN experts, one on racism and the other on minority issues to make an official US visit and scrutinized American human rights record. I don’t know what to make of this. Perhaps you can explain. I’ve got the graphic up on the screen now.

Sridhar Chityala: Yes, again, Antony Blinken’s statement yesterday, was robustly criticized by GOP members for bringing in 2 UN experts, one’s record on racial theory is well known and the other has professed and advocated open borders. So these two people are going to come to the United States and meet a whole bunch of people and assess and give feedback, ‘Yes. The United States is abysmally racial and the treatment of minorities by the United States is very discriminatory or whatever it is that Mr Blinken has in mind. To use United Nations as a tool to validate and judge what’s happening in the United States to self-justify the progressive and liberal agenda is stretching the imagination a bit too far. I’m not sure what his objectives are. Probably, he is yielding to the progressives edict to justify maybe more human infrastructure budget, or human reparation budget so that more money can be thrown into the kit, that seems to be… But it’s very unheard of, this type of an approach. But, there’s always a first and I think Biden Administration is leading in several firsts as far as in the short tenure in the last six months.

Sree Iyer: Let’s take a look at the Markets now. Markets rally the second day as Dow jumps 200 plus points to recoup Monday losses. Biden says pay fair wages and workers will return. 500,000 hotel jobs have disappeared since the pandemic. Elon Musk owns Bitcoin, Dogecoin, Etherium and sends the crypto past 30,000. Again, this is Bitcoin, I suppose. Sir, I’ve got the Markets to chart up, please go ahead.

Sridhar Chityala: Well, yesterday the markets were another 200 points plus. It flipped past the losses that it incurred on Monday. So today, markets are back and well beyond where they were at the beginning of the week on Monday. As we speak, the stock futures are already up as the markets await the unemployment claims.

Sree Iyer: And that brings us to a close of today’s program. We will be joining you again on Saturday, not tomorrow. We don’t have DGI tomorrow. We will be joining you on Saturday, same time, same place and we will be covering Friday news, as well as the evolving events on Saturday, by which time we will know for sure if the Olympics have started and so on and so forth. Sridharji, as always a pleasure having you as our expert commentator and viewers, apologies for the noise – I don’t know what was wrong, but it started really early in the program. Initially was fine. Once it starts airing, it is difficult to change settings. So please bear with us. I hope you can hear me. Sridharji, Namaskar, and we will see you on Saturday.

Sridhar Chityala: Namaskar, thank you, and have a wonderful day everybody.