Sree Iyer: Hello and welcome to episode number 93 of daily Global insights. I’m your Sree Iyer, joining me is Sridhar Chityalaji. Sridharji, namaskar and welcome to PGurus Channel.
Sridhar Chityala: Namaskar and it is wonderful to be back.
Sree Iyer: It is February 8th 2021. We start with the US Headlines Trump impeachment defence to display timelines images from the Capitol storming as their trial. So, this is very interesting that Trump is going to use the very footage that Congress used to impeach him.
Sridhar Chityala: Well, I think that Congress used it to impeach him without a sign of dissent or without a sign of any evidence, it is what you call as a herd mindset trial process where you all kind of clap and say, okay we all decide, he incited because there was this activity that took place and that probably resulted in the insurrection that happened, that’s the word insurrection, incitement and insurrection and hence, we need to impeach him. So, it went very much along the party lines and quite a few people who you know, there are at least 10 Republicans who and said, you know, it’s impeachment so they can’t use the same evidence and say show me where it is. Now, they get a chance to hear back.
Sree Iyer: Now, in fact, they are going to be shown some videos of Democrats actually inciting violence.
Sridhar Chityala: Well, this video that has appeared and not videos that has appeared. These are explicit speeches of Maxine Waters, Charles Schumer, Nancy Pelosi, Alexandria Cortez, and so on, who are talking about why the world is not doing rise, rise, rise, Nancy Pelosi, you should be doing this or that. So they’re going to present that in say should these four people be therefore be impeached as a result, maybe they turn and say, you know, amongst the four, who is the person really needs to be impeached, could kind of turn up, so, it will be interesting to see that’s another evidence has been presented.
Sree Iyer: And Alan Dershowitz a very famous lawyer in the United States has said that the Congress put itself above the law in Trump impeachment. Why does he say that?
Sridhar Chityala: He has been consistently saying that the House and has no mechanism under the Constitution to impeach a citizen. So, President Trump is no longer, the president. The impeachment as per Constitution is for removing from office is sitting president, hence, this is unconstitutional. There’s no precedence, it is creating probably a very bad scenario where, if you have the majorities and you have something to stand on you could call anybody, any of the past presidents or any of the house members anybody because they Citizens now because the immunity prevails as long as they are in the government. They are no longer in the government. They can be called and impeached.
Sree Iyer: Now, President Biden also says that the United States will not lift sanctions on Iran to get them to the negotiating table. What is there to negotiate now? This seems like a statement that doesn’t lead anywhere.
Sridhar Chityala: Iran has been stating, it has met its obligations. Under Trump, they have stated that they have not, there is enough evidence of the enrichment of uranium. There is also enough evidence of illegal oil transfer activity that is taking place. We ourselves reported the two tankers of the coast of Indonesia, which was arrested and one happens to be Iranian registered and one happens to be Chinese registered. So, I think that more sanctions were imposed. Also, there interference in Lebanon and potentially causing a threat to Israel that also pointed out, you saw that there was a big ammunition dump that was taken out devastating Lebanon to the extent Lebanon is today in crisis for some unknown reasons, not unknown reasons, but known reasons but Known Unknown, which is namely what exactly is the political instability? Why this political instability? Why the economy is in tatters? So, I think you see that there is the hand. There was also Soleimani footprint in Iraq, there was also Al-Qaeda footprint and they took out the number two Al Qaeda in Iran. So, these were the activities that we’re going on which meant that Iran has not let go of its ambitions, which is contrary to what they agreed and started into the world principle. So, I think that is Trump’s position leading in perhaps, Biden is softening and Iran is saying you know let’s shed Trump’s policies, let’s kind of start, while they have reached enrichment to their threshold of 20% plus. Israel has stated they are very close to a nuclear bomb and they may take deterrent actions before it’s too late. So, Iran is hoping that Biden will bring them back and Iran’s view lifts the sanctions, we will negotiate. Biden is saying no, we are not lifting sanctions, we should be discussing what’s going on.
Sree Iyer: Now, President Biden also says that he is ending deals with some Central American countries as far as Asylum is concerned. Now, we know that there is a caravan wending its way up to the United States. Does it have any significance with this?
Sridhar Chityala: Well, Biden passed an executive order, which is from zero tolerance to too much more open and free borders. He also passed this executive order, where they would be an Asylum office and they would be treated with compassion. He also passed a resolution, where family separated, which was the previous case that would be they would be considered. There was this DRESS act and you know, I don’t know the full expansion of the DRESS act but, it is something to do with it, the rehabilitation of all these miners who come in and who can potentially join the workforce later without having had the proper credentials or their background validated. So, I think that this way the executive orders passed by Biden to eliminate. So, what Trump’s orders were is that anybody who is seeking Asylum from these three countries must go back to their respective countries and seek Asylum from these respective countries to be considered like you know El Salvador, Honduras and Guatemala. So, I think Biden is saying that’s gone, now, the new rules come into place.
Sree Iyer: Interesting and the GOP Senator some of them have requested President Biden to keep the United States Embassy in Jerusalem. Is there any move afoot to change it?
Sridhar Chityala: Well, given the rate at which the executive orders are coming, which is exactly opposite policies to that of Trump, they’re concerned that Biden may shut down the embassy in Jerusalem. So, they’re asking him to explicitly confirm that he is going to keep the embassy in Jerusalem.
Sree Iyer: Now, Twitter has permanently suspended Gateway Pundit’s account and Trump is also mulling starting his own social media platform. So, a lot of things churn still happening in the social media’s sphere.
Sridhar Chityala: I think social media in my view; it is going to if it is not already. It’s well on its way to split itself into two platforms one that are left-leaning platforms and the one which I won’t use the word objective, but right leading platforms. Clearly, Gateway Pundit was not left-leaning was not a Centrist very much was carrying use and other things of the right though objectively it may look good similarly the objectively left to use may look alright, when you hear CNN or when you hear, CNBC or ABC or whether you hear MSNBC, etc, etc. So, therefore I think that in my humble view, this is the beginning of the bifurcation journey that is likely to happen.
Sree Iyer: Black lives matter and Antifa protestors are marching through the District of Columbia DC shouting Burn It Down. Now, this was something that attributed to the other side. So what is going on?
Sridhar Chityala: Well, I think that there still seems to be dissatisfied. They say that the police atrocities, as well as high-alertness, continues. They can see more deaths. So, they marched through the DC and shouting slogans and obviously, you have restaurants eaters who sit outside in eat and threatening them or potentially creating fear. Apparently, National Guard and police lined up in one single kind of a line standing between the restaurant-goers as well as the marchers. So, there were also videos uploaded which shows some skirmishes between these protesters dressed in black with some flags with the DC police, but given the presence of national guard and much higher alertness of the police. I don’t think they were any major incidents, but it’s a reflection that this is not died. I think Andy NGO has published a piece that this is not just a one-off but, this is a very organized left-wing movement, which is now spread across all over the country, but with a deep footprint in Portland, Seattle in some of the Western States.
Sree Iyer: Well, this is where the thing gets a little interesting the people that they supported for coming to power are now in power, but the protests are not stopping. So, it is going to interesting to what exactly their demands are and how this plays out? Certainly, unrest of any kind is not good. Let’s take a quick look at global headlines. Myanmar sees its biggest protects, since the 2007 uprising, looks like the population has not liked what happened to Aung San Suu Kyi?
Sridhar Chityala: Well, they had always said she’s a very popular leader. There was always the issues between her and Junta, especially around this Rohingya has and other issues that were going on, also, around the broad kind of the economic policies. There’s also been pressure from the United Nations in some of the people the way these Rohingyas need to be dealt with. So, there is general unrest that was brewing and discontent between her and the Junta. Eventually resulted in she being overthrown and put behind bars, as well as and taking over of the government and they have declared martial law or they’ve declared dictatorship for one year, that Myanmar will be under the administration of the Junta going back to the old days. They have also; I heard arrested the Australian advisor Aung San Suu Kyi. I think that’s also created some tremors amongst the people.
Sree Iyer: Well, the US is newest destroyers Rafael Peralta has arrived in Yokosuka Japan. So the US is beginning to get active again in East China sea, isn’t it?
Sridhar Chityala: It is, so East and South China Sea. I think Biden is formulating his Global policy around his military. The latest Destroyer coming to Yokosuka, that where the seventh fleet is also stationed. We also have Nimitz and Regan in the South China Sea it’s a reflection that there is a fear of the Chinese incursion and there’s also been if you recall we have reported here that Biden should not be repeating Obama-one Obama-two policies and you know blinking and potentially losing the territory and conceding very aggressive takeover of China by some of those contested areas in the South China Sea, particularly the Philippines, Vietnam we also saw Myanmar, Thailand, Indonesia and of course Japan and Taiwan.
Sree Iyer: Now, a broken Glacier has caused flooding, heavy damage to Rishi Ganga, Tapovan power project in Chamoli in Uttarakhand looks like the deluge is now under control, how are things now?
Sridhar Chityala: I think, this particular incident is very widely covered, globally, because of the calamity and I’m told that it’s nearly 150 deaths. When you look at all the reports and the video footage it looks like a flash flood, the water seems to have receded but created havoc, 150 people dead, took out three bridges which were used by Indian army or the military raising speculation, whether this was some kind of sabotage, but doesn’t seem to be the case. It’s just one of those flash floods which happens in that region. Once the project is complete, potentially such kind of damages may be mitigated. But certainly, I think that they seem to have brought it under control.
Sree Iyer: In the meantime, F-35 maker Lockheed Martin has signed an agreement with India’s HAL to explore collaboration and India seems to be working towards self-reliance in defence with all the supply chain disruptions that are happening. In fact, viewers we are going to have a one-on-one exclusive with the subject matter specialists that will air in a few days, stay tuned on that. Do you have anything to say about these two things, sir?
Sridhar Chityala: I think the only thing that I would say is that people have may have forgotten that the dilution of Foreign Equity Contribution was increased from 49-74%. So in other words, that more Equity contribution and capital can come from the foreign manufacturers who are prepared to not only manufacture for India’s use but also they can potentially export the manufactured aircraft or carriers or be it a type of ammunition, drones, etc. So, I think that India has recognized this in lieu of several threats that are emerging from China. So today, India has built a very resilient manufacturing industry or continuing on the path towards building a very strong defence establishment which would give it the opportunity not to be reliant on overseas exports or imports but to be able to supply that domestic needs by itself. The covid situation has only exasperated that need and they do not want supply chains to be disrupted, as a result, its defence being starved at the most inappropriate time.
Sree Iyer: the United Arab Emirates has drastically cut Palestine Refugee Funding amidst its historic peace deal with Israel. So this thing is now beginning to ripple and beginning to hurt a few other countries. We will touch upon this in a little bit.
Let’s take a quick look at the covid pandemic. Looks like the AstraZeneca vaccine is not that effective on the South African strain of the covid virus and some countries have halted it, some countries are saying don’t use this. What is the big picture of why AstraZeneca vaccine seems to be a little bit less effective?
Sridhar Chityala: Well, the only scientific conclusion that one can infer is that the strain has not yet been scaled or the appropriate immunity protocol has been determined. So there was this, even AstraZeneca in its initial manifestation they said that they could use under emergency conditions. It had reached efficacy of about 65% compared to Moderna or compared to Pfizer BioNTech which were around 90% plus, even Sputnik. So AstraZeneca is working its way through the process. There was this belief that it could also be used for the variant and initial research points out that it’s probably close to 50% efficacy or less than 50% efficacy in terms of dealing with this issue. That means you’re going back to the lab and working your way but it’s a big news item because this was one of the things that seem to be the augmentative vaccine that is to be used around the world as the capacities are stretched for BioNTech and the Moderna vaccines.
Sree Iyer: And it appears that in Harbin City in China, the virus outbreak continues to worsen. We will keep you posted on the developments there. And more importantly, now President Biden is saying that it is going to be a challenge to reach herd immunity by the end of summer. So this just tells us that there are many unknowns about this virus and it is very very foolhardy to say that a change in administration will make the virus go away. Your thoughts, sir.
Sridhar Chityala: I think that my thoughts are, without sounding, I have to go and support here. Mr Donald J Trump. Everybody blamed Donald J Trump saying, he did not wear the mask, he didn’t do this, he didn’t do that, you allowed this to expand and you’re killing people etc. All kinds of things were advocated. Now you’re beginning to hear one after the other, these unfolding scenes. One is, well deaths are inevitable and we are marching our way we could reach 600,000 deaths. Exactly, one year ago. Dr Fauci said the United States will have about a hundred to a hundred and fifty thousand deaths one year ago. So we’re now past 475,000 deaths. We’re not too far from hitting the 600,000. Second, we basically said we have an orchestrated program and you know vaccines in place and we will do a better job. Well, thanks to President Trump. He delivered his vaccine by November, which many people did not expect him to deliver. They thought it was all bogus, but he delivered the vaccines. Then, you heard another news item, which is some of these deaths were miscounted by at least one governor of a democratic state. So, there is a lot of mismanagement issues that seems to be underway and what is also brightening is, pretty close to $300 billion set aside in stimuli programs 1, 2 and 3, in the latest one we got something close to $75 billion which includes $20 billion for local covid support and $50 billion for the vaccination programs.
The concern is, where is this money going? And you know why are we not able to mitigate? When you take India, in comparison, India has got walked about 10-11 million cases, of which 10.5 million cases have seen recoveries. There are 150 thousand deaths and less than 150,000 active cases. And you compare that to the United States where you have 27.6 million cases, only 17.3 million recoveries and close to 10 million people still active and 475,000 deaths. So it’s an astonishing number, where the crowd and herd immunity seems to have been accomplished in India. We seem to be quite far away and we’re still fighting over masks here, whether we should have one mask or 2 masks or whether a fine should be imposed, these kinds of stuff. So clearly, there’s a problem. There is a significant problem in the United States. We still don’t know what exactly the reason behind this massive massive outbursts in the United States.
Sree Iyer: In markets and the economy. Treasury Secretary Janet Yellen says that the United States could return to Full Employment if it passes the $1.9 trillion stimuli. I think that number is now drastically reduced. If I remember correctly and even President Biden is negotiating that. Where do you think the agreement will be reached?
Sridhar Chityala: I think right now, as we speak we are still on that 1.9 trillion. I don’t believe that there were only resolutions and amendments passed which basically reflects that this is not going to go into non-stimulus-related programs such as overseas funding, such as abortions, immigration control, etc. So they wanted this to be directed across three specific segments. One, direct payments to tax the taxpayers as well as to the unemployed people $1,400. There were some questions around whether it should go to all the people are whether it should go to people, who are earning between 60 and or less than $150,000 of combined income, those who are above $100,000 not be paid. So there seems to be some resolution around that. So close to $400 billion set aside for covid related programs and $450 billion dollars set aside for community, local, that very much seems to be on track and on top of this, there is also another stimulus from July 1st that Schumer and Nancy Pelosi are looking at which is to give this $250 per month like a regular monthly payment to those who have families with children aged between 6 and 17 years and those who have children aged less than six years be given $300. So they say, there’s a top-up on top of that. Remember there is also close to $400 billion dollars, which we have touched, unused capital preserved from cares-1 to and cares-2 and small business program extension that is still sitting with the treasury, it’s accessible by way of credit to the small business. So it’s a significant amount of cash that’s going in.
To Janet Yellen’s point, there is some truth because she’s going by the numbers that she saw which we doubted as must need and well-directed. The first $2.1 trillion stimuli which bent the patterning in a v-shaped recovery and brought the retail sales up. So, unemployment is around less than 7% – 7.2%. She believes this will help, especially, the PPP program will also help in containing the markets and the recovery.
Sree Iyer: And lastly, India’s foreign exchange reserves rise to 590 billion and with external debt at 554 billion, India now becomes a net creditor nation.
Sridhar Chityala: Indeed, I think that is a remarkable number. Just for people, in the last one year, India has added close to a hundred-plus billion dollars in its reserves. There are three important things, one, it is a self-reliant number, two, in the event of any war or a contingency it has the cash to meet. I use the word, simplistic $600 billion it’s now able to meet its debt obligations at any given point of time, but also able to offer credit to somebody because of excess cash sitting in its reserves, the first point.
The second is that I had always maintained in the markets that when India is a 5 trillion dollar economy, the reserves that it should have should be around 15% which is around $750 billion as a contingent to not only meet its any emergent needs but also, it’s the right number for the economy of that size because India is very heavily debt-funded from inside rather than from outside. So it needs this as a five trillion dollars economy. It seems to be well on its way showing that the economic parameters don’t seem to really match with a lot of the rhetoric that is going on both on the media as well as some of the agitations in India.
Sree Iyer: That brings us to a close on today’s episode. As always, we’ll be back tomorrow. Same time. Same place. See you all and Namaskar. Thank you, sir, for all your help and as always we will be back tomorrow talking about more breaking news.
Sridhar Chityala: Thank you and have a wonderful day.