Sree Iyer: Hello and welcome to PGurus channel, I am your host Sree Iyer. This is episode 55 of daily Global insights with Sri and Sree, Sridhar ChityalaJi. Sridharji, Namaskar and welcome to PGurus channel
Sridhar Chityala: Namaskar and good morning to all on a bright crisp, cold morning. It’s 26 degrees Fahrenheit and 21 degrees Fahrenheit, it’s like -3 degrees centigrade and -6 degrees centigrade.
Sree Iyer: We are 39, which is probably 4 or 5 degrees Centigrade barely above the zero. It’s pretty cold here too on the west coast. SridharJi, let us jump into the US Elections. Now, we are seeing a lot of activity in the Senate sir. Why don’t we start there? Can you please update us on what is happening in Senate now?
Sridhar Chityala: Great, We’ve been speaking on the election, so, it’s moved to Senate and House. The certification is complete, there was a major hearing on Tuesday in the Senate on the various Witnesses came and spoke about the alleged irregularities that they saw. So, broadly, the theme again evolved into three categories, one is everybody knows the postal ballots. The second is the process within the processes and the inconsistencies of process within counting centres and the third is obviously systemic issues coming from the Dominion software and the patterns of swings that one has seen. Ron Johnson was on record which is to say that there is no way that a system of votes can change, you know when it can win. The counting is about average 38,000 to go, you know, 260,000 or 206,000 at some big number that he threw up which is 200,000 plus. So, the key message from there is Senate has heard the views and that was a live stream, so, anybody who wanted to hear could hear that? So that’s the first kind of strand of activity that has happened. The second strand of activity that is going on there are you also find now, Colorado another state has joined. We saw New Mexico come in now Colorado has joined in conducting their own internal investigations and hearings to determine whether there was no valid and proper process, that’s another strand of work that’s going on. Ken Starr has come in public, this is on the legal side, he feels that the Supreme Court and the local state Supreme Court’s were out of skills and constitutionally invalid in terms of changing processes, which is the limit of the state legislatures. So, this is the noise that you are hearing, where do we go from here? There are two important things, we mentioned to you that the National Investigative Agency (NIA) is supposed to brief a report tomorrow, but Mr John Radcliffe has made a comment that the report could be delayed by you know, two or three days that is public now in Newsmax as well as in Fox and other channels, of course, the main media, which is blindly on the one side of the fence basically stating, you know, nothing about this facet just moving on. So, this report is very critical because 2018 executive action can empower the resident to make a move when there is evidence to point that there is foreign interference. So, another kind of intervening step before we go to the final date of January 6th. January 6th we’re going to have the consolidation and the counting of the votes in the assessment of the certification Etc.
Now, there is a little ride up there, which is if a member from the house and if a member from the Senate stand up and vote and suggest that they should be a hearing on the irregularities of the elections. Then the vice president who is the head of the joint houses has the mandate to move that forward. It is believed that Mike Pence will allow that to happen. And now the numbers of house reps have moved to four and the number of Senate has moved to four. Ron Johnson clearly is one, then you have Rand Paul potentially, then you have on the house side Mo Brooks and you also have Kevin McCarthy and so on. Notwithstanding the fact, Mitch McConnell endorsed Biden and congratulated him on Tuesday which was tweeted by President. This is the final frontier which is to say that, should that hearing happen and they discuss that they are not accepting the votes. Then it will go into House-Senate joint voting which means one state get one representative vote to represent that specific state in the counting process. Right now, there are I think 30 Republican and 20 Democratic states, so you can see which way, some people speculate that the interference is real as well as this House and Senate is plausible with Mike Pence at the helm of Affairs. So, there is still a pathway to victory. Just to wrap the legal side, the legal side basically is that they say they’ll continue because it’s about the integrity of the Republic. So they’ll continue to fight on January 20th no locus standi to them.
Sree Iyer: Just to clarify. I think there were some comments made on Fox News about Maria Bartiromo saying something about Donald Trump. I think I would like to and please tell me, sir, if my interpretation is wrong. All Maria Bartiromo is saying is that there is a way for President Trump to still win. I don’t think she has declared that Trump has won this election. What are your thoughts, sir?
Sridhar Chityala: Well, I think that it would be sensational; it will be all over the place if Trump has won the election trust me. And they would be enormous kind of public hue and cry and you know left media will be I don’t see any flashes news messages and so on. So, you rightly say it is conceivable only from one facet, which is namely the last point that I mentioned. That the four senators and four House Representatives choose to conduct an inquiry, then it goes into the inquiry process. And which means what you are saying is that
It is fait accompli that if it gets into an elongated discussion, two hours I think is the nominated time, so, it goes into 30-20 voting. It’s possible, she’s saying that route if it gets down that path there’s a distinct possibility that he could win the election rather than saying he has won the election.
Sree Iyer: Yes, and now let us get to a slightly different segment of this news webcast. We are going to talk about an interesting character Patrick Byrne. Patrick Byrne is a billionaire, he made his money as CEO of a company called overstock.com. Many of you may have bought something from there. At least, those who live in the United States or on the Western Hemisphere. I don’t think Overstock is that well known in India. But, be that as it may, he has a very interesting story to tell and I am going to just relate to you, what he explained and we are going to watch that thing now. So Patrick Byrne was contacted by the Federal Bureau of Investigation who wanted to catch Hillary Clinton on a sting. What they had said, told him was that they said that Hillary Clinton had accepted a 20 million bribe from turkey and they wanted to do a sting on her, where they can catch her red-handed accepting one more bribe and for that, he had to facilitate that meeting and this happened in December 2015. As I am talking you can see the timeline and the whole story play in front of you. So you’re welcome to watch that.
Now, what happened was Byrne actually set up that meeting with the representative of another government who he is not named which is not important, but there was a 10-minute of the record meeting with Hillary Clinton when 18 million dollars were transferred. And after that Patrick Byrne was expecting that the FBI would swoop in and catch Hillary Clinton red-handed. However, that did not happen and when he asked the FBI, why have you not yet caught, they had a slightly different story to tell he says, what he says is that after that when he was trying to press them for an answer a few days later or a few months later. We don’t know exactly what time frame, three FBI agents met with him and they said that this is going to be completely not going to mention any more, that Byrne should forget that all this happened and that it was a ploy by Barack Obama to try and control Hillary because at that point is that, this is the beginning of 2016, Hillary is going to come to power and this is a Bunsen burner that Obama will use to control Hillary. If she goes along what he wants her to do the flame will be low, but if she starts acting independently the flame will be turned up high, all these are Patrick Bond statements. I mean, that’s what the FBI told him and there was a plan to have Michelle Obama follows Hillary Clinton eight years after she debited from office. So, clearly, a Trump victory was a big spanner in the works, but be that as it may. So, this is just something that Patrick Byrne has explained and we just wanted to share that with you. However, Patrick Byrne has also been very active in trying to locate what happened really in this election. So, he has been very active, he is got about 30 to 40 man squad, which has been looking at all the different results and he says that China has done a soft coup on the United States and he has some very compelling data to share. There is an article that has come in Epoch Times, I would encourage each and every one of you to read it because I’m not going to give you all the details. We don’t have the time to do that here. The important takeaway from there is his claim that there are only six counties, where if you can rig the election like that then the whole presidency can be controlled and he gives three or four instances that have more to place in front of you. He says there was a sequence of 123,000 votes that all went Biden way, and also in one state, he said out of 590,000 odd votes, 99.6% went to Biden and in a close election like this, you know, it is statistically impossible to have those kinds of numbers. So, that is why we are seeing now all these questions coming up on the house legislators, all the states. In fact now the Senate everybody is in up in arm. Now, what we have to wait and see is what kind of evidence emerges from all these things people are working 24/7 around the clock trying to get something that will stick and that is what is going to determine who has won the election. This is our opinion; again, don’t take our word for it. You can read all the documents. We are going to give you a few links that you can see along with this video and you can make your mind up for yourself as to what really happened in the election of 2020.
Sir, let’s move back up to our main story, let’s look at what is happening on the covid? Can you please give us a global covid update sir?
Sridhar Chityala: I think oh it is moving along while the US elections move on, as well. So, I think we have now gone past the 75 million mark in terms of the number of cases, 1.6 million deaths. I also heard that the number of deaths in India little bit increased today relative to the previous days the uptick. But, of course, the conversion rates in India Or the recovery rates in India seems to be quite remarkable and you know 52.3 million people out of this have turned the corner and well on their way. Now, the point is that the programs in the United States are getting rolled out, so, it is well set in terms of the facilities and so on they just waiting for the budget to happen so that the entire 2021 plan can be rolled out right now up to March they have the funds. I think 100 million people is what is targeted to be vaccinated, many of us are getting alerts from our respective hospitals as well, which is to say the vaccines have arrived but, there is a prioritized model as a prioritized sequence that is being used. So they will be hospitals will get in touch with us. This is those of us who are you know have regular kind of what you call the programs with our specific doctors.
As far as Germany is concerned it has peaked. There was a peak of death in Germany. So, Europe is now gone into a complete shutdown. You know, Germany, Holland, Spain etc is in a complete shutdown. Something similar is going on in Asia as well with Seoul, Korea is experiencing higher, only Singapore and Japan seem to be reasonably in control. Otherwise even Indonesia and Thailand there are rising cases. It’s very interesting that Thailand is marketing its five-star which is unoccupied because primarily driven by tourists to provide quarantine facilities as well as treatment facilities for people and to come and kind of the cooperate at concessional rates.
As far as the medicines are concerned, I think the AstraZeneca, as well as Pfizer, seems to be well on the way, though Moderna is mentioned the only two places, the Moderna has been ordered is one is if I’m correct in Japan and the other one in the United States both of them have placed orders with Moderna still it’s in the kind of evolution.
India has got its infrastructure right, it seems like it has made significant investments in the storage as well as cold storage and distribution facilities. This is the breaking news and they are well organized to move forward with the plan. There’s a general belief in around the world. I think we talked about 60 nations going there and visiting the facilities. This is well-advanced thinking that India would be the kind of the epicentre of providing aid to some of the smaller countries. The Serum Institute, Pune, Mr Poonawala has gone and record to say that India could see a retail price for a vaccine which is $6.00 to $8.00. Now, should that be the case, people can make quick trips to India get themselves vaccinated and probably a one week quarantine and get back. So $6.00 is almost nothing. It’s equivalent to less than Copay here in the United States. So, therefore, India seems to be going well with its Covishield and Covaxin, they’ve got these new ones ZyCov-D which is a hybrid. So I think that India seems to be well on its way and also to support many countries in the world. Bhutan, for example, has raised his hand and said, we are looking for India to be supportive. So I think the economic outlook for 2021 reflects that this vaccine program will address the covid issues and get economy back on track.
Sree Iyer: Thank you, sir. And let’s take a look at global politics, especially in the Asian region. We’ve had some fast-moving developments in and around Japan and Russia has been testing its new anti-aircraft weapon, isn’t it? Can you update us a little bit about that?
Sridhar Chityala: For the past month, this has caught the attention of the US, but is just now coming to the main fore. They have deployed their S -300 MIG 4 as the air defence system in the Kuril Islands. If you’re going to put up the map. I can also take a look at the map for a second. If it is a look at the map, it’s right at the Okhotsk just below the Sea of Okhotsk, the Island is right at the intersection of North Korea, Japan, and South Korea and then just on the other side you have the South China Sea. Well, I don’t know if there is an alliance between Russia and China because many of the Japanese, our artillery positions and the defensive positions are facing China, for example, the Kuril islands is a buffer where Russia wants to be a mediator in this potential looming issue. So, the general Russian politics, is that they never want to out of global politics. They always want to be a player in the table. As you probably know that the five eyes strategy which we discussed, the sixth being Japan, so the Five Eyes strategy is in Yokosuka, Japan’s promulgated nod means which is to effectively state that it is going to control everything around that is the way by which the five major powers have oversight in what’s happening around the ecosystem or around the environment. And when New Zealand brought this up and China said well forget about the eyes, we will pluck the eyes out when the five eyes kind of came up. So there is a lot of contention which seems to have emerged post-November 3 under the pretext that Trump will not be in power. Everything was quiet and hunky-dory, now, the ugly head has reared up. So the Russian position, can we have the map, already covered this whole South China that particular sea as an epicentre of problems and issues. And so these guys have positioned themselves quite nicely there as a buffer and what their role is – unclear.
Sree Iyer: Thank you for that update, sir. Now, let’s take a quick look at what has been happening in India, especially in that Wistron plant. Now we are hearing reports that a Student Federation of India leader has been arrested as being one of the people who was instigating this attack and again there is a lot of misinformation going on. We saw some Chinese person trying to say that these are the perils of doing business in India, that their labour system is not set up. Can you quickly cast some light on this particular topic and then we can move on to markets?
Sridhar Chityala: I just want to make sure that we avoid in a lot of conspiracy theories but the story is, there are incidents that are coincidental. So let me lay down the strategic context here. The strategic context is that there is a move to ship mobile manufacturing capabilities to India, especially the phones. The reason being India is emerging as the number two manufacturer and consumer too because in recent times it produces a lot of it for its own consumption. Now, if I looked at Apple’s iPhone plan for 2021. The 2021 plan is 96 million phones to be manufactured, 96, this particular plant, Wistron plant, which is a Taiwanese plant where they put capital and part of the PLI program, and they had 1,700 people out of a big number. I know what their expansion plan was. Their expansion plan was to add 25,000. So there is a major developmental capability and major expansion program in alignment with the strategic goal of Apple. So right in the middle of it, you have two incidents that happened, one, this whole blow-up and stealing of the iPhones and then a press report which indicated that this is the work of non-payment of payroll. In India it is very easy to insert any type of article, why in India in the United States we have seen, any type of article can be inserted and for a fee or for your activism or beliefs. So this article pops up, immediately, the local state government Labor Department says there have been no complaints of non-payment of salaries. Now, these are reports based on what you read of the press. So whether somebody has gone and actually investigated the records, etc, etc. This immediate reaction is to go and tackle the management and figure out and make them accountable. But what came out was a tweet from China which is to say that this is an example of trying to move from China. China has very strict and stringent labour laws, offers a stable labour primate, so people should be cautious if you are trying to move your manufacturing from here, so when you put these pieces together, it seems like, and then when you look at the other data, which is China has got 1.85 million people embedded all over the world in important corporate functions and government departments, especially in embassies and so on, who’s also a dissident either from Shanghai and Hong Kong has made that list of each, about 8,000 names have been released, but not least the public as yet, but it has been released to the appropriate authorities. When you look at this, then one can only conclude that this is some kind of an instigated action and I hope the Indian government stands up, gives the assurances to Winston and says to stay and we come up with, we recognize these things can happen but India has a long history of manufacturing facilities. It is a very very important strategic issue for India in terms of getting these out and demonstrating, also demonstrating to China that the moves are real and will happen and it is not just based on one factor. It’s also based on several factors that that is looming. The other important thing, just to wrap-up is these phones are embedded with 5G. There is a world Forum that is developing and India is part of that Forum which wants to develop an independent 5G technology capability. By having these phone manufactured in the Chinese location, that independence of that 5G technology is very easily defeated. This is how some Nations like China engage in games to disrupt.
Sree Iyer: Yes, that umbilical cord has to be cut. Absolutely and I think people need to tune in a little bit more, technically, to understand what Sridhaji just mentioned, but as a responsible website, we will be covering more in-depth on technology, what technology does, what are the different plans of the 5G technology and so on, so stay tuned. Let’s take a quick look at the market sir. There has been a lot of movement in the market in the last couple of days because the vaccines are getting rolled out, 2021 looks good. So I’m going to with your permission put up the FED projections. Do you want me to do it now, or you want to talk a little bit, and then we can go to that.
Sridhar Chityala: Yesterday the two things happened and this morning the third thing happened. One is Bank of England is keeping the rate steady, yesterday the EU passed a budget of 1.8 trillion Euros for the next 10 years of which 15 billion euros is being set aside for 10 programs, with a specific focus around covid and adjacent developmental activities for encouraging especially the businesses so that can be a stimulant to the growth and it was overwhelmingly approved in the EU Parliament, which is quite amazing and very positive kind of sentiment for EU markets as well. So after that, the FED announced the economic data, now you can put up the chart. two major announcements, one is it will keep the interest rates at zero, very important point, two, it is going to continue to buy $120 billion per month of asset purchases. That means it adds close to 1.44 trillion dollars by way of liquidity into the system through the asset purchase program. This is over and about the stimulus. It was very very hot inning to note for their projections 2020 will not be – 7% or -9% contraction, which has been a subject of debate between myself and a few other people. We are on the market economics. We are not in the monetary economics, on the fiscal economic side, but on the market, that we felt that this the directed stimulus has a definite impact in terms of containing the contagion of Market contraction. The market contraction of the economy is going to be 2.4% for the FED projections, which originally have revised the 6% to 3.7% So that’s another positive sign in terms of the impact of the stimulus in less than 12 months. I have been giving credit personally, I stand by it, to President Trump, Steve Mnuchin, and Jerome Powell, the three members managing this thing together, but of course, the visceral people would not like to give any credit to any of these people because the numbers have a story. The other important facet in this is, the inflation. They’ve can keep the inflation at 1.2% and they have also, kept the unemployment, remember, we went to 14 -15 per cent in the peak in March/April, April to June quarter. We have been able to pull that back to about 6.7%, was at 7.6% There was a little bit of a spike, we had brought it down to 710,000, moved it up to 853,000 in the absence of a stimulus.
So when they forecast it out for 2021, the market growth is a remarkable 4.2% and inflation of 1.8%. And then when you go to 2022 the market projection of the economic growth is around I think 2.6% if I’m right and sorry 3.2% point for 2022 and 2.4% for 2023. So they have kind of increased. My original projection for 2021 will be 3.6% and 2022 will be around 2.4 to2.8%. But this asset purchase program and low-interest rates, irrespective of the stimulus measures, the stimulus can only marginally impact but in conjunction with the stimulus, this can be a very positive kind of momentum. So, in other words, many pundits, this is the message that we want to give, if you are in public markets, 2021, in my view is going to be a quite a stellar year for those who are in public markets in terms of harnessing. We can’t say which sectors, but that’s something that you guys can figure it out. But in general, the markets are expected to, the economy doesn’t grow without the markets growing. It’s a very positive kind of sentiment. When you look at the three variables, one is the growth, the second is inflation, the third is the unemployment rate.
Sree Iyer: Sir, there is an abbreviation called PCE. Can you expand it for us, sir?
Sridhar Chityala: Personal Consumption Expenditure.
Sree Iyer: Okay, and there are two variables that are shown PCE inflation and core PCE inflation. Perhaps you can give us the difference between those two.
Sridhar Chityala: I think that is, what is within the core, and what is outside the core? All those which are discretionary goes into the non-core. The core comprises of your house your energy, so core consists of certain items listed in the United States, which forms the makeup of the price movement permanent indices point of view.
Sree Iyer: In other words, things that you cannot do without, I get it.
Sridhar Chityala: Which is why the market, the stimulus programs are directed at these specific segments so that the core elements of the economy from a consumption point of view is met.
Sree Iyer: Thank you for that explanation, sir, and with that, we bring an end to our today’s session. We’ll be back tomorrow again same time, the same place, do join in and Namaskar and have a great day.
Sridhar Chityala: Thank you.
References:
1. Patrick Byrne, ex-CEO of Overstock on how Obama was planning on controlling a Hillary presidency
2. 2020 Election fraud is CCP “Assasin’s Mace” Patrick Byrne
3. Intel community assessment delayed amid dispute over whether China sought to influence 2020 election
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