— N. Rangarajan, Mumbai.
General Trump ( not president) is determined to mow down the markets. Fresh tariffs of 25% each on Mexico and Canada. 10% on China.
Threat of 100% on BRICS nations. This is likely to result in high cost economy for the consumers. High inflation. High interest rate regime for longer years.Finally a negative 2% growth for the might USA.
Who could benefit and who could be most affected?
India will be the most beneficiary. Why?
Our local consumption is our maximum economy. The FM has boosted it with her dream budget of providing disposable income at the hands of Bharatiyas to power the Indian economy. This is the real reason not the middle class cries for putting ₹12 lakhs in their pockets. Go and spend is the message. Of course it is an excellent fore thought and a more excellent decision foregoing ₹ 1 lakh crores of government revenue. I am astonished at this present Government on such futuristic decisions.
Who will be affected?
Of course our bullying neighbour China. Why?
Local consumption is paltry. China is a humongous Export Economy. At their own costs they sell cheap from pin to plane throughout the world.
Only aim is gather as much Dollars by killing the local manufacturing and thereby the local economy of each and every possible country. China is reeling under severe stressed economy.
For example in December quarter they showed huge jump in exports which is actually a front loading which mind boggling discounts.
In the year 2024 the trade surplus for China stood at $ 2.75 trillion. December quarter accounted nearly 15 to 18% One may wonder so what? Having front loaded and the countries stocking for more than required period of time now will hesitate to import and China will be in trouble to export to such countries.
As far as the USA is concerned some economic experts have opined that to stem the rots in the ensuing economic crisis the oil has to be at $15 per barrel. I leave it to all of you. I laughed loudly on this mad dream figure. The double whammy is General Trump trade war with the cost of imports increasing.
The days of both Humpty the USA and Dumpty the China greatly falling are not far off from the tall wall of arrogance. Gift nifty is down by 200 points as of now. But our government and in particular our FM has played well.
Yes the USA hitherto enjoyed not only cheap products but saved their country from filthy manufacturing wastes and Toxins contaminating their country. Slowly and steadily other countries especially China built their huge reserves not only in dollars but in gold too which is second in the world at 2000 tons after the USA’s 8800 tons.
Also China developed in all respects the infra that too the latest unlike the British or USA whose infrastructure are old and may crumble n near future due lack of resources. Now another important issue is USA debt. It is at a humongous figure of $36 trillion. It used to be quantitative limits say $1 trillion or 2 trillion.
In Joe Biden regime it was changed clandestinely to time limit ie for example till January 2025 you can borrow any amount. Absolute nonsense. Biden borrowed nearly $5 trillion during his 4 years in office. Another worrying factor is the credit card NPAs. It is reported that $1 trillion is pending for the past 3 or 4 months. Nearly 95% is believed to be written off.
Now coming to USA government debt. Let’s recall Nixon for a moment. He overnight scrapped the paper money dollar for gold, which was a sovereign promise. Kissinger had to rush to Saudi to pacify.
Now, Trump is talking of repaying USA debt BitCoin like cryptocurrency. Cryptocurrency has no asset backing and is the most volatile as you all know. It means nothing but the largest bubble is waiting burst causing immense damage and confusion around the world. Political rhetorics and playing to the gallery are all fine but at whose cost or at which country’s cost is the moot worrying point.
I fore see a huge shift in Geo political allignments regrouping and more trouble for many countries. Perhaps Bharat may experience milder tremors with the current government and its foresight. I also feel it is very interesting to watch and follow the current happenings and eager to see what will fold out and hw and when and who will face the music or dance to the music.
I also feel that the Elephant will surely dance while the Dragon will face the music. The Eagle Ney the vulture may wait on the hill top to take away its pound of flesh.We can keep discussing it.
