Feds and its Fibs II

This blog is a continuation from Feds and its Fibs I.

Inflation is weakening of the value or ability of money to purchase goods & services. If I used to buy a kilo of apples for Rs. 100 some years back but I can buy only 750 gms today for the same Rs. 100, that implies there has been inflation. So, if there is severe inflation in the US as I have referenced in the previous part, it is but natural to wonder why has the US$ appreciated against most world currencies unlike what happened with Argentina or Venezuela or Zimbabwe or Sri Lanka when these countries started facing high inflation vs their respective historic averages. For instance, vs. the INR, US$ rate has moved from 72.99 to 79.71 in the past one year (it had briefly crossed the 80-mark as well) and vs. the EUR, it has moved from 0.84 to a parity of 1. (I have deliberately ignored CNY because of the managed floating system China follows where the CNY is pegged to the US$ based on the People's Bank of China's reference rate). This economic principle defying behaviour is the greatest shield the US$ and the USA has had over past so many decades.

Feds and its Fibs I

The US Federal Reserve (The Fed) conducts its annual economic symposium in the Jackson Hole mountain valley and the event is keenly watched by economists and financial experts around the globe for it has now come to witness presentation on major US monetary policy decisions and commentary on the road ahead for the world's largest economy. The event's highlight is the Fed Chair's speech and this year's roughly 8 minute readout by Fed Chair Jerome Powell was truly representative of the classic deer in the headlights moment. The Fed's commentary continues to confirm critical implications for the global economy in the wake of the COVID pandemic and hit by high inflation. Empty vessels clang the most, it is said. The fact that that the Fed has been talking a lot and acting little personifies the idiom. To delve into this, I shall be publishing a two-part blog. In the first, I intend to explore the genesis of the US' inflation problem and present circumstantial & tangible evidence on the Fed's cognitive dissonance while creating this problem. In the second, I wish to put forth the argument on why is it now going to be quite different than what it used to be in the past and what may Bhaarat look forward & adapt to.

Budget Betrayal

It is that time of the year when the talk on tax slabs heats up and #Budget2022 was no different in evoking another set of strong yearly reactions with the Finance Minister not even tinkering the slabs & slab rates to the benefit of the salaried and middle class. The economy & citizenry was hit by the pandemic, especially so by the second wave which recorded a significant loss of lives & livelihood. If ever there was a time of extending relief and mitigating the slipping back of families into 'poverty', this was it. Yet, the GoI severely disappointed the middle class and hence the natural outpouring of justified emotions. There was a time when taxing was considered a sanctioned loot by the government; from there, we have reached a point where I see so many positive voices expressing that taxes are being put to good use and hence the resistance of these individuals to governments collecting personal income tax has reduced significantly. From a blanket pessimistic view, this year's budget has witnessed a progressive and constructive expression of angst that the middle class income taxes are the major financiers of the welfare & freebies. In today's blog, I seek to explore this statement.

Virus, Vista and Vedas

The receding second wave of the #ChineseCommunistVirus in May 2021 has witnessed a much higher death toll than the first wave and that has naturally led to further fraying of emotions. I saw multiple arguments afloat during this time, that focused on targeting any activity/expenditure from the government or even private institutions that was not directly connected to fighting the pandemic. The notable targets were the Central Vista and the ongoing construction of the Raam Mandir. In today's blog, I intend to present certain perspectives at play divided into three sections - one, base facts on the health sector & more; two, a micro-level inspection of the fabled Temple vs Hospital or Religion vs Science or Economic Projects vs Human health arguments and three, a macro level presentation on Bhaarat's Temple Ecosystem. I am hoping that the write-up will nudge the reader to give a nice thought - take what appeals to him/her and leave everything else behind.

In Queue, In Quandary

A few days back, I had posted a small Facebook write-up - a set of three Q&A on vaccine pricing with a hope that it would answer queries of those genuinely interested in seeking answers while demonstrating either the ignorance or the malice of the other kind, aka Left Liberal educated intellectuals. Today, I am going to present a write-up offering perspectives on the process which preceded vaccine pricing, i.e. its supply chain. This blog is an outcome of my wife's insistence for presentation on this topic as she is totally peeved with unreasonable charges being thrown across the table ignoring the supply chain management concepts of queuing, run-rates, inventory, cash conversion cycle and capex (or capital investment). Letting her stay peeved is not in my best interests - physically as well as emotionally, hence - In Queue, In Quandary. Using basic daily life examples and avoiding complication of the financial terms mentioned in the previous sentence, I'll present a simple food-for-thought perspective on this topic. By the end of the write-up, I am hoping I would have unboxed few of the answers to some of the questions swirling around, such as the following:

1. Why the Centre doesn't procure vaccines for all its people unlike some western nations?

2. Is there a vaccine shortage and production deficiency? If so, why not ramp-up?

3. Why have we not halted vaccine exports and rather, why are we not importing additional vaccines?

Costs of a Crisis

In Sep 2020, I had written a blog titled Greenwoods for the GDP on the backdrop of massive liberal & opposition outcry as the FQ12021 GDP fell by 23.9% y/y. In the blog, I had presented the economic background on why the fall was inevitable, how it stands in context of our country's fight with the #ChineseCommunistVirus as well as certain socio-economic comparisons with the developed world. I had also mentioned how our leadership chose to take the middle road by attempting a balance between lives & livelihood, the two twins in any crisis. Eventually, I had remarked that how the Left Liberal Ecosystem would have gone to town over fatalities if not the GDP fall had India chosen to be as brazen as say the USA when it comes to restrictions and safety protocols. Seven odd months down the line, the ecosystem has found that long lost twin called lives ironically in the Kumbh Mela in Haridwar. Given that the fabled ecosystem has found this twin after pompously expressing mock concern over the other twin called livelihood back in Sep 2020, I thought about taking up this opportunity to present the twin sides associated with any crisis taking the example of Kumbh Mela in Haridwar.

Private, Reporting for Duty!

"Government is selling India! Government is selling all our prized assets! Government is selling the country." 

Such statements from the opposition were not unexpected post the 1st Feb 2021 Union Budget with the push of BPCL, Air India etc disinvestments and further information of four PSBs up for sale being released by the Finance Minister. A working class raised in Nehruvian Socialism and a society fairly broken from spirit of entrepreneurship of ancient Bhaarat, naturally might resonate with such headlines and comments. The ghost of privatization is difficult to shake off for some but then what do we stand to achieve with it? Is it all bad or all good or is it somewhere in between? Is there a sweet-spot that one can aim for between the poles of Privatization (broadly, Capitalism) and State Ownership (i.e. Socialism)?

To answer these questions, one needs to ponder over the question, "What is any government's core job?". A government is supposed to provide for its people economically and socially while ensuring internal & external safety and security. When one says 'provide', one has to acknowledge that for anything the government has to give to Raam, it has to take something from Shyam. For anything it has to give to Laxman, it has to take from Raam and for anything it has to give to Shyam, it has to take from Laxman. This something can be a direct cash transfer as done through Kisan Samman Nidhi, it can be good roads/public infrastructure, it can be having a good night's sleep with a robust law & order system, it can be security from foreign/local terrorists so on so forth. Put simply, to provide or to spend money on welfare, infrastructure and security, government needs taxes. For the government to earn enough taxes to cover rising annual expenditure, it has two levers it can employ:

Faith and Fragility

A famous tale is told of Gautama Buddha - he was peacefully meditating under a tree when an angry traveler arrived on the scene and started hurling abuses against Buddha. Unmoved by the tirade, the glow and peace of Buddha never changed and the radiating energy had a calming effect on the traveler whose anger slowly settled and awestruck, the man patiently waited for Buddha's meditation to come to an end. After some time, Buddha opened his eyes and with a serene smile looked at the man. The now not-so-flustered traveler enquired, "Tathagata, I insulted and abuse you, yet you never reacted. Did you not feel bad or hurt?". Buddha calmly responded, "Suppose you would want to give me a gift and I refuse to accept it, with whom will the gift stay? You, right? It is my choice whether I accept the gift and it is also my choice whether I accept the abuse." 

A Hindu society which has grown up on a steady diet of such stories - stories from the Panchatantra, from the Jataka, from Mahabharat, from Ramayana or from the Upanishads - such a Hindu society is geared to be at poise, be graceful and be calm. Whether or not, a child has been read out such stories by his/her grandparents, parents, uncles, aunts or teachers, the natural centuries of conditioning shines through making the child (and his/her future adult version) less susceptible to a violent reaction to abuse or hurt inflicted later on in life.

Having grown up like this, it is now but natural to wonder why does this Hindu society respond/react in the times today (especially since May 2014) with a rush of adrenaline, with anger and with 'intolerance' towards any abuse thrown at its gods, at its scriptures and at its symbols - case in point, Amazon Prime's Tandav web-series (the background can be found here and here). Are we over-reacting as a society? Are we, as many liberal individuals have pointed out, so fragile that our faith gets threatened at the drop of a hat?

Battleground of Relationships

On a hot afternoon in Coleman, Texas, a family is comfortably playing dominoes on a porch, until the father-in-law suggests that they take a 50-mile trip to Abilene for dinner. The wife says, "Sounds like a great idea." The husband, despite having reservations because the drive is long and hot, thinks that his preferences must be out-of-step with the group and says, "Sounds good to me. I just hope your mother wants to go." The mother-in-law then says, "Of course I want to go. I haven't been to Abilene in a long time." The drive is hot, dusty, and long. When they arrive at the cafeteria, the food is as bad as the drive. They arrive back home four hours later, exhausted. One of them dishonestly says, "It was a great trip, wasn't it?" The mother-in-law says that, actually, she would rather have stayed home, but went along since the other three were so enthusiastic. The husband says, "I wasn't delighted to be doing what we were doing. I only went to satisfy the rest of you." The wife says, "I just went along to keep you happy. I would have had to be crazy to want to go out in the heat like that." The father-in-law then says that he only suggested it because he thought the others might be bored. The group sits back, perplexed that they together decided to take a trip which none of them wanted. They each would have preferred to sit comfortably, but did not admit to it when they still had time to enjoy the afternoon.  This story is what management expert Jerry Harvey, termed as the Abilene Paradox, to explain why groups of people end up achieving outcomes which none of them wanted in the first place. The story is also reflective of the quintessential Bhaaratiya family and by extension, society. Though it is a paradox, this very concept of valuing emotions of the rest of the family members/society has held us, as a generic society, in good stead for a very long time. Thus, because we (barring exceptions here or there) are conditioned in a way to take 'one', 'two', 'three' and more for the team, we have refrained from getting into controversial or confrontational emotional scenarios at home or at work.

Greenwoods for the GDP

A very distant Left Liberal chachu (and I can't stress enough the importance of the word 'very') happened to remark how India was going to the dogs with a 23.9% YoY GDP contraction in Jun 2020. With all the bravado he could bring in while unable to hide the glee of India doing badly, he proclaimed how the  Titanic was sinking while Bhaktagan were busy playing the music. Having had a long experience now interacting with Left Liberals, I have been convinced that the only way to reach their minds is through green chutney demos and nothing else has even a remote chance of working. I subtly shifted the discussion from one black swan event (COVID-19 of 2019-2020) to another, i.e. the 2008 Global Financial crisis. I then took the discussion to this Left Liberal chachu being laid off in early 2009 because of the crisis and went on to remark how my dear chachu faced a record -90% YoY fall in his income for CY2009 having been unemployed for most of the year. The poor chap kept trying to defend himself all along offering one explanation or the other sharing terms like 'Act of God', 'External factors', 'company limitations', 'trying times for financial sector' etc etc. I stuck to my guns for a long time and finally he uttered the words I was patiently waiting for nearly twenty minutes, "Chaitanya, I was not working for 10 months of the year! How do you expect growth! Infact, there is going to be a contraction!". "Exactly!", I smiled! "The country was not working for some months, Chachu", I said and walked away praying he wouldn't miss the Greenwoods for the GDP!

Devil is in the Demand

In times of great trouble, more often than not, I have found that returning to nature & her laws can provide man with the requisite guidance to navigate choppy waters and ferocious winds. We are completing nearly two months of a differently regulated lock-down and we once again stand at an interesting junction that demands us to redefine our priorities and re-balance between immediate risk to lives vs. economic hardships (a longer term, more drawn out, more slow and equivalent in pain/loss if not more). As we step into a post-COVID world, Government of India is coming up with a slew of interventions & stimuli to reboot our economy. The announcements are being done in tranches and the broad theme of these moves has clearly emerged which I shall elaborate later. While some of us are upbeat, some are not glad with the announcements. During the course of this write-up, taking the Rs. 20 lac crore economic package as a context, I'd be pondering upon the role of the government, economic demand generation concerns, possible stable solution and few of the many questions that the outbreak of the #ChineseWuhanCoronavirus has possibly catalyzed. I am hoping that my loud pondering will assist the reader in exploring the events happening around and likewise aid my own thought process & development as well.

Fidayeens are Few

The marvelous side-effect of the #ChineseWuhanCoronavirus is the redrawing of definitions, priorities and boundaries of multiple living entities. From dolphins swimming in Venice to Elephants roaming in Dehradun, to deers frolicking on urban roads to birds chirping more sweetly than ever either on trees or while riding the travelators! In all this, humans have a chance to bond with their families, invest time in introspection/spirituality, ponder on 'what is peace' and more! Amongst all these jolly good opportunities of revisiting or redefining, lies an opportunity to revisit & redefine another misunderstood definition - it has been a bane to Indian politics and society for too long but nature has ensured that barricaded-at-home Indian populous gives it a thought, i.e. secularism. Now I'll leave that to each fellow Bhaaratiya to ponder as I move towards the focal point of my blog today which is the conundrum of 'a few'. Let me state outright that I consciously with a sound mind completely support and subscribe to the assertion "Not ALL Muslims are bad/evil! A 'few' of them are".  The point of divergence lies in a single word, 'few'. What do you mean by 'a few' ?

Joke of a Judiciary

We proudly claim India to be a democracy - rule of the people, by the people and for the people. It is but logical to conclude that in such a political set-up, the people's choice is the ultimate binding declaration or covenant. The people's choice is reflected by the legislative (Lok Sabha) and for all practical purposes or day-to-day national operations, the executive (PM, his cabinet and the administration). Theoretically so, the word of the legislative, i.e. law passed by the Parliament, is the final word on the matter. When that law is not upheld, the function of the third estate, i.e. the Judiciary, commences - delivering justice for violation of the law. However, what is to be done when the fence consumes the farm?

Mee Punha Yein

Year 1980, Bharatiya Janata Party’s first president, Bharat Ratna Atal Bihari Vajpayee thundered the prophetic and magnetic words, “Andhera Chhatega, Sooraj Niklega, Kamal Khilega”

Year 1984, post Indira Gandhi assassination, Rajiv romped home with over 400 seats in the Lok Sabha; BJP opens account with 2 - Dr. AK Patel from Mehsana, Gujarat and Chandupatla Ranga Reddy from Hanamkonda, AP; both get mocked by the ruling dispensation on the floor of the house, “Hum do Humare do”.

The early 1990s, the immortal Raam Mandir movement reaches an emotional crescendo and BJP crosses 100 LS seats for the first time; the late 1990s saw Atal-ji being sworn in multiple times as the PM eventually managing to lead a coalition government into the new millennium.

The mid-2000s saw the fall of the Vajpayee government in spite of improved economic parameters, tremendous scientific & infrastructural progress (who can forget Pokhran and National Highway expansions?) as the Congress Ecosystem managed to best the gentle giant; Narendra Modi is watching and learning – noting down the mistakes that should not be repeated.

Year 2014, the culmination of the wishes of a great and ancient nation coupled with the pain of the dark decade – Narendra Modi becomes the 2^nd BJP leader to take charge as the Prime Minister of India with a thumping single-party majority; by year 2017, the party is ruling 71% of the land mass and 69% of the population.

Year 2019, Narendra Modi does an encore crossing the most coveted and cherished triple-century Bhaarat celebrated immediately followed by the fulfillment of two long standing manifesto promises – abrogation of article 370 and the commencement of a King’s return to his Kingdom of Ayodhya!

Cut to today with the following image circulated in social and mainstream media with hysteric glee and unsavoury captions:

Muck is in the Middle

We are a day away from state assembly elections in Haryana and Maharashtra; the latter being my home state and housing a significant chunk within my social circle, has seen a noticeable banter around it - what with an unconventional choice for the CM completing a full term in spite of obstacles within and outside his party, traditional derailment techniques applied by the liberal ecosystem and national context to a state election. Numerous reactions are coming through and they have triggered a fairly old recurring thought in my head that I keep pondering upon every once in a while - the relationship between the Traditional Indian Middle class (TIMC) and politics. This blog is an attempt to express my frank, brutal and naked understanding of a fairly common phenomena in our politics : why does the general politician (irrespective of any affiliation, ideology, caste, background etc) not take this TIMC that seriously as much as he/she does the other socio-economic groups? (Bonus: what can it do to change it!)

Mind over Madrasa

Which war is the ideal war? – The war that is won without stepping on to the battlefield.

It is very easy to misinterpret the above statement; for modern day “peacekeepers”, the statement is akin to not going to war at all – ever! For fanatic extremists, the statement is an excuse given by the weak. For students of Chanakya, Shivaji and Krishna, it is the principle of minimal casualties. For these students, the statement is all about understanding that the mind is the all-encompassing superlative battlefield made up of tiny zones of conflict – physical and/or emotional - this is modern warfare! The Abrahamics understood this very well and hence you can seen a transition in Christian conquests – from overt Goa inquisition style torture or brutal British subjugation to the silent dagger mechanisms perfected by the Vatican Church, based on the combination of smart economics and emotional appeal executed brilliantly by scores of missionaries particularly along the eastern belt of India. Islam too evolved to understand that wars needn’t be won on the might of the sword alone and hence came the advanced weapon of demographics as explained by Muammar Al Gaddafi - something they have successfully employed in Europe and will deliver them the continent in a few decades. However, does the Hindu understand his own legacy?

Aa Gaya Modi

We wake up to a saffron day and quite a lot of us would have had the most peaceful of sleeps last night having known that Modi-led BJP has secured a majority on its own and the wider NDA will get the opportunity to lead this great nation for the second time in a row. In Jan 2019, I had presented my thoughts with mathematical arguments on why BJP alone should score 290-300 seats in Lok Sabha elections after being prodded by a friend. I received disbelief, doubt, hope and trust among many emotions and responses. However, what helped me state so confidently as the elections came and went was outright mockery by the left liberal ecosystem and the robust 67%+ electoral turnout (a general election record beating 66.4% of last time). Today, albeit by a small margin, I am glad that I am proven wrong and the Modi Juggernaut exceeded my calculations by securing 303 seats and a ~37% vote share (my guess in Jan 2019 was a minimum of 35.6%). This event has notable takeaways for us Bhaaratiyas and some cautionary indications as well.

Indian Government: Your, Mine or Ours?

As a student of Finance, Debt and Equity have always been the conceptual building blocks in my studies and in my professional life. As a quick basic introduction, both are modes of financing operations of any entity. Debt financing involves provision of capital with a promise of periodic interest payments (fixed, floating or zero) and the repayment of the upfront capital along with total interest at the end of the tenure - a home loan & the EMIs associated with it are a classic example. In this mode of financing, the financier does not have any ownership in the enterprise to which the financing is provided. As against this, in Equity financing, the financier has direct ownership (either active or passive) in the entity to which the capital is provided. The most prevalent example is owning a common share of a publicly listed company making the owner of the share a shareholder in the said company and hence a proportionate 'owner' of the entity and its business. Being an owner of the business exposes one to its risks and rewards in significantly higher proportion. The cash flows are irregular more to say and the primary source of gain is from capital appreciation of the value of the business, i.e. the Market Capitalization, of the firm. Thus, more often than not, Debt has assured cash flows, fixed periodicity and lesser risks attached to it along with zero ownership in the enterprise while Equity has proportional ownership, irregularity of cash flows and higher risk/reward attached it. For the sake of this blog, I am ignoring the convertible modes of financing.

With the basic of Debt and Equity behind us, I'll proceed with a keen observation of mine which has grown stronger in the past few months, on how politics has evolved or changed in the past five years if I look through the lens of Debt & Equity. Till 2012-13 approximately, we could see the Debt Model operating in full flow while post it, the Equity model has started taking shape with increased proportion as a percentage of our total population. I am seeing comments over the social media and outside it as well which are indicative of this difference though I am yet to come across any article explicitly putting forth such an observation. Let me elaborate:

Fiberakht

Summer is here and temperatures are going up – the Sun seems to shine much more radiantly than any time of the year and outdoor sport is now a less attractive offering. Though IPL has just commenced and cricket happens to be my favourite sport, another sport is fast challenging the numero uno status it holds in my life especially with the soaring celsius count outside. This sport is called 'Fiberakht' or simply ‘Fiberals vs Bhakts’ – the so affectionate monikers either side has bestowed lovingly on the other. Ideally, it should have been the age old ‘Liberals vs Conservatives’ but times change and so should we. The more I engage in this sport, the more I am reminded of an approximate nineteen minute TED talk by psychologist Jonathan Haidt titled ‘The Moral Roots of Liberals and Conservatives’; the more I am reminded of it, the more I tend to enjoy this sport of 'Fiberakht' - going after the fiberals, seeing them frothing and also getting insulted in this process yourself has an intoxicating charm to itself. Fun apart, Haidt’s talk is where I would like to focus as I move through this blog trying to connect it to Bhaaratiya values and the environment currently.

The Ecosystem and its Existential Crisis

Through various tales observed in the theatre of nature do we get a lot to learn. Many a times, the animals or the plants or the swishing winds or the gushing waters have a lot to communicate, a lot to teach. A cornered animal tends to fight back ferociously and we have seen/heard stories of herbivores such as bulls or gazelles too fighting back advances of carnivores and no more consider them surprising, given the circumstances. Though the event itself is no more a surprise, the ferocity involved continues to amaze me and offers a glimpse into the vast untapped energy of an entity and its ability to channel it through its own name & form. This animalistic ferocity though not illogical in any way is out on full display in our nation today and the next seventeen months look ominous with dark clouds gathering on the horizon and a cornered animal making its last stand in a battle that began five years back.