Geo Politics, US Dollar, Gold

Geo Politics, US Dollar, Pound, Euro, Gold

The world has grown and understood the strategies and tools of  supremacy, controling and looting ! 

It is like local Gang War ( Party Party - Cartelization ) and Gali Ka Gunda (Local Goon) type situation where one says and keep threatening - 

‘Ae Meri Baat Sun , Meri Baat Maan, nahin to ….’

(Listen to me, Do as I say) , I am your Big Daddy, you learnt and earning from me, this planet belongs to me !! 

Others have also developed and capable to stand on its own feet! 

Analysis, while it has been coming true in last 17 years and more so in last 6 years too even more accurately with timings.

Change is constant and change is bound to happen for good - It is like Product Life Cycle of Empires /Dynasties which has been longer before but now even a century is a major achievement with M&A , New Industries and new markets with new players ! On average One Warrior Family use to rule for about 200-300 years and even Rothschild as business family and few others have a history of around 175 years.

Empires / Dynasties change but old families have ruled for centuries !  

Reducing now is Imperialism and colonialism using tools like Nuclear threat, Wars, Capturing and looting, fooling, regime change, civil wars, killings. Asia, Africa, Latin America (so called 3rd world countries )

It is a Tug of War and will continue - Animal Tendency 

New Tools are financial economic civil and digital including political.

Combination of Tug of War Players are 

US- China - Russia 

US - NATO - BRICS 

May take another 20-25 years for Asian China India to rule

Process of Change should be gradual and with homework amongst countries and even a resolution in UN. This will avoid Chaotic situation , defaults, Lehman like situation worth almost 110-150 T USD or GRID LOCKING. Ideally barter should be allowed and bilateral currency settlements should be permitted and erosion of Value of Fiat currency should be avoided by routing into Bit or other coins !

This in fact is another source of devaluation of currencies and making a parallel economy!! 

 

Hence, UN resolution for a level playing field and ending of slavery , colonialism and imperialism should be passed. Status Quo or Return of Territory on a price term should be the way forward with a cut off date. Like Hong Kong deal of Britain and china. No more bombings and killings due to war and territory grabbing, making each other weak - breaking nations - civil wars , etc all such tools and actions should be stopped and all nuclear Bombs, hydrogen and other similar bombs should be destroyed for ever - as developed and civilised plant beings (as no one is behaving like human beings or social humans)

India is vulnerable as of now unless people give clear mandate

US and its Agencies and China back stabbing others to align and rule along with US is most likely the case. 

Burkino Faso Ibrahim in Africa , Taliban makeover in Afghanistan are latest examples 

In any case trade in dollars has reduced to 64% and all these European and US economies are over around 125% in debt of GDP. 

Hence even to pay interest they need almost 2 T USD (US alone has to pay 1 T USD of interest on 34 T of debt. Japan and Europe are again in trouble. 

Other examples going on are like Iranian PM was killed in Helicopter crash , Japanese PM resigned , Japan decoupled from US, Japan has 200%+ debt to gdp ratio, 6-8 T USD of JGB’s, Bangladesh, Pakistan, Ukraine, Russia, Iran, Canada and now India (being tried) are classic open and public domain examples. 

Situation is that even the strategies and steps are also being shared and president and team are making money openly by speaking and sharing policies like yellow journalism and insider trading inspire of SEC and matured democracy and markets of 200 years - capital market , commodity , bullion and money market.

Fear of Myanmar going with India, Nepal with India, BRICS, Saudi and UAE going away to china etc are further fear! 

Economic war is also happening and US trying to capture rare earth metals and gold at any cost as Europe has no money left and no arms and even army.

The case of lethargy is creeping in US and Europe for last 75 years and they are no more interested in loosing their people and money (nothing left) again in wars and by going to other countries to loot! 

Hence they are recruiting from 3rd world  and outsourcing !! India and China has been the best in terms of their spiritual, intellectual supremacy and hence they are managing almost 35-50% of world money and heading most of corporations worldwide. It is about genes and culture ! Wars have been read , seen heard between Christianity and Muslims in last 1500 years and Hindus have in any case in Asia have in past proliferated culture and trade  rather than looting and have not been in war to loot and capture ! Hence, it is a bilateral and not unilateral as  the case is being said and spoken about that so called Developed nations have given everything! 

Gold in any case now has only one trajectory of upward slope … as analysed in 2021/22/23/24/25- all have come true since 1100 USD Troy ounce to 1700 to 2500 to 3000 to 3500 and it should certainly be going above 4000 and hover around 4000 +/- 8% next 2-4 years. 

Currencies are going to be fluctuating and one should be hedged at actual buying rate of underlying or else situations can be as bad as covid or even like 2008 with few currencies! Synthetic/ natural hedge is the solution! 

What is to be seen is that reducing rates and Carry Trade - dumping own currencies and own currency - base currency appreciation based on REER happens or still beating by central banks /funds and even to see when central banks start behaving like hedge funds !!

Happy Investing !!

Views are personal without any aspersion and is a situational analysis with respective disclaimers as per law of land international laws of facts and public domain information)

Economic And Monetary Policy Direction India Japan America China

Economic and Monetary Policy  Direction 

China India Japan America

https://timesofindia.indiatimes.com/business/india-business/larger-than-expected-surprise-rbi-cuts-repo-rate-by-50-bps-to-5-5-emis-to-come-down/articleshow/121664705.cms

Strategically as a matter of direction -

1. Increasing Money Supply before others do 

2. ⁠Good to reduce rates to be able to push INR borrowing and be coat effective in exports 

3. ⁠Leads to increased consumption and hence GDP Growth

4. ⁠Long term impact will be good as this will help increase Joint Ventures and foreign companies to come and invest as differential reducing 

5. ⁠Increase in INR/USD or appreciation in Rupee is  a boon for repatriation and hence lucarative to investors, Chinese have followed this strategy for more than 15 years,

6. ⁠This is in line with a long term strategy which was folllowed post 1988 Asian currency crisis which led to ‘0’  zero rate policy by Japan JPy (beating liquidity premium theory) in 1991., then by Swissy CHF from 1995-2010,  USD from 1973 onwards…and USD index is , currency basket and parity of USD-CHF, Pound- Euro proves of strong power play of strategy.

7. ⁠2008 onwards QE and blackrock with other funds have cinsistenly followed the beating of LPT by having 0.5% rates for almost 10 years! 

8. ⁠All this has resulted Carry trade ( dumping own currency for other currencies ) and hence JPY/CHF/USD and cross hedging for interest rates appreciating Currency pairs. - This eventually leads to further depreciation of own Local currencies like INR etc due to lack of demand

9. ⁠For all this to happen, country like india and indian companies - have to increase international trade, appreciate currency, reduce inflation, be current and capital account surplus , create currency acceptability in international exchange and develop a robust large domestics money market (depth, breadth, settlement guarantee, multiple convexity and duration delivery) by allowing international players (investment banks) to trade. JGB’s are classic example for the same. Vietnam is implementing since last 3 years the systems and practices.

10. ⁠This should be the task for ADB, BRICS bank of creating Asian System. India should propose MM ,  IDBRT, NEAT, SGF, Currency Parity like LIBOR (Now accepted is SOFR). This is the only way to come out of slavery of USD/SWIFT/SOFR. Decoupling. As petrodollars are over and this will lead to addition of other currencies as reserve currency for Countries Central Banks, World Bank, ADB. USD is just a BITCOIN.

11. ⁠Gold revaluation by US is due as US will start another QE to handle its MM (bonds market) obligations of around 1-1.5(4 T) TUSD interests.

12. ⁠already Global GDP and US GDP has direct correlation with Bonds , QE and JGB as carry on interest and currency happens.

13. ⁠Banks (Treasuries) are going to make good profits on Currency and Bonds market as the direction is clear and bond prices to increase.

14. ⁠It is a vicious cycle where once into QE as tool, because of Inflation , stagflation, stagnation and interest differential, erosion in REER/PPP leads to Revaluation of Assets ( Implied ), and hence to be able to push economy and beat other countries, one has to have a direction and such clear systems and practices and should not change due to political changes and that is why Independence / Freedom of Central Banks / Monetary Authority - is a critical aspect of sustained growth ! 

Food for Thought!!

Happy Investing and Growing! 

Dinesh Goel

New King of Planet Making It’s Place Trump

 New King of Planet Making It’s Place 

All this what is happening was not known by experts ? By the King himself who is a successful fashioned entrepreneur and billionaire ? Is he doing experiments ? 

For To be a king , thought has to be different - unless one weakens opponents how the new king will rule ? 

For making opposition weak tools are reducing monetary power and breaking the network !! Other tools are also there like judiciary and investigations on decisions and actions ! 

Imagine the impact of investigation on accepted fact when Zelenskyy says 200 B USD aid not received ? Who all should be investigated.

Who are common people and agencies 1. Blackrock 2. Larry Fink 3. Bill Gates 4. Elon Musk 5. Tesla 6. George Soros 7. Warren Buffet 8. Aramco 9. Saudi King Salman 10. Putin 11. Britain King 12. French Govt  13. China 14. Indians. 15. Top 50-100 Companies like Apple, IBM, Lenovo, Banks, Investment Banks 16. Controlling Corporate families like Rothschild , Cargill etc 

The network and power / muscle is being broken and hence unless this is not done , Trumph will have to go - impeached ! Hence - all election agenda and actions everyday made is benefitting whom ? New Ecosystem of New King !! 

US with 9000 T of Gold - is another tool which is being used and is expected to be revalued as is done every three years, this is what allows them to reprint and follow expansion - quantitative easing. So with BRICS and other countries creating gold backed currencies and bilateral barter currency trade with separate system moving away from SWIFT can lead to more demand and interest in Gold. India being the largest with almost approx 75 lakh crore of gold cult, happens to have around 7000-8000 T with people with average annual accretion of around 200T. India, China and Russia will continue to buy more gold with even Britain and Europeans investing. These countries have already started getting back their hold holdings from Britain and US banks.

The issue is even bigger when it comes to Interest Rates, there will be increased burden and rate reduction will become a challenge with inflation. QC Vs QE Vs USD Index. 

The Problem is that whether USD depreciates or appreciates, it’s always going to favour US considering unwind and increase in carry trades due to decreasing interest in home currencies of countries!

Tilt in Trade currency basket and unwinding with loosening of power and reduced Sale of Weapons will lead to reduced power of Super Power! Already UN , Security Council, World bank and Crude with Petrodollars has lost its sheen !! Even China and Russia has given alternative to Saudi, Iran and third world.

Minerals and Mines (Ferrous and Non Ferrous) has already lost it’s lustre with African continents 26 countries growing and nothing much is left as Coal and ferrous / non ferrous precious metals are all looted and excavated / allocated. Hence the need for Ukraine with 1 T USD of assets - Problem - already captured by Russia which in any case will not be acceptable to US and Europe!! Hence no option to continue War or settle between 4 parties ( China , US, Russia and Europe )

Crude is already loosing its importance owing to alternate energy sources and green energy with automotive sector shifting to EV and gaining almost 8-10% of world market.

Industries too are less dependent on Generator Sets and hence Solar playing almost 20-25% world energy requirement. Brent Crudes Average has been 77USD/Barrel with marginal coating of avg 2 USD / b of production cost.

Venezuela has been quite due to the fact that US has met it’s own demand internally and Saudi wants to rule crude market. 

Reason for Saudi to come up with 500b Real Estate Development as an alternate to Dubai is for the reason of expected reduced Crude dependency. 

Increased expenditure on Weapon and Army by Japan, Europe , China, India , UAE and Russia will lead to further USD borrowings and increased Fiscal deficits. How long and period of the activities will show it’s impact and colors in medium term of 3 years and at least the direction is getting clearer.

This unwinding and Contango or grid locking will have its cost which the world should be ready to pay and that’s exactly what will happen in next 3 years. Loosing of grip by superpower creates multiple power centres and hence will lead to more powerful regional blocks but eventually more safe and secure with better understanding as at least regional blocks will not be in a position to fight because of of structured economic and political exposure.

It was shared that it is going to be inflationary for US economy and against the expansionary / quantitative easing.

US Economy will also have to pay a price as interests will have to be shifted.

Yield Curve and interest outgo on 31 T USD of outstanding Treasuries with sensitivities of additional 1% interest will lead to huge outgo and fall in treasury losses of almost 250-500 BUSD of banks treasury losses! Reason why economists predict recession in US and referring to 1930- But , things have changed and nothing of this sort will happen as the world is slave of USD and Reserve Currency.

Govt’s in Geo Political Interest re-alignment will happen with the-  The new King of Planet

Europeans and NATO are also threatened as a block to align , Zelenskyy is threatened and even Putin checkmated. Ukraine, Bangladesh, Myanmar, Turkey, Iran and Syria are going to be the biggest problems of next 2 years! 

China threatened to align and same with Canada.

As a King of Planet and Superpower , the new King is making it’s place and trying to have it’s say for himself his family and associates. Politics seema to be driving economics and all agencies too! Economics is still sub servient to politics. It is Protection money and power which is being sought by the new ruler!! 

Agri sector cannot remain untouched with Ukraine disturbed, food security is becoming a challenge. This is leading to regional and country hoarding! 

Trade Cost / Freight and supply chain costs are going to be sideways with spikes owing to letting the ships continue to hold and carry for longer leading to hoarding on ships silo’s!! Let’s see how the S4/S5/S6 behaves out of 7 routes! 

Unless this settles, Steel, Auto and then as follower (lagging) industry Real Estate will face the heat. Isn’t fall of Real Estate prices and stocks going to benefit the new ecosystem? 

Just have patience as everything is notional - gain and loss , best time for day traders and AI/ Quant Models in all 5 Markets !! The dust settles ! Energy has to settle ! It’s a matter of time !! Overnight strategies and profit analysis is deciding the next days statement !! 

https://dkgoelenkash.blogspot.com/2024/11/series-ii-trump-triumps-us-dollar.html

Scenario and Direction

 Scenario and Direction

1. US Political and Policy Change (Geo Political to Business)  shall lead to correction in Prices of selective stocks and Index correction of 10-15% min which is being experienced. It had increased from 27000 level in 2021 to 45000 in Q2/Q3 2024. Now at 42K is already down by 5%. Expect another fall of 5-7% min in next upto May-June 25

2. ⁠This will correct in July-Oct period with Google, Apple and Tesla as max gainers.

3. ⁠Fed Rate 5 to 4.25% (3 Cuts) and 10YBond Yields - sep 2024 3.36 to 4.39% in Nov 2024 - Major Higher Jobs and Inflation 9% in 2022 to 2.7% in Oct 2024, somewhat was a contrarian impact - on yields- on rate cut yields went up which resulted in losses to Banks on HTM and HFT categories with notional and actual losses on Money Market holdings. This based on stronger economic outlook led to more US short term equity investments and being more liquid as investors are expecting correction and buying on correction.

4. ⁠Sentimental impact of USD is creating USD index going to 110 levels and hence covering panic leading to other currencies fall like USD/INR going down to 85.5-86 levels. 

5. ⁠Forex Reserves in India is down by almost 70+B USD which is very negative with FEO trying to stabilise by OMO.

6. ⁠Sensex to remain sluggish for few months with spikes on China US Israel Iran Ukraine Russia Oil news!

7. ⁠USD strengthens and weakens other currencies and when USD weakens even then it weakens other currencies due to shift in rates and carry trades and hedging

8. ⁠Fx to be under pressure for few months with major spikes and fall of 1% is possibility.(Considering Normalised Dep of2.3%pa in USD/INR. Present fall was overdue and as was analysed in Oct Nov 2024 itself.

9. ⁠Bullion Gold and Silver to again start increasing and gain almost 5-7% by July 2025. Present fall was imminent as selling came to stabilise FX and due to policy change and move to Bonds positions.

10. ⁠US Bonds and JGB yields are going to fall. 10YUS Bond yield should fall to 3.5-3.75% Levels in few months. 10YJPY Bonds yield should fall from 1.25 levels to 1.00% levels in next 3-6 months. It increased from 0.6% with inflation at 2.5% level. 

11. ⁠USD/JPY moved exactly as analysed in Oct/Nov that it will fall from 160 to 14-150 Levels and finally it will come down to even 135 levels and the same holds even now.

12. ⁠Pound and Euro is finding it difficult to sustain and falling against all currencies owning to poor economic situation and US playing against European economies. 

13. ⁠What is to be seen is that to what extent Trump and its Currency and economic policies are curtailed by deep state and NATO. As was analysed , Biden Govt and Ukraine has done everything possible to create Havoc before 20th Jan as was analysed and shared. Bombings and further sanctions on OIL trading, processing, insurance companies associated with Russian OIL is a blow - last effort by Biden NATO and Ukraine. Reversal of Such Decisions are imminent post 20th Jan and hence breather.

14. ⁠Chinese recovery and Fx RMB CNY fixation is going to be most critical with BRICS stand in its currency. Russia and Ukraine war is a must to settle - Russia is decaying with 21% Interest Rate and still a sluggish 1-1.5T economy.

15. ⁠It is accordingly advisable to be patient and average losses of 25-30% in portfolio should be able to be covered in 6M to 12M or even to find better selective option to cut losses.

_It is Just a personal view and analysis with Natural and Commercial Disclaimer of of no risk and liability of others decisions_