Covid and Post Covid events led to directionless Geo political situations due to lack of business and humanitarian sense and extended Political Power play over Economic sense.
When Mother Earth as Plant itself is at stake and life with environment is at danger, Obsession of power play and continued Cold War Era is meaningless.
Having Nuke’s have proved useless. Soil, environment, People in Army and Civilians are dying with or without Nukes.
World / Plant and space including other planets are being divided and fought for since Adam and Eve / Big Bang times between Hindu, Muslim, Christians, Chinese, Judaism etc. The result is evident by way of the fact one can count country and religion. Secularism is a word coined in 1850’s to have a place where there is no religion and which can be used to represent every religion with majority and minority.
Maslow hierarchy theory is for use and misuse and as long as one is able to fulfil the psychology needs , the addiction doesn’t permit to upgrade and move higher and attain spiritual and self actualisation state of mind. Hence, obsession is habitual of addiction of power of psychic play in a vicious cycle. Equity, Cult, justice, fair etc is again challenging. The present state of affairs of last so many years , USD, SWIFT, UNSC, UN, Nagasaki, World wars, extension of NATO and wanting to have Cold War, breaking of Soviet Union and weakening of nations and making them slaves etc are all examples.
So, people in US have disowned the policy of bombings and increasing wars? They want more of money and business !!
This is exactly going to happen and with Trump , Indians and Musk , it is expected to be sensible and economic oriented actions like Higher Tariffs, Reduced Visa, Anti Outsiders, Reduced Interest rate Regime, Lower Yield Curves, ( buying of US treasuries again) leading to immediate buying of US Treasuries to have capital appreciation, liquidate gold and sell equities a bit, Job Rates to be higher, again carry trade in USD and JPY, ( USD is always going to benefit - Depreciates / Rates increase - people need to buy more and hoard, USD Appreciates - Rates reduce and again USD needed as other local currencies are dumped for carry trade and swaps and hence again hoarding and keeping it outside by not exchanging for additional gains.
USD index in any case will increase and except for 2020 Covid times, it has been hovering between 100-115 leading to JPY , Chinese , Indian and other currencies volatility and as VIX is high hence the hedge premium too.
Russian Ukraine war, BRICS , Chinese, Saudi, biparty and zonal currency efforts and picture seems to have been again slowing down because of Trump!
Iranian and Ukrainian problem if solved or if subdued , Gold May fall and will again increase with revaluation and continued efforts of BRICS.
US will have to be aggressive to keep the USD supreme and will have to control information and development in control and as slave to US otherwise, world will see another 3 Groups - Europe with Euro , USD and its slaves, BRICS with China, Russia and India at helm with Brics Bank and separate trade and currency settlement system. This may have to be backed by Gold and even guarantees to avoid defaults. Decoupling will take longer and may need a bit more clearer intent and leadership.
As regards graphs and overlay / superimpose correlation of currencies, VIX, Index, USD Index, Bullion, SOFR, Yields of last 5/10 years - the charts below gives an idea of 6 months of volatility, corrections and specific impact of Trump actions. Considering reducing yield curves and more stability, reduced Arms spending, will lead to reduced crude price(76-78) USD/barrel levels,
Post present average correction of 5-10% in Metals, 15-25% in equities, 5-10% in bullion and precious metals, there is a clear indication that this is what has been understood and there will be pressure on selective industries and currencies. USD/INR has fallen by 1.5-2% in 2 months and Sensex has fallen by 10% in 1 month.
It was shared in Oct and early Nov that the Sensex should be around 77500 and it is now at 77500 levels.
Banks and Financial sector will be doing better due to treasuries making more money due to MTM gain and it gets immediately reflected in P&L, Recoveries have been good, retail portfolio has been good and with reduced NPA and consolidation of banks, improved rating and counter party international correspondent banking limits are good and hence Top 5 Banks should be able to give 15-25% returns in next 1-3 years. ROA is close to 1 or >1% and NIM should be 2.-3.5%.
Industries which will be under pressure for next 2 years are like Auto, Auto Ancillary, Flat steel , coal, PSU, Defence, Pharma( DPCO is linked to WPI and there is no increase in WPI ) increasing the price of products under DPCO will be difficult and hence most of Pharma companies will retain prices and shall not show abnormal profits. Mankind Pharma , Torrent, Cipla are active and in news with increasing market shares too.
Better doing Industries will be Agri, Service’s, Education, Travel, Tourism, Food, FMCG, electronics and phones, ISP, cables, real estate, clothing, 2 wheelers, exchanges, EV, Solar, Roads, Entertainment and Sports.
Carbon , fibre, e-commerce, last mile, Airlines, Airports, Power, Shipping.
Considering JGB 6-7 T USD , 100-115 levels of USD JPY in 2018-19, as inflation is 2.6/2.4 levels , except for higher unwinding of JPY carrytrade and inefficiencies, increased JPY expenditure in arms led to this spike of 155 levels. This is going to be at a level of 130-140 levels in 6 -12 months
USD/INR has the potential to cross 85 levels as a matter of spike but should be settling at 85 levels in 3-6 months. RBI has been doing OMO and FII has started taking Lindy out and hence almost 20-40 BUSD has moved out in last 3 months. USD/INR has been depreciating at 2-2.4% per annum. There is a clear scope of 40-80 paisa depreciation.
USD index range is 102-107 and 110 is a spike and not sustainable as almost 10% of trade is decoupled due to bilateral trade agreements and due to petrodollars and Saudi not adhering to USD regime. Even Russia, China and India are open to bilateral trade and settlement too and hence it will lead to almost 10T dollar of trade settlements going out of USD and hence impacting USD index and hence 102 levels should be ideal in 12 months time. With VIX also settling down from 14 now to around 8 levels, hedge premium will also reduce to 5-5.5% levels in 12 months.
Considering all these markets and exchange ratios , etc are rigged, over a period of time due to bilateral trade , decoupling, open regime, barter, improved and informed currency and economic management by countries shall lead to a challenge of this artificial trade index based in basket of currencies and keeping euro USD levels stable very close to 1:1 since 2000.
Bullion Gold has analysed in 2021/2022/2023/2024 since 1700USD/Tounce - that it should reach 3000USD and settle in 2025 and then 3500 in 2027/28 is exactly happening. Gold AUX has crossed 3 times 2800. It should trade and will be range bound between 2200-2600 for next 6 months and will again bounce to 27-2800 levels.
Is the Next President is Under Training ? Elon Musk?
