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Durudarshan - Investment Analysis

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What are the chances of the worldwide economic Recovery continuing this year?

Posted on January 2, 2016 at 11:19 AM Comments comments (16)
The chances are pretty decent of the worldwide economic Recovery continuing this year, with the promising possibility of enhancement.

Japan seems to have decided to continue its Stimulus, running at some $85 billion a month.  This is gigantic for the size of their population, and guarantees the highest standards of living in the world to all Japanese citizens, plus a growing influence around the world, where their capital is likely to foster growth and development.  For example, they have offered $35 billion to India for joint venture in developments of infrastructure, and this will certainly add to Japanese GNP.

India has done joint venture and co-operation treaties with Germany and France, to help develop some of the 100 new cities that Pradhanmantri Shree Narendra Modi announced at the beginning of 2015.  Since then, he has visited China and Russia, and is signing up co-operation and trade agreements with every likely nation, including many in Africa.  As a lot of Indians lived in Africa and grew up there, it seems India is taking an altruistic stance, wishing to repay with gratitude to their African brothers and sisters.  This is a laudable gesture, and will enable the inherent and huge potential growth that is in places such as Lagos and Zimbabwe. 

China too is extending its sphere of influence, Hon Xi Jinping visited so many nations and signing up trade and co-operation treaties.  I can imagine joy for all these nations, where they will have expertise been made available to them, together with the machinery and transportation to fully benefit from their resources as well as create infrastructure developments which they so badly need.  How can people not imagine dams, electricity, drinking water available on the doorstep, schools, dispensaries, hospitals, hotels, housing, tourists.....thriving economies....where God has blessed them with the rich fertile lands, mineral wealth, green vegetation, fragrant flowers, livestock to provide them plenty of milk.  Africa is most likely to come up with the most number of billionaires soon....or if not, at least top social entrepreneurs who will instead contribute to their lands through holding together and creating business enterprises which serve the communities.  If not dollar billionaires, these will be the enlightened spiritual billionaires who will do great good for their communities....at once, their people will have increasing standards of living.  If the local African banks can back these entrepreneurs, they can create the development and wealth and growth that is the potential.  I pray all these people receive the rich blessings from God.

The United States has steadily grown from the dark days of the 2008 meltdown to today, where the economy seems to have been totally restored, and is growing, with confidence, more jobs, more enterprise, more homeowners, more cars......Now the Fed will just need to fix the Debt Ceiling (in March, it seems).  If they just expand the balance sheet to January 2017, the Obama administration will be home and dry, and all the senators and representatives can continue to collect their pay checks. 
The alternative policies of the Tea Party crowd or Republicans like Donald Trump would see Obamacare repealed, and poor students being sent home due to lack of a free lunch at school.  Those dark days caused due to sequestration are something that is best forgotten. 

I pray Hillary Clinton shall become elected as the President at November 2016.  Simply, it seems her destiny.  It would resonate with the times and the perceptions of people today, everybody seeking self-expression in a democracy.  Her election will enshrine the highest achievement in gender equality.  That is a truth the people will not wish to hide, nor deny themselves. The time has come for this Democrat to rise as the dove, and sit in the highest office in the land.

She was very successful as a peacemaker in the Middle East when she was the Secretary of State.  She has a natural gift for making peace agreements, and people trust her.  She is a natural ambassador for peace.  The world atmosphere will change when she becomes President, the whole tone of political relations will change, I believe, for the better.  It is up to the people, to honour her, and elect her to the White House. 

The One Trillion Eighty Billion Stimulus that the European Central Bank has rolled out has the promise of being extended beyond September 2016, as announced by their President Mario Draghi recently.  That will offer ample scope for upgrade and innovation by the companies in the Euro Area (and by extension Europe) to meet the challenges of these times.  On that note, the one thing the world is waiting for is the Juncker Plan.  With reforms under way, Greece must surely be ready for it.

The low Oil price has depleted the reserves of the oil exporting nations, and their budget deficits have been bigger than envisaged.  That suggests they will review their stance on cutting productions, and introduce some cuts before long; their stance has hurt their purses deeply, so some change may be expected.  Russia too could follow suit, unless they are happy to foster a recession at home.  Common sense would suggest oil price could begin to rise.....but when is only known to the bigwigs in OPEC and Russia.  It is past the post-panic stage; it seems it is a time when they must be regretting not cutting back production earlier.  And there would be no loss of face.  Economic reality seems pretty harsh.

May I wish you good health and joy for the New Year.

Kind regards,
Durudarshan H. Dadlani

(c) Copyright, but may be freely shared.

2015 may be a very good year, but caution ahead

Posted on February 6, 2015 at 7:09 AM Comments comments (12)
Two Thousand and Fifteen may become a very good year, for most nations.

In China, where they recently cut rates and introduced a Trillion Dollar stimulus, the dynamics of internal growth and development as well as for the export markets suggests robust growth.  The Honourable Xi Jinping is quoted as saying that China will achieve a new standard in progress.  His words are welcome, and should give heart to anyone who may be fearing a slowdown in China.  The actual production and shipments overseas ( I hear huge ship loads arriving in Britain, and for the first time in many years hear the trains ferry the goods across in the middle of the night in a huge procession) testify to that.

In the U.S., the start of Prosperity which I had foreseen for November 2014 seems to have materialised, and heatmaps of happiness continue to grow for the people there, with increasing numbers of auto purchases, mortgages taken out on single family units, more people in work both seasonal and permanent, lower Oil prices (although that is a mixed blessing), and good weather, apart from the recent snow.

I see the DOW going upto 18,500* by June this year, although the prospects for 2016 may be mild, with perhaps the saving grace of Hillary Clinton becoming elected as the President.  Sentator Jeb Bush is a strong candidate, but I detect the dynamics at play will ensure the Democrats will again have tenure of the highest position in the land. 

*I am just expressing my opinion, based on the logics of what I perceive.  People should speculate at their own risk.

The Oil producing nations will have to work in co-operation and ensure a stable oil price, otherwise their dollar-denominated revenues will not meet the cost of their imports, and may lead to ques outside empty supermarkets, waiting to buy stocks (g00ds) which are being rationed, as in Venezuela. 
It makes me cringe in shock to see the situation in Ukraine, where the rebels loyal to the Soviet leadership are wrecking havoc and creating ghost towns, where life seems at 1950s levels.  Mr Putin can be generous and call these people off.  He must extricate himself from this very messy situation.  It is doing no one any good.  Once peace is restored in this region, hopefully the Rouble will recover, and help people in Russia share the common prosperity that is developing worldwide.  Oil seems to be bouncing around levels which may be optimum, and which may prove good for everybody, including the newly formed shale and fracking operators.  Mr Putin has to apply the generosity principle, and help the kindred folks in Ukraine.  That conflict is just so unnecessary, it is just like bullying people who at one time Mr Putin was willing to big a brotherly hug.  I just don't believe it.

Under Pradhanmantri Shree Modiji, India is on track for the fastest growth since Independence, although the recent industrial productions figures at 2.6 percent seem so faint.  Provided the RBI decide to enjoin the procession of Recovery and lower the benchmark repo rate, things should improve.  There is a great natural appetite for investment into India, with the right atmosphere.  Creating a major air hub to compete with what exists in the Arab Emirates may be a good raising of the bar, but let us all wait and see what will actually materialise.  But in the meantime, the commencement of building a 100 new cities seems a great vision, and Modiji has my congratulations.  I hope his BJP policymakers and bureaucrats will ensure implementation and fulfilment of such measures.

The caution that I mentioned....while times are good, save a little for the future, and build some reserves for the second half of 2016, when it will all come in handy.


May the Lord's blessings be upon all.


Kind regards,

Durudarshan H. Dadlani


(c) Copyright. 



 





Magnificent, the ECB Stimulus

Posted on January 25, 2015 at 5:08 PM Comments comments (10)
The Trillion Euro stimulus announced this afternoon by ECB President Mario Draghi is nothing less than magnificent in my view, and will help create jobs and industry for millions, and turn into wealth.  This stimulus augurs well for the European stockmarkets and for the Euro itself, which it now underpins with a very positive aspect.  It seems to have been announced at the right time, and although the immediate market reaction may not have been wildly enthusiastic, it is a complex stimulus, needing people to understand and digest its implications.

In plain terms, it is 60 billion Euros per month over 18 months, starting from March to September 2016, meaning a total of 1,080,000,000,000* Euros.  This was announced by Mr Draghi at the press conference in Frankfurt this afternoon.

It will serve the 19 nations that make up the Euro Area, or Eurozone, which now includes as from 1st January 2015 Lithuania.   However, it will not be available at the moment to Greece, which benefits from arrangements already in place from the IMF, which gave them two bailouts and numerous haircuts.  Perhaps there could be cross border mergers of some organisations which would benefit all?

There seems enough appetite for additional funds, especially by companies who have not been able to find funding from the banks so far.  This is a ready segment that will be glad to be served by this Stimulus.  As in England and Britain, where Mr Cameron has been visiting various companies, who have received funding now, something similar needs to be implemented in the Eurozone.  Money invested in companies which need capital for upgrades of machinery, or cash flow to keep the factories operating while their customers arrange to pay them, will maintain employment and sustain livelihoods and, hopefully, even create wealth in the long term.  That 'old school' way of trading had died recently in the credit crunch, and could well do with revival.  It may be the clue to bring Recovery back on stream.


This Trillion Euro Stimulus was long awaited, and probably is just in time, now joining the money flow in the U.S., Japan and China, to maintain the worldwide economic Recovery, which shall flourish to Prosperity for all nations.  The next stage surely must be for the BRICS nations to reduce their benchmark interest rates and for the Emerging Markets to do something similar, in due course to be followed by Africa perhaps?  Or even simultaneously, and soon?  Why not?  The national books can become squared internationally, as each nation develops its resources, trades with the other nations, and brings development and growth at home.  Would that not be the most marvellous thing to happen?


I wish you peace and prosperity, to every nation, man, woman and child.


Kind regards,

Duru-darshan


(c)  Copyright.

P.S. Earlier I left out three 0's.  Aw aw aw!


The Oil price - what's happening?

Posted on November 24, 2014 at 4:05 PM Comments comments (7)
I had suggested a few months ago that the Oil price should be down, as had Oppenheimer chief economist Fadel Gheit.

Now it is down, well below $85.  At this level, I believe it is overdone, now at around $76 for Brent Ice and $71 for West Texas Intermediate.

Most of the economies who export oil would not find it viable to be producing at $70 a barrel - there would be no profit.

The only exception is Saudi Arabia.  Some have suggested that they would be profitable producing it at an even lower price.  However, the supply and demand dynamics as well as the political advantage would tip outside their interest, and economically, they would be throwing away their clout in the market by making it cheaper.  Under $70 a barrel will hurt a lot of the Oil exporting nations and their balance sheets.  Their infrastructure development projects would probably come to a halt in a short while, and that - forgive me pointing out - may induce a contraction in the world economy, that most people would rather not see.

In their own best interests as well as that of other OPEC nations, this Friday's meeting in Vienna I predict will produce a tightening on production quotas to restore the value of Oil. 

It is suggested that Russia may be reducing their production by about 300,000 barrels a day; if Saudi Arabia cuts their production by around a million barrels a day, the demand-supply dynamics may restore the price upwards.  The winter in the Western hemisphere is predicted to be cold, which will necessitate more fuel use.  If the price is restored upwards, that in fact would be best for the world, so all economies can continue as before (and better for those obtaining Oil at the current lower prices) without harming anyone too much. 

The world will be waiting for some sensible decisions in Vienna this Friday.

Kind regards,
Durudarshan H. Dadlani

www.durudarshan.co.uk/blog

Where next for the worldwide economic Recovery?

Posted on November 26, 2013 at 8:04 AM Comments comments (9)

DOW passes 16,000 - where next?

Posted on November 19, 2013 at 4:21 AM Comments comments (8)
Good morning, readers.  As the DOW passed 16,000 yesterday, I didn't write anything at that moment.  Regular readers of my column/blog will surely know that I was one of the few to suggest the DOW would go past 14,000 - then past 15,000 (the magic of 15,000) - and only recently 16,000.  I was of the view that the DOW could even do 17,000 this year, in the next five weeks or so.  A thousand points in say 25 working days, is it possible?  I shall wait to assess the markets further before I would commit to such a suggestion. 
 
In the meantime, I imagine a lot of punters will take some money off the table, and put into alternative markets.  India SENSEX has seen more inflows in last few days.
 
If not this year, then certainly I believe the DOW will hit 17,000 in next few months, on the proviso that the feel-good is assisted by the candy distribution, on which the panel will decide in the US this week.
 
That's all for now.
 
I wish joy and success to all my readers, in Netherlands, Fuzhou, California, India, Kenya, Tokyo, etc, etc.
 
Kind regards,
Duru-darshan.
 
Caveat : Everyone trades entirely at their own risk, I am merely sharing my views.
 
 
(c) Copyright  19th November 2013, Durudarshan H. Dadlani.
 
 
 

How is the economic Recovery likely to continue?

Posted on October 28, 2013 at 8:34 AM Comments comments (101)
It has taken all of five years for the world economies to be restored to semblance of normality from the dark days of 2008.
 
Remember those days when the interest rates were quite high in the advanced economies, anything from 4 to 7 percent - and that for the benchmark European Central Bank, Federal Reserve and Bank of England rate. 
 
The crisis created by the collapse of Lehmann Bros sent shockwaves throughout the financial system worldwide, with stockmarkets tumbling, loss of confidence in trade, fall in house prices, and a mood of pessimism gripped the world. 
 
At the vortex of the crisis, when Oil price reached $147 per barrel, according to OPEC AND European Union figures, about $250 billion additional bills were imposed on the European Union's oil expenditure, and what a terrible crisis it created, making transportation and manufacturing unviable in many countries, e.g. Portugal, Spain, Greece, the extra drain sucking the life-force out of the system. 
At the peak of the crisis, people who were earlier working in the textile industry were suddenly without work, and wondering how they would find their cod-and-chips.  Enterprising young people and old were trying their hand at the e-commerce economy, and finding lot of work but little revenue.  The Prime Minister of a sovereign nation which was so prosperous not so long ago was visiting the heads of state of various nations, asking for help.  The social security systems were severally stretched, the tax revenues not corresponding to the new outflows.  The interest on the bonds became quite high, to attract investors.  Talented people from universities were not able to find opportunities to make a living. 
Demand on housing was as high as ever, but people didn't have money to rent, nor were banks willing to extend mortgages.  Indeed, banks and loan corporations were suddenly unviable, after the property price plunge and bankruptcies of many individuals. 
 
Today, comparatively, there has been a return of confidence.  Things are getting better.  Spain, Portugal and Greece have seen their bonds become more attractive to international investors.
But the worst is hardly behind us, yet the oil price remains so high.  The pending closure of the Grangemouth Refinery is an indicator of the havoc the oil price plays with the balance sheet of such businesses.  A business that was viable up until recently today stands in need of £300 million, with that it would support 800 jobs until trade is more favourable.  This may be a microcosmic illustration of what could be in store for the OPEC nations, unless they decide to reduce the oil price to a level that is affordable to the rest of the world, and would give the OPEC nations an on-going stable income on a long-term basis into the future, and allow the world to breathe, and help sustain Recovery. 
 
It took two-and-a-half years after the high oil price knocked the economies for six for a return to some kind of normal business activity.  Common sense tells me that the high price today will probably hamper growth for about a year-and-a-half, and it is already restricting growth and causing hardships in many places, e.g. Yemn, Kenya, India, and almost all the nations outside the G20. 
I WOULD RESPECTFULLY SUGGEST THAT THE OIL PRICE NEEDS TO BE BELOW $85  A BARREL.
 
That would help the hard-pressed developing nations meet their bills from their depleted reserves or devalued currencies, and enabling continuation of trade with the U.S., China, European Union, Israel and indeed OPEC, which would create a dynamic of mutual co-operation and support that may help all nations thrive and develop all their potential.  That is the missing piece of the jigsaw in the picture of a continuation of the worldwide economic Recovery. 
 
All the listening hearts of the world know what I am saying, and those who sit in positions of influence will do what is necessary, for that I pray.
 
Kind regards,
Duru-darshan.
 

Narayani Namastute!

Posted on October 19, 2013 at 12:21 PM Comments comments (7)
When I get so many readers from Kansas City to my blog, I think Narayani Namastute! Narayani Namastute!  Yes, on the auspicious  day of Full Moon, as it was yesterday, and with the conjunction of the debt ceiling raise decision in the U.S., I was wondering what the Kansas City Fed Chairman Narayanan Kocharlakota was thinking.  I haven't read anything in the press, but he is normally an advocate of quantitative easing with deliberate measure.  In this regard, again, it is early days to see a ballpark figure of the debt ceiling raise, and for the 4 months of January 15th, Congress has announced that the U.S. government will be fully funded.  Their Comptroller is likely to know what that means, and how much money will continue to flow into the system until then. 
 
In the meantime, it must be a great relief that the shutdown has been lifted.  Never again, I can hear everyone saying.  People have lost income and business, tourists have suffered not being able to visit monuments and museums they may have especially travelled over the States to visit.  The short but very long 14 days have cost the U.S. dear, to the tune of some $24 Billion in lost revenue and productivity.  The lesson is clear, such a shutdown over an extended period would cause the economy to slow down, and the economy to lose something on the GDP measure.  It is like an economy in good shape being told to trim down.  Never again, I hope.
 
As to the ballpark figure, my suggestion is $1.32 Trillion over 20 months, which works out at $66 Billion per month.  After payment of some $60 Billion per month for the social security net, that leaves $6 Billion per month for enterprise and job creation.  Jobs ranging in pay from $20 or $30,000 per annum to $250,000 per annum could be created, perhaps 300,000 or 400,000 per month.  And he presto! within six months the U.S. would have whizzed on from Recovery to Prosperity. 
 
But that's just a ballpark figure I am suggesting.  At current Stimulus of $85 Billion per month, maybe it could be different.  In view of the regime of Abenomics in Japan and their Stimulus of $85 Billion per month, the per capita differential is in Japan's favour.  It is a theme to be explored over the coming days. 
 
I am glad to note the global economic order has been stabilised after the agreement in the U.S. on the debt ceiling raise.  As they all enjoy four months of relative calm and stability until 15th January and then to 7th February, I trust they will have this in mind and not give everyone, including themselves, a tough time. 
 
Certainly, the costings and implementation of Obamacare is something they can review and see how technically it would be best implemented.  The beginnings of the British NHS took about 40 years in gestation, before it received the blessing as a Royal Charter in 1947 under the kind King George.  Obamacare is by comparison in its infancy, and needs to be tweaked and explored before this very sound principle can bring benefits to the citizens and the nation.
 
Kind regards,
Duru-darshan.
 
 
 
 
 

Hello, New Zealand....silly song with a silly hat!

Posted on October 17, 2013 at 3:29 PM Comments comments (10)
Someone from New Zealand seems to remember the 'wear a silly hat and sing a song' article I blogged some time ago.  That, plus all others (over 1100 articles on my blog www.durudarshan.co.uk/blog) are there for your amusement. 
 
When I was much younger, some of my colleagues used to say that perhaps one day I should write a book and call it 'The Thoughts of Chairman Duru'.  My style must have been an amusing version of the great Chinese leader. 
 
My collection of work I have merely labelled for the meantime as 'From 2008 to Recovery'.  I started to put my words on Google soon after the collapse of Lehman Bros in October 2008, which had the effect of a whirlwind hitting the capital markets.  At that time, with subdued optimism and a fool's courage, I started to search for Worldwide Economic Recovery, May 2009, at Amazon.co.uk.  The computerised book search merely cancelled out the May 2009 and gave me a handful of economics books.  I found Nobel prizewinner but very modest hence great economist Dr. Edmund Phelps words inspiring.  I feel still that in his works we can uncover some of the dynamics of restructuring our economies and re-creating Recovery from the clean landscape after 2008. 
 
In the U.S., a lot of things seem to have been implemented, as well as in China, which has seen phenomenal growth in the last 30 years.  Looking at this giant nation which is still partly a command economy, with a hierarchy where commands are given and executed without loss of time, one marvels at the inspiration to build and modernise left them by their great leader Chairman Mao.  He was ruthless towards his enemies, but to his nation, he was a jovial comrade, leading them with emotional songs and poetry even when they worked hard on half empty stomachs.  China has done their Leader proud, and the tradition has continued with the Honourable Hu Jintao furthering friendship with Mr Obama, which will surely further blossom now with the Honourable Xi Jinping.
 
The world is open for trade and further development, with Britain and Mr Cameron today inviting participation from France and China in building a nuclear power plant here in England.  It is my belief that the lessons learnt from Fukushima as to how safe actually nuclear technology is, will be used to build a new generation of nuclear power plants throughout the world, which needs all alternative sources of power to build and continue forward. 
 
The worldwide economic Recovery will continue by the grace of God, with more trade developing between nations, more co-operation in investing and helping build the other nations, so that in peace and exchanging the resources each nation is blessed with, all can share what God has given, to the glory of our Father in Heaven, whose name is Allah to some, Bhagvan to others, who loves all humanity deeply and will surely help us all find solutions to the problems that confront us.  That I sincerely believe, and after the fiscal arrangements America has put in place last night, it seems for the meantime the music of Recovery will continue.
 
Putting on a silly hat and singing a song is a great idea of the Wal-Mart chairman.  Haeri Mai, that's what the sister at church says to us sometimes.  It means hello; to me, it sounds like my own Mum's name.
Today I hear the North and South parts of New Zealand have two new names in Mauri, the green island and the other one. Please do let me know when you write to me.  I'd appreciate your comments.
 
In the meantime, kind regards,
Duru-darshan.
 
 

Debt Ceiling, grounds for optimism

Posted on October 15, 2013 at 2:35 PM Comments comments (5)
Sound bites coming out of Washington this morning suggested that progress had been made on the debt ceiling raise negotiations, but there was still some work to be done. 
 
Indeed, NDTV was stating that a deal had been agreed in principle, to the effect that there would be 'full funding' of the government till 15th January, and thereafter a debt ceiling renegotiation date of 15th February.  If that is in fact so, that would be great news for everybody, at least they won't have to worry about the cold winds of November and can have a holiday and relax over Christmas before having to face the cold corridors of Washington in the New Year.
 
People are counting on the House Fathers Harry Reid and Mitch McConnell to bring everybody to the fold and get some agreement in principle, so that it can be presented to the world latest by Thursday.
Optimistically, everybody is waiting for such news.
 
In the meantime the U.S. Budget Office is issuing advisories in the event that an agreement is not reached.  Namely that in the event of a debt ceiling limit not being raised, the government will have run out of authority to issue any more money into the system.  In the most unlikely event of that happening, the ramifications would multiply twelve times what has happened under the Sequestration.
(The sequestration cuts totalled $85 billion over twelve months from a Q.E. budget running at $85 billion per month; hence one twelfth, so the effects of a halt would be magnified twelve times.  This is just to put in context some meat for the doomsters.  I cannot see the wise elected leaders of the U.S. ever leading America down that path, which would of course spell pessimistic scenarios for the world, as all nations trade with the U.S. and lot of people are engaged in producing something for export or working in calls centres and so forth which serves the major economies.)
 
Ideally, everybody would like to believe that such an agreement will be reached and released to the world, that full funding of the government continues until January, and then once again they can face the cold winds of February to negotiate another debt ceiling raise.  In the meantime, the funding will ensure U.S. continues to trade at full strength with the world, and create more jobs at home and abroad, creating a continuation of the Recovery that has gladly blessed this great nation. 
 
Japan is most definitely looking for an endorsement of the QE policies which they have implemented with a huge success, pulling Japan out from a phase of stagnation that lasted 20 years to what are glad welcomes of a Recovery.  China likewise is re-focusing on domestic growth; how much better it will be if things continue in a positive way across the globe, so that there is work for the workshops, freight for the transport and the oceans, everyone doing something purposeful, busy, happy, earning their livelihoods, buying houses, cars, sending their children to schools and colleges and universities, a whole world procession in progress, the army of humanity. 
 
How wonderful it will be for those wise leaders in Washington to agree upon and then issue to the world the words that signal the continuation of the economic Recovery at home, and by extension to the world.  I pray for this. 
 
Looking for inspiration yesterday, some words occurred to me, which I tweeted, as follows :
  "Have faith, just believe.  Everything will be all right, by the grace of God."
 
I sincerely believe that shall be so.
 
Kind regards,
Duru-darshan.