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Honest Information, Profitable Trading

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

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The ECB's announcements today should create an environment for stable growth

Posted on November 12, 2015 at 11:55 AM Comments comments (2)
President of the European Central Bank announced this morning a) willingness on the part of the ECB to continue the Stimulus beyond September 2016, as was originally intended, currently running at Euro Sixty Billion per month over an eighteen month period; and b) the reduction of ten basis point in the benchmark rate.
This should provide the confidence for an environment of stable growth within the Euro Area, and of course through interexchange extending into the whole of Europe.  I imagine this will be very welcome to industry and commerce in Euroland, where they can now plan on a longer period into the future.  I would read this to mean there will be no shortage of capital to carry the economic Recovery forward.  And of course, there has never seemed shortage of ideas or ambition to innovate and succeed, and hopefully capital will be available to such enterprises and entrepreneurs. 

My question is : has the E.C.B. started to print the money or authorised electronic transfer thereof?

Sometimes it has seemed unclear.  If the E.C.B. can indeed fund enterprise, in addition to buying asset-backed securities (which seems like taking over old loans with new capital), then it will be doing the job most entrepreneurs will be hoping it does best, to offer capital backing to people already in business and wishing to upgrade their machinery to current standards, and those setting anew with ideas of creating innovative products that will set the trend and likely to find a market in the new economy.  As times move on, it is naturally necessary to discard what does not work and replace (and retrain people) with what will be the new trailblazers. 

On the whole I believe this is very good news for Europe and especially the Euro Area, this extension of the Stimulus and the slight reduction in the benchmark rate.  I was a bit surprised at the market reaction, of the stockmarkets falling a bit, but I imagine they will soon correct after digesting the good news. Once there is more positive activity and consumer appetite picks up in a confident, forward-looking economic climate, core inflation will start to pick up, and in course of time give reason for the interest rate to be hiked.  But not just yet, and that should be seen a good news for stable growth and maintaining an even keel.  I believe so.  Even in the United States, the economy does not seem fully ready to accommodate a rate hike, although it remains to be seen what the Fed Chair announces on 15-16th November.

As for the United Kingdom, following remarks by the Bank of England Governor recently that we won't be seeing a rate hike just yet, perhaps not until early 2017, helps me put in context the information people are receiving from their banks : the interest rate will actually be reduced by 10 basis points.  At least, Europe and U.K. seem to be following the same strategy.  So far it has done good, so more good can be expected.

Kind regards,
Duru-darshan

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