US Trade Deficit; Problem for the World !

US Trade deficit at $726 billion with 2 trillion dollars worth of imports, which by the way is bigger than the whole of Chinese economy. Consumer Spending is the key, when the whole world is saving, US people are spending like never before, with there saving rates lowest in decades.

Indian are saving 29% of there GDP and China is saving more than 40% of there GDP, where does these savings go ? Central banks of Asia buys US T bonds which has very less rate of interest, but since dollar is the vehicle currency and no other altenatives for save investment, central banks of Asia does not have much options.

India have Forex reserves of $ 145 billion and Chinese have $700 billion, mostly in T bonds.. But if the world does not the finance the US Deficit, dollar is bound to decline and thus the value of T bonds, which are nothing but a piece of paper !! ( What a waste for India and China )

Everything is mathematical and calculated but unfortunately if there is any sort of crisis, natural or man made, than the situation might change in a jiffy and would surly take the world into recession as dollar would decline, thusInterest rates would increase and as US has credit financed housing bubble, property rates would plummet, and thus consumer spending,which would reduce the imports and would create problem for developing countries like china as Chinese have over capacity in most of there manufacturing units and any world shock would result in mass level of unemployment in US and China.

Its High time for America to take tough measures before situation gets out of hand. If not for themselves than atleast for humanity !!

Revenge of colonies; Time has come !!

Changes are part of life, as always been taught by all our teachers and parents but what is happening and probably would happen in next 2-3 decades would or might be called revenge of colonies. Confused ?? Don't be; Globalization or outsourcing sounds familiar even if you read newspaper once in a blue moon !! West likes free markets or atleast that's what they claim, but they are afraid of 2.3 billion Chinese and Indian, who would take away many of there jobs and without any war, it would be a great revenge for the colonies of Asia and the best part is that, we would be alive to see such a historic paradigm shift in the world history !! We would love it if we are Asian and hate if from the west, but will it happen and so soon ?

American think that China can only make Nikes and Adidas shoes and those colorful T shirts and Indian can take call in the night to troubleshoot there computer or file there Income tax claims or Indian engineer can do maintenance work only, but they are wrong as with time Indians and Chinese would move up the value chain and nobody would be able to stop them.

The Biggest problem with American is that they think there economy is knowledge driven and there country is center of gravity of the world, which infect was true in last 100 years but not anymore, America is a knowledge economy only in patches like silicon valley and Chicago with little favour of finance from wall street but what about the rest 95% land ? Based on subsidies and little productivity, who will save them ?? Mr Bush can't even save himself !! This is where India and china come into picture with close to 0.7 million engineers every year and ready to work 60 hours a week, on salaries that are 60-80% less, so the shift is evident. Who can stop it ? NOBODY !!

The Biggest advantage for India and china is there population, what a market !! 2.3 billion people in comparison with 280 million in USA. China and India does not even need to go crazy with foreign market, there own market is Huge and would create big companies in next 5-10 years with Mittel Steel and Lenovo just the tip of the iceberg !

Consumer Spending is the key to growth with American example as the case in point in last 100 years, American consume everything in such huge numbers be it cars,machines,shoes,cloths,software,games,steel..... and list goes on, but how long can 280 million compete with 2.3 billion.

Just think of the ever increasing number of middle class in these 2.3 billion souls, there consumer spending is rising everyyear and the shift is evident, just imagine and keep imagining ! ! Indeed what a revenge ; without bloodshed.

Iran : God help us !!

If US made us believed that Iraq was dangerous, wait what will unfold in next few months, maybe next few years, but one thing is sure that world is in danger, unlike Iraq's WMD hoax but one thing is sure that Mr Bush and his adventures or world exploration might finally confront a insane president of Iran, Mr Mahmoud Ahmadinejad.

How can one justify when the president of Iran claims that 12th Imam would return to the world in next 2-3 years provided there is crisis and its the duty of Mr Ahmadinejad to create one, if there is non. If the president of a nation believes that world is comming to an end with Imam comming and after 7 years, world would finish, than how safe is the world ? now the question is not if the imam who disappeared in 9th century is hidden and would return under any crises as believed by Mr Ahmadinejad, but the concern is that a nation is headed by a Pycho who is hellbound to have nuclear bomb, not to showcase power but to use it as soon as possible.

Now as this matter has been refereed to UN Security council after numerous round at IAEA and finally a consensus is been formed by all the veto powers, hence putting sanction would not be as difficult as probably it looked 3-4 weeks back. But will it solve the purpose? Does Iran really care what UN does ? If someone is remotely following this issue, would know that Iran has made the joke out of US and EU3 and would continue to do so as Mr Ahmadinejad comments on Israel or Imam or russia proposal suggest.

No matter what US does in next few months, the only option that would work, has to be a military option but it would not be easy to form a consensus with Middle east and the whole Arab world as they would like a diplomatic solution.

War is evident and inevitable, all US can do is delay it further, which might not be the right decision in the long run !!

Dragon or Elephant ? who will win !

Whenever there are comparisons between the two raising economies China and India, there are many apprehension on both sides but what makes this a reality and not a bubble like Asian crisis or Japan property bubble is the advent of communication, be it the fiber optic cable for high speed connectivity or be it the telecommication which has made the whole world a small place.

Year 2006 is very different from say 1985 or 1990, when globalization was not rampant because there was no Internet or fast telecommunication, but look at it now, India being the back Office of the world, only and only because of the revolution in technology which has favored the English speaking people, thanks to colonization and probably the only good thing in Nehru Era was the stress on Education, which now has become the back bone of the growth. Indian economy is 53% dependent on services as are most of the developed societies ( US 80% Plus), but the big question is, what about the 60% of the Indian population engaged in Agricuture ?

China is totally different as its a dictatorship and thus its based on mass scale of production by forcing people to engage in factories, thus becoming the factory of the world. Manufacturing gives employment to more people than services and thus better standard of living to more people. Chinese economy is manufacturing based and Indian economy is services based, now the big question is ... Which one is more stable model for growth ?

India being a democratic country is a advantage, when it comes to long run, as many experts feel that as and when Chinese people enter in middle class, the next progression is always the demand for freedom and restricted Google will not help in the long run.

Another point is the export dependence of china, as its the manufacturing hub of the world and they export there cheap products but what happens if there is a slowdown in the world economy, which is quite likely with US trade crises and for how long will the world buy T-BONDS ? On the other hand India is not a export economy and infact its a services based economy where work is outsourced from the developed world and if the world economy slows down, they would need to cut cost and work on there productivity and what better way than to outsource non critical work to Indian engineers and BPO Brigade.

Can India or china replicate each others model, infact it is highly unlikely as Chinese will not be able to speak English as Indian can and Indian can't produce products like china because Indian bureaucracy and politics is too busy in making money for themselves, a peril of a third world democracy which has 40% illiterates.

Finally who will win the race ? Let time decide, as it could be possible that both succeed with there large middle class population or both turn out to be another failure , with china turning into a hostile military opponent of USA or maybe communism give way to democracy, with Bloodbath and Indian keep corruption and poor governance as there best friend, as they have done so far.

If Past was european, Present is American, Than FUTURE IS ASIAN( Indian or Chinese ?) OR Group of ASIAN Countries ?

History is not always history !

Ever since we start studying, we develop a phobia towards few subjects which one finds difficult to understand, possibly because teacher are not interesting or subject itself is out of context. If there is a candid camera placed to reveal, in which subject student tends to take siesta than others, then possibly History would top that list across continents

Student always have a notion that past is not relevant and hence reject in there mind as irrelevant to there current context and teachers also by there boring style, make this subject equally torturous. History is always considered a past which should be taught to current generation, so as society does not make the same mistake as there ancestors did in there generations.

Infect history is nothing but story of few great men of the past and not about normal people and there lives, history is always about few great people who changed the course of mankind, by there determination and vision, be it Alexander the great who at the age of 33 become the undisputed King of half the know world at that point of time, by his sheer passion and obsession to be immortal and immortal he did become in our history books. History can never be of average people, or so to say, normal men but of few ordinary people with extraordinary courage to define greatness in there own terms and take a path which is never been traveled before in time, and that’s the greatness of the subject which should inspires people to think big and courage to make there own path even if chances of success for minimum, as they say, life is a journey , rather than just reaching the destination and thus history plays a pivotal role in recording deeds of achievers and doers and not of losers, which we have in apenty in every generations.

Globalization : The best would survive.

World has been rapidly changing ; some say for the better and some say for the worse; only time would be the judge. With the advent of globalization and the whole world getting kited in a small web, there was hardly any time in human history as exciting as the next century. An organization is no more country specific but expertise specific and they go, where they get the best value for money.Dell has manufacturing units in US, Malaysia and china, as these markets provide cheap labor and automated systems, but there back office is in India, there captive call center in mohali and bangalore-india and not in china or Malaysia, Dell's marketing team is in Austin and there biggest add budget and there target market is US consumers( mostly) , WOW .. Companies like Microsoft, TI, Oracle sets there development centers in India, whereas Walmart, even Sony sets there manufacturing units in China.

So organization's are getting smarter and smarter; cutting cost by any way possible, be it outsourcing or offshoring , the end result is better bottomlines and margins. But the question is, DO these MNC's have a choice ? They might just packup if they don't follow the basic rules of competitiveness and globalization, which has changed the rules of Business forever.

There are plethora of reason, like Fall of communism,Internet and telecommication, dot com bubble which resulted in cheap fibre optic lines and as a result cheaper and much cheaper internet and communication from US to Asia, outsourcing and possibly many other which resulted in world; Becoming a Global village,in last 20 years, with idea following from one place to another irrespective of country, caste or religion.

Now, what matters is performance and not nationality, organization would go to that market which offers them; Value for money . EX- cars are made in south Korea\Japan than just Detroit, software are made in Bangalore than just silicon valley, movies are made in Mumbai than just LA, Taiwan makes the design of many semi conductors and than they are made in China and not Taiwan, so things are changing like never before and Darwin theory is much more relevant ; Survival of the Fittest... But little modification in 21st century and we have ' SURVIVAL OF THE FITTEST NATION AND ITS PEOPLE'.

Age of Google and Apple; Sony and Yahoo are passe

If there are organisations which are making the waves higher then hurricane and tsunami , then the palpable choice would be Apple computer with Ipods selling like hot cakes and google with search engine and contentious Google earth. These companies have re written the rules of success like nobody ever did, Apple which, at one point of time was nothing but a dead duck has changed the perception of people and there bottomline with there Ipods which has become ubiquitous. google on other hand has become generic term for search, with 37% market share and easily the most dominant player.

When Sony came with Walkmen, it bought probably the most innovative musical device of recent past and was expected to be the leader in innovation, but it was not meant to be, with Apple coming with Ipods and not Sony ! When Google come in, Yahoo was the dominant player in the market but it changed too quickly for the liking of Yahoo and to some extent MSN.

Now the big question is, will MSN, Yahoo or Sony would be able to regain there lost glory ? or will we see a New Google or apple . Innovation in product line and little risk taking is all it takes !! Best of LUCK Guys :)