Broad Picture: What the coming months hold for us?

Its been a scenario of doom and gloom all across the world the past week. As the Financial Markets bleed, doomsday predictions are announcing the coming end of the world. Lets see what the future holds for us.

Crystal ball gazing has always been difficult.Some things are apparent now. The US will no longer be the superpower it once was. Its influence is on the wane. It is a gradual process, buy say in about next 20 years it will no longer be as dominant as it once was.

They say every century belongs to a country. Earlier,it was the British who ruled the seven seas on the back of its fleet and industrialization. Before that we had the French and Spanish domination.

Printed paper or currency is losing value. Mindless printing of currency notes has eroded the buying power of the US Dollar. Precious Metals like Gold and Silver are the new safe havens.

Downgrades of US AAA Rating means it would be difficult for US to borrow from the world at the same almost zero interest rates.

Europe is in doldrums of its own. After Greece and Ireland, now Spain and Italy are on the verge of default. The future of Euro is under question.

With the 2 major currencies of the world, the Dollar and Euro having a major question mark against their name, gold emerges as an alternate currency.

Domestically, the car sales are slowing down, the housing sales are down and the economy is slowing down

The tell-tale signs are all there. You have new launches like the Volkswagen Vento being pushed at 6.99 % Interest Rates. We keep getting smses from builders imploring us to buy their flats.

The good part is the sharp drop in oil prices. This means no more fuel hikes in the short term.

Looking at the big picture, the cycles of boom and recession have shortened. India does not get into recessions, since it is a booming economy we experience what is known as a slowdown.

The focus now would be on government policy making to bail us out. If we see good reforms then Indian Markets would do well.

For now, we are firmly in the downtrend. Expect support around Nifty 4800 and Sensex 16000 levels.

That is the time, when we buy good strong companies that have survived precious slow downs and come out stronger. Till then, we wait and bide our time.

Enjoy the Rains and keep buying Gold, Gilt funds and small quantities of good stocks.

Sporting excellence a sign of an emerging superpower

The Olympics for 2016 have been allotted to Brazil. Brazil has edged out established cities like Tokyo, Chicago ad Madrid.

Often, when a country is on its way to becoming a economic superpower, it is reflected in the Sports Arena. By this, I mean consistent performances, not a few flashes in the pan, moments of individual brilliance.

Lets take the 1992 Barcelona Olympics. During those games, Soviet Union was at the top with 45 golds followed by USA and Germany. China was just making a small splash in the pool with about 16 golds.

In the 2000 Games, USA had 36 golds, followed by Russia with 32 and China 28 golds. The gap between China and the the top powers was coming down.

Cut forward to the 2008 Games and the performance reflects the new order in the world. China has got 51 gold, USA 36 golds followed by Russia.

There are several reasons for sports mirroring the economic strength of a country. As a country grows prosperous, the surplus funds grow and its citizens get better facilities. Athletes and other sportsmen get world class facilities to practice and are taken care of by the corporates.

China hosted the 2008 Olympics and it was making a statement to the world. We have arrived. We have the best facilities in the world. Our Sportsmen are the best in the world.

As the economic clout of a country grows so do its allies. Brazil was able to edge out even the mighty Obama backed Chicago. Speaks a lot about where USA is heading.

We have the 2010 Commonwealth Games. Lets see what message we send out to the world.

ps: Sometimes, its fun to ignore the markets and look at other angles associated with economics.