It is the first compelling warning that I have read from any Indian
writers. I follow international commentators such as Mark Faber, Bob
Hoye, Steven Roach etc regularly but I haven't seen much except for
the normal cheerleading from the CNBC /Economic times crowd from
India.
Besides physical gold what would be the best investment for
the times ahead in your opinion? I am starting a business for fitting
of CNG kits on vehicles. Do you feel that this being a cost saving
device, would actually benefit from an economic depresion? Ofcourse it
would definitely benefit from a spike in oil prices.
An insider tip, manufacturers of seamless cylinders and chromium
molybdenum steel tubes, should boom in the coming years. Unfortunately
I don't know of any that are publicly listed. Anyway in the current
rush to junk assets, I don't think they would be able to come to the
market where the likes of Jet airways sell for 2000(?).
I have been observing the market for some time now.
Here is what Isee of the superlongterm macroeconomic picture.
The following analysis might seem eccentric but I am writing it
because of what I see as the honesty and fortrightness of your
article.
Stocks and financial assets at historical peaks.
Productivity gains from computing etc have been discounted.
THese gains are anyway less than those achieved from the discovery of
steam power, locomotion, railways, the auto engine, human flight,
chemistry etc.
Thus if having emerged from a 2 century period of the greatest
innovation we still find ourselves at record share prices we are in
long term trouble.
The basic engine of growth has been the scientific revolution. However
that has petered out a long time ago. In physics there is nothing
important after the 1930s.(I am a former student of physics)
Similarly in other sciences, basic progress has long since ceased.
We find universities filled with professors who try to demonstrate the
equality of the races etc.
Most societies have benefited by copying and borrowing of european science. However very few have replaced these with their own scientific
systems. We in India live in a time where the most powerful men and
women consult their palmreader for the minutest action. In otherwords
an abhoriginal level of intellectual and social culture.
The level of commerce depends on the level of civilisation. The level
of civilisation and the complexity of its institutions depends on the
culture of the people. This has been in degeneration for decades now.
We have 2 centuries of demographic suicide behind us. For 2 centuries
the educated elite has been bred out of existence.
This is exaggerated in India and seen in the political stranglehold of
the caste equations etc. As I mentioned before, it is my belief that
the economy can only match the level of civilisation and ultimately of
culture.
We are already beginning to feel the crushing effect of the
accumulated environmental degradation of the last two centuries.
Due to the induced excess of resources arising from the industrial
revolution, cultures across the world have turned degenerate. There is
not a nation on the planet today, where the ruling political class is
not the most incapable and parasitic. ( I have lived on three
continents)
Thus in my view the long term picture for the next century or so does
not seem very bright.
However if we only look at the next few years, there is no reason to
see a decline in the ascension of Asia relative to Europe and the US.
However I see some major bottlenecks after the US economy crashes and
the infinite import vacuum dries up.
As far as India goes, I believe the best fate we can escape with is a
break up of the country so that the functioning regions are not sucked
into the void of central Indian politics(Bihar etc).
Finally as the conqueror Tamerlane once said, "China is a sleeping
giant that may lay dormant for centuries and then one day rise and
shake the world."
Even as an Indian I am more convinced of the Chinese story than the Indian one.
-Viraj Shah
