BANKRUPT USA AND STUPID ASIAN CENTRAL BANKS

(PATIENTLY READ THESE THREE PARAGRAPHS FIRST)

Joe Smith of USA started the day early having set his alarm clock
(MADE IN JAPAN) for 6 a.m. While his coffeepot (MADE IN CHINA)
was perking, he shaved with his electric razor (MADE IN HONG
KONG). He put on a dress shirt (MADE IN SRI LANKA), designer jeans
(MADE IN SINGAPORE) and tennis shoes (MADE IN KOREA).

After cooking his breakfast in his new electric skillet (MADE IN

INDIA) he sat down with his calculator (MADE IN MEXICO) to see how
much he could spend today. After setting his watch (MADE IN TAIWAN)
to the radio (MADE IN INDIA) he got in his car (MADE IN
GERMANY) and continued his search for a good paying AMERICAN
JOB.

At the end of yet another discouraging and fruitless day, Joe

decided to relax for a while. He put on his sandals (MADE IN BRAZIL)
poured himself a glass of wine (MADE IN FRANCE) and turned on his
TV (MADE IN INDONESIA), and then wondered why he can't find a
good paying job in.....AMERICA.....

SUMMARY

USA does not produce any real goods. They import every thing
from Asian countries just by printing dollars or tbills which is
effectively a promissory note that at some point in the future they will
pay us that value of money back by exporting goods to us and buy
back those dollars. The accrued debts of USA as of Feb. 08 are
nearing 10 trillion dollars (i.e. 10,000,000,000,000 dollars). There is no
way USA can produce so much of goods to pay off those debts. Yet
our insane policy makers keep loaning to USA.
 Majority of Exports and imports of all world countries are
transacted in American dollars. If a country’s exports are more than
imports then that country will have a trade surplus and naturally the
currency of the trade surplus country will appreciate against the
dollar. (Eg. If we require 100 dollars to pay for our imports and we
have 200 dollars from exports, then the situation of the exporters who
would like to exchange dollars for rupees will be “dollar vangaliyo
dollar” Narpathu roobai dollar muppathu roobaikku and so on).
This is basic economics as the supply goes up demand goes down.
When demand goes down price automatically goes down.

Come to the case of USA. As everybody knows USA has been

importing more than what they were exporting, for decades together.
Then how come their currency is having more value than our Asian
currencies or simply put how is the US dollar defying the law of
gravity. What is going on in the world markets? We shall see how
India alike other Asian countries is contributing in keeping the dollar
value up.

Let us take the case of 2007 where we had dollar surplus despite
our trade deficit due to NRI contributions and FDI inflows. The
excess inflow of dollars being around 120 billion of which RBI bought
up around 100 billion dollars and added to our forex reserve thereby
preventing wild devaluation of dollar.

From where did the money come to our RBI to purchase those
dollars?

Never in the history of India did we have a surplus budget

(Our central governments expenditures always exceeded the revenues
collected by ways of taxes). We are already struggling to meet the
huge funds required to improve our much needed infrastructure.
Then from where did RBI get those rupees to buy the excess dollars
the exporters are bringing in. Simple. We have a technology called
printing press at Nasik. Upon instructions from our Govt it can print
as many rupees as the RBI wants.
The printing presses start creating the rupees required to buy those
excess dollars from the market at the expense of paper and ink only.
This is called M3 supply. (M3 supply =legally genuine but morally
govt approved and printed kalla nottu). Now the RBI buys those
excess dollars in the market with the newly printed rupees. Then it
loans those dollars back to USA by purchasing treasury bills (similar
to a fixed deposit) of USA so that America can spend that money
again.

In one way our govt is right in doing it because if it doesn’t do

this then our stupid Asian competitors whose central banks are also
doing the same idiotic thing will become more competitive than us
and since dollar is the widely accepted currency for trade with other
countries as well, all our exports will be in jeopardy. Our domestic
manufacturing industries will not be able to compete with cheap
imports.

So easy? and after all a good cause. Then why

don’t they keep on doing it forever. How silly they allowed the rupee
to appreciate by 15 percent last year. The real reason why they could
not keep on printing new rupees and exchange dollars forever is
INFLATION

Imagine a scenario where all companies in India stop producing real

goods and start doing software jobs to USA and rest of the world and
let us assume that all companies run successfully.

Then in order to keep the value of dollar up our stupid reserve bank
must keep on purchasing those incoming dollars by printing money
out of thin air as if there is no tomorrow and truck loads of newly
printed money ( Govt approved kalla nottu) will be chasing the very
few goods produced. The end result being hyperinflation. The
proof of this is soaring prices in real estate markets, gold, crude oil etc
etc.

USA is borrowing and enjoying, all those goods we Asians toil

and produce, due to the stupidity of our Asian central banks in
maintaining such a huge exchange rate differential. In USA average
salary in software industry is 6000 dollars. At today’s exchange rate it
is equivalent to 2.5 lakhs rupees per month. With those 6000 dollars
he can enjoy 2.5 lakhs rupees worth of Asian products and have a
very high standard of living. The American govt will print dollars and
give it to us for all the imported items he bought in the market which
means that some day we can also purchase goods from USA with
those dollars. But what real goods do they produce? Nothing because
they have off shored almost their entire manufacturing capacity to
china, India and all Asian countries. Tomorrow if all Asian countries
try to buy some real goods from USA with those dollars they will
come to know how big a cheat and bankrupt USA is. Russia is
cleverly buying gold from USA by using dollars that is why price of
gold is soaring from 250 dollars to 925 dollars within a year.

Our Indian software industry is also making abuse of this exchange

rate differential. They say in America you pay 2.5 lakhs per month for
a techie okay we will do it for one lakh. You have a cost saving of 60
percent and they pretend that they are very fair even though they are
aware that the exchange rate differential maintained due to the M3
money supply will create disparity in the Indian working class.

Now they have one lakh in revenue for a person of which they
don’t mind giving 50k or 60k as salary. They attract best engineers to
do the very basic testing and coding works which they could have
very well done with science graduates for a meager 5k to 10k per
month. They are not bothered about distorting the balance for the
rest of the Asian manufacturing industries who are unable to pay
such hectic salaries. The top management of every software company
is aware of the exchange rate differentials. They simply don’t bother
because RBI is always there to print rupees and exchange for dollars.
Further if techies salaries go down then the top management Walla’s
salaries must also go down. This is not acceptable to them. They
create an illusion that testing and coding are so brain storming and
there is a talent crunch in India. They covertly encourage attrition by
not even insisting on relieving letters which is a violation of basic
ethics and justify wage hikes.

The disparity in salaries these govt approved and printed kalla

nottus (rupees handed over to software companies for exchange of
dollars) have created is so huge that a bank manager with around 20
years of experience and working 12 hrs a day for 6 days a week and
terrible responsibility draws only 60 percent of the salary a tester
(leave the programmer) with two years experience and probably
spending half of the time in bench draws.

Now it is high time realism is starting to kick in. Gone are those
days of illusion that testing, coding are super brainee jobs. They are
very similar to assembly line jobs in a factory and don’t deserve such
hectic pay. News of software companies hiring science graduates are
popping up in every nook and corner. Hope you remember software
and other exporters screaming for RBI to intervene when rupee
appreciated 15 percent last year. This is because their kalla nottus
were creating huge inflation and the RBI decided to stop exchanging
govt approved and printed kalla nottus to dollars for a while and the
inflation promptly came down from 6.5 percent to less than 3 percent.

At some point in the future if the Asian central banks realize

inflation is getting out of control due to their stupid practice and stop
buying dollars thereby allowing their currencies to appreciate then all
bets are off. Lots of salary cuts and termination news, just like what
Tcs and IBM did in the end of Jan 08, will start popping up.

The economy of USA is in no good shape either. Just to keep

their economy afloat or worse just to pay the interest of their debts
they need to borrow around three billion dollars every day from the
rest of the world. Day by day bad news is pouring in. There is no field
without a mention of huge layoffs in USA from the beginning of 2008.
Being an economy where two third of GDP is consumer spending, if
unemployment goes up then consumption goes down in turn
collapsing the businesses and their offshorings.

Take the case of a boxer who is infected by HIV. Every thing

looks great with him. You cannot know that he is affected by a killer
disease unless and until symptoms of the disease starts showing up.

USA is very similar to the HIV infected boxer and now for the
symptoms part of goliath’s (USA economy) death.
 1) World Bank and IMF have already warned that dollar might
collapse any day due to their unsustainable debt.

2) Subprime related problems are hitting the headlines.

3) All banks in USA are writing down (Decent American version

of saying “lost the money”) billions and billions of dollars.

4)World’s largest bond insurers Ambac and Mbia are already

downgraded from AAA to AA Grade which will in turn erode away
huge part of capital from the world’s largest American banks pushing
the largest consumer economy (As Americans themselves feel proud
to admit) into far far worser situation than a mild recession which is
called depression.

Even if America somehow manages to keep delaying the entry

into the inevitable depression from mid 2008 to 2025 or still further,
there is still terrorizing news.

“THE ULTIMATE AMERICAN DOLLAR

COLLAPSE”.

Due to the huge risk involved in the erosion of the value of their
forex reserves every nation wants to get rid of the devaluing dollar.
The only thing preventing them from doing it is the fear of the central
bankers that like stock market crash if any one Asian central banker
suddenly tries to sell off their dollar holdings, then everybody will
panic and try to dispose off their dollar holdings and the depreciation
of the dollar would be so fast that within one electronic trading hour
the value of the dollar might change like this

Prior to Dollar sell off 1 dollar = 40 Rs

After Dollar sell off 1 Rs = 4000 dollars.

(This is no exaggeration. I would like to challenge any sane

person to prove me wrong).
For a country like India it would mean that all those two hundred
billions (20,000 crores) of dollars or so bought by our RBI as forex
reserve would become worthless within a matter of minutes. Similar
is the case for Chinese (1,40,000 crore dollars), Japanese (1,00,000
crore dollars), Gulf countries (3,50,000 crore dollars) and all other
Asian central bankers.

Yes of course nobody wants the value of their dollar holdings to

go down. No sane person will try to sell off their dollar holdings
suddenly. But the situation is alarming. Every Asian central banker is
watching his counterpart with nervousness if whether he would start
the sell off. Nobody wants to start this but once started nobody wants
to be the last in getting out of dollars for the more later they get out
the more worthless their dollar holdings becomes. This is what our
reserve bank governor, Indian finance minister and prime minister
mean when they say that global uncertainties are looming.

So techies who dream of 17 percent wage hike every year till we

match American wages, please be aware of the reality and be
prepared for the changes that might suddenly turn up. Bear in mind
that your profession might be very similar to a cinema heroine’s
career. However beautiful she maybe, the most talented actress, okay.
Few years down the line when new beauties turn up the tendency
would be to avoid the old heroine.

Similarly when new talents are available in the due course of

time and rupee appreciates further the company may treat you like a
liability or replace you with a cheap fresher. The recent news of TCS
planning to debut freshers onsite is a classic example of what is in
stake for the future. Don’t get carried away by current illusions. Start
saving now and avoid getting into huge EMI loans. If you are a male
get married soon because right now girls both from your field and
other fields prefer you only. They are not aware of the risks involved.
This situation may not last long. When USA goes down you will end
up jobless and will become the least preferred. Act fast.

Especially brides who will not even consider grooms from other
fields
Idhae linelayae mapillai parungappa,

Padhinanjayiram sambalathai vaichukkittu enna perusa sadhichuda

mudiyum,

Akka veetukarar softwarela ambathayiram vangurar enakku

pathayirathula mapillai partha naalaiku Yivarum avarum onna
parkum pothu Yivar manasu evvalavu sangadapadum

And all those dubakkurs

If you are still going to be adamant “MAY GOD BLESS

YOU”.

STILL NOT CONVINCED? OR YOU ARE IN ONE OF THE

FOLLOWING CONCLUSIONS.

1) SOME NON IT JEALOUS FELLOW BLABBERING?

2) USA IS A SUPER POWER. ALL COUNTRIES ARE DECADES

BEHIND THEM. THERE IS NO CHANCE OF USA FAILING.

3) I HAVE BEEN TO USA. IT IS THE RICHEST COUNTRY IN

THE WORLD. I WILL NEVER BELIEVE THIS ARTICLE.

4) EVEN YESTERDAY I SPOKE TO MY BROTHER IN

CHICAGO. HE SAID ALL THESE THINGS ARE RUBBISH AND
JUST FEAR MONGERING.

Ha ha ha

REMEMBER LAST YEAR WHEN RUPEE APPRECIATED BY 15

PERCENT THE EXCESS INFLOW WHICH THE RBI DID NOT
BUY WAS ONLY AROUND 20 BILLION (2000 CRORE) DOLLARS
AND AMERICA HAS A BUDGET AND TRADE DEFICIT OF 1500
BILLIONS EVERY YEAR WHICH MEANS LOTS AND LOTS OF
DOLLARS WILL BE POURING INTO ASIA.
NOW ENJOY THESE TWO LINKS AND FEEL THE CHILL
SHOCK WAVES FLOWING DOWN YOUR SPINE.

http://www.youtube.com/watch?v=3RhnHo3RDfg
http://www.youtube.com/watch?v=jmeHiFZUWtE