Global Economic Meltdown: Its impact on Indian markets

In my last post I had discussed the prospects of a global economic meltdown likely to be triggered by a US economic collapse. I have got an overwhelming response to the post: It ranges from appreciation to disbelief, some of the readers have painted me as a doomsayer, some have questioned the legitimacy of the 'bombshell' I have dropped. I would like to assure my readers that whatever I have written is based on thorough research backed by hard facts. The reasons for the shock and disbelief is confounded on the fact that the information I have shared is being suppressed by mainstream US media, so most people are unaware of the activities of the 'Deep State'. However, a lot of information is available through private channels on 'Youtube', which includes serious warning by top economists, which has often been ignored by US administration. I would request readers to read about 'Deep State' in context of USA and you would understand how deep the conspiracy is.

The actions of the 'Deep State' and the 'Federal Reserve' have helped in creating the biggest bubble in the history of USA, which is now threatening to explode anytime. The 'Deep State' has become so powerful that even the US President and the US Congress are forced to tow their line on several occasions. About Federal Reserve it is said that the statement of FED chairperson has more impact on the US markets than the actions of US President. And this is the root cause of the malaise that has set in the US: The vested interests of Deep State have been responsible for trampling upon the rights of US citizens as well as the Sovereignty of Independent nations. The policies of the FED in the garb of 'Quantitative Easing (QE)' has led to creation of a debt monster which is now impossible to contain. In the process the number of billionaires has increased manifold in US and the middle class has been wiped out. These billionaires are now running the Deep State and the mainstream media, which serves their vested interests. The top 1% of US citizens hold over 50% of the wealth of US, According to estimates 40% of US citizens are living below poverty line, as they have no means to buy food beyond one week, if a calamity strikes. And this has the potent of a civil war engulfing the nation if any calamity strikes. Donald Trump has shown signs to challenge the Deep State which may create a conflict within the US administration. As is it, the mainstream US media (the likes of CNN & NBC) are against Trump and his policies due to their vested interests.

We all know that US is a Confederation of 50 states, each state enjoying very high autonomy. At least 9 out of these states are on the verge of bankruptcy as they have amassed huge budgetary deficits. They can levy taxes on their citizens, but they cannot print notes like the Federal Reserve. Further, US laws allow institutions to file for bankruptcy but states are not empowered to do so. Readers are advised to read about 'the plight of 'Illinois' a US state which is already bankrupt, it has not presented a budget for 2 years and has no money to pay its employees. The state of several other states is no good: to name a few: Connecticut, Massachussets, New Jersy other than Illinois. It may not be possible for the Federal Govt. to offer bail-outs to these states. Disaster will be the first to strike these weak states as soon as the stock market crashes and US Dollar goes into a tailspin.

What will be the impact of this crisis situation on the Indian economy. Let us analyse the performance of our economy and the state of our markets. The Indian economy is not in the pink of health. Our economic growth is over dependent on the services sector, the 'Industrial' and 'Agricultural' sectors being continuous under performers. Despite the slogans of 'Make in India' employment generation has been at the lowest in several decades. The golden lining has been the remittances from Indian diaspora working abroad. which keeps us going. But this phenomenon is now under serious threat due to the escalation of global tensions and inward looking policy decisions by developed nations. Notably, US and UK have announced policies to limit white collared jobs to expats. The conflict within the Arab world (Qatar being marginalized by powerful Saudi Arabia & UAE) does not auger well for our citizens working there.

Our stock markets have been artificially propped up by prospects of a good monsoon and the passage of GST bill. But the progress of monsoon is now showing serious faults in the distribution of rainfall across the country. Implementation of GST is again fraught with several risks: Slowing down of the economy, escalation of inflation. Our markets have been thriving on excess liquidity which has returned to the economy in first quarter of FY17-18 as money supply limped back to normalcy. FIIs have also pumped in huge amounts due to surplus liquidity available with them. The results for Q1 are not likely to give any comfort to the FIIs. The situation is likely to change soon. The first signs of the slowdown have given jitters to the stock market on 27th June. Investors are advised to book out from equity markets/ lighten their positions ahead of the impending crash. Indian indices are likely to correct on their own fundamentals, which has the potential to take NIFTY to sub 9000 levels in the next couple of weeks. In the event of a global meltdown we could see sub 8500 levels on NIFTY in its aftermath. Although we are better placed than US markets, the contagion effect will play out: If US falls 40% we may also fall 20% from the current levels. The only safe havens in the turmoil would be precious metals; Gold & Silver. Investors are advised to safeguard their portfolio in the event of the occurrence of a global meltdown, which is coming soon.

The countdown has begun: US economy faces a grave economic crisis, US Dollar will cease to be a global currency

The writing on the wall is crystal clear: US economy is heading for its greatest collapse in history, far more serious than the great depression of 1929 and the Stock market crash of 2008. But unfortunately the manipulators are busy rigging the stock market to dizzy heights, ignoring serous warning from several senior economists and legendary investors like Warren Buffet, George Soros, Mark Faber, James Davidson among others. But the endgame has begun, it is only a matter of time before it is all over.

What ails the US economy and what would be the timing of this much awaited collapse, let us try to understand. The biggest problem with US economy is the ever ballooning debt: The national debt of the US economy is over $ 20 trillion (up from $ 1 trillion in 1980's) However, this figure does not include unfunded liabilities like unemployment grants, retirement and social security expenses. If these are included the figure is well over $ 210 trillion. The average US citizen carries a debt burden of over $ 600,000, which the highest debt per person in the world. In the past two decades the Political class and the Federal reserve have moved from productivity linked growth to debt financed growth. In the process US now boasts of a most corrupt political class and a highly irresponsible media which have been hiding the truth from the US people. The figures of official unemployment rate are 5.5%, whereas the actual unemployment is a staggering 23%. The US Dollar has been artificially propped up and interest rates artificially pegged too low to avoid the catastrophe. But the more the FED prints notes more deeper it gets into trouble. The FED has financed/ bought 71% of the US economic debt by printing dollars. The latest figures reveal that many countries including Russia and China have been aggressively selling US treasuries, and buying Gold instead.

Rampant gambling is going on at Wall Street where the top US investment companies are propping up the markets by over leveraging the funds lent by US Govt. The average exposure of the Top 5 investment companies (includes Morgan Stanley, BOA Merryl Lynch) is over 30 times their net worth, any stock market hick-up can force them into bankruptcy. The argument that these companies are too big to fail does not hold good any longer. Politically also US is passing through a very bleak phase. Donald Trump is trying his best to revive the economy, but the corrupt administrators are busy thwarting his decisions. They have also hatched a conspiracy to malign Trump. Even the FED Chairman is not supportive of Trump's policies and is waiting to shift the responsibiliy of the economic failure on the doorsteps of Trump. 

The crash now seems inevitable. It will lead to:

• A stock market correction of up to 50% (The current PE of the market at 27 is well above the historical average of 16, despite stagnating performance by companies
• The real estate market may follow suit with a fall of over 30%
• The US dollar will cease to be a global currency and its value may fall by over 20%
• The unemployment rate in US may double from the current level
• The banking system may be shut for few days, and there could be shortages of food and essential items
• Other global markets may also fall in tandem with the US market

Now about the timing of the impending crash. Although fundamentally time is over for the US economy, but the actual timing of the death knell will be signalled through a peep into astrology.:

A Great American Eclipse is going to occur on Monday, 21st August 2017. It is the first Solar eclipse in 99 years that will engulf the entire USA, total eclipse will be visible in 10 states. This will likely trigger the collapse of the US economy. The impact of the eclipse will be felt one month before its occurrence, coinciding with the Leo moon cycle (July 23 - August 21, 2017). This period would likely produce earth shaking moments for the US, which may lead to startling revelations against the US President or radical moves by him causing public anger & violence.

In a nutshell, US economy is likely to face a severe shutdown between June 21 & September 21, 2017. As a matter of abundant caution please advise your friends and relatives living or working in US to prepare themselves for this catastrophe. Those of you planning a trip to US may also take necessary precautions rather than getting caught unawares.

(Disclaimer: The aim of this article is not to create panic but help readers to understand the situation and take informed decisions about their wealth and property. The impact of this US crisis on Indian economy shall be analysed in a separate post)