Markets hit new highs: 'Make hay while the sun shines'

On Thursday 13th July 2017 BSE Sensex scaled a new landmark: Mount 32000. Entire media went Gaga over the event, every newspaper carried the news as their headline. Maybe the media will have another event to celebrate soon: NIFTY hitting 10,000: it is only 100 odd points shy of the coveted mark. Now a flashback: NDA Govt. under PM Modi presented its first budget on 28th February 2015 and the Nifty touched 9129 that day, which became a headline the next day. We all know what happened thereafter. Again when NDA presented its 2nd budget on 29th February 2016, Nifty did a U-turn and touched 6826 three days later. The newspapers carried this as their headline on 4th April 2016. Rest is history: Nifty in July 2017 is at 9900 grabbing another headline. I need not tell you what is going to happen next: because history repeats itself.

That is why the title of this post is 'Make hay why the sun shines'. I had heard stock markets being labelled as 'Satta Bazar' or 'Casino' but never believed that stuff. But the way stock markets are being manipulated around the world today, we need to rethink. The major Central Banks around the world (US FED, ECB, BOJ etc) have colluded with one another to create a slush of liquidity to lift stock markets to unsustainable levels, having total dis-regard to the principles of economics. The artificial money created by Central banks has not helped the poor sections of society, instead they have created a greater rich-poor divide. They have also helped their respective Governments to pile up excessive debts which they are unable to service. Their game plan is now about to end, which will lead to the greatest asset bubble burst in history and the ensuing stock market collapse world over.

A global currency reset is inevitable: US Dollar will cease to be a global currency. We all know that the US economy is in a massive debt trap, so what will cause the bubble to burst. Today US is passing through one of the greatest political crisis in its history. The divide between the Democrats and Republicans has reached dangerous proportions. Democrats who thought that the post of President of USA was their right have not been able to accept Trump at the helm of affairs. Several stories are being cooked to implicate Trump and his family, and they might even try to get him impeached. On the other hand Trump is also collecting evidence against Obama and Hillary, and may open criminal investigations against them. All this does not auger well for an economy that is under serious threat of exploding. As I have mentioned in my previous post several US states are on the verge of Bankruptcy. US Dollar is fast losing its grip as a 'Reserve currency' with as many as 23 countries bypassing US Dollar as a medium of payment for international transactions. The fall of the Dollar, and along with it the Equity markets is a foregone conclusion.

What could be the alternative to the US Dollar? The Euro zone has its own share of problems, so Euro may not be looked upon as a viable alternative. A viable alternative can be provided by the BRICS (Brazil, Russia, India, China, South Africa) nations. Together these nations account for 43% of the world population and about 25% of the world GDP, which is equal to the GDP of USA. They have already launched their own alternative to the IMF called the New Development Bank (BRICS Bank). It would be in the interest of India & China to strengthen the BRICS agenda rather than fight over petty issues. The 9th summit of the BRICS nations is scheduled to be held at Xiamen, China in September 2017. This would be an opportunity for this group to provide global leadership in the aftermath of the US Dollar collapse.

Now coming to the markets and the behaviour of various asset classes in the aftermath of the global crisis. This is the last opportunity for the investors to book profits in the equity markets, as the markets may start correcting within the next couple of days. We are looking at a 40-50% erosion in US stock prices, which will lead to a correction of up to 20% in Indian markets as well. The crisis may also lead to softer energy prices, which will be good for countries like India. That is why we shall fall much less as compared to western markets. The best investment bet in these troubled times would be precious metals (Gold & Silver). The prices of Gold & Silver have been artificially suppressed by big US banks operating in the derivatives segment, whereas the physical demand for these metals continues to be high. Gold and Silver touched record highs of $1900/ ounce and $34/ ounce in 2011, and since then they have corrected substantially. They are likely to regain these levels, and even beyond, within the next one year. This translates into a return of 55% and 110% respectively from the current levels. Investors are advised to switch a part of their investments into Gold ETFs or Silver futures to make a killing in the emerging scenario. Please enjoy the last leg of the global rally in equity markets and await for the turn of the cycle, which may kick in sooner than most people expect.

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)

Uncertain Global scenario may lead to turbulence in equity markets

I have been cautioning investors about the risks in Indian markets over the past few months. Equity markets have corrected substantially to the levels of 7900-8000 on Nifty, which I had anticipated. However, our markets have not factored in all the immediate global risks and the negative impact of 'Demonetization'. So where are the markets headed in the next few months from now on? Let us try to find the answer to this question.

Global research houses are now coming up with their revised estimates for India's GDP growth, and most of them have painted a rather gloomy scenario. There have been serious downgrades for GDP estimates for second half of fiscal 2016-17. As equity investors always take a forward looking bet on the markets, they are likely to take a bearish view in the near term. The 2 most important factors that stunned the markets in November (Modi's Demonetization & Trump's victory) would continue to drive the fortunes of our markets in the medium term.

International Factors:

• US Monetary policy action of raising interest rates has led to the strengthening of US Dollar. The Dollar index has risen beyond 103 and is likely to test 105 in the short term, putting pressure on inflows into emerging markets
• After several rounds of negotiations OPEC and non-OPEC countries have arrived at a consensus on cutting global oil output, leading to a sharp uptrend in Crude oil prices. Crude is like to head towards $60-65/ barrel, which is negative for net importers like India
• Protectionist stance by global leaders: Britain & USA may impose restrictions on overseas workers leading to a shrinking in global trade, which is negative for countries like China & India

Domestic Factors:

• Economic activity has slipped to multi-year lows, leading to a sharp decline in GDP growth for next couple of months. India may clock a GDP growth of 5.5-6% for FY 16-17, a sharp decline over the previous year
• Large scale unemployment in SME sector and Rural sector will put adverse pressure on consumption demand from the rural markets, leading to a big blow to our 'consumption theme'
• Rupee would continue to decline, leading to further exodus of FII money from our markets. FIIs would take any new bets on emerging markets only after January 2017, after Donald Trump takes over as US president on 20th January
• There is also a likelihood of an escalation in Indo-Pak hostilities across the border, adding to the economic uncertainty.

Considering the above factors corporate earnings of India Inc. are likely to grow by a meager 2% during FY 2016-17. The markets are likely to take the final plunge sometimes in January 2017, after the inflow of Corporate results for Q3 ending December 2016. The markets may react to levels of 7500 or lower on Nifty during that period. But due to the 'Spring effect' we could see a U-shaped recovery thereafter. The upcoming Union budget to be announced on 1st February 2017 could prove to be a game changer for the markets. Investors are advised to buy aggressively in the 7500-7700 range on the Nifty to lock in handsome gains during the next year. Long term investors should continue to hold on to their investments in the market mayhem.

Demonetization demystified: A 'Hormegeddon moment' for Indian economy

A fortnight has passed since 8/11, when PM Modi announced the 'Demonetization' of Rs.500/1000 currency notes, a step that has been hailed by many as a 'bold initiative' and 'catastrophic disaster' by others. While I fully support the PM's crusade against black money, corruption and counterfeit currency, I would like to analyse the issue of 'demonetization' from the perspective of an Economist. "Hormegeddon" is a term coined by entrepreneur and New York Times bestselling author Bill Bonner to describe 'How too much of a good thing leads to disaster'.

Demonetization is the act of stripping a currency unit of its status as legal tender. In order to understand the effects of demonetization let us have a peep into history. Demonetization has been tried by several countries in the past to meet the under noted objectives:

• To take out of circulation higher/ lower value notes that have become redundant
• To reduce Govt. debt and reduce inflation
• To remove counterfeit notes in circulation
• To curb parallel economy and illegal trade

In 1969, Richard Nixon, the then United States president, had, in one go, demonetized $10,000 and $1,000 bills. He kept only $100 as legal tender, which achieved its stated objective. But demonetization attempts by Ghana in 1982 and Nigeria in 1984 failed miserably as these debt ridden economies collapsed after demonetization. In 1987, Myanmar’s military invalidated around 80% value of money to curb black market. The decision led to economic disruption which in turn led to mass protests that killed many people. The demonetization that happened in North Korea in 2010 left people with no food and shelter. Mikhail Gorbachev ordered to withdrew large-ruble bills from circulation to take over the black market. The move didn’t go well with the citizens which resulted into a coup attempt which brought down his authority and the led to Soviet breakup. 

Several countries in the past have taken up demonetization drive. but those exercises were too small in nature. India also attempted demonetization in 1978 under PM Morarji Desai when Rs.1000/5000/10000 notes were banned. However, at that time the notes banned formed a minuscule 3% of the total currency in circulation. The present demonetization drive in India is unprecedented and biggest in the monetary history of modern world, as it attempts to take 86% of the issued currency out of circulation. The most acceptable argument in favour of the recent move seems to be a strike against counterfeit notes which have been widely used for terrorist funding. As far as black money is concerned about 97% of the black money generated in India is parked in foreign accounts, real estate and precious metals (gold & bullion), and only 3% may be held in the now banned currency notes. As per RBI estimates out of total currency notes issued worth Rs.1754000 crores, 86% are in denominations of Rs.500/1000.

The immediate likely advantages of this move are:

• A size able curb on Hawala trade from across the border, a big blow to terror funding in India
• A huge surge in liquidity for the banking system, paving the way for lowering of lending rates
• A one time windfall gain of around Rs.3,00,000 crore for the Govt. (in the shape of notes not getting deposited in the banking system), leading to lowering of Govt. fiscal deficit.
• A drastic fall in inflation due to scarcity of money.

Now let us analyse the disadvantages of this move:

India has been billed as the fastest growing economy in 2016-17, which resulted in it getting the status of the most favoured destination for foreign investment. Demonetization will lead to a major dent on our growth prospects leading to a catastrophic effect on future investments in India. The major ill effects are listed below:

• India's GDP is expected to shrink by almost 50% during the second half of fiscal 2016-17. Our GDP estimates for the whole year would be revised downwards to 5-5.5%.
• Indian economy adds approx. 1.2 crore people to the job market every year. With the shrinkage of economic activity most of these people would add to the unemployment stream, leading to widespread discontent.
• The capacity utilisation of the Corporate sector which is already at a low of around 63% is likely to dip further, leading to a fall in turnover and employment generation.
• The likelihood of small business sector taking a major hit are very high. This may lead to closure of several businesses leading to widespread unemployment and higher NPAs for banking sector.
• The shoddy implementation of the scheme is already adding to the woes of the underprivileged sections of the society, especially the daily wage earners.
• The political deadlock over the issue is causing delay over several important legislation, like GST, which is likely to get postponed by one year. 
• The cost of replacement of 86% of the currency is going to be pretty high, although RBI has not given any figures yet.

How far the Govt. is capable to cope up with these challenges will determine the success or failure of this exercise, till such time the patience of millions of honest/ law abiding citizens of our country shall be continuously put to test.

Investors fasten your seat belts: The D-Day has arrived!

Investors across the world are on their tenterhooks as US awaits the announcement of its 44th President. There has been a lot of discussion/ speculation around the world as to who is going to be the next incumbent to the White House. But from an economists' point of view it is hardly significant on who occupies the coveted position, as it is certain that the next incumbent would have to sign the obituary of the current 'Super Power' of the world. 

Believe me, the US economy is in shambles and the outgoing President Barak Obama must take due credit for this sorry state of affairs along with the Federal Reserve of the US Govt. In response to the faulty economic policies followed by the Obama administration, FED has been printing money to be distributed amongst the borrowers at the cost of the savers. This policy can be termed as 'rich getting richer'. US GDP growth during the eight years of the Obama administration averaged half the rate of the Clinton years and only one-third the rate of the Kennedy and Johnson years. The FED has followed a Zero interest rate policy for the past 8 years and is still shy of reversing it, but this artificially managed rate is no longer sustainable. When the US moved away from the Gold backed US Dollar standard in the early 70's, its credit to GDP ratio was 1.5:1, today it has shot up to 3.2:1. The new US President would have to address this anomaly, and the chances of declaration of a 'Financial Martial Law' in US are extremely high.

Thus, whom so ever wins the November 8 election, the markets around the world are likely to slip into a 'Coma' for a while before they are able to appreciate the reality. The next 2 months are going to be extremely volatile for the markets, as the transition of power in the US is not going to be a smooth affair. Things are likely to settle down only after the new President assumes office in the middle of January 2017. It is not going to be easy for the new President, as he would also have to prepare for transfer of the 'Super Power' baton to another nation. Who the next Super Power would be, will be decided in the next couple of years, but China seems to be a front runner for the crown, provided it is able to address its growth issues, which have taken a temporary beating.

Post the results of the US election, US markets would almost certainly lead to a fall in the markets worldwide, they could correct anywhere between 10-20% during the course of next 2 months. Investors in India are advised to tread cautiously during this period, as there is a likely hood of heavy FII outflows during this period. But at the same time it would provide a good opportunity to enter the market on declines, as India is on the cusp of a sustained bull run due to 2 major favourable factors: Low crude oil & commodity prices and a low interest rate regime. Indian markets could turn attractive after a 5-6% fall from hereon, that is around the levels of 8000 on the Nifty, when the risk-reward ratio would turn attractive. Mid Cap and Small Cap indices could go down more during this period, after their recent dream run.

Uncle Sam faces grave 'Economic Crisis': Will it go the Russian way!

While going through the history of 'Business cycles', we stumble upon an interesting fact: An 'economic crisis' or 'recession' repeats itself every 7-8 years on an average. Consider the historical evidence: Ever since the 'Great depression of 1931', the world has undergone a crisis situation at regular intervals. The last two crisis are still ripe in our memory: The crisis of 2001 (known as 'Dot-com bubble'), and the 2008 crisis (known as 'Sub-prime mortgage crisis'). This theory points towards another impending crisis in 2016-17. 

With the stock markets world over in the midst of an unprecedented 'Bull run', it is virtually unthinkable that a crisis is coming. So I had to brush up my knowledge of history to pin-point from where this crisis would emanate: Would it be Greece, China, Britain or any other country. The financial markets have braved all the negative news: be it failure of Greece, China's slowdown, Brexit or continuing recession in Japan, but will they be able to absorb the biggest shock that is knocking at our doorstep. Let me tell you a breaking news: 'Uncle Sam aka USA is broke' and will lead the crisis of 2016. I have been consistently warning my readers that the markets are over-heated, but the markets have continued to defy all logic in the recent past. I am happy that now people are giving heed to these sane voices. Here are a few statements, about American markets, recently made by some famous market experts:

•  “A $68 trillion ‘Biblical’ collapse is poised to wipe out millions of Americans.” - Jim Rogers
•  “Investors are on the Titanic” and stocks are about to “endure a gut-wrenching drop that would rival the greatest crashes in stock market history.”  - Marc Faber
•  “U.S. stocks are now about 80% overvalued.” - Andrew Smithers
• “Sell Everything” because “in a crowded hall, the exit doors are small.” - Royal Bank of Scotland

These American seniors have been worried about their nation's ability to pay out social security. Let us understand the reasons for their grave concerns about the future of American economy:

1. US is staring at mind boggling debt of $19 trillion, and an unmanageable fiscal deficit of $200 trillion
2. Inflation and Falling Real Wages: Retail inflation is higher than the figures declared by the Federal Govt., leading to an erosion in the real wages earned by a majority of Americans
3. American's have little or no money set aside for emergencies. According to a survey almost half (47%) said their savings would cover their living expenses for 90 days or less
4. The Federal Reserve’s fund rate has been coming down for more than 30 years, any hike would cripple the budget of an average American
5. US companies are increasing relying on foreign sales for survival, with global recession looming large these companies will find it hard to remain profitable
6. With the west losing its supremacy in the global sales, the world is looking with suspicion at US$ as the 'Reserve currency'. The recent decision by IMF to declare 'Rem nimbi' as an additional Reserve currency will add to the woes of US$.

These conditions are pointing towards a grim reality: The crash of US$ and the US stock market. To avoid this catastrophe US Federal Govt. may impose a 'Financial Martial Law' to shore up its resources, which means bad news for American citizens. At the same time US is also facing two more challenges: The US presidential election (The campaign so far has been reduced to a non-serious business with personal vendetta to the fore and major issues in the back-ground), and the chances of a full fledged war with Russia over Syria - as Russia has decided to challenge any diktat from USA or the NATO. Financial Emergency was last invoked in USA by President Nixon in 1973.

Will USA go the USSR way? The answer is 'No', because USA has a Federal Structure where states enjoy sweeping powers, and the US President is 'All Powerful' in the sense that he can be ruthless with the enemy as well as its own people in times of 'Emergency'. USA has enjoyed the status of the 'Sole World Super power' ever since the end of the cold war. But if the simmering discontent among the common US citizens spreads to the streets it may pose a serious threat to the Presidential form of Govt. in its present form. Will USA come out ever stronger as it did after the 'Nixon shock' of 1973, or will its supremacy as Sole World Super power threatened, and Barak Obama going  down in history as the last strong US President? Only time will tell, but the world is definitely moving towards a tectonic shift in the 'Balance of Power'.

Based on the above, my prognosis is: USA will lead the world into a deep economic crisis sooner than later. Investors are advised to reduce their holdings in risk assets like equity and real estate, and focus on alternate investments. An increased proportion of Debt and Gold in the portfolio would be a better option. If US markets are expected to crash by 30-40% as per estimates of analysts, Indian equity markets would also bear the brunt, although to a lesser extent,