Nandigram refuses die down

Some things simply refuse to die down.. Nandigram is one of those things it seems.

After routing the CPM in the recent national elections, Some Trinamul Congress workers have locked down a Gram Panchayat Office, demanding immediate reelections. The Police had opened up fire to disperse the crowd. One Person had died and Many are supposed to be in critical condition.

Dollar to remain top currency: German minister

The US dollar will remain the world's top currency after the financial crisis is over, but the euro and the Chinese yuan will gain in importance, Germany's finance minister said on Thursday. 

In an interview with Manager magazine to appear on Friday, Peer Steinbrueck was asked if the US dollar would retain its position as the world's reserve currency after the dust has settled on the worst economic crisis since the Great Depression. 

"That is the $10,000 question," Steinbrueck quipped. 

"I would say: yes, but the yuan and the euro will also gain in relative significance," the minister added.

Is China the next consumer market?

China's Automobile market is growing exponentially. They have an untapped consumer base that is constantly growing as China is expected to surpass the United States in the next 10 years. While Sales of Automobiles is a good indicator, the growth of real-estate sector is what would drive growth because once people buy homes, they would start buying things to fill them up, triggering growth in other markets like consumer goods etc. 

Even if this happens, this growth might not help the global economy much because most of goods required by the chinese households would be produced internally within China. Expecting China to replace US would be too optimistic.

Russia, China to push global currency at G8 summit

Brazil, Russia and China are supposed to challenge the dollar hegemony at the coming G8 summit. India seems to be conspicuously absent from voicing against the dollar.  However Germany, France and Canada are against including debate on dollar as reserve currency in the G8 summit. 

The emergence of a new global currency is one of the key milestones to be achieved before the next wave of globalization can start.

Dollar role in Indian FX basket would change

Suresh Tendulkar, chairman of the prime minister's economic advisory council has said that the weight of the dollar in the basket of currencies that helps set the rate of India's partially convertible rupee currency may be reduced. Asked whether the U.S. dollar should be weaker he said: "I think it is necessary...it should go down." <link>

No global recovery till world finds a replacement for US consumers

The June US job employment report suggests that the alleged ‘green shoots’ are mostly yellow weeds that may eventually turn into brown manure. The employment report shows that conditions in the labor market continue to be extremely weak, with job losses in June of over 460,000. With the current rate of job losses, it is very clear that the unemployment rate could reach 10 percent by later this summer, around August or September, and will be closer to 10.5 percent if not 11 percent by year-end. I expect the unemployment rate is going to peak at around 11 percent at some point in 2010, well above historical standards for even severe recessions.

This data indicates that US consumers are not going to their buying spree anytime soon. Someone has to convert to Consumerism sooner or later for globalization to rebound.

Nouriel Roubini: The retrenchment of the U.S. global consumer of last resort needs to be compensated by increased consumption in current account surplus countries if the world economy should grow on the same path as before the crisis. However, Japanese consumers are too weak to pick up the slack, the Germans don't want to and the Chinese are not yet wealthy enough to replace the U.S. consumer even if they manage to shift their export-led growth model. As of now, the Chinese current account surplus and savings overhang is not shrinking much. 

Bill Gross (PIMCO): There is no global replacement for the American consumer who lost at least a$15 trillion in wealth since early 2007. "Short-term policy rates will be kept low for longer than cyclical norms, and the outlook for risk assets – stocks, high yield bonds, and commercial and residential real estate will involve just that – risk. Investors should stress secure income offered by bonds and stable dividend-paying equities