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The Russian economy gets an exceptional boost with the behaviour of ruble currency separating from the oil prices. Russia benefits from higher oil prices at the same time as it benefits from a weaker ruble. The ruble has declined 15% since April after more sanctions on Russia. The revenue earned in dollars converts into more rubles for imports and other financing for the Russian economy. At the end of 2017 a barrel of oil brought in 3,835 rubles for Russian sellers, when converted into rubles from U.S. dollars. In October 2018 each barrel brings in 5,262 rubles, an increase of 40%.  Russia deftly managed its emerging market crisis with lower ruble following the crisis in Ukraine by adapting its economy to a lower ruble, lowering imports and using import substitution. Initially Russia split with OPEC and Saudis to produce oil all out, but by 2018 with the Saudi economy hurting and Russia feeling the impact of lower oil prices, an OPEC agreement with Russia has pushed prices higher with production limits. Earlier adaptation by 2016 to the lower ruble, further decline of the ruble in 2018 with sanctions by U.S. for Russian interventions in other countries including the U.S. election meddling, have combined with higher oil prices to strengthen the Russian economy. Russian private and government debt held by foreign investors has fallen since 2016 to 32% in the first quarter, according to Societe Generale. This means Russia is less sensitive to foreign investor exit from the country with political and economic winds changing. Russia's current account surplus increased to $18.3 billion in the first quarter of 2018, up from $14.6 billion in the prior quarter. A weaker ruble has translated into more inflation which reached 5.5% at the end of 2017, above 4% target. Russia's central bank made quarter point increase to 7.5% for the interest rate in September 2017. Overall the management of the emerging market crisis since 2016 as Russia responded to NATO expansion and adopted its own policy is remarkable considering the damage from earlier emerging market crises. Countries such as Argentina, Brazil, and even India are feeling the impact of the current emerging market crisis, each with its own version of the crisis- Argentina with dollar denominated debt, Brazil lacking money in the budget after high pensions, and India with higher energy costs and weaker rupee.   ...

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The Brazilian economy is growing too fast, and this pace not only won't be sustained, but it has signs of serious trouble ahead. The Brazilian economy grew at an estimated annualized pace of 10% in the last 6 months and generated 962,000 jobs between Jan-April of 2010. Growth in 2010 is expected to be 7%. The jump in growth is partly the result of the stimulus measures of the Lula government. But a consensus of experts is that Brazil still saves too little, has not invested enough in infrastructure,and its economy has the potential of 5% sustainable growth each year. The central bank has increased interest rates - increase of 0.75% in April 2010, and economists in Brazil think the rate will go up to 13% in 2011. About $10 billion in cuts in spending have been announced but they are cuts to an already growing budget approved by Congress, so in reality it will only slow the increase in spending. Public debt is at 42.7% of GDP. Real interest rates have fallen from close to 20% in 2003 to between 5-10%. Costs per unit of labor are increasing at about half the rate of real wages according to a finance official. The National Development Bank or BNDES played a role in helping the economy with subsidized loans when the financial markets ran into trouble. It has expanded lending by 50%, with money from the Treasury of 180 billion reais. Some of the measures of the Lula government has reduced the skewed income distribution Brazil, and in doing so has increased consumer demand. Meeting high consumer demand, and meeting the need for commodities like soyabeans and metals from China, has boosted growth in Brazil to twice the sustainable rate and it is now at a par with China and India. But this places Brazil too dependent on the boom in Chinese demand, especially as the stimulus in China slows and the property bubble threatens China's economy. See links to China. A new President after the upcoming Presidential election will have to tackle the high interest rates in 2011, lower commodity prices, and the need for better infrastructure, and make the adjustment to a sustainable pace of growth....

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Global infrastructure needs are expected to go up by 20% to 2.1 trillion dollars annually for the next 10 years compared to the previous ten years, according to the Samsung Economic Research Institute. India's investment in infrastructure will double to 1 trillion dollars in 2012-2017. compared to the prior five year period. Toshiba hopes to increase sales by 20% to $38 billion for nuclear power generation and distribution equipment and railway equipment, by the year ending March 2013. This is 38% of total revenue for Toshiba. Hitachi has set a goal of a 46% increase in sales to $29 billion, or 20% of total revenue for Jan 2011- March 2016. The Japanese Government and a consortium of Japanese companies are working together on deals such as the deal signed with Vietnam in October 2010 for nuclear power. The International Nuclear Energy Development of Japan entity, includes 12 companies and the Japanese government. The consortium was critical to negotiating the Vietnam deal.

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The Indian newspaper "The Hindu," said in its editorial that India's Supreme Court's decision in February 2012- declaring the giving of telecom licenses by the government without holding a public auction "arbitrary and unconstitutional" -was a lesson for other industries where unscruplous behaviour also prevails. The behaviour of the government in not investigating the issue of telecom licenses was described as severely hurting its credibility. The Asian Age in an editorial welcomed the decision as bringing in more money for the government in a public auction for the telecom licenses to help reduce the government's budget deficit. The Indian Express criticized the 4 month deadline for implementing the ruling. The Economic Times looked at it differently, saying the ruling will increase the telecom industry's capital costs and lead to delays in upgradation and raising of telecom prices.

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Denning provides a reminder of the growth but also real risk in emerging markets. The weighted average score in Transparency International's 2010 Corruption Perceptions Index for BRICs countries is 3.3 out of 10, compared to 6.7 for the Eurozone, and 7.1 for the U.S. Russia needs an oil price of $120 in 2012 to balance its finances, and the consensus is for oil price to be $103. China has a bad loan problem at its banks. Brazil and India have inflation problems and growth constraints from poor infrastructure. There is aneed to be grounded in realities when it comes to emerging markets. The IMF underscored this weakness in its recent report. Sudden capital outflows could reveal serious weakness in some countries.

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To cut the deficit estimated at 5.5% of GDP, the Indian government is cutting fuel subsidies. It is reducing the $5.6 billion spent on fuel subsidies. About $4.4 billion is also is spent on subsidies by state owned energy companies. Prices for gasoline will rise only moderately by 3.5 rupees a liter to about 55.7 rupees a liter. This should improve the situation for state owned energy companies and for private sector companies like Reliance and Essar.

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Tom Albanese of Australia's Rio Tinto resigns, ending a six year period at the company, after taking a $14 billion loss in Jan 2013. Of this $10-11 billion is for the failed Alcan Aluminium acquisition, and $3 billion for the acquisition of Riversdale Mining with coking coal assets in Mozambique. The Alcan Aluminium acquisition has resulted in $30 billion in wirtedowns for Rio Tinto including the latest writedown. Aluminium prices have declined 22% since 2007. The coking coal prices have declined 43% since 2011. Shipping coking coal down the Zambezi would require dredging the river and approvals, the coal is also of poor quality requiring additional processing. Sam Walsh who headed the iron operations since 2004 takes over as new CEO. Walsh has managed the large Pilbara iron ore projects on time and on budget. Earnings on the large iron ore projects have increased 15 times since 2004, with near doubling of production. Rio Tinto is the world's second largest iron ore producer. The focus of operations will now be on developing iron ore deposits to meet demand from China, India, Russia and the Middle East. A string of CEO's of commodity producers have resigned. Anglo American's CEO Cynthia Carroll resigned after investing in an iron ore project in Brazil in 2007 which cost $5.6 billion more than expected to develop. Going to remote regions of the world has increased risks for mining companies and overoptimistic projections have hurt the companies badly....

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Amol Sharma and Paul Beckett of the WSJ interview Finance Minister Chidambaram about the Indian government's decisions to open up the insurance, retail and airline sectors to foreign investment, and bring the deficit down to close to 5.3% in 2013. Faced with slowing growth and the risk of credit ratings agencies lowering India's credit ratings the government of prime minister Manmohan Singh has decided to take some decisive steps, including a shift in coalition partners to maintain parliamentary support for these steps. When asked about what influenced the government's resolve to take these decisions, Chidambaram says credit ratings was one factor, another was the difficulty Indian companies were having raising capital inside the Indian market and overseas. In addition he says growth could not be sustained at earlier levels without new capital, and new foreign investment was needed for sustained growth. The Kelkar committee report provided a sense of urgency to the government by providing an independent view and showing the worst case scenario if the government maintained the status quo. Chidambaram says subsidies will now be transferred in the form of cash directly to beneficiaries and reduce costs by cutting leakage in the system.The government will use the list of LPG cooking gas households to transfer the subsidy for 6 gas cylinders directly to beneficiary accounts. The plan is to do the same for the Rural Employment Guarantee Program and subsidized foodgrains to cut the leakage that stems from duplication and falsification. The Indian government's ongoing program to use information technology to have computerized records of the the entire population and linking to the financial system, incuding a large rural population, now makes it possible to take these steps. On the Kelkar committee's recommendation to increase prices of basic commodities cooking gas, kerosene and food to reduce government subsidies, Chidambaram says this is ambitious and the government has to consider the political context even though it agrees that this has to be done over time....

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Tax changes for autombiles as part of a"fiscal correction" were announced by the Finance Minister, Pranab Mukherjee. The base excise tax on most goods manufactured in India was raised from 10% to 12%. The excise tax on larger cars with gasoline engines above 1.2 litres or diesel engines above 1.5 litres was raised to 24% from 22%. The customs tax on imported cars and SUV's over $40,000 and gasoline engine over 3000 cubic centimetres, or diesel engine over 2500 cubic centimetres was increased to 75% from 60%.

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Saudi Arabia continued to follow a policy of high oil production in 2016, and reported that it produced 10.67 million barrels a day in July 2016. Iran is producing at a pre-sanction level of 4 million barrels a day. 2017 oil demand prediction by OPEC is at growth of 1.15 million barrels a day. Experts says that the interests of Iran and the Saudis may be converging to reduce production as they face low oil prices. Iran needs to make large investments and Saudis face budget cuts with low oil prices. They point to this cooperation being temporary as there are issues of competing politics in the region, and beyond that both countries seek to expand their market share.

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India's prime minister Modi takes the first six months of his administration to come to grips with the problems of a slow moving bureaucracy, inexperience of ministers, problems left behind from the previous Congress party administration. He had raised hopes during the election campaign of faster action, but it now appears that it will take much longer, about 1-2 years for the new administration to make the transition to rapid growth. Analysts say this is also the approach Modi took in Gujarat state where he was chief minister, an approach of carefully studying the problems before formulating a plan of action. To do this Modi is ensuring a level of continuity in the civil service and has reappointed top civil servants such as Mr. Ajit Singh.

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Venezuela faces an uncertain future after U.S. efforts to support Mr. Guaido and call for new free and fair elections have failed. With help from Russia the Venezuelan economy is showing signs of recovery from the steep decline and high inflation in 2019. Oil production is expected to reach 1 million barrels a day in 2020 after falling to 650,000- 700,000 barrels a day in 2019. Russia's oil company Rosneft provides critical help for Venezuelan oil sales and maintenance in oil fields.  National Security Adviser John Bolton is faulted for his advice to president Trump on Venezuela, that merely voicing support for 36 year old Guaido, would lead to regime change without action from the U.S. With the recovery in Venezuela with help from Russia and Cuba, Mr. Guaido's popularity has dropped by 20 points to 38%, according to a Venezuelan pollster Datanalisis. Most Cubans and Venezuelans in the U.S. are in Florida where there is support for new elections, and Mr. Trump continues to support Mr. Guaido. The lack of support for change from other countries including Europe, India, Turkey, and Mexico have led to a stalled situation in Venezuela. There is concern for the steep inflation, the migration of about 4.5 million Venezuelans, the shortages of critical supplies as a result of the economic collapse in 2019. The situation is stabilizing for the government yet the future of Venezuela with U.S. sanctions and weak economy leaves Venezuela in a precarious situation. Venezuela continues to be an example of how well meaning changes for social justice can lead to political changes that bring about economic collapse. This happens  when business and the economy flounder under mismanagement and corruption under crony socialism, a variant of crony capitalism. The old capitalist class and the privileged families who ran the country under its old two party system are gone. Replaced with a new class. The trying out of untested economic ideas in the quest for social balance leads to economic mismanagement, loss of critical human resources which leave the country, and a higher degree of poverty with shortages than before.  Today in Latin America Brazil shows how allowing generous pension benefits at the expense of basic needs and public services in the budget can hurt the economy. Argentina's overborrowing once again shows how this leads to IMF loans and harsh economic austerity. Chile shows how not financing pensions and public services can lead to collapse of public confidence and riots. Venezuela shows how the quest for social justice and reducing privilege can itself get flawed, leading to mass migration of as many as 4.5 million citizens. This happens under models that vary from free enterprise models to socialist or nationalist models showing that models can be less relevant than good sense and good management. In the beginning and for some time each of these models worked well, commodity price supported booms concealed real problems. Avoiding extremes, prudent spending, good investment and hard work, investment in education and infrastructure, building consensus, and good management, is critical for the future to avoid the bad outcomes facing much of Latin America. A lesson also for Asian and African countries that basic virtue is more important than socialism or free enterprise or nationalism when it comes to development.   ...

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  Rachel Louis Ensign of the WSJ describes one moment in the Madison Square Garden Trump rally. In it Lutnick who Ensign describes as embracing controversial crypto finance business, and EV's Musk, say they plan to  create a Department of Government Efficiency or DOGE, also the name of a cryptocurrency. The US Federal Reserve, the European Central Bank and the central banks of China, India have warned of risks and dangers associated with Crypto currency which has no backing of the government. In one moment of the rally at Madison Square Garden as reported in the WSJ. Lutnick says- "How much do you think we can rip out of this wasted, $6.5 trillion Harris-Biden budget?”   “I think we could do at least $2 trillion,” Musk said.  Fitzgerald says "Yeah" A budget that the large part of includes spending for Social Security, Medicare, Defense, Education, and other departments of government. Howard Lunick is Donald Trump's head of Human Resources in 2024, for hiring people to run the government under his administration. In 1993 he was running the company Cantor Fitzgerald and taking his son to kindergarden when the bombings of the World Trade Center by terrorists killed 980 of the company's employees. Fitzgerald has contributed to Kamala Harris's campaign for US Senate in 2016, and calls himself a fiscal conservative and social liberal. In 2023 he was invited by Trump to help his campaign. Fitzgerald says the Democratic party left him with its immigration and other policies. This report by Rachel Louis Ensign in WSJ says Cantor Fitzgerald's company has embraced crypto, which larger companies have stayed away from. It says the WSJ has reported that a Hong Kong based owner of the stable coin tether used Cantor Fitzgerald to help oversee its $39 billion bond portfolio. Crypto finance is reported as playing a large part in 2024. Rachel Louis Ensign of the WSJ describes one moment in the Madison Square Garden Trump rally. In it Lutnick and Musk say they plan to  create a Department of Government Efficiency or DOGE, which is also the name of a cryptocurrency. The problem with cryptocurrency is that the US Federal Reserve does not support it, China, India and the European Central Bank disapprove of it and it is banned in China even though some of the crypto companies have connections with China. In one moment of the rally at Madison Square Garden as reported in the WSJ. Lutnick says- "How much do you think we can rip out of this wasted, $6.5 trillion Harris-Biden budget?”   “I think we could do at least $2 trillion,” Musk said.  Fitzgerald says "Yeah" ...

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The Economist magazine points out that Indian companies will have to invest more in innovation if they are to maintain return on investment. It says the GST, government action to reduce corruption since 2012 through court decision on crony capitalism, better functioning markets for land, natural resources and capital, more efficient supply chains, will force large Indian companies to compete by becoming more efficient. Under the previous regime before 2012 large Indian companies were able to make high ROI but this was an illusory advantage, as the growth in the Indian economy could create opportunities for firms that can compete with innovation, quality and efficiency. In this sense the Indian economy is entering a new phase under the Modi administration with stretch goals and efforts to create  the next ten year period of growth very different from the past.

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After increasing the price of subsidized diesel, the Indian government lays out a plan to cut the deficit over five years. The plan sets a goal for the deficit of 5.3% for fiscal year ending March 2013 to come down to 3% by 2017. Earlier India's central bank, the Reserve Bank of India (RBI), had said the government needed to take action on the deficit before it reduced interest rates. The RBI faces a difficult task in reducing rates to stimulate the slowing economy because inflation was 7.8% in Sept. 2012. At the same time the sharp decline in growth is a cause for serious concern- the most recent RBI forecast for GDP growth made in July for the current fiscal year through March 2013 is 6.5%. This may not be achieved as other economists have lowered the estimate to as low as 5% because of slow government action in economic reforms, high interest rates, and the uncertain global economc outlook. The last action by the RBI to lower interest rates was a drop of half a percentage point in April 2012. Much of the momentum for the Indian economy was lost in the first half of 2012 with the governments vacillating steps for opening the retail and other sectors to foreign investment. Only in October 2012 has prime minister Manmohan Singh set a clear direction by dropping coalition partners opposed to reforms and announcing new policies for foreign investment....

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Joanna Stern of the WSJ uses the original iPhone that came out in 2007 for one day in June 2017 and sees how it felt to use the introductory version. The original one worked on a 2G cellular network. It took about a minute for the president's Twitter feed to fully load in the old phone's Safari browser, it now takes 5 seconds. A lot has changed with the smartphone revolution in ten years. Lunch spot search results, Stern points out, might take longer than the time to eat lunch in the Maps App with that old phone. No emojis, predictive text, no Siri, and no third party apps, no Apple Music or Spotify, all that came later. The 2 megapixel camera took decent shots but not without good light. What is useful in Joanna Stern's little experiment is that it makes one reflect on how quickly people forget, how so much is now taken for granted as smartphones change the way people live their lives and interact with technology on a daily basis. Not mentioned here is how common smartphones have become with the Android versions made in China offering so much more for the budgets of ordinary people. And how it has changed the lives of billions of people in China, India, other parts of Asia and Latin America, bringing them into contact with the outside world. What is also interesting in this sense is that what took a huge effort over many years and many disappointments- the idea of a touchscreen that works- shows what an idea and the courage to persist in the face of innumerable hurdles can accomplish. See the link to how  Steve Jobs accomplished this. Daisuke Wakabayashi talked with Apple engineer Greg Christie in his article-"Apple Engineer on iPhone's Birth," Wall Street Journal, March 26, 2014. Christie had worked on a digital personal assistant at Apple in 1996, one that had tried the first touch screen Apple made. The device failed in the market. In 2004, eight years later the touch screen is the idea Jobs had Christie work on again. Many frustrations and obstacles later the first smartphone was developed by 2007. It took 10 years and undaunted effort which is the Apple story under Jobs. ...

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Projections by the U.S. Energy information Administration and the International Energy Agency for oil supplies and demand 2010-2035. Continued high growth in demand in India and China, and declining demand in Japan, U.S. and the EU.

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The new Australian budget is designed to generate a slight surplus from the A$44 billion deficit for the fiscal year ending June 30. This prepares the Australian government of Julia Gillard for elections in 2013. The budget depends on the mining boom to generate the tax revenues for planned economic growth of over 3% in 2012-2013. This is based on the large number of projects planned for investments in oil, gas and other energy projects, valued at US$456 billion. GE as supplier of turbines and other products to the Chevron-Total gas project and other projects in Australia, has sales in Australia match its sales level in China in 2012-2013. This gives an idea of the extent of the boom in the mining and energy sector. Even the widening trade deficit to A$1.59 in March 2012 reflects large imports for the mining sector. The weakness of this approach is that too much is dependent on the mining and offshore gas boom. Retail spending is weak and Australia is increasingly looking like a two tier economy, subject to the boom and bust cycles that its mining companies have experienced in the past. A bubble in Australia's housing markets and uncertainties in the global economy pose other risks....

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The U.S. Federal Reserve announced on Dec. 13, 2016, that it would increase its benchmark short term interest rate by 0.25 percentage point, to between 0.50% and 0.75%. The increase will also be reflected in business and household borrowing costs. The Fed also announced its intention to make 0.75% percentage point increase in 2017, possibly in 3 quarter percentage point moves. The Fed's forecast is for the fed-funds rate to reach 2.1% at the end of 2018, and 2.9% at the end of 2019. The Fed's policy is based on a sense of strong labor market with unemployment falling, and says it is based on discussion at a 2 day meeting, and "in view of realized and expected labor-market conditions and inflation." This reflects a view that there is now not that much slack in the labor market, that further improvements could trigger higher inflation. Fed forecasts for inflation are for it to increase from 1.5% in 2016 to 1.9% in 2017 and to the target of 2% in 2018. The unemployment rate of 4.6% in 2016 is forecast to go to 4.5% in 2017 and remain at that level till 2019. Economic growth is forecast at a median annual rate of 1.9% in 2016, 2.1% in 2017, only a slight improvement from last forecast in Sept. 2016. Support for chairwoman Yellen's policy decision was unanimous. See the link on views of NYT's Binyamin Applebaum and Neil Irwin on how Fed rate policy and economic growth under the Trump administration is likely to play out, and Ian Talley's report on impact on exports with a stronger dollar in WSJ. These views also are in line with the Fed's forecasts and policy decision as they reflect the concerns of the Fed about inflation, and also reflect the Fed's view that growth will be close to 2% in 2017-2019, and not the 3-4% stated by Trump and Treasury Secretary Mnuchin. Fed rate policies to keep inflation at about 2% tend to counter stimulus spending by the Trump administration and effect of tax cuts. The size of the stimulus and the tax cuts are also likely to be much smaller than stated because of Republican concerns about the deficit in the U.S. Congress, according to these views. The stronger dollar also has the paradoxical effect of making trade gains more difficult while increasing trade friction in tougher bargaining supported by Trump, making the higher growth targets harder to reach.   ...