Wednesday, December 3, 2014

WHY AND WHERE MANUFACTURING WOULD BE HEADING

My article might look like an philosophical but I have tried my best to give very normal outlook. Low trust on the government policies leads to restrictive consumption as people are more inclined to save rather than spend. 2008 recession might be over according the stock market players but in real economic terms it not. Just mere looking at investments in stock market and inflow of capital and some cooked number of statistics influenced by government and bankers might be a good way to increase confidence but people are sceptical at heart. Recently manufacturing data of few economies came up where it is clearly indication that there is significant drop or stop of manufacturing. Why manufacturing is coming down despite of so much positive vibes created by banker, politicians and stock market players.My worry is not restricted to short term but long term.
  • One who has burnt his house will fear from the slightest view of the flame in any corner of the world. Consumers are reluctant to got for spending as weak government and political system fails to segregate capitalism and sustainable economy.
  • Bankers, politicians and stock market analyst are working hard for short term results but the long term is least bothered. The vicious cycle runs in this way that every present government is busy in proving his abilities at the cost of common man across the globe. We never think what we will keep for children over the next 20 years 2034.
  • The real picture of the economy over the next decade will be very conservative outlook and approach by the people over their consumption planning across all segments.
  • This conservative approach is well reflected now but is being hardly made aware as the same is being disguised by market players.
  • Human Behavior and culture is changing and we are witnessing the same in term of drop in manufacturing and consumption.These are above the cooked number of the various economies.
  • The circulation of liquidity in the system has become restricted to a certain segment of the market and this well reflected that no wage hike or full time job availability is negligible.
  • Hence every is prune to more savings and less towards consumption. Balance of life and controlled life behavior has emerged from these well exploited people over the last decade by the various economic and government policies.
  • The biggest observation of the present time is that manufacturing is not going to pick up across the globe and cheap labour followed with technology based-cost efficient consumption has replaced the global landscape of consumption.
  • Low cost of production and technological support has brought marginal costing of production to Zero.
  • Very soon in 2015 we will witness liquidity injection by many economies where momentum of economic growth is declining and again the liquidty will flow into risky assets which will further instigate the riskiness of the various asset classes.
  • New highs for Dow Jones, FTSE, Sensex, Gold, Crude, Commodity and all other assets classes in 2015 but will that lead to increase in wages and employment.
  • If there is no one to buy any good why companies will manufacture? MANUFACTURING IS BOUND TO COME DOWN.
  • Dow Jones can scale new heights provided they continue with Buy Back of Shares and increasing the shareholders wealth over the time.Today 70% of the US corporate earnings lies outside of US.
  • This is the result of Exploitation planned and executed by US.
  • The world economy has invested less into socio-macroeconomic long term investments. This is proved through Britain where over the last 3 decades applied mathematics have been removed and pure mathematics have been employed. This has resulted no progress in Research and Development.
  • If we search many economies like this we would many cases which are the prime reason for these economies to collapse. Only Capitalism won’t be sufficed.
  • Today we are witnessing digital restriction in many economies. Over the next 10 years we would find restriction on free trade and restriction on migration policy. All these will be done to protect and bring back the resources back at home. If today US citizens are unemployed one of the basic reason is that all of the manufacturing has shifted to China and hence no jobs for the US citizens. Can anyone explain me why I will not place restriction when my own people are way heading towards starvation?
  • Technology has changed the culture of trade and business at the same time it has changed the economic structure of the world.
  • Export driven economies like China is today set for an all time low level in GDP growth. How sensex and Nifty will earn high levels when exporting countries are dried up and revenues are not going to come. Do you want me to believe that cost efficiency products of India will replace Made in America, Made in China, Made in Europe etc. Even I buy this point but how long you expect that these economies will bear the cost of International Free trade policies. Remember these international policies were created to exploit other economies.
  • Just like US opened the gates of China in WTO in 2001 and later on after a decade that exploitation is costing US billions of dollar. Hence one day these will come to an end.
  • We need socio-economic investments and capitalism should be restricted .Everything is not business.I am more worried about the long term rather than the short term.
  • Over the next 10 years we will find stringent migration policies and Trade policies where consumption will happen under 'Made in My Country'.
  • When their are so many things do you think that RBI should cut down rates only for the heck of corporate earnings to grow.If their is no export market then where the goods will be sold. Does rate cut is required for that Rs 7500000 cr debt to be re-modelled so that again the NPA could be lowered for the short term and create a collapse in the long term jut like US.
  • If profit grows then it makes sense for rate cut.But who will buy the products. Inflation might increase at any point of time which will spook commodity prices. Hence to offset that price hike we are asking for rate cut so that corporate profit increases and banks take the hit on a later date. Stop the crony capitalism.Vote bank games of individual states should be kept aloof from these so dynamic market and economic movements of the global market. 

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