Trends,Analysis,Foresight Of Global Economy,International Managemenet & Business Strategy.VISION BEYOND ANALYSIS
Thursday, February 25, 2016
In the recent budget Indian
railways have highlighted on adoption of Activity base costing in Indian
railways. Its nice to find that Indian railways are adopting and changing’s its
mindsets and policy towards cost optimization and to recover from losses
despite of higher revenues. We all know that Indian railways earns a lot through
advance ticket booking but it has loses on its books. This is very reason that
after independence Indian government is aggressive looking ahead for adoption
of costing methods in its railways operating process. Before I move ahead I would like to inform my readers that I will cut down on words and would give images to portray the concepts of Cost Management in Indian Railways. Now this activity based
costing adoption in Indian railways is going to be wider scope since it has
many functions and many departments linked under several segments. If we make a
quick look towards the several areas where activity based costing can be implemented:
·
Freight traffic
·
Passenger Traffic
These two segments are further
divided and in to several part where in order to design a cost model we need to
identify the various parts of the cost drivers. A question might come up that
what type of cost information is required and which areas to be focused to plugging
the gaps. Well cost information and understanding is needed so that our results
to could identify the final objective. Cost Optimization is a broader term
hence we drill it further and we conclude are as follows:
ü Identify
money makers or money losers
ü Take
resource allocation decisions
ü plan
and control operations and activities
ü Find
economic break-even points
ü Compare
different options
ü Discover
opportunities for cost improvement
ü Prepare
and actualize business plans
ü
Improve strategic decisions making
Now moving ahead we find that Indian
railways needs pricing decision of its Freight Tariffs and also about its investments
decisions so that movement of goods and services brings more trade and investment
opportunities. We are all demanding GST but once it’s come the biggest
requirement over the years will be logistics and Indian railways demand will go
up. Hence pricing become more important so as neither the customer neither the government
burns a hole in its pocket. So my activity based costing should be linked not
only with cost optimization but with identification of pricing of its services.
In railways we can derive the
Activity based costing either by Top down Approach or By Bottom up approach.
To clarify these terms two examples may be given:
Example I: When using the top-down
approach to calculate the staff costs for the traction, they would be
calculated by dividing the total costs for driver wages in a railway company by
the number of driving hours of all drivers in that company.
A bottom-up approach would be to
multiply the number of driver working-hours for a certain activity by the gross
salary per driver-hour.
Example II: When using the
top-down approach to calculate the energy costs for a certain activity, the
total traction-related energy costs in a railway company would be divided by
the total train-kilometres (or gross ton-kilometres or whatever unit of
measurement is considered suitable) this railway company produces during a
given period, giving the energy cost per train-kilometre.
A bottom-up approach would be to
calculate the energy consumption for that activity using a suitable formula
which takes into account running resistance, air resistance, losses, etc. and
then multiplying the calculated energy consumption, suitably expressed in kWh,
by the actual working price per kWh.
Which of the approaches is used
in the model depends partly on what data are available. Generally a bottom-up
approach is preferable for the following reason:
In the top-down approach, there
is no longer any direct connection to the factors causing and determining the
costs; instead, the total costs are simply distributed over some measurement
units (train-kilometres, working hours, tons, etc), although no linear
connection necessarily exists at all.
For example, when calculating
infrastructure charges for a train, these can of course, easily be calculated
by dividing a railway company’s total annual infrastructure charges by the
total train-kilometres, although in reality they might be charged per
gross-ton-kilometre or vice versa.
A
bottom-up approach makes it easier to take into consideration specific characteristics
of a transport, as well as changes in
the relevant cost determining factors, as the following examples illustrate:
When
calculating energy costs for example, a bottom-up approach makes it possible to
take into account the weight of the train and if it is running at high or low
speed, while the top-down approach normally only calculates the costs on the
basis of the average energy consumption per train-kilometre, irrespective of
the speed and weight. Another example would be infrastructure charges.
Please
do remember they have common cost and joint cost in many departments hence you
need to design the costing models and also the cost drivers accordingly. The below picture will elaborate about the flow chart:
At the
same time there is incremental cost of operating which also needs to be taken
into account. Hence I have included one format for the incremental costing of
the Railways based on the departments and segments. The below flow helps me cut my words and complexity in explanation:
Now
lets come to the model of Activity Base costing where cost drivers are
segmented: I have given the format for making its much easier to understand.
Hence In my 1st series i give an idea about the steps and the process to be taken while designing the activity based costing models for railway segment. In my next series I will come up with more valuable insights of other segments raised in the Indian Railway Budget 2016-17 related to cost management profession.
Tuesday, February 23, 2016
EVERY 100 YEARS PRICE CHANGES...MORE SWF TO REEDEM
If we look into the economic
history and economic theories we find that when price of a product changes it correspondingly
changes the economy of and industry and on a large scale economy of the
country. Price changes leads to product changes which lead to change of an industry
monopoly in the long term. Price is the most important factor for deciding the
fate of an industry or economy. It leads to creation of unemployment and also
creation of employment and other industrial growth.
From wood to coal conversion lead to an
significant change over in the wood cutting industry which lead to unemployment
as they lacked skilled mining knowhow. Significant drop in investments in wood
cutting industry, which lead to collapse of the ancillary industries like plant
and machinery. Now after another 100 years or more we came up with oil which
replaced the coal mining industry and its consumption. It true that it did not completely
stop the coal mining and coal consumption industries but the golden era period
of the coal industry collapsed in due course as the world economy and
industries shifted into oil based consumption pattern. Just check that from
coal based steam engine the entire railway industry across the globe got
converted into Diesel or oil based railway system.
During this change over unemployment
in mining industry, plant and machinery industry related to mining went for
wild toss. The entire consumption industry significantly shredded off the coal
based products and the future of plant and machinery also changed their consumption
pattern from coal to oil. This lead to an significant drop of investments in
coal industry and lead a stupendous rally of investments in oil production and
oil related industries change over.
Now we are currently again after
100 years or more we are going through the phase of change form crude to
alternative energy. But there is a difference between the history and the
current times. Currently oil is not
being replaced with any immediate industry but it is being found that the
current economies have done a blunder in their investments within industries within
their economies.
There are two economic thoughts
which strike my minds. The current scenario speaks very clearly those countries
like Russia, Saudi Arabia, Oman, Bahrain and all those countries in crude
production have not well diversified their investments which will keep their
economies alive in times of collapse of their prime resources. It’s very
practical that one fine morning the entire crude stored under the ground can
get vanished with a simple earth quake. My 2nd economic thought is that like
the previous economic history of product prices we did not witness massive sell
of markets, collapsing like a pack of cards. Since birds of globalization were
not flying across many countries like now. We are awaiting to witness massive
sell of across various asset classes in
2016 as these crude exporting countries have the liberty to support their
countries fiscal and consumption demand by liquidating $7 trillion dollars of
Sovereign Funds which they have built over the last 15 years. Sovereign wealth
funds of oil-rich countries like Norway, Saudi Arabia, Russia and Qatar sold
more than $213 billion worth of stocks in 2015, this number will grow
further in 2016. Debt to GDP ratio and other social burden might increase in
the next 20 years if we don’t think from now.
My research says that we will
witness QE to come ahead to stop these liquidation since currency across the globe
and asset class across the globe from bonds equities will be hammered further.
Please don’t mingle this situation by calling Recession. It’s a liquidation
phase of investments which have been built over the years, built for these
crisis times.
Crude exporting countries needs
to focus on alternative to crude export and hence I find more investments to
flow into other industries. We don’t know that over the next 50 years the
pattern of crude consumption might change like the history of wood and coal.
Economic models and probably theory reflects that every 100 years the pattern of
natural resource consumption changes. This change will be much faster under the
current times as technology is speeding up the process of changes. The reason
for saying all these is that under the current circumstances the affect of the
low crude prices have impacted the social segment too. Likewise Saudi Arabia is
cutting down its students
Hence it’s clear that under the
current economic process and policies we will not be able to sustain our social
costs in the long term. I find that the biggest debate for this century will be
that will governments across the globe will bear the burden of social cost. We
are not counting properly on the probabilities of risk and uncertainties and that’s
the place where we are feeling the heat. We are all taking into account the
economic research based on the short term trigger whereas the large picture is
often being ignored by the capitalist minds. Well we are yet to witness massive
outflows in sovereign wealth funds investments across asset class and there are
more pains in the sidelines.
Posted by INDRANEEL SEN GUPTA at 11:00 PM 0 comments
Labels: WORLD ECONOMY
Wednesday, February 17, 2016
HYBRID BOND...NEVER EXPLAINED PROPERLY
In 2014 I was sitting in an office
with my friend and he was over the phone discussing about Hybrid Bonds and investments
in asset class. He was able to sell a good amount of Hybrid bond to an client
where he earned a hefty commission. The biggest problem of today’s global
economy is that liquidity aspects of these Hybrid Bonds were never properly informed
to the tax payers and they took a hit at their end under the current circumstance.
High yield and returns forced them to drop other safe assets class investments and
bring all savings under Hybrid Bonds and Debt.
The fight over asset class investments
have been long history since the inception of every new asset class came in the
market. Investors have become smarter
and more risk takers without understanding risk factors. I will come to this
smart investors segment later in the article.
Hybrid bonds took birth to attract
inflows by offering higher yields and returns. But attracting the investments not
form investors but form other investment asset class. Yes that’s the main reason
why toxic bonds and debt papers are introduced into the market. Hybrid Bonds
and Debt are not taken into account of any index also. For the moment, contingent
convertible bonds-Hybrid Bonds are not included in any of the fixed-income
reference indices such as those compiled by Bank of America Merrill Lynch and
Barclays Capital. The consequence is that investors who use those indices as
benchmarks do not invest in contingent debt. The Barclays Capital Index Product
Group has made it clear that contingent capital is – similar to other mandatory
convertibles – not eligible to be included in the broad-based investment-grade
Barclays capital bond indices.
Corporate also came up with bonds. But their
theory of Bonds issue was split into two segment 1)Investment category
and Low category companies. The investment-grade hybrids are labeled “safe
haven hybrids,” whereas their lower-rated equivalents are better known as “high
beta hybrids. The gimmick of the English word played its game and made
investors to burn out billions under the current scenario. These hybrid debts
are mostly under deferral system where principle payment is deferred and only
the coupon is extended and compensated by a higher yield.
Well the depth of this type of
Hybrid Bond/Debt is that four companies raised a total of $4.7bn through
convertible bonds in the first half of January 2014 alone.
ArcelorMittal
Italy’s Eni
Abengoa, the Spanish renewable
energy company
Italian real estate group Beni
Stabili
Total convertible issuance for
the first 6 months of 2015 was up to USD 50.8 billion.In 2014 there have been
55 convertible bonds issued in Europe so far this year worth a total of
$17.3bn, compared with 38 worth a total of $15.6bn at the same stage last year
of 2013. I am not getting into the numbers of 2015. The history is yet to
unfolded and that’s what’s scary for the markets.
Today’s financial market is
linked with every asset class and surprisingly every asset class is competing with
against each other. Hybrid bonds like the convertible bonds were issued not
only by banks but also by corporate. Share Buyback spooked the capital markets
and major indices across the globe. Now a convertible bond is one where investors
can convert the same into shares and can take back his proceedings. Smart investors
play their trick as they played this time. Now let me share difference between two
Hybrid Bonds or Debts being played in the market since many of my readers might
get confused. Conversion of the bond into shares or activating the write-down
of the face value takes place when the bank or an organization is still a going
concern. Now there is another hybrid bond or debt called bail-in capital, where
the loss absorption kicks in when the bank fails. Now I hope you are clear that
smart investors exited their position and made many times profit as they took
advantages of currency depreciation of cross countries to book high margins of profits.
The surprising part was that many
banks were not listed and they also came up with convertible bonds structures
and product. Massive incentives have been given by the banks to the employees
who were engaged in deal with this issue beforehand and to make sure that its solvency
is strong enough to weather a possible financial storm and to fend off the loss
absorption by getting strong bond investors. The biggest gainers have been the
core clients of the banks who exited the Hybrid Bond positions at the time when
the markets and the bank shares were trading at the highest levels. On the other
hand banks also got relief from the debt service payment. The coupons and the
face value no longer need to be repaid.
Now after the smart investors
made their money they non smarter got stuck as they have to accept shares at
the low share prices provided they are subscribed under forced conversion or at
the discretions of the bank. There are many more stories to unfolded about the
depth of this Hybrid Bond Market which is many times bigger than the Global
equity Market.
Posted by INDRANEEL SEN GUPTA at 11:30 PM 0 comments
Labels: EUROPEAN ECONOMY
Sunday, February 14, 2016
HYBRID BONDS....TO BLOW UP MANY BANKS
European
banks are going to make life hell for the global economy. Taxpayers are running away as they are
butchered by the European banking regulation where any crisis will be managed
through the bond holding and then Taxpayers funds will be deployed to revive
the bank’s balance sheet. According to the guidelines which were agreed upon
was that 8% of a bank’s liabilities will be wiped out mandatory before any taxpayer support can be provided,
where placing of unsecured senior bondholders and also large corporate
depositors will be forced to go ahead
with loses. The problem is not with the
banks across the globe but with hybrid category of debts which have been taken
into account where the bond or hybrid debt holder does not know the quality of instruments
being held by them. Indian stock market investors might be thinking that Equity
is the highest risky asset but unfortunately Debt is the product which is of
mass destruction.
Hybrid
products of Bonds and debt have come up after 2008 recession where Bonds have
been floated with high risk. This might sound surprising but the hard fact is
that we are sitting on Island of Highly dangerous quality Hybrid Debt products.
For example contingent convertibles, contingent capital, buffer convertible
capital securities, enhanced capital notes, etc. are all different names for
the same kind of capital instrument issued by a financial institution. Now this
bond is having fancy names based on countries but the real thing is that these
bonds are designed in such a way that can be used to write off the losses of an
bank without even triggering the bank to be default. So it hides the banks financial
position as hardly the market comes to know of its crisis and secondly is uses
the bonds automatically without informing the holder of the same. The biggest risk
here is the one who are the owners of the bond. Further these bonds of Hybrid quality
have a tenure beyond a decade. The Lloyds Banking Group launched its $13.7 bn
issue of enhanced capital notes which was spread over a number of bonds with
maturities ranging from 10 to 22 years. These bonds have been f in December 2009 right
after the financial crisis. This clearly shows the risk being borne by the
citizen and by the economy to hide the wrong practices of operation executed at
the bank’s end.
Global
Big banks are shedding of their assets
and winding up business division not for cost cutting or for any grim
outlook on the economies but due to manage their books and cover their losses
and provide enough capital to inject into their system to avoid bankruptcy.
Hybrid
Bonds have more stories to go ahead which I will cover in my next part.
Posted by INDRANEEL SEN GUPTA at 11:00 AM 0 comments
Labels: EUROPEAN ECONOMY
Thursday, February 11, 2016
GOLD @$1500 /OUNCE...NIFTY MORE PAINS...GLOBAL ECONOMY MORE TO SLOWDOWN
Gold prices have started rising since this is not only the safe heaven
assets but also saver of these times. Please don’t forget that Bond Yields Are ZERO
and tocks are falling. There is no reason for stocks across the globe to rise
as there are hardly any macro factors to support the same. Further we witness that
Banks across US and Europe are in trouble similar to subprime crisis where they
hold these OIL bonds where they are no buyers. Best place to invest before it
melts away is Gold. Gold will find more
limelight as Dividend payouts across the globe have come down significantly and
will come down further next to ZERO. If we look at the chart we find that
dividend payouts are declining.
Hence gold
is safe heaven. It might climb $1500/ounce or can create new historic highs. If
we look at the demand and consumption pattern of Gold in China we get clear
understandings WHERE Gold will be heading. Gold was silently building ups its market and
demand. A quick look at the numbers reveals the story where sales of American Eagle gold bullion coins reached
124,000 ounces in January, up 53 percent from a year ago. And last year at the
Austrian Mint, one of Europe’s largest, consumers bought up 1.75 million coins,
four times the volume sold in 2008 before the financial crisis
Sovereign Funds are getting liquidated and the recent testimony of US
FED CHIEF that she is not in hurry for interest rate hikes has spooked alarms
that it’s better to exit sovereign funds and invest in their own economies from
where the funds belongs. Rupee is also working according to its destiny during
these times. In between European banking new rules are yet to be implemented as
they took 1 year time to implement the same which was passed in 2015. Hence again
tax payers funds will be used to save the European Banks and that what they
wanted. Bank Recovery and Resolution Directive,
the legislation is yet to be implemented. Further many banks and industries will
be freezing up pay hikes and more job cuts might come up which will decline the
consumption pattern of the global economy. This might not be an appropriate
time to speak these but truth is just like Sun. The biggest pain will be cut
down in global investments to the tune of $300 to 400 billion dollars. This
will be have a significant effect on the global economy altogether. It’s a liquidity
crisis and it has just began.
Coming to
crude there is hardly any chances apart from a war to lift the prices. I don’t
know how much trust to be relied on the news that Saudi and Iran and Russia are
coming together for crude production cut down to lift up prices but Iran is
already stated delivery of its crude to many countries. A tanker chartered by
Glencore loaded 80,000 metric tons of fuel oil on Friday and is bound
for Singapore, according to Thomson Reuter’s ship tracking data. Iran has
aggressive plans of raising more than $40 billion of foreign investments for
its oil industry. Well the world is also looking forward for viable projects to
invest and that crude looks lucrative as well as negative. Japan is going to
receive its crude shipment by the end of this week from Iran. Vitol
Group brought crude from Iran. In between as I repeated told in my
previous mails that Junk Bond Market of crude will explode its has happened
this time with European banks. Wells Fargo CFO John Shrewsberry
highlighted the bank's $42 billion in total oil and gas credit in his
presentation at the conference; 41 percent ($17.4 billion) is already
outstanding.
European
banks are defaulting and the crisis is going to be havoc. It might be the
begging of another asset class bubble burst which will drag the world economy
and market into deep red or recession. I am adding fuel to the fire but I am
trying to figure out where the plunge will end. Bank of
America's total energy credit exposure amounts to $43.8 billion, but more
than $21 billion of that has already been funded. Morgan Stanley has
thus far funded about 30 percent of its $16 billion exposure to energy credit.
Banks credits and their exposure is just going to take a toll on the global
economy and more on tax payers funds. In between Sweden has moved into negative
interest rates to 0.50% from negative 0.35%. Toxic and junk bonds are just
getting. If we look at the historical numbers we find that the oil industry had
$455bn of bonds outstanding in 2006, which increased to $1.4tn by 2014,
according to the Bank for International Settlements (BIS). Oil companies
had $1.6tn of syndicated loans in 2014. The point of default is that investors
will not get back their funds. For example according to Moody $2tn of bonds had
been issued by mining companies since 2010. They are now rated as junk and
their market is collapsing. Hence tax payers funds and banks will have to
inject liquidity into the system. A company named Glencore, which has $36bn of
net debt and a market value of $20bn. Its size might be high as $100bn.
Only advice STAY
AWAY FORM STOCK S.GET ALL IN CASH. Buy large caps and avoid margin trades.
Posted by INDRANEEL SEN GUPTA at 9:38 PM 0 comments
Tuesday, February 9, 2016
NEGATIVE INTEREST ...PENSION ASSETS ARE AT RISK
Well also one thing I would discuss
later in this article is that Iran is not in discussion with Saudi Arabia its
European companies. Now, coming back to the earlier point which I was
discussing,that no more QE and no more printing of money would be working now. We
have witnessed negative interest rates on government bonds from Switzerland,
Denmark, and Germany and now Japan. The best game for any economic
policy is the weaken its currency, which leads to cheapening of its exports and
let other countries buy more of its goods and services particularly those have
higher-yielding currencies. Further the problem will be more with pension and
retirement based funds across the globe since restriction of withdrawal as well
as no gains on their savings would spook more problems in the long term. Deflation
problems cannot be solved through Negative Interest rates policies. If we look
at the history over the last 1 year we find that ECB came up with rate at minus
0.10% in the summer of 2014. It did not work to control deflation and it
further lowered its rate at minus
0.30%. In Swiss Central Bank came up with a minus 0.25% interest rates and
later on dropped it further to minus 0.75%. The problem did not end here, infact
many commercial banks are introducing fees to open and maintain an account
We have already witnessed
currency war and now we are going to witness a new paradigm of interest rates
where Negative Interest Rates will play replacing Zero Interest rates. After
Japan now many countries across the globe would move towards this policy which
will spook a bubble burst for the debt market and Sovereign Wealth Funds in the
long term.
Negative interest rates mean that
in order to park funds in bank one has to pay interest. Ideally it never happens
like that but bank doesn’t pay any interest rather they deduct the expenses
form the savings of cash. This is what Switzerland’s interest rates have
been doing over the last 10 years. On the other hand many will say that
negative interest rates might induce more borrowing and consumption, but there
is heavy risk of people exiting bonds and debts product into cash. So US
will not go for negative interest rates. Coming to other economies we might
have to wait and watch what other economies do to keep their export market to
alive. The problem is with the Pension fund manager who need generate positive
cash flow to the elderly person. Now the worst thing which will happen is
they will scout desperately for high-yield bonds, emerging market debt, and
high-dividend equities which will create bubble in debt and hybrid
product categories.
This is one of the prime reasons why
companies like Moragn Stanley, Credit Suisse and other banker have been cutting
down their debt wealth management part especially in Asia. They have huge herculean
pressure of providing returns on their investments as they getting into lending
game whether is real estate debt, structured credit products or high yield
loans to fetch returns over. Now with this ongoing problem of debt sovereign
wealth funds are now seeking permission to invest in infrastructure, renewable
energy etc. This has two parts 1) Safe
assets are at risky point and 2) Investments in other sectors will be like
bubbles being created. The largest sovereign wealth funds in the world include Norway at
$900 billion; UAE Abu Dhabi at $775 billion; Saudi Arabia at $740 billion; and
Kuwait at $410 billion. China has three such funds including Hong Kong that
total $1.5 trillion.
Iran is not in recent discussion with
Saudi Arabia for crude price negotiation. It’s actually the European companies who
are approaching the Middle East for crude negotiation since Euro will come up
with bond purchase and in order to get buyers Middle East Sovereign Funds
inflow in the bonds are crucial. Hence the trade off is going to begin. Everyone
is trying to pull funds from the other asset classes particularly from Debt and
invest in equities. Coming to the last part US fed might find its difficult to
go for interest rate hike but in order to pool and stop leakages of fund
outflow from Sovereign they may go ahead. Further a pull of US economy in term
of interest rates coming down might act as political weapon to win but might
not be reasonable things since that would create sentiment of weak US economic
growth prospects. The current situation
is very crucial. There is no proper road map for the recovery as long as Crude
and Commodity prices don’t grow.
Posted by INDRANEEL SEN GUPTA at 11:00 PM 0 comments
Labels: WORLD ECONOMY
Sunday, February 7, 2016
US TO EXPORT NATURAL GASES
US has started export of its
crude and now by 2017 we will see US will replace the exporting courtiers of
gas exporting. Yes US economy is aggressively working on pipelines to transport
the natural gas to the developing countries and its going to start exporting of natural gases. The global market of
energy consumption is going to change over the next 10 to 15 years or may be
faster than that period, since coal consumption is being reduced aligning the Paris
summit and also advance technology in production of crude and gases have
resulted significant change in energy consumption pattern. Decreasing Canadian
imports and increasing exports to Mexico would open the gates for US economy to
get into export of natural gases. If we look at numbers we find that in the first 10 months of 2015, U.S. gas
production was up 35% over the same period in 2008. Over that same
time, U.S. imports fell 31%, with imports into the key U.S. north-east market accounting for the significant drop. Enbridge, Nexus and Spectra
Energy are working hard to develop the pipelines for natural gas transfer.
The developing or importing countries have understood
very clearly about the benefit of low crude prices on their current account and
on their fiscal conditions. This is going to be the key factor which will
provoke many developing countries to adopt for alternative energy sources like
wind or solar and natural gas leading to shift from crude dependency. Its something
going to be like In-dependency from Energy Import. At the same time these importing
countries have come to know that how much wealth and prosperity these exporting
countries enjoy at the cost of developing countries crude import.
This is the space where opportunity
for alternative energy sources gets birth and will replace the crude dominance over
the next 10 to 15 years. The theory is clear not only save energy but also save
money. Saving import bills improves the economic condition of an country is
well read by everyone. But coming to India I find high levels of corruption and
poor education of minister level candidates leads to slow development of
alternative energy sources. Moreover we easily link export with our import which
leads to decline of an economy. India might be later starter but it has learned
the lesson of saving money through low crude prices.
US economy have learnt very
well that crude export is going to create investments, gross capital formation and
also employment which keeps the American consumption market alive. Hence Middle
East will be replaced from the map of crude dominance and developing countries
would find significant growth opportunities in their economic investments as
they save funds. Now the question is how long the crude prices will remain low.
Well forget about the betting game focus better on long term strategy of making
the economy free from import and more dependent on own energy production. Recessionary phases will continue and
developing economies will have to tide over the same. Hence no point of getting
into the myth that economic condition of the global economy is healthy and its
going to remain in growth path over the next 50 years. Countries need to come
with strategy where energy independence is achieved. The world is really changing its pattern of energy
consumption.
Today, air planes fly into For
example in Australia gas-derived jet fuel is being used, Germans pump gas-born
diesel from Qatar. Shipping firms plan LNG fuelling stations on the Great Lakes,
Brazil buys chilled gas from Norway and Tesla auto mobiles purr along American
highways charged from power stations that once burned coal. The growing networks
of pipelines are going to replace crude and also current Research and Development
in engineering is going towards the path of crude independence. So invest in alternative energy and also
invest on pipelines as they will bring in more profits in the long run to
reduce the transportation cost which will lead to more money savings for the
importing countries.
Posted by INDRANEEL SEN GUPTA at 12:10 PM 0 comments
Labels: US ECONOMY
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- COST ACCOUNTANTS OPPORTUNITY FOR INDIAN RAILWAY
- EVERY 100 YEARS PRICE CHANGES...MORE SWF TO REEDEM...
- HYBRID BOND...NEVER EXPLAINED PROPERLY
- HYBRID BONDS....TO BLOW UP MANY BANKS
- GOLD @$1500 /OUNCE...NIFTY MORE PAINS...GLOBAL ECO...
- NEGATIVE INTEREST ...PENSION ASSETS ARE AT RISK
- US TO EXPORT NATURAL GASES
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February
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