Dr M Khalid's global village blog

Graphic: China is not very dependant on USA for exports: Stephen roach wrote in the TIME magazine: The global connection is underscored by America's voracious appetite for foreign credit. Overseas investors now hold about $4.5 trillion, or 48%, of all U.S. Treasury securities. In late 2008, China surpassed Japan as America's largest foreign lender; it now accounts for nearly 30% of Treasuries owned overseas. America's addiction to foreign capital did not emerge out of thin air. It stems from a chronic shortfall of saving — an imbalance that was deeply embedded in a culture of excess and bubbles. Aided and abetted by reckless policies, Americans became convinced that open-ended housing appreciation was a permanent source of wealth. Consumers no longer relied on the income they earned at their jobs to produce their retirement nest eggs and emergency accounts. Instead, they became hooked on credit and the ability to extract purchasing power from the housing bubble. ...

If gold is not money, Why do top Banks of the world hold gold as a reserve? And why do countries keep gold as a reserve? Banks value gold above currency is proved as they do transactions among themselves keeping gold as collateral. (Ref: LCH.Clearnet to accept gold as collateral - FT.com http://www.ft.com/intl/cms/s/0/362f211e-f00b-11e0-bc9d-00144feab49a.html ) China ranks at more than no.30 in terms of per capita Gold reserves. However, It ranks no. 1 in terms of Forex holdings. The U.S. posted a record cross-border investment outflow in June 2015 as China and Japan reduced their holdings of Treasuries and private investors abroad sold bonds and notes. The total net outflow of long-term U.S. securities and short-term funds such as bank transfers was $153.5 billion, after an inflow of $33.1 billion the previous month, the Treasury Department said in a report today. The June figure, and $40.8 billion in net selling of Treasury bonds and notes by private investors in June, were ...

If you have a home loan, you may have often thought of repaying it, either in whole or in parts. What’s the best way to repay? We receive a lot of queries from young double-income-no-kids (DINKs) clientele, whose primary and high priority goal is buying that “dream home”. On an average, one out of five clients asks such a question. They are usually in the middle of paying a home loan, or have booked an apartment and want to know which is the best method to fund it—through regular equated monthly instalments (EMIs), or only interest payments for underconstruction properties. What are the tax benefits that they can claim in both options? Whether the vested stocks they receive annually or the bonus they get should be directed to reduce their home loan liability? Which is the best EMI option: fixed or floating? Which option to choose when interest rates are rising or falling, and what is the fine print on “fixed interest rate”? These are just some of the questions that we receive on a reg...

  Have some surplus funds and in two minds about how best to use it? Yes, you can invest in tax-free bonds offering attractive interest rates of about 8.7 per cent. But what about your home loan on which the interest rate has been galloping? We offer four tips on how to make the choice. Suppose you have a joint loan of  Rs.  30 lakh at 10.5 per cent with a tenure of 20 years remaining. KEEP THE EMI STEADY You now have surplus funds of  Rs.  1 lakh and are in the 20 per cent tax bracket. By prepaying  Rs.  1 lakh, you can reduce the monthly EMI by  Rs.  1,000 – from around  Rs.  30,000 to  Rs. 29,000. In this case, the term remains 20 years and the interest paid through the life of the loan works out to  Rs.  40 lakh. However, if you pre-pay, but opt to retain the same EMI, the loan could be paid off in 18 years. Total interest paid then reduces to  Rs.  35 lakh. The original loan would have...

Switzerland stunned global financial markets Thursday, slashing its official interest rate to -0.75% and abandoning its attempts to cap the franc’s exchange rate against the euro, against a broader backdrop of central bank alarm at the slowing world economy. The Swiss National Bank’s move is nothing short of a revolution in the world of finance: no central bank has ever set its official interest so low. In pushing rates so far into negative territory, it is consciously destroying the value of investments in the franc in an effort to scare off ‘hot money’ that has flooded the country in search of a ‘safe haven’ from turbulent global markets. Such flows have been the bane of Switzerland since the start of the Eurozone debt crisis in 2010, pushing the franc up to a level that makes life near-impossible for the Swiss economy. But the SNB’s move is also part of a broader wave of anxiety about deflation in large parts of the world economy, an anxiety that is growing as the collapse...

SINGAPORE, Jan 19 (Reuters) - Gold held close to a four-month high on Monday as uncertainty in global markets pushed investors towards the safe-haven metal, with the focus this week on the European Central Bank's policy meeting. FUNDAMENTALS * Spot gold was firm at $1,278.21 an ounce by 0046 GMT, near a four-month high of $1,281.50 reached on Friday. * The metal gained nearly 5 percent last week after Switzerland unexpectedly abandoned a cap on the franc. * Dealers assumed that the Swiss National Bank had moved with the knowledge that the European Central Bank would take the plunge into full scale quantitative easing at its policy meeting on Jan. 22. * The euro flirted with 11-year lows early on Monday as investors braced for the ECB to take its boldest steps yet to combat deflation and revive the euro zone economy. * Sources have told Reuters the ECB may adopt a hybrid approach - buying debt and sharing some of the risk across the euro zone while national central ban...

The combined wealth of the world's richest 1 percent could overtake that of the other 99 percent by 2016, according to a report by Oxfampublished Monday, as billionaires, politicians and business leaders gather in Davos for the annual World Economic Forum. In a study called  " Wealth: Having it all and wanting more. "  the international charity warned that a sharp rise in inequality was holding back the fight against global poverty at a time when 1 in 9 people do not have enough to eat and more than a billion people live on less than $1.25 a day. Getty Images Of the remaining 52 percent of global wealth in 2014, about 46 percentwas owned by the rest of the richest fifth of the world's population. The other 80 percent of the world shared around 5.5 percent, according to Oxfam. Rising inequality has moved into the spotlight in recent years amid concerns that living standards have been hit by slow economic recovery in the wak...

The Euro hit a five year low against the dollar this week. The step taken by Swiss National Bank (SNB) resulting in massive pressure on the Euro is only the tip of the deep faultlines among the Eurozone countries. As the Greek elections loom, there could be proposals to break the Euro after the results. As per the book 'he End of the Euro: The Uneasy Future of the European Union' by Johan van Overtveldt,Minister of Finance of Belgium, the Euro is clearly unstable. As the world's powerful economies collaborate to establish closed transaction channels among themselves by passing the USD and any other currency, There is increasing risk for Eurozone to face pressure if the currency becomes unreliable due to volatility. If the breakup of the Euro takes place abruptly, it will lead to greater pain. A better approach can be a gradual, controlled breakup of the Eurozone into two blocks as suggested by several economists including Philip Booth, Institute of Economic Affairs. ...

Scientists, like mothers, have long suspected that midnight snacking is inadvisable. But until a few years ago, there was little in the way of science behind those suspicions. Now, a new study shows that mice prevented from eating at all hours avoided obesity and metabolic problems — even if their diet was sometimes unhealthful. Researchers at the Salk Institute for Biological Studies in San Diego and elsewhere began experimenting with the eating patterns of laboratory mice in a  previous study . On that occasion, some mice consumed high-fat food whenever they wanted; others had the same diet but could eat only during an eight-hour window. None exercised. The mice that ate at all hours soon grew chubby and unwell, with symptoms of diabetes. But the mice on the eight-hour schedule gained little weight and developed no metabolic problems. Those results were published in 2012. For the new study,  which appeared in the journal Cell Metabolism in December , Salk scientists fe...

Fallout from Switzerland’s wildly swinging currency ricocheted around the world, hitting global banks with tens of millions of dollars in losses and triggering the collapse of some brokerage firms. Deutsche Bank  AG suffered about $150 million in losses Thursday after the  Swiss National Bank  abruptly removed the cap on the Swiss franc’s value , sparking a massive rally, according to a person familiar with the matter.  Barclays  PLC also racked up tens of millions of dollars in losses, although they totaled less than $100 million, another person said. Brokers around the world are crumbling in the wake of the Swiss National Bank’s shock decision to remove the cap on its currency. WSJ's Tommy Stubbington reports. Photo: AP. Meanwhile, a major U.S. currency broker warned its equity was wiped out, a U.K. retail broker entered insolvency and a New Zealand foreign-exchange trading house collapsed. Regulators in Europe and Asia scrambled to assess th...

Schlumberger Ltd, the world's No.1 oilfield services provider, said it will cut 9,000 jobs, or about 7 percent of its workforce, as it focuses on controlling costs in response to a continuing fall in oil prices. The company took an already announced $1 billion charge in the fourth quarter related to the job cuts and trimming of its seismic business. Schlumberger 's customers—oil producers—have slashed capital budgets and reduced the number of rigs amid a nearly 60 percent slump in oil prices over the past six months. http://www.cnbc.com/id/102342793 also see: http://drkhalid.blogspot.in/2014/12/will-sub-70-oil-let-petroleum-industry.html http://drkhalid.blogspot.in/2014/12/shell-chevron-schlumberger.html

Since 2011, 327658 kids went missing in India. That is 224 kids per day ! New Delhi:  The Supreme Court, while expressing serious concern for missing children, has asked the National Police Academy, Hyderabad, to consult police authorities across the country and to come out with a study curriculum and a training module for  sensitising  police on child rights and to trace missing children, prevent human trafficking and child  labour  and other vices that go with exploitation of children. A bench comprising Justices  Madan  B.  Lokur  and  Uday   Lalit  asked the Centre and the States to have coordinated efforts to trace missing children. The bench gave this direction during the hearing of a writ petition filed by  Bachpan   Bachao   Andolan . ================================= INNOCENCE LOST ================================= 3,27,658 children missing since 2011 in India 1,81,011 of the missing childre...

Copied from a public notice ----- ----- Ministry of External Affairs (Patiala House, Tilak Marg, New Delhi) Government of India CPV Division ******* Dated: December 23, 2014 ******** PUBLIC ADVISORY *** Indian citizens living in India and abroad are advised to apply for urgent re-issuance of their passports in the following (i). HANDWRITTEN PASSPORTS The International Civil Aviation Organisation (ICAO) has set a deadline of the 24th November, 2015 for globally phasing out of all non-Machine Readable Passports (MRPs). From the 25th November, 2015 onwards, foreign Governments may deny Visa or entry to any person travelling on a non- Machine Readable Passport. The Government of India has been issuing Machine Readable Passports since 2001. The Passports, however, issued before 2001 and particularly those issued during mid 1990s with a validity of 20 years will fall in the category of non-MRPs. All han...