Life's been a little inconvenient for the past few months since I had a hairline fracture. Been quite immobile though I have started to move out lately. Lately, with the doc diagnosing me with the RSD disorder, it seems this will take a "little" longer....let's hope I get to be on my feet soon.
Aseem is a strong believer of Karmas. A couple of days back, on hearing about the RSD disorder, he asked me what is it that I had done for me to have to go thro' this and I said that I didn't know. Now, that is an issue. Well, if I don't even know what have I done (if that is indeed the case) then this is not going to be good.... :-)
Other than this on the personal front, nothing else worth writing home about. Quite honestly, this isn't worth writing about either :-)
Now, let's see what else is happening....around the world.....
Financial crisis - This seems like a 'milestone' in a series of events, to me. Milestone in terms of the transition of power from the west to the east. Now that we are talking milestones, let's see if we can separate this transition into 'stages' -
- Started in the 90s when the "flat world" concept came into being. Offshoring/Outsourcing were the execution part of the exercise. China became the factory of the world and India, the back-office.
- We moved into Wars on Terror - Suddenly, we saw the US borrowings climbing up at a faster pace....
- We see the subprime crisis. This is the decoupling stage. This is where the emerging economies realize that the they are expected to think beyond just servicing the 'developed' nations.
- Dollar dumped as the reserve currency.
- Rise of a new superpower.
We are in stage 3 now. This again, can be expedited if there is an Israel-Iran war anytime soon. Which does seem a probability. Common sense tells that it can have a very negative affect on the US economy with Iran threatening to block the strait of hormuz through which 40% of world oil passes.
Other than the obvious as to how the rest of the world will deal with this shift of economic strength, something more subtle yet more important that comes out of this is the emergence of a super-power. Will China take that place or will Russia retain its former glory? Well, Russia sure has been exerting its newly regained petrodollar-based-power on it's neighbors. But if I were Russia, I would understand that for me to be the post powerful, I need to take on my challenger to the throne - China. so, logically, we should expect some 'small' skirmishes between the two in the coming years. Let's see where that goes....
What this makes me think is how much of regulation should there be really. What we need to understand is that the subprime crisis was purely a case of greed but then don't all instances of growth begin with greed? What this instance really differs on is the fact that the "financial innovations" that this growth was based on (MBS, CDS, CDO etc.) were actually devoid of any real substance. Quite honestly, it makes you feel that the Wall Street was actually taking everyone for a ride. But does this mean that there should be more regulation to control such instances. Where do we stop? If we move in that direction, how far are we really from becoming socialists? What we need to understand here is that these people were some of the best brains in the country, who could honestly not predict this downturn. Everything looks simple on hindsight but it's the predicting that is challenging....
Other than the financial crisis, one of the other things that fills our newspapers these days is the hunt for new sources of energy. Most nations today have a dearth of energy to fuel our growth. It is actually quite stupid. Energy is one thing we have all around and it is that one thing we seem to be fighting over all the time. What this really tells you is how far we still have to go in terms of exploring our potential. Energy is all around us and yet we are unable to utilize it.
