No one explained the anguish, compromises and toil of an Indian expatriate better then V S Naipal. He himself was a legend, who wandered throughout his life balancing between the memory of his native India and aspiration of the West where he grew up.
In continued grandiose adventure, since the days of Pandya, Chola and Gujrati traders, today we witness a generation of Indians who have toiled to rise to a triumph level of glory and leadership position in Industry, polity, Research, Academia, Business and profession all over the world. The immediate compensation to their hard work were carefully preserved and invested across the Globe in dollar denominated wealth in myriad form. It certainly is more than just a token of their hard work and struggle which happened often in the most hostile living condition.
Dollar for multiple decades has driven its fortune from a stable dominant expanding US domestic economic condition. Although the US economy in those hey days was never a surplus on both fiscal and current account, yet the US $ emerging as world currency post Bretton wood Agreement, eclipsing all these infirmities. Huge majority of World trade was settled in the US $. American banks were the largest depository of dollar denominated Bonds. And last but the least the US emerged as the biggest importer and consumer of consumables. Fortune favored every maverick monetary and fiscal action of the USA until China flooded the world with its cheap goods and weak currency for nearly two decades.
Covid -19 had finally brought the sequences of challenges closure and closure to the US system. Misery and drought in domestic resources is visible across the US in just little more than a year of muted economic activities. The US which imports the majority of food stuff is struggling to balance between its supply chain and food inflation. The huge silent migration of have not’s from South America is another challenge to existing strained resources. The cycle of economic and Industrial activities are receding and so is the availability and circulation of capital in the economy.
The Government of the US has resorted to two alternatives. It raised the rate of personal taxation and flooded the market with zero cost money. In the last one year the US has unbelievably issued Bond worth 5 Trillion dollar without a dollar addition of actual growth in the Economy. The Debt to GDP which was capped around 100% of GDP has taken a beating now and the new ratio is crossing 120% of debt to GDP ratio.
Who will bell the cat?
Amongst the seemingly receding world consumption and rising waves of pandemic where the scope of productivity in the US economy of 32 Cr population is visible? Who would pay to the FED for the outstanding debt it is raising and distributing for only revenue expenditure. The economist and Business commentator are silent and not offering any critical scrutiny. FED has started this experiment of expanding cheap money around 2000 in various Quantitative easing formats only to be followed by both Europe and Japan very soon.
Inflation, induced demand through cheap debt without adding value to real absolute economy is an unviable combination, a catastrophic decision for the World currency and economic system. US $ has a great stake in the world. And remotest possibility of depreciation or downward revaluation will bring tremor to the value of dollar denominated wealth.
Expatriate Indians, Who have so far rejoiced the fruits of their exceptional talent and acumen should examine, compare the prospect of competitive Valuation and Value preservation between US $ and Indian Rupee, and should act accordingly.
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