Source: a bad potato (id:iamhtd)
Recently, India has stirred up a thousand waves by announcing that its international trade will be settled in rupees.
Er, don’t make a mistake, it’s India’s local currency rupee, not ruble.
The Reserve Bank of India announced that traders can open special accounts in the banks of some trading partner countries, and all import and export trade can be settled and invoiced in rupees. The rupee price adopted by both parties is determined by the international offshore exchange rate, and this provision is announced to take effect immediately.
The news shocked many people.
Many people believe that this is the second major economy to implement the local currency settlement mechanism after Russia announced the use of rubles for settlement of friendly countries to Africa this year.
You seem to see:
India bravely jumped out and slapped the United States, which will accelerate the collapse of the dollar hegemony.
The United States has always been partial to India, actively pulling India to form an Indo Pacific Alliance, and was stabbed in the back by India mercilessly?
It is estimated that two countries will look confused after hearing this, one is the United States, and the other is India.
Although India has a bad brain and a strange brain circuit, which once made great people think for ten days and nights and can’t understand it, it is not stupid for common sense problems after all.
India knows whether the rupee is qualified to become an international currency, let alone challenge the hegemony of the dollar.
To become an international currency, we need to have the strength to become an international currency, and we need to have anchors that can endorse our own credit.
At present, there is still only one mainstream international currency, that is, the dollar. The euro, pound and yen of other western countries can only be regarded as a derivative of the dollar.
The anchor behind the US dollar is a powerful force, including global military bases, 12 aircraft carrier formations and thousands of nuclear bombs, which makes most international capital believe in the credibility of the US government and its ability to protect capital.
Based on this point, the biggest ability of the US dollar is to make it worse than the US dollar, that is, to collapse the credit of all countries, especially the “allies”, except a few more than 10 sovereign countries such as China, Russia, India and Iraq, and to make the euro, pound and yen worse than the US dollar at any time.
The credit of the Russian ruble is energy. No matter how hard Europe talks, it can’t live without oil and gas.
While the credit of Chinese currency is made in China, the western world can find at least 10 pieces made in China in any ordinary family, from pots and pans to household appliances, from T-shirts, shoes and hats to furniture toys.
Without made in China, leaving the Chinese supply chain is not only a matter of the sharp increase in manufacturing costs, but also the continuous somersault of CPI. Whether it can be done is a big problem.
Just like after the outbreak of the epidemic, the United States, while discrediting China, imports masks from China while holding its nose
But even so, at best, we can barely compete.
What about India? What does India have?
Is there any hard currency? I can’t seem to think of it
India has a lot of curry, but no one likes it except Indians;
The Ganges River in India is famous all over the world, but only Indians are used to it;
Of course, there are still many users in the world of generic drugs, textiles, software and movies in India, but the market is too small.
If India wants to fight against the hegemony of the US dollar, the United States probably doesn’t care about it.
India plans to pay rupees in international trade. Who does it? I want your rupees. What can I buy?
So why does India need to settle the Rupee? Why?
In fact, it’s very simple. India has no money.
Of course, India has more rupees, but there is no dollar.
In 2021, India’s export trade made great progress, reaching 418billion US dollars. Modi was very happy about this and made a special speech, believing that it was a decisive progress for India;
However, India’s import volume is US $611.8 billion;
India lost $193.8 billion once it went!
In fact, India’s deficit is a normal state.
From the founding of India in 1947 to the present, in more than 70 years, only two years has been a surplus, and the surplus is pitifully small.
The surplus in 1950 was US $7million, the surplus in 1972 was US $120million, and the annual deficit in the rest of the year.
And the deficit is getting bigger and bigger, more and more outrageous.
In January this year, India had a deficit of $17billion;
In May this year, India had a deficit of US $25.6 billion;
Moreover, India’s deficit also lies in the premise that it imports oil from Russia at a low price and sells it to Europe at a high price as a secondary trader. In February, India imported 60million barrels of ultra-low price oil from Russia, which can earn a huge profit of $50 per barrel.
Otherwise, India will lose even more.
If this trend continues, India’s rate deficit will probably exceed US $250billion in 2022.
Everyone does business in the global village. India needs a lot of imported products in dollars every year, and its own products can’t be sold. Of course, it has no money
India has many people, but what’s the use of that? India can’t say I can’t afford to pay. Let’s use people to pay debts.
Therefore, there was no choice but to announce that India would settle in rupees first.
As for whether the international market recognizes it or not, it can only be said
You may have a question. India has a huge deficit every year. Where does it get dollars to import products and import weapons all over the world, exceeding 10 billion a year to build equipment for all countries.
Today, India’s foreign exchange reserves are still $500billion. What’s going on?
Where did indian money come from?
This is really amazing.
Well, to sum up, India’s dollar mainly comes from four aspects.
First of all, India dares to borrow money everywhere. Today, India’s total foreign debt is more than $600billion, with interest rates as high as 8%, and the annual interest payment is nearly $50billion.
But India is in debt now anyway. The more it owes, the more it dares to borrow money
You may ask, India is like this, and anyone dares to lend him money?
This is the logic of the United States, not the worst, only worse.
If you say that India is rotten, Greece, Argentina and Iceland are all bankrupt. It’s not a bunch of institutions that lend them money. After all, now the world is in a mess and there are no good investment opportunities.
The second aspect of Indian money is the remittance of overseas Chinese, immigrants or migrant workers.
This is indeed India’s advantage as a populous country, because there are not so many industries at home, and many Indians go abroad to enter the world, especially in Silicon Valley, where many Indians engage in information technology and earn high salaries.
Many people make money and remit it to their families and relatives in China.
However, it is not the European and American countries that create the most foreign exchange for India, but the Middle East. In the six GCC member states of Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain, as many as 8.5 million Indians work, accounting for about 40% of foreign workers.
In Bahrain, there are 570000 Indians, more than 500000 Bahrainis!
These Gulf countries are most in need of oil and US dollars. Therefore, in 2018, India was the country that received the most migrant remittances in the world, with a total amount of US $78.6 billion, more than 10% of the total global migrant remittances;
However, these Indian workers earn money very hard, which is all hard work. In 2021, the Russian satellite news agency reported that at least 2000 Indian workers died due to overwork and heat during the construction of World Cup related facilities in Qatar
The third aspect of Indian money is foreign investment.
It is also because India’s huge population market has always been the favored object of international investors. By 2020, the global investment attracted by India reached US $59.6 billion, almost 30% of that of China;
And India has an “advantage”, which is to make your money come in and go out
It is often dollars that come in and rupees that go out.
Chinese mobile phone companies have the most say in this regard. Mr. Lei said tearfully: I abide by the law, but India just asked me to pay a fine of 65.5 billion rupees.
In 2022 alone, a certain rice was “harvested” by India twice Either detain deposits, freeze assets, or find excuses to fine.
Do you think India is aimed at Chinese enterprises?
In fact, many European and American Chemical, automotive and other enterprises that invested in India entered India wearing gold and silver, but finally left India naked.
India said: if you earn my money, you must spend it in my territory, otherwise it will make you look good!
In India, it is not only the slow progress of the project, but also the tears of Japanese enterprises. Only in 2021, Wal Mart was fined $1.35 billion by India, Amazon was fined $170million, and Google was fined $21.17 million;
Ten years ago, I was in the mobile phone industry. At that time, the Chinese market was almost saturated. Many peers I know focused on two overseas markets, one is Africa, the other is India.
In many African countries, public security is in a mess and corruption is serious, but at least 8 of the 10 countries that came to Africa have made money back.
Well, what about India? As far as I know, there is also something I can earn. All I earn is rupees
Unfortunately, can rupee buy a house in Beijing, Shanghai, Guangzhou and Shenzhen?
The third brother smiled: you want to earn my money. You really want to be blind.
Of course, you must ask, India’s investment environment is so poor, the world knows, then why so many people go to India to invest?
You think you’re the only one smart. Ask Mr. Lei
Mr. Lei said that the market of 1.4 billion people is so vast that I have to give up. It’s a pity.
Of course, foreign investors are not stupid. In 2021, India still absorbed us $45billion of foreign capital, but US $32billion withdrew from India. Compared with the two sides, only US $13billion remained;
Fourth, India’s largest industry, er, is not selling grain, but Fraud business.
The fraud business in India is the absolute conscience of the industry and basically only pits Americans
According to the survey data of the New York Times, as many as 56million people in the United States have been cheated by telephone, and 17% have been cheated several times. A large part of these fraud calls come from India.
In 2020, Indians defrauded US $28billion through telephone fraud, including US $20billion from Americans and about US $8billion from Canada.
In 2018, a statement on the website of the U.S. Department of Justice said that 24 members of a telephone fraud Gang headquartered in India were sentenced to four to 20 years’ imprisonment, and they defrauded hundreds of millions of dollars of U.S. citizens.
This business in India can generate stable revenue of US $20 billion to US $30 billion or more every year.
Why can Indian gangs only pit Americans? Because they have several innate advantages.
First of all, because English is the common language in India, there is no problem communicating with Americans;
Secondly, because of this, coupled with the advantage of labor cost, India has undertaken a large part of the service industry from the United States and Europe, the most important is the call center outsourcing business. According to the data in 2020, India has more than 2000 call centers.
Indians provide services for U.S. tax departments, debt companies, credit card departments, insurance companies and other enterprises. From selling mobile phones to notifying overdue credit cards, the business of the call center can be described as diverse. The business can be said to be very skilled, and at the same time, they have mastered a large number of American information
With these innate advantages, Indians are extroverted and thick skinned. They can talk and boast. In addition, India trains nearly one million engineers every year, but it can only provide about 200000 jobs, and a large number of engineers can’t find jobs So the customer service center is combined with software engineers who are proficient in information, which is amazing!
India’s fraud business against the United States soon industrialized. The basic routine is to pretend to be a staff member of the tax or Drug Enforcement Bureau, falsely claim that the other party involved in the case should freeze accounts and other operations, and ask the other party to transfer money Basically, one swindle is accurate, and the success rate is very high.
You know, in 2020, 200million people in India were hungry and exported rice, that is, in exchange for $8.7 billion in foreign exchange, but the fraud group created more than three times the income!
With the above four items, when India is doing international trade, at least it has the money to pay and will not write a blank note.
However, the money from these four items will not be so comfortable to use.
Because foreign exchange reserves are not funds that the government can call at any time, but all foreign exchange savings of the country and investors.
India’s life is very tight. No amount of money can support the annual trade deficit.
Coupled with India’s lack of energy, China’s lack of oil, India’s oil cloud content is less, only 1/4 of ours.
The first loan is to repay. Even if you don’t repay the principal, you have to repay the interest, and the interest is rolling more and more, which has been overwhelmed today.
One day I can’t afford it, that is, the country goes bankrupt, the financial collapse
The second is personal remittance. Basically, it is the overseas Chinese who call their families and relatives to make living funds. The theory is that the state has no right to misappropriate. Once misappropriation reaches a certain degree, the US dollar cannot make ends meet, and finally a bank run will occur, and the credit will also collapse;
The third is the money that foreign investors have in Indian banks, which cannot be misappropriated. Once the Indian government uses it, when foreign investors want to evacuate, the bank will be ruined if it can’t give money
It is no problem for India to squeeze or fine individual investors occasionally, but once it is obvious, all Indian investors will run overnight.
So India learned, and now it seems to be specifically aimed at Chinese enterprises
The fourth item of money comes from a wrong way. Indians want to wash their money and “run” out. Of course, modi said it’s not so easy for you to run
Anyway, that’s what happened in India.
The Central Bank of India has foreign exchange reserves of 630billion US dollars, but the available foreign exchange reserves are only about 60billion US dollars.
At the beginning of this year, with the Federal Reserve raising interest rates, the situation in India has turned sharply downward.
From June to July, in just one month, the rupee plummeted by 7%. Of course, compared with the yen and the euro, the figure of 7% is not big, but in addition to the United States, India is the world’s largest trade deficit country, which is fatal.
The United States can print dollars. What about India?
Although other industrial countries have deficits, they are not as outrageous as India.
In May, Vietnam had a deficit of $1.7 billion, which was enough to surprise. India directly did 15 times!
Once the exchange rate of a large deficit country such as India falls by 30% or more, the foreign exchange reserves will be dried up in two months.
At that time, if you can’t even pay the interest on your foreign debt, you will be declared bankrupt just like Sri Lanka.
In order to stabilize the rupee, in 2020, the Central Bank of India has purchased 43billion rupees and Indian bonds.
The remaining dollars are really not much
This is not all. Since the beginning of this year, US $29billion of foreign capital has been withdrawn from India, and US $33billion of stocks have been sold by foreign investors.
India, on the brink of the triple kill of stocks, bonds and remittances, may well collapse the rupee
Therefore, India urgently announced that rupees can be used for international trade.
Fortunately, India says yes. If India says yes, it is estimated that everyone will start panic selling rupees and running on the US dollar.
But this policy of India is almost useless. Who would be willing to hoard a pile of rupees.
Many people may think that countries like India want to settle in rupees, which is also a blow to the dollar.
Maybe it’s a little bit more or less. It has a 0.0001% bonus attack on dollar hegemony.
But modi must not be in the mood to think about this problem. Now he just wants to stabilize the rupee exchange rate.
Moreover, India does rupee settlement. Who knows who he will target?
India, a country with an extremely poor business environment, can’t do a good job in foreign trade enterprises. It takes a long time to settle a pile of rupees
It is gratifying that India is expected to become the world’s most populous country in the next few years.
Then, Indian migrant workers have increased, and fraud groups have a new force
As for the rise of India, forget it.
Recently, many people said that what we should worry about is India, an “emerging country” with a large population.
I think it’s completely groundless. Whether a country’s population is wealth or burden ultimately depends on whether the country has enough matching industries to support the employment rate.
With sufficient employment opportunities, population is the driving force and wealth;
Without employment opportunities, population is a burden.
Quite simply, if India’s population becomes 3billion, do you think India will explode in situ or rise here?