Suresh asked me to write the future events ( 6 months to 1 year) in the backdrop of government losing all the ammunition.
This is very difficult to predict especially what would happen with 6 to 12 months. My long term view is that the Indian Economy screwed to the point of no return and it is impossible to repair the economy without a crash. Let us try to predict.
1. Rupee will nosedive further. It is possible that we will see 65 Rupees per dollar easily.
2. The effect of Rupee will automatically cause Repo and CRR to go up.
3. Share markets nifty and sensex will crash ( 4500-5000) to (12000-14000) levels respectively.
4. After Anna Hazare, middle class will come to road to protest against the real estate crash. Middle class who invested in speculative real estate will face the heat.
5. Banking system will be hit very badly. NPA will go up hugely.
Since this is something which would happen first time in India ( the sheer size), it would be scary. Be in cash.
This is very difficult to predict especially what would happen with 6 to 12 months. My long term view is that the Indian Economy screwed to the point of no return and it is impossible to repair the economy without a crash. Let us try to predict.
1. Rupee will nosedive further. It is possible that we will see 65 Rupees per dollar easily.
2. The effect of Rupee will automatically cause Repo and CRR to go up.
3. Share markets nifty and sensex will crash ( 4500-5000) to (12000-14000) levels respectively.
4. After Anna Hazare, middle class will come to road to protest against the real estate crash. Middle class who invested in speculative real estate will face the heat.
5. Banking system will be hit very badly. NPA will go up hugely.
Since this is something which would happen first time in India ( the sheer size), it would be scary. Be in cash.
H Mango,Thanks for the predictions.I agree that all those are very good possibilities.I am not sure what is our banks exposure on foreign borrowing.With the rupee falling over 10%,it must be substantially cutting into their provisions.
ReplyDeleteIn regard to point 4 I am skeptical.The last time our people got together was in 1947.We had some good leaders then.Now every leader has his own agenda so an eruption like Egypt seems unlikely