{"id":38373,"date":"2018-09-27T07:05:59","date_gmt":"2018-09-27T12:05:59","guid":{"rendered":"http:\/\/olduvai.ca\/?p=38373"},"modified":"2018-09-27T07:06:28","modified_gmt":"2018-09-27T12:06:28","slug":"india-the-emerging-market-crisis","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=38373","title":{"rendered":"India & the Emerging Market Crisis"},"content":{"rendered":"
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India & the Emerging Market Crisis<\/a><\/h3>\n<\/div>\n
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India\u2019s financial markets are in the throes of this Emerging Market crisis. The Mumbai-based Infrastructure Leasing & Financial Services (IL&FS) is an over 30-year-old infrastructure lending giant that claims to have helped develop and finance projects worth $25 billion in Asia\u2019s fastest-growing economy.\u00a0The company recently defaulted on debt payments because it ran out of cash. This is illustrating what we have been warning about. As interest rates rise and the dollar, the first casualty\u00a0will be the Emerging Markets (EM). Because interest rates were driven to absurdly low levels in Europe and the USA, those who need yield ran off to the EM field.<\/p>\n

Central Banks cannot manage the economies anymore. We live in a porous\u00a0global economy. The Fed buying back 30-years bonds\u00a0to lower real estate loan yields was absurd. The false assumption was that only American owned such debt. But the dollar is the reserve currency. That meant that more than\u00a040% of such debt resided outside the USA. Central Banks can no longer manipulate\u00a0the economy using the demand side economic models. They drove capital rushing into the EM sector desperate for yield\u00a0\u2013 especially state operated\u00a0pension funds.<\/p>\n

This is why we have a serious debt crisis on our hands. The greenback is STILL<\/strong> going to press higher against the rupee. Just look at the pattern. This is NOT<\/strong> an isolated high. We are looking at a significant rally still on the horizon for the dollar.<\/p>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

India & the Emerging Market Crisis India\u2019s financial markets are in the throes of this Emerging Market crisis. The Mumbai-based Infrastructure Leasing & Financial Services (IL&FS) is an over 30-year-old infrastructure lending giant that claims to have helped develop and finance projects worth $25 billion in Asia\u2019s fastest-growing economy.\u00a0The company recently defaulted on debt payments […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5496,1954,1732,422,5479],"class_list":["post-38373","post","type-post","status-publish","format-standard","hentry","category-economics","tag-armstrong-economics","tag-emerging-market-crisis","tag-emerging-markets","tag-india","tag-martin-armstrong"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=38373"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38373\/revisions"}],"predecessor-version":[{"id":38374,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/38373\/revisions\/38374"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=38373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=38373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=38373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}