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Global Economy will accelerate significantly January 30, 2009

Posted by Bipin Agarwal in Global Economy, IT Offshoring - Future Direction, Politics and economy, Quality of Living, Real Estate Development in Global Economy.
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Next Twenty five years for the world will be significantly different from last one hundred years as far as economic growth and quality of life is concerned. There are lot of Think Tank (politically or business interest motivated), economist and so called expert and they like to predict the future based on past experiences related to recession and depression.  That is the path of least resistance, run some mathematical model and come out with the prediction. If you are right, then you are viewed as genious, if you wrong, people ignore. Current economic crisis is different from past, and future opportunity is also much larger because of the liklehood of broader consumer participation.

What is key difference in the past and future? Information flow and closing of the knowledge gap. World has yet to feel the real impact of internet and information flow as as  a result. We are still building the infrastructure and application for internet impact age. Internet infrastructure and associated applications will be in place in next few years. Just remember how car is a common means of transportation only in the developed world after fifty years. Full impact of this mobility around the world still has to be realized.

What are the three basic revolutionary changes in last several hundred years that will affect the masses and result into the economic growth.

  1. Invention of Clock – allowed us to capture the value of labor
  2. Personal/public transport vehicle – helped reduce the distance
  3. Internet – Information flow to masses

Impact of internet on economic growth will be more profound then any of us can imagine. Current global economic issues are just a blip. Here is why next twenty five years will see significant economic growth and improvement in average  Quality of Living of the world population.

  • Significant current economic problem is related to US and UK  credit crisis only because of  bubble in home prices, reckless spending by consumer, mis-management of policy by US government, social program, and wars.
  • Rest of world continues to save.
  • Internet is creating significant business opportunity for telecoms service providers, retailers, media company, manufacturing, and technology companies.
  • Alternative energy focus (wind and solar) will create significant business opportunity for energy companies, manufacture, service providers.
  • Non American world (Asia, central America, South America, Europe, Africa, and others) will have access to technology and infrastructure related to energy, transport, and internet that is available to only 20% of the world population currently.
  • Information availability will inspire people and will create significant need for consumption related to improving the quality of living. This will create significant opportunity for health care, organic farming, travel & tourism, electronics, real estate, etc.
  • World population is growing and will create significant opportunity for real estate and related service company to provide affordable housing.
  • Financial service sector will be core participant to this growth. All the business sectors require financing and financial sector will lead the growth beyond our imagination.

We should not confuse the global economic growth with the performance of stock market such as S&P, Nasdaq.  They are barely co-related. We can keep debating about the de-coupling of America with the rest of the world, the fact is that it has already happened. Just because at the present situation, stock market in Asia go down as the American stock market, it gives a false impression that there is no de-coupling. Just look, largest company market capitalization (China banks) are not even listed here. Not every company that will benefit from this opportunity will be listed on NYSE or NASDAQ.  Not every consumer that will participate in the economic growth is a resident of developed country.

If you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

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Cornorstone of American recovery – Energy self sufficiency January 23, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Recession.
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Obama in his inaugural speech has clearly demonstrated that it is easy to communicate when you use simple language, no paragraph just few words, know when to stop.

Our president can use same approach to get America excited about the future and people from all walk of life will come together to solve the problem. That is how John F. Kennedy did it, put a vision of getting to moon and America became a different place.

President Obama can declare that “USA will be self sufficient in energy in next eight years”.  Once the vision is articulated all the policy decision for all aspects of the administration including, foreign policy, middle east policy, trade and currency policy with countries, energy policy, bailout of financial institution, manufacturing, public infrastructure, environment, tax of individual and corporate, social security, medicare can be made under the over arching vision.

What Does Energy Self Sufficiency means?  There are serveral major aspects of it:

  1. Energy efficiency – This consists of energy efficient lights, green building, making current home and commercial building  energy efficient
  2. Taxing the gas (renewable energy tax) and  electricity (level of usage) – incentive drives the behavior.
  3. Alternative energy – solar, wind, bio fuel, clean coal, nuclear with the focus that USA will manage with no, or minimum import of technology
  4. Electric car, Hybrid car with production in US
  5. Smart Grid
  6. Public transport infrastructure around Twenty Minute Lifestyle (walk to living, focus on reducing car as a major means of transport)

This will also help keep the interest group and lobby at bay. It is important to mandate that all manufacturing related to this initiative will happen in America.  Supporting this tax credit will go a long way. Remember, government job is to define the priority, create policy to support that, America has enough intellectual capital and hard working people to make it happen.

I wrote this article on Jan 23rd. Here is the good news, our president Obama called for independence from oil on Jan 26th. It is a great step forward for American. Every other country should do that. Go OBAMA. Following is the link to news from BBC.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

How to revive Western Economy? January 19, 2009

Posted by Bipin Agarwal in Global Economy, Politics and economy, Quality of Living, Real Estate Development in Global Economy, Real Estate Development in India, Recession.
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Global  economy has a role to play in reviving the economy of countries, but is to change to being a mix of global and local. I call it Glocalization. This is the new mantra for making the western economy vibrant. There are several ways it can be done. I will talk about some of them below. If you have other ideas, let me know.

Business Model

Business model that has been built in the west based on central control, scale the business some how, consolidate, etc. does not work. CitiBank, BOA, RBS, Countrywide, fortis, just some example.  Creating long term business will require some kind of local ownership not just marketing such as HSBC (your local bank). Some sort of franchise model for the front end. Back end efficiency can be consolidated same way as stock exchange does it.  It will create local jobs, loyalty, community involvement, etc. Small to Medium business should dominate the business activity. What if Starbuck had a local owner for each of the store, there will be as many business owners, no union, local connection, brand value, etc.

Manufacturing

There has to be local manufacturing. Bottom sixty percent of the population survives on low tech manufacturing and providing services to the other forty percent. Without low tech local manufacturing, it will be tough. Could it lead to increasing the cost of some of goods manufactured locally, yes, but there is no reason for common person to leverage low cost of labor from some other part of the world to have artificial better life like we have been having in Western world.  Western countries have a life time opportunity to keep the next generation of technology local, create local jobs, and eliminate the trade deficit.

Education

We are fortunate that we create lot of intellectual capital because of higher education, then we turn around and send the export the technology for using the cheap labor, makes no long term sense. One area when US can take leadership is green energy (solar). All the electric vehicle should be created here for local consumption.

Immigration

USA is doing a poor job of managing its immigration policy. Lot of people from all over the world come here for higher eduction, we need to make every effort to keep them here. If  anything we should encourage people from all over the world come here to get educated and make every effort to keep them here.  This is the biggest growth area and biggest competitive advantage for USA in  21st century.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about

Obama Stimulus – Great for Real Estate and global economy January 11, 2009

Posted by Bipin Agarwal in Global Economy, IT offshoring and Real Estate development, Politics and economy, Real Estate Development in Global Economy, Real Estate Development in India.
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President-elect Obama will announce a huge financial stimilus package in the first qtr of 2009.  While there is no known perfect solution for economic downturn, the package to be announced with details that are available in the press, looks like a good start.

Infrastructure spending will not only help create employment, but will benefit business in the area of real estate, commodity, car, public transport.

Green Energy initiatives should help promote the sales of car, reduce the trade deficit, create employment, etc. Risk here is that this initiative is not hijacked by the lobby related to bioful (bad idea). The focus should be solar and wind energy. These are the two most viable non poluting source.

What we would like to see that there is significant money spent on public transport infrastructure so that new real estate development can be done around the concept of cluster community based on Twenty Minute Lifestyle (TM of REDHAWK Investments Group).  Rest of world can learn from this initiative as well. There is a good possibility that Stimulus will have significant spending on Broadband infrastructure, that will get the masses behind the next phase of economic growth.

Africa, South America, Easter Europe, China, India have a huge opportunity to follow the lead of this stimulus package and spend money on public infrastructure and green energy.

Once the details of the plan aer out, I will write again about the specific industry and opportunity that will be of interst for business and individuals.

if you have a question, about Global economy, Real Estate, and Politics correlation, feel free to ask

http://www.redhawkinvestments.com

Bipin Agarwal

bipin.agarwal@redhawkinvestments.com

https://twentyminutelifestyle.wordpress.com/about