Posted May 20, 2014 by Martin Armstrong
QUESTION: Mr Armstrong, first let me thank you for the wonderful service you are performing to common people like me. I used to be strong believer of conspiracy theories and a gold bug but something did feel right until you came along and explained how things really worked.
I’m an Indian software professional working for one of the conservative NY banks. I can see that the bank is laying off a lot of people quietly and I can see your many observations about the market and the investment banks are indeed true.
My question is on the Indian elections which happened recently. Mr Narendra Modi has won by a landslide and this is kind of victory margin was only possible due to the unfettered corruption of the previous government.I can clearly observe your theory of people raising against corruption everywhere, in this election verdict.
India is expecting Mr Narendra Modi to work economic miracles. But as you had mentioned Emerging markets are going to slide further into economic depression so has India already turned the corner, or are is it going to slide further. What are the options for investment in India for the next 5 years.
ANSWER: India is following the forecast we made 2 years ago in Bangkok. I pointed out that there was a double top and that India would breakout to the upside. The government has been way too corrupt and the central bank has been following the traditional nonsense misreading the capital flows and trying to stem the tide. As a nation begins to prosper, it ALWAYS begins to import goods and it also invests its income outside the home country. This causes the current account to decline into negative territory yet it is reflective of a boom, not a bust. The same mistakes were made by Australia in the 1980s. They expected the currency to decline because of a current account deficit yet it rallied. They were totally confused by this development. The Australian Associated Press did an article on me at that time bluntly stating that I was teaching Australia about its current account and how it really functioned.
We distinguished India from the rest of Asia including China. This market should have risen and it has done so. We may yet see the major high form in 2017. I will actually be speaking there in Mumbai come this September 2014. BTW – Indian is my favorite food.