Month: September 2025

We saw earlier that USD is falling out of favour with all countries. They are putting their eggs in different baskets. In answer, the US has given a modicum of authenticity and reliability to stable coins provided the coin issuer backs it up with purchases of US bonds. Thus a dollar put in stable crypto coins, is a dollar invested in US treasuries.

What can Europe / China / Japan do about this?

They can play their own masterstroke.

Each can pass its own version of the Genius Act.

Thus each country can have crypto exchanges which issue stable coins based on that country’s currency.

E.g. a stable coin worth a guaranteed one euro, a stable coin worh a guaranteed Renminbi or even a Yen.

So issuers of these stable coins would need to hold bonds of these currencies of the same value for which the stable coins have been issued. The audits would be by the respective country governments.

Wow! So we will have USD stable coins, Euro stable coins, etc.

Now let us see how the US govt stacks up against these other heavy weights.

Already those who are heavily committed to the USD are ruing the fact. Nimble market players including drug cartels, are certain to use the stable coins which are backed by the currency which they feel will remain the strongest bet in retaining its value.

The US is in for some tough shocks.

Countries around the world have realised that the dollar is not such a nice thing to have. Hardly a good store for wealth.

So they have diversied over the past year into a basket of currencies other than USD, into gold, and so on.

This spells trouble for the USA as it has to keep on issuing more bonds every year to finance its free lunch. A country which decides to moderately shift its exposure will drastically drop its fresh purchases of the dollar, even if it refrains from selling the bonds to protect its own investment.

So to whom does the US palm off its snake oil i.e. its greenback currency?

Trump stumbled on an idea. He brought the Genius Bill. This bill focuses on stablecoins, setting up regulatory guidelines for this form of digital currency across the United States. It gives legitimacy to stablecoins and effectively puts them on a perch as a legitimate safe currency to deal in. Provided, there is a provided of course, the stable currency issuer should back it with equal amount of USD or Treasury Bonds purchased. Thus just like earlier USD had a currency backed by gold, now we have a currency (or will have), in the form of stable coins of myriad hues, which are backed by the USD.

Thus as the world moves to stable coin, the US is guaranteed a huge stash of its IOU’s in perpetual dead stock, being used just as a counter weight to the stable coins issued.

Buy prey, who will buy a stable coin, when I can very well buy a USD for the same money? Answer is simple – drug lords, money laundering operations, illicit money generators etc. For the difference between USD and stable coin worth one USD is that the USD can generate interest. The stable coin sits like a dead duck.

 

Trump is going about it all wrong.
He should institute a Donald Trump Prize and award it to Alfred Nobel!

This is pathetic. Give him a tenner, someone…

Trump, in his craziest move yet (and that is saying something), has just imposed a hundred grand per year as ‘staying fees’ for holders of H-1B Visas. 

Granted, the current lottery system was not in the best interests of USA. At the very minimum, it should have been changed to a system which favoured the most sought after people i.e. those with the highest salaries which US companies were willing to pay.

But the new step practically kills the H-1B in one swift stroke.

And as reams are written on how this will affect India, no one is yet saying about those who will be affected the most.

The US Universities.

They are done for.

US University education has itself worked as a lottery system wherein you pay tonnes of cash for a degree just with the hope of somehow slipping into permanent residency for good.

Now all those who bought into that lottery find that the tickets are duds.

And those who were issuing those tickets, the US universities, will find that there are no takers.

And that their bloated costs will not be compensated by the miserly US student. They need fat wallets of overseas students, which are no more.

Many universities will close down.

Many parts ot the economy who catered to them will take a severe hit.

And a source of part time slave labour will be halted.

While US companies shift jobs to GCCs – Global Capability Centres.

Not good times for MAGA.

I saw the video of Charlie Kirk’s assassination. The accuracy with which the sniper delivered, was the stuff which US Navy Seals would aspire to.

Charlie Kirk’s killing greatly saddened me.

But as I think about this event, it is clear to me that whenever such a killing happens, the side which the killer represented, invariably is the winner. Not that the Democratic Party endorsed this.

But the Republicans have a huge hole in their talent pool which will be too difficult to fill up.

One Charlie Kirk, one Elon Musk, one Joe Rogan was the difference between victory and loss for Trump.

Not that I anyway admire Trump. I believe he has let down the world.

But Charlie Kirk was a breath of fresh air in the way in which he went into liberal dens and held open debates with civility and without rancour.

This is a permanent loss for the Conservatives. A very heavy loss. And correspondingly, a huge advantage for the left liberals. For every next competitive play that comes along.

Sad, but true.

The Modi government recently reduced GST rates on a range of goods. Also, it ought to reduce the number of GST slabs as was being demanded by many including Rahul Gandhi.

I demur.

What is the rational for having less number of GST rates? We may have 100 different rates even running into decimals. It could all be dependent just on the HSN code and fed into the computer where it would be updated from a central website. Such that on making an invoice, the GST rate applicable would automatically be selected. What is the problem in having that? Nothing.

The problem is not having multiple GST rates. The problem is when the same product can be sought to be classified as one or the other in order to escape higher GST rates and to try to sneak into a lower slab. This gives incentive for dishonesty and ultimately puts the honest manufacturers in a position of disadvantage. The solution to this is to look at which products are susceptible to this kind of jugglery and to do the needful so that GST rate evasion is no longer an issue for that category of products. There are many products for which evasion is just not possible or too difficult because by their very nature, those products are being produced in the highly organised sector only. Let us say television or vehicles. These should be subjected to high GST rates in order to get revenue for the government. On the other hand, take a product like the humble maska bun. There was a seminar with our respected finance minister in South India and a trade representative came up and told that he owns a restaurant and there are different GST rates depending on whether it is a plain bun or a butter maska bun or muska ban with jam in it. Now, such a scenario is nothing but a recipe to invite tax evasion. So it would be smarter for the government to forego their revenue and to have minimal or rate of GST on these things. Have minimal or rate of GST on products which are being produced in such a decentralised way that it would be impossible to regulate or it would be counter-productive in that the government would have to create an extreme license Raj with its tentacles in the smallest towns in order to enforce rules. Why not just take money from the big manufacturers and leave the other product categories out of the GST ambit?

The government does need to do the needful to ensure that cases of inverted duty structure which compel industry to seek GST refunds are nullified or minimised. These are cesspools of corruption. It can tweak the duty of the final products accordingly again. That means that it cannot adhere to the concept of having a very low number of GST slabs.

The government can also have the concept of having certain cash cow products as such that it’s GST can never be claimed unless the customer is making some valuation and selling it effectively as the same or as a very similar product. For example, if I buy cement for my construction of my new office, then I cannot claim the GST on it. Government should strengthen these rules. Also, it should ensure that these rules are not circumvented by the manufacturer of that product using it in-house. For example, if the manufacturer of cement uses his own cement to make his own office building, he should be compelled to pay GST as soon as the cement was manufactured, as it should be treated as a sale, though it was used in-house. This will put a stop to big end-to-end, conglomerates misusing this provision.