{"id":1055,"date":"2020-05-25T21:19:00","date_gmt":"2020-05-25T21:19:00","guid":{"rendered":"http:\/\/oscillationss.blogspot.com\/?p=1055"},"modified":"2020-05-25T21:19:00","modified_gmt":"2020-05-25T21:19:00","slug":"vitamin-d-impact-on-covid-19-mortality-and-what-china-wants","status":"publish","type":"post","link":"https:\/\/oscillations.in\/?p=1055","title":{"rendered":"Vitamin D impact on Covid-19 Mortality and What China wants"},"content":{"rendered":"
\n<\/p>\n
\nCovid-19 crisis may be going to change
\nthe world as we know as of now. I still hope that India will emerge stronger
\nfrom this crisis though there may be some complications due to migrant labours on virus infections and economy front in the near time and we need to plan
\nfor normalizing this migration as early as possible. On infection front, I still
\nthink our demography and better immune system may help us in controlling the severity
\nand mortality though I think infections can run high as due to novelty of this
\nvirus it is highly contagious. But I am very hopeful of finding a cure of this
\nvirus very soon because of the advancements in the fields of genomics and DNA
\nmapping.<\/span><\/div>\n
\n<\/div>\n
\nCovid
\nmortality and Vitamin D<\/span><\/u><\/b><\/div>\n
\n<\/div>\n
\nI am a great devotee of Sun and
\nbelieve in the power of Sun for our <\/span>well-being. Every day in office, i take sunshine
\nfor 20 minutes at the roof of our office. For me Vitamin D is a miracle
\nmolecule for our health and longevity. When Covid began spreading in India in
\nMarch i was of the view that Vitamin D is vital for covid immunity.
\nBecause Vitamin D inhibits inflammatory response of our
\nbodies which is the main cause of death in covid. <\/span><\/span>
\n
<\/span><\/span>
\n<\/p>\n
\n<\/a><\/div>\n


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\nCoronavirus is not killing us…in
\nmost cases it is the inflammatory (immune) response of our bodies. Coughing is
\nour immune response- to throw out the pathogens so is diarrhea and
\nvomiting….it is our body’s immune response. Fever is a common immune response
\nto an infection because a higher body temperature can provide a hostile
\nenvironment for pathogens. That\u2019s why I never take medicines for fever, throat
\ninfections etc. because I want my body\u2019s immune system to fight with these
\ninfections and this further strengthens the response time and impact of immune
\nsystem.<\/span><\/div>\n
\n<\/div>\n
\nThere is always a debate whether to
\ntreat fever or not. But fever is not a disease but a sign of fighting against
\nthe disease. That day I was reading about Wagner von Jauregg who in 1900
\n(before invention of antibiotics for bacterial infections) injected malaria
\nparasites into the bloodstreams of people with syphilis which caused high fevers
\nfor many days. Then he treated the malaria with quinine. <\/span>But then he found that the high fevers caused
\nby malaria cured syphilis. For this achievement, von Jauregg won the Nobel
\nPrize in 1927. That\u2019s why I always try not to treat the fever. Also at higher
\ntemperatures, our immune cells like white blood cells (neutrophils), B cells,
\nand T cells work better.<\/span>
\n
<\/span>
\n<\/p>\n
\n<\/a><\/div>\n

Inflammation is the immune response
\nof our bodies where white blood cells (like neutrophils) along with other
\nchemicals fight against bacteria and virus. These white blood cells are
\nequipped with weapons like enzymes to break the structure of the infectious
\norganisms. This inflammatory response has two stages- first, \u201cpro-inflammatory\u201d
\nwhere cells and other chemicals are produced for attacking and neutralizing the
\nharmful pathogens\/substances by releasing the enzymes and anti-bacterial
\nproducts. So this is the first part of the battle where many cells and
\nbacteria\/virus will die which are required to be removed from the battle field
\nand to rebuild the recovery (healing).<\/span><\/div>\n

\n<\/div>\n
\nThis healing of the tissue starts
\nafter the end of pro-inflammatory stage. Then \u201cpro-resolving\u201d forces take charge and
\nthey are the ones tasked with the task of tissue repair after the elimination
\nof the disease-causing bacteria\/virus. The discovery of existence of \u201cpro-resolving\u201d factors revolutionized the treatment of inflammation which earlier was mainly focused on
\n\u201ctreating\u201d (or hindering) pro-inflammatory factors by trying to reduce the
\naction of the pro-inflammatory components but now they are focusing on to increase
\nthe action of the pro-resolving factors to start the healing process more
\nquickly. Medicine world is getting the understanding that if we try to stop pro-inflammatory
\nfactors by using strong anti-inflammatory medicines (like aspirin, paracetamol,
\nibuprofen) then this will also hinder the signals for \u201cpro-resolving\u201d factors
\nto come up and start healing process.<\/span><\/div>\n
\n<\/div>\n
\nSo when our lungs are attacked by
\nvirus then our immune system comes for the fight to eliminate the virus and
\nclear away the damage and then to repair the lung tissue. When our immune
\nsystem is working properly then it is very strictly regulated so as to only
\nimpact or attack the infected area. So our immune response to the virus causes
\ninflammation in the lungs but in some cases it can also cause significant lungs
\ntissue damage and this is the why covid is deadly. Thus this tissue damage and
\ninflammation can cause difficulty in breathing and that\u2019s why the role of
\nventilators are so big and so is the role of a robust healthcare system. This
\ncan also explain the high death rates of elders whose lung tissue is already
\nweak due to old age. <\/span><\/div>\n
\n<\/div>\n
\nIt has been observed that in some
\nindividuals this virus may only cause mild symptoms but in some cases it causes
\nan overactive inflammatory response in the form of massive release of
\n\u201cpro-inflammatory\u201d cytokine cells. And this overactive inflammatory response is
\nthe only difference between survival and death from Covid. Virus is not at the
\ncore. Virus has the role in infection. In march when I was discussing this with
\nsome of my doctor friends; there were suggestions that this can be due to
\ngenes. But I told them that there can be a possibility of role of Vitamin D
\ndeficiency also because Vitamin D inhibits the production of pro-inflammatory
\ncytokines.<\/span><\/div>\n
\n<\/div>\n
\nCoronavirus is suggested to have
\ncome from Bats though it is not proved as yet but still lessons from Bats are
\nimportant. It is surprising that bats are responsible for the spread of all the
\ndeadly viruses like Ebola, Nipah, SARS and MERS. Actually Bats are wonderful
\ncreatures as they can live safely along with the presence of these deadly
\nviruses in them. This is due to their remarkable ability to limit inflammation\u2026better
\nto say their anti-inflammatory ability. <\/span><\/span><\/div>\n
\n<\/div>\n
\nBats are the only mammals that can
\nfly and this requires massive amount of energy for long period of time. So no
\nsurprise these Bats have very high metabolic rate (Metabolism is the
\nbiochemical process whereby our bodies create energy with oxygen for carrying
\nout various functions) to enable the functioning of higher muscle activity for
\nflight. We humans also do physical activity but only for short duration of time
\nwhereas Bats do this for much longer period of time. This high metabolic
\nactivity raises the temperature and in Bats this high temperature state
\npersists for much longer time (to be considered as Fever state as per our
\nbenchmarks) so this leaves Bats with much higher body temperatures than human
\nbeings (41 degree vs 37 degree). <\/span>
\n
<\/span>
\n<\/p>\n
\n<\/a><\/div>\n

Due to this high metabolic activity
\nand high temperature the result is the significant breakage of cells and DNA
\nstructure and this result in massive release of DNA bits floating around
\nfreely. Our bodies\u2019 immune system identify and recognize these free DNA
\nfragments as Viruses and this trigger our immune system to activate
\ninflammatory response (release white blood cells (T cells ) ) which as
\nexplained above sometimes goes into over drive and releases massive number of
\ncytokine cells which damages healthy tissue along with infected tissue. So same
\nshould have been the case with Bats also and they should have very short lives.
\nBut Bats have developed a remarkable ability to suppress this inflammatory
\nresponse to minimum. In order to survive the massive release of cells damage,
\nBats might have lost some genes via mutation over generations related to high
\ninflammatory response.<\/span><\/div>\n

\n
<\/span><\/div>\n
\nSo the inflammatory sensors which
\nwork in our bodies to trigger inflammatory response but these react barely in
\nBats. So Bats do not survive due to inflammatory (fighting) response but
\nbecause they have high tolerance for any infection. So this fierce and swift
\nresponse from Bats makes viruses on their bodies replicate and mutate much
\nfaster and this is why they are so deadly for weak immunity system human
\nbeings. Also, as Bats have higher body temperatures so technically they are in
\nfever state most of the times and this fever stops the infection from deadly
\npathogens. Further, as the viruses from Bats\u2019 bodies already have exposure to
\nhigh temperatures so they are more deadly for humans.<\/span><\/div>\n
\n<\/div>\n
\nI am a hard core gym man for more
\nthan 20 years and also like jogging and sprinting. Many times friends and
\nrelatives have questioned this madness for physical workout and strength as
\nthey feel that career is more important than this. When I was doing Chartered
\naccountancy many doubted on me as they perceived this gym etc.as wastage of
\ntime and declared that CA and Gym are not made for each other and I\u2019ll be a
\nfailure. But I did pass the CA that too without any sort of coaching. I have
\nseen the children of our relatives and friends doing study all the time. so many
\ntimes I have told them that as you have never done intense workouts so you
\ndon\u2019t have the ability to feel the massive inflow of power, energy and rhythm
\nin your body. I told them that when we regularly stretch
\nour bodies to the maximum (by intense physical activity) then our bodies
\nrelease large amounts of testosterone (a hormone) which is what makes a man a
\nMAN. It is vital for sex drive, bone mass, muscle building, fat burning and
\nsperm count. Its production drops as we age. So one can see why our current
\ngeneration is so weak, fatty and powerless. It always surprises me how a real
\nMAN can derive happiness from owning an Apple mobile phone rather than having a
\nstrong and powerful body. <\/span>But sadly this is what our current generation
\nis and many times I have to tell them that you surprise at my madness but I
\npity you for your weakness.<\/span><\/div>\n
\n<\/div>\n
\nMany times I have told my friends
\nthe impact of high temperature on the health of our bodies. Like if you are
\ndoing gym\/sports\/intense aerobic activity 4-5 times a week then you are taking
\nyour bodies into higher temperature for longer periods of time and this will
\nsave you from many infections. Many times, in winters in Punjab whenever I
\ncaught with flu I would simply do intense sprints in the morning for around 1
\nhour and most of the times it cured the flu. The reason may be the high
\ntemperature. Further, my body remains hot most of the times and in winters if I
\ndo intense workouts it emits steam just like a pot of boiling water. Many people
\nget terrified to see the steam oozing out of my body. It took me long time to
\nunderstand that this may be due to higher metabolic rate of my body.<\/span><\/div>\n
\n<\/div>\n
\nI studied about the remarkable
\nbodies of Bats while I was searching for the answers for steam coming out of my
\nbody and then I found the reason from the Bats- it is high metabolic rate and
\nhigher base body temperature. So taking the clue from Bats I always have the
\nbelief that ability to fight off the Covid may be derived mainly from the
\nregulated inflammatory response of our bodies and hence Vitamin D may play
\nvital role. <\/span><\/div>\n
\n<\/div>\n
\nSo few days back,
\nthere are reports which confirm the important role of Vitamin D in controlling
\nthe deadliness of Covid (Not preventing as most people are reading it wrong). The association is the role of Vitamin D in
\ninhibiting\/regulating the production of cytokines. The study was able to find
\nthat this is also why countries like Spain and Italy suffered so much since the
\npeople there had lower Vitamin D levels as compared to most other Northern
\ncountries. Scientists who have done this research are of the view that the
\nimpact of Vitamin D might be as high as cutting the mortality rate in half. The
\ngovernment health agencies of UK have recommended taking vitamin D supplements
\nduring this pandemic. Some links:<\/span>
\n
<\/span>
\nhttps:\/\/www.sciencedaily.com\/releases\/2020\/05\/200507121353.htm<\/a><\/span><\/p>\n

https:\/\/www.nutraingredients.com\/Article\/2020\/04\/28\/Clear-link-between-vitamin-D-deficiency-and-severity-of-coronavirus-say-researchers<\/a><\/p>\n

https:\/\/www.indiatoday.in\/coronavirus-outbreak\/story\/is-vitamin-d-a-shield-against-coronavirus-researchers-study-covid-19-connection-1681736-2020-05-25<\/a><\/div>\n

\n<\/div>\n
\nI also think that the mortality
\nrates are defined by the robustness of healthcare system because in the worst
\ncases there will be stress on healthcare system in the form of ventilators etc.
\nBut it is possible that Vitamin D has also one of the factor affecting
\nmortality rates.<\/span><\/div>\n
\n<\/div>\n
\nSo the threat of covid is here but
\nit would be better to look after our Vitamin D intake. The perfect way is to
\nabsorb sunshine on bare body when sun is at maximum height (around 12 am to 1
\npm). Then there are cod liver oil capsules, eggs and mushrooms. Also, studies
\nhave found that by exposing Mushrooms to sun for almost an hour results in the
\nmassive increase of Vitamin D levels, almost equal to Vitamin D supplements.
\nJust take the mushrooms out of packing and place them in sun uncovered. Whether vitamin D is effective against Covid or not but it is great for our strong bones and
\noverall health.<\/span><\/div>\n
\n
<\/span><\/div>\n
\n(Disclaimer: I do not belong to medical profession in any capacity so please discuss with your doctor before moving ahead with anything)<\/span><\/span><\/div>\n
\n<\/div>\n
\nBut
\nhow high is the mortality rate of Covid-19<\/span><\/u><\/b><\/div>\n
\n<\/div>\n
\nI was trying to get the answer of
\nthis question as this will have the most significant bearing on our response
\nand length of lockdown in the country as lockdowns have massive economic
\nimpact.<\/span><\/div>\n
\n<\/div>\n
\nDeath rates across the world seem to
\nvary too much but as the timing and strain of the virus is almost same so the
\ndeath rate should almost be the same. Virus is not mutating very fast as of now
\nand also it shouldn\u2019t be more deadly in one place than another. But still there
\nis way too much variation.<\/span><\/div>\n
\n<\/div>\n
\n<\/div>\n
\nThe likes of Italy, Spain, France,
\nUK and Netherlands have death rates in the range of 10-15%which is very high
\nwhile the likes of Russia, Germany, south Africa, south korea, Chile, Qatar has
\nlow rates of 1%-2%. Even worse affected US has death rate of 6%. But there is a
\npattern to this variability. Like, first countries with elders have suffered
\nthe most like Spain and Italy. Italy has the largest population in the world at
\n65 or older and this also defines the high death rate because these elders were
\nalready suffering from many other life threating diseases. So there is high
\nchance that the death is not due to Virus but due to other reasons but as they
\nwere Covid infected so it is treated as covid death but this may not be the
\ncase. Still, the elders are almost 80-90% of the dead in high death rates
\ncountries including USA.<\/span><\/div>\n
\n<\/div>\n
\nBut I checked the life expectancy of
\nItaly, Germany, USA, <\/span>Spain & France and
\nthe same is 82.5, 80.6 , 78.6, 83 and 82
\n<\/span>years. So Italy, Spain and France\u2019s populations are equally or better
\nequipped to fight the virus. So there are other factors at play than the virulence
\n(deadliness) of the Covid alone.<\/span><\/div>\n
\n<\/div>\n
\nGermany has lowest death rate due to
\nrobustness of its healthcare and one of the reasons is that large proportions
\nof infected in Germany were aged between 35 to 59 which has very lower death
\nrates. Russia also has low death rates due to fairly young population but there
\nwere accusations that it hide the actual death cases. But there is no visible
\nincrease in the overall death rate in the country as compared to previous
\nyears. Further, Russia has done very extensive testing (some 6 million) and I
\nthink this is one of the reasons. Avg age of people died in Italy is above 70.
\nGermany also had much lower infections in older people (20%, Spain and Italy
\n50%). <\/span><\/div>\n
\n<\/div>\n
\nI tried to find out
\nthe number of deaths in Italy, spain in the same period in the previous years
\nso as to check how many deaths are actually due to covid. Actually, in my view
\nthis data should have been taken for all the countries because too many people
\nare questioning the data where they want to or where they find the death rate
\nlow but they wanted the same to be higher (Ego bias) like they have questioned
\nthe data for countries like India\/pakistan which have low death rates but in my
\nview one of the biggest reasons is the young population of these countries. But
\nstill, having the data of normal death rates of previous periods (excluding
\naccidents as now there are lower accidents due to lockdown) would have given
\nsome valuable insights because too many deaths might have been recorded as
\nCovid deaths when the underlying reason is not covid related complications.<\/span><\/div>\n
\n<\/div>\n
\nAlso, the method of counting deaths
\ndue to covid in Russia is important as Russia has counted only those deaths due
\nto covid which are actually due to underlying covid symptoms like pneumonia not
\nwhere people have dies due to heart attack but they were infected from Covid. I
\nthink this will have profound impact on mortality rates. Also, as explained above Vitamin D may also have a role on the death rates.<\/span><\/div>\n
\n<\/div>\n
\nTesting is the main reason which can
\nartificially inflate the death rates. Because due to limited testing capacity, in
\nmost of the high death rates countries testing is only done on those with
\nsevere symptoms. But as per the experience there are many people who don\u2019t even
\nshow any symptoms (asymptomatic) or show very mild symptoms so they are n tvot
\nbeen tested at all. So there is a selection bias of only counting symptomatic
\npeople in high death rate countries. Estimates put asymptomatic people at some
\n40%-50% of all the infected people.<\/span><\/div>\n
\n<\/div>\n
\nIceland is one such country with
\nhigh testing rate of almost 13% of total population and so far it has only
\nreported 1800 cases with just 10 deaths.<\/span> It
\nhas tested everybody quite opposite to what every other country is doing-
\ntesting only the sick persons with symptoms and large numbers of people were asymptomatic.
\nIceland has no lockdown as of now. Even schools are opened. Germany also has
\ndone more extensive testing including those with no symptoms. So testing only
\non the basis of symptoms may be giving inadequate data for doing any reliable
\nanalysis and drawing inferences. Current conclusions about death rate of covid
\ndo not take into account that only a fraction of infected people are actually
\ntested (selection bias).<\/span><\/div>\n
\n<\/div>\n
\nBut one of the best case for us is
\nthe cruise ship Diamond princess where some 700 people were tested positive out
\nof 3500. So this ship is like a closed environment test in a laboratory. The
\nship was quarantined in Japanese waters on 3rd feb with 3711 people so almost
\ntwo months have been passed. Japan has tested all the people on the ship. The
\nship has more elderly people. The ship was perfect for the spread of virus as
\ninfected crew was cooking and cleaning the rooms, all the people were eating
\ntogether in closed places, close living spaces, many old people, much higher
\nsocial interactions. So that ship had the worst environment. Infection started
\nfrom foodservice crew members which put all of the ship into the virus risk.
\nOut of 3711 people some 712 were found infected but 651 have recovered with
\nonly 13 dead (all elderly). So, almost 83% were never infected at all in spite
\nof being in such a dangerous place for virus spread. Almost 50% infected people
\ndo not show any symptoms at all\u2026the same is 100% for Children below 10. <\/span><\/div>\n
\nIt is surprising to see such a high
\n% of asymptomatic people for a virus considered so deadly. So if we can
\nextrapolate these findings on our current death rates then these rates should be
\nfallen by 50% because as of now our data and study is based on symptomatic
\npersons when 50% do not show any signs.
\n<\/span>One can say that cruise passengers generally are rich & otherwise
\nhealthier people so this ship data may also be biased. But still in any case,
\nwe can very well count and rely on the data of recovery and asymptomatic
\npatients. Also, it shows that this virus is not at all deadly when it
\nencounters healthy people even if they are elderly people.<\/span><\/div>\n
\n<\/div>\n
\nBut still, the attack rate of this
\nvirus is relatively high as there is no immunity to it as of now. So in case
\ninfections are high then there will be heavy stress on the healthcare system
\nwhich is very dangerous for countries like India with less robust healthcare
\nsystem. Hence, until more data about its mortality rate is found or there is a
\nmedicinal cure for it, it is better to follow social distancing. It is
\nparticularly important for the safety of elders in our homes and people with
\ncompromised immunity due to underlying diseases as they are more vulnerable. So
\ni think India is doing right by locking down as our healthcare system may not
\nbe as robust. Further, sometimes over-reaction is much better response than
\nover-confidence.<\/span><\/div>\n
\n<\/div>\n
\nWhat
\nChina wants<\/span><\/u><\/b><\/div>\n
\n<\/div>\n
\nIf you ask this question to any
\nChinese, ultimately the finger will be pointed towards only one man- Xi
\nJinping. Welcome to the world of Autocracy. Some people believe that authoritarian
\ngovernments are better for planning a great strategy and its implementation and
\nso they are more likely to lead a country into economic growth. They cite the
\nreasons like fewer regulations, prompt and timely implementation, power to make
\nbold and big decisions etc. This logic may look better on the paper but real
\nlife is always very different because of its multi-dimensionality. First, for
\nthis to succeed a superman like human being is required like Maharaja Ranjit
\nsingh, Samrat Ashok, Shivaji, Akbar, Maharana Pratap etc. But persons like
\nthese are very few and stretched over centuries. So collective consciousness has
\nbetter chance to perform under democracy than when autocracy is the slave of
\nsomeone average like Xi Jinping. Democracies due to their public answerability
\nare much better in planning strategically to the core and implementation if
\nsuccessful is maintained even if there is a change of leadership like BJP in
\nplace of Congress. Further, democracies due to freedom and openness promotes
\ninnovation & creativity which are the main forces fostering economic
\ngrowth (quite contrary to the Chinese model where debt is given to states for
\nspending and Voila!! GDP growth is here). That\u2019s why I always say that GDP
\ngrowth is not economic growth.<\/span><\/div>\n
\n<\/div>\n
\nAnd China needs a superman now. But
\nthe problem is that there are some people who think that superman is superman
\nbecause he wears his \u201cunderwear\u201d over his pant (this is Underwear syndrome). China
\nhas so many like them. Recently, British economist Jim O’Neill remarked he was
\nthankful the coronavirus outbreak started in China and “not somewhere like
\nIndia\u201d. If one can see these are the persons who suffer from \u201cUnderwear
\nsyndrome\u201d. Look at the wisdom of this man\u2026he can\u2019t see the conspiracy and poor
\ngovernance levels of china in handling the virus but he is so sure of India\u2019s
\nincapability to control. Now this man should see the pathetic response and condition of UK in fighting with the virus.<\/span>
\n
<\/span>
\nThere are many such<\/span> \u201cunderwear syndrome\u201d people in
\nIndia also who shout \u201cBhakat\u201d at everything which can question their intellect.
\nBeing in stock analysis stream, I normally want to have free discussions
\nwithout being tagged as a follower of BJP or Congress like I was critical of
\nthe timing of Demonetization but still PM Modi ji is doing a fantastic job.
\nLook at the fear he has instilled in the minds of Pakistan and China. After very strategic Balakot strikes, Modi Ji has ended the pakistan’s madman theory of using nukes…Balakot strikes called the bluff out of Pakistan’s Madman theory. And now both Imran
\nkhan and Pak army is trying to bring India into talks. Now they are saying nuclear weapons are very dangerous. <\/span>Look at the alliances he
\nis building with all the global powers of the world. Indian Economic growth and
\nPM Modi ji- I\u2019ll further touch this topic in some other post but let me bring a
\nperspective. India and China had almost same GDP in or around 1988-89 and they
\nhad the similar defense spending but today China GDP is almost 5 times of India
\nand defense budget is some 6-7 times bigger. And in all this period from
\n1989-2019 when for most of the time congress was in command. <\/span>
\n
<\/span>
\nFurther, there was high growth phase during 2004 to 2012 but that was
\nthe time of great IT and Pharma export story which happened mainly because of
\nsome great maverick and visionary individuals and there was not much role of
\ngovt. They supported it once it was put into act by these individuals. And then
\nthese two sectors set the tone for the demand for cars\/bikes which set the tonefor
\nthe growth of Auto Industry in India. It also developed real estate and wealth
\ndistributed from these rich IT\/Pharma people to common man. But when Modi
\ngovernment took charge in 2013, the growth started to slow down in these
\nsectors due to competition and global slowdown. So India is in need of new
\nsectors which can be the torch bearers of growth for next 10-15 years.<\/span><\/p>\n
\n<\/span><\/div>\n<\/div>\n
\n<\/div>\n
\nSo there were many people around me
\nwith whom I used to do free and long discussions but then I noticed some of
\nthem using \u201cBhakat\u201d jibes in social media and I left them completely after
\nthat. They are not worthy of a talk leave alone brain storming discussions.
\nRecently, one such fellow brought the topic of RBI giving the dividend to
\ncentral Government. One of my friend replied that central govt might needed
\nthis money to which that fellow used \u201cyou are a Bhakat\u201d Jibe and was smiling.
\nBut then I asked him whether he tried to understand the inner working of RBI
\nand the impact of this dividend. He only had a wry smile and murmured that ex
\nRBI governor was also against it. But I told him where is his intellect and why
\nyou want to believe this man Raghu Ram only\u2026why he has better credibility. Why can’t Ex RBI governor Bimal Jalan who has advised for this dividend? Why it is that you people only find value in someone who is Anti-Modi? In some cases i have seen these people supporting pakistan and china also!!!<\/span><\/div>\n
\n<\/div>\n
\nI told him that earlier Raghu ram
\nhad also hailed Modi Govt to initiate the bank loan cleanup and blamed the
\nseeds of this crisis on reckless lending in UPA regime.<\/span><\/div>\n
\n<\/div>\n
\nBut the main reasons for not
\nre-electing him was more about his attacks on Govt policies and less on his RBI
\noperations. When he was not lowering the int rates in spite of Govt pressure he
\nexpressed that the prime mandate of RBI is financial stability\/inflation not
\neconomic growth. But then on other hand he was criticizing govt heavily in
\npublic over Make in india, Jan dhan Yojna, Tolerance which was never his
\nmandate and he was giving his comments as RBI Governor. I think he was crossing
\nthe line.<\/span><\/div>\n
\n<\/div>\n
\nRaghu was also advising for privatization
\nof PSU banks which was easy to say at his position not at the Govt level and
\nthe time needed for this was massive while economy\/banks needed urgent support.
\nPSU banks are not bad per se it is the managing power. UPA mismanaged but this
\ndoes not mean that BJP would do the same. PSU banks have social
\nresponsibilities of taking banking to poor masses in rural area. I have seen SBI
\nbranch in remotest villages of India but not a single private bank. So another
\nview to see PSU banks as social and economic growth driving entities as a whole
\nnot from the micro view of the profitability of these banks.<\/span><\/div>\n
\n<\/div>\n
\nEven Jalan panel advocated the
\ndividend out of revaluation reserves. The panel is chaired by former Governor
\nof RBI Bimal Jalan who is an institute in itself and a very credible fellow. So
\nI tried to explain to him the logic behind the RBI dividend. I am explaining
\nthe same here also. Please keep in mind these are just my views:<\/i><\/span><\/div>\n
\n<\/div>\n
\n1. First of all, RBI has a very
\ndifferent type of balance sheet. It has liabilities in the form of money issued
\nbut it is the only one who can issue interest free liabilities. So RBI has this
\nsuperhuman ability-it issues zero interest liabilities and earns interest from
\nthe assets purchased from it. Due to its capability to create money it\u2019ll never
\ndefault on its liabilities.<\/span><\/i><\/div>\n
\n2. So due to the nature of its
\nfunction-zero interest liab which earns interest-it\u2019ll always earn net income
\nso due to almost nil risk the requirement of capital is not high. In fact there
\nare some countries like Israel whose Central bank has even operated with \u2013ve
\ncapital. So we can afford to be conservative with central banks.<\/span><\/i><\/div>\n
\n3. Then, RBI balance sheet is a part
\nof big macro level balance sheet of Government so it can\u2019t ignore the fragile
\nbalance sheet of govt while maintaining high levels of capital. RBI is part of
\nGovt. But it is also true that to give autonomy to RBI they should have
\nadequate levels of capital.<\/span><\/i><\/div>\n
\n4. So as we can see now the issue is
\nwhat is this adequate level? If we take the global standards, then RBI is way over
\ncapitalized. Against the median ratio of capital to assets of 8% RBI had 27% in
\n2017-18.<\/span><\/i><\/div>\n
\n5. As we know reserves are part of
\nretained earnings. Same is true for RBI but almost 3\/4th of the reserves of RBI
\nare revaluation reserves. Foreign currency assets are some 70% of total assets
\nas this is the prime role of RBI to have foreign reserves. Then there is Gold
\nand local currency G-Sec\u2026so most of the reserves comprise of the fluctuations
\nin these foreign currency reserves and Gold\/G-Sec.<\/span><\/i><\/div>\n
\n6. As rupee is falling forever so
\nthese reserves are only rising. So prudence says that RBI should keep reserves
\nin case there is rupee appreciation. But RBI keeps most of the revaluation
\nreserves in the contingency reserves not available for dividend (although
\ncommercial banks can show valuations gains as profits).<\/span><\/i><\/div>\n
\n7. Now there is big secret about RBI
\nneeding these reserves. Actually RBI has limited ability to influence Rupee
\ndepreciation i.e. it can\u2019t sell all its USD reserves to support the rupee as it
\nneeds USD for country. But strangely, RBI has unlimited ability to support the
\nappreciation of rupee as it can buy any amount of USD by creating money at
\nwill. So due to this, the chance that Rupee will appreciate massively is remote
\nas RBI can control that.<\/span><\/i><\/div>\n
\n8. Also, at the current levels of
\ncontingency reserves RBI can support the appreciation of rupee to the levels of
\n45 which is highly unlikely.<\/span><\/i><\/div>\n
\n9. So all this means that RBI can
\npart away some of the revaluation reserves to support the government without
\naffecting and risking its existence and autonomy. As per Jalan committee, RBI
\nhas excess reserves to the tune of 50%-60% (some 5-6 lac cr) which it can
\ntransfer in 3-4 years.<\/span><\/i><\/div>\n
\n10. Now the next important question
\nis-how this will be done and where the money will be spent. But here are many
\ncombinations to do this and each one has its own repercussions like public spending
\nof this money will be inflationary and dangerous. To channelize for the
\neconomic growth and to avoid high inflation the excess dividend should go to
\nbank re-capitalization.<\/span><\/i><\/div>\n
\n<\/div>\n
\nBut I was sure that that fellow
\ncould not grasped the essence of this explanation. I told him not to act
\nlike a fool. But when they use \u201cBhakat\u201d jibes I actually find this very
\nfunny and laugh a lot as it just shows that they have nothing much to say or offer on the subject
\nthough I want to say to them, \u201ccome on!! you can be better than this.\u201d But when these people use “Bhakat” jibes they think that they are a superman with underwear on the pant.<\/span><\/div>\n
\n
<\/span><\/div>\n
\nBut I don\u2019t expect
\nfoolish jibes from intellectual people. These are only for the use of average
\npeople who can\u2019t think much so all this buzz and noise is created for these
\nbrain dead people. But I again want to say I expect much better from
\nintellectual class.<\/span>
\n
<\/span><\/div>\n
\nComing back to China- So there is no
\ndoubt that China has done a big blunder in handling Covid and spreading it in
\nthe entire world and there is massive global backslash and US is using this
\nopportunity to trap, sideline and destroy China. So a normal human with average
\nwisdom would have tried to reach other countries with helping hand using soft
\npower. Just like what Taiwan did- Taiwan has distributed large quantity of
\nmedical assistance to the countries across the globe just to create a positive
\nenvironment for them so that they can throw away the Chinese takeover threat.
\nBut what is China doing?? Just the opposite. They have tried to trap small
\ncountries into debt for medical supplies, imposed duties on Australia imports
\nfor asking for Covid inquiry, showing aggressiveness in south china sea, taking
\naway autonomy of Hong kong and now they are creating troubles with India at
\nborders. <\/span><\/div>\n
\n<\/div>\n
\nThere may be a chance that Xi wants
\nto portray the strength and power of China in the wake of local and global
\nbackslash. He wants to show that china is still tough and will take hard
\nstance. But this is expected from average fellow like Xi and it is good that
\nthis is happening because at least now the world will be able to recognize the
\nthreat of autocratic and irresponsible country like china. The threat is not
\nnew and global powers had in them to recognize this much earlier when china was
\nstealing technology, when they were ring fencing their economy but wanted to be
\nlargest exporter, when they killed innocent in Tiananmen square in 1989,when
\nthey killed Tibetan soul, when they are forcing millions of Uyghur muslim in
\ndetention camps. But all kept quiet due to their economic reasons as China was
\na massive market for them or they needed china money like Pakistan. But now all
\nof a sudden, the world has got a massive slap from the china behavior and I
\nfeel world will never be the same for chinese.<\/span><\/div>\n
\n<\/div>\n
\nIndia has also crafted their China
\nstrategy carefully now and all of a sudden India is getting into the game.
\nIndia has made string alliances with China adversaries like US, Japan,
\nAustralia. Also i think, we need to play the economic card well because china can’t afford to loose such a large market like India. In the past, India never tried to avoid One China policy and never
\nrecognized Taiwan as separate but recently two BJP MP\u2019s virtually attended the
\nswearing-in ceremony of Taiwan President Tsai Ing-wen and even sent her
\ncongratulatory messages. India avoided the same in 2016. India also supported
\nCovid inquiry proposal at WHO. So now China by creating tensions at border
\nareas is trying to give a warning to India. But I think India now is well
\nprepared and well assured of itself. And even this plan of China to hit the
\npsyche of India may backfire because this will further strengthen the purpose
\nand need of strong alliance of India with US. China can\u2019t afford the US
\nalliance with India because this will hit its interests very hard both from
\nIndia and US.<\/span><\/div>\n
\n<\/div>\n
\nSo China has done a grave mistake in
\nletting India to go to US to balance the threat of China. China has done a
\nfoolish thing by posing themselves as a threat to India when it was certain that
\nIndia would always wanted to settle the disputes with china and move forward. There is not much at stake with border disputes with India and both china and India could have settle the disputes by keeping something and giving something for the mutual benefit. China
\nhas nothing much to gain from any war against India now as this will hit China
\nvery hard both physically and economically and this will give US the chance the
\npounce at south china sea, Hong kong and Taiwan. Even Tibet will be in danger.
\nBut strangely China has chosen Pakistan which itself is very unstable and
\nopportunistic. So wisdom would have advised China to befriend a democracy and
\nresponsible power like India for long term benefits. With Pakistan, China can\u2019t
\neven be sure of the safety of nuclear weapons. Some says that with Pakistan China may benefit from the expansion of BRI initiative via CPEC. But had china formed a friendship with India then india would not have opposed the same and in fact may have even partnered with them. <\/span>
\n
<\/span><\/span>
\nRight now amid current border tensions t<\/span><\/span>h<\/span><\/span>ere is high chance of a small scuffle between India and China though both may want to avoid it as no one knows for sure whether it could remain low intensity fight. Both may be apprehensive of each other (game theory) and may even decide to forego it for some other time. But China is giving India the reason to change their strategy and target where it hits china the most- by supporting Taiwan and south china sea and forming alliance with US for defense strengthening. There is a big tactical difference in the focus of both- India considers China as prime enemy whereas China considers US. So China has to cross US for its global ambitions and it is not in its interests to create a strong enemy in the form of India. Here, it is better if India behaves or create its image as someone very unpredictable because this makes formulating a definitive strategy against India very hard. Though i feel that India’s Balakot strike and tough stance during Doklam is enough to create an aura of unpredictability. But China after facing humiliation at Doklam may want to avenge the same by having a low intensity fight…so India also need to create unpredictability. Also, there are always doubts on the combat qualities of chinese forces…they are timid and corrupt. One of the reason is the one child policy of china due to which some 70-80% of chinese army men are only son of their families and this make them combat averse. I think China knows this especially keeping in view the brave stories of indian army right upto kargil war where they snatched the victory from the jaws of defeat.<\/span><\/div>\n
\n<\/div>\n
\nChina foolishly tried to blackmail
\ncountries to stop questioning covid handling by stopping the supply of
\nessential medical and other supplies. This has led many countries across the
\nglobe to think about their mistake in creating their supply centers in China.
\nAnd I have no doubt that there will be flight of supply chain from China. Whether
\nthis will come to India or not is another thing which I\u2019ll discuss in another post
\non economic revival and growth of India. China may try to stop this forcefully
\nbut now they have already committed the grave mistake and now there is no
\nstopping.<\/span><\/div>\n
\n<\/div>\n
\nI have seen some commentaries these
\ndays which say that China growth is much internal now and share of exports have
\nfallen to some 20% of GDP. So they mayn’t worry that much about Exports. But if you ask me this is not the case and there is
\na need to do some fine tuning. First, Investment is one of the biggest components
\nof the China\u2019s GDP (some 40%) and this investment is controlled by the Communist
\nParty. Massive funds in the form of Debt is given to state run enterprises,
\nlocal governments via state run banks and this debt is used to construct roads,
\nbridges, large real estate projects. So for them it is very easy to grow GDP.
\nBy increasing debt for investment by some 10% they can create GDP growth of 4%
\n(10% of 40%).<\/span><\/div>\n
\nBut most of these investments are
\nwaste and bad as they do not contribute anything for GDP growth because they
\nare in excess of their requirements. Nobody use these bridges, real estate
\nprojects\u2026these are ghost cities. So these investments does not do anything for
\nthe economy\u2026no factory uses the road and bridges to move their goods faster, no
\nfarmer benefits from them and save his agri produce. So these are just bad
\ninvestments and needs to be written off so as to correct the GDP figure. But
\nthis is not done in China and as per estimates some 10-15% GDP is reported
\nhigher due to fake numbers and bad investments like this. In my view this can
\neven be higher. China has one of the highest debt to GDP ratio ( 317% as of now) and most of the debt is bad.<\/span><\/div>\n
\n<\/div>\n
\nSo if one takes into account this
\nexcess reporting of GDP by some 15% then all of a sudden 20% share of exports
\nbecomes 30% and this is very significant because share has fallen but absolute
\nvalue has gone only bigger and bigger and then further there is a question of
\ndistribution pattern of local growth and export income.<\/span><\/div>\n
\n<\/div>\n
\nI am leaving this topic here now due
\nto length of this article but will touch this issue in much detail in the next
\npost on economic growth.<\/span><\/div>\n
\n<\/div>\n
\n<\/div>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

Covid-19 crisis may be going to change the world as we know as of now. I still hope that India will emerge stronger from this crisis though there may be some complications due to migrant labours on virus infections and economy front in the near time and we need to plan for normalizing this migration as early as possible. On infection front, I still think our demography and better immune system may help us in controlling the severity and mortality though I think infections can run high as due to novelty of this virus it is highly contagious. But I…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1055","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/posts\/1055","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/oscillations.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1055"}],"version-history":[{"count":0,"href":"https:\/\/oscillations.in\/index.php?rest_route=\/wp\/v2\/posts\/1055\/revisions"}],"wp:attachment":[{"href":"https:\/\/oscillations.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/oscillations.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/oscillations.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}