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The Mark Mobius View


wealthymatters.comHere is a recent interview from Forbes India to counteract all the gloom and doom

Mark Mobius: Debt crisis will help emerging markets

Dr Mark Mobius, executive director, Templeton Emerging Markets Group, tells Pravin Palande and Shishir Prasad that he is optimistic about India and in many cases, a weak rupee may actually benefit some companies in the country.

Dr Mark Mobius

Profile: Executive director, Templeton Emerging Markets Group

Career high point: Consistently voted as one of the most influential investment managers in the world

Last vacation: Doesn’t take any.

Known for: Travelling a lot; comic book based on his life

The idea of a single currency (euro) for differing political units seems to be in trouble. What does it mean for global currency markets? Read more of this post

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Sudhir Hasija-The Upwardly Mobile Entrepreneur


wealthymatters.comSudhir Hasija is the chairman of the Rs 1200 crore homegrown handset maker Karbonn Mobiles.Here is a link to the company’s website:http://www.karbonnmobiles.com/.

His story will tell you how a person with few means can get into wholesaling and then into manufacturing.So for all would- be industrialists here is his story:

55 year old Sudhir Hasija, is the son of a government clerk. He left his home in Meerut, Uttar Pradesh, after clearing his Class 10 exams. He then moved to Hyderabad where he spent three years in a machine tools company and saved around Rs 3,000. He used this money to set up a business selling TV accessories such as antennas and trolleys in Chennai. It was a difficult struggle. He would climb to the rooftops of buildings bare footed in the scorching heat to install antennas. He used to wash at railway stations and stay in low-cost lodges. However he persisted and managed to built a thriving business that he expanded across other southern cities.  Read more of this post

Currencies of Antiquity


The Reichsmark was never an international currency.So studying inflation in the Weimar Republic is not enough.This post traces the history of the Drachma,Denarius,Bezant and Dinar–the international currencies of antiquity.I think knowing this history will help us see the parallels and understand our world better.If macro-economics is not really your thing,atleast knowing about the coins should give a rough idea of which ones would be more collectable for their bullion content!

The Drachma

wealthymatters.comThe Greeks minted stunningly beautiful coins.Non-Greeks thousands of miles away treasured these coins and so they became the first “international currency”.Archeologists have found Greek coins as far away as China, India and Northern Europe. In fact, even though Rome soon rose to eclipse Greece, most Asians kept using Greek money for centuries.

The main currency of Greece was the Athenian Drachma (pic on the left). It was a silver coin, and its weight and quality stayed amazingly consistent through the centuries. From Solon, around 600 BC, to Alexander the Great, around 300 years later, it stayed exactly 67 grains of fine silver. This was the money Alexander brought to India, and from there it traded yet further East becoming the monetary standard of all Asia. And even as Greece declined and was finally absorbed into Rome, its value did not fall much. By the end of the Drachma’s life, it had only declined to 65 grains of fine silver. This is an extraordinary achievement. No other civilization has ever had an international currency that stayed the same value —or pretty much so, since a fall from 67 to 65 grains of silver is a loss of less than 3%. And this was not only during the period of its greatest influence, but even as it declined in power over a period of six centuries.Whatever the secret of the Greeks was, no international currency since then has ever been able to keep its value, even as the government issuing it started on its seemingly inevitable decline.Certainly the conquering Romans were astounded at how the Greeks had mastered money. They paid Greece the ultimate monetary compliment by fashioning their own money, the Roman Denarius, as an exact copy of the Drachma right down to the size and weight. Read more of this post

Using Inflation To Create Wealth


Those who learn from history, have the ability to PROFIT from it.So here is some history:

wealthymatters.comInflations start out slowly.Governments will not openly admit to debasing the currency. They will cite other reasons for why inflation is going up. In Weimar Germany,for example, government officials and those within the finance community blamed their trade partners and foreigners for the Reichsmark depreciating.  German writers and politicians at the time had said that “paper inflation was not the cause or consequence of the external depreciation of the Reichsmark.  The depreciation of the Mark was held completely independent of the condition of paper circulation between 1921 and 1923″ – even though money in circulation went up 23 times within 2 years !  Prices of imported goods back then – denominated in US dollars – went up 344 times.  The official view from within the government of the Weimar Republic – the chancellor, the head of finance, the head of the Reichsbank – was to blame it on the excessive burdens thrust on the German people with war reparations, the violent policy adopted by France (when France invaded and took over an entire industrial section of Germany), and they also blamed it on increases on the price of imported goods.Conversely, the view held by those outside of Germany was that the depreciation of the Reichsmark was due to the government’s huge budget deficits, which required Germany to continuously print paper money. I guess people around the world will recognize the current day parallels to this scene from history.Quite a few governments are doing something like this today.  Read more of this post

Cold Steel


wealthymatters.com

‘Cold Steel’ is a mesmerising read.It is a narration of the takeover battle waged by Lakshmi Narayan Mittal against the management of Arcelor to emerge as the Emperor of Steel.

In 2006, the two largest steel-producers in the world-Arcelor and Mittal Steel, are in the middle of  a bitter battle for total market domination

At first Lakshmi Mittal proposes a friendly merger with rival Arcelor, a pan-European company whose interested parties include the governments of Spain, Luxembourg and Belgium.

Arcelor’s mercurial CEO, Frenchman Guy Dollé, firmly refuses,using intemperate language.To quote,“The answer is clearly no…There are two categories of steel. There is premium-quality steel and there is commodity steel. It’s like, there’s perfume, that Arcelor specialises in, and then there’s a sort of eau de cologne which is Mittal’s domain… a lot more technology and grey matter goes into each tonne we sell.” ….. “Part of Mittal’s offer consists, if you’ll excuse the expression, of monnaie de singe.”(literally meaning “monkey money” or “funny money” or tainted money).These same words come back to haunt him later.

The refusal sets the scene for a massive hostile takeover involving billions of dollars of finance and government and shareholder manoeuvring. The corporate battle that ensues takes on epic proportions and becomes  one of the world’s biggest and most hard-fought industry takeovers of recent years. It sends shockwaves through the political corridors of Europe, excites the world’s financial markets, enriches thirty hedge funds and transformes the global steel industry.The participants come from many different continents and include six billionaires, many of the world’s top investment bankers (interestingly with two brothers, pitted against each other, one working for Goldman Sachs and the other for Morgan Stanley),top law firms and public relations outfits , presidents , prime ministers and politicians occupying the highest positions in the current and emerging superpowers. Read more of this post

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