I guess most of you might have read this article on the net....since its pretty old one....but i am re-publishing it on my blog for those who missed it: Its worth reading once....dont miss it . I should thank my friend narayan for sending this to me
For those who would like to see the recorded video.....here's the link:
www.youtube.com/watch?v=D1R-jKKp3NA
This is the text of the Commencement address by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, delivered on June 12, 2005
I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I've ever gotten to a college graduation. Today I want to tell you three stories from my life. That's it. No big deal. Just three stories.
The first story is about connecting the dots.
I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?
It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: "We have an unexpected baby boy; do you want him?" They said: "Of course." My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.
And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents' savings were being spent on my college tuition. After six months, I couldn't see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn't interest me, and begin dropping in on the ones that looked interesting.
It wasn't all romantic. I didn't have a dorm room, so I slept on the floor in friends' rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:
Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn't have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can't capture, and I found it fascinating.
None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, its likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.
Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.
My second story is about love and loss.
I was lucky — I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.
I really didn't know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down - that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me — I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.
I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.
During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple's current renaissance. And Laurene and I have a wonderful family together.
I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don't settle.
My third story is about death.
When I was 17, I read a quote that went something like: "If you live each day as if it was your last, someday you'll most certainly be right." It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: "If today were the last day of my life, would I want to do what I am about to do today?" And whenever the answer has been "No" for too many days in a row, I know I need to change something.
Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.
About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn't even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor's code for prepare to die. It means to try to tell your kids everything you thought you'd have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.
I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I'm fine now.
This was the closest I've been to facing death, and I hope its the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:
No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.
Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.
When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960's, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.
Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: "Stay Hungry. Stay Foolish." It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.
Stay Hungry. Stay Foolish.
Thank you all very much.
Wednesday, September 12, 2007
Wednesday, August 1, 2007
Different Drummers
Few days back I attended a training on "Art of Self Management". The course material has following impressive article, which I feel is very much relevant our personal and professional life. I always tend to search myself in the other person, rather than appreciating what he or she is. This article was a great learning experience for me.
If I do not want what you want, please try not to tell me my want is wrong.
Or if I believe other than you, at least pause before you correct my view.
Or if my emotion is less than yours, or more, given the same circumstances, try not to ask me to feel more strongly or, weakly.
Or yet, if I act or fail to act, in the manner of your design for action let me be.
I do not, for the moment at least, ask you to understand me. That will come only when you are willing to give up shaping me into a copy of you.
I may be your spouse, you parent, you offspring, your friend, or your colleague. If you will allow me any of my own wants, or emotions, or beliefs, or actions, then you open yourself, so that some day these ways of mine might not seem so wrong, and might finally appear to you as right - for me.
To put up with me is the first step to understand me. Not that you embrace my ways as right for you, but that you are no longer irritated or disappointed with me for my seeming waywardness. And in understanding me, you might come to prize my differences from you, and far from seeking to change me, preserve me and even nurture those differences.
If I do not want what you want, please try not to tell me my want is wrong.
Or if I believe other than you, at least pause before you correct my view.
Or if my emotion is less than yours, or more, given the same circumstances, try not to ask me to feel more strongly or, weakly.
Or yet, if I act or fail to act, in the manner of your design for action let me be.
I do not, for the moment at least, ask you to understand me. That will come only when you are willing to give up shaping me into a copy of you.
I may be your spouse, you parent, you offspring, your friend, or your colleague. If you will allow me any of my own wants, or emotions, or beliefs, or actions, then you open yourself, so that some day these ways of mine might not seem so wrong, and might finally appear to you as right - for me.
To put up with me is the first step to understand me. Not that you embrace my ways as right for you, but that you are no longer irritated or disappointed with me for my seeming waywardness. And in understanding me, you might come to prize my differences from you, and far from seeking to change me, preserve me and even nurture those differences.
Sunday, July 29, 2007
Environmental benefits of Vegetarianism
Last evening I was watching Dicsovery Channel at home. I was so engrossed in the article on environmental & ecosystem imbalance which we are causing by non-vegetarian diet. I thought of researching and writing my next article on this topic. My intentions are not to preach a vegetarian diet, but just to leave a thought in our inner conscious. Lets make own conscious contribution towards environmental balance. Firstly, I personally think we owe this to our mother earth and secondly, it would definitely make this world a better place to live. Happy blogging........please feel free to post your comments......
The production of meat and animal products at current and likely future levels is often considered as environmentally and ecologically unsustainable. It is also argued that even if sustainable, modern industrial agriculture is changing ecosystems faster than they can adapt. While vegetarian agriculture produces some of the same problems as animal production, the environmental impact of animal production is significantly greater.Environmental vegetarians can be compared with economic vegetarians, who consider the meat industry economically unsound, and both citing the same efficiency concerns, many vegetarians see natural resources as being freed up by vegetarianism and veganism. These in turn can be contrasted with moral vegetarians, who see the eating of meat (and other animal products, in the case of vegans) as morally wrong.
"The cost of mass-producing cattle, poultry, pigs, sheep and fish to feed our growing population... include highly inefficient use of freshwater and land, heavy pollution from livestock feces... and spreading destruction of the forests on which much of our planet's life depends."
1. Water resources : Water is becoming an increasingly scarce resource in many parts of the world. Overuse by humans is damaging to rivers and ecosystems and leads to salinity and desertification. A vegetarian diet uses considerably less water than a meat based diet. This is because to produce meat, water must be used in the production of feed for animals, which must be fed to the animals during their entire life. The loss of water (and energy) between trophic levels is very large. When the grains go directly to humans this inefficiency is avoided. As an illustration, the water needed to produce a pound of wheat in the USA is 14 gallons whereas the water needed to produce a pound of beef is 441 gallons. More than half of the water use for all purposes in the USA is used for livestock production.
For reasons of inefficiency similar to that of water consumption, animal protein demands far greater expenditures of fossil fuel energy — eight times as much for a comparable amount of plant protein. This is wasteful of non-renewable fossil fuels and produces carbon dioxide, a greenhouse gas.
Animal production also creates damaging animal waste. In the United States, livestock account for nearly 20% of total methane emissions. One ton of methane has the global warming potential of 23 tons of carbon dioxide. Substituting meat products with protein containing alternatives such as soy or beans would greatly reduce the amount of land, water and energy needed to feed a population.
2. Grazing and Land use : Factory farm animal production, while having a smaller land-use footprint, still requires large quantities of feed that must be grown over large areas of land. Mass free-range animal production requires land for grazing, which has prompted encroachment on undeveloped lands and clear cutting. The move into wild lands has increased the rate of species extinction and damaged the services offered by nature, such as the natural processing of pollutants. Over-grazed lands, especially in semi-arid regions lose their ability to support animal production due to rapid topsoil erosion and desertification because of the trampling hoofs of animals at unusual concentrations on the land. This makes further agricultural expansion necessary. According to the United Nations, ranching-induced deforestation is one of the main reasons for the loss of plant and animal species in tropical rainforests.
3. Trawling : Trawling is similarly destructive to sea ecosystems, removing around 5-25% of an area's seabed life on a single run, although if conducted only at low levels and well managed it can be a sustainable practice. Overfishing has been widely reported because of increases in the volume of fishing hauls to feed a quickly growing number of consumers. This has led to the breakdown of some sea ecosystems and several fishing industries whose catch has been greatly diminished. The extinction of many species has also been reported. According to a Food and Agriculture Organization (FAO) estimate, over 70% of the world’s fish species are either fully exploited or depleted.
“Overfishing cannot continue, the depletion of fisheries poses a major threat to the food supply of millions of people.” - Nitin Desai, Secretary General of the 2002 World Summit on Sustainable Development
4. Petroleum: Petroleum is one of the resources freed up for other usage by a vegetarian diet: Within the Pulitzer-winning book by John Robbins, "Diet for a New America," which uses data primarily sourced from the world's largest body of scientists, AAAS, Robbins explains how the petroleum used in the transportation of farm-animals, the later processing of them, and the raising and harvesting of the vast amount of crops fed to farm-animals (which is much greater than the amount of crops people would need if we were to eat the crops directly, rather than feeding them to animals, then eating the animals), adds up to greatly increase the amount of petroleum used. So, if more people adopt a vegan diet, not only is more food available, but more petroleum to deliver that food is.
World hunger
Many believe that if everyone followed a vegetarian diet, thus freeing up resources that would be used in meat production, we would be many steps closer to eliminating world hunger. A popular saying is that even with more food, the problem is transporting all of that food to the starving people. The petroleum freed up by a vegetarian diet as shown above may answer that dilemma.
Critics of this view may observe that the root causes of world hunger are often traceable to harmful political structures rather than genuine resource shortages. Moreover in developing countries where hunger is more common, animals bred for meat are seldom fed food that is consumed by human beings; instead they are often free ranging cattle or goats or chicken that simply eat grass and other food stuff that is thrown away by people. The exact extent to which animals are free ranging against domesticated is not known, but there is no doubt that the trend is towards increased domestication, with only a small proportion of meat consumed coming from wild animals.
Monday, July 23, 2007
Match Drawn at last
Guys with great difficulty our indian team saved the first test.well lets thank the god Indra for that.....just bad light though ...no rain.....will post my next article pretty sooon.....till then keep bloggin.....
Thursday, July 19, 2007
Homesourcing: An Amazing story about JetBlue Airlines
Jetblue's David Neeleman first started homesourcing at Morris Air, his first venture in the airline business. (It was bought by Southwest.) Morris air had 250 people in their homes doing reservations. "They were 30 percent more productive-they take 30 percent more bookings, by just being happier. They were more loyal and there was less attrition. So when I started JetBlue, We decided we are going to have 100 percent reservation at home", he said.
Neeleman has a personal reason for wanting to do this. He is a Mormon and believes that society will be better off if more mothers are able to stay at home with their young children but are given a chance to be wage earners at the same time. So he based his home reservations system in Salt Lake City, where the vast majority of the women are Mormons and many are stay-at-home mothers. Home reservationists work twenty-five hours a week and have to come into the JetBlue regional office in Salt Lake City for four hours a month to learn new skills and be brought up to date on what is going on inside the company.
"We will never outsource to India' said Neeleman. "The quality we can get here is far superior. Employers are more willing to outsource to India than to their own homes, and I can't understand that. Somehow they think that people need to be sitting in front of them or some boss they have designated. The productivity we get here more than makes up for the India [wage] factor."
A Los Angeles Times story about JetBlue (May 9, 2004) noted that "in 1997, 11.6 million employees of U.S. companies worked from home at least part of the time. Today, that number has soared to 23.5 million-16% of the American labor force. (Meanwhile, the ranks of the self-employed, who often work from home, have swelled during the same period-to 23.4 million from 18 million.) In some eyes, homesourcing and outsourcing aren't so much competing strategies as they are different manifestations of the same thing: a relentless push by corporate America to lower costs and increase efficiency, wherever that may lead."
Neeleman has a personal reason for wanting to do this. He is a Mormon and believes that society will be better off if more mothers are able to stay at home with their young children but are given a chance to be wage earners at the same time. So he based his home reservations system in Salt Lake City, where the vast majority of the women are Mormons and many are stay-at-home mothers. Home reservationists work twenty-five hours a week and have to come into the JetBlue regional office in Salt Lake City for four hours a month to learn new skills and be brought up to date on what is going on inside the company.
"We will never outsource to India' said Neeleman. "The quality we can get here is far superior. Employers are more willing to outsource to India than to their own homes, and I can't understand that. Somehow they think that people need to be sitting in front of them or some boss they have designated. The productivity we get here more than makes up for the India [wage] factor."
A Los Angeles Times story about JetBlue (May 9, 2004) noted that "in 1997, 11.6 million employees of U.S. companies worked from home at least part of the time. Today, that number has soared to 23.5 million-16% of the American labor force. (Meanwhile, the ranks of the self-employed, who often work from home, have swelled during the same period-to 23.4 million from 18 million.) In some eyes, homesourcing and outsourcing aren't so much competing strategies as they are different manifestations of the same thing: a relentless push by corporate America to lower costs and increase efficiency, wherever that may lead."
Monday, July 16, 2007
The Battle Against Corruption
I chanced upon this article in the International Herald Tribune, which details an anti corruption effort in the state of Karnataka.
This is remarkable on many levels. One, it harnesses the power of the internet and the blogosphere, to reach out to as many people as possible. Two, and equally importantly, it helps give a voice to the honest section of the bureaucracy, and throws light on the deep rooted corruption prevalent there, which tends to slip through the cracks, as the focus remains on the politicians.
According to the IHT article, this blog was also inspired by the belief that if the effort was more public, it would prevent a Satyendra Dubey/Manjunath style killing. It seems a bit like wishful thinking to me, but this is really path breaking stuff nevertheless.
This is remarkable on many levels. One, it harnesses the power of the internet and the blogosphere, to reach out to as many people as possible. Two, and equally importantly, it helps give a voice to the honest section of the bureaucracy, and throws light on the deep rooted corruption prevalent there, which tends to slip through the cracks, as the focus remains on the politicians.
According to the IHT article, this blog was also inspired by the belief that if the effort was more public, it would prevent a Satyendra Dubey/Manjunath style killing. It seems a bit like wishful thinking to me, but this is really path breaking stuff nevertheless.
The much hyped Indian Story
Let's now discuss a little about the hyped indian story. let’s look at it from the root level. If you are believing the comments on the Indian story, it is mainly driven by the middle class salary rise. All are aware that this rise is mainly constituted by the IT sector – how long can people in Indian IT sector keep their jobs?
Already, companies like British Energy have scrapped their BPO operations in India and taken back the work to their own country. How long will the Indian story continue, no one knows. Even Indian companies like Infy, Wipro, Satyam have opened up offices in China, Russia, Romania, Czech Republic, Canada, Philippines, Thailand, etc. If the work can be outsourced to India, it can as well be taken away to another country. It took only 2 years for outsourcing to become a buzz word; it may take much less than that for the work to be taken away. At that point of time, there will be no rising salaries, no spending power, no extra money, and hence no demand and affordability for new houses or cars or visits to shopping malls. When will it happen, no one knows, but if it happens, things will come done tumbling.
The great Indian IT engineers proudly submit their pay slips, take house loans, car loans for big amount – completely missing the crux of the point that everything is dependent on their salary, which comes from a HIGHLY RISKY job. If they loose the job, they loose their salary, they loose their house, car, everything. You talk about boom in real estate, or boom in the retail market, or hike in car/bike sales, all coming from the extra spending power from the emerging middle class-which is driven by the software salaries.
Sometimes I wonder what other job a IT engineer can take up if unfortunately he looses his job. Everyone is relying on the Indian Story, mainly dependent on the foreign money from IT industry – how long it will continue, only time will tell. Rupee-Dollar rate has already hit the IT sector, same is being reflected in other sectors as well. We’ve already seen the slowdown in Indian IT sector in 2000 to 2002 period; still people don’t realize the ground realities. It’s a risky job and a risky Indian story, plan your future properly and especially your finances.
Please feel free to post your comments. Let me know how many defer on this argument.
Already, companies like British Energy have scrapped their BPO operations in India and taken back the work to their own country. How long will the Indian story continue, no one knows. Even Indian companies like Infy, Wipro, Satyam have opened up offices in China, Russia, Romania, Czech Republic, Canada, Philippines, Thailand, etc. If the work can be outsourced to India, it can as well be taken away to another country. It took only 2 years for outsourcing to become a buzz word; it may take much less than that for the work to be taken away. At that point of time, there will be no rising salaries, no spending power, no extra money, and hence no demand and affordability for new houses or cars or visits to shopping malls. When will it happen, no one knows, but if it happens, things will come done tumbling.
The great Indian IT engineers proudly submit their pay slips, take house loans, car loans for big amount – completely missing the crux of the point that everything is dependent on their salary, which comes from a HIGHLY RISKY job. If they loose the job, they loose their salary, they loose their house, car, everything. You talk about boom in real estate, or boom in the retail market, or hike in car/bike sales, all coming from the extra spending power from the emerging middle class-which is driven by the software salaries.
Sometimes I wonder what other job a IT engineer can take up if unfortunately he looses his job. Everyone is relying on the Indian Story, mainly dependent on the foreign money from IT industry – how long it will continue, only time will tell. Rupee-Dollar rate has already hit the IT sector, same is being reflected in other sectors as well. We’ve already seen the slowdown in Indian IT sector in 2000 to 2002 period; still people don’t realize the ground realities. It’s a risky job and a risky Indian story, plan your future properly and especially your finances.
Please feel free to post your comments. Let me know how many defer on this argument.
Friday, July 13, 2007
Bone of Contention: The coming collapse of the US dollar
The skew in the global financial system -- commonly called 'global imbalance' -- seems to be fast spiralling out of control.
For some time now economists have been engaged in the mother of all debates: whether the US dollar would collapse by as much as 40% when compared to other currencies (some are even betting on the US dollar going belly-up) or whether there would be an orderly devaluation -- that is, a gradual revaluation of other currencies vis-a-vis the US dollar.
In effect, the question that is confronting us is not 'whether' but 'when' and by 'how much.'
This global imbalance can be understood in economic terms by simply examining the massive size of America's twin deficits -- trade and budgetary. Put modestly, Americans have been living way beyond their means, consuming much more than what they could possibly afford and, in the process, borrowing far beyond their capacity for too long.
This was facilitated by a policy of maintaining weak currencies across the world, notably in Asia. This policy of maintaining a competitive exchange rate for their currency to boost exports has resulted in a race to the bottom amongst various countries.
Nevertheless, this arrangement suited countries, both Asian (with a huge unemployed population) and American, (as it provided cheap imports for its huge consumption binge).
While the going was good, everyone profited and expected the arrangement to continue indefinitely. Unfortunately, linearity as a concept has limited appeal in real life, much less is global macroeconomics.
No wonder, of late, countries are discovering that this arrangement has its limitations. The current account deficit of the United States translates into current account surplus of exporting countries. To cover this deficit, US borrows: this corresponds to the forex reserves of exporting countries. The crux of the issue is that no other country, barring the US, has such a huge consumption pattern and an ability to absorb this huge export surplus.
In substance, countries are producing their goods, exporting it mostly to the US, and parking the resulting export surpluses with the US to facilitate US to finance its imports!
Clearly, the global imbalance is a by-product of this mindless competition by various countries to devalue their own currencies and the reckless consumption in US. Naturally, it is indeed tempting to blame US consumption for this crisis. However, one must hasten to add that the emerging economies -- notably Asian countries, especially after the1998 currency crisis -- with their fixation for weak currencies, are equally to be blamed.
The net result? Well, consider these facts:
By mid-May 2007, the US National Debt stood at approximately at mind-boggling $8.85 trillion -- i.e. approximately $28,000 for every American.
The basic structure of the American economy is that the deficit of the US government is 4% of the GDP and the household sector 6%, which are offset by a domestic savings of 3%, largely from corporates, leaving a substantial national deficit of 7% to be covered by the capital flows from the rest of the world.
The current account deficit of the United States for 2006 is estimated to be in excess of $850 billion. This approximates to 7% of its GDP. Surely, even for the US, this is unsustainable.
In order to ensure that this money is routed into America and to sustain its gargantuan borrowing programme, the US has repeatedly raised its interest rate to its current levels of 5.5%. While the very size of the US debt makes any further increase in interest rates virtually impossible (as it would make borrowings uneconomical), any cut in interest rates to stimulate its economy and make it competitive would mean that the US may not get the money it requires to sustain itself.
On March 28, 2006, the Asian Development Bank is reported to have issued a memo, advising members to be ready for a collapse of the US dollar.
Since end March 2006, the US Federal Reserve has stopped publishing the quantum of broad money (that is the aggregate of US dollars circulating in the entire world -- technically called 'M3') in the US economy. This is the worst possible signal that the US Federal Reserve could have sent to the world.
Obviously, what aids and sustains the US dollar is a 'suspended sense of disbelief' amongst countries about the value of US dollar. Yet, common sense tells us that the excess supply will obviously result in a fall in the value of any product. The US dollar is no exception.
What is bizarre to note here is that despite the fact that crude is produced mainly in the Middle East; officially it can be purchased in dollar terms from one of the two oil exchanges situated in New York and London. Obviously, should Iran carry out the threat to commence oil trade in Euros or better still an oil exchange, the US dollar would come under tremendous pressure.
The US dollar is akin to the promissory note of a defunct finance company. It is common knowledge that a currency, when not backed by anything precious is just a piece of paper. When US abandoned the Gold Standard in early 70s, countries habituated by then to the US dollar under the Bretton Woods arrangement continued to accept the US dollar as an international currency without demur as the world was not prepared for any other alternative. Else, the global economy would have collapsed by 1971.
But the diplomatic silence did not solve the problem. It merely postponed it and it has come back to haunt us.
But over time even this was found to be insufficient and consequently the oil standard of the 70s gave way to an implicit multiple commodity standard of today. Naturally, commodity prices -- including crude prices -- have soared in the past few years. Unfortunately, this arrangement too is failing the US. No wonder, the US dollar increasingly resembles a promisory note of a defunct finance company.
But as commodity prices go up it has lead to inflation across the globe. No wonder, countries are forced to increase their interest rates to fight inflation.
This has triggered an interest rate hike across continents and the US is finding it extremely difficult to sustain its current borrowing programme: it hardly has any elbow room to manoeuvre.
No wonder, the US Fed is unwilling to make public the M3 figures, as it does not want the holding position of the US dollar to be publicised.
Interestingly, in such a doomsday scenario, some economists are still betting on central banks of other countries to defend the US dollar. It would seem that the US has 'outsourced' even this sovereign function to the central banks of other countries. After all, should the US dollar collapse, the biggest losers will not be the US but those who have US dollar-denominated forex reserves.
Naturally, countries holding US dollar reserves are caught on the horns of a serious dilemma -- should they seek to correct the global imbalance, it could result in the imminent collapse of the US dollar, and should they continue to defend the US dollar, they would be a long-term loser as the current arrangement has seeds of self-destruction.
While every central banker is conscious of this fact and thereby seeks to postpone the inevitable while nervously looking for his counterpart in any other country to break ranks and thereby trigger the collapse.
Surely, the emperor is without any clothes. There are only two possibilities from here on: Either we are witness a global meltdown of the US dollar, or allow controlled US dollar devaluation (read, revaluation of other currencies). If it is a global meltdown the global economy is doomed, if is an orderly devaluation, it is damned.
For some time now economists have been engaged in the mother of all debates: whether the US dollar would collapse by as much as 40% when compared to other currencies (some are even betting on the US dollar going belly-up) or whether there would be an orderly devaluation -- that is, a gradual revaluation of other currencies vis-a-vis the US dollar.
In effect, the question that is confronting us is not 'whether' but 'when' and by 'how much.'
This global imbalance can be understood in economic terms by simply examining the massive size of America's twin deficits -- trade and budgetary. Put modestly, Americans have been living way beyond their means, consuming much more than what they could possibly afford and, in the process, borrowing far beyond their capacity for too long.
This was facilitated by a policy of maintaining weak currencies across the world, notably in Asia. This policy of maintaining a competitive exchange rate for their currency to boost exports has resulted in a race to the bottom amongst various countries.
Nevertheless, this arrangement suited countries, both Asian (with a huge unemployed population) and American, (as it provided cheap imports for its huge consumption binge).
While the going was good, everyone profited and expected the arrangement to continue indefinitely. Unfortunately, linearity as a concept has limited appeal in real life, much less is global macroeconomics.
No wonder, of late, countries are discovering that this arrangement has its limitations. The current account deficit of the United States translates into current account surplus of exporting countries. To cover this deficit, US borrows: this corresponds to the forex reserves of exporting countries. The crux of the issue is that no other country, barring the US, has such a huge consumption pattern and an ability to absorb this huge export surplus.
In substance, countries are producing their goods, exporting it mostly to the US, and parking the resulting export surpluses with the US to facilitate US to finance its imports!
Clearly, the global imbalance is a by-product of this mindless competition by various countries to devalue their own currencies and the reckless consumption in US. Naturally, it is indeed tempting to blame US consumption for this crisis. However, one must hasten to add that the emerging economies -- notably Asian countries, especially after the1998 currency crisis -- with their fixation for weak currencies, are equally to be blamed.
The net result? Well, consider these facts:
By mid-May 2007, the US National Debt stood at approximately at mind-boggling $8.85 trillion -- i.e. approximately $28,000 for every American.
The basic structure of the American economy is that the deficit of the US government is 4% of the GDP and the household sector 6%, which are offset by a domestic savings of 3%, largely from corporates, leaving a substantial national deficit of 7% to be covered by the capital flows from the rest of the world.
The current account deficit of the United States for 2006 is estimated to be in excess of $850 billion. This approximates to 7% of its GDP. Surely, even for the US, this is unsustainable.
In order to ensure that this money is routed into America and to sustain its gargantuan borrowing programme, the US has repeatedly raised its interest rate to its current levels of 5.5%. While the very size of the US debt makes any further increase in interest rates virtually impossible (as it would make borrowings uneconomical), any cut in interest rates to stimulate its economy and make it competitive would mean that the US may not get the money it requires to sustain itself.
On March 28, 2006, the Asian Development Bank is reported to have issued a memo, advising members to be ready for a collapse of the US dollar.
Since end March 2006, the US Federal Reserve has stopped publishing the quantum of broad money (that is the aggregate of US dollars circulating in the entire world -- technically called 'M3') in the US economy. This is the worst possible signal that the US Federal Reserve could have sent to the world.
Suspended sense of disbelief
Obviously, what aids and sustains the US dollar is a 'suspended sense of disbelief' amongst countries about the value of US dollar. Yet, common sense tells us that the excess supply will obviously result in a fall in the value of any product. The US dollar is no exception.
Late Iraqi leader Saddam Hussein was fully aware of this paradigm. Seeking to exploit the inherent weakness of the US dollar, Saddam wanted to trade his crude in Euros, which would have lead to a lower demand for the US Dollar and thereby triggered a dollar collapse. And those were his 'weapons of mass destruction -- WMD.'
And if some analysts are to be believed, Venezuela and Iran too possess the very same WMD. Naturally, it requires some specious arguments and military intervention to protect the US dollar. Never in the history of mankind has a national army protected the national currency so vigorously as the US Army has done is the past decade or so.
What is bizarre to note here is that despite the fact that crude is produced mainly in the Middle East; officially it can be purchased in dollar terms from one of the two oil exchanges situated in New York and London. Obviously, should Iran carry out the threat to commence oil trade in Euros or better still an oil exchange, the US dollar would come under tremendous pressure.
The US dollar is akin to the promissory note of a defunct finance company. It is common knowledge that a currency, when not backed by anything precious is just a piece of paper. When US abandoned the Gold Standard in early 70s, countries habituated by then to the US dollar under the Bretton Woods arrangement continued to accept the US dollar as an international currency without demur as the world was not prepared for any other alternative. Else, the global economy would have collapsed by 1971.
But the diplomatic silence did not solve the problem. It merely postponed it and it has come back to haunt us.
Post gold standard, by a tacit approval of the Organisation of Petroleum Exporting Countries (OPEC) and strategic manoeuvring, the US had ensured that its currency is implicitly backed by crude, instead of gold. This explains the American 'geo-political and strategic interests' in the Middle East.
But over time even this was found to be insufficient and consequently the oil standard of the 70s gave way to an implicit multiple commodity standard of today. Naturally, commodity prices -- including crude prices -- have soared in the past few years. Unfortunately, this arrangement too is failing the US. No wonder, the US dollar increasingly resembles a promisory note of a defunct finance company.
It is no coincidence that global trade in most commodities, including oil, is denominated in US dollars as the respective international exchanges are located in the US. To what extent are the prices of these commodities manipulated to protect the US dollar is anybody's guess.
However, it may not be out of place to mention that a barrel of oil which cost less than $10 to produce is sold approximately at $70 in the international market.
But as commodity prices go up it has lead to inflation across the globe. No wonder, countries are forced to increase their interest rates to fight inflation.
This has triggered an interest rate hike across continents and the US is finding it extremely difficult to sustain its current borrowing programme: it hardly has any elbow room to manoeuvre.
Doomed if it does, damned if it doesn't
Meanwhile, countries are increasingly realizing that the value of the US dollar that they are holding is fast eroding, whatever be the 'officially managed exchange rate.' And if fewer people want the US dollar -- as for instance when oil is traded in Euro the demand for the US dollar will fall -- it would trigger an avalanche.
No wonder, the US Fed is unwilling to make public the M3 figures, as it does not want the holding position of the US dollar to be publicised.
Interestingly, in such a doomsday scenario, some economists are still betting on central banks of other countries to defend the US dollar. It would seem that the US has 'outsourced' even this sovereign function to the central banks of other countries. After all, should the US dollar collapse, the biggest losers will not be the US but those who have US dollar-denominated forex reserves.
Naturally, countries holding US dollar reserves are caught on the horns of a serious dilemma -- should they seek to correct the global imbalance, it could result in the imminent collapse of the US dollar, and should they continue to defend the US dollar, they would be a long-term loser as the current arrangement has seeds of self-destruction.
While every central banker is conscious of this fact and thereby seeks to postpone the inevitable while nervously looking for his counterpart in any other country to break ranks and thereby trigger the collapse.
Surely, the emperor is without any clothes. There are only two possibilities from here on: Either we are witness a global meltdown of the US dollar, or allow controlled US dollar devaluation (read, revaluation of other currencies). If it is a global meltdown the global economy is doomed, if is an orderly devaluation, it is damned.
Let's Start with Humor: World's Best Resignation Letter
Dear Mr. Baker,
As an employee of an institution of higher education, I have few very basic expectations. Chief among these is that my direct superiors have an intellect that ranges above the common ground squirrel. After your consistent and annoying harassment of my co-workers and me during our commission of duties, I can only surmise that you are one of the few true genetic wastes of our time.
Asking me, a network administrator, to explain every nuance of everything I do each time you happen to stroll into my office is not only a waste of time, but also a waste of precious oxygen. I was hired because I know how to network computer systems, and you were apparently hired to provide amusement to your employees, who watch you vainly attempt to understand the concept of "cut and paste" as it is explained to you for the hundredth time.
You will never understand computers. Something as incredibly simple as binary still gives you too many options. You will also never understand why people hate you, but I am going to try and explain it to you, even though I am sure this will be just as effective as telling you what an IP is. Your shiny new iMac has more personality than you ever will.
You wander around the building all day, shiftlessly seeking fault in others. You have a sharp dressed, useless look about you that may have worked for your interview, but now that you actually have responsibility, you pawn it off on overworked staff, hoping their talent will cover for your glaring ineptitude. In a world of managerial evolution, you are the blue-green algae that everyone else eats and laughs at. Managers like you are a sad proof of the Dilbert principle(google it).
Seeing as this situation is unlikely to change without you getting a full frontal lobotomy reversal, I am forced to tender my resignation; however, I have a few parting thoughts:
1. When someone calls you in reference to employment, it is illegal for you to give me a bad recommendation as I have consisted performed my duties and even more. The most you can say to hurt me is, "I prefer not to comment." To keep you honest, I will have friends randomly call you over the next couple of years, because I know you would be unable to do it on your own.
2. I have all the passwords to every account on the system and I know every password you have used for the last five years. If you decide to get cute, I will publish your "Favorites," which I conveniently saved when you made me "back up" your useless files. I do believe that terms like "Lolita" are not viewed favorably by the university administrations.
3. When you borrowed the digital camera to "take pictures of your mother's b-day," you neglected to mention that you were going to take nude pictures of yourself in the mirror. Then, like the techno-moron you are, you forgot to erase them. Suffice it to say, I have never seen such odd acts with a ketchup bottle. I assure you that those photos are being kept in safe places pending your authoring of a glowing letter of recommendation. (And, for once, would you please try to use spellcheck? I hate correcting your mistakes.)
I expect the letter of recommendation on my desk by 8:00 am tomorrow. One word of this to anybody and all of your twisted little repugnant obsessions will become public knowledge. Never f*ck with your systems administrator, Mr. Baker! They know what you do with all that free time!
Sincerely,
David Blocker
Network Administrator
As an employee of an institution of higher education, I have few very basic expectations. Chief among these is that my direct superiors have an intellect that ranges above the common ground squirrel. After your consistent and annoying harassment of my co-workers and me during our commission of duties, I can only surmise that you are one of the few true genetic wastes of our time.
Asking me, a network administrator, to explain every nuance of everything I do each time you happen to stroll into my office is not only a waste of time, but also a waste of precious oxygen. I was hired because I know how to network computer systems, and you were apparently hired to provide amusement to your employees, who watch you vainly attempt to understand the concept of "cut and paste" as it is explained to you for the hundredth time.
You will never understand computers. Something as incredibly simple as binary still gives you too many options. You will also never understand why people hate you, but I am going to try and explain it to you, even though I am sure this will be just as effective as telling you what an IP is. Your shiny new iMac has more personality than you ever will.
You wander around the building all day, shiftlessly seeking fault in others. You have a sharp dressed, useless look about you that may have worked for your interview, but now that you actually have responsibility, you pawn it off on overworked staff, hoping their talent will cover for your glaring ineptitude. In a world of managerial evolution, you are the blue-green algae that everyone else eats and laughs at. Managers like you are a sad proof of the Dilbert principle(google it).
Seeing as this situation is unlikely to change without you getting a full frontal lobotomy reversal, I am forced to tender my resignation; however, I have a few parting thoughts:
1. When someone calls you in reference to employment, it is illegal for you to give me a bad recommendation as I have consisted performed my duties and even more. The most you can say to hurt me is, "I prefer not to comment." To keep you honest, I will have friends randomly call you over the next couple of years, because I know you would be unable to do it on your own.
2. I have all the passwords to every account on the system and I know every password you have used for the last five years. If you decide to get cute, I will publish your "Favorites," which I conveniently saved when you made me "back up" your useless files. I do believe that terms like "Lolita" are not viewed favorably by the university administrations.
3. When you borrowed the digital camera to "take pictures of your mother's b-day," you neglected to mention that you were going to take nude pictures of yourself in the mirror. Then, like the techno-moron you are, you forgot to erase them. Suffice it to say, I have never seen such odd acts with a ketchup bottle. I assure you that those photos are being kept in safe places pending your authoring of a glowing letter of recommendation. (And, for once, would you please try to use spellcheck? I hate correcting your mistakes.)
I expect the letter of recommendation on my desk by 8:00 am tomorrow. One word of this to anybody and all of your twisted little repugnant obsessions will become public knowledge. Never f*ck with your systems administrator, Mr. Baker! They know what you do with all that free time!
Sincerely,
David Blocker
Network Administrator
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