Japan has recently been harvested by the US dollar, the yen fell to nearly 160 against the US dollar, even if the Japanese government and the central bank may have taken emergency measures to save the market by 8 trillion yen, the effect is still fleeting, the yen downward trend is still irreversible, according to the greedy nature of the US government and international financial investors, even if the Japanese government bows its head, there will be no good fruit for them to eat. Just after Japan's debacle, the United States set its sights on India, another big Asian country, and was ready to use the method of withdrawing a large amount of funds and shorting the rupee exchange rate to forcefully harvest the Indian economy. Under such a blow, the Indian economy, which is already not very good, is likely to cause various industries such as manufacturing to collapse or even fall into a long-term recession once it is harvested by the dollar.
According to data released by the National Securities Depository Corporation of India on May 3, foreign funds, including manufacturing, have withdrawn nearly 6 trillion rupees from India since India began to tighten monetary policy in 2022, equivalent to more than three times the net outflow during the 2008 US financial crisis and at least the highest annual withdrawal in 20 years. In addition, the Indian stock market has also been gradually "shorted" by foreign investors, according to data from Citibank, a Wall Street institution, since the fourth quarter of 2023, overseas investors have sold a net of $3.8 billion worth of Indian stocks, about 31.5 million Indian rupees, and Citi has also downgraded the rating of the Indian stock market.
As far as India is concerned, the current international capital market and its domestic market environment are really "rumors of rumors, grass and trees", and the lessons of Japan's harvest are not over. Since New Year's Day 2021, the yen has depreciated by 35%, and the yen exchange rate is still hovering around 155, which has led to a large-scale capital outflow from Japan. Japan, which relies on imported resources, has seen its import costs rise sharply, which will have a significant impact on the price level and inflationary pressure, and the living standards of the Japanese people will inevitably continue to decline. Even if the Japanese Government and the central bank smashed a total of 8 trillion yen twice to rescue the market before and after the May Day "Golden Week," they still had little effect, and even Japanese Prime Minister Fumio Kishida was asked whether to bail out the market, but he was also hesitant and noncommittal, for fear of offending the US masters, and wanted to "endure the calm for a while" and beg the United States to raise its noble hand and let Japan go as soon as possible.
For international investors, India is not a very ideal market, because the quality of labor and infrastructure related to the foundation of economic development, to the business environment provided by the government and local governments, are relatively poor, and the liquidity of India's real estate market and financial market has not been high, which has led to the recent bearishness of foreign investors on India, and it is reasonable to withdraw up to 6 trillion rupees.
Of course, no matter how bad India's investment environment is, it will not lead to such a large-scale withdrawal of funds from foreign investors, after all, India has abundant and cheap labor, and it can make money no matter what, but coupled with the harvest of the dollar and the low exchange rate, it will not be able to retain international capital. In the past two years, India's monetary policy has been tightened, and the rupee exchange rate against the US dollar has been declining, especially in the last month, the Indian rupee is the same as other Asian currencies, under pressure from the strong US dollar, and the exchange rate has continued to hit new lows, after the US dollar against the rupee currency exchange rate once hit a low of 83.579 during the day, the US dollar index rose, and the outflow of domestic stock funds has put pressure on the rupee, and it is not excluded that the Indian government and the central bank will use foreign exchange reserves to reverse the decline of the rupee.
Not only has the lower rupee exchange rate led to the withdrawal of manufacturing and other industrial capital at the national level, but India's grassroots retail investors have also been "cut leeks" by foreign capital. Since 2021, India's Sensex Index has risen by 55%, and the Bombay Stock Exchange and the National Stock Exchange have raised 81.424 billion rupees, which can be said to be the "hot money" of Indian retail investors, because as the market overheated, they have taken out other funds and poured into the stock market, but now most of the listed companies have fallen below the issue price, and the major shareholders have gained a lot of wealth, but the retail investors have lost a lot.
Therefore, if investors continue to withdraw, coupled with the squeeze of the strong dollar against the rupee, the Indian economy will really face the risk of regression, and if the US continues to keep interest rates high and the Fed does not cut interest rates, the Indian economy could fall into recession.
On the one hand, India's global manufacturing factory facilities, which have supported India's rapid economic and foreign trade growth in recent years, are simply not enough to continue to operate or even expand reproduction, because these factories that undertake global industrial transfer basically only have some assembly lines, unless they are some multinational companies such as Chinese smartphone manufacturers. Combined with factors such as poor infrastructure and the quality of the workforce, India's manufacturing sector is simply not that resilient, and even Indian consumers prefer high-quality and affordable goods made in China. Therefore, when India's investment market is unable to attract foreign capital, the "investment" momentum, one of the troika of economic development, is even weaker, and it cannot support India's economic development at all, let alone achieve Modi's ambitious goal of becoming a developed country by 2047 for the sake of elections.
On the other hand, India is also facing a debt crisis, and a series of economic growth has been created by debt accumulation. Although India's foreign exchange reserves total nearly $650 billion, this is a drop in the bucket compared to the country's total public debt, which is nearly $3 trillion. These debts in the context of the Fed's high interest rates, Wall Street financial capital provides a large number of interest rate differentials to harvest India's wealth, but India cannot be compared with China, China can also use its rich foreign exchange reserves to defend against it, but India's foreign exchange reserves that cannot make ends meet cannot resist the harvest of the Fed and Wall Street.
In order to pass on the huge debt and economic deficit, the United States is sharpening its knives to Asia, and is intensively laying out the Indian bubble market, with a large-scale withdrawal of funds and a shorting of the ruble. It has been speculated that in the event of a heavy blow, India's economy is likely to return to the level of the 1997 Asian financial crisis, or even fall into a deep recession. If the Modi government continues to be ambitious and rejoice, India's wealth will sooner or later be harvested by the United States, and India's economic development will also collapse, let alone the goals of developed countries.