Due to the bankruptcy of America’s Silicon Valley Bank (SVB), the international market has once again become turbulent. This has also resulted in a significant crash in the Indian stock market.
SVB is considered the 16th largest Bank in America. The Bank provides loans to IT companies, healthcare and other emerging start-ups. Therefore, a significant amount was in circulation through this Bank. SVB Financial Group is the parent company of the Bank and their shares crashed by 85%. Thereafter, the Bank was closed. The announcement of the Bank’s closure has affected businesses around the world and has set the stage for another recession.
The assets of SVB are US$ 209 billion (approximately Rupees 17,130 crores) with branches in many cities of USA. The Bank purchased bonds from its own funds; but, due to low interest rates, this investment did not get good returns. The US Federal Reserve has consistently increased interest rates for institutions in the IT sector. As a result, investors withdrew money from the Bank as they needed money for their own businesses. With rising interest rates, investments in the IT sector reduced. Due to frequent withdrawals, the Bank had to sell its properties.
Large borrowers found it difficult to repay their loans, and investors were also affected. The Bank has decided to sell its shares, and Elon Musk, the one of the welthiest people in the world, has shown his willingness to buy SVB.
What is the credibility of the American institutions ?
In January this year, the US Research Institute, Hindenburg, published a negative report on India’s leading industrialist and the world’s number two billionaire, Gautam Adani’s business empire. Hindenburg sources the financial problems in any establishment and publishes its extensive reports which prove its claims. Shares of the Adani Group plummeted after the release of the Hindenburg report. Due to this, Adani became infamous in the world and suffered a loss of hundreds of crores of Rupees. Why does a Research Institute that follows Adani, who recently shone on the world stage, ignore the malpractices of such a big Bank in its own back yard ? Such Institutions and organisations find time to keep an eye on upcoming businesses/investors in India. It will be important to find out whether they really do not see the malpractices of sinking Banks in their own country, or deliberately ignore them. Such issues reveal the credibility of US research institutions and establishments/businesses.
Some days ago, SVB was honoured as the Best Bank in the USA by the world famous magazine Forbes. Now the same Bank has gone into bankruptcy. How do American institutions blindly admire each other ? This shows how they are digging their own graves. However, the same institutions hound the Indians who become famous. They fudge reports, spread false stories of injustice and oppression of minorities in India. All this so that developing countries such as India do not overtake the USA.
History of 2008 repeats !
In the year 2008, Lehman Brothers Inc., an American global financial services firm and the fourth largest investment bank in the US, declared bankruptcy. At that time, not only USA, but the entire world faced recession. Between the years 2001 and 2006, real estate companies were given huge loans by the American banks. They did not think how their loans will be refunded. The American real estate market was at its peak. When the recession set in, the problems of banks increased and their defaults led to the collapse of Lehman Brothers. Then too, the world, including USA, was shocked.
Being independent – An absolute necessity
USA is considered to be the richest and most prosperous country in the world. Its industries are highly praised all over the world. The world is still very dependent on the US banking industry. As a result, attempts are made to imitate their systems and methods. When there is turbulence in the industrial and banking sector in the US and they face a crisis, there is confusion all over the world including India. USA tries to monitor the functioning of the world or in other words, USA tries to control the world. As a result, India has to dance to its tune.
Congress party has had a tradition of blindly imitating the USA. Ever since Prime Minister Narendra Modi has come to power and given his slogan of ‘Atmanirbhar Bharat (Self-reliant India)’, the country has been somewhat wary.
It is time to decide how much India should depend on USA. India has abundance of natural, man-made and human resources. Therefore, India should continue on its course by planning an independent policy and development based on Dharma. It is beyond doubt that someday India will prove its position as the Numero Uno in the world !
India should continue on its present course by planning an independent policy and development based on Dharma !