2008-10-13 06:57:07 - RBI Governor D Subbarao said cost of borrowings have increased for India Inc because of factors like risk aversions, deleveraging and frozen money markets, which is also affecting the availability of funds in the international markets.India can be too badly hit with this global cruch in fiscal market.Bush administration now favours injecting cash directly into US banks as part of its strategy to rescue the country"s floundering financial system, which in effect will lead to the partial nationalision of the banks, a media report said today.

India in danger zone

Reserve Bank has warned that the global financial crisis can spread to India through equity and forex markets, while money, debt and credit markets could be impacted indirectly due to the continuing onslaught.

However, the country may escape the worst consequences of the crisis, even as “the equity and the forex markets provide the channels through which the global crisis can spread to the Indian system," RBI Governor D Subbarao said here on Saturday
India"s exports during the first five months of the current fiscal registered a growth of 35.1 per cent to 81.2 billion dollars as against 60.1 billion dollars in the same period a year ago.The capital market, found FIIs have net pulled out 10.05 billion dollars in 2008 so far, while they have net pumped in 2.15 billion dollars in the debt market, according to SEBI figures.

US and its allied force war with Iraq and Afghanistan.

Super power US used its influence in haste action to declare Iraq making weapons of mass destruction and threat to the world asked its allied forces to punish the Sadam to hang to death.In process the long drawn embattled war between developed nations and Iraqi found themselves in situation which did not calm to restore the peoples goverance in Iraq.Non-coperation of the peoples in Iraq along with continued battle with Afghanistan radical chief Osama responsible for Sept 11, 2001 terrorist attacks in US,unending to be in sight of allied forces made the US and its allied forces spend trillions of dollars on these two ventures. US and others allied forces which were to get some billions of contractual orders saw their plans nosedive with fiscal spending mounting on high scale with no returns.US and EU were caught in fiscal fix when blue chip Dow Jones industrial average suffered worst loss since Sept 11, 2001 terrorist attacks and plummeted more than 500 points.Financial markets across the world were rattled by the sale of Merrill Lynch on Sunday and Lehman Brothers Holding declaring bankruptcy on Monday and subsequent decision taken by the government against bailing out the failing financial institutions.

Adding to the turmoil was insurance giant American International Group (AIG) trying to arrange bridge loan of 40 billion dollar to tide over the difficult period and approaching the Federal government and the New York State.

Asian market and Euro stock market felt its effect and world stock market tumbled with bears hammering the blue chips with ease.

Housing market remained sluggish and most of the unsold houses made the mortgage market plung thus the fiscal institutions investors had tough time.However the oil price receding may give some confidence to the stock markets but will take months to recover.Elections in US,UK will keep the business at low ebb and Indo US nuke deal is silver linning in hour of global recession,likely to be through by US congress in converging session.
As the recession progress and cut in employment is on rise the demand of oil be recede and the price of crude oil must touch the bottom to level of 50 dollar a barrel and then only we can see the light for the global fiscal crunch to heal up slowly and gradually.

Fuelled oil rice rise

Parabolic rise in oil price is ploy of speculators who wants to reach the price to such an height that its consumption decreases, allow the artifical bubble to burst.With this unprecedent rise in oil price has shattered global economy and the inflation reins in the world.Fast track moving economies of China,India and South korea will find itself in slow pace.China"s cheap labour, the manufacturing hub of the world is being eroded.Countries look for alternate source of oil.

India"s economy on quick rise of inflation galloping each weak and presently official release 8.7% is seen on continous rise due to global hike in fuel price and may touch double didgits in a month.US and Europe too faces uphil task as inflation has slowed down their economy.

Rise in price seen retreating as Summit nears taking action.OPEC countries remained static in investment to enhance capacities non OPEC countries Britain Norway,Mexico and Russia did made an effort but presently they too are in steady and their oil exploration cost escalated.Non OPEC countries produce one third of oil OPEC produces.

An alternate to oil,{hydrogen gas,ethanl,biofuel,solar fuel,power as fuel} suggested will bring fiscal loss to the immediate gainers and shift the pricing to the next chief fuel of the world.Speculator along chief producer go for final kill before awareness brings quantum jump to option fuel energy source.Ethanol blend,bio fuel appears to be be failing lot in this directions.Oil is part of life energy,Oil King on its golden moments donot want change .
OPEC"s reference basket of crudes from 13 countries was $130.87 per barrel on Monday, compared with $126.11 the previous Friday, the oil cartel said. Russia"s energy giant Gazprom told a European business forum in France
that oil prices could reach $250 per barrel in the longer term. News agency AFP quoted Alexei Miller as saying that rivalry for hydrocarbon resources will continue to grow.

U.S. President George W. Bush calling the initiative “interesting" and British Prime Minister Gordon Brown welcoming it."As one of the world"s largest producers and consumers, we expect to participate," White House spokesman Tony Fratto said later.

The summit is called to mitgate the blame game and to reach reasons responsible the roots of causing surge oil price to an unaffordable to most of the countries, protests seems to emegre from both developed and devloping nations.

Oil experts are having diverse version of oil fields,when one view suggest it limited for three decaded the other postulates more than double the OIL RESERVES.

Oil pricing urgently needs a International regulatory authority to keep check on speculative spiraling price rise of oil which needs statutary guidelines from oil producers and Consumers.

Israeli Threat of war against Iran is another war in Oil producing regions made speculative affect on oil price surge.

Gazprom one of the biggest oil producer of the world and chief
suppliers to Europe Alexei Miller its CEO told the European Business Congress in France gas delivery prices for Europe have reached $410 per 1,000 cubic meters, the Russian energy giant"s CEO said on Tuesday.
Russia"s gold and foreign currency reserves increased by $0.5 billion, to $549.1 billion, in the week of May 30 - June 6, the Central Bank of Russia said Wednesday.

Alexey Miller, chairman of Gazprom said the higher crude prices it expected would drag gas values up too. “We think it oil will reach $250 a barrel in the foreseeable future," said Miller, insisting that high demand rather than financial speculation was the primary factor, an argument that runs counter to that put forward by Opec.

OPEC"s Secretary General on Tuesday appealed Abdullah al-Badri said there is no shortage of oil in the market called for measures to quell market speculation, a factor OPEC says is sending prices to unjustified levels.

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