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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late....

Silent Money Killer: Loss of Buying Power

In personal finance, we often worry about losing money in the stock market, dislike the volatility associated with equities or mutual funds, or feel anxious about missing out on a hot investment tip. Yet the biggest threat to our wealth is far quieter and far more dangerous: loss of buying power. It is the invisible erosion of your money caused by inflation - a force that operates every single day, without pause, without headlines, and often without being noticed until it is too late.
Inflation does not take away your capital visibly. It does not reduce the number in your bank account. Instead, it reduces what that number can buy. A Rs 100 note today buys far less than what it did ten years ago. This gradual and relentless decline is what truly destroys long-term financial security. The real damage happens when people invest in financial products that earn less than 10 per cent returns, especially over long periods. India’s long-term inflation averages around 6 to 7 per cent. When you add lifestyle inflation - the rising cost of healthcare, education, housing, travel, and personal aspirations - your effective inflation rate is often much higher. So, if you are earning 5 to 8 per cent on your money, you are not growing your wealth. You are moving backward. This is why low-yield products, despite feeling safe, often end up becoming wealth destroyers. Your money appears protected, but its strength - its ability to buy goods, services, experiences, and opportunities - is weakening year after year. Fixed-income products like bank fixed deposits and recurring deposits are essential, but only for short-term goals within the next three years. Beyond that period, the returns simply do not keep pace with inflation. A few products are a financial mess - they are locked in for the long term with poor liquidity and still give less than 8 per cent returns, which creates major problems in your financial goals journey. To genuinely grow wealth, your investments must consistently outperform inflation and achieve more than 10 per cent returns. For long-term financial goals - whether 5, 10, or 20 years away - only a few asset classes have historically achieved this: Direct stocks Equities represent ownership in businesses. As companies grow their revenues and profits, shareholders participate in that growth. Over long horizons, equities remain one of the most reliable inflation-beating asset classes. Equity and hybrid mutual funds These funds offer equity-debt-gold diversification, professional management, and disciplined investment structures that are essential for long-term compounding. Gold Gold has been a time-tested hedge against inflation and periods of economic uncertainty. Ultimately, financial planning is not about protecting your principal. It is about protecting and enhancing your purchasing power. That is what funds your child’s education, your child’s marriage, your retirement lifestyle, and your long-term dreams. Inflation does not announce its arrival. It works silently. The only defense is intelligent asset allocation and a long-term investment mindset. Your money is supposed to work for you. Make sure it continues to do so - not just in numbers, but in real value. (The author is a Chartered Accountant and CFA (USA). Financial Advisor.Views personal. He could be reached on 9833133605.)

Inside Nepal’s Crisis and the Geopolitical Gambit Against India

Far from any spontaneous rebellion, Nepal’s upheaval is part of a covert strategy by global powers to encircle and destabilise India.

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As Nepal burned, the ashes concealed a far deeper geopolitical design. For beneath the smokescreen of protest and political rhetoric, a well-rehearsed script unfolded in the Himalayan state throughout this week.


It began with ostensible protests by disillusioned youth against a sudden social media blackout metastasising into full-scale violence. As thousands marched through Kathmandu, their demands extended beyond digital freedoms to corruption, unemployment and governance failures.


The government of Prime Minister K. P. Sharma Oli responded with a brutal crackdown. At least 51 people perished and more than 1,300 were injured after police opened fire on protesters who had defied curfews. But as the unrest accelerated with the Presidential Palace, Parliament, Supreme Court and government offices set ablaze, an unsettling pattern emerged.


This was not merely popular disaffection boiling over. Beneath the surface, a deeper conspiracy was at play to destabilise India by turning its small but strategically vital neighbour into a pawn of global ambitions.


Prime Minister Oli’s sudden flight to Dubai, rather than China or India, raised eyebrows. Behind closed doors, whispers of ‘Deep State’ involvement swirled. The army, rather than restoring order, seemed to enable chaos. Masked mobs brandished self-loading rifles (SLRs) - standard military-grade weapons - with disturbing ease. Was the Nepali military complicit in the unfolding spectacle? Going by the sequence of events, it is hard to escape the conclusion that the Nepal ‘crisis’ was a pre-planned coup, executed with surgical precision.


The rise of overtly anti-India figures in Nepal only confirms the wider game afoot. Rabi Lamichhane, a former journalist turned politician and an ex-American citizen with a graft-tainted past, was lionised by the very protestors who freed him from prison. Balen Shah, notorious for banning Indian films in Kathmandu, also surged in popularity. Both signalled that interim power in Nepal was passing into hands antagonistic to New Delhi.


Viewed in isolation, Nepal’s descent into chaos might seem localised. But viewed in context, it disturbingly fits into a regional pattern of destabilisation – one aimed squarely at encircling India.

Let us begin with Pakistan. On April 10, 2022, Imran Khan’s government fell under a no-confidence motion in Parliament, followed by a spate of corruption charges and his eventual imprisonment. Yet the key moment came earlier, when Khan declared, in a Turkish television interview, that Pakistan would never permit the United States to operate military bases on its soil. Soon after, the army, long adept at engineering political transitions without overt takeovers, moved decisively to discard its once-favoured protégé.


In the Maldives, a similar narrative unfolded when Mohammed Muizzu, a pro-China candidate, ascended to power in November 2023 on a platform that called for the expulsion of Indian influence. He accused New Delhi of harbouring thousands of Indian soldiers, despite official figures reporting fewer than a hundred. What was Muizzu’s true purpose? China, already having leased a strategic Maldivian island for military use, stood to benefit from India’s marginalisation. Yet, in the midst of the Maldivian financial crisis, it was India, not China, that offered critical economic support - a fact conveniently obscured by anti-India rhetoric.


Sri Lanka’s collapse mirrored this pattern. In July 2022, President Gotabaya Rajapaksa, who had leased the Hambantota Port to China, fled amid mass protests. Beijing, despite its close ties to Rajapaksa, did not extend aid. Instead, the regime was left to crumble under domestic pressure, allowing foreign powers to manipulate the power vacuum.


The military takeover in Myanmar further amplified this regional trend. On February 1, 2021, the democratically elected government led by Aung San Suu Kyi was toppled under the flimsiest pretext: failure to retire a general. The junta swiftly assumed control. Notably, Myanmar’s military remains one of China’s most loyal allies, underscoring the complex interplay of domestic pretexts and external influences.


Then came Bangladesh’s turn. On August 5, 2024, Sheikh Hasina was ousted by the military after resisting U.S. attempts to establish a permanent base on St. Martin’s Island. Her ouster cleared the way for Nobel laureate Mohammad Yunus, a figure long favoured by American strategists, to assume power. Hasina herself sought refuge in India, highlighting the strategic angle underpinning the transition.


Even India has not been spared. The forces of subversion have long attempted to destabilise the world’s largest democracy. From Sharjeel Imam’s incendiary call to sever the Siliguri Corridor to the sustained campaign over the Rafale deal, the design was unmistakable: to engineer regime change. Be it the ‘Chowkidar Chor Hai’ slogan, or the Shaheen Bagh protests or the farmers’ agitation - all bore fingerprints of foreign-funded NGOs, Khalistani elements and leftist groups eager to turn popular unrest into a proxy war.


When investigations revealed that funding for certain protests came via accounts in the United Arab Emirates, the connections became clearer. Even the Pegasus spyware scandal, the alleged vote rigging charge levelled against the ruling party, and the Hindenburg report were strands in the same tapestry, designed to sow distrust in India’s democratic fabric.


Why this fixation with India? One obvious reason is its meteoric rise that threatens established global power structures. India is now the world’s fourth-largest economy, rapidly advancing towards superpower status. Its defiance during the tariff wars unleashed by U.S. President Donald Trump’s demands, its strategic rapprochement with Russia and China (solidified through the Shanghai Cooperation Organisation (SCO) summit) has heightened American anxieties about its waning global hegemony.


In this light, Nepal’s coup can hardly be called ‘incidental.’ The timing was simply too precise and the dramatis personae picked to enact the script, just too calculated. After all, Nepal is not just a mere ‘geopolitical neighbour’ but shares an ancient civilisational bond with India. The shared cultures, familial ties and religious traditions – especially evident in Uttar Pradesh and Bihar - mean that any upheaval in there resonates far beyond Kathmandu.


From New Delhi’s perspective, the stakes could not be higher. Permitting a regime hostile to India to consolidate power in Nepal not only compromises national security but also risks the strategic integrity of the region. The Himalayas are not just natural barriers but have long been corridors of influence and potential geopolitical flashpoints.


The Nepal ‘coup’ is a chess game of global proportions, where both the American and Chinese ‘Deep States’ appear to be tacitly cooperating in thwarting India’s global ascent. Each manoeuvre - whether in Nepal, Pakistan, the Maldives, Myanmar, Sri Lanka or Bangladesh - is a calibrated step in encircling India, constraining its ambition, and sowing discord from within.


However, India’s democratic institutions have held firm until now. Its military remains vigilant and its strategic partnerships continue to deepen. But any complacency at this stage would be dangerous. From the Bolshevik coup of October 1917 cloaked as a spontaneous ‘workers’ uprising’ to Cold War-era regime changes in Latin America and West Asia, history is replete with instances where ‘popular’ causes concealed external designs.


As India navigates this treacherous terrain, its challenge will be to disentangle genuine domestic dissent from manufactured disquiet and fortify its strategic borders. After all, the real battle does not lie in the streets of Kathmandu or Dhaka but the unforgiving corridors of global geopolitics.


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