Global Linkages 1.Role Switch among major economies of the World Pre Post – and Ahead - China rebalancing forces World to rebalance 2.Euro Zone more likely to deflate 3.Japan – end is near

Pre 2008 Crash-Global Linkages US Biggest Consumer 1.Low Demographic dividend 2.Consumption driven by ultra easy monetary policy China Biggest Export 1.High Demographic dividend 2.Massive financial repression in economy Euro Zone – Export Driven, Internal Imbalances 1.Low Demographic dividend 2.Excessive Leverage in Periphery Japan– Export Driven 1.Very weak Demography 2.Energy Independence – nuclear energy 3.Deflation Commodity Exporters fuelling Investment boom in China Australia, Latin America, and other emerging markets ex-India EU and China trade EU and Japan trade

Post 2008 – No market for Chinese Exports US Sub Prime Crisis 1.Consumer demand destroyed 2.Demography weakened further 3.Crisis Exported to other major economies China No Market for Chinese Exports 1.Debt driven investments not yielding returns 2.Demographic Dividend Euro Zone 1.Crisis imported from US 2.Debt Crisis in EU 3.Consumption Destroyed Japan 1.Further economic malaise 2.Aged Economy 3.Already weak domestic demand weakened further To whom will Commodity Exporters Export. Australia, Latin America, and other emerging markets ex-India Emerging Markets Crisis Need to Rebalance China

China Biggest Consumer 1.Demographic dividend 2.Consumption driven by high population base US Net Exporter 1.Low Demographic dividend 2.Energy boom and Exports Euro Zone – Net Exporter, Debt deleveraging, Deflation 1.Low Demographic dividend 2.German led Export powerhouse EU and US trade 2014 & ahead – Role Switch and World Rebalancing In Long Run, Commodity Exporters will fuel Investment boom in United States, EU. (Australia, Latin America, and other emerging markets ex-India) Japan–End is Near Neither consumption driven nor Export driven growth possible

Can Euro Zone cannot achieve inflation Target Euro Zone 1.ECB set 2% inflation goal 2.May use negative rates, Us styled QE to trigger inflation 3.Already running record high unemployment ECB alone cannot counter deflation coming from two major economies. Hence Rise in EURUSD inevitable (conditionality – EU remains intact) China Rebalancing will send deflationary shock around world. CNY would fall against EUR Japanese QE already exporting deflation to Euro Zone. It is evident from sharp rise in EURJPY pair. Potential Japanese crash would add to deflationary forces

Japan – End is near Japan’s economic malaise Extremely weak demography High Debt to GDP ratio Monetary policy ineffective Energy Dependence No Way Out No scope for Consumption driven recovery No scope for Export driven recovery Neither a Tourism attraction