Jim Rogers, famous commodities investors cautions on investing in India and points to upcoming war due to water

UR6ZR6UN9U9W Legendary Quantum Fund manager (along with George Soros) and commodities investor Jim Rogers is short Indian equities and has categorically declared that India while an exciting place to visit is not a place for him to invest in. In an interview with Bloomberg last week, Mr. Rogers proceeded to urge the Indian Government to figure out somehow how to run a country pointing to the non-convertibility of the Indian currency, the Rupee on the international markets. He has also blamed the restrictions on foreign investors as another reason why he feels the Indian government does not know how to run an economy.



As posted in an earlier blog post, this view on the Indian macroeconomic environment is reflected in investors moving their capital out of India and I believe it is only a matter of time before the current bubble in Indian equities which has built up again since the last pop in 2007 will burst again in the near future perhaps quite dramatically. Mr. Rogers also pointed out about the possibility of an upcoming war due to shortages of water resources in India and Pakistan. I have previously blogged about this possibility of a war between India and Pakistan in the near future as well.

With the arrest of Musharraf, Pakistan may be stumbling towards total anarchy - followed by a war

How the mighty have fallen! The man who took Pakistan very close to a nuclear war with India back in 1999  is now under arrest in his own country, an event which may ironically possibly trigger another nuclear confrontation with India attempting to finish the job he started. The Washington Post reports that Musharraf faces the prospect of prison or death, if convicted of treason and military commanders would certainly not accept the jailing of their former colleague at arms. Pakistan’s former military rulers have long been held responsible for the instability and militancy plaguing the country and for disrupting democratically elected governments and none have ever been held accountable.



This arrest may either be a game changer prompting the Pakistan army to try to broker a deal to send Musharraf packing - or more ominously - may create a diversion by opening an offensive against India in some way shape or form. Escalating response from India may bring inevitable instability in the whole region. The markets would do well to price in this geopolitical risk.

Why a war between India and Pakistan is very likely by 2014 or later

Bruce Riedel, a former CIA agent and now a Senior Fellow at the Brookings Institution, a think tank in Washington DC has written a book entitled "Avoiding Armageddon America, India and Pakistan to the brink and back". Mr. Riedel's main argument in the book is that if there is one place in the world where we could have a nuclear war in our lifetime, it's in South Asia. In an interview with rediff.com, Mr. Riedel has suggested that "India and Pakistan have fought four wars, and there's no reason to believe they are finished. If one thinks of what a future war between India and Pakistan would look like, it is Armageddon." Mr. Riedel also hinted that "dark forces in Pakistan who will do anything and were vividly on display in Mumbai in 2008 haven't gone away. If anything, they are stronger today than they have ever been before. Indians need to think clearly about what kind of future they are going to have with a Pakistan that has the fastest growing nuclear arsenal in the world, and more terrorists per square mile than any other place in the world." As Mr. Riedel further elaborates in the video, Pakistan army's obsession with India is not likely to end any time soon and the next war which is only a matter of time will likely result in Armageddon.