India’s weekend election gives the ruling Congress Party a big win and paves the way for economic reforms.

The train wreck known as China’s manufacturing sector took another tumble down the hill as India imposed a six-month ban on toy imports – one of China’s largest exports. The setback for China underscores our ongoing warnings to investors that neither a multibillion stimulus plan or anything that Beijing throws at its ailing economy will promise investors those speculative profits of yesteryear.

In the mornings, I glance at the book of inspirations in my father’s room. It is strategically placed above the TV set from where the chants of stock market movements are pelted out. The thought for August 17^th reads: “Reality is always open to revision – My choice plays a key role in whether I accept the world as it is or alter it to suit my desires.”

When the UPA Government first came in, great hopes were placed on a well educated, sensible, triumvirate of Finance Minister, P Chidambaram, educated at Harvard, Prime Minister Manmohan Singh, (Cambridge and Oxford) and Planning Commission Chairman, Montek Singh, (Oxford).

Last year, China was viewed as the driver behind rising commodities prices.

Now the blame for spiraling food and oil prices is increasingly being laid at the door of Fed Chairman Ben Bernanke for cutting the fed funds rate to 2% and unleashing yet another wave of inflationary surplus liquidity.

The fallout is now being seen as India, China, the Philippines and Indonesia hike their own interest rates to rein in rising prices.

Consumer prices jumped 7.7% last month, down from 8.5% in April, but inflation there remains top of the list of economic concerns.

Over the past 5 years the welcoming policies towards unknown “foreign” buyers into the Indian stock markets has created a fake bull market in the Indian stock exchanges. The P-Notes or participatory notes were even recognised to be fake by the creators of these instruments: they are called “synthetics”.

An ostrich can hide from reality for awhile, by digging its head in the sand, but ultimately, when he raises it to breathe, he must face it.

Inflation in India reached a four-year high of 8.24% for the week ending May 24, with major banks forecasting further rises ahead as the government hiked the price of discounted fuel.

“Soaring oil prices have forced Indian authorities to raise subsidized fuel prices and risk propelling inflation that is already running at a three-year high,” says Jason Simpkins in Money Morning.

There are those who will tell you that oil is a cyclical business and a global fungible commodity. It rises and falls with the business phase. If you look at a hundred-year chart, it is as obvious as a sidewinder on a sand dune. A sine wave through time — up and down in seven-year cycles.

The United Nations announced yesterday (Wednesday) that an additional $20 billion would be needed each year to combat global hunger.