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Saturday, 14 September 2013

Jim Rogers Blog - Uncle Ben is a Historic Disaster?

Not true? Everybody is printing money is an effort to debase their currencies so that exports remain competitive, while consumers will suffer with rising prices that will not be reflected in inflation indices. The game is on.

First, we are not promoting Uncle Ben's actions and decisions in anyway - it is just that all these guys are boxed in and have few choices to consider. They are boxed in for a number of different reasons, but if we cut to the chase, physical-reality's constraints are now governing what both central bankers and their abstractionist economics can and can't do. 

So, what's really going on? The secret is we are past "peak everything" making the inputs needed for production and consumption outputs scarcer. As a result, if you are chasing these scarce physical objects with abstracts (money) and all the other chasers are doing the same, how would you try to win the chase? You are right, have more abstracts than the other chasers - which translates into what? Print more money.

What does the end game of this chase look like? Simple extrapolation says we will ultimately have printed lots of money, but for some reason it didn't create anymore inputs for the economic process anywhere. I wonder why that is?

So in a funny way we do not really blame Uncle Ben and his friends because not even Jimmy has come up with a solution to fix this predicament. Why? Simply because there isn't one.

First Financial Insights
September 13, 2013  

Poor Uncle Ben and friends...are just boxed in. Reality Check!


Wednesday, 11 September 2013

Eric Sprott Blog: NOBODY GETS IT - Is it the Detroit or Nauru Template?

By: Eric Sprott and Etienne Bordeleau On July 18 2013, the city of Detroit officially filed for bankruptcy under Chapter 9. At $18 billion, 

Nobody gets it! 

That includes Sprott, the economists, politicians, bureaucrats and all the others in their respective supporting casts. Sprott points out that the government promised more than it could ever pay - what government doesn't? That aside, going through all the historical accounting, economic,finance and legal numbers and rhetoric does very little to identify the issues and learn what could have been done to avoid this collapse. Or to even find any  remaining ways to salvage a situation, that is bound to get worse.

Detroit is not alone in this regard, there are many others out there. If fact, many of those entities are actually countries, who are following the now famous "Nauru Template." These nations include Greece, Spain, Cyprus, Italy, Venezuela, Egypt and many more. Defining that template is straightforward - it is an economic situation that is no longer sustainable because the available resources for economic production and consumption are diminishing rapidly to exhaustion, while populations remain constant or expand requiring the same or greater production for consumption..Not good math, as it leaves many folks  ultimately desperate for a means of basic subsistence.

Outside the physical constraints, there were three obvious conceptual causes behind these collapses. First, the policy-makers and leaders foolishly continued to hang onto archaic mainstream economic doctrines that had no basis in reality

Two, they all failed to properly evaluate trends in physical resources, population growth, environment, competition and positioning for long-term activity, particularly as certain activities were  predictably becoming obsolete. For instance, if their once physically based economy was shifting to a conceptually based economy - then how could these cities/nations build advantages to attract and retain these types of economic concern. Such advantages are complex taking years of dedicated effort to build and "most importantly" - do not bring politicians immediate rewards and votes.

That's the cost of doing the right things for the future - personal sacrifice!

Anyway thirdly, there was no longer-term business plan, strategy, nor a  permanent central-economic board to oversee these strategies, plans and implementations, regardless of the political influences of the times. Random and in-cohesive actions and decisions have little chance of success. 

Clearly, these situations are open to prime application of many common seafaring metaphors. The ones we recall sound like this: - No Captain! No Compass! No Destination!. Means? - NOBODY Gets IT!

First Financial Insights
September 11, 2013 

Famous Statues' Motown Chorus: 

“Nobody Got IT”
...shanna, na, nah, bee boop de loo..



Sunday, 8 September 2013

Jim Rogers Blog : Global Economic Slowdown or Meltdown?

(Read More Above)

Well if Jimmy thinks we are headed for a slowdown; he is dead wrong. It is going to be more akin to a meltdown. Why?

First, interest rates at some point are bound to rebound. That is a simple mathematical calculation when completed has the potential to drive stock and bond markets down by fifty per cent or more. Include real estate properties in the market definition.

But the real big - big reason is that we are past peak everything, and that spells trouble as things move to the other side of the slope. If anyone thinks that have fewer things and more consumers is a good thing - they are need of prompt medical attention. In other words, smaller pies and more eaters will never be a good thing.

When will it occur? No one can predict for sure, but it should be within five years - and then continue much longer  All this should lead to more social, political and military disturbances. Making matters worse.

First Financial Insights
September 8th, 2013  

Expect Another Meltdown...

Saturday, 7 September 2013

WRONG AGAIN! real economics: USA industrial muscle

I have been writing since the 1980s that there has been no idea more pernicious than the one the postulates that there is no legitimate crit...

Economist are wrong again! Hand back those Nobel Prizes! You gutted American Industrial Muscle, and no one is the wiser. First, we concur that the American corporation's pursuit of shareholder value had a lot to do with it. A Company's first responsibility is to its stakeholders, and only secondly, to its corporate home jurisdiction. There is no national allegiance, so they are soulless entities, not really entrenched by sovereign constitutions, as they operate within a supra constitutional context making them, in effect, Virtual Countries - operating under the rules that they pick and  like best.  Many books could be written about these barbarians at and within our gates.

But the real culprit here was the ancient mercenary concept of "comparative advantage" the economist supreme rationale for unencumbered international trade and globalisation without any sense of moral code or ethical governance. This concept assured that the deck was stacked against the middle class and organised labour by forcing it to compete with oppressed de facto "slave" labour in other countries. What chance was there for fair competition?  And their jobs? None! 

For certain inflation and domestic prices have been contained over the past thirty years, but the wreckage caused in lost jobs, social decay, and destitute cities are, by far, not just compensation. Visit Detroit. Solid jobs were moved overseas by soulless Company's who along with local foreign governments exploited its peasant labour forces to their mutual advantage. Everyone else lost. 

So as a Mr. B. Springsteen, a nice fella from New Jerseyexpresses " I am afraid these job are going boys - and they ain't coming back" 

Thus, there is no such thing as advantage for the many, in comparative advantage in the real world.  It is a myth. It is propaganda. It is for the few. Just poppycock built by naive economists supporting the vested interests and rhetoric of foreigners and Virtual Nations. And there are no prizes for the slaves or those who lost their jobs. And so  - so much more...

First Financial Insights
September 6, 2013

Special thanks to a Mr, B. Springsteen, Rumson, New Jersey a worker and resident for his nice writing, that we printed here, and for bringing this unfortunate historic matter to our attention. He tells a story that portrays the human side of tragedy Merci, Bruce and hope everything works out for you and your friends, down there in your hometown 

My Home Town...

Troubled times had come to my hometown
My hometown, my hometown, my hometown

Now main streets whitewashed windows and vacant stores
Seems like there aint nobody wants to come down here no more
They're closing down the textile mill across the railroad tracks
Foreman says these jobs are going boys and they aint coming back to
Your hometown, your hometown, your hometown, your hometown

Last night me and kate we laid in bed talking about getting out
Packing up our bags maybe heading south
Im thirty-five we got a boy of our own now
Last night I sat him up behind the wheel and said son take a good
Look around
This is your hometown

Robinson , Charlie

Wednesday, 4 September 2013

BUY Signals - Gold Could be $5000 to $10000 Or $250? Or $13,756?

I'm only looking at 1 year in this conversation, but 4 years from now you could be somewhere in the $5,000 to $10,000 range with the ...

When you are dealing with any speculative asset you are dealing with unknown random events that could move its price. They could be big moves too. In light of this, gold has as much a chance of going up, as it does down. So under this reasoning gold could go to any number - the key word is could. 

Putting mathematical and linguistic concerns aside, the investing (upside betting) environment for gold is now looking better, given the large collapse in price over the past 12 months, but mostly because global geopolitical, disaster and climate events are accelerating; creating the potential for a "Black Swan Event" that would be very good for gold prices in the near term.

In the long run, we still do not ascribe much intellectual or "real physical economic" value to this metal. It is a value that primarily depends and appeals to people's inner brains' sensory and emotional cognitions based on the allure it earned in ancient times. However, our rational frontal cortex is  not so allured or intrigued by its largely superficial attributes.

First Financial Insights 
September 4, 2013 

Of Two Minds...

Monday, 2 September 2013

Jim Rogers Blog - Banks Stop Printing Artificial Money

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There is one big problem with Jim's statement - Central Banks have alway and will always print money artificially. Why? First: How is money created? Where is it born? Who creates it? The answers to  these questions are actually quite simple. Money is created by virtue of a journal entry by a Central Banker in their books of account. There is little "physical" rhyme or reason for its creation, as the basis for authorizing the entry is a decision made by policy-makers based on the circumstances of the time. So the amount of entry is not determined by a set tried and true formula tied to GDP or any similar economic measure. It is largely arbitrary. 

So the paper you hold in your hands, bank accounts or use to ascribe other assets value is existentially nothing more than the fiat offspring of a Central Banker's accounting entry. It is not tied to national resources or future resource output potential in anyway - that would put  too much science into this mystical journal entry and money printing process. By the way, the more we print the more global stock markets go up as shown:

Global Stock Market Growth Flat J -Curve (Exponential Upwards)

Therein lies the real issue, because as national resources behind the money supply are exponentially depleted by expanding populations, so is the de facto value of each money unit that had ever or will ever be printed.Thus, creating the basis for another exponential J-curve, as there is an inverse relationship between printed money and exponential resource output depletion. (see charts below) More and more printed money is simply needed to preserve the statu quo perceptions and defer social unrest.

Global Money Supply Flat J-Curve (Exponential Upwards) 

Global Resource Depletion Flat J-curve (Exponential Upwards)

Global Population Growth Flat J-Curve (Exponential Upwards)

Debasement in a sense actually started when the very first dollar was printed. The above hockey-stick charts show a fairly clear relationship between the expanding expanding money supply, resource depletion and population growth, leading to two logical questions: What's left? How long will it last?  The chart below uses oil as a surrogate for resources - and as expected the J-curve is inverted to the money, depletion and population J-curves above.

Global OIL Production (Extraction) Declines - Flat J Curve (Trending to Exponential Downwards)

Not only do these charts paint an obviously  bleak picture - the most important observation is that they are all going the wrong way - Exponentially!  And so is the climate right along with it as population growth spurs a J-curve in climate change as well as can be seen in the undernoted chart.

Global Climate Change - Flat J Curve (Exponential Upwards)

Bottom line is that the printing of money actually correlates with the respective J-curves population growth, resource depletion and climate change. While they correlate the printing of money appears to affect everything in the wrong way. But regardless of causation or correlation all these charts are forming J-curves going the wrong way.  But most importantly, they are doing in EXPONENTIALLY!   

Now try explain these simple J-curves to Central Bankers in Greece, Cyprus, Spain, Portugal, Nauru, Japan, Italy, Ireland, and the rest. Money is de jure or legal evidence from the issuing state that it is obliged to pay its holder the stated value of resource outputs through its various agencies. All is fine until there are no further resource outputs because inputs no longer exist for conversion by the nation's economic processes . As we can see in individual real nations noted, as these J-Curves continue to accelerate, the economic effects and value of money diminishes by country, and should ultimately do so in an exponential manner globally.   

What next? Just keep reading the international headlines.


First Financial Insights
September 2, 2013

"Stop Printing Artificial Money"


Sunday, 1 September 2013

Get Inspired; Think Big, Great Quotes...

Get Inspired; Think Big, Great Quotes...
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In our view, a few great quotes in the morning can get the engines going in a way that coffee could never accomplish. Indeed even having a handy file sitting around to refer to - is just what the doctor ordered in those times when you need a little boost to break out of a rut. Quotes are not panaceas, but they can be wonderful ways to change perspective, spur creative thoughts or maybe remember it's time to smell the roses.

Maybe we humbly recognize that we are not really so smart, so what's wrong if we stand on the shoulders of giants once in awhile, by begging, borrowing and stealing whatever ideas we can from the distilled wisdom of their minds 

Here to help you along with your list, is a link to Forbes top 100 quotes which we have augmented with our own. And we add one old saying, discipline yourself to start every single day with a positive first thought. It makes it much easier to sleep, because you know exactly how you'll be thinking when you awake in the morning. As grandma said, "that's the restful magic of positive thinking..."

Grandmas' - The Shoulders of Giants...

First Financial Insights
August 31, 2013

Additional Selected Quotes; 

Why do they call it rush hour when nothing moves?
- Mork, Mork and Mindy

I'm all in favor of keeping dangerous weapons out of the hands of fools. Let's start with typewriters.
- Frank Lloyd Wright (1868-1959)

I have not failed. I've just found 10,000 ways that won't work.
- Thomas Alva Edison (1847-1931)

It matters not whether you win or lose; what matters is whether I win or lose.
- Darrin Weinberg

I think there is a world market for maybe five computers.
- Thomas Watson (1874-1956), Chairman of IBM, 1943

You can observe a lot by just watching.
- Yogi Berra

If we don't succeed, we run the risk of failure.
- Dan Quayle

Only two things are infinite, the universe and human stupidity, and I'm not sure about the former.
- Albert Einstein (1879-1955)

The greatest pleasure in life is doing what people say you cannot do.
- Walter Bagehot

You have to stay in shape. My grandmother, she started walking five miles a day when she was 60. She's 97 today and we don't know where the hell she is.
- Ellen DeGeneres

More than cookies, dreams and bedtime stories...

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