International LEADERS Calling Market Crashes Years Ahead
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'Warned 2000 tech slide; predicted 2008 meltdown in 2007. Forecasted 2020 global economic collapse in 2011, AND NOW- BY 2050 - THE MOTHER OF ALL CRASHES"

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Here is the true problem with all this so-called Renewable Energy Malarky. Simple Greek logic... ' All Humans are Mortal ...

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Friday, August 30, 2013

#Bugonomics - What Butterflies Too?

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Visit this article's slideshow to view the varied beauty of this species

The Common Blue (Polyommatus icarus)

Imagine a world without butterflies - and poems, and romance, and dreams that touch the heart of destiny..

Since 1990, the EU butterfly population has been on the decline with implications that affects crops and resultant food production. And a 50% drop in grassland butterflies is significant because it is a key indicator of the state of bio-diversity. Remember  no bugs - no economy - and then food becomes an issue.

Not being in a position to substantiate these reports, we however sense there is some truth to the issue by virtue of many corroborations. Consider all the evidence regarding climate change as well; it becomes straightforward to conclude that as the climate swaggers about, other variables are sure to be effected. Bugs are no exception.

All this gets back to one principle of "Bugonomics" insofar-as non-financial metrics are critical indicators of macro-economic well-being and better identify concerns that would seriously impair economic viability. Just like a doctor who must go beyond the window-dressing by probing for underlying concerns with modern scientific tools.

In this case, the demise of butterflies and other bugs points us towards an understanding of the deeper causes. These causes are tied to bio-chemical farming technology used to enhance crop production to feed ever-expanding global populations whose growth has been supported and exacerbated by fossil fuels along with neo-classical economic theory. A theory that blindly encourages growth with no regard for its consequences.

At this juncture, we may falsely believe that we are winning the  "Bug Battle", but in the end the champions are sure to be different. And that should bug (sic) a lot of us!  

Dr. Peter G Kinesa  
August 30, 2013

We are the Champions!


Wednesday, August 28, 2013

The Marc Faber Blog Childish Remarks: "The FED Asset Purchase Disaster?"

The Marc Faber Blog : Childish Remarks -The Asset Purchase programme of the Fed has been a complete Disaster

Doctor Faber's conclusions are first premature and more than likely wrong. 

In fact, it will be difficult to measure how effective Fed policy has been or will be as history has yet to unfold. Had Uncle Ben not implemented this program, then interest rates no doubt would be much higher than they are today. There are a lot of very nervous long-bond holders who were obviously more than happy to pass their holdings back to the Fed. Everyone is living in fear of a sharp spike in the long rates that would absolutely clobber the principal market value of these bonds.

But QE is not just about keeping rates low, it is also a crafty way to hold asset values in place, including the equity market. This may actually be its main purpose. The last thing the Fed and Obama needs is to have huge bond losses realized and recorded by banks, portfolios, and other financial intermediaries.

Such losses would vacuum up all the liquidity in the repo, bond and money markets faster than Lehman's 2008 debacle, as well as knocking the proverbial crap out of their respective equity boxes. Think about it - this prevention is moping up about 40 billion (possibly more) monthly in marked-to-market accounting losses that would be caused by sharp rate  increases.

Like the Fed we are holding back a few cards here, but in all likelihood, there is more to the Fed's QE policy actions than meets the eye - and Marc should be a little more careful with his remarks - they come across as premature and childish! 

And that's being kind.

Dr Peter G Kinesa 
August 28, 2013 

Marked to QE Market
Uncle Ben's Converted Losses 


Sunday, August 25, 2013

PLATINUM WEALTH PARTNERS -Jim Rogers #Gold #Commodities #USDollar

Week Ended, August 25, 2013



Does this mean we should land on the moon again for bargains? Folks could be waiting there right now looking for our business. Who, we wonder?

Commodity prices are ready to shoot upwards whether there is a war in Syria or any big event somewhere else on the planet. Syria is somewhat irrelevant in this regard as markets are poised more on fundamentals to lift skyward.

The world is more fragile today than it was twenty years ago for obvious reasons. More people, fewer resources and wider geo-political tensions and instability. For more worries you may add in climate change, wildfires, water supplies and worst - fewer and fewer pollinating bugs. And that's the war we are really losing sleep over.

Bottom Line: Anyday, anything, or anytime - LIFT OFF ALICE!

First Financial Insights
August 24, 2013

To the Moon...

Just cannot see eye to eye with Jim on the collapse of the US dollar, albeit the financial calamity is more or less a hangover from the 2008 Meltdown and remains plausible. Indeed we had  forecasted such a collapse two years back, by 2020. Bonds yes; but a currency short is fraught with too many pitfalls.

There are many reasons behind the likely stability embedded in the US dollar in such times. Two are big ones. One,  it will simply win by default because other currencies that are competitive, in any significant way, should be that much worse off in the turbulent economic times ahead. Remember, the US is a Hegemony with about 60 -70% of the world's resources and economies within its influences and/or control. There is little else in terms of a viable surrogate exchange media that could handle the global financial volume and liquidity needs as well. Former communist countries have huge credibility issues to overcome to garner any trust for this role.

But most importantly - they have bigger GUNS! In the end, that may be all that matters. 

First Financial Insights
August 22, 2013 

Pentagon 2020 Outlook:
 Continues to See Strong US Dollar

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International investment adviser Marc Faber is author of The Gloom, Boom & Doom Report. (SHERWIN CRASTO/SHERWIN CRASTO/REUTERS)


While we have long held a position that in the long-run there is no legitimate or logical reason based on sequential forward events, and both historical asset-class performance and purchasing power losses over the past thirty-three years to own this object, yet this psychotic placebo continues to attract the attention of speculators.  Nouriel Roubini had candidly referred to it as a "barbaric relic" - his kind diplomacy is respected. 

So why do promoters such as Dr Doom continue with there promotions despite all this? We can presume that they understand the psychosis of small investors attracted to such a cure all placebo and operate to take advantage of their fantasy. The above purchase of Sprott affirms the possibility of such a tactic by promoters. 

But the most important issue is not whether to buy or sell this object - the real issue is disclosure. That is will the promoters advise the public of subsequent sales before they are effected or will they cleverly front-run them in various de facto forms ahead of small investors, underneath the radar of a complex myriad of international rules, laws and regulations?

Funny thing, we really don't expect  answers to these questions any time soon.

First Financial Insights 
August 20, 2013  

Just Keeping them ... 


Friday, August 23, 2013

#Bloomberg - #Detroit Gone to the Dogs (Video)


Detroit's recent bankruptcy filing places it at the top of our list of major economic events along with the other circumstances that surround it. To many these events go beyond the horrors of a Hollywood epic. Because we know they are real!

This is a great multi-media article using both a supporting video and slide show to provide a substantive visual sense of just how bad it is on the streets of Detroit these days. There are wild hungry dogs roaming the streets; painting a picture of a lost world at damnation's edge. Raving animals who have been left behind by stressed owners unable to neither care nor feed their once beloved pets. And certainly for many of these family pets, the cycle of life mirrors the destitution of their former or current caregivers.

Bloomberg's story is a good one, reminding us that there are so many ways to view this city's plight from a human, economic, social and political perspective. Emphasizing that the determiners we use have not been enough to warn us to hit the breaks, long before the train speeds over the cliff. 

What can be learnt from this city's history - falling from the penthouse to the doghouse in less than a century? Where do we begin with our line of inquiry? Is there anything that can ever be done, particularly when global conditions are poised to worsen? 

Many questions without easy answers - and perhaps hiding omens of things to come.

Dr Peter G Kinesa
August 23,  2013

Downtown Detroit 1950's - 
Amazing Picture

Tuesday, August 20, 2013

#TIME - Bugonomics - Now it's Honey Bees!

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TIME magazine cover for the 19 August 2013 issue: ' A world without bees'. Photo: Hannah Whitaker / TIME

A few weeks back we highlighted a graph illustrating the decline of wildlife and bugs in the UK, since 1968 - it was our economic graph of the week. Wherein the term "Bugonomics" was also coined for posterity. Our point then and still is - Economists place too much emphasis on the abstract measures of wealth, such as GDP and CPI, and not enough on the key metrics associated with the real physical wealth of the planet. Blame them all, right back to Adam Smith. 

Compare this to your doctor's assessment based on how well you are dressed during appointments - not on any other diagnostic measures that probe into the physical state of your body. It would be a small consolation being well-dressed for your premature funeral. See the point? That's why we believe the field of "Bugonomics" is destined to replace Keynesian and other neo-classical theories. It is clearly more scientific.

So we applaud TIME magazine's article on "Honey Bees" for bringing forward this salient economic issue. For it drives home the idea that without these bees our way of life and existence may be in jeopardy. And that's just one bug! Unfortunately, we can only link you to the beginning of the article, but it should be enough to get the point across. 

In summary, we emphasize that bugs can go on when our economies don't; but our economies would cease if bugs should ever perish. In fact, we speculate matters will be much worse for us if they do. By the way, all along the economy would be growing at a robust pace, and we should all look pretty good too!

So when will Harvard, MIT, Oxford or Princeton ask, "Why don't we have someone teach a "Bugonomics" course this semester, instead of that old school theory?" Hopefully, for our collective sake, they are searching for applicants at this very moment. 

Dr Peter G Kinesa 

August 20,2013

P.S. It should not take a rocket scientist to figure out that certain "non-financial measures" are better determiners of macro-economic wealth - however, it remains unthinkable that economics should be cluttered by the blathering of scientific protocols. So far.    


Flowers? I can't even fly Doc!

Sunday, August 18, 2013


Week Ended, August 18, 2013




Many months# ago we actually concluded that without Steve Jobs the company would not be able to repeat or meet the achievements or expectations of its founder. There is an artistic-creative element in people of Steve's character that cannot be replicated by professionally trained managers from Ivy-league business schools. 

Moreover, entrepreneurial vision and drive is a talent few ever configure in a similar way. 

So whether its Ford, Buffet, Carnegie, Gates, Stronich or Jobs, their unique compositions are rare and the companies they build and run are never the same once they move on.

Keeping Apple on the watch list, but our vision for the future remains short-sighted.

First Financial Insights
August 16, 2013

One primary rule of investing - when the Company's top executives start dumping their shares, it's time to head for the hills. We are not going to set out all the reasons why and all the excuses executives use to justify their dispositions. Nope, instead we are going to ask you to look at the fellow captioned above and ask "what if this guy started dumping shares in that small town company from Omaha?

Never happened, and if it did - you know that the flood waters are really coming. 

It all boils down to how do you believe in folks that do not believe in themselves? Just plain-old folksy small-town stuff. There is however-  one City-slicker - Jimmy Rogers, who thinks that Facebook is not an investment, its a waste of time. We agreed with him then, and still do. 

This also may explain why Facebook users are so depressed - they finally figured out Jim's astute observation.

Stockholders may soon join its users, as t is still just a click away from ten or less, on the Ticker. 

First Financial Insights
August 14, 2013 

" Facebook is not an investment, it's a waste of time" 

Now if you think that I have any thing further to say here or want to challenge these two guys on their stock wisdom,  you do not know me yet. Let's face (sic) it, if Facebook is our leading technology company, then we are in a heap of trouble. Seems like some of their top executives think the same way too. Imagine if the President said, "but, after this - I am leaving America"

There is something in good-ole small-town wisdom that appeals to me. Right Zeke?

Dr. Peter G Kinesa
August 14, 2013

Sure Zeke, l'll BFF you????

TORONTO CONDO bubble CRASHING – WHAT NEXT? - READ MORE   2008 Meltdown or Japanese Bubble... (read more)

When will they ever learn? Or is it simply in the nature of our species to always create these gigantic credit-driven asset bubbles? And why is it a social phenomenon that no country, culture or region is immune to through-out history? 

From a investment view, we are seriously perturbed about Toronto's Condo Bubble and the possible outcomes that could occur when the bubble further deflates. As a result, we have placed a number of sectors on our watch list; obviously including  retail, financial, property development and construction industries. In the weeks ahead, we will provide further.comments and analysis regarding the much anticipated fall-out with more specific industry assessments.  

Remember also how globalization was sold to us as the best way to improve national economic well-being, standards of living, create jobs and lower risk levels. Now everything is so deeply inter-connected financially, physically and politically, yet these promised improvements seem to be moving us in the opposite direction. Do you think it was all a big lie serving a few special global interests? Do you think that they pulled the wool over the eyes of our political geniuses?  If you do - then you are not alone!

It begs the question - who is really governing sovereign nations given all the operative trade agreements, and organizations, such as the WTO, EU, IMF, World Bank and others, with relegated powers? Have all these supra-constitutional connections watered-down sovereign constitutions so much that national destinies have been moved beyond elected officials' powers? This may explain why Canada patterned its monetary policies after the FED - they have to!

This is a big issue that requires a good deal more analysis and thought, but there are clear hints that "globalization" was just a crafty synonym disguising "annexation". What does that have to do with the price of Condo's in Toronto?

Lots! Just ask its Mayor.   

First Financial Insights

August 12, 2013

Asset Bubbles 101: 

In the end, remember nothing is...


What everyone should come to understand in the age of globalized economies is that no country, region or city is completely immune from the trends and events that occur around the planet. More so in the years ahead when shrinking raw material supplies and food stocks cause more unrest and political strife.In all likelihood making the originating shortages worse and causing spikes in CPI and accordingly the borrowing costs set by markets. 

Therefore, cities like Toronto may experience seemingly immune short-term booms, but the hardships of marginal countries ripple back, sooner or later . And as more and more countries are affected by climate change, resource shortages, social and political tensions, booms may actually become just pages in economic history books.Why? Because abstract economic theory's positive-sum-game is moving rapidly towards a head-on collision with existential economic theory's negative-sum-game. Somehow, reality has a way of defeating the wild speculations of old-age stories, as physics and mathematics are absolutely concrete in construction.

Having that in mind, we should be concerned that as the population-resources-depletion formula worsens we do not blindly fall into the "exponential economic trap". Illustrated by the simple idea.that when an element doubles with every unit measure of time, then at one minute to 12 its glass is half full -  fooling one to think a lot more time remains. What happens next is clear, but perhaps not so clear if the concept is ignored or misapplied. The exponential function in itself sets hard non-negotiable constraints on all asset bubbles, and also total physical economic outputs. We must remember not to forget the implications of this function and its real, but invisible existential constraints.

If we do, the clock says there won't be much, if any, time to fix the situation. This function is plainly ruthless.

Dr. Peter G Kinesa
August 13, 2013

Friday, August 16, 2013

GOOD NEWS: US Coal Exports Double (2007-13)

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U.S. coal exports by destination country, 2007-2012. Graphic: RealClearEnergy

Should we not be dancing in the streets along with the stakeholders of the coal companies experiencing unprecedented success in export sales marked by Asian customers providing even faster growth? Funny thing - what is good news for some, is bad news for others. Sure this keeps  the pressure off energy prices and perhaps defers building more nuclear plants. Also local air pollution may decrease, but other forms of environmental damage from strip and conventional mining should offset this benefit. 

The bad news starts with the fact that we are still accelerating the depletion of this non-renewable resource, despite reductions in US domestic consumption. Global air pollution and carbon emissions also increases, ensuring that we continue supporting the long-term destruction of the bio-sphere.What is ultimately more devastating is that the increase with its exponential trend in mining, means that, at some point, a future generation will simply run of another energy source. 

By then there may be a mere 14 billion living on the planet when the lights actually go out. And do you think that this might set the stage for intense wide-spread global conflicts? Hmm. So today's good news creates tomorrow's bad news. 

Ah, but who cares, every generation faces its own challenges. Right?

Dr Peter G Kinesa
August 16, 2013  

How long does the dance last?

Wednesday, August 14, 2013

#JAPAN - Radiation Leaks Escalate - Markets Nervous?

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A protester calls for measures to contain contaminated water at the Fukushima No. 1 nuclear power plant during a demonstration in front of the prime minister's office on 2 August 2013. Photo: Satoru Ogawa / Asahi Shimbun

Stop the Nukes?

Continuing to keep an eye on this radioactive hot spot as it has significant implications on just about everything; including the Japanese money markets, economy, currency and world energy prices.  

Should pressure from this growing public concern force Japan's return to fossil fuels, then it should add further to global oil demand, moving prices much higher. What is really more concerning are the effects of this radiation on living and environmental conditions. Is there a possibility of turning parts of Japan into a giant nuclear wasteland? Remember too, the same folks trying to fix this problem were the ones who caused it! Einstein did not think that this was a good idea.

Lets not also forget that this will dampen interest in nuclear power, as an alternative to fossil fuel, around the world. Not good for an industry that is already struggling with slowing demand. But a positive change for fish stocks and those who depend on them for survival.

Meanwhile, do you ever wonder about the intelligence of our species?

"Jack, let's build a nuclear reactor?"

"Where Steve?"

"How's about by the ocean near lots of people and fish that sits on a fault line exposed to large tidal waves?"

"Are you sure Steve?"

"Certainly - it is the most economically viable choice"

Now imagine that some form of this line of simple reasoning actually occurred. Worse. It will probably happen again. 

Dr Peter G Kinesa
August 14, 2013

Remaining Fukushima Fish demand  vote?

Sunday, August 11, 2013


Week Ended, August 11, 2013




Japan’s Economy Grew Less-Than-Forecast 2.6% Last Quarter

Investment Drops - 
Annualised Growth 2.6% 

Recently folks were applauding the turn around in profits for some of JAPAN INC's biggest exporters, as short-term delusional benefits of its managed currency devaluation jumped earnings in the second quarter, leading some to even proclaim that the two decades of economic decay had finally come to an end. That celebration was short lived, as overall GDP growth for the period, did not meet expectations.

Moreover, business confidence, as measured by capital investment, drifts hesitantly despite improved profits. Consumers can look forward to a possible increase in sales taxes, that certainly cannot add to their feel good levels. Plus, as import costs increase, they can expect their pocket books to be squeezed much more in the months ahead. 

In all, the deflationary overhang is still there as low interest rates cause both consumers and businesses to act cautiously. It is still hard for commercial banks to lend too, because lenders " collateral values" can disappear in an overnight whisper of a rate increase. These internal structural weaknesses play into foreign competitions' hands as they can invest capital more effectively. That's not good for the export business.

At some point, Japan's deflation should disappear with the import of hyper-inflation on materials from other countries, at same time, so should exports. Then what?  Growing global populations and shrinking resources will not work to save this economy from the fix it entered after its financial bubble burst and the finite constraints of a shrinking planet set  in.

First Financial Insights
August 9, 2013

One day the world will wake up the realities of physical and population economics, that will make it much easier to understand this type of mess. Until then, every one plays with abstract concepts that cannot cure real long-term issues. For many, the realizations will be too late.

Dr Peter G Kinesa
August 9, 2013     

U.S. Births per Year

Looking at this moving graph gives you that sinking dizzy feeling after a while, but nonetheless it is interesting from a general point of view. The baby boom and subsequent bust are obvious as well as the general flattening of the distribution over time as medical health care improves. By 2060, the vast majority are over 21 years old - that should shape into different consumption patterns.

Moreover, more breakdowns would be useful such as income, education, origin, gender, geography, and occupation, amoung other attributes. Calculated Risk provides its own observations.

But lets not forget the most important factors are the growing population numbers and diminishing resources (wealth dilution), that makes immigration of any sort economically illogical. What corporate entity gives away its shares for free and dilutes its current stakeholders' wealth? None! Down the road, as this issue becomes more apparent, then the levying of hefty "Immigration  Taxes" of say a $100,000 per applicant or higher, starts to.make a whole lot of sense as a way earn revenues to balance fiscal budgets, sustain taxes and keep the dilution of real national wealth in check

This form of tax recognizes that the ideals of three hundred years ago no longer apply in a shrinking world, where key resources grow scarcer by the moment. To do otherwise, exposes nations to the greater possibilities of social unrest and political upheaval as austerities unfold  - when the planet's capacity to deliver the essentials of living is curtailed.

First Financial Insights
August 8, 2013

Growing sentiment for taxation fairness

Why country's have not imposed a tax on immigration, traces back to the classical economic model that ignores an accounting of the nation's physical balance sheet and naively believes that somehow GDP production outputs (revenues) alone measure its wealth. This overly simple accounting measure has encouraged the accelerated depletion of physical wealth with no regard for longevity. How can so many smart people operate like we have no limits; when we clearly do?

Sooner or later, exponential mathematics will shake us back to reality, but probably too little; too late, as the glass will appear to have been half full just one minute before the clock strikes twelve. And then the rest vanishes.

The devil is in the "exponential function."

Dr Peter G Kinesa
August 8, 2013

(more video)

Shale's Big Shoes to Fill

No kidding? In fact, we have done this analysis once before using Bill Gross's (PIMCO) numbers that puts US total debt closer to $100 trillion once all contingencies, guarantees  and other unfunded future liabilities are thrown into the pot. And that's present valuing related assets using today's long-term treasury rates. What happens when they double?

So what would it take to pay off the US debt - you would  think that one trillion barrels in  world -wide oil reserves would do it?  Under strict assumptions it does, but then how do you run the future economy? To be fair, this assumes too, that all US debt is owed to foreigners. It isn't. The vast majority is owed to other citizens that Keynesian economists believe we should  not fret about under the theory  - it is just money you owe  to yourself. That could be a hard one to explain to pensioners if one day that debt is cancelled for whatever reasons.

Still. we are on-side with Mr Rogers, as it is going to take a lot more than shale oil to pay the debt and keep the "physical economy" running for a few more decades. Think about it!

First Financial Insights 
August 6,2013 

Another set of NUMBERS

This is what happens when you ignore physical balance sheet accounting, before you know it - you have no national resources to physically pay back everything you owe to whomever. Keynes was right "in the long run we are all dead" and poor economic accounting and theory just assures that we get there so much quicker. 

Well at least Bill Gross gets it.

Dr Peter G Kinesa
August 7,  2013

Best Sellers List