Sunday, August 11, 2013

PLATINUM WEALTH PARTNERS - BLOOMBERG,Jim Rogers, Calculated Risk


PLATINUM WEALTH PARTNERS:
Week Ended, August 11, 2013


DR. PETER G. KINESA'S
INTERNATIONAL INSIGHTS
"PLATINUM WEALTH PARTNERS"



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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.


PLATINUM WEALTH PARTNERS
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.


PLATINUM WEALTH PARTNERS
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!

PLATINUM WEALTH PARTNERS
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












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