Jim Rogers - Never Forget

Hmmm...

Jim Rogers: Politicians always look for the easy answer

There is a good reason for this - they are not exactly the sharpest knives in the drawer. In fact there was a village in Texas missing a idiot not so long ago. The consequences are still being fealt today.  

FirstFinancial Insights
November 30, 2012

Sure I can spell it!


 

OUR COMMENTS

 

Too funny, but it was not that long ago. And we should never forget the consequences. Have great weekend!

 

 

Dr Peter G Kinesa

November 30,2012

Marc Faber: The Market is going down because corporate profits will begin to disappoint

Marc Faber: The Market is going down because corporate profits will begin to disappoint

Appreciating that markets are in an unprecedented bear market; the biggest question for investors is what strategy to take? Pending shortages in key raw materials combined with the implications of peak oil, do not provide the footing for sustainable growth of any sort. Our investment strategy is scarcity based. Countries, currencies, populations and hard asset mixes create a new investment calculus; recognizing the existential economic of global decline - the negative sum game that is contrary to the delusional neo-classical economic view.

In the end,  REAL corporate profits can only shrink under the weight pushing national GDPs lower. Such outcomes drive the War of Economic Attrition.

Dr Peter G Kinesa
November 29, 2012 

A Fight to the End

 

 

Marc Faber: The whole Global Financial System will have to be Reset

Marc Faber: The whole Global Financial System will have to be Reset

My god, what next? 

Why will the system collapse? Because it is a system that is flawed in its design, ignoring two constraints of physics regarding finites and chaos theory. These are the hard constraints any economic system must consider or else face a tremendous imbalance leading to its collapse.

The underlying premise of the abstractionist theory is that wealth abstracts can be created forever.Of course, in the abstract world this is possible ( e.g. printing money), and so it can thusly fabricate a positive-sum abstract game. Whereas, in the real physical world, the second law of thermo-dynamics prevails creating a negative-sum real game. There are fewer and fewer raw elements available for use with each passing moment as each transforms into the chaotic or non-usable state.

Neo-classical economics, hence conveys a picture that is contrary to the actual meta-economic version. The Reality. Furthermore, there is a growing imbalance between the stored wealth in the positive-sum abstract game and the remaining inventory of usable elements yet to be transformed under the negative-sum real game. Disaster occurs when the imbalance between the two is breached - causing the systemic collapse of the entire financial system. So no wonder NO ONE UNDERSTANDS RISK!

Hopefully, this sheds further light on Marc's quoted statement and prediction.


Dr Peter G Kinesa
November 28, 2012

Positve-Sum Gamers

FIRST FINANCIAL INSIGHTS: Jim Rogers: Shortages of Raw Materials will lead ...

FIRST FINANCIAL INSIGHTS: Jim Rogers: Shortages of Raw Materials will lead ...: Follow Investors' Insights Regular Updates (Sample Post; November 22, 2012) Jim Rogers: Shortages of Raw Materials will lead to Wars...


Let me add my two cents here. Everyone needs to be more careful when they order lunch.

Dr Peter G Kinesa
November 28, 2012

I won't  forget next time, promise

 

 

 

FIRST FINANCIAL INSIGHTS: Paul Krugman: Franc Thoughts on Bond Vigilantes

FIRST FINANCIAL INSIGHTS: Paul Krugman: Franc Thoughts on Bond Vigilantes:

Paul Krugman: Franc Thoughts on Bond Vigilantes

http://krugman.blogs.nytimes.com/2012/11/23/franc-thoughts-on-bond-vigilantes/


When the statistcal logic is flawed, the evidence is suspect and the comparison is analagous to apples and oranges - thusly lacking relevance; you end up with a pretty meaningless analysis and conclusions. One could also conclude the slide in journalistic standards at the New York Times is self-evident; if we take the same approach saying that an isolated case is representaitive of the attributes of the entire population.

However, no such conclusion is possible because further study is requried


Dr Peter G Kinesa
Novenber 27,2012

Damned Analysis...

Marc Faber : The global economy will hardly grow next year or even contract

Marc Faber : The global economy will hardly grow next year or even contract



Great one year of contraction .However it is much worse then that when you start to measure everything on a real per capita basis. Population alone expands by 1% globally and inflation say runs around 2%. Add it up and it seems like we need about 3% overall nominal growth in order just to keep up. No wonder governments no longer focus on real per capita numbers - otherwise, we would observe and conclude that have been in a global recession for many years.

The other problem with global GDP is what unit of measure provides a standard - is everything being converted to US dollars? Well, the US dollar has been debasing for the past decade. Its real global purchasing power is down by 25 to 30%  the very least. Now, the argument may be made that we have actually been in a global depression for the past decade.

Now this is armchair economics, however one has a certain sense that numbers used by the media, government and other pundits just do not correlate with reality. Lets briefly look at what we face going forward over the next 10 to 25 years.

Minimal global GDP growth in debasing unit(s) of measures

Ever expanding populations growing faster than the nominal GDP

Depletion of raw materials critical to the production of consumable objects

Little in terms of technological breakthroughs expected -  if Apple and Facebook are category leaders- we got problems. 

Climate Change and Geo-Political issues will continue to draw more resources away from consumer production

It therefore looks like the global contraction is running a marathon well beyond the one year predicted by Mr Faber.


Dr Peter G Kinesa
November 26, 2012

Marathon? I'm stuck!

The Daily Bell - Euro Crisis: Major Implications For Investors

The Daily Bell - Euro Crisis: Major Implications For Investors

Why is it that Headline writers are masters of understatements. Certainly there is stronger language at hand that could better convey the gravity of this crisis. This is a situation that was crafted on the hope that all the problems would be worked out along the way. Sounds like a shot-gun marriage - doesn't it?.

Anyway we recommend you read George Sorro's speech from "Festival of Economics" ( no we are not kidding - that's its real name) His talk provides a detailed perspective along a past, present and future outlook outline. Draw your own conclusions, but we still believe there are no one-eyed kings to lead the way out of this mess. And there was never even an exit strategy apparently defined by it originators. Masters of the Universe strike once more.


If you cannot find a copy, email or tweet me, and I  will send it to you. It is a insightful narrative from this guru of finance. 


Dr Peter G Kinesa
November 23, 2012

Annual Festival of Economics 2012

Economists meet to exchange ideas

The Fall of Lehman Brothers - Finance Documentaries

The Fall of Lehman Brothers - Finance Documentaries


These guys obviously were not too big to fail, but the implications of their failure reverberated around the world and triggered the biggest bailout of Banks and Dealers in US history. The question is: Have we leaned anything from this financial disaster? Time will voice its decision; sooner, or later.

Our recommended  business book list ranked "Too Big To Fail"  #7 of all time top ten, because of the importance of  events leading to and occuring after Lehman's demise. A blow by blow account of the power players in Washington and Wall Street,  provides a fly-on-the-wall perspective of their tense inner workings.

The book  and documentary should provide you with an informed view of a time, when the world of finance was mere moments from collapse.


Dr Peter G Kinesa
November 22,2012

Socialist Capitalism ?

Marc Faber : There will be Pain , very substantial Pain

Marc Faber : There will be Pain , very substantial Pain

For sure Marc. Moreover, we are happy you are finally aligned with our economic thinking. The  blog below (Economic Collapse 2020: A Failed Theory)  sets out our view from over a year ago, when we forecasted a financial collapse by 2020. A forecast that compares to Mr. Fabers' and again affirms why First Financial Insights have been accurately predicting events over the past couple of decades. Sorry - just tooting our horns a bit.

To summarize here are a few of the critical drivers:

Outdated abstractionist economic theory prevails - experts slow recognizing that physical economics will override their neo-classical theory. Print money and add more debt. Too bad for everyone.

Not much has changed since 2008, and the leverage and risk may be greater now. Memories are short.

There are imbalances in trade and finance that continue to grow, despite sluggish activity. Some  Banks and Brokers assets are still growing at unsustainable rates relative to global GDP - there will be a reckoning.

Interest rates are too low, too long - setting the stage for a mathematical deflation in asset values that could  have staggering implications; turning into social unrest - and then, geo-political confrontation. History at it again.

Resources deplete while populations grow. In the end, this will never pencil out. 

Euro crisis is still chugging along. Using outdated fiscal and monetary measures cannot affect real or physical economy.The whole thing never made sense because it distorted the benefits of comparative advantage, and the cultural and historical aspects were not homogeneous thereby also impeding free flowing labour. It encouraged inefficiencies, but concentrated power.  

While in the short term large abstractionist institutions are too big to fail, it is naive to think that anything is ever physically too big to fail. Economic entropy is a cruel mistress .


Dr Peter G Kinesa
November 21, 2012

Indeed Entropy: You are cruel.

FIRST FINANCIAL INSIGHTS: Economic Collapse 2020: A Failed Theory

FIRST FINANCIAL INSIGHTS: Economic Collapse 2020: A Failed Theory:


For the record we are authorized to post this First Financial Insights blog from last year. Not much has changed to affect this view. In fact, the tide of evidence and events keeps growing - supporting this forecast. Indeed many leading gurus are just now hopping on the bandwagon over one year later.  Marc Faber and Jim Rogers respective blogs today evidence this trend. Welcome aboard!

Comments posted below restate some of the key drivers behind our concluding prediction. A good idea to keep an eye on these over the months and years ahead.

Dr Peter G Kinesa
November 20, 2012

Welcome Aboard!

Jim Rogers:Communism and Socialism have failed many, many times

Jim Rogers:Communism and Socialism have failed many, many times

The issue here is not the labels. Free enterprise, democracy, socialism; and even communism, all have their inherent weaknesses and strengths. In the purest sense, the concern is about the degree of centralized (closed system) compared to decentralized (open system) power; at the extremes both are dysfunctional. Thus, it is by default logical, that some mix of the two systems is required. The right mix is subject to the circumstances and time lines involved - and largely an arbitrary and subjective debate for the cocktail crowd's musings.

By the way, unfettered capitalism and democracy also lead to failures.Certainly, the greed and corruption of the past decades has left our beloved systems at the brink. The last chapter has not been written. But one must fear that if we continue to wear rose-coloured glasses regarding unbridled economic and population growth; it is hard to imagine a Happy-Hollywood  ending. Again, just ask those who still live on Nauru what the consequences of this paradigm are.

Mr. Rogers this is not your neighbourhood, so perhaps you should pay a visit to their turf - observing what's left of a society that was, just a few decades back, measured as a leading capitalistic system...


Dr Peter G  Kinesa
November 20, 2012

Visit Nauru Today?



Nouriel Roubini Blog: The Economic Contraction Is Spreading Now To The C...

Nouriel Roubini Blog: The Economic Contraction Is Spreading Now To The C...:

The economic contraction used to be in the periphery of the euro zone. It is spreading now to the core of the euro zone. For example, it is ...


What France, Germany and other core Euro nations are heading into a recession? In all, this should not be surprising as we define and delineate the Meta-Economy: Wealth-of-the-Planet-Economy, into three major components.

First, is the abstractionist economy (neo-classical) that is the primary concern of the media, academics and politicians. It is however the shenanigans invoked through its contextual logic and mathematics that distracts our attention from the real root issues.

The real economy is the second component that many often refer to; focusing on the actual production and consumption of physical goods and services. Its perspective neutralizes the subjective influences of the monetary and financial abstract systems, thereby providing a more unbiased view of human activities.

Then there is the physical economy that views human activity as the conversion of finite usable elements of mass and energy into consumable objects. Constraints are therefore prevalent under its umbrella as it ties back to the hard principles of physics and mathematics. Importantly, it recognizes that as entities - nations -deplete their usable elements (e.g. Nauru); and similarly affect direct output and economic activity correlations. Little reference is generally made to this element, despite its remarkable predictive qualities.

So I guess that's why we are not often surprised. By the way, a look at our recommended readings list provides a little insight into a general theory of reality that pervades our thinking. 

Dr Peter G Kinesa
November 19, 2012

Help me if you can, I'm feeling down...



Marc Faber : Ben Bernanke can drop as many Dollar bills as he likes

Marc Faber : Ben Bernanke can drop as many Dollar bills as he likes

The creation of fiat currency has reached a tipping point, particularly for countries in the Euro zone. Why? First, it should be self-evident that even with low rates, there has been no uplift in capital formation or new business activity. One would expect that even established firms would be escalating there capital expenditures. They are not! Why? There are few sensible opportunities and the general economy is stuck in a liquidity- valuation trap. Why? Well, for one Greece, Spain, Italy and the others have fewer resources to exploit while consumers remain handcuffed at the pocket book.

So Uncle Ben might as well be back creating converted rice, as it will have about the same effect on this Ice Age for global markets, business and economies.

Dr Peter G Kinesa
November 17,2012

Uncle Ben's Converted Rice?

 

 



The Daily Bell - Central Banking and 'The Edgy Optimist'

The Daily Bell - Central Banking and 'The Edgy Optimist'

Since the days of Adam Smith, it has been recognized that money is an imaginitive invention. Indeed, Smith himself was less concerned about the medium, rather focusing more on the reasons and logic behind the physical flow of production and consumption; however, failing to realize that both were ultimately constrained because the planet's inputs would ultimately cease existing. Remaining for all time as his one critical faulty assumption that would project our human experiment on a disasterous course.

Today, Central Bankers recklessly create infinite amounts of currency that have inherent obligations to deliver future value - they may be optimists, criminals or utterly insane believing and upholding this money-creating process that possesses no relationship with delivering object goods and services. How can they perpetually create money, when the originating source of value will ultimately be depleted? The answer lends much weight to the conclusion: "not only is this process a criminal ponzi scheme - it is absolutely insane".

And perhaps this is why Central Bankers secretly admire and study the Bernie Madoffs of our times.


Dr. Peter G Kinesa
Novmber 16, 2012

MONEY Creators: Who did it?



Jim Rogers Blog: 2013-14: A Slowdown Is Coming

Jim Rogers Blog: 2013-14: A Slowdown Is Coming: 

America is going to have a slowdown in 2013-14, there will be fewer jobs, more unemployment and turmoil in oil and currency markets. - in Ec...

There is no doubt about it - and, there is very little left in terms of fiscal or monetary tools to fix this mess... essentially the wreckage of the 2008 crisis. Abtractionist economists are finally facing the end game of their alchemist remedies and as we have said: the markets remain in the " The Mother of All Bear Markets" that could last for years...if not. decades.

What we face is the physical realty of drawing blood from a stone, a shrinking pie of resources mixed with a growing number of diners; remains a  hard mathematical constraint to any further growth, particularly on a per capita basis - the only metric that really counts.

Welcome back to Hoover Town.

Dr Peter G Kinesa
November 15, 2012   


Crowd awaiting 2016 "State of the Union Address" - Washington Post,  

The Daily Bell - Is the Age of the PetroDollar Over?



The Daily Bell - Is the Age of the PetroDollar Over?

It should never cease to amaze us how certain interests will always conjure up numbers to forge a rabbit-out-of the-hat solution to problems that have been festering for years. Cut to the chase guys. Its all about the longevity of our species - and here the numbers are pretty easy to define.

All other things being equal cut the population down from 7 billion to 1 billion and you invariably extend our existence seven fold. In all likelihood, that's  just another 700 to 1,000 years. Deeper cuts would be needed if we strive to achieve a more extended inhabitance of the planet.

Future generations do not have a democratic voice in this decision, so it is up to us to decide our species' date with the cliffs of time. Thus far, the preference is clearly seeking a sooner rather than later end to the human experiment. A short apology to future kinfolks appears to suffice.

Add to this the possibility of a nuclear winter at the whims of geo-political posturing - well, even the above numbers become overly optimistic. So keep on fracking, drilling and mining, but no matter however you extract it, the conclusions are dim for the hopes and possibilities of future generations. Again, sorry about that!

Dr. Peter G Kinesa

Goldman Sachs Documentary - Finance Documentaries

Alice In Wonderland - join the party.



Goldman Sachs Documentary - Finance Documentaries


Back in 2008 these Masters of Abstraction were just moments away from collapse. Hey, they were just Too Big to Fail...for now.Remember they produce nothing, shuffle paper and convince the world that their negative-sum game is a positive-sum game. Funny mathematics and linguistics, aided by the witchcraft of lawyers and accountants produces something from nothing that defies the laws of thermo dynamics and theological doctrine.

But sooner or later the kids grow up to find out that Santa Claus, The Tooth Fairy and Easter Bunny are inventions of our imaginations. Inventions created by the likes of the Mad Hatter at Mad Sachs - who truly believe they will never grow up - however, as history proves and as stories go... All Mad Things Must Come to an End.


Dr. Peter G Kinesa

Remember...Nothing is Forever

Marc Faber: Middle East Will Blow Up and Affect Markets

So much for overpopulation and economic growth.

Marc Faber: Middle East Will Blow Up and Affect Markets

Marc understands that we are still faced with the perils of a nuclear war that will make all other issues redundant. It is worse now than the Cold War period because of the threats of rogue nations or  non-aligned agents. And we remain under  hair-trigger alert that requires the decision as to whether to create a World Obilteration: in just 15 minutes. In fact, the Russian's system (Perimeter) of retaliation could be launched automatically based on sensors and computer systems that detect such a War in the Middle East - a War that is percieved by their automated system to be a first strike attack on their nation - that ISN'T.

"Affect Markets" is thus the understatement of all time - as it will simply destroy them forever! So it is - as our timeclock ticks at just 15 minutes to Doomsday...

D Peter G Kinesa

First Financial Insights Inc.: Global Stocks to Collapse

America's prospects are good for the next ten  years. Hmm..

 

First Financial Insights Inc.: Global Stocks to Collapse:

   Oh my... Here we go again!   Global Stocks to Collapse by 50% Fuelled  by Credit Crunch - Markets Mel...


While global markets moved downwards significantly last year shortly after this projection; our view remained unchanged based on fundamentals mentioned and financial mathematics. Oh baby - its a wild world ... and it's hard to get by just on a smile.

Dr. Peter G Kinesa   

Marc Faber: Markets Will Drop at Least 20%

There she goes???

Marc Faber: Markets Will Drop at Least 20%

Any signifcant spike in long rates could make matters much worse as we have been warning for months now. Plus as the likelihood of a geo-political event increases so does market risk and the risks to the downside. Credit crunch in eurozone could just incinerate all values making equities difficult to justify with high systemic risks pushing to crush profits and liqidity. No Santa Claus ho ho hoing these days.


Dr Peter G Kinesa

Marc Faber : The Uncertainty is much higher than in the past

Marc Faber : The Uncertainty is much higher than in the past

By all measures.

Dr Peter G Kinesa

Empathy represses analytic thought, and vice versa: Brain physiology limits simultaneous use of both networks



Empathy represses analytic thought, and vice versa: Brain physiology limits simultaneous use of both networks

Now how the heck can you measure this given the speed of the brain's organic processing. Something to think about anyway.

Dr. Peter G Kinesa

Marc Faber : The U.S. will Default through a Depreciating Currency

Get the picture?

Marc Faber : The U.S. will Default through a Depreciating Currency


Currency debasement is a given. Its value is constrained by the infinite regression of time amd the finite regression of inputs - particularly Non-Renewable Natural Resources. Thus, the expected outcome of these two regressions is the gravitation of  its value towards zero. This, of courese, will brutally obliterate economic activity as it is slowly realized that the abstract constructs associated with all forms of currency or exchange can no longer be converted to concrete constructs. It will happen.

Shhhh... but don't tell anyone.  

Dr Peter G Kinesa

First Financial Insights Inc.: HUMAN EXTINCTION IS INEVITABLE...



First Financial Insights Inc.: HUMAN EXTINCTION IS INEVITABLE...

Remind me again - Why such a big rush? Human Extinction Is Inevitable… But why get there as soon as possible??? The republis...

Seems that given the mix of entropy, resource exhaustion, overpopulation, biosphere collapse, and a financial meltdown that is all guarded by a command and control system that could inadvertantly launch obilterating missles at any moment - in some cases with little or no human input - any bets to the contrary appear ill-advised.

Dr Peter G Kinesa

One day, There will be a Deflationary Collapse that will blow all the levers and deflate Assets Prices

One day, There will be a Deflationary Collapse that will blow all the levers and deflate Assets Prices


Faber is bang on. Fisrt, once interest rates rise -actually double - from historic lows, the mathematics kicks in, and brings asset values down by 30% or more. Yep. Then watch the finanancial system collapse under the weight of depleted banking capital that cannot be restored in short order.

Rates will rise due to cost driven inflation that is caused by the physics of scarcities in critical elements that create economic activity, and related outputs. Thus the basis for economic activity will be severely constrained by the exhaustion of critical rsources - thereby restricting the ability to restore the banking system's capital.

If this sounds like Greece, Europe, Japan, Nauru and ... oh yes, - Easter Island, you may be starting to see the message and understand the highly probable outcomes set to unfold.


Dr Peter G Kinessa

The Invisible Depression



The Invisible Depression

If you look hard enough you can actually see this one. Start with Greece, Spain, Portugal and Italy. In short - expect more unrerst.

Dr Peter G Kinesa

The Daily Bell - Detlev Schlichter on the Nature of Money and the Evolution of an Inflationary Depression



The Daily Bell - Detlev Schlichter on the Nature of Money and the Evolution of an Inflationary Depression


For certain as resources deplete while the populations grow. Welcome to Nauru and a short history of progress.

Dr.Peter Kinesa

Please Raise Prices - Students For Liberty



Please Raise Prices - Students For Liberty

Economist always use deterministic logic for probalistic cicumstnaces that have nothing to do with the new laws that emerged and prevail. Fiscal policy stimuis a prime example.

Dr Peter G Kinesa