Over 1.5 Million International FOLLOWERS AND Readers have engaged our various digests and blogs providing insights on the "SEVEN BIG Es" - Earth, Economics, Environment, Energy, Exponentiation, Entropy, and Extinction, curated by our world renowned "Quantum Realonomist" - First Financial Insights Inc. - Dr. Peter G Kinesa
WORLD LEADING INSIGHTS
International LEADERS Calling Market Crashes Years Ahead
Second to None, Anywhere...
'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"
To the point, forget about all the graphs, charts and illustrations that you were shown back in school by your economic, business and finance professors. Why? Because the most important ones are those they failed to show and tell you about and just how important they are to markets, GDP and economies. In fact, they are so important that they would turn every other economic thesis upside down - starting with Adam Smith's, Enquiries into The Wealth of Nations.
Not going to say much more; other than, it is very clear that Smith and his subsequent CULT believers have missed the point entirely, having no clue as to what "Wealth" really is - we leave the rest for to you to figure out. Dr. Peter G Kinesa July 29, 2013
Economics, Theology, Politics or EXISTENTIAL PHYSICS?
More and more, we are keeping an eye on these powder kegs around the world, as the potential for physical disruptions in oil supplies or critical raw materials grows with each new revolution or social disruption. Sure shootings and violence will bring the interested parties to the table, seeking diplomatic solutions, but we fear that they are short lived. Why? Because what is really needed are economic solutions that grow ever so much more impossible to effect, as these countries have overshot the physical capacities of their geographies. Too many people and too little resources. There are two clear actions countries such as Cyprus, Greece, Spain, Japan, Egypt and the rest need to do - first, effect civil policy measures to reduce populations levels in the years ahead, as they can no longer draw blood from a stone. It is time to face the reality that certain geographies will only be able to sustain their population levels for so many years, before completely collapsing. And certainly, infinite sustainability is absurd. Secondly, develop and implement a "National Business Strategy" - that may also mean opting-out of global or regional institutions (EU, IMF,WTO, etc.) that largely restrict emerging foreign competition through trade agreements providing short-term benefits, but working to the long-term and over-weighted benefits of bigger players. In other words, denying or retracting their ability to develop sustainable "comparative advantages" through protective measures that allow industries to develop and grow over time. Some tough medicine here, in very general terms, however if measures are not soon taken to re-balance a nation's physical economy's limits with the number of people it can optimally and sustainably serve; then the political situations in many nations will simply spin out of control. Not good for oil! markets! consumers!- and just about anything you can think of. Dr Peter G Kinesa July 9 2013
These comments reflect more on economics and thought-process rather than markets, however that is what defines the markets when all is said and done. Britain was certainly on the right track when it decided not to participate in the European experiment. And it remains shocking that Poland is seeking membership in this club, given the mess and clear failure of this project. What is it about Polish people? There is something that we just do not understand. All we can say, is that too often we give up long-term advantages, in order to remedy a short-term problem. Why did the Brits decide not to join the club - by gosh, as Paul sarcastically notes in his New York tone, they did some "analysis." No one else apparently does? This point, in itself, raises some fascinating considerations when in comes to expressions such as: "they did their homework," "paralysis through analysis" analysed to death" and so on, and so forth. In fact, just writing about it makes one wonder and come to believe that analysis is much more perpetual in motion than stoic; as new ideas, devices, facts and knowledge is brought to the awareness of our cognitive processes. Particularly, for complex situations where the deterministic and subjective variables are always in a dynamic state of change, with the possibility of even two opposites co-existing as truths at the same or different times. Go figure - the movie never ends ! So you see there is enough material here to write at least ten, five hundred page, books about the analysis of analysis. What is the right amount? the right tools? the right perspective? Or how about analyzing the initial diagnostics and its tools - if its wrong, then so should be the supporting analysis. Then, there are the assumptions and we can assume that most people have different ones - or can we? The point being, do we ever really know if we are doing the most relevant diagnosis, analysis and evaluation of goal, facts and constraints leading to the optimal solution for a moment or forever? I have a funny feeling that such knowledge is impossible to attain, except for those who command the arrogance to think otherwise.Why? Because they know, they know everything. In the end, this is a "very serious" topic and process, as it defines the fate of individuals, economies, businesses and our species in so many other ways. The case of Britain, supposedly doing the right analysis once, contrasts with years of bad analysis, that saw their Empire rise and fall, from being a political, economic and military powerhouse, to what it is today, and the tomorrows to come. Should we blame it on the analysis? Probably, but you may never know for sure! First Financial Insights July 6, 2012
New Yorkers, eh!
ANALYZE THIS BUDDY !
The Dr Peter G Kinesa Blog : ALL ECONOMISTS ARE WRONG - DEAD WRONG: Captain, My Captain... ALL ECONOMISTS ARE WRONG – DEAD WRONG! Why we are in this mess: Where did it all begin? Why? .. Good time to do a little report and see if there is any evidence that would suggest that Economists are right, and perhaps this conclusion is wrong. Let's see there's Europe, Cyprus, Egypt, Brazil, China, Japan, Greece, and, and, and... Then of course there's the Fed and the interest rate trap ready to launch us into an asset deflation spiral. As well as, overpopulation, unbridled growth, biosphere devastation and exponential resource exhaustion. Hmm. Not much has changed, so.... ALL ECONOMISTS ARE STILL WRONG! First Financial Insights July 5, 2013
Stars of what we are...bringing them back into our arms -
Every now and then it is a good idea to return to a prior article and look at it with a older set of eyes to discover if your thoughts and ideas have been changed, modified or turned upside down in some strange way. In this case, very little has changed and there is a strong belief that to have a shot at the universe - the orientation of humanity's goals must be towards its longevity; not just the absurdity of growth for the sake of growth. Again, the mathematics speaks in a way that words cannot convey, insofar as the algebra of population and resources can define our visitig rights on this planet. Obviously, the lower the population levels, the greater the time we should have as a species, with all other things remaining equal. Then! And only then, could we come to know what is unknown, a path less chosen and yet to be discovered. Why not? For that is what makes all the difference. First Financial Insights July 4, 2013
Moving hearts is like trying to catch a star - bringing their minds into its heart; back where it belongs...
The Marc Faber Blog: Low Rates FREEZE markets - Mr. Bernanke is most likely to retire and unlimited QEs forever will continue There is no doubt that Central Banks painted themselves into a corner - they have made it impossible to raise interest rates, regardless of inflation. Why? Because if they do, it will cause an unprecedented deflation in asset prices and bring consumer spending to its knees, as disposable income is siphoned away to service debt service costs that could double or worse. It would cripple consumer demand and confidence, in a horrifying way with these double knock-out financial blows, triggering a deep prolonged depression. Moreover, obliterating the balance sheets and capital boxes of the world's biggest commercial and investment Banks, with the mere stroke of a pen. What this also means is that governments will do all they can do to manipulate inflation numbers to fool consumers, investors and savers. Time will tell if this form of quiet debasement, confiscation and taxation will work. Probably, because all Central Banks are moving in a similar co-ordinated step - and there are no other planets offering better rates and liquidity. So far! The big point being - is how did everyone manage to get into the same no-escape situation that Japan has been in for the past two and a half decades? We have some answers, but we will leave them for another time. Meanwhile, we concur with Marc insofar as we should get use to the QEs for a long, long time. Pretty boring stuff. First Financial Insights July 2, 2013
Intergalatic Bankers Now Preside Over More Years of QE
Who are the Mystics, JIM? Why are they selling? The first answer is Central Bankers; starting in developing countries, second in marginally developed countries; and lastly, all the rest. And they all have plans to unload their holdings on whomever will step up to the plate, while the gold party still commands peak prices. Central Bankers are like everyone else; wanting to keep their jobs. Big market wins do little for their meal ticket, but if they get caught on the short end, they might as well start heading for the cottage. Permanently! Or much worse in some cases. Hee, hee... Central Bankers are dumping to balance out debt or pay for fiscal austerity measures and shortfalls with no end in sight. Politicians almost everywhere are desperate to save their hides, stem social unrest and avoid having their nations fall into the hands of revolutionaries. More countries are sure to be selling gold reserves in the future, as they too face austerities, caused by ever dwindling national resources, and yet more mouths to feed. Our finite planet is tightening the noose. Meanwhile, buyers are waking up, to the fact, that gold is a terrible investment, currency proxy or insurance device, as demonstrated by the past 30 years market performance. Should Mystics overwhelm the market with sales (either directly or through collateral monetization) - NO ONE; not even Jim, can then predict or fathom how low gold's price could go - even $50 an ounce is possible. We must never forget that we are dealing with a social phenomena, and not a scientific phenomena subject to object deterministic rules and observation. Therefore, anything is possible. Anything - and that goes both ways in this commodity's market. Dr Peter G Kinesa July 6, 2013
THE BIG MAMA OF ALL CREDIT CRUNCHES This article reflects a Chinese financial system that is on the brink of a biblical credit collapse - "The Big Mama of all Credit Crunches" To be expected, from a system that operates on the outermost margins in every respect and oppresses its population in order to support a elite few who run and control the "party" (pun intended). An oppression that has been well documented by the Epoch Time; Nine Commentaries on the Communist Party,and many others. As history has proven regimes like this, (the former Soviet Union being a recent example) fall apart from within, due to inefficiencies, atrophy, and wasteful policies that are unsustainable physically, politically, socially and morally. Briefly, here is a short list of items that should draw deep concerns from all investors, businesses, economists and world leaders. Oppression of human rights, dignity, freedom of information and expression are the hallmarks of an evil totalitarian system leading to ruthless atrocities for which there is no accountability. We need to look no further than the controls that are placed over the Internet to see clear evidence of restrictive tactics over information and communication flows as indicators of a totaltarian attitude. Lack of financial transparency is pervasive to domestic, private and government accounting systems and numeric outputs. No faith, whatsoever, can be placed on any the financial or economic information generated by these entities. They are all students of the Bernie Madoff's School of Accounting - and we know, when unregulated, where that leads. China is desperate for non-renewable resources in order to sustain its inefficient economic system and unsustainable growth. Its simple self-evident strategy of exploiting it massive labour pool, to achieve huge pricing advantages on exported goods creating trade surpluses, then realizing billions in US treasuries, that are in turn used to buy resource based entities around the world is clear. China also perverts capitalism's principles, by using Sovereign Funds, that are not comparable to corporations in any way. They have no accountability to stakeholders, markets or financial measures of success - thereby, undermining all concepts of free, fair and open trade and related principles of comparative advantage. Where is Mr. Krugman when we really need him? Where is the Conscience of a Liberal? China's currency is also fixed to the US dollar, given it an unfair advantage in trade that allows it to maintain this economic-political strategy of labour exploitation and oppression, leading to the reserves of US currencies needed to secure supplies of non-renewable resources. It works to the party's primary advantage, with little trickle down to the people of the country. Who should complain? Not North America because it too benefits from the cheap exploited labour with lower cost good on the shelves at Walmart, Costco, Target and others, hence containing domestic inflation and low interest at the Fed and other Central Banks. The other big losers however have also been the hard-working American union members and middle class that forged the spirit and heartland of a great nation. Their jobs and way of life were traded away by these unsavoury business practices. Low interest rates also lead to high asset valuations in Western nations and can thus be tied to the cheap labour exploitation of millions and massive loss of American jobs - so everyone (elites?) had or has an interest in maintaining the status quo of these trade practices, even though they are definitely unsustainable while benefiting so very few on both sides of the Great Wall. Water shortages are becoming headline news; the importing of water is becoming essential to feeding the Chinese economic machine. Pollution, unbridled and unregulated economic growth are the drivers behind this need. Water and oil are the two essentials of modern industrial-consumer complexes, shortages as Jim Rogers so astutely noted will lead to wars. There are no reasons to doubt Mr. Rogers conclusions. No reasons. Add further, the climatic chaos created by the growth economic mantra and you do nothing but reduce the supplies of fresh water through pollution, warming and upheaval of the natural systems of the planet. Without fresh water supplies, you cannot feed people, armies or politicians - the final outcome is not hard to figure out. Gorbachev recognized that the Soviet Union was doomed and could not compete with the West because it did not have the accounting measures to manage responsibility centres at all levels of enterprise. Without management accounting measures, you cannot manage what is not measured; leading to sloth, inefficiencies, moral bankruptcy and wide-spread corruption. Ultimately, the Soviet Union's system collapsed and Glasnost was needed to bring transparency, democracy and accountability to its economic and political systems. Today, there is growing evidence that the Chinese system also suffers from the lack of accountability along with the management and financial yardsticks needed to properly manage its economic, social and environmental activities. Ghost cities, tell us that there is little expectation of economic payback or return on investment for such projects. Pollution pervades all aspects of life, leading to huge long-term health and environmental concerns; eventually they impede all forms of industrial and agricultural activity. Add to this, the poor management of national finances such as, gold purchases at historically high prices, over-exposure to US treasuries and above market purchases of resource companies by Sovereign Funds, are a few of the disconcerting practices that infer a lack of financial controls and understanding. Synthesizing the analysis, we should bear in mind a number of considerations: One, at the meta-economic level the hard constraints of a finite planet will prevail on exponential economic growth in resource depletion and over-population. No nation can escape the consequential pending disaster to occur when the fragile balance of populations, resources and the bio-sphere is broken and lost forever. Two, the business cycle of expansion and contraction comes into play sooner or later, with its unavoidable reversion to the mean theory. Thus, when China faces this mathematical reversion, after extreme growth rates - the other side of the equation could be just as powerful to the detrimental contraction side of activities . Three, leverage is a useful and beneficial way to spark accelerated growth making everything look easy at the time. But, the when the wheels come off, the downward push is even faster and harder. Every generation, it seems, must relearn the perils of debt and how their related bubbles have created untold pain and suffering when the party came to an end. Four, societies where oppression and corruption are everyday parts of life, with little in the way of transparency and accountability, do not survive. Internal and external forces historically come to bear, that results in dramatic social, political and economic changes - this is a law of nature that returns systems back to the their equilibrium. In China's case; this could be termed as a return to a balance between its cultural Ying and Yang! What we see then is a system that has many deep troubles, where possible unrests and breakages could occur at any moment, with its credit leverage fuelling a " The Big Mama of all Credit Crunches" that changes and brings about a long overdue Glasnost to a nation that has been operating far beyond its equilibriums of Ying and Yang in so many respects. That, by rules of nature, must revert to the mean. The rest of the world should be prepared for major adjustments when this dragon lies slain by the consequences of its unsustainable beliefs and practices. To be forewarned, is to be thusly forearmed. Dr Peter G Kinesa May 10, 2013
Once , a long time ago, the Artic was as warm as the Everglades; ask any geologist. By all accounts, we are prematurely heading back that way at a rapid rate. Climate denial will not stop the existential feedback systems that warm the planet taking human enterprise to its knees. We cannot just click our heels and return back to Kansas. The neo-classic economic fairy tale is coming to a very dreadful end. We are melting under its growth mantra.
When my boss gets up on his stump and expouses his reasonings on matters, he reminds me of Teddy Kenedy's concession speech at the 1980 Democratic National Convention. Brings a tear to the eye, a lump to the throat and a pocket full of dreams with unyeiding inspirations. Here's the full text, from today's Investors' Insights. For good measure, I have linked in Ted's speech so you can catch the tone and cadence here. What's amazing about the content of the speech too, is how little has changed over the past thirty plus years. That's sad. Passing the torch... Dr Peter G Kinesa March 5, 2013
Eric Sprott discussing the complete lack of gold reserves that the Canadian government has. Start stacking Canada! End of the Road: H...
That's a good thing. Eric clearly needs a few lessons in Meta and Macro Economics, including an understanding of the Nauru Paradigm Cycle. First, what type of countries require large Gold reserves? Well, of course, countries on the verge of physical bankruptcy - meaning they have virtually exhausted all their non-renewable and renewable resources - hence, they are entering the last stages of the Nauru Paradigm. Gold is the last stand for these desperate countries, providing one remaining lifeline to deferring the inevitable collapse of their economic, political and social complexes. But, Gold can only relieves such symptoms temporarily - it does not fix or cure the underlying economic malady.
By the way, most countries entering this final phase of the Nauru Cycle can expect two outcomes: increasing social unrest and growing external hostilities. This is a historical fact, but it is also reflected on today's geo-political stage. Consider Syria, Egypt, Iran, Greece, France, Japan and many others (China?) - all are nations entering the final stages of the Nauru cycle - where physical resources per capita are in rapid decline. Expect More Wars.
Canada, on the other hand, is invariably the richest country in the world given the vastness of its resources and infrastructure complexes. Its per capita resource/currency ratio is second to none, given its relatively low population.The last thing Canada needs is more Gold - it has enough in the ground in the event of need. Yet, there's more...
More reasons why Canada doesn't need Gold reserves?
First; in a few short years, Canadians will be able to pick it up tonnes of Gold on the cheap, as last stage countries in the Nauru survival mode are dumping their reserves to finance wars; stay social unrest or ensure departing dictators have their retirement assets available in the right places, after political life. (Dictator's Survival Guide: Zurich Gnomes 101) .
Second, for the reasons mentioned, Canada's currency is trending upwards under immense long-term pressures, so the last thing it needs are measures that could be perceived to strengthen this sleeping giant of global currencies. It would not surprise us to see the Canadian dollar rise to $1.50 US in five years, and climb further to $2.00 in ten or less years - particularly when the FED's exponential, on-going debasement of the greenback is taken into account. This the price to be paid by the US for running its fiat currency presses 24/ 7. Meanwhile, these fiat currency presses, allow the US o tpay debts with paper IOU's, knowing that any debt repayment in physical currency forms is impossible (not enough OIL in the world?) - this paper chase cannot; however, last forever. People figure it out, sooner or later.
A patient Canada is sure to be a BIG Winner in the Gold game down the road; albeit, a meaningless win when critical global resources are practically depleted or unusable. Mr Sprott needs to revisit his Meta-Economic books and refresh his understanding of the deep implications of the "Nauru Paradigm Cycle."
It goes without saying, that the Canadian dollar is a great surrogate play on hard and soft commodities (including fresh water), both of which have more real upside in the coming years. Rogers, Soros and Faber think these commodities are too. Gold is a more speculative strategy - we prefer the elements offering real economic utilities - not golden abstractions from OZ.
Want to look into the future? America's future? The global future? Then look no further than Detroit. Or Newark, Buffalo. Akron, New Orleans or many other American cities. And we can ask so many questions? Like why do they look like Third World nations? Is this really the richest country on Earth? Or how's about a simple; What happened to America? If anything tells us that the metrics used by economists; measures such as GDP, are meaningless as a means of managing real world activties, then these everyday examples of inner city decay, should prove the point beyond any doubt. Sure it is well documented that Americans migrated to the cozy suburbs miles from the cities, as the automobile provided a means of escape. But add to this, the stripping away of the industrial heartland by Walmart and China, the shifting to a service-based economy, and the conversion of homes into ATM machines; these all created and contibuted to this civil destruction. So the crabs that are now left in the inner-city barrel, have little hope of rising above theses dark depressed streets of despair - the streetcar named desire does not travel their anymore. Stellaaaa... Some believe that these cities will be revived when gas prices drive the automobile to its inevitable extinction. But will the jobs return to these cities? Will the manufacturing base return back from China? Unlikely, as the scarcity of raw materials is going to make any sort of manufacturing anywhere on this planet difficult. In the end, the only thing still missing from this permanent picture of the American Dream and Global future is - MAX! And how sad, this all is... Dr Peter G Kinesa February 21, 2013
In early February, I finally got a week off and had the opportunity to fly back to visit my old Alma mater, the world famous Nauru School of Keynesian Economics. Named, of course, after one of its most famous students and, founded by Adam Smith, long before his tenure in Scotland. Many of the world's leading Keynesian Economists, and Economic Nobel Prize Winners, have passed through its arches of higher(sic) learning
Anyway, here's me on the beach with a few of my co-ed friends and colleagues, enjoying the refreshing weather and tropical views. Also, there is a photo shot of my good friend from school, Dr Nigel Tapatughamans, fishing on the beach - who for years was the country's leading Keynesian Economist; and was also once considered for a Nobel Prize, when Nauru was a working miracle. Indeed, not so long ago, Nauru had the highest income and wealth per capita in the world.
Seriously, there is a very important message here that should not escape raw wisdoms.The economic history of Nauru is a lesson of utmost meaning, for it foreshadows the fate of the larger planet that continues to apply insane Keynesian Economic ideas, despite real physical and mathematical constraints. Just Nuts - Watch some of these videos below, they should be a mandatory part of curriculum's in all schools of business and economics. Better yet; all schools. As it demonstrates, in no uncertain terms, where the human enterprise is headed globally, should it continue along the conventional economic path. However, in all likelihood it may not even attain the simple paradise of Nauru; as geo-political tensions could interrupt even this tranquil destination. So please, please take the time to view one or more of these videos and explore further how one small nation magnifies the trajectory of the human condition should we continue to foolishly believe and practice the same old theories that many of us learned at Nauru's World-Famous "School of Keynesian Economics" BUT MORE IMPORTANTLY, pass, tweet, share, post and show this video archive to as many friends, families, colleagues, strangers and foes as you can. So that they too, may join a larger awakening and understanding, of where all this Keynesian economics and unbridled consumptive growth leads us. For these are certainly not the stairways to heaven that we have all bought into...
All the Very Best,
Dr. Peter G Kinesa
February 17, 2013 P.S. This histroric post was actually the first ever blogged by First Financial Insights,(May 27, 2011) defining a theme that focuses on an economic reality inclusive of physics and exponential mathematics: not hypothetical abstractions built within subjective contexts - with the clear view of avoiding the outcomes of Nauru and Easter Island - with the clear view of sustaining the human enterprise for as long as possible - with the clear view of avoiding the premature human extinction, that Keynesian Economics will ultimately lead us to. And then you judge, as we let the facts and numbers speak for themselves.
Mother Earth asks us one simple thing: PLEASE STAND BY ME...
