Archive for July, 2012

  • Given the insane levels of debt, rampant inequality,  currency debasement, failure to punish financial fraud, letting the private banks take over the system of credit creation, de-linking of fiat money from anything real, growth of the too big to fails, repeal of Glass-Steagall, refusal to rein in derivatives, sovereigns taking on banks’ debt, crony capitalism, endless war, and other shenanigans … our financial crisis was entirely foreseeable.

    The Financial Crisis Was Foreseeable … Thousands of Years Ago

    Given the insane levels of debt, rampant inequality, currency debasement, failure to punish financial fraud, letting the private banks take over the system of credit creation, de-linking of fiat money from anything real, growth of the too big to fails, repeal of Glass-Steagall, refusal to rein in derivatives, sovereigns taking on banks’ debt, crony capitalism, endless war, and other shenanigans … our financial crisis was entirely foreseeable.

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  • The modern banking system is therefore really a debt-creation system. One thing is for sure. The exponential growth of debt is a structural problem which – unless directly addressed – will swallow all economies which try to ignore it.

    Money As Debt – The Rothschild Mafia (Paul Grignon)

    The modern banking system is therefore really a debt-creation system. One thing is for sure. The exponential growth of debt is a structural problem which – unless directly addressed – will swallow all economies which try to ignore it.

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  • Is it not the same? The only different is the number of participants (Libor is 18 banks and Kilbor is 12 local banks). If it is a free market, then let the whole market participant determine the right Kilbor rate than let on a hand full of banks determine the rates. It is not 'manipulation'?

    News – Malaysia’s Klibor unlikely to be manipulated

    Is it not the same? The only different is the number of participants (Libor is 18 banks and Kilbor is 12 local banks). If it is a free market, then let the whole market participant determine the right Kilbor rate than let on a hand full of banks determine the rates. It is not 'manipulation'?

    Continue Reading...

  • But after a while Ben got lazy, and Chen got tired of giving Ben free fish to eat. At first they used sea shells as money to keep track of how many fish Ben owed Chen. Then they switched to leaves from the tree. Finally they just broke a stick off the tree and drew little lines in the sand. If Chen gave Ben a fish, Ben drew (issued) a line in the sand on Chen's side of the island. There were only two of them, so it was easy to avoid cheating.

    Focal Point: Gold

    But after a while Ben got lazy, and Chen got tired of giving Ben free fish to eat. At first they used sea shells as money to keep track of how many fish Ben owed Chen. Then they switched to leaves from the tree. Finally they just broke a stick off the tree and drew little lines in the sand. If Chen gave Ben a fish, Ben drew (issued) a line in the sand on Chen's side of the island. There were only two of them, so it was easy to avoid cheating.

    Continue Reading...

  • When we use the fiat money system, inflation is inevitable. In another word, it is already bake-in the cake when we start to use the fiat money system. We cannot escape from it. Couple with a debt based economy, where most of the consumption is supported by debt (mainly credit card, loans), we got a fast moving economic train that moving too fast towards a solid hard wall.

    The spectre of food inflation

    When we use the fiat money system, inflation is inevitable. In another word, it is already bake-in the cake when we start to use the fiat money system. We cannot escape from it. Couple with a debt based economy, where most of the consumption is supported by debt (mainly credit card, loans), we got a fast moving economic train that moving too fast towards a solid hard wall.

    Continue Reading...

  • The key point is that in the US for the past twenty years the numbers are often phony and the game is rigged, because greed in the financial and managerial elite has overcome any fear of prosecution. When the rewards are great and the risks incidental, dishonesty thrives. The consequence is that the financial sector has become a largely extractive, outsized activity that thrives on the fraudulent manipulation of risk and value, distorting the real economy, and transferring wealth from the productive to the clever and unscrupulous. This may serve during a period of endless financial expansion, but when the hard times come the frauds collapse quickly.

    Study Finds About 20% of US Public Companies Cheat On Earnings Reports

    The key point is that in the US for the past twenty years the numbers are often phony and the game is rigged, because greed in the financial and managerial elite has overcome any fear of prosecution. When the rewards are great and the risks incidental, dishonesty thrives. The consequence is that the financial sector has become a largely extractive, outsized activity that thrives on the fraudulent manipulation of risk and value, distorting the real economy, and transferring wealth from the productive to the clever and unscrupulous. This may serve during a period of endless financial expansion, but when the hard times come the frauds collapse quickly.

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  • This is what a spending, consumption based economy looks like. Saving is not required because it halt 'growth' of the economy. If you think that all these will benefit majority of the people here (the 99%), think again. Look what happen to Wall Street 'financial district' and its relation to the current overall condition to the US.

    News – Putting KL on world finance map

    This is what a spending, consumption based economy looks like. Saving is not required because it halt 'growth' of the economy. If you think that all these will benefit majority of the people here (the 99%), think again. Look what happen to Wall Street 'financial district' and its relation to the current overall condition to the US.

    Continue Reading...

  • Many readers have told me that this is one of the most difficult things to do. Why? Very simply, because it is an admission of having been wrong especially if that sell stop triggers a loss as opposed to locking in a gain. Get over it! When you invest, you will have losses and admitting that you were wrong from time to time will not kill your portfolio. What will kill it is letting small losses turn into large ones.

    Never Too Big To Admit Mistakes

    Many readers have told me that this is one of the most difficult things to do. Why? Very simply, because it is an admission of having been wrong especially if that sell stop triggers a loss as opposed to locking in a gain. Get over it! When you invest, you will have losses and admitting that you were wrong from time to time will not kill your portfolio. What will kill it is letting small losses turn into large ones.

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  • Because the only protection against a bear market is to be in cash on the sidelines or actually invested in bear market funds. And don’t let any of these index proponents tell you any different—when the markets head south, index funds with will join the crowd.

    Avoiding Tragedies

    Because the only protection against a bear market is to be in cash on the sidelines or actually invested in bear market funds. And don’t let any of these index proponents tell you any different—when the markets head south, index funds with will join the crowd.

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  • Not 'fine-tuning' but MAJOR overhaul is needed to our economy. We are still using the same Keynesian economics where consumption is good and saving is bad in such that saving deprive the economy the lubricant for more growth. This same Keynesian economics is responsible to what is happening to US and Europe now. The great Keynesian experiment is coming to its end. The problem is debt. We need to teach people to spend within their needs. Not borrowing to buy thing they not really need.

    News – Some fine-tuning needed to fix imbalances, says CIMB Investment

    Not 'fine-tuning' but MAJOR overhaul is needed to our economy. We are still using the same Keynesian economics where consumption is good and saving is bad in such that saving deprive the economy the lubricant for more growth. This same Keynesian economics is responsible to what is happening to US and Europe now. The great Keynesian experiment is coming to its end. The problem is debt. We need to teach people to spend within their needs. Not borrowing to buy thing they not really need.

    Continue Reading...