INVESTORS' INSIGHTS:
Week Ended August 11, 2013
FIRST FINANCIAL INSIGHTS
"Investors' Insights"
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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 the 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.
INVESTORS' INSIGHTS
First Financial Insights
August 9, 2013
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.
INVESTORS' INSIGHTS
First Financial Insights
August 8, 2013
Growing sentiment for taxation fairness
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!
INVESTORS' INSIGHTS
First Financial Insights
August 6,2013
