Niall Feguson: Empires on the Edge of Chaos . . . and The Course of Empire . . .

-------- Original Message --------

Subject:	FWC: RE: Niall Feguson: Empires on the Edge of Chaos . . . and The Course of Empire . . .
Date:	Sun, 28 Feb 2010 13:47:14 -0800
From:	Jas Jain

 From: XXXX
Subject: Niall Feguson: Empires on the Edge of Chaos . . . and The Course of Empire . . .
Date: Sun, 28 Feb 2010 09:21:41 -0800

Complexity and Collapse: Empires on the Edge of Chaos By Niall Ferguson:

http://www.informationclearinghouse.info/article24874.htm

http://web.sbu.edu/theology/bychkov/cole.html

 

Thanks. Some of us read and discussed The Collapse of Complex Societies By Joseph A. Tainter on the old Longwaves group in late 1990s. I still stand by my own theory of The Longer Wave, with the current Longwave marking the end of the Modern Western Civilization in terms of a very long period of decline marked by chaos and disintegration of various institutions including democracy. No, all you "long-term bulls" on America, a la Warren Buffett, America is not going to come back up strong, as it had done in the past, from this decline. Buffett would die an unhappy man having disappointed his shareholders. Blind faith has consequences.

 

China would come out of this period of chaos and disintegration as the clear top dog. Please read the histories of China, Europe and India for the past two thousand years. There is no contest! Misery awaits those who pray to false gods (democracy being one)!

Jas

DOW DJIA Adjusted for Inflation

I (Kirk) got this in the email today from Chartoftheday. I think it is good to post here because it sort of shows that the DOW has gone nowhere in the past decade.

For some long-term perspective, today's chart illustrates the Dow adjusted for inflation since 1925. There are several points of interest. For one, when adjusted for inflation, the bear market that concluded in the early 1980s was almost as severe as the one that concluded in the early 1930s. Also, the inflation-adjusted Dow is a little more than double where it was at its 1929 peak and trades 54% above its 1966 peak – not that spectacular of a performance considering the time frames involved. It is also interesting to note that the Dow is up 57% from its March 9, 2009 low which is actually slightly more than what the inflation-adjusted Dow gained from its 1966 peak to today.

Journalists and bloggers may post the above free Chart of the Day on their website as long as the chart is unedited and full credit is given with a live link to Chart of the Day at http://www.chartoftheday.com.


Friday, February 26, 2010

• 2009 GDP Quarterly and Annual Data
  The estimate for GDP was revised up by 0.2% from the first estimate for Q4-2009 GDP which was was 5.7%. See tables and graphs at the end of this article.
  
  Highlights of Table 1:
  
  
• The contribution from durable goods jumped 20.4% in Q3 from "Cash for Clunkers" then it dropped back to 0.2% in Q4.
• Contribution to GDP from "Structures" continues to plunge at double digit rates.
  

best regards
Kirk Lindstrom

http://kirklindstrom.com/
Blog: http://kirklindstrom.blogspot.com

"Kirk Lindstrom's Investment Letter Explore Portfolio" gained 33.5% in 2009. This portfolio has 75% in equities and 25% fixed income with a beta of 1.0.

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Excellent Paper -- This Time is Different: A Panoramic View of Eight Centuries of Financial Crises of Carmen M. Reinhart and Kenneth S. Rogoff.

-------- Original Message --------

Subject:	FWC: Excellent Paper -- This Time is Different: A Panoramic View of Eight Centuries of Financial Crises of Carmen M. Reinhart and Kenneth S. Rogoff.
Date:	Thu, 25 Feb 2010 04:58:32 -0800
From:	Jas Jain <jas_jain@hotmail.com>

Subject: Excellent Paper
Date: Thu, 25 Feb 2010 12:47:39 +0100

This Time is Different: A Panoramic View of Eight Centuries of Financial Crises of Carmen M. Reinhart and Kenneth S. Rogoff.

This paper was the origin of their famous bestselling book. It has great links for historical research. Enjoy it!

Economists are useless in avoiding the crises and then responding to the crises in a positive way because the crises are caused by how various participants behave, especially, the political and banking leaders, and economists haven't invented the techniques to make political and banking crooks behave in a less crooked manner. Greenspan and Bernanke, both economists, encouraged the banking and finance crooks with their praise of the mortgage securitization during 2004-2007 leading up to the debt blow off. Greenspan, in particular, was himself bred in a culture of deception, fraud and manipulation (you are considered smart!) that pervades NYC banking and finance. It was obvious that these two were facilitating pushing debt on the households, an evil act, and didn't home crank warn about construction of 30M Debt Concentration Camps under these two? America has rogue economists and evil economists. Only the evil economists get the top economic policy power. America has become a safe haven for crooks and evildoers. Three biggest evildoers in 2002 were in America and not in Iraq! We went after the wrong guys. There cannot be any reasons for hope until we get rid of crooks and evildoers at home. And don't hold your breath because they have more power today.

 

History is nice for understanding and to see the problems before they cause the harm but it is useless in avoiding the problems because you cannot use history to change people's behavior. People who understand history the best are never in power; those who profit from the crises, e.g., crooks and manipulators, are! Only crooks survive the journey to the top!! The American econo-political system has degenerated into a system of the Crooks, buy the Crooks and for the Crooks. Democracy has delivered the goods!

Jas

Kenneth Rogoff: “Horrible” China Crisis May Trigger Regional Slump

-------- Original Message --------

Subject:	Rogoff: "Horrible" China Crisis May Trigger Regional Slump
Date:	Wed, 24 Feb 2010 03:54:50 -0800
From:	Jas Jain

Rogoff: "Horrible" China Crisis May Trigger Regional Slump

This was reported on Bloomberg. Kenneth Rogoff is among a rare breed of born-and-bred American economists who understands my words of warning for the past dozen years: "It is the debt, stupid!" He, with a coauthor, recently published a book about financial crises caused by debt and leverage over the last eight centuries. Some of us cranks had read a part of that history long time ago. Plus, some of us cranks do understand debt and its consequences. It is definitely not a rocket science.

 

I think that China's crisis would trigger lot more than "regional slump." It would simply confirm the global Greater Depression, made in America in 1990s, that has been working its way slowly and would explode at some point is time over the next few years. There is no reason to wait for the whole world to acknowledge the Greater Depression before one puts his house in order. Better safe than sorry.

Jas

---

Kirk's Notes:
The above are the opinions of Jas Jain, not Kirk Lindstrom.  Jas has given me permission to document his email alerts here.  I often disagree with Mr Jain, especially his use of language to insult others, but I respect his observations. 

• Best Investment Newsletter
  
  
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• KirkLindstrom.com

Greenspan: “the financial crisis was “by far” the worst in history”

-------- Original Message --------

Subject:	FWC -- Greenspan: "the financial crisis was "by far" the worst in history"
Date:	Wed, 24 Feb 2010 03:23:35 -0800
From:	Jas Jain

"The financial crisis was caused by a "fundamental misjudgment in the marketplace," Greenspan said." No, Mr. Greenspan, it were the crooks in the marketplace, whom you defended and supported, that caused the crisis. The crisis was scripted! . Didn't some crank concluded, a dozen years ago when Greenspan was being celebrated as the Maestro, that America had created a financial system and conditions that would lead to the global Greater Depression and repeatedly warned about "It is the debt, stupid!?" (Yes, that was in 1998 when I started warning people against the corporate crooks that had taken over the American economy and the financial system via control of the government, including the Federal Reserve).

 

Can you imagine that unelected Greenspan has had more power than any single American for the past 30 years! Greenspan set the stage and Bernanke has guaranteed the global Greater Depression by bailing out the culprits. Dynamite duo! Thing about postponing simple recessions and depressions is that they get bigger and bigger until no amount of manipulation can stop the financial catastrophe inherent in these manipulations. 

 

Only an ignoramus can be optimistic about America's future because the same crooks that created the crisis have even more power today than three years ago. Yes, Warren Buffett is an ignoramus when it comes to forecasting the future of the US economy on which he has bet it all. 

Jas

-x-x-x-x-x-x-x-x-x-x-x-x-

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1aLQ51QXlDA&pos=3

Greenspan Says Crisis 'By Far' Worst, Recovery Uneven

By Joshua Zumbrun

 

Feb. 23 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the financial crisis was "by far" the worst in history and called the recovery from the global recession "extremely unbalanced."

The world economy has undergone "by far the greatest financial crisis globally ever," Greenspan said today in a speech to the Credit Union National Association's Governmental Affairs Conference in Washington...

The financial crisis was caused by a "fundamental misjudgment in the marketplace," Greenspan said. Greenspan defended markets, because other forms of economic organization are worse.

Greenspan said he wants the subprime mortgage market to return. "I hope we can find a way of resurrecting the subprime market," because it was working well until those mortgages were widely securitized, he said.

Charlie Munger warns 2012 is our tipping point on 'road to ruin' + Basically, It's Over

-------- Original Message --------

Subject:	FWC: Munger warns 2012 is our tipping point on 'road to ruin' + Basically, It's Over
Date:	Tue, 23 Feb 2010 17:11:03 -0800
From:	Jas Jain

Please see the two attached links with comments from Buffett's parner Charlie Munger. Of course, no one could have known this 12 years ago that America was on the Road to Ruin , right? It takes a rare breed of born-and-bred American a long time to see the reality, but overwhelming majority of born-and-bred Americans, including Munger's partner Warren Buffett, is still clueless about what lies ahead for the US economy—the Greater Depression. Buffett is a classic born-and-bred American dope, suffering from an uncalled for optimism about an America that no longer exists, who recently made an all-in bet on the future of the US economy. I guess the left hand must not be talking to the right hand. Buffett dopes (those who own shares in Buffett's fiefdom) would be punished for their blind faith. The guy should have retired at 65 as a hero.

 

America's primary problem is born-and-bred Americans raised in the Age of Propaganda orchestrated by the worst Crooks in centuries. There is no solution to this problem other than the destruction of the system that sustains the Crooks. It takes centuries of pain and suffering to change people's bad habits and even then there are no guarantees. Greeks have not yet fully recovered from the damage done by democracy 2400 years ago. The beliefs and habits of the Greeks were forever changed. Democracies (the kind that the world has today) never fail to destroy a civilization whose greatness preceded the arrival of democracy. That is the problem that born-and-bred American dopes cannot deal with. A bad system guarantees a bad outcome. Bigger a democracy worse would the outcome be!

Jas

-x-x-x-x-x-x-x-x-x-x-x-x-x-

http://www.marketwatch.com/story/story/print?guid=DE9C526C-5F20-43F7-BF55-3D7084E9E4D0

Feb. 23, 2010, 12:01 a.m. EST

'Death of American Capitalism:' The 10 final scenes

Commentary: Munger warns 2012 is our tipping point on 'road to ruin'

By Paul B. Farrell, MarketWatch

ARROYO GRANDE, Calif. (MarketWatch) -- Good news, Americans are "downbeat about today. Upbeat about tomorrow," says the latest USA Today/Gallup Poll. "Americans feel battered by hard times, record home foreclosures, stubbornly high unemployment rates and war."

And yes, we are "fed up with Washington and convinced more than 3 to 1 that the nation is heading in the wrong direction," yet there's "confidence that there will be better times ahead, that the classic American dream endures and hasn't been extinguished. It's not even at its low ebb." Why? Because we're in denial!

Do Main Street's 95 million investors know something Warren Buffett's long-time partner, Charlie Munger, doesn't know? Munger is warning us "It's Over" for America. Yes, "o-v-e-r," America's in decline, at the end-of-days, coming to "financial ruin," says Munger.

...
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http://www.slate.com/id/2245328/pagenum/all/#p2

Basically, It's Over

A parable about how one nation came to financial ruin.

By Charles Munger             Updated Sunday, Feb. 21, 2010, at 3:30 PM ET

In the early 1700s, Europeans discovered in the Pacific Ocean a large, unpopulated island with a temperate climate, rich in all nature's bounty except coal, oil, and natural gas. Reflecting its lack of civilization, they named this island "Basicland."

The Europeans rapidly repopulated Basicland, creating a new nation. They installed a system of government like that of the early United States. There was much encouragement of trade, and no internal tariff or other impediment to such trade. Property rights were greatly respected and strongly enforced. The banking system was simple. It adapted to a national ethos that sought to provide a sound currency, efficient trade, and ample loans for credit-worthy businesses while strongly discouraging loans to the incompetent or for ordinary daily purchases.

...

Krooksman Is Right About the Republican Deceit

-------- Original Message --------

Subject:	Krooksman Is Right About the Republican Deceit
Date:	Mon, 22 Feb 2010 14:31:59 -0800
From:	Jas Jain

From The Bankruptcy Boys, by Paul Krugman, Commentary, NY Times:

"The conservative answer, which evolved in the late 1970s, would be dubbed "starving the beast" during the Reagan years. The idea — propounded by many members of the conservative intelligentsia, from Alan Greenspan to Irving Kristol — was basically ... a game of bait and switch. Rather than proposing unpopular spending cuts, Republicans would push through popular tax cuts, with the deliberate intention of worsening the government's fiscal position. Spending cuts could then be sold as a necessity rather than a choice, the only way to eliminate an unsustainable budget deficit."

http://www.nytimes.com/2010/02/22/opinion/22krugman.html

 

The Era of Crooks and Evildoers in America, in terms of economics and finance, was heralded under Reagan-Greenspan. The proof, as they say, is in the pudding—the Crooks have done far better than the rest since 1981 than they did from 1949-1980, the period during which middleclass working Americans did extremely well. Irving Kristol, the father of neo-cons was a crook (any time you see the adjective neo in front of an ideology you can assume that the practitioner is intellectually dishonest, i.e., a crook; the same applies to the adjective reform in front of a religion or a policy; does the religion needs the reform or the practitioner!). Paul Krugman, a neo-Keynesian, is, thus, a crook; hence, the name Krooksman. No crook, or propagandist, is always wrong, or even mostly wrong!

 

Republican propagandist Rush Limbaugh worships Reagan as Ronaldus Maximus, in terms of his economic policies, proving that Limbaugh is an ignoramus Supremus. There is lot of blame to go around between the two parties, I mean organized gangs, but there is no doubt that Republicans are the bigger culprits over the past 60 years. America is doomed as long as either one of these gangs have power. Of course, even a worse organized gang exists—The Federal Reserve—but that gang gets its sustenance form the two political gangs.

Jas

The Wealthiest In America Paid the Lowest Taxes, as % of Income, On Record!

-------- Original Message --------

Subject:	The Wealthiest In America Paid the Lowest Taxes, as % of Income, On Record!
Date:	Thu, 18 Feb 2010 17:07:53 -0800
From:	Jas Jain

This was reported on Bloomberg and is based on the 2007 data released by IRS. I am quite sure that the "record" is for period after the beginning of the WW II. When the income tax was first instituted only the top 1% paid income tax. This is the legacy of the Regan-GW Bush tax cuts that in reality favored the very wealthy and Warren Buffet has pointed this out several times. The bottom 40% have paid lower taxes since 1981 under the Democrats as well as the Republicans and their share of the total income tax is very small anyway. The middle-class that earns W-2 income has seen hardly any lowering in overall federal taxes, as % of incomes, since 1981. No, American economy does not need tax cuts. The main problem is systemic financial fraud.

 

The tax policy in America is a sham and every time a politician speaks of tax cuts (Republican), or reform (both), or fairness (Democrat), he is a conman. America is full of born-and-bred partisan dopes but Republican dopes are definitely dopier of the two groups. Both parties support Crooks wholeheartedly, but Republicans, led by Greenspan, GW Bush and Bernanke, are in a class by themselves. Obama, Pelosi and Reid, whom propagandist Limbaugh blasts on a constant basis, are products of their evil deeds! A born-and-bred American dope never takes responsibility for his mistakes and, as a result, remains a dope-for-life.

 

The key problems for America are: Debt (a result of bad tax policy), Democracy, Dopes and Doom. Nothing can save Americans from themselves! The efficacy of the American system in breeding dopes is exemplary. 

Jas 

Trimmed Median PCE Inflation Rates

-------- Original Message --------

Subject:	Deflation or Inflation? A Picture Worth a Thousand Words
Date:	Wed, 3 Feb 2010 11:17:08 -0800
From:	Jas Jain <jas_jain@hotmail.com>

Deflation or Inflation? A Picture Worth a Thousand Words

Graph source:

http://economistsview.typepad.com/economistsview/2010/02/deflation.html#comments

Jas

---

Kirk's Notes:

1. PCE is Personal Consumption Expenditure. You can get the latest press release for the data here.
   
   
2. Obviously from the above graph, we have had inflation over the whole period shown. What the graph shows is the INFLATION RATE has come down
   

We update the PCE monthly in "The Retirement Advisor"

• Best Investment Newsletter
  
  
• Kirk's Two Investment Letters

America’s Jobs Problem: More Education is a Waste of Money

-------- Original Message --------

Subject:	America's Jobs Problem That No Economist or Politician Dare Talk About
Date:	Wed, 3 Feb 2010 11:00:29 -0800
From:	Jas Jain <jas_jain

Serious degradation of the native-born Americans—moral, cultural, economic and physical degradation. No school, or college, would cure that, or teach that. It is a cultural "education" learned at home and everywhere. Vast majority of jobs require little more than discipline and willingness to work, something that has degraded greatly among the bottom half of the native-born population in America. Discipline starts at birth and since 1960s Americans have been breeding undisciplined children under New Age theories and to boost self-esteem. During debt-induced booms even marginal workers with poor habits get jobs, especially soft service jobs. In a tough economy that lies ahead only good workers would be able to keep and get jobs. A higher and higher % of the able-bodied working-age Americans would get supported by welfare. Economy would keep getting less and less efficient. Can you spell long-term decline? Illegal immigrants from Mexico and some other countries are here primarily because they are needed. Also, what % of small businesses, the American jobs machine, are first and second generation immigrants?

 

It is all about people's behavior and Americans at the very top and the bottom have been behaving badly. Middle-class workers with good habits would keep getting more and more burdened. We have a bad system and bad culture fully entrenched. Throwing money on education is a waste. Maybe, America needs discipline schools for kids and for adults. I am sure that some of these problems are now present in other countries too.

Jas

Culture Matters: Not-so-great America & Supremacy of the Deutschland Kultur

-------- Original Message --------

Subject:	Culture Matters: Not-so-great America & Supremacy of the Deutschland Kultur
Date:	Wed, 3 Feb 2010 07:48:16 -0800
From:	Jas Jain

Please see the attached table for the Quality of Living Survey ranking. Austria and Switzerland are very much part of the Deutschland Kultur and clearly #1. There are other smaller Germanic countries, e.g., Denmark and Norway, with smaller cities that are also part of this top group in the quality of cultural and material life. The second rate countries are smaller Anglo-Saxon countries. America is too big to be anywhere close to the top. The worst city in the world is also an American city—Baghdad. Beware of Americans bringing the gift of democracy! Only a morally bankrupt population could have re-elected GW Bush in 2004, who would go down in history as the worst President, and, regrettably, many decent Americans, a majority indeed (brainwashed but decent), would pay the price for the morally bankrupt system now firmly in place, supported by Democrats and Republicans taking turns.

 

No one can deny the advantages that the current Americans inherited after the end of the WW II and relative advantage over the Germans was enormous. What happened since?! Not to ignore the fate of 6M helpless Jews, most ordinary Germans were also victim of the greedy American business thugs (when Wilson, a horrible President, entered the WW I after winning the election in which he promised to keep America out of the war) and later of democracy imposed by America and its allies. Americans, especially, baby Doomers, really need to figure out how they lost the greatest advantage any nation, or a generation, had ever inherited.

 

If you want to get an insight into the future of America read German history before 1913. In economic terms Germany has achieved what it had wanted before 1913, a customs union dominated by Germany (with Prussian leadership), in the form of the EU. It were the Prussians, under general Blücher, that put the British at the top at Waterloo and in another important war before that. No, democracy does not produce the best leaders nor is it the best political system. Poles and Germans were victims of the Great Powers politics of the eighteenth century Europe and America was easily the biggest beneficiary. History has been extremely kind to Americans but not for long. America is too big to succeed, especially, as a democracy! Germans got one gang in power via democracy and Americans got two gangs. Furthermore, democracies degrade the demos.

 

Jas

-x-x-x-x-x-x-x-x-x-x-x-x-x-

 

Rankings		City	Country
2009	2008
1	2	Vienna	Austria
2	1	Zurich	Switzerland
3	2	Geneva	Switzerland
4	4	Vancouver	Canada
4	5	Auckland	New Zealand
6	6	Dusseldorf	Germany
7	7	Munich	Germany
8	7	Frankfurt	Germany
9	9	Bern	Switzerland
10	10	Sydney	Australia

 

Return of the Cow Standard! .... Burst of the Mother of All Bubbles

-------- Original Message --------

Subject:	***** Return of the Cow Standard! Motherland of the Modern Capitalism Would Lead to Burst of the Mother of All Bubbles!
Date:	Wed, 3 Feb 2010 05:43:02 -0800
From:	Jas Jain

Return of the Cow Standard! Motherland of the Modern Capitalism Would Lead to Burst of the Mother of All Bubbles

 

Forget PIGS and pay attention to the motherland of the modern capitalism—The United Kingdom. All bubbles have debt bubbles underneath (stock market is a substitute debt market). The total debt burden, public and private, is 450%+ of the GDP. The budget deficit is 12.1% of the GDP. Greece is a rabbit compared to this fat pig (America is a fat elephant).

 

The English will go back to their monarchy when democracy falters; the Scots will get back their independence, but what would Americans and Indians do? Widespread civil unrest and violence are unavoidable as the demonic democratic debt bubbles deflate one by one and long depression sets in.

 

USD would out live the cable and most other paper currencies. Gold would serve as a substitute currency until the world goes back to the Cow Standard, the longest lasting standard of measure of wealth and monetary unit in human history. Heavy fines and dowries were paid in cattle (a Rajput friend of mine, a son of thakur who married a girl from deep desert, got camels, sheep, goats and cows, in addition to gold, as dowry). Gold as a monetary unit is only a teenager compared to the Cow Standard. The networth of the very wealthy was measured in tens of thousands of cows. Other common animals were also used as monetary units.

 

Talent was not a currency in ancient Greece (before the coins came into circulation); it was merely the mass of gold for the real monetary unit-the ox. (I would need to check how many oxen were equal to a talent of gold). Long after the coinage the public used the sheep as a monetary unit in the Roman Republic around 200 B.C.

 

Worshiping a cow is far more rational than worshiping money! Needless to point out, the Hindu Aryans were on the Cow Standard and so were their cousins among the Indo-Europeans, including the Anglo-Saxons. You can't eat gold but you can get a lot to eat form a cow! The Arabs and the Hebrews might go back to the sheep standard.

 

Jas

Fwd: ***** Return of the Cow Standard! Motherland of the Modern Capitalism Would Lead to Burst of the Mother of All Bubbles

-------- Original Message --------

Subject:	***** Return of the Cow Standard!
Date:	Wed, 3 Feb 2010 05:43:02 -0800
From:	Jas Jain

Return of the Cow Standard! Motherland of the Modern Capitalism Would Lead to Burst of the Mother of All Bubbles

 

Forget PIGS and pay attention to the motherland of the modern capitalism—The United Kingdom. All bubbles have debt bubbles underneath (stock market is a substitute debt market). The total debt burden, public and private, is 450%+ of the GDP. The budget deficit is 12.1% of the GDP. Greece is a rabbit compared to this fat pig (America is a fat elephant).

 

The English will go back to their monarchy when democracy falters; the Scots will get back their independence, but what would Americans and Indians do? Widespread civil unrest and violence are unavoidable as the demonic democratic debt bubbles deflate one by one and long depression sets in.

 

USD would out live the cable and most other paper currencies. Gold would serve as a substitute currency until the world goes back to the Cow Standard, the longest lasting standard of measure of wealth and monetary unit in human history. Heavy fines and dowries were paid in cattle (a Rajput friend of mine, a son of thakur who married a girl from deep desert, got camels, sheep, goats and cows, in addition to gold, as dowry). Gold as a monetary unit is only a teenager compared to the Cow Standard. The networth of the very wealthy was measured in tens of thousands of cows. Other common animals were also used as monetary units.

 

Talent was not a currency in ancient Greece (before the coins came into circulation); it was merely the mass of gold for the real monetary unit-the ox. (I would need to check how many oxen were equal to a talent of gold). Long after the coinage the public used the sheep as a monetary unit in the Roman Republic around 200 B.C.

 

Worshiping a cow is far more rational than worshiping money! Needless to point out, the Hindu Aryans were on the Cow Standard and so were their cousins among the Indo-Europeans, including the Anglo-Saxons. You can't eat gold but you can get a lot to eat form a cow! The Arabs and the Hebrews might go back to the sheep standard.

 

Jas

Dollar For Dopes! A Foreign Tourist Tipped Me a Buck for Being American ...

-------- Original Message --------

Subject:	Dollar For Dopes! -- FWC: A Foreign Tourist Tipped Me a Buck for Being American ...
Date:	Wed, 3 Feb 2010 04:30:13 -0800
From:	Jas Jain

A Foreign Tourist Tipped Me a Buck for Being American ...

So we're sitting on the side of this hill overlooking the city. I'm chewing on a pig's ear and Daisy's sipping bourbon -- or maybe it was the reverse, I can't say for sure -- and this Asian man with a toddler comes up to say hello to the puppy. I'm pretty sure he was South Korean.

So I do the usual routine -- drop a treat into the 2 year-old's hand and hold it flat so Daisy can grab it without nipping the little tyke by accident. We do this a few times, the baby giggles, momma gets some video and everyone's happy.

Nothing noteworthy about it until poppa thanked me in halting English and shook my hand. And when I withdrew it, I was a bit surprised to see a crumpled up single in my palm -- the guy'd apparently given me a gratuity for my small part in his family's U.S. vacation.

American dopes are a superb entertainment for those not fortunate enough to be born in America. We don't need an entertainment industry. The single most profitable industry in America is breeding dopes! To be effective it must start at birth. Practically, every living American is a product of the Age of Propaganda, in which the TV and radio entertainment played a big role, that replaced the Age of Reason in the West.

 

Jas

Jas Jain on US Dollar

-------- Original Message --------

Subject:	US Dollar
Date:	Mon, 1 Feb 2010 11:18:13 -0800
From:	Jas Jain

Jules (born-and-bred Swiss): "In respect of the USD I can not fully understand your notes. Because the USD is still the most used reference currency in the world, it is essential to have a clear picture. I will be thankful for your explanations, why the USD should rise in the long term. My thoughts are: (1) In the long term the USD is has no value (Marc Faber, Jim Rogers); (2) with a lower USD the debit of the US can be reduced; (3) if the USD has no value, the US debt is 0."
 
Hello Jules,
The fate of the USD is intricately tied to the US Treasuries and inflation. Marc Faber, Dr. Doomed, has been trashing USTs for 6-7 years and Jim Rogers was short USTs before the big run up in 2008 and had to cover at a loss. Another dollar bear, Peter Schiff, is an idiot. People who have lot of following are wrong on some subjects and right on some. One must first determine who understands what and how well. Blind following, very common in the US and the rest of the democratic world, leads to troubles and disappointments. America is full of false prophets in the world of investment.

Regarding your thoughts: (1) Marc Faber and Jim Rogers are morons when it comes to the US Treasuries and the US dollar (if one is wrong on USTs that person is wrong on the USD); (2) All developed countries have deficits and debt issues are not just in the US; (3) USD would have no value only after the world economies and the global economic system have totally collapsed and not before that.
 
My views on USTs and the currencies have a 3-5 years time horizon. I was bullish on Swiss franc for 1999-2008 until my target of parity was reached based on the long-term under-valuation/overvaluation trending that is common, but now I am bearish on Euro and the Swiss franc because my conclusion is that the USD has bottomed and the trend reversal is likely to lead to fair value (1.2), first, and then to 1.4-1.5. The long-term trend lines (please see the attached graph) have lot of variations in policies and sentiments built into them. Once the extremes, based on fundamentals, are reached the reversal follows.
Best regards,


Jas

The Secret to the Home Prices in SF Bay Area

-------- Original Message --------

Subject:	The Secret to the Home Prices in SF Bay Area
Date:	Mon, 1 Feb 2010 10:19:40 -0800
From:	Jas Jain

Is no secret at all! They are highly correlated with the stock market, in general, and the prices of the leading local tech stocks, in particular. Attached is a graph of the relative prices in the greater SF Bay area to the greater LA Area. The relative prices in the Bay Area bottomed recently exactly in the month that the stock market bottomed, March 2009.

 

If the stock market makes a new low, most likely within the next 6-18 months, expect the Bay Area home prices to make new lows (lower than the recent lows during March 2009). Some people have claimed that the home prices in Bay Area reflect great weather, hiking trails, windsurfing, etc. That is an amazing level of ignorance.

 

The general prosperity in the Bay Area has been a function of the stock market and when that old cow stops giving milk you can say goodbye to the latest Land of Milk and Honey. People forget that home prices in Detroit area used to be higher than in San Jose area. Lakshmi, the godess of wealth, does not stay put!

Jas