Dear reader, if you are like me, you are baffled by the constant barrage of economic data telling us that ‘things are good or bad or getting worse or getting better. If you are confident that you understand all the data you are either delusional or you are an economist. [Dear reader, that statement was meant as a joke. Of course, it is widely known that all economists are delusional.]
I will however simplify the process of understanding the global economy to one simple number that we can all easily understand and that we can all check every morning. This number represents all one need know before making any economic or investment decisions. Before I tell you the magical number that can predict the future I must preface my observation with a little background information.
If one studies any or all of the myriad data points relating to any or all statistics from around the world, such as GDP, the price of oil, inflation statistics, currency and market fluctuations, earning news, employment statistics etc., one is left, not with knowledge, but with a migraine. Let me say, for the record that no one, including economists, analysts, pundits, politicians, bankers, brokers and, of course, yours truly, are able to digest all this information, let alone draw any form of rational conclusion from the data. Information overload and systemic complexity has rendered any form of analysis irrelevant and inaccurate. [In deference to conspiracy theorists I will acknowledge that the accuracy of much of the data is also suspect.]
An example of this data overload and inaccuracy is found in the most revered of financial statistics, the Bureau of Labor Statistics [BLS] monthly job report. It is not that the report is purposely inaccurate. The report goes to great lengths to ensure that all its assumption and methodology are clearly explained. [Well, clearly enough for ‘government work’, anyway.] Unfortunately no one has the time, ability or interest to read and interpret anything but the headline number. Underemployed individuals, the birth death/model [a process where the BLS simply guesses how many jobs were created by small business] and other factors render the report less than what it is purported to be, that is, an accurate tally of employment in the US. The number produced each month by the BLS is interesting to be sure, but it does not rise to the standard of actionable intelligence.
We have, I think reached the point that there are effectively no longer national economies there is only one global economy. The main effect of this change is that realistic analysis and commentary of a region’s economy can only be done in a global context. Unfortunately the global economy is simply too complex a system to analyze in any meaningful way on a short term basis. Imagine the complexity and inherent inaccuracy if one tried to compile a Global Monthly Employment report.
How does one explain to a vintner in Spain who sells wine to China that his success is dependent on the workers in China making a good living selling I- phone’s to the US at a reasonable cost as long as the cost of oil does not make the shipping cost prohibitive to all importers and exporters. How does one factor in the inflationary or deflationary impact of government money printing and artificially low interest rates. How does one factor in unrest in the Middle East as well as gridlock and animosity in Washington. How does one include currency manipulation and fluctuations in our conversation with the vintner? One does not analyze what these issues mean. One guesses what these issues mean. There is nothing wrong with guessing, but call it what it is. Economists should not hide behind statistical mayhem and pretend that their opinions are anything but a wild eyed guess. The economist’s opinion is no more accurate or informed than the opinion of the Vintner in Spain. Economist’s opinions are no more or less valid or more accurate or informed than the Small Business Owner on Main Street. Funnily enough although their opinions have equal weight, economists are paid ten times the wages offered on Main Street. But I digress.
Hubris prevents economists, politicians and analysts from appearing on television and saying, “That’s a good question, but frankly it is so complicated now I really have no idea which way the economy is going. Anything I say is, at best a wild guess with a 10% chance of actually being accurate. There is no historical precedent for our current globally connected, interdependent, wired economy to base my analysis on..” It would not make very entertaining viewing or reading to have a series of experts state that opinion over and over again. I suspect it would not do much for Main St.’s confidence.
There is however, one number that does tell the complete story regarding the health of the global economy. It is the only number investors, economists, analysts and politicians need to know. The number is provided to us by ‘The Economist’ magazine. The number is The Economist’s interactive overview of government debt across the planet
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Government debt is, sadly, the life support system that our world depends upon. It is the oxygen, water and sustenance of the global economy. At 2:30 p.m. EST, September 25, 2012 the total debt was 48.9 trillion dollars. Currently this number is increasing at a rate $250,000,000 per hour. As long as this number continues to increase at this rate we will continue to enjoy this half hearted recovery/slow entry into another recession that exists today. However if the rate of increase of global debt were to slow appreciably or dare I say it, the total debt were to begin to decline, then one can be quite sure that a depression is coming. In that event, one should be reading Steinbeck’s ‘The Grapes of Wrath’, rather than your favorite financial website. A decline in the rate of increase of government debt or a decrease in the aggregate of government debt would signal that all companies, workers or individuals who are recipients to some degree of the largesse of government [in other words, everyone] would be feeling the pinch. In one form or other, both the 99% and the 1% will feel the pain of government cutbacks. They will be united as both groups reduce their spending accordingly. The ripple effect of significantly reduced government spending does not ripple through the economy. It will be more akin to a Tsunami.
To imagine this scenario it is perhaps easier just to visualize life in Greece as it is today. Life in Greece is a process of layoffs, business closings, deteriorating service and a not so slow, slide, into the economics of a Third World country. [Actually it would be worse than Greece is today as there would be no bailouts for the world from the European Union.]
Dear reader, before you despair it is possible that one can interpret a decline on aggregate government debt to another factor. It is possible that by cooperating on a global scale by our politician’s will foster an environment that encourages global growth on a huge scale. Our politicians will put their own re-election aside and in some cases their own regional interest for the greater good of the world at large. Americans will pay much for their goods as long as it helps the living conditions of Chinese workers. China will sacrifice some price advantage and risk higher unemployment to ensure that their companies do not pour raw sewage and chemicals into their waterways. Middle Eastern countries will come to an agreement that satisfies the disparate needs of all interested parties and an enduring peace will begin. This will lower the price of oil by $50 a barrel and provide further stimulus to the global economy. This scenario might happen.
However I would encourage your skepticism on the subject on global cooperation.
Dear reader, it is not that reduction of global debt is not a necessary and inevitable step on the road to a realignment and transformation of the global economy. It is that a prolonged reduction in global government debt will signal the end of money printing and low interest rates and the beginning of a long and very painful adjustment before any benefits will be noticed by Main Street. A reduction of global government debt will signal that that the “Can” we have been kicking down the road has reached the end of the road and can be kicked no further.
So each morning check the Global Government debt clock and then make your investment decisions. Be prepared to try and make your exit strategy one that will allow you to be at the head of the heard. [For details on the meaning of ‘exit strategy’ contact your Central Banker’ where you will learn that there is actually no such thing as an exit strategy. ]
Spain, Greece, well OK all of Europe, California Illinois, well OK all of the United States, some banks in China, well OK all banks in China, are slowly coming apart at the seams. Like a tiny chip in your windshield that remains insignificant for months and then one morning morphs into a spider web of cracks on your windshield, global government debt is displaying, not so tiny cracks. A sudden frost will turn those cracks in the global economy into a spider web of financial difficulty that will reach out and touch all of us.
After you have checked the global debt clock in the morning and before you invest, there is only one question you need to ask yourself before you invest. The question, first asked by Inspector Callahan [Dirty Harry] is “Are you feeling lucky”?
Dear reader, surely, I do not need to restate the litany of financial and economic events that lead one to the inescapable conclusion that the markets are hopelessly rigged against the investor.
Rather than worrying about the loss of integrity and innocence in the market let us learn and profit from it.
Clearly it is a waste of time reading financial statements. These statements are now irrelevant.
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There are only five things you need to know before you invest.
The first thing item to know is the efficacy of a company’s lobbyist at securing contracts from the government. Lobbyists are the key to a company’s success. Find out if the company’s lobbyist is well connected in the halls of power. Does the company have lots of ex –politicians, civil servants and their family members working for them? Has the lobbying firm been indicted recently? [This is not a bad thing it simply means that the lobbying firm is willing to think ‘outside the box’]. Can the lobbyist prevent competition from other companies from reaching the market? Can the lobbyist secure a bailout, oh sorry, I am being politically incorrect, let’s call it a ‘To Big to Fail Market Stability Supplement’
The second key aspect of a company that you should investigate is CEO compensation. You should ensure that the CEO of your selected company is being paid at a minimum, 1 gazillion dollars per year. The more money a CEO is paid is a reflection of the complete control the CEO had over the board and the shareholders. This means that if an opportunity arises to have government enact laws favorable to the company the CEO can act quickly to ensure swift passage of the legislation. Ridiculously high compensation for a CEO should be viewed as a good thing.
The third aspect of a company you should research is whether the company is domiciled and does business in a country whose government has embraced perpetual money printing, perpetual deficits and debt. This leaves the USA and Europe wide open for investment. Do not worry about elections and whether the government might choose to follow a different course. History teaches us that once this direction is chosen, like Thelma and Louise’s journey, there is no turning back.
The fourth component of your research on a company must ensure that regulators that monitor your prospective investment are inept and captives of the industry they regulate. This leaves most of the world wide open for investment. Inept regulators ensure that the companies you invest in will not be bothered by pesky lawsuits and requests for information.
Finally, ensure that you are clueless as to how your advisor is paid or motivated relating to the investment being considered. Individuals who worry about advisor/broker compensation and motivation are quickly filled with suspicion and self doubt.
Dear reader, with this knowledge you may now call you broker and start to invest, if you dare.
Dear reader might I suggest that you get a bottle of Gravol before you start to read this article. I will provide you with stock recommendations that will make you feel queasy at best, [hence the Gravol] and perhaps very ill at worst. I hope, to paraphrase Jack Nicolson’s character in a Few Good Men, that ‘You can handle the truth.’
To understand the validity and profit opportunity of these recommendations, I must preface my advice with two key macro issues that are critical to your appreciation of the value of my advice. I will take you through these steps and deliver you to a new theory of investing called ‘Common Sense’. This theory is not new, rather it has allowed itself to be pushed aside by an intelligentsia of providers of investment advice who wish to complicate, obfuscate, and monetize the concept of investing and investment advice to serve their own desire for personal profit. They are ably abetted by world governments who have an insatiable appetite for campaign contributions, debt and reelection. As well, the purveyors of investment and economic wisdom are greatly assisted by citizens who have a desire to make sure that ‘the music does not stop’.
The pensive lament of a tourist in ‘The Hamptons’, when looking at the yachts of Mr. Lynch, Mr. Merrill, Mr. Morgan and other Wall Street tycoons, who turned to his friend and asked “But where are the customer’s yachts?”, seems to capture the aforementioned issue appropriately.
Dear reader now we will see what this means for you. Let us examine the two key issues before we decide on a course of action.
The first macro issue is Modern Economic Theory and its cousin Modern portfolio Theory [MPT]. It is a truism of MPT that you must risk a portion of your portfolio to equities to provide for reasonable level of return over the long term. Every financial advisor is equipped with colorful historical charts that show you how equities have historically outperformed all other asset classes over the long term. [For the investment industry history began about 90 years ago, for the rest of us human history began about 10,000 years ago] But I digress, investors looking at these charts, that cover approximately 90/10,000 of human history, are quickly convinced that stocks are the right investment for a large portion of their portfolio.
There is however one statistic that never appears on these charts. Fortunately ‘The Economist’ magazine makes the information available via its GLOBAL DEBT CLOCK . Global Government debt accumulated in the last 90 years is 48 trillion dollars. If one was to include corporate and consumer debt the accumulated debt, would be, well, a very big number.
In simple terms for investors to understand the world’s economies and stock markets are overvalued not by an arbitrary multiple of earnings, but by at least 48 trillion dollars. Fortunately Modern Economic theory allows this modern day Ponzi scheme to continue. So far so good, all is well.
However, [ you might want to open your Gravol now], The second macro issue pertinent to our analysis, is that the world’s central banks have recently announced the arrival of permanent money printing. This is done under the guise of a baffling array of newly invented financial terms that have no relation to their purpose or impact of the action they represent. [Sterilization, QE, TWIST, etc]
These programs, we are told are undertaken to promote stability and growth. The reality is that these programs are undertaken for two very ugly reasons. The first reason is that the world has run out of money to lend to each other. The normal process that would bring this rather bizarre money lending back into some sort of equilibrium would be higher interest rates.
This brings us to the second reason these programs have begun in earnest. Higher interest rates can not be allowed as they would bankrupt governments around the world. Higher interest rates would be an event similar to those initial large investors who asked Bernie Madoff for their money back. It was these withdrawals that ended Mr. Madoff’s ‘Reign of Profit’.
Similarly higher interest rates would end the 48 trillion dollar ‘sugar high’ that the world is enjoying. Since there is no money left to borrow it must be printed.
Dear reader it is at this point that we must turn back the clock and rely on the ‘Common Sense Theory of Investing’. The central axioms of Common Sense Theory of investing are:
A penny saved is a penny earned
Don’t put all your eggs in one basket
If it sound too good to be true it probably is not true
A fool and his money are soon parted, as well as Will Roger’s corollary to this axiom “A fool and his money are soon elected”
If you do not understand an investment do not invest in it. [Also known as the end of the derivatives market]
And of course Warren Buffet’s rule, like Asimov’s Three Rules of Robotics overrides all other axioms. “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.”
The ‘Common Sense Theory of Investing’ tells us we should strive to be debt free, liquid, well educated, in good health, well prepared and well informed.
Now let us apply Common Sense to a variety of the most likely scenarios that will occur due to Government Debt and Money Printing. This will help guide our investment strategy.
Scenario 1- Money printing continues until money has not value. Wallets are replaced by wheel barrows. Governments will search for a scapegoat and declare war on somebody. Debt is repudiated and the cycle can begin again.
Scenario 2- Interest rates are allowed to rise, wallets are no longer necessary as no one has any money. Governments will search for a scapegoat and declare war on somebody. Debt is repudiated and the cycle can begin again.
Scenario 3-The children and grandchildren of baby boomers confiscate all personal property and assets of boomers to reduce the accumulated debt. [85% of the world’s accumulated debt was accumulated by while the boomers were in charge] Boomers will no longer require wallets as they will be on a strict allowance administered by their children and grandchildren. Markets will collapse. Governments will search for a scapegoat and declare war on somebody. Debt is repudiated and the cycle can begin again. [However, only boomers will be allowed to serve in harm’s way on the front lines.]
Scenario 4-The world allows market forces to act in an unrestrained and unmanaged fashion. Wallets will no longer be necessary as the only thing of value people will care about or carry with them is food and water. Markets will collapse. Governments will search for a scapegoat and declare war on somebody. Debt is repudiated and the cycle can begin again.
Scenario 5- The leaders of the great religions of the world, whose religions all espouse peace, sacrifice, concern for their fellow humans, concern for the environment, the sanctity of life, sharing and caring, come together and for the common good of civilization lead us through and uncomfortable painful readjustment to management of global finance based on the tenets of their respective religions.
Markets will collapse. Governments will search for a scapegoat and declare war on somebody. Debt is repudiated and the cycle can begin again.
Undoubtedly dear reader you would agree with me that Scenario 3 is the most likely outcome.
So, where does that leave us as far as our investments are concerned? The Common Sense Theory of Investing would indicate that you should be confused concerned and somewhat sick to your stomach [hence the Gravol] If you are not confused and concerned then you have not yet completely understood the Common Sense Theory of Investing, [or you do not read the newspapers]
All the likely scenarios indicate that at some point you will want exposure in your portfolio to the weapons industry. It is the only industry that has always been bigger this year than it was last year. This has been true for 10,000 years.
Do not waste your time reading the balance sheets and sales projections of any weapons company you choose as a suitable investment. This information is irrelevant. The only information you need to know is the efficacy of the weapon company’s lobbyist at securing money from the government. You must study the company’s lobbyists. They are the key to a weapon company’s success. Find out if the weapon company’s lobbyist is well connected in the halls of power. Does the company have lots of ex –politicians, civil servants and their family members working for them? Has the lobbying firm been indicted recently? [This is not a bad thing it simply means that the lobbying firm is willing to think ‘outside the box’]
Since the economic and financial events we are currently enduring have no precedent in scale or variety there is no model, no pundit, analyst or economist that can offer direction. Common sense tells that If it looks like a duck and walks like a duck it’s probably a duck. If money printing and government debt look like a potential disaster and feel like a potential disaster then government debt and money printing will probably be a disaster.
Common sense tells us to take our Gravol, to get liquid and get prepared. Get ready to buy a few weapon company stocks.
I would also suggest ensuring that you are on good terms with your children.
The recent actions of the ECB and the Federal Reserve have driven the final nail in the coffin of Capitalism and Democracy. Both these cornerstones of our civilization have been on life support for years. Central bankers decided last week to ‘pull the plug’. Capitalism and Democracy will be replaced with a hybrid economic system combining the attributes of the old Soviet Union’s command economy, the Oligarchy’s of South America and efficiency and integrity of today’s of today’s economic system [with a dose of fascism thrown in for good measure].
“Rubbish, you declare”, “Poppycock”, “More left wing ranting”. Fair enough dear reader, at this point in history you are still allowed your own opinion, but before you clik away you should consider the following realities.
Capitalism, as defined by Wikipedia is an economic system that is based on private ownership of the means of production and the creation of goods or services for profit. Let us consider the following realities. Only then can we understand how our central bankers performed the ‘coup de grace’
Global spending on Weapons was 1.74 trillion in 2012. For many countries particularly the United States the largest employer in the ‘private’ industry is the weapons industry. In the United States, if one includes the postal service and the military over 3 million people work for the Federal Government. [Imagine if we included state and local government employees in this number] In every developed country in the world the civil service is by, far the largest employer in the country. The second largest employers are those industries or sectors such as weapons, health care or education that receive their revenue from the government. The developed world is no longer served by government. The developed world is dependent on government spending to maintain, not improve, their current lifestyle. Private ownership of the means of production and the creation of goods or services for profit exists only as curious anachronism in small pockets around the world. One could not possibly argue that worldwide, the automobile, banking, weapons and health care industries exist only at the pleasure of government spending. The survival of these industries is reliant on favorable government support, spending and regulation.
In simple terms most societies in their current form only because our governments borrow money from future generations to keep civil servants employed and captive industries on life support. Competition and survival of the fittest, truisms of capitalism do not exist anymore. The concepts of entrepreneur, merit, hard work, pride, sacrifice, choices, work ethic, patience, effort, pay as you go, integrity, truth, risk reward, moral hazard fairness and equality are, of course, now obsolete. To survive going forward the key will be one’s ability to ‘‘get me some of that newly printed money”.
Now let us consider democracy. Once again let us use Wikipedia’s definition that defines Democracy as ‘a form of government in which all eligible citizens have an equal say in the decisions that affect their lives. Democracy allows people to participate equally—either directly or through elected representative.’ Dear reader, surely the death of democracy is not something we need to debate. It is self evident. No, “you still believe in democracy, you still believe that your vote counts”. Please consider the following words and phrases carefully. Create an image your mind as to what each word or phrase means the system of government known as democracy: Gerrymandering, Hanging Chad’s, QE 1, QE 2, unlimited campaign spending by individuals and corporations, “corporations are people too” Bailout conditions, Operation Twist, QE 3, technocrat government, TARP, Wall Street bailout, lobbying, Greece, Spain Italy, ECB terms and conditions for bond buying campaign. There are more words to help paint this picture but I do not want these disturbing images, that I imagine you created in your mind, to cause you Post Traumatic Stress. These are not words that were spawned in the evolution of democracy. These words evolved as democracy evolved into a more sinister system that left the world with the ‘illusion of democracy’.
Let us now connect the dots that connect the death of capitalism and democracy to the recent actions of our central bankers. By announcing in tandem over the last couple of weeks that both federal reserve and the ECB, both led by unelected officials, that they would expand their asset purchasing [ Oh Please can we all just agree to call it money printing]. The central banks have irrevocably committed their respective governments to a course of action that is done without public consent, understanding or referendum. These have enacted fiscal policy disguised as monetary policy that will handcuff the “citizen taxpayer’s” ability to manage government finances for, well, forever.
This course of action will cause a misallocation capital of historic proportions. On ‘Main Street’ the theft [via artificially low interest rates] of retirement income from retirees, who diligently accumulated retirement capital during their working years to provide interest income in their retirement will continue unabated. [In some ways, you have to admire baby boomers for their audacity and hubris to steal from their parents via artificially low rates as well as their children and grandchildren through absurd government borrowing. This is done to maintain the lifestyle boomers have become accustomed to. The boomers are like a Robin Hood from an alternate bizarre dimension. The boomer Robin Hood steals from old and young and keeps the money for himself] ‘Moral Hazard’ has been removed from decision making process. It has been replaced with a modern version of “I’m all right Jack”
Governments will be able to spend in an unlimited fashion, immorally with no fear of punishment by the bond market vigilantes. Dear reader, ‘How could government spending be immoral?’ you ask. When our governments spend money we don’t have on goods and services we cannot afford or do not need, at prices that are not determined by a free market capitalist system only to leave the ‘Butcher’s Bill’ to our children and grandchildren that is immoral, undemocratic and definitely not how capitalism works.
I am a baby boomer. I think the question everyone should be asking themselves is not why students in Quebec, who enjoy the lowest tuition in the Canada, are protesting tuition increases. The question we should be asking is why are the students in the rest of the country not joining the students of Quebec in protest.
The students in Quebec have made their feelings the clear on this issue of tuition increases. This message has not resonated with all students in Quebec or with students the rest of Canada. The message certainly has not captivated the general population. However, should the students in Quebec change their message slightly; anyone under thirty will promptly join the protest. Baby boomers in Canada should be very afraid of this.
The change in the message is quite simple. The students are angry about the tuition increases but they are even angrier about the $250 billion dollar debt that Quebec has accumulated and that will be the responsibility of Quebecer’s under the age of thirty to pay.
Democracy was built on truisms such as ‘no taxation without representation.’ In Quebec [you can substitute Quebec with the name of just about any other province or even Canada for the matter] the baby boomers, in order to satiate their appetite for more of everything and for perpetual good times have spent, through their governments, not only their own money, but their children’s and grandchildren’s money as well. The children of baby boomers, who are in school now, will not have any important decisions to make when they replace us in positions of power. They will not have any choices to make regarding which services to provide the public. They certainly will not have any options when deciding the structure of post secondary education. The baby boomer generation will have left them a bare cupboard. They had no representation when their tax dollars were spent as they grew up. Once the younger generation is in power the only choice they will have is which debt to pay first. Canadians under the age of thirty should investigate the combined federal and provincial debt if they need any motivation to join the students in Quebec in their protest.
I will not bore you with statistical alchemy that is the usual weapon of elected officials, economists and baby boomers. I would simply ask each student, [or brave baby boomer] to pick up a calculator and do some basic math. Quebec’s public sector debt is about 250 billion dollars. Quebec’s annual deficit is out of control. Extrapolate these numbers forward a few years and you come to the inescapable conclusion that the students of Quebec will spend the rest of their lives paying off the government debt accumulated by their parents. There will be no road repairs subsidized day care, health care, great civil service jobs, or public works projects. The students in Quebec have nothing to look forward to except grinding debt and hard and difficult sacrifices to service the debt that was left to them by their parents. The situation in Quebec is not unique. Ontario checks in with a 250 billion dollar debt and a 15 billion dollar deficit. Canada has accumulated a 580 billion dollar debt and it is climbing rapidly.
If you want to believe that Quebec or Canada’s political baby boomer politicians are going to successfully confront the debt crisis I would simply ask you to make a list of any 10 year period in the last 50 years when government debts declined sequentially I wish you good luck.
The youth of Canada, whose future tax dollars have already been spent without their consent or representation should be in the streets, arm in arm with the students of Quebec demanding change. Baby boomers should be prepared for a special tax so that tuition is free for students in Quebec [for that matter everywhere in Canada. ] A post- secondary education is an essential tool for the next generation to have any hope of digging themselves out of the ditch dug by the baby boomers. That the baby boomers would pay a special tax to subsidize free tuition is one way my generation can say, “Oops, sorry about that crushing debt we are leaving you.”
As baby boomers generally only act in their self interest I would ask my fellow baby boomers to pick of that calculator again and do some basic math on our health care costs. If those Canadians who are students now are not well educated and well employed and able to pay significant taxes society will not be able to pay the massive health bill that the baby boomers will present to society as boomers enter their golden years.
Canada and its provinces are now inexorably linked together in either a death spiral or an economic rebirth. It is up to students of Quebec and Canada, in fact all the youth of Canada and, perhaps reluctant baby boomers to decide which whether our future is death spiral or rebirth. Regardless of the path chosen it is going to require sacrifice on everyone’s part, [including baby boomers.]
There is no easy solution, Should Ontario or Quebec consider separation as an option, the world’s financial markets would quickly refer to these provinces as ‘Grebec or Gretario since the finances of these provinces will soon be similar to the situation that is confronting Greece. The only illusion that allows Canada and its provinces easy access to the credit markets is the belief that we are a stable country. Separation by any province would launch Canada over the credit abyss. Please do not take my word for this fact. Do not rely on the talking heads and politicians who offer banal, soothing clichés to try and reassure you that everything is going to be fine. Do not believe it when you are told that it is OK, we can still have it all. Do about five minutes of research on Google, then pick up your calculator and do the math.
The students of Quebec should be not being mocked, vilified and suppressed. They should be viewed as patriotic Quebeckers and patriotic Canadians who want to prevent Canada’s baby boomers from driving the province and the country over a fiscal cliff.
To the students of Quebec if you do not believe that the baby boomer generation of your province lead by its baby boomer politicians is prepared to throw your generation ‘under the bus’ I would ask you to consider how much time the leaders of all there parties have spent discussing the fiscal abyss that your province in moving toward with speed that would make Usain Bolt jealous. Solidarity with Quebec’s students is not an option it is non- negotiable position that all Quebecers and Canadians who care about our children’s future must fully embrace.
Economist or Alconomist,
The most recognized aspect of the Science of Alchemy is the pursuit of the ability to turn a base metal into gold. This protoscience included mystical aspect that was better suited to wizards and warlocks. Eventually the confusion caused by alchemy was debunked. Scientists were able to devote their energy to more real and productive endeavors.
Today the world is bedeviled by a a modern day equivalent of alchemy. Those that study this modern day equivalent are called economists. Like many alchemists before them economists hold positions of great power and influence. Their words are listened to by world leaders with reverence and an almost fawning adoration. The emergence of economists is significantly more dangerous to the world than Wizards working in dingy laboratories trying to turn iron into gold. Economists are in the driver seat, pedal to the metal, driving us over a cliff in a manner that would make Thelma and Louise proud.
The basic alchemy that economists are preaching to the world is that we can keep borrowing more money and printing more money to get our way out of the debt crisis. This theory, like the obsession of turning iron into gold is by any measure of common sense, impossible, stupid, dangerous and absurd. However like any good ‘con job’, the leaders and the general population are a perfect ‘mark’ because they desperately want to believe the myth. The alternative is to accept that developed countries and their baby boomers are going to have to endure years of hard times and a lower standard of living while global debt is paid down, defaulted on and deleveraged. One can dress it up under the guise of trickle down , or Austrian school, Keynesian, supply side, or QE 3, stability fund, stimulus or Operation Twist but the fact remains that the baby boomers around the world lead by their Alchemists oops I meant to say Economists have driven the worlds finances into a rather deep ditch. {Think Grand Canyon].
Printing and borrowing more money would be akin to Thelma and Louise, when they hit the bottom of the Grand Canyon, taking out their shovels and starting to dig their way to China
In order to end the dangerous tyranny of the false beliefs espoused by economists there are some simple steps we can take immediately that will ensure that the world starts to make good decisions. These changes will not be expensive and will give the world some hope for a bright future.
These changes might even allow us baby boomers to look our children and grandchildren in the face and tell them we care about their future without cringing as we think about the $50 trillion dollars worth of global government debt we are bequeathing them.
The first step is to shift all financial research and opinion to Las Vegas bookies. It will be much more accurate to simply get the odds makers in Vegas to give us a line on Greece going bankrupt. Vegas can easily tell us the over /under on the impact of the Federal reserve printing more money. I believe that most people would have significantly more trust in information tabulated by Las Vegas bookmakers than they would have in information tabulated by economists.
The transition would be an easy one for most people. It would be hard for the economists. I do not want to put anyone out of work. To help Economists as they transition to more appropriate jobs in the service industry I would simply suggest that economists be required to wear a large multi colored wizard’s cap whenever they are in public. The purpose of the wizards cap would be to indicate the appropriate level of ‘gravitas’ to anything they might say or do. I would suggest that economists should be required to finish all ther pronouncements with the words ABRACADABRA. They would then be required to wave a magic wand.
Finally I would suggest that the word economist be discontinued and replaced with the word Alconomist to reflect their connection to the Alchemists of days gone by.
You cannot turn a base metal into gold you cannot borrow and print your way out of a debt crisis. You can reach your destination if an Alconomist is your guide.
I believe if the world saw our leaders and their retinue of advisors and economists at the next financial summit wearing Magicians caps and waving magic wands while they uttered the words Abracadbra to each other the world would have a much clearer idea of the potential for success for our current world financial plan
An Intervention for America
An intervention occurs when a family member or loved one’s life has become so dysfunctional due to addiction or mental disorder that those who care and love the individual intervene. The friends and family gather around the individual and declare and unequivocally recite to the distressed individual unassailable evidence of the havoc their lifestyle is wreaking on themselves and on their friends and family. The friends and family will confirm their love and concern for the afflicted individual and then try and encourage the person to accept that they have a problem and to begin the journey to recovery.
I am proposing that the world desperately needs to perform an intervention on the United States of America.
Unfortunately America is suffering from an hallucinogenic and emotional disorder that prevents them from taking an effective leadership role in the world. This affliction is not unique to the America. Many countries in the world have this disease but have not yet reached the same degree of severity as America.
The world wants to love America. The world needs America’s leadership to navigate our way out of the absurd economic, political and environmental mess that now exists. There is no country in the world that has more brains, resources, and energy to tackle the challenges that confront us. No other country is in a position to take a leadership position to solve the problems that confound us.
In order to help America regain its health it behooves all citizens of the world to intervene and help America recognize its problems and ensure that Americans know that we love them. The citizens of the world will do whatever we can to help them get better. We will stand by them as they work their way through the recovery process. We need America to be happy and healthy and to once again become a respected and trusted leader of the world community.
For America to recover from its affliction we have to gather around, hold their hand, tell them we love them. At the same time we must give them unassailable evidence of their hallucinogenic and delusional disorder. The first step to recovery is to help the Americans admit there is a problem. Denial is not an option.
Let me begin the process with great temerity, love and optimism to outline some of the more serious hallucinations that are confusing America’s thought process.
Politics- It is blatantly obvious to anyone who does not live in America that the country is governed by two parties that hate each other. I am not talking about a hatred that prevents you from inviting your neighbor over to dinner. I am taking about a deep, passionate civil war kind of hatred. For the governing parties it is not about country any more it is about power. Whichever party is in opposition has only one goal, and that is to ensure that the country drives into a ditch so that in the next election the opposing party will be able to regain power.
America has fulfilled President Eisenhower’s prophecy that the military industrial complex will take over the government. Your elected leaders are not beholden to the people. They are beholden to the military industrial complex. It is no surprise that most congressmen and senators become millionaires while they are in office and become multi millionaires shortly after leaving elected office.
One only needs to look at a map of congressional districts to realize that gerrymandering has made the concept of democracy a joke.
The recent discussion of ‘legitimate’ rape was in itself appalling but it also served to highlight the celebration of ignorance that that exists in American politics. Your leaders regularly make outrageous statements that are geographically, historically, scientifically and factually wrong yet rather than being humiliated they double down on their ignorant statements and are celebrated. Surely after three trillion dollars and the lives of countless brave men and woman your leaders should know that it is not pronounced I-Rack.
Foreign Policy- Assuming [ and this is a big assumption] that the USA’s interventions around the world are done with only the most pure altruistic intentions it is important to understand how their actions are perceived by the rest of the world. In order to help Americans understand I would ask that all Americans to imagine how they would have felt if Mexico had sent troops into Florida in the 2000 Presidential election to ensure that free and fair elections were being held. Alternately I would ask Americans to imagine how they would have felt if some random European or South America country had sent troops to America to ensure the protection of the rights of your aboriginal populations as the West was settled 150 years ago. Perhaps Americans could try and visualize what would have happened at the end of WWII if the great powers had ceded Wisconsin to become the new Jewish state, or perhaps Puerto Rico, or Rome or northern Germany.
America was only able to pursue ‘American Exceptionalism’ after what is recognized as the bloodiest civil war in history. Perhaps other countries must be left to sort it out themselves so that they too, can become exceptional. [However if we stop selling these countries weapons we might limit the carnage.]
By imagining these scenarios the Americans might begin to understand the how their actions are perceived around the world.
Americans are the most amazing people in the world.
We are absolutory dazzled by the pictures coming back from Mars this week. Why then, are Americans watching re- runs of ‘Real Housewives’ instead of episodes of a new show called ‘Real Engineers of NASA’. Why are Americans watching Jersey Shore instead of creating a new show called ‘Amazing Entrepreneurs Who Will Change the World’?
Military- Americans want to believe that they are a peace loving democracy that is only interested in human rights and the sanctity of human life. It is important for Americans to realize that they outspend the rest if the world on weapons of mass destruction by a factor of 10 to 1. America is the number one exporter of weapons of mass destruction by hundreds of billions of dollars. [To be clear, I will arbitrarily define a weapon of mass destruction as any weapon that can kill more than ten humans in the span of 60 seconds. Surely that is reasonable.] This might help explain why the rest of the world is suspicious of America’s protestations of being a peace loving country. It is fascinating that America can be so passionate about the ‘right to life’ discussion or the ‘stem cell’ debate while making more bombs guns explosives, land mines, WMD and other killer ordinance than the rest of the world combined.
The motivation for this massive expenditure on weapons is to protect America from its enemies. This is on its face now become an absurdity. MAD [Mutual Assured Destruction] has been replaced by MED [Mutual Economic Destruction] China, Russia America and India and most other countries cannot survive without the mutual trade that exists between them. Any kind of war between great powers is now suicidal as it will ensure the economic collapse of both countries. Furthermore the massive military might, [achieved by sacrificing productive government spending on education infrastructure and other benefits] is as we have seen, quite useless in pursuing dubious regional conflicts. Aircraft carriers are not much good against a _________ [insert one of the following: citizen, terrorist, insurgent, freedom fighter, malcontent, dead enders, innocent bystander,] Perhaps ideas can be more powerful than guns. Perhaps we need more powerful ideas. All American’s should revisit President Eisenhower’s farewell speech.
Most of your enemies are not plotting against you. Your enemies are sitting in their La-Z–Boys drinking a beer and watching you spend your way into the abyss on a bloated military that is draining your treasury and destroying your country. Why would an enemy want to get out of their comfy chair and plot against you? You are doing a better job of destroying your own country than your enemies could ever do.
Religion- At their core, the great religions of the world profess tolerance love, peace, respect and sensitivity. Unfortunately the great religions have been co- opted. Religions are now used as a bludgeon of power and intolerance to control citizens and to force citizens to think a certain way. Both of your political parties seem to believe they are on a ‘Mission from God’ and anyone who stands in their way risk’s eternal damnation. Fortunately the continuous stream of affairs, sex scandals, bribery and corruption charges, hate- mongering, war mongering and fear- mongering indicates that your leaders don’t really believe in their religion. However they are not reluctant to use religion as a weapon against their opponents. [That is until they themselves are caught in the act.]
The Economy- This issue is actually quite simple. America and just about every other developed nation have not enjoyed an economic miracle for the last 50 years. We, led by America, have simply borrowed and printed money to achieve whatever goals and toys we wanted. The circumstance the world is now in is not different than one faced by an individual household whose monthly payments are close to or exceeding their monthly income. One by one the developed countries are hitting their credit limit. America is not immune from this scenario. America is the heart and lungs of the word economy. When America reaches its credit limit, well even I don’t want to think about that. America is not strolling toward its credit limit it is rocketing to its credit limit. America and the world can no longer borrow and print their way to prosperity. We are going to have to earn it.
I would humbly ask each person on the planet to tweet an American and tell that that you love them, and we want them to get better. Tell them we are behind them as they confront their demons. Tell them we need them to be strong. [ I don’t mean build another aircraft carrier strong , I mean strength to recognize their problem and to overcome their hallucinations and to think clearly again]. America’s strength will give other countries in the world the courage to accept and overcome their own particular demons. We know it will not be easy, we will stand by them on their road to recovery. We understand that our future well being is directly tied to the results of our intervention. The world is depending on America. Our children and grandchildren are depending on America. We know that the way ahead will require shared sacrifice. With America’s leadership we can overcome our challenges together. We can be proud of the world we will leave our children. Hug an American, tweet an American and tell them you love them. ‘Like’ an American on Face book’. Give Americans the strength, courage and determination to get better. We need America’s leadership now more than ever.
My ambitions for my blog are to , entertain, amuse, provoke, caution, energize, recognize and learn
David Hague 