The US Dollar Problem is Different

So the US Dollar just lost a couple of percent against other major currencies. So? I mean, seriously, the dollar has gradually sliding ever since the dot-gone bust, which isn't exactly news.
What is different this time?

Strictly speaking, not much, but there is some underlying economical and/or mathematical issue that might slowly come to the forefront over the months ahead. The twin deficit isn't going to go away, simply because the only way to do it, would be to cut government spending by ridding Washington of red tape, abolishing many pet projects, firing many government emplyees and pushing American businesses to become export-oriented, while competing with imports on an equal footing at the same time. It's not gonna happen. Period.

However, as long as there are some exports of far higher value than the many low-cost imports, things would look up. Especially with a prospering economy that would continue increasing the government revenue to a point where Washington might begin being able to start paying down their debt - which would take a few centuries, but is theoretically possible nevertheless - as long as foreigners accept US Dollars in payments and continue buying US debt.

But what would happen if all those dollars were seeking to buy tangible assets all of a sudden?
What if investors would begin setting up shop in the US and start buying it up, literally?
They would bid up prices for everything tangible that could pass off as an asset. From property to shares, to utilities, to distribution, everything really.

Now imagine these 'buyers' are passive. Imagine they buy and sit on it, without growing their newly acquired assets, because they have no interest in earning morte Dollars from it. After all, they begann buying the assets for the sole reason that they stopped trusting the currency and wanted to have something of value instead.

So, let's say, they buy property and mainly want to earn enough return to maintain their investments, not to expand them. Any surplus income is then going straight back overseas.
You'd have a florishing economy mainly financed with foreign money, that simply won't grow.
Instead, any slight growth potential would be siphoned off before tax gets it's dirty hands on it, and sent back to the investors.

Prior to that, asset prices would skyrocket, as many foreign dollars would chase everything that is nailed down, so to say, while not lending anyone anything anymore. Imagine, rather than rolling over bonds and other debt instruments, as they have been doing for decades, the first ones begin to convert the debt into assets without buying any new debt.

Foreigners would not only own the American economy lock, stock and barrel, they would take all profits off the top with zero reinvestment, driving prices even higher, but noone is selling. And the local industry lacks the funds to grow the economy by itself.

First the Fed would probably spend money into circulation like mad, which locals can't afford to borrow, and foreigners refuse to accept, given that theyhave more of them than they know what to do with.
Next, even though inflation would be going through the roof for assets, the Fed would probably drop interest rates to next to nothing, hoping that someone will borrow the cheap dollars. But not many would, because these dollars won't buy anything, anymore.

And all the while there are tens of millions of Americans complaining about their hardship and how foreigners now own everything, and how honest, hard-working Americans can't afford to buy any assets worth having, anymore. As a result the government would most probably raise property and capital taxes to punish the foreigners for giving Americans such a hard time, cheered along by the sorry unwashed - who would now be priced out of the market premanently, and who would be responsible for all the other Americans loosing their property as well, as they now couldn't afford the property taxes any longer.

It is unclear who would buy or who would end up owning properties in the US, but there is a fairly good chance that the government would ultimately show colours and begin nationalizing businesses and properties in the best interest of the people and for the common good.

Obviously I don't expect the above scenario to come to pass to such an extreme. Otherwise I wouldn't have invested into cheap rentals in the Midwest. But I do expect things to get really tough on the coastlines, and that the US is not too far from martial law, needed to protect the rich from the rioting masses, after they devoured what is left of the middle class...

The Chinese Century Is Much Faster

After watching the ingenuity the Chinese displayed when constructing the railway to Tibet, the genius behind the new harbour bridge (which actually cuts accross the 40 mile river mouth and bay), and how overcoming obstacles and challenges just about became routine exercises over the past few years, I am more than just convinced that China is the 'new America'.

The impossible is done everyday, outright miracles require state approval but aren't much of an issue either, and Chinese engineering genius seems to know no boundaries - or at least won't accept any when they reach them.

The whole mind-set reminds me very much of the people who made America great in the past century, but with one major difference. When America started out, it was sparsely populated, new tools, techniques and technologies were only beginning to be invented, and it did take Americans almost 150 years to get their country to it's pinnacle.

China has 1,200,000,000 inhabitants, technologies are already available, and whatever is implemented in China today, is the bleeding edge best humanity has to offer at this stage. In other words, China doen't haven't invent in the wheel, they can buy the tyre manufacting plant, including all know how and then start improving on it right from the start.

In my opinion it will take the Chinese less than two decades to reach the level Americans worked 150 years to reach, and 50 years to maintain, and about two decades to squander.

That is why China will not be a military threat to anyone for the forseeable future. They'll just leave everyone else in their dust as they gradually take over the leadership mantle in all areas.

Of course, there is a socio-economic problem that will become a serious issue in a decade or so. There are almost 200,000,000 more males than females in the Middle Kingdom, and with Chinese don't particularly like Indian or Indonesian females.
It is the staggering numbers involved whenever dealing with China, that make her unique, and which also make it of paramount importance that China does not become democratic anytime soon.

The political system of many Asian countries - the successful ones - is completely different, as are the political mindsets of Asians, from European/American ones. Westerners tend to either trust their governments or be cynical about them and their unending attempts to regulate and nanny everyone. Asians distrust the government and ignore it as much as they can. Asian governments, well aware of that, are quite comfortable with this arrangement, and by and large leave the governed alone, as long as they are not being opposed.

In other words, the entrepreneurial drive in Asia creates de facto free markets which frequently ignore government regulations, and which are being tolerated by the respective government as long as they create growth and don't cause social upheaval. Asian governments only begin to interfere with their respective middle class(es) when the economy either matures, or when the upwardly mobile become too powerful and/or begin to demand political clout.

This then means that China might succeed where the West failed so miserably, leading humanity into space, colonizing Mars, industrializing Earth's orbit and probably the Moon, in the process. As long as the can-do, go-get mentality prevails, let's give the Chinese a hand and support them all the way.

Think about it.

Everything That Is Wrong With The U.S.

This might come as a surprise to some, but I've come to the conclusion that nothing is wrong with the United States. Nothing at all. Zilch. Nada.

Instead, I believe, the U.S. is doing perfectly fine. It is exactly where it ought to be, doing exactly what it ought to be doing. Considering the path it was put on about a century ago, that is.
Sure, the government wasted the perfect opportunity to capitalise on the immense goodwill the rest of the world had towards it after 911. Sure, the government is fighting two wars it can't win for no real strategic, economic or any other reason that I could fathom.

But so what? America can afford two wars. She could afford a third and probably even a forth one, as long as they are comparably small in scale. In fact, if the American people would finally get around to fully supporting their government then the government could focus it's attention on increasing American power overseas, rather than wasting time, resources, money and spin meisters on bribing voters and borrowing elections (elections aren't stolen, because after a limited period of time new ones are held, so cheating is borrowing; it's a bit like inflation).

So frankly, I am disappointed in the American public. After all, I picked the U.S. as the place to incorporate some companies, rent a mail box, and run my global (and highly mobile) empire out of a shoebox, and as such have a vested interest in American dominance of the globe. Well, and now we even own some bits of dirt state-side. I thought, I's set a good example and instead of buying a piece of the land of the free, I's buy some pieces with a foreign company and thus set them free.

No, but seriously, the United States was meant to be an Empire in spirit and substance very early on. Even before the West was conquered, the Dons driven back, the Frogs bought out, the Russkis paid off, the very moment the "federal grubmint" made something into law, the road was set for empire. While I firmly believe that the American people always had and still have the very best of intentions and a genuine desire to have everyone on the planet enjoy the American lifestyle, the United States has devoured everything its path until they reached the Pacific coast line, where they began building ships and proceeded to occupy Hawaii, Guam, The Philippines.

Countries willing to trade and to accept American 'protection' (in the form of uneducated advisors telling people how to run their countries properly), were, and still are, welcomed into the fold with open arms (and daggers in hands).

But again, hey, so what? The only real problem is that people seem to think that America is standing for something else. If the U.S. populace would finally get it in their mind that America is an empire bent on world domination, as most empires are, then things would become so much easier. I mean, American's abroad behave as if the owned the place, U.S. politicians still seem to believe into the American calling (long distance, at affordable rates), and the U.S. has the most powerful military apparatus the world has ever seen.

So my advise is simply, to come clean. Say it openly. Allow foreigners to fall in line and support America's quest. Hold some rallies, develop some real pride, send your kids to serve in the imperial armies for the glory of all things American.

Say: Heck yeah, we want to rule the world!

You'll be surprised how many people will accept the idea and respond with asking "how"?
Get it over and done with already, unite the world as a single US colony and put Germans in charge of administration, build a Disneyland on the moon, and use the immense brain power of the combined populace to achieve worthwhile goals, solve global problems, get everyone laid, and help humanity to move on.

Or just get out of other people's homes, shut up, and behave yourself.

Stand up or get lost.

Personally I think it's funny. America is the best entertainment God came up with since he created woman.

Think about it.

Man of the Year

The new Williams movie is certainly worth watching. If for nothing else, then for the one-liners. Although, admittedly, some of them are quite stale by now. Nevertheless, the movie has somewhat of a tech theme, but in typical movie fashion, no tech clue.

The main premise of the movie is that a decent guy runs for president because he is fed up with politics, as are many of his supporters. And election day is held using a computerized voting system that might be flawed. The flaw is pointed out early, explained later (but makes absolutely no sense in terms of coding), and the rest of the movie is a mix of BigBad corp, conspiracy for profit, the shallowness of U.S. politics and the good guy doing the right thing.

The female support is shown as doing what she thinks to be the right thing, even though she herself has her doubts - which reminds me of the addage about the path to hell being paved with good intentions.

Williams shows himself as caring but clueless, and ends up admitting as much. Then comes the happy ending brush. Basically a neat tragi-comedy with just enough satire to provoke serious thought among those remaining few still capable of the feet. A collection of funny quips for the masses.

Worth watching. Worth thinking about.
And definitely worth the occasional laugh.
If it wasn't all that true...

The Other US Housing Market

Suddenly the press in the U.S. has begun to change its tune. Housing Bubble, do we read (finally), irresponsible buying behaviour, quasi-criminal lending policies, doom and gloom ahead.
Sure, they should have mentioned all of the above some two years ago, and in doing so helping an overheated market to cool down a bit.
Sure, the people working for the press probably believed the hype themselves and happily piled up more holiday homes, time shares, investment rentals, etc. themselves, and are now beginning to realize what was obvious to anyone not partaking in the ponzi scheme of bidding up properties they didn't need, couldn't afford, and will most probably walk away from shortly.

But then, there are two fallacies in the overall picture the press is painting, and both of them are far more dangerous to the economy and what is left of the free market than a few million people loosing their homes.
Number one, the press is setting the stage for class actions against reckless lenders. Just like they helped investors after the dot.gone bust to sue advisors and analysts for billions.
Number two, the picture is slated heavily towards the situation in large cities and burbs, especially on the coasts, completely ignoring the heart lands and small town America (you know, the guys that make sure that the nation is overfed).

Setting the stage for more regulation, consumer protection and court approved hand outs to people who are too darn stupid to know what they need and how to save for it, will most probably ravish the entire industry if it is applied wholesale. The press ignores the fact that "the fat cat banks" don't hold the mortgages anymore. Pension funds, insurance companies and other corporate investors do hold the bulk. The press ignores the fact that the two largest lenders, Freddie and Fanny are quasi-government sponsored and would be bailed out by Washington.
The press ignores the fact that most people who bought themselves mansions on low to medium salaries won't be able to afford the upkeep and maintenance once the builing and construction companies and their suppliers raise prices to make up for the shortfall - which will increase the cost of construction for everyone, commercial buildings included.
And these are just the direct results. Add to that the fact that more regulation and protection will raise the cost of doing business, lead to losses of jobs and bankruptcies among smaller contracters, as unfree markets naturally do, and worse, that lenders will be discouraged to lend to non-commercial customers for years to come, and you start to get a hint of what is ahead.
Not to forget the negative message this all will send to people who are basicallybeing told that they should refuse to live up to their responsibilities and pay the price for their own stupidity.
Dire straights, indeed.

Point two is that small town America didn't partake in the boom, but might suffer from the bust. While property prices in rural areas didn't increase much during the past years, and supply and demand is fairly stable, increasing interest rates will force the rural population to rethink some of their holdings, often family farms, arable lands, medium cost dwellings, etc. This in turn will most probably lead to an increase in demand for lower cost dwellings (a real farmer sells the home before the acreage) and a collapse in the prices of up-market dwellings in small towns.
In other words, the standard of living, lower in the countryside to beginn with, will drop further, as the populace there will make do with what they can afford, or risk loosing the farm, literally.

And other people's misery is a splendid font of opportunity. We've picked a few smaller towns and are buying low cost, ramshackle houses as fast as we can get them ;o)
Because when everyone runs in circles and yells 'unfair', the country is headed for poverty. And during poverty cycles, cheap rentals rise in price exponentially.

Think about it.

The Devil Wears Prada

So my wife and I watched the vid, and both liked it, sort of, in a shallow way. Then I thought it over. Don't get me wrong, the script is light entertainment, the acting is very good (seasoned actors are usually reliable) and the story is by and large very believable.

But then, the movie distorts reality and passes judgement on what is esentially the day-to-day business of running a successful magazine. Sure the boss is seemingly way over the top, commanding around her poor overworked assistants, chewing them up and spitting them out.
Marryl does an excellent job at playing an over the top bitch for that, and one can't help but wonder if there is an underlying snipe at Martha Stewart somewhere in there.
Rethinking the message after a while, it appeared to me that basically the assitants were simply doing their jobs, running errands, making appointments, feeding and coffeeing their boss at any time of the day. Hello, that is what assitants are there for. Don't like the heat, work in a coolhouse.

The liberal arts friends of the heroine, see their friend change before their eyes, and seem not to like that change. Hello, that's called success. Nevertheless, they don't mind the lavish presents she bestows on them.

Overall, in order not to spoil the movie for people who haven't seen it yet, it's an envy flick that ridicules workaholics, pokes fun at the crowd who wear designer clothes, and belittles the Jet Set. And yet, there are several times when the truth oozes out, the truth that it is the fashion industry that decides what you wear, even you believe not to follow fashion, and that the seemingly dumb and shallow droids working in the business have a detailed understanding of one of the largest industries on the planet. Which basically makes them good looking, well dressed, geeks.

Go see it.

Back for good

It's hard to believe that almost 18 months have passed since I last blogged.
Whereever did the time go?

I got married again (amazing, I actually found another human being who seems to able to live with me 24/7; a scary thought, I know) in July, and the church wedding is scheduled for February next year, because the logistics involved are herculian. We are carting about two dozen family members from accross the world here, invite another four dozen of her friends and all four of mine, as well as a number of wanna-bes and prospective friends in case the need arises in the future. Getting hotels organised, plane tickets, pick-ups, venues, truck loads of booze, etc. is no mean task.

We also consolidated our far flung mini-ventures into a more coherent structure and moved into new premises with views to kill for. Well, you know, the kind of views I like, bridges, express ways, harbours, airports, shopping centers - the life blood of commerce and basis of civilization.
Other people go to nature to relax, I go and sit in a cafe in a shopping mall and enjoy the vibe of commerce, wheeling and dealing, as it were.
Okay, the views include the timbered hills, the Indian Ocean and lots of greenery, and we got pot plants (plants in pots, potted plants, not plants of pot) all over the place, but it's a highrise and I love to soak up the atmosphere of freighters in the harbour, busses carting workers to factories, movement, progress, commerce, hope for the future. Ka-ching.

Other than that, not much new to report; but I will resume regular ramblings after this glimpse into my personal life (yes, it IS a life, thank you very much), and hope to do so more frequently again.