Thursday, September 26, 2013

No taper.

Back then when everyone believed that the Fed will taper in sept 2013... only to find out that the Fed is not even doing a token $1b or $5b of taper.

Saturday, September 21, 2013

Ben's deep thoughts

I don't mean to inflate the issue, but I can't taper off my criticism.


Good comments from the readers.... this comment sums it up nicely:

"Buffet is a cunningly dishonest man. He is conveniently not telling us, 1. The purchases of those bonds were paid for by the people's money being debased and worth less against our will. 2. As interest rates rise, which they already have begun to do, those profits will turn into losses. I would bet that happens by the end of the year. Of course the Fed does not care, because as Buffet says, the Fed has no need to deleverage, it can force us to pay as much as it needs to bail out the banks because we have choice but to use it's (sic) debt as our money. This is freedom?"

Immorality of inflation

Dr Paul: Think about it in a moral sense. What if he gets his 2% (inflation)? What right does the Fed have to take away 2% of their purchasing power automatically? What right does they have to punish the elderly who save money? I asked Bernanke and Greenspan the question and they throw their hands up and say that they feel some people will benefit from this.

Keynesians wrong once again

Mainstream economists.... wrong about bailouts and stimulus.
This is the real sentiment on the ground:

"A Feb. 2012 survey found that 52% of Americans thought bailing out the banks through the Troubled Asset Relief Program (TARP) was the wrong thing to do, while 39% supported the action. That was a big turnaround from 2008 when the crisis hit in 2008 and 57% had said TARP was the right thing to do."

I'm sure it'll be more than 52% as it becomes clearer that things are going awry.

Thursday, September 19, 2013

Watching Ben's Q&A now. Oh wait, why am I doing that?

Why bother questioning Ben... he's bluffing all the time. Or he's just simply incompetent. Anyone can dig up his record and see for himself/herself. Has been great fun betting against his Keynesian policies in the past few years. But this is really destroying America. That was why we Austrian economists were so mad about their destructive policies right from the first QE and bailout.

Implicit value of gold in SGD, under Bretton Woods System

Fun Fact: Taking Singapore's M2 money supply and dividing it by its gold reserves, and if the world were to return to the Bretton Woods System with 40% gold backing, the implicit value of gold will be some SGD 61,000. Even if we use the much lower M1 figure, we will get a figure of about SGD 20,000.

Saturday, September 14, 2013

Agriculture is a No. 1 on a list of "useless" college degrees?

I remember our geography textbooks in sec school, where agriculture was classified as a 'primary' industry. It gives us the impression that it is low-paying and not lucrative. While that is true in certain periods of history and is certainly true in the past 3 decades, it is beginning to change, and should continue to do so in the next decade or two. 

The average age of farmers in the US is now 58 years, in Japan it's 67 years. More than one third of European farmers are older than 65 – technically retired. Less than 5% of farmers in analysed (by IFAMA) countries are younger than 35-years-old! All OECD countries show similar trends.

And just for LoL from this article below:
"Aside from trying to stem the graying of America's farmers and ranchers, her mission is fueled by a recent blog posting that put agriculture at No. 1 on a list of "useless" college degrees."

Thursday, September 12, 2013

"You hope for the US to crash so that gold will rise"

Contrary to the favourite rants of antigoldbugs, I do not buy gold/silver and then hope for the US economy to crash. In fact, I buy gold/silver because of the foolish things that policymakers pursued and are still pursuing. The crash is inevitable. Many are also not comfortable with the fact that I'm so confident of the inevitability of the crash. But believe me, if the antigoldbugs really studied Austrian Economics in depth instead of just reading opinion articles about it, they will be way more confident in predicting the crash than I am.

If I really love to see the US crash, I would have advocated for these very same policies that the policymakers are making. Bailouts. Stimulus. Money printing. Deficit spending. More wars. But I don't. I hate what they are doing, because they are destroying the livelihoods of so many ordinary people. And that is why I can't hold myself back but to use strong words in my rants against these policies.

Saturday, September 7, 2013

Careful with your bank deposits.

True and scary. This is in the US. It has already happened in Cyprus. Depositors lost up to 60% of their deposits.

What about Singapore? The last time I checked, the Singapore Deposit Insurance Corporation (SDIC) - which was set up in 2006 to insure bank deposits to assure people and make them trust banks - only has about $130 million in the fund. Only $7.4 million are in CURRENT assets, the rest are in NON-current assets (god knows what kind of assets they are).

Hope my numbers are correct. Felt like calling them up and ask if this is a joke, but haven't got about doing it. Come up with your own figure of the number of bank accounts, and divide $130 million by your number and see what result you get.

Free-market economists will say that such government insurance schemes make people less cautious about their banks. This is very true and is one of the causes of the 2008 financial crisis. After all, we all do more research on the smart phones that we want to buy, rather than research on the banks that we want to put our deposits in.

Just a few years ago, Singaporeans lost money in the banks' investment funds and it was big news. About 10,000 Singaporeans lost all or a large part of their investments totalling over S$500 million in products linked to Lehman Brothers. Only part of the money lost was compensated.

Note: This is not fear-mongering. It's a good practice be careful with your accounts. It may not hit us but it may hit future generations.

Thursday, September 5, 2013

MAS losses

Singapore’s central bank, MAS:

2012/2013: S$10.61 billion net loss
2011/2012: S$2.77 billion net profit
2010/2011: S$10.9 billion net loss

MAS incurred the losses because it is trying to prevent the SGD from rising. 
Strong economies are supposed to have strong currencies!
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