Monday, February 24, 2014

Portfolio update

Mid-to-Long-term portfolio:

Long gold from $950
Long silver from $14
Short US 30-year bond futures from $150
Long sugar from 16.50 cents
Long north korean gold coins -- coming soon
Long chinese yuan against sgd from SGD:RMB of 1:5

Short S&P500 from $1840

Friday, February 21, 2014

Song for helicopter Ben

A song dedicated to helicopter Ben.



yellen yellen.... walking into a minefield created by bernanke and greenspan and which she helped to create... those 2 managed to escape in time and breathe a sigh of relief, but I'm afraid yellen won't be so lucky.

In the future when scholars study this era of gross monetary mismanagement, these 3 people will certainly go down in history as the Fed's worst chairmen.

The definition of insanity

If it fails (as it has for ages throughout history), repeat the same tactic again with renewed vigour. Last i remember, Einstein had a nice quote for this kind of behaviour.

Multiplier effect?

Economists often say that creating inflation (printing money) has a "multiplier effect" in the economy and therefore it is good.

It is akin to saying that alcohol has a "multiplier effect" on my happiness and is therefore good for my happiness.

You see, it is unsustainable. Once the alcohol (and money printing) stops, the big hangover/ crash is inevitable.

Preparing for civil unrest?

Interesting. The US Government has been purchasing firearms and ammunition off of the market at an alarming rate. Preparing for civil unrest? 

Tax the rich...not!

What the rich do with their money:
1. keep in banks as savings, which are loaned out to businesses or other people
2. do investments, which grows the economy and provide jobs
3. donate to help the less fortunate

But people love to tax the rich disproportionately and give money to the bureaucrats. Hmmm

Minimum wage

Good intentions, unintended consequences.

Fun fact: The minimum wage law in the US does not apply to the mentally challenged. Why? Because the bureaucrats understood (hopefully) that employers will be less likely to hire them. This shows that the lawmakers understood (hopefully) that the minimum wage law discriminates against the less-skilled workers. This is also one major reason why youth unemployment is so high. It is also the reason why there are more and more unpaid interns, because the company will run afoul of the law if they pay you some money.

"Unions top that list. A higher minimum wage increases the demand for union workers by reducing competition from lower-skilled workers. For instance, if the minimum wage was $8 and the union wage was $40, employers give up 5 hours of low-skilled work for every union worker-hour utilized. But increasing the minimum to $10 means employers give up 4 hours of low-skilled work for every union worker hour."

Deflation is a threat... to whom?

"Germany must accept higher inflation, says OECD":

It is BS to throw ur garbage to another country.

Also BS: "Deflation poses a threat to economies because falling prices encourage people to put off spending in anticipation of further declines. Retailers then cut prices, profits fall and salaries are reduced, which can quickly lead to a deflationary spiral."

Inflate, inflate, inflate

Mums know more about inflation than govt. It is astounding that the US reports very low inflation when it is one of the largest money printers, when the US dollar is not strong relative to other currencies, and when other nations are reporting high inflation. After all, we all consume the same beef, oil, steel, zinc, etc.

Food, energy, education, healthcare, toll, stock etc prices are going up. Yet, traders and investors still believe the BS govt inflation numbers, which are fudged using hedonic adjustments and substitutions. They don't do their own shopping. Their butlers do it for them. 

A friend recently told me he was shocked that the price of old ChangKee curry puff in Singapore has gone from 80 cents to $1.40, 75% increase in just 3 years. Why? Demand-supply dynamics play a role, but more importantly, MAS increased credit supply by 40% in the past 3-4 years alone, and more before that.

Printing behind the scenes

That's why I've said, even without qe, they are still printing behind the scenes!

The taper bluff

The taper bluff. Guess what will happen when they stop the 'stimulus'?

In 2013 The Fed Bought 150% More Treasurys Than All Foreigners Combined:

Friday, February 7, 2014

Be realistic about taxes in Singapore

For those of us who keep complaining about indirect taxes in Singapore (including myself) such as COE, ERP, GST, etc.

Well, that's because everybody wants government to do this and that. The nation wants government to provide housing, transport, education, healthcare, social and welfare programs but all these have to be paid for. If you take out one component, say GST, from their budget, the government will have a budget deficit. I am not making this up. You can check their budget.

One thing the government can get rid of, however, is CPF. I believe people are better managers of their own money.

Regarding taxes, Singaporeans are not the most taxed citizens in the world. The western nations are way worst. Just for the record, I would like a 0% income tax. But that is impossible if you allow government to be involved in providing so many services.

The best solution is to let the free market provide the services I've mentioned: healthcare, transport, education, etc. Then we can get rid of stuff like COE, ERP, GST, etc.

America became a great nation 100 years ago with ZERO income tax. Why? It was because their federal government was not involved in all those services I mentioned above (not even in building highways!). Those services are solved locally. Over the decades, they start to politicise all those services, and this is one of the reasons why they are in a bad shape right now.

Thursday, February 6, 2014

Government interventionism in the Depression

And this is one of the reasons for the Great Depression of the 1930s: Government interventionism in the market.

Of note is also the Depression of 1920, which no one talks about, because government actually stayed out of the market and it was over within 1-2 years. My article from feb 2013:

Monday, February 3, 2014

North Korea

Even though I've researched quite a bit on N.korea in the past year, this book is proving to be a page turner... 

It confirms the info I've gathered, but with more details.

It tells of the entrepreneurial spirits of the N.korean people, when given the smallest of openings by their govt. 

It tells of the thriving black market, which provides goods and services where govt had failed - yet another proof that free people provide for themselves best.

It shows the unprecedented public display of anger against the govt in 2009/2010 due to massive devaluations of the currency that wiped out a lifetime of savings. The govt supposedly did a public apology to contain the anger.

In many cases, this looks like what happened in East Germany right before the merger, something unimaginable just a little over 2 decades ago.

And etc etc.

I cant wait to get my hands on Nkorean gold coins. It's a bet that the current regime will not be around in the forseeable future.

Sunday, February 2, 2014

Recessions every 5, 6 years

Don't like to use official numbers but let's just use it. Slowest job 'recovery' since 1945. . Recessions happen on average every 5,6 years. 2008 + 6 yrs = 2014 maybe? What next?
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