Thursday, June 2, 2011

Too Long for Twitter, Too Short for Separate Posts

 I am crossposting here and on Davian, the technology and marketing partner for my inflation-oriented autotraded product.

Spain, just like China, has its own set of empty towns. Whenever you see these satellite pictures, you can be sure that there is a bank somewhere holding the bag (or keys, if you'd prefer). Long periods of mispriced credit look great on the income statements but, as they say, the balance sheet is the future.
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Currency devaluation chart from the Roman Empire: tracking the decrease in silver content in the coins over the years. Persistent currency devaluations seem to cause a lot more problems than they solve. Since it is difficult to imagine life without money, I wonder if there are two future scenarios possible: a "stable" global currency (many countries do not have own currencies now as it is) and/or a group of competing or complementary private currencies without governmental control. Private currencies would need major network effects to be successful, so, dare I say it, hello facebook dollar!
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Speaking of countries that need a new currency, look at Belarus. After its currency devaluation, the government decided to freeze food prices until July 1st of this year. These attempts never really work and lead to shortages. Other Eastern European countries learned the hard way and have been operating with currency boards for many years quite successfully as a stable currency is major factor in predictability, and, hence, economic development. In general, countries that are not that great at self-governance are not that great in managing their currencies, either, and the populace knows this so most contracts are denominated in the "USD equivalent of..."
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Energy is a precious resource that should be used judiciously. I wonder if some emerging markets are making a major mistake by encouraging the rapid automobilization of their countries. The single-driver daily commute is very energy intensive, often stressful, and a noticeable waste of time for highly specialized labor. No easy solutions exist for the US but some markets might be making the mistake of copying the US model.
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The ore barons in Australia and Canadian homeowners might not have a full idea what is coming to them if/when there is a slow-down (or worse) in China.
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Three quotes I posted on Twitter recently that got "mileage":
Coco Chanel: "Some people think luxury is the opposite of poverty. It is not. It is the opposite of vulgarity."
Leon Trotsky: "You may not be interested in war, but war is interested in you"
George Orwell: "If liberty means anything at all, it means the right to tell people what they do not want to hear."
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On the topic of liberties, the gradual erosion of liberty is in full bloom. Recent court decisions have rolled back rights going back to the Magna Carta (that's 1215 AD), including the right to due process. We're not at the EU stage of targeting free speech as thoughtcrime but we are getting there (“one sees the sun slowly set, yet one is surprised when it suddenly becomes dark.”)

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