Economic Trends

Long-term trends grow from short term trends. We attampt to determine the short term trends and where they are pointing.

Cyprus-Canada

If Cyprus Is the Bellwether, Canada Is the Red Flag

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If Cyprus is the bellwether, then Canada is the red flag, showing that Cyprus is not an isolated situation. The damage wreaked by monumental debt is systemic, and it has taken place throughout the First World and beyond.

This latter statement will very likely be the most difficult to accept as reality. If so, here is something to consider: Canada has approved its bail-in on a national level just one week after a final decision was made in Cyprus. As we all know, the wheels of governments worldwide move slowly. The reader might ask himself whether he believes that the Canadian government has, in short order, approved its own bail-in, in reaction to the events in Cyprus. If this possibility is simply too far-fetched, he must accept that the plan for Cyprus has been known to the Canadian government for some time and that a similar bail-in for Canada has been in the works for a while. It was simply agreed that Cyprus would go first – to act as the litmus test.

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Revenue Management

Trends: Revenue Management

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One of the hottest new trends today is developing pricing effectiveness solutions. Good pricing effectiveness comes from determining a person’s willingness to pay. Companies specialize in “revenue management” by tracking a customer’s willingness-to-pay and helping a company to optimize its revenue stream based on that willingness. For instance, in the case of that airline passenger, one person absolutely needed to get somewhere at the last minute and therefore he was willing to pay almost anything for a seat on that plane. And the other person was looking for a bargain and only flew because the flight was cheap. Just like the vender in the stall in the 3rd world, if you could determine the person’s desire level, theoretically you could charge the first person a much higher rate while simultaneously charging the second person much less.  Unfortunately for companies (but fortunately for consumers) companies are not mind-readers so they can’t squeeze the absolute last dollar out of you… Or can they?

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Porche Sales

The Greatest Wealth Transfer in History

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All governments engage in larceny and fraud, using their authority to transfer wealth and power from the outsiders to the insiders. But the clever government does so by deception… while the clumsy one does so with no pretense or excuses. In the US, for example, the feds deny savers any financial return from their economies under the pretense of “economic stimulus.” Wage-earners get nothing, while bankers, speculators and zombie grifters are rewarded with ultra-low-cost financing, capital gains, bailouts, and giveaways.

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Job Security

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In a changing economy, it is important to be confident that your job is secure before you make long-term investments. The future is not certain and if you lose your job you will require liquidity or you could end up in financial ruin. The key is to have at least 6 months of living expenses socked away in liquid assets before you invest in less liquid things like real estate, timber or privately held businesses. Although stocks are more liquid in a sudden downturn like we experienced in 2008 liquidity can be severely impaired (if there are no buyers) or you may be forced to liquidate at a significant loss. Warren Buffet is famous for maintaining massive amounts of cash waiting for just such an opportunity when he can name his price and everyone else is so strapped for cash that they have to accept his offer.

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Natural Disasters That Have Created Investment Opportunities

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Every cloud has a silver lining, and in the case of some natural disasters, there have been great opportunities to take advantage of financial markets after the worst damage has been done. Often when the old has been swept away and new modern construction takes its place an area can be revitalized and get a whole new lease on life.

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U.S. dollar Currency

Is the Dollar Really King?

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In addition to saving yourself time and worries by mostly ignoring public information, learning to discern the difference between good and bad information can lead to better decision making, in your everyday life, and in your investments. As a case in point, during the conference here, someone in the audience asked a question about quantitative easing. Doug Casey took hold of the microphone and replied along the lines of, “People need to stop using constructs such as ‘quantitative easing.’ Those are just terms that politicians have come up with to obfuscate the truth. The proper term for quantitative easing is currency debasement, plain and simple.”

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