Thursday, July 25, 2024
Advancing Time: Looking Back, A 2018 Warning Of Markets Overdone
Advancing Time: Looking Back, A 2018 Warning Of Markets Overdone: While listening to a financial program recently I heard one of the participants mention and praise Fred Hickey, an analyst whom I was unfami...
Looking Back, A 2018 Warning Of Markets Overdone
While listening to a financial program recently I heard one of the participants mention and praise Fred Hickey, an analyst whom I was unfamiliar with. Upon researching this fella to get a feeling of his views, an interview he did years ago popped up. It appears that back in early 2018, Fred Hickey, a frequently cited expert on Bloomberg News and Barron's Round-table was more worried about the state of the financial markets than he had ever been.
Hickey, known for publishing his
extremely well-respected investment
newsletter, The High-Tech Strategist, took the stand that asset prices were dangerously overvalued. Today, the same markets are much higher, in truth, they never really retrenched.
While his primary focus had been on analyzing Tech stocks, over the years he had expanded his research into macro trend analysis. This includes how central banks started increasingly intervening in world markets and distorting the price of money. Rather than taking this post as a criticism of Hickey, consider it solid proof that we have again witnessed the adage often attributed to the famous economist John Maynard Keynes:
The market can remain irrational longer than you can remain solvent.
This saying is often cast out as a reminder that a person can be right
but timing often determines our destiny. It also underscores why,
capital preservation should be job one. The market will fail only when
something breaks. It is only then that delusion and despair will
overtake the optimist irresponsible central banks and the policies
politicians continue to crank out. History indicates that efforts to postpone the day of
reckoning only delay it.
As pointed out, Hickey, a
lifelong expert in "all things technology" was railing against market trends as far back as 2018. Even then he concluded that gold (the
"barbaric relic") had become the sanest asset to put one's capital. This was due to its safety factor and its current level of
undervaluation. This is why Hickey was out warning about how we were in an everything bubble.
His warning included how companies such as Tesla were doomed to fail. This argument held some truth but over the years, forces have pushed the boulder up the hill. Today markets are at insane levels and much higher than many of us thought possible. This is a time when it might be wise to remember trees, no matter how tall, do not grow to the sky.
In a very recent video on Thoughtful Money, Sven Henrich of NorthmanTrader.com reached out with the message that he closed out all his longs this week and moved to cash. While he has been a bit spooked by recent market action, he makes it clear be is not all that bearish. Based on his charts, he is cautious. This is due to the fact we are experiencing the most distorted markets in history. Whether this is a result of too much liquidity or passive investments driven by computer trading is an issue of debate.
The important thing is where the
market goes from here. Having been bearish far longer than I ever wanted to be, every time I turn towards capitulating, I try to remember that two wrongs don't make a right. This is particularly true in economics. When the numbers don't work it is only a matter of time before reality hits hard and long. The idea that this time is different has throughout history proven untrue. Whether the market pullback that started a few days ago is a preamble to something greater has yet to be determined.
(Republishing this article is permitted with reference to Bruce Wilds/AdvancingTime Blog)
Thursday, July 18, 2024
Advancing Time: China's Massive Three Gorges Dam Again In Peril
Advancing Time: China's Massive Three Gorges Dam Again In Peril: China is again facing massive flooding. Some problems are built to last and won't go away. The massive Three Gorges Dam and flooding iss...
China's Massive Three Gorges Dam Again In Peril
China is again facing massive flooding. Some problems are built to last and won't go away. The massive Three Gorges Dam and flooding issues in China fall into this category. This is a disaster waiting to happen.
The two AdvancingTime articles below from 2020 give details and indicate the dam's failure. This is most likely a case of when not if. Both articles have had some parts deleted to make them shorter and easier to read.
China's Massive Three Gorges Dam Is In Peril --- Sunday, July 19, 2020
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| Click On Image To Enlarge |
Over the last month, most people have not paid much attention to the
weather in China. This is because it is not something we dwell upon but
it merits our attention since word has been leaking out that China's
massive Three Gorges Dam is in peril. Most of us have little knowledge
of this dam which is the world's largest and the implications if it does
fail. Its failure would result in a massive loss of life and property. After record
rainfall with more expected concern is rising as the flooding continues.
It is said about 400 million people live downstream of the dam and
apparently no plans have been made for their evacuation. Here are a few
facts about the dam. The Three Gorges
Dam is around one and a half miles long and just over 600 feet tall. It is a hydroelectric
gravity dam that spans the Yangtze River by the
town of Sandouping, in Yiling District, Yichang, Hubei province, China.
Construction was started in the 1990s and completed in 2006. Its failure
would have catastrophic consequences and could kill around half a million people.
Vice Minister of Emergency Management Zheng Guoguang said on Monday that
the Yangtze, Asia's longest river, and parts of its watershed have seen
the second-highest rainfall since 1961 over the past six months.
Residents in the Yangtze River basin in recent weeks have expressed
concerns over the ability of the massive dam to handle more heavy rain,
even though authorities have been releasing floodwater from the
structure. If the dam does fail the province's capital Wuhan the
epicenter of China's coronavirus outbreak would be hard hit.
China's Massive Three Gorges Dam On Edge Of Failure --- Tuesday, July 28, 2020
The failure of this dam, which is the largest in the world, would have catastrophic consequences. It is estimated such an event could result in around half a million people being killed. The Asia Times reported several days ago that Beijing has admitted that its 2.4-kilometer Three Gorges Dam spanning the Yangtze River in Hubei province “deformed slightly” after record flooding. The deformation occurred last Saturday when waters from western provinces including Sichuan and Chongqing along the upper reaches of the Yangtze River peaked. At this, point the biggest concern is that rain continues and more is expected.
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| China's Three Gorges Dam |
The company that manages the dam noted that parts of the dam had “deformed slightly,”
displacing some external structures. Seepage into the main outlet
walls had also been reported throughout the 18 hours on Saturday and
Sunday when water was discharged through its outlets. Wang Hao, a member of the Chinese Academy of Engineering
and an authority on hydraulics who sits on the Yangtze River Administration Commission, has assured
that the dam is sound enough to withstand the impact from floods twice
the mass flow rate recorded on Saturday.
It should be noted that Wang’s remarks stoked a volley of mockery after he said the
flooding could be a good thing as the dam would only become more rigid
the longer it was steeped up to its top.
(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)
Sunday, July 14, 2024
Advancing Time: Velocity Of Money Is No Longer A Huge Inflation Fa...
Advancing Time: Velocity Of Money Is No Longer A Huge Inflation Fa...: Let's talk about the velocity of money! The speed at which money flows through the economy is often tied to speculation about the future...
Velocity Of Money Is No Longer A Huge Inflation Factor
Today, small businesses are suffering the most pain of cost increases since larger enterprises have a lot more ability to get cheap funding. More small businesses forced to close may result in stagflation in this economic cycle rather than deflation which is normally associated with downturns. This is a reason for concern on both the employment and inflationary front. Not only do small businesses employ a huge number of people but they generally resist raising prices due to close relationships with their patrons.
As for the velocity of money;
Velocity is the speed in combination with the direction of motion of an object. Velocity is a fundamental concept in the branch of classical mechanics that describes the motion of bodies.
The scalar absolute value (magnitude) of velocity is called speed.
The faster money moves through the economy is sometimes tied to demand in that John or Jo will take all their money on payday and spend it immediately if their demands are high. In such a situation, retailers and vendors will rush to replenish goods to refill shelves. During low demand, they will spend the money slowly over time and the vendor will pull from inventory rather than place new orders.
Please consider the possibility that what is considered a "slowing in the velocity of money" is rooted in where money or wealth is being placed. Another factor could be who holds the bulk of money in circulation. As inequality has grown and more wealth shifted into the hands of a few, the idea these few will park their wealth and money for long periods of time feeds into why velocity is falling. Then, please consider, that a shift in investor attitudes causing a shift away from intangible to more tangible investments could spark a surge in both velocity and inflation.
Over time, changes in the way people handle transactions, such as using more or less charge cards or debit cards as well as the way financial institutions facilitate such transactions may affect how velocity is viewed. Still, how much the velocity of money affects inflation is difficult to assess. This leads us to the question of whether inflation is being driven by demand factors or simply increases in cost being passed along.
Much of the inflation we have witnessed in recent years has been attributed to supply chain shock as well as a large increase in the money supply. Huge government deficits and spending as a result of Covid and efforts to get the economy moving post Covid have acerbated the situation. This brings up the question of what we should expect going forward. Demand-pull inflation, cost-push inflation, or if the economy continues to fall, stagflation.
Mixed into this brew is the idea trade is good for all parties concerned, trade deficits, the value of fiat currencies, and tariffs. Several flaws
regarding the idea that "free trade" is the answer to many of our problems have revealed themselves in recent years. In short, it is time to honestly look at the role of trade and why it should be considered a double-edged sword. While the
idea behind trade has a great deal of
merit it is often given far more credit for economic growth than it
should.
With government spending predicted to grow in coming years, and a continued debasement of fiat currencies, deflation is unlikely. No matter how those in the know or in charge of such policies seek to spin it, they can’t lead countries out of what appears to be persistent economic trends. While the rate of price inflation is easing, core inflation remains stubbornly high.
The problem is continued government spending. The Fed’s efforts to ease inflation and the easing rate of inflation are both about to run into major resistance. A recent article published in The Daily Signal told how The Tax Relief for American Families and Workers Act of 2024 is nothing of the kind. Instead, it is a mixed bag that includes welfare expansions, corporate windfalls, and inflationary deficits.
It is logical to envision that huge government deficits will result in further inflation and increasing interest rates as the government generates new money without increases in real productive capacity. such spending tends to crowd out private borrowing. In short, bigger government acts as an impediment or roadblock to increasing supply while increasing demand. While the velocity of money does affect inflation, government spending is where economist should center their focus.
(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)
Sunday, July 7, 2024
Advancing Time: Danger Ahead, China Is Pushing, Pushing, Pushing
Advancing Time: Danger Ahead, China Is Pushing, Pushing, Pushing: There is danger ahead and the ramifications have the potential to be massive and devastating. China is pushing to become the automaker of th...
Danger Ahead, China Is Pushing, Pushing, Pushing
In the area of efficient economies, a system of state-controlled markets and subsidies has a strong advantage over market-driven capitalism in the short term. Time and time again, it has been proven that heavy-handed government interference in a market can rapidly ramp up an industry far faster than free market forces. Governments can change rules, expedite approvals, fund, or turn a blind eye to those they favor.
I contend that China is using Elon Musk and Tesla as a useful pawn to muddy the issue of what is fair in the area of free trade. After all, if Tesla, which is identified as an American company, is allowed to sell cars in China, why shouldn't Chinese companies be allowed to sell their cars in America? Furthermore, isn't Tesla's success an indication or even proof that EVs are the future and best way to avert climate change. These are both conclusions I do not accept.
A CNBC video recently explored how China has the manufacturing capacity to supply half the world's cars. It delves into how China has its eyes on the United States and why insiders say it's only a matter of time until it affects America's auto industry. Even though. President Biden slapped Chinese automakers with stiff tariffs that effectively double the price of an imported EV some insiders warn tariffs may not be that effective in the long run, and may even do more harm than good.
This push to export Chinese cars all over the world is another gambit to expand China's power and decimate its rivals and competition. China has and is playing the same game in a slew of other industries. This has not yet gained the attention it should, and by the time it is obvious to most people, China will be the only go-to option in many key industries. Sadly, the auto industry is an area where Chinese products can rapidly make major inroads or progress if allowed. This is indeed a gambit that will be difficult to halt because consumers want inexpensive vehicles.
How do people across the world feel about China?
The number of countries looking unfavorably at China has increased since the poll started in 2019. The
countries with the most respondents favoring China were Nigeria, Kenya,
Thailand, Russia, Egypt, and Saudi Arabia. Still, views
of China are broadly negative across most of the advanced
economies. Roughly three-quarters of respondents in
Japan, Sweden, Australia, Denmark, the United Kingdom, and Germany had a
negative view of China. It is important to note these "feelings" are fluid.
We must remember, China's economy is false and manipulated, much of China's growth came from "over-constructing everything," this is equivalent to building bridges to nowhere. Now China wants to, in a predatory manner, take jobs away from other countries to expand its manufacturing away from constructing ghost cities and towards producing high-end items needed across the world.
To be clear, I do not consider myself a "Chinaphob," or should I say, to be sporting an exaggerated or unfounded fear of China. My concerns are deeply rooted in China's actions over the last several decades. Rather than becoming more open and free, its government has become more controlling and authoritarian. It is far past the time we should be calling a spade a spade.
Footnote: I'm aware that the word "Chinaphob" may or may not exist or be recognized, yet. Below are several links to prior articles related to China. Some focus on its push into various industries. https://brucewilds.blogspot.com/2024/05/difference-between-fair-trade-and-free.html https://brucewilds.blogspot.com/2021/03/chinas-strength-should-be-evaluated.html https://brucewilds.blogspot.com/2023/09/subsidies-corrupt-economies-china.html https://brucewilds.blogspot.com/2023/04/china-is-staying-afloat-by-flooding-its.html https://brucewilds.blogspot.com/2018/08/china-has-no-intention-of-altering-its.html https://brucewilds.blogspot.
(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)
Saturday, July 6, 2024
Advancing Time: America's Trade Deficit Is Widening Again
Advancing Time: America's Trade Deficit Is Widening Again: While Americans go about their daily life not enough attention is being paid to the trade deficit. It is and has been widening, again. The...
America's Trade Deficit Is Widening Again
While Americans go about their daily life not enough attention is being paid to the trade deficit. It is and has been widening, again. The U.S. international trade deficit
widened 0.8% in May to $75.1 billion. This is the largest deficit since October 2022. Over all, the trade deficit is up $14.4 billion or 4.2% from the same period last year. These numbers, and those for the last several years highlight that for all the ruckus it created, the trade war failed to bring
down the trade deficit.
The world may have already hit peak globalization, much of which was promoted on the idea trade was good for all parties concerned. Several flaws regarding this notion have revealed themselves in recent years calling for a reassessment of this theory. In short, it is time to honestly look at the role of trade and why it should be considered a double-edged sword. While the idea behind trade has a great deal of merit it is often given far more credit for economic growth than it should.
First of all, trade must be fair or it has the potential to damage one party or the other. The promise that increased trade will create new jobs has turned out to be largely a myth. History has shown that trade agreements with low-wage nations are not the great job creators we have been told. Instead, we have experienced a hollowing out of the middle class. This is why AdvancingTime has in the past banged away at the fact that where and what consumers buy matters.
The trade deficit with China continues to weaken America and strengthen our rival. Making your rivals stronger at your expense has always proven to be a mistake in the long run. The belief trade is a huge benefit to the masses is championed by large multinational companies that influence trade policies and have the most to gain.
Many Americans tend to ignore the fact China is rapidly building factories in Mexico to sidestep tariffs. Geopolitics has made Mexico as a trade partner increasingly preferable to China. In 2023, Mexico overtook China as the United States’ largest goods exporter, based on recent trade figures.
The U.S. imported nearly $476 billion from Mexico and shipped roughly $323 billion to its southern neighbor in 2023. Meanwhile, the Bureau of Economic Analysis reported that imports from China to the US fell by approximately 20% to $427.2 billion. This is partly due to American firms seeking to diversify their supply chains due to strained relations between the US and China. Some of this centers around national security worries, particularly in the area of technology.
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| Once Wealth flows To Asia, It Stays There |
Even before China started manufacturing in Mexico, much of the money our neighbor to the south received by way of trading with America was quickly passing through Mexico and flowing to Asia. This means it could be argued that when all is said and done we were still transferring our wealth to the far east only by the scenic route. This is not a recent occurrence, numbers indicate that in addition to the United States, Mexico has for years been a huge importer of goods from China.
In 2017 Mexico ran a trade deficit with China of around 64 billion dollars. In 2019, trade between the two countries reached 100 billion dollars with the deficit growing even larger. Mexico recorded exports to the Chinese market worth 7.1 billion dollars while Chinese exports to the Mexican market rose to 93 billion dollars.
The question we should ask is whether free trade is really a win-win. The answer probably falls into a grey area based on the terms on which transactions are based. There is a lot to be said for being self-sufficient. A strong case can also be made for favoring trade with nearby friendly neighbors rather than distant countries, such trade can improve the neighborhood.
Those preaching the virtues of globalism and free trade point out that American consumers pay far lower prices because of this but overlook the fact that in the long run, such an imbalance will not end well. The reasoning that we are trading worthless dollars, currency, or paper for goods is a bit misleading. It might be more accurate to say we are trading away jobs, wealth, and even our future.
Sunday, June 23, 2024
Advancing Time: A Few Thoughts About The State Of The Economy
Advancing Time: A Few Thoughts About The State Of The Economy: Below are a few current thoughts and takes about the "State Of The Economy." The world and markets seem to be on autopilot. There ...
A Few Thoughts About The State Of The Economy
Recently I have not been writing as much as in the past. Like many of you, the business of daily life has been consuming all my time. Like a frog in a pot of water that is rising in temperature, the average American is complacent and remains in a state of denial. Inflation is meandering along with a small drop in consumer goods, but that does not mean it is dead. People, whether passively or actively continue to invest in intangible assets. By not buying tangible and real items they help to minimize inflation by diverting money from physical assets like machinery, vehicles, and buildings.
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| What And Where We Buy Matters! |
History shows that when consumers feel more financially secure and confident they spend
more freely, the reverse is also true. Get ready for the "reverse wealth
effect" to kick in. If this happens it will be a real ball breaker. The
wealth effect is a behavioral economic theory based on people
spending more as the value of their assets rise. Even decades after its economic bubble popped, Japan stands as a monument to the devastation the reverse wealth effect can unleash.
Some of us, long ago predicted inflation would increase and the economy drop away. The flaw in our thinking was underestimating the size of the stimulus the government would put in the pipeline. This massive infusion of money into the economy has only postponed the collapse of the financial system. Still, many investors are
basing their investments on more intervention from central banks and
governments to pull another rabbit out of their hats. It still remains a possibility that currencies will be debased and inflation may soar at the same time the global economy sinks into a funk.
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| Used, This Item Has Little Resale! |
How weird has all this become? We might throw into this mix what could be called the "garage sale factor." You can call this the used items market if you like. This is where a little-used Keurig coffee maker that costs well over $100 is likely to sell for only around $10. In short consumer goods having little or no resale value highlights the fact we already have way too much stuff and could go a long time before needing to buy more. This also supports the idea a loss of the wealth effect will result in a devastating drop in demand for consumer goods. There is a big difference between need and want.
One of the biggest X factors investors and the masses face is corruption
in government and the fact that we have no real say or input into how
things will be resolved in the case of a crisis. Systematic corruption
means things will unfold to do the least damage to those in charge.
Another big issue is world affairs, with conflicts sprouting up in so
many areas, we have little reason to get overly comfortable. The fact
government debt has exploded and the soaring use of the T word,
"trillions" alone is problematic. It is best to remember that when a currency is debased the biggest losers are the masses.
(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)
Monday, May 27, 2024
Advancing Time: The Economy Has Not Been Fixed, Big Problems Ahead
Advancing Time: The Economy Has Not Been Fixed, Big Problems Ahead: In recent years, the government's expenditures have soared and the national deficit has exploded. This has caused the national debt to e...
The Economy Has Not Been Fixed, Big Problems Ahead
In short, nothing has been fixed or repaired, we have not created a sustainable economy. Printing and creating new money is not fixing the problem, instead, it has created an economy addicted to printing and creating even more new money. We here in America need to focus on the American economy, if that is strong it will help galvanize the country's future.
An example of our failure is seen in how China got a big boost with the passing of Biden's 1.9 trillion dollar relief package and the American taxpayer is the big loser. Buying junk from China will do little good when it comes to creating jobs in America. When looking at the policies flowing out of Washington it is clear many politicians seem to have no idea that all consumer spending and purchases are not created equal.
Purchases and investments should bounce around a community sparking future
economic growth that enriches everyone. Amazon's growth is a sad example that others give money wings allowing it to exit not only the community but often the
country.
Damn near every economist and analyst seem oblivious to the point that what and where consumers buy matters a great deal. An article that delves into spending and its impact on the economy claims, "Where
money flows and who it enriches is a key component of economics. The
failure to consider this is a blind spot many people have." Much of what
has been registered as growth over the last few decades does not necessarily transfer into economic
strength.
This point is something that has been covered time and time
again on this blog in articles such
as, Healthcare Spending Wrongly Feeds Our GDP, and Economic Growth Does Not Equal Economic Strength. Many of our economic problems stem from consumers making poor decisions. The least responsible
consumers tend not to fulfill
obligations but to take on new debt and squander every penny they
can lay their hands on. Online shopping and companies such as Amazon are
like heroin to an addict when it comes to promoting spending that
destroys real economic strength.
Another huge issue is that inflation is not just prevalent in manufactured consumer goods but inflation also occurs in the area of fees, tolls, and taxes. People tend to forget just how much of government spending is done on the local and state levels where simply printing more money is not an option for eliminating revenue shortfalls. This translates into a slew of revenue-driven schemes that come back around to become a huge driver of inflation.
When we look at where inflation has occurred during the last decade or so we find it centered in areas where the government has expanded its influence. Two that rapidly come to mind are in the areas of healthcare and education. The skyrocketing cost of even basic health tests and medicine, as well as tuition at universities, screams inflation. This dovetails with claims by politicians that leveraging local dollars to match federal and state resources is not always a win for the residents.
Many people fail to grasp just how much government has expanded over the years. Much of this growth has been masked by "outsourcing" a great deal of the work done by government workers. Another place this sneaks under the radar is in the huge growth of "quasi-government " entities such as airport authorities and downtown improvement districts which are able to levy special taxes. Utility companies, often monopolies carrying out government mandates under government supervision, also can be placed in this category.
The theory that a lot of future inflation will flow from governments is tied to local governments' need for revenue. Local and state governments have hidden and masked the size of its growth and financial promises from the public. Since state and local governments lack the federal government's ability to print money and buy back its debt they must pay higher interest based on their credit rating.
It is a fact that businesses and landlords eventually must pass on to consumers the added cost forced on to them often through higher prices. Another way to do this is by transferring responsibilities, limiting warranties, or reducing goods and services that had been previously provided. A city forced to cut costs or increase revenues often chooses to plow snow only when three or more inches fall, reduce the number of times it picks up leaves, or increase fines for such things as parking violations or ticketing drivers for violations caught on camera.
An unnoticed but very important part of the inflation puzzle is that so many people are willing to invest in intangible assets. The Fed should be ecstatic about this, in not increasing demand for tangible and real items they help to minimize inflation. Intangible assets are often "useful resources" that lack physical substance. Examples are patents, copyrights, trademarks, and goodwill. Such assets produce economic benefits but you can’t touch them and their value can be very difficult to determine.
Another example of quasi-intangibles are stocks, when you buy a share of stock what do you really have? For a long time, I have taken the view that many "financial assets" have slipped into the intangible class. Assets such as stocks, pensions, and annuities all harbor many of these qualities. These are things we can not touch and often live in the land of future promises. Over the years the growth in such assets has exploded. Intangible assets stand in sharp contrast to physical assets like machinery, vehicles, and buildings.
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| This Chart Could Be Considered Very "Troubling"! |
The growing danger resulting in policies encouraging
people to invest in intangibles does lessen inflation. When money is
created or printed it has to go somewhere, and this has been fueling the
"everything bubble." Yes, the wealth effect creates more spending but it is not the key driver of inflation. The
main reason all the newly created money has not resulted in even more inflation is rooted in the fact it is being diverted from goods most people need to live and into intangible assets. The theory that investments in intangible assets minimize inflation may
be a chief reason government savings and wealth-building programs are
centered on driving money into such assets.
Many people and even economists have real misconceptions as to how the economy works. Where money flows and who it enriches is a key component of economics. The failure to consider this is a blind spot many people have. Fans of Keynesian economics that encourage government spending to stabilize the economy tend to discount the importance that savings plays in a balanced economy, or that small local businesses are the heart and soul of the economy. Where and how money is spent matters a great deal. In the end, we will all be forced to pay the price of this "cost-shifting" by suffering a lower standard of living.
(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)
Wednesday, May 15, 2024
Advancing Time: The Powerful "Think Tanks" We Seldom Think About
Advancing Time: The Powerful "Think Tanks" We Seldom Think About: Most of us have given little thought to Think Tanks. This includes their purpose, how they are funded, why they exist, and those pulling the...
The Powerful "Think Tanks" We Seldom Think About
Sometimes are lack of pure attention or simply misreading a headline or title results in taking us down a road we might have not taken. Recently, I misread the title; "WTF Do You Think Tanks Actually Do?" Thinking it was referring to the use of tanks and their role in warfare I decided to take a closer look. I expected to find something about tanks being used as line breakers, like shock troops or heavy cavalry in ancient/medieval times. Instead, I found information about Think Tanks and their role in creating public policy.
It was reported near the end of 2021 that the United States now has 2,203 think tanks, a more than two-fold increase since 1980. These institutions generate new ideas for policy-making, assess existing policies, and draw attention to neglected issues. Much of the work Think Tanks do is done behind the scenes, off the record, or in briefings that are not touted publicly. Part of the reason many avoid the light of day is they operate to simply justify every and anything for money.Think tanks take donations and then generate the reports and studies that inform and influence the government and those making our laws. Their expensive studies could be described as "vetting the truth in the name of profit." This is a slippery slope. The reports, data, and information they generate often dominate the laws Washington imposes upon us. This should be apparent from the fact they often write a great deal of the legislation.
In some ways, Think Tanks are, the government lobbying the government. Many of those people taking jobs in Think Tanks are paid very well and are former government employees or politicians. It could be argued that Think Tanks are, the government lobbying the government. With reassuring names such as the. "Institute For The Study Of" or The "American Foreign Policy Council" these groups formulate road maps going forward.
Their input shapes the future of society and our culture carrying with them huge ramifications. Think Tanks are often used as weapons in the battle for our hearts and minds. About eight and a half minutes into the video that took me down this road, the producers of the piece give an excellent example of just how much this matters. Big Pharma, agriculture, the fast food industry, and weapon manufacturers, all huge sectors of the economy, use Think Tanks to skew information that promotes their goals.
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| Sounds Like, "Power And Money" |
The material these groups generate flows directly into the media, in fact, it is often their job to pump it out in a way that promotes an agenda whether right or wrong. The material is often presented to intentionally skew or create conflict that can halt positive change. Much of this is rooted in securing or maintaining the financial position of those funding the studies.
The comments below were under the video I watched. While slightly altered they represent the thoughts of other viewers;
- Think tanks are like corporate consultants: they may have started as an independent insight, but have since gotten co-opted into inventing justifications for their sponsor’s predetermined decisions and act as a hired scapegoat if those decisions don’t pan out.
- Finding out that big pharma and big food are fighting is the kind of good news I didn’t know I needed today. This is a "Proxy war" of sorts and we are the pawns.
- Think tanks get money from the military-industrial complex. This is why somehow defenseless countries with weaker weapons are threats.
- The fact scientists could look at the same data about lead in the environment over time, and some arguing lead in gasoline was fine with others arguing it was a catastrophe waiting to happen. All this makes a person think that 'trust the science' and just listening to one lab, school, think tank, or organization means you're ultimately listening to the opinion of someone who has money linked to things going their way.
- Think tanks take a medium amount of money from big business and talk to
the Government.
Then, they convince government authorities to contract with big
businesses for massive contracts. Also, a medium amount of money flows
to government authorities in this step.
This all results in big businesses making disgusting amounts of money
producing expensive parts, maintaining heavy equipment, or providing a
"service" for the government that the people never asked for.
In the end, we, the people pay absurd amounts of money to the
government.
Considering how much Think Tanks influence government policy, they
deserve much more thought. Things like, where they get their money or
funding matters. Who they employ, and who employs them is also
important. Think Tanks are tied to the hip with lobbyists, big companies,
power, and more. Whether working for a foreign government, big pharma,
or the military-industrial complex, the bottom line is Think Tanks are not
working for you and me. A final thought, life is odd and the people determining our fate are scary.
Wednesday, May 8, 2024
Advancing Time: Difference Between Fair Trade And Free Trade Hits ...
Advancing Time: Difference Between Fair Trade And Free Trade Hits ...: It is finally being acknowledged by main stream thinkers there is a difference between fair trade and free trade. Those who have taken for ...
Difference Between Fair Trade And Free Trade Hits Home
Throughout history, trade policies have had massive long-term
ramifications on the strength of a nation's economy. The promise that
moving from producing products and increased trade will
create wealth has turned out to be largely a
myth for most Americans. Still, we hear the narrative spun by politicians and those profiting from exploiting unfair trade.
On Thoughtful Money, Michael Every, a Global Strategist at Rabobank, makes a compelling argument the world is at or near a tipping point. Every delves into the issue that the world is continuing to fracture geopolitically. Every gives the
impression that the only way out of the global economic mess created by insane trade policies is to do
"protectionism right" and that will not be easy to implement.
A radical shift has been taking place in the way people think about trade and its long term impact on our economy. This has been a long time coming. The election of Donald Trump in 2016 unleashed this debate and the Genie can't be put back in the bottle. Despite his faults, Trump brought front and center the undeniable truth that America as a country was allowing some countries to massively abuse its trade policies.
History shows that planned economies often run into a wall. We witnessed this in the Soviet Union in 1990 and are now seeing it in China. Planned economies tend to be inflexible and unresponsive to supply and demand. That should be their problem and not ours. They should not be able to benefit by wrecking our economy. In the last 24 hours, CNBC put out a video about why American automakers are failing in China. This is a subject I have written several articles about, and hits on a much larger problem and that is, how China conducts business.
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| China's Economy Based On Exporting Cheap Goods And Labor Exploits Trade Partners |
Free trade is given far too much credit for bringing prosperity to all, in fact, when it is not fair, trade can hurt the quality of overall growth. Trade between countries is not as big an economic driver as many people claim. The world can be divided into several trade sectors or groups. Every makes an effort to break it into the West, Europe, and the rest. The so-called rest constituting China, Russia, and a slew of underdeveloped countries.
How Europe ultimately decides to with the coming changes in how trade is conducted will make a difference in the global economic landscape. Until now Europe has appeared to be giving in to the seductive promises cast out by China. This has placed Europe in a position where it may become subservient to China. Going forward, the most important factor, when all is said and done, may be recognizing there is a glaring difference between fair trade and free trade.
(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)
Sunday, May 5, 2024
Advancing Time: Chinese EVs are piling up and blocking European Ports
Advancing Time: Chinese EVs are piling up and blocking European Ports: The mania over replacing fossil fuel powered cars with electric vehicles is beginning to wane. Several news agencies have reported that m as...
Chinese EVs are piling up and blocking European Ports
The news China has approved Tesla's program intersects with China's push into the EV market as its housing market explodes. In short, China needs a new spark or something to kick-start its economy. With enthusiasm for EVs on the wane, approving Tesla's program may be another propaganda campaign to tie EVs with the image, and idea, it will lead to an idyllic future. The Chinese EV sector wants and needs the "Tesla development" to generate the sign that the U.S. and China can work together in the EV space.
Automobile manufacturing is a huge market and the Chinese have made a huge investment in the EV sector by subsidizing its growth. In doing so they have set in motion the machinery to destroy auto manufacturers in other countries and thus dominate global auto production. Diminishing demand in China for their products is a huge contributor to Europe's top two car manufacturers' downturn which the Financial Times reported recently.
Not only has China heavily subsidized its EV sector, but it has even gone to outlawing the sale of fossil fuel automobiles. It now appears China has gone down this path with the intention of taking over the world auto market. It could be argued Tesla is no more than a pawn in this strategy. Embrace China early on, then when it becomes convenient, throw it under the bus, but not yet.
In a video, The Electric Viking, delves into the issue of Chinese EVs piling up in European Ports.
It seems from the number of new auto transport ships under construction
or being planned in China this is only the start of a full-court
press. This is where it should be noted that, abusing free trade is not fair trade. China's form of capitalism is predatory. Many of the comments below the Electric Viking video indicate viewers agree something is wrong and offer several solutions to the problem. 
China Is Targeting Europe
As for Tesla's stock, while it has moved much higher, Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, said. “This has not been a short squeeze,” Dusaniwsky said as S3 has “actually seen short selling into this rally with over 2 million new shares shorted over the last week.” Tesla is the third largest U.S. short behind Nvidia and Microsoft, he said.
It seems that Wells Fargo analyst Colin Langan was also surprised by the
big share price move. Langan warned that there could be restrictions on
sharing data, which could limit Tesla's (TSLA) ability to leverage the
tech progress it has seen in the U.S. There is also the glaring point
that Chinese electric vehicle makers are undercutting Tesla when it
comes to pricing.
Yes, the cars China produces must go somewhere, but that does not mean into my country! Remember price is not everything and there is a hidden price embedded in these cars. That is the destruction of local jobs. Again, I'm forced to ask whether EVs are the answer to global climate issues that governments and EV proponents claim. The fact that I'm not a fan of these vehicles aside, one thing is certain and that is China is all in and plans to crush automakers across the world.
(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)
Thursday, May 2, 2024
Advancing Time: Looking At Financial "One-Offs" Driving The Economy
Advancing Time: Looking At Financial "One-Offs" Driving The Economy: Biden recently signed a massive aid package to give Ukraine and Israel a boatload of money. Much of this will be in the form of weapons ma...
Looking At Financial "One-Offs" Driving The Economy
Those of us accused of promoting doom porn and claiming history indicates markets revert to the norm have been wrong for a long time. In our defense, distortions in the markets can go on for a long time. Still, if history is any guide this time will not be different. Simply put, trees do not grow to the sky and at some point, the numbers do not work. Not all things move in a linear fashion or extend along a straight or nearly straight line, they can go parabolic, or collapse before our eyes.
Lately, many people have forgotten the lesson the economy tried to teach us in 2008. Massive intervention halted that collapse, but this is not about the Fed, it is about the economy. Looking back through history, many of the things that have impacted the economy are now viewed as "one-offs" or in some ways a one-time event with a huge impact. This is one reason many comparisons between what is and what was have now been rendered obsolete. Still, certain laws of economics should and do, over the long term remain intact.
Don't forget, that much of the financial machine runs on autopilot and not on a day-to-day basis. This means markets become complacent and tend to assume a trend will continue. After a decision is made as to how money will be invested over the next year or two investors have a way of turning their attention elsewhere. This is a key reason so much money is passively invested and discounts the long-term ramifications of reality.
Also, important is the velocity of money. This is the speed at which money moves through the economy. It is important to remember a very small percentage of rich households at the top hold much of the money cast out into the world. This is often parked in investments and does not get "spent." This might explain why the speed at which money moves through the economy has been slowing. Meanwhile, no moss grows on the money poor people get into their hands.
Liquidity and leverage also play a large role in economic growth. Leverage is often tied to loose and easy money policies. While people seem obsessed with small changes in interest rates, a far greater concern is liquidity. Without liquidity, markets can not function and true price discovery does not take place. There is a yin and yang aspect to the economy that short term can be forgotten putting investors at great risk. This centers around the opposite but interconnected self-perpetuating cycle that results from bad policies.
To get a handle on where the economy is headed investors are
generally forced to turn towards the news and the most recent data.
Sadly, incompetent bureaucrats, people with agendas, and governments
have a way of skewing data. Financial strength is different from the
illusion of growth often touted in the GDP that results from a slew of
methods to boost consumption. Below are examples of a few things
investors fail to see as the "one-offs" they are.
- Recently we have seen many new Employer Identification Numbers (EINs) being requested, this may be mistakenly seen as a sign of new business formations. In truth, many have existed for a long time and others not be viable. New regulations are driving this and it does not mean small businesses are thriving.
- In December of 2023, companies plowed over $18 billion into constructing manufacturing plants in the US ($220 billion annualized), up 64% from a year ago. This is up by 170% from December 2019. Even with government incentives, this cannot go on forever.
- A matter that has not garnered enough attention is how economic problems from China may spill over and directly impact Japan. Over the years China and Japan have become major trading partners. Japan's direct investments surged as technology used to develop China's global supply chain exploded. The current problems haunting China are likely to spill over and damage Japan's fragile recovery.
One of the most underrated drawbacks in our world full of people is that with a large population also come large problems. People have to be fed and taken care of. Cycles of population growth may generate ever more opportunities and new demand, but this is only part of a much larger economic equation. It can lead to quality not quantity being greatly underappreciated. Capital flows and factors such as brain drain due to taxation and legal protection are a big deal.
The goal of all investors should be to look out long term and not to lose a lot of capital until we get there. Capital preservation is job one while at the same time positioning ourselves to benefit during the final inning of an unending game. Considering the number of people that have made a fortune and then lost it, good luck with that.
(Republishing of this article welcomed with reference to Bruce Wilds/AdvancingTime Blog)
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Wednesday, April 24, 2024
Advancing Time: The Ugly Future Of Social Security, Huge Shortfall...
Advancing Time: The Ugly Future Of Social Security, Huge Shortfall...: The ugly future of America's Social Security system is rooted in the fact major shortfalls ahead must be addressed in some way or anothe...
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