The Way The System Works – Jim Rogers On The Markets 12-05-13

Salient to Investors:

Jim Rogers writes:

For a few thousand years, when people got into trouble and failed, competent people reorganized the assets and started over. Today, America and the West are kicking the can down the road and letting the incompetent people take over the assets from the competent people and letting them compete with the competent people. In the early 1990s, Japan tried this and lost 2 decades, whereas Scandinavia let people go bankrupt, suffered a horrible 2 or 3 years but then grew dramatically over the past 15 to 20 years.

Read the full article at http://jimrogersonthemarkets.blogspot.com/2013/12/the-way-system-works.html

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Fareed Zakaria GPS – CNN 09-08-13

Salient to Investors:

Fareed Zakaria said:

  • The US has put its credibility on the line and will find it extremely difficult to keep its actions limited in a volatile situation.
  • Ousting Assad would almost certainly lead to chaos and the ethnic cleansing of the Alawite sect and perhaps of other minorities, as happened in Iraq.

Nicholas Burns at Harvard said the US has every reason and right to act to preserve its credibility in the world while the Security Council is frozen because of the cynical policies of Russia and China.

General Wesley Clark said we need to bring the nations of the world together to say you cannot use chemical weapons. It will be a Goldilocks kind of strike: Syria won’t be able to say it didn’t hurt but or say it destroyed the country.

Paul Wolfowitz at AEI said it is not possible to end this civil war peacefully with Assad in power and to have some influence over the final outcome, we need allies on the ground in Syria, and that means the Free Syrian Army.

Fareed Zakaria said Sweden is very different from the Socialist Sweden of the past, with:

  • No inheritance tax.
  • Very free markets: freer and less regulated than the US in many sectors.
  • High income taxes that fund things like health care and pensions that are far more efficiently run than their counterparts in America. Sweden tends to be near the top of most rankings on quality of life and competitiveness.
  • Government spending in 2012 down by a fifth from the 65 percent of GDP in 1995; to sixth place, behind even France.
  • A budget deficit of  0.5 percent of GDP versus 5.7 percent in the US.
  • Policies that allowed Saab to go bankrupt in 2011, and Volvo to be acquired by the Chinese.
  • Lower corporate tax rates than in the US.

Zakaria said Scandinavian countries are slowly moving away from big government to smart government. The leader expected to win next week’s Norway’s elections is a conservative, running on a campaign to cut taxes.

Watch the video at http://globalpublicsquare.blogs.cnn.com/category/gps-episodes/ or read the full transcript at http://transcripts.cnn.com/TRANSCRIPTS/1309/01/fzgps.01.html

Joseph Stiglitz attacks US ‘inequality’ – BBC News 01-24-13

Salient to Investors:

Joseph Stiglitz  said:

The richest 1% of Americans have doubled their wealth  since 1980 and now hold 25% of the country’s wealth, yet the median income level in the US had not changed since the early 1990s.

The American dream has gone: the US has one of the worst opportunity rates in advanced economies, and a child’s life chances are more dependent on the income of the parents than most other industrial economies.

A major bipartisan effort over the past 20 years had markedly improved equality in Brazil, while Scandinavian countries were leading the way with the highest levels of equality.

Read the full article at http://www.bbc.co.uk/news/business-21183987

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The Global Economy In 2013: 5 Key Economic Trends? – Seeking Alpha 01-23-13

Salient to Investors:

Shane Brett at AllAboutAlpha writes:

  • The long-term outlook for the US economy is broadly positive with housing stabilized, consumer confidence slowly returning, political instability solved by Obama’s decisive win, and as health spending increases under Obamacare.
  • Cheap domestic energy will continue and the US will seriously expand exploration of shale oil using fracking technology. 2013 will see a relocation of energy intensive industries back to the US, causing trade disputes.
  • The big unknown for the US is the effect of massive Quantitative Easing, and currency volatility is virtually guaranteed.
  • The US has the benefits of being food and potentially energy independent, having a young growing population, and of being the center for economic creativity and new business start-ups.
  • China will ramp up infrastructural spending in 2013 providing a boost to the world economy, boosting copper prices and commodity dependent economies like Canada and South Africa.
  • Chinese companies are starting to bid more aggressively for both US companies and domestic American contracts, which will cause friction over the next few years.
  • The German election in September will completely dominate 2013  in Europe, with little substantive progress being made in ending the Euro Zone Crisis until then.  Merkel has disguised both the true size of the Euro crisis and the price to hold the Euro Zone together from the German electorate.
  • The main economies of Europe will teeter between zero growth and recession in 2013.
  • Global money creation will increase currency volatility, with the US Dollar and Euro weakening significantly in 2013. The Australian Dollar is the most overvalued currency now that country’s commodity export boom is subsiding, domestic economy slowing, and interest rates falling. The Euro will remain volatile.
  • The amount of money creation is unprecedented and its outcome largely unknown – massive currency debasement has always preceded high inflation and economic decline. Inflation will rise in the years ahead – always the intention of the US to devalue in real terms its gigantic national debt.
  • Commodity prices will stop declining in 2013 and the super cycle will resume – excluding oil, commodity prices declined progressively throughout the whole of the twentieth century, but reversed the whole decline during the past decade.
  • The world faces a zinc and phosphorous shortage.  The world population will increase by 140 million people in 2013. Many important countries depend on importing food.
  • The melting of the North Pole ice caps will add new regular shipping routes across the Arctic in 2013, a major economic advantage to Russia, Canada, the US and Scandinavia.

Read the full article at http://seekingalpha.com/article/1126361-the-global-economy-in-2013-5-key-economic-trends?source=email_macro_view&ifp=0

 

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