Kudos for Eric Janszen

[blazespinnaker]

For those who know me, I'm not a butt patter. I speak my mind and I never have a problem being contrary to the local powers that be.

I am also not a gold bug. Even if fiat money falls, I don't necessarily see gold as the correct alternative. I am also not much of a bear, being generally optimistic about how things will turn out. However..

Credit has to be given where credit is due. Things are playing out very closely to how Eric laid it all out. He predicted economic crisis around complicated leveraged funds and he was right.

Of course, a lot of people called that, but Eric took it a step further and put himself squarely behind what's happening now. He predicted Ka, which with a 40% chance of 4.25 fed funds in December, looks like it's starting to happen precisely as he described.

The story isn't over yet, and I'm not sure Gold is the correct "poom" investment, but I can tell you that when Eric speaks, I'm certainly listening a lot more carefully these days.

Cheers,

Tim.

[rabot10]

Re: Kudos for Eric Janszen

For those who know me, I'm not a butt patter. I speak my mind and I never have a problem being contrary to the local powers that be.

I am also not a gold bug. Even if fiat money falls, I don't necessarily see gold as the correct alternative. I am also not much of a bear, being generally optimistic about how things will turn out. However..

Credit has to be given where credit is due. Things are playing out very closely to how Eric laid it all out. He predicted economic crisis around complicated leveraged funds and he was right.

Of course, a lot of people called that, but Eric took it a step further and put himself squarely behind what's happening now. He predicted Ka, which with a 40% chance of 4.25 fed funds in December, looks like it's starting to happen precisely as he described.

The story isn't over yet, and I'm not sure Gold is the correct "poom" investment, but I can tell you that when Eric speaks, I'm certainly listening a lot more carefully these days.

Cheers,

Tim.

I agree and I am a butt patter, brown nose etc. Eric is the most informed and precise poster on the internet bar none and I read them all. I am very smart (my kids tell me this all the time so it must be true) but hats off to EJ

Thank You for the iTulip web site
Your humble follower
Rick

[Guest]

Re: Kudos for Eric Janszen

Rick -

<< Your humble follower >>

Maybe that's laying it on a little too thick?

[Mega]

Re: Kudos for Eric Janszen

Am about to bet the farm on this Janszen, you better be right!

(Jokes apart Eric all you can do is offer you thoughts, its up to us if we decide to act on them).
Mike

[rabot10]

Re: Kudos for Eric Janszen

Rick -

<< Your humble follower >>

Maybe that's laying it on a little too thick?

Lukester I'm trying to get more iTulip credits OK, btw what I said is true

[EJ]

Re: Kudos for Eric Janszen

blazespinnaker,

Thank you for the kind words.

Over the years, we have learned more from our mistakes than from our correct calls. A few lessons we learned:

1. Don't fight global central banks. Economies and markets are now so heavily influenced by governments that one must now spend more time analyzing the jockey than the horse to judge the outcome of the race. Political probabilities are now more important that market probabilities.

2. This makes our task especially hard, because we don't try to judge short term events but rather major turning points, such as occurred in 1929, 1946, 1971, and 1980. The challenge is understanding the antecedents of political change in the wind, and distinguishing between those that are likely to get blown out like candles from those that will be whipped up into a forest fire when the winds of change are blown in by unintended economic events. A major recession during an election year during war and other disruptive events are the classic ingredients for a major geopolitical and economic re-ordering. That's why we spend as much time as we do exploring economic history in the iTulip Select area. If political events transpire that significantly reduce the degree of global central bank cooperation, then the position of the US in The System can change dramatically and quickly. For example, a military invasion that forces repudiation by US trade partners of US foreign policy will quickly express itself as a rapid decline in the dollar. Never underestimate the importance of geopolitics. (This also explains the mystery of why we have cultivated relationships with economic thought leaders in Australia. Australia is the economic and political canary in the coal mine, stuck between Asia and the US. Our sources have told us that the Australian government has already received ultimatums from both Chinese and US representatives: pick our side. The timing of these ultimatums, and Bush's recent visit, may indicate imminent change.)

3. In spite of our best efforts to foresee events that conform to patterns that hold true throughout history, The System which operates the FIRE Economy now rules, and as long as it does it is the jockey to watch. What if Bin Laden has in mind a major attack on the US 9/11 this year, as he has repeatedly promised? Short term, the impact in 2001 was economically negative. Long term, much to many observers' surprise, US consumers were easily egged on to defiantly go out and borrow and spend even more. Never underestimate the behavioral engineering capabilities of The System.

What we can know is that much of what has been accepted about the success of the US economy and markets since 1980 from the street level up to US leadership is based on false beliefs, enabled by trade partners for their own self-interested reasons, which may at any time be revealed as false by events that wipe them out in a crush of reality. The System can perform tricks of perception which become real. They are in the physical world equivalent to bending light, making objects appear where they are not. Take away the forcefield and the US learns that debt is not wealth; net savings stored in forms of money which maintain their purchasing power is wealth. A line of credit is not money. Money earned from trading continuously inflated assets is not a sustainable source of household or national income. Government subsidy of oil prices via military spending is uneconomical. Deficits matter. And so on.

Eventually these truths will express themselves. The System will go through radical and sudden change. When it does, as it did in 1980 when the FIRE Economy was born, USA, Inc. will go through a major re-structuring. It will be unpleasant. But the overriding truth of the USA is that its people and its system deals effectively with these events. Everything that is right about the USA will in the long run fix everything that is wrong with the USA.

[c1ue]

Re: Kudos for Eric Janszen

Eventually these truths will express themselves. The System will go through radical and sudden change. When it does, as it did in 1980 when the FIRE Economy was born, USA, Inc. will go through a major re-structuring. It will be unpleasant. But the overriding truth of the USA is that its people and its system deals effectively with these events. Everything that is right about the USA will in the long run fix everything that is wrong with the USA.

EJ,

I hope you are right, but I fear (and act on) that you may not be.

As I've mentioned before, it could be argued that the prosperity of the US is a historical accident arising from the destruction of the pre-eminent industrial nations in WW I and WW II, coupled with the relative restraint of the robber baron elites due to the Great Depression and egalitarianism resulting from shared war experiences, yielding a 20 year golden age from the end of WW II to the late 1960's.

Since then the behavior of the robber baron elites has been returning to more historically consistent levels.

It is no coincidence that the wealth distribution indices are returning to late 1800's, early 1900's levels.

I base this view on historical examples:

1) Spain rising to world power due to New World gold/silver. Extended period of economic prosperity leading to Spain's decadence and pushing the Dutch to revolt

2) Dutch gaining world power via trade and in turn becoming decadent and divided by religious separatism

3) In turn the Dutch are displaced by the English in trade. England finally becoming undisputed world power after the French Revolution and Napoleon's defeat. Pax Brittanica

4) First France (population grew only 33% from 1800 to 1900 due to land reform from French Revolution) then England devastated by a series of wars with Germany - the 3 leading up to and including German independence then WW I and WW II.

5) US picks up the economic pieces from a Europe devastated by war. US population largely unaffected, US economy rescued by war industry then later re-industrialization of Europe. Pax Americana but for Communism, instead Cold War

6) Free lunch experienced from end of WW II to mid 1960's ends as Europe completes re-industrialization. Economics (actually social welfare) returns as a serious political issue starting in 1964 (Kennedy's 'New Frontier') but really got going with Lyndon Johnson's 'Great Society'. Economically unsound policies continue into Nixon's administration culminating in Nixon ending Bretton Woods.

[bill]

Re: Kudos for Eric Janszen

Never underestimate the importance of geopolitics. (This also explains the mystery of why we have cultivated relationships with economic thought leaders in Australia. Australia is the economic and political canary in the coal mine, stuck between Asia and the US. Our sources have told us that the Australian government has already received ultimatums from both Chinese and US representatives: pick our side. The timing of these ultimatums, and Bush's recent visit, may indicate imminent change.)

US offers Guns: http://news.xinhuanet.com/english/20...nt_6666014.htm

SYDNEY, Australia, Sept. 5 (Xinhua) -- Australia and the United States on Wednesday signed a new defense and trade cooperation treaty here on the sidelines of the Asia-Pacific Economic Cooperation (APEC) meetings.

Australian Prime Minister John Howard and visiting U.S. President George W. Bush met before the signing of the treaty, which allows Australia to get more access to secret U.S. military technology.

Others offer cash:http://www.itulip.com/forums/showthr...5598#post15598

Japan cranks up the fund.http://business.timesonline.co.uk/to...cle2408089.ece
Should get interesting.

[bill]

Re: Kudos for Eric Janszen

Never underestimate the importance of geopolitics. (This also explains the mystery of why we have cultivated relationships with economic thought leaders in Australia. Australia is the economic and political canary in the coal mine, stuck between Asia and the US. Our sources have told us that the Australian government has already received ultimatums from both Chinese and US representatives: pick our side. The timing of these ultimatums, and Bush's recent visit, may indicate imminent change.)

a little recent news on the subject...

http://business.smh.com.au/chinese-f...0428-294f.html


Chinese feel not welcome in Australia

• John Garnaut

• April 29, 2008

REPEATED delays in foreign investment approvals by the Federal Government are causing "significant and damaging misconceptions" in Beijing, says a lawyer for Chinese state-owned companies.
Ian McCubbin, a Melbourne partner at Deacons, said some Chinese companies were dropping their investment applications believing they were unwelcome.
"I've had very senior people in Beijing tell me 'the Australian Government has banned investment by China in Australia'," said Mr McCubbin, who is managing a number of Foreign Investment Review Board applications.
"And I also understand that there are at least two investments by Chinese enterprises or bodies in Australia that have dropped their investment proposals on the basis that they believe those investments would not been approved."
A second Australian adviser said the delays, understood to involve 10 or more potential investors including Sinosteel's unannounced plans for Murchison Metals, were at the top political level in Canberra rather than in the FIRB office. "I was told the applications are all sitting in the office of Treasurer," said the adviser, who also represents a number of Chinese companies in Australia. Some investors, thought to include China's $200 billion sovereign wealth fund, have withdrawn their investment applications because they believe the approval delays reveal the true position of the Australian Government, contrary to public assurances by senior ministers and the Prime Minister, Kevin Rudd.
A spokesman for the Federal Treasurer, Wayne Swan, said the Government did not confirm the claim but "makes no apologies for taking the appropriate time to thoroughly consider and assess applications against the national interest guidelines made public in February".
Australia's investment reputation has been damaged as Chinese companies continue to accumulate funds for foreign resources investments.
Yesterday a Shanghai newspaper reported Baosteel's chairman as saying he had established a special purpose offshore investment vehicle. "Xu Lejiang revealed yesterday his company has set up a subsidiary studying the investment chance in iron ore and coal projects including overseas purchases," said The Oriental Morning Post.
Mr McCubbin has acted for companies such as Sinosteel, China Coal, the steel giant Angang and the company that manages China's sovereign wealth fund, China Investment Corporation.
He said Australia had not told Chinese investors to withdraw their applications. Rather, the FIRB has asked applicants to withdraw applications and immediately reapply to extend the 30-day application period.
Mr McCubbin said none had been resolved recently, and at least one had been rolled over for three successive months.
Most foreign investors seeking more than 15 per cent in a significant Australian company are required by law to receive the board's approval.
But state-owned enterprises - which include almost all big Chinese investors including Chinalco - are required to seek approval for any stake, no matter how small, under the policy guidelines.

[Melchior]

Re: Kudos for Eric Janszen

Responding to c1ue:

I would note one point: the US is still the supreme military power of the present-day world. As long as that remains true, there will still be some additional (potentially ruthless) solutions to the economic problems of the US, no matter how serious they may be.

[Chris]

Re: Kudos for Eric Janszen

Responding to c1ue:

I would note one point: the US is still the supreme military power of the present-day world. As long as that remains true, there will still be some additional (potentially ruthless) solutions to the economic problems of the US, no matter how serious they may be.

As long as it does...but how long can it with such massive economic problems? For example, see how the race proceeds even as USA Inc stops for a breather...

http://www.telegraph.co.uk/news/majo...rine-base.html

China has secretly built a major underground nuclear submarine base that could threaten Asian countries and challenge American power in the region, it can be disclosed.



Satellite imagery, passed to The Daily Telegraph, shows that a substantial harbour has been built which could house a score of nuclear ballistic missile submarines and a host of aircraft carriers. Continues...

[c1ue]

Re: Kudos for Eric Janszen

I would note one point: the US is still the supreme military power of the present-day world. As long as that remains true, there will still be some additional (potentially ruthless) solutions to the economic problems of the US, no matter how serious they may be.

True, but as has been demonstrated in Iraq - the ability to destroy a country's infrastructure does not simultaneously enable the destroyer to reap the economic benefits.

There is absolutely some level of subsidy which the US military position can extort from the world, but I think we're well past the point where the costs outweigh the benefits for every other nation.

[phirang]

Re: Kudos for Eric Janszen

As long as it does...but how long can it with such massive economic problems? For example, see how the race proceeds even as USA Inc stops for a breather...

http://www.telegraph.co.uk/news/majo...rine-base.html

those short base metals... see above.

plz recall that PLA runs china...

[Slimprofits]

Re: Kudos for Eric Janszen

Never underestimate the importance of geopolitics. (This also explains the mystery of why we have cultivated relationships with economic thought leaders in Australia. Australia is the economic and political canary in the coal mine, stuck between Asia and the US. Our sources have told us that the Australian government has already received ultimatums from both Chinese and US representatives: pick our side. The timing of these ultimatums, and Bush's recent visit, may indicate imminent change.)

http://www.reuters.com/article/2014/...A2O20A20140326

China realizing its ambitions to internationalize the yuan is likely to be a "seismic event" for global markets, leading to large capital flows and perhaps a new reserve currency, a top Australian central banker said on Wednesday.

Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe said the process had some way to go yet but that Beijing had signaled its seriousness by last week widening the trading band for the yuan, also known as the renminbi (RMB).

"In Australia's case, our very close trading ties with China, our funds management expertise, our natural endowments in sectors of strategic importance to China and our ongoing need for overseas capital to help fund investment all suggest considerable scope for building much closer and mutually beneficial financial ties between the two countries," Walsh said.