Market Perspective

These Are Interesting Times – A Hegemon Struggle Not A Tradewar – Week 6

Posted by on Aug 15, 2018 in Ned Massie, Perspective | 0 comments

The Impact of the Current Hegemonic Conflict: The main event is not the “trade war” with the Euro zone because the Euro will not endure so it cannot be the Hegemon. NAFTA is also not the main event because neither Mexico nor Canada have the capacity to be the Hegemon. China not only aspires to be the Hegemon, on paper it has the capacity. For that reason, the conflict with China about “Free and Fair Trade” has enormous impact on the economic future of the world in general, but the USA in particular. As so well explained in Kori Schake’s book “Safe Passage”, when a country becomes the Hegemon it uses its position and power to replicate its values globally. As the Hegemon, the USA replicated its core values of democracy, self-determination, and free trade to eliminate European empires. Imagine China replicating its values of dictatorship, government control of the economy and of every aspect of life, and “Anything goes if it benefits China” trade. Contemplate the collapsing socialistic governments of Venezuela, Brazil, Nicaragua and Rhodesia with their imploding economies and starving citizens being replicated globally. It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is...

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These Are Interesting Times – A Hegemon Struggle Not a Tradewar – Week 5

Posted by on Aug 9, 2018 in Ned Massie, Perspective | 0 comments

Hegemonic Drama – USA versus NAFTA: No trade agreement is ever perfect, and I am sure the new ones will not be perfect either. However, when NAFTA was being debated, a very successful business man by the name of Ross Perot campaigned vigorously against NAFTA by referring to it as “the loud sucking sound to the South”. His concern was the fact that NAFTA would export American jobs to Mexico. He was correct. America has paid a steep and painful price. Mexico is a country without laws. It is governed by a collection of thugs that compete with each other for control of that geographic area and its drugs, petroleum, etc. NAFTA has sucked American jobs south. While some wages have increased in Mexico, the amount of illegal immigration in to the USA speaks legions about the quality of life there. The nicest thing one can say about the leadership of Canada is that he is “innocent” about the real world. The USA had eight years of that quality of leadership and survived. As the re-negotiation of NAFTA occurs, shifting back towards “free and fair trade”, one of the results will be increasing wages in Mexico. One of the benefits of wages in Mexico increasing will be the reduction of illegal immigration into the USA. Canada will experience economic challenges but hopefully its democracy will provide the feedback necessary to change course before too much damage is suffered by inept leadership. It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is...

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These Are Interesting Times – A Hegemon Struggle Not a Tradewar-Week 4

Posted by on Jul 27, 2018 in Ned Massie, Perspective | 0 comments

Hegemonic Drama – USA versus Europe: The common European currency, called the Euro, was a really bad idea built on a disastrous foundation of mass self-delusion. The associated governance structure provided no feedback mechanisms and so it built an overwhelming, stifling bureaucracy that promulgated unfettered regulations. The only country that has really benefited economically from the Euro is Germany. Make no mistake, Germany has benefited greatly. But as Germany has sucked in the financial success of the Euro, the other Euro countries on the opposite side of those trades are in pain. Most obvious is the pain reflected in other countries such as Greece (which deserved pain for being stupid) and now being reflected in Italian politics. The recent elections in Italy indicate that the younger generation of Italians are completely fed up with the status quo. Change is imminent. The Euro will unravel. The question is not will the Euro collapse, the question is when will the Euro collapse. Brexit will make the British look brilliant. It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land....

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These Are Interesting Times – A Hegemon Struggle Not a Tradewar – Week 3

Posted by on Jul 25, 2018 in Ned Massie, Perspective | 0 comments

China: If I could obtain any one fact about China, I would ask to see an accurate Balance Sheet of that country. The key question in evaluating China is whether that country is actually bankrupt. My educated guess, albeit without complete information, is that the answer is… YES. China’s so-called economic miracle has been force fed by amazing debt. Their debt to GDP ratio is now one of the highest in the world. 250% headed to 300%. Over the last 30 years, China has bailed out its banks five times, and appears to be in the process of doing something similar now. An example of the cracking financial footing of China’s “miracle” is Anbang Insurance which had been on a global spending spree supported by the Chinese government and is now under the ownership of the government with its CEO probably sitting somewhere in a prison cell. Anbang is simply one example of this trend. Blinded by their ambition to dominate the world (be the Hegemon) China has not played by international rules, but rather its own rules… “Whatever benefits China is good.” Under its current “One Road, One Belt” program, Dictator for Life Xi of China is attempting to use its currency, which may actually be worthless, to expand their economic dominance globally. While China has a long-term perspective, versus the USA’s short-term quarterly report perspective, China faces some real demographic and financial hurdles to becoming the Hegemon. Every previous country that followed the path China is following, has experienced economic collapse. Being the second-largest economy in the world, China’s collapse would send significant ripples through the global economy. In my mind the most important question is whether the current Hegemonic Drama between the USA and China will be the straw that breaks the camel’s back causing the collapse of China’s economic house of cards. I do not think the question is “will” China collapse economically, I do think it is a question of “when”. It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is...

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These Are Interesting Times – A Hegemon Struggle Not a Tradewar-Week 2

Posted by on Jul 18, 2018 in Ned Massie, Perspective | 0 comments

Hegemonic Drama: When Trump was announcing his cabinet appointments, one of the most remarkable was Wilber Ross becoming the Secretary of Commerce. I remember wondering why Mr. Ross, one of the most intelligent and wealthy global investors of our time, would agree to serve in that back water capacity. Can you name any of the last ten USA Secretaries of Commerce? However, Mr. Ross being appointed as Secretary of Commerce will be judged by historians as a brilliant decision. In that position, Mr. Ross is the equivalent of the Field General in the economic war of the Hegemonic struggle currently underway. The media is demonstrating their consistent ineptness by labeling this amazing drama as a simple trade war. It is accurate that the debate is about “free trade” versus “free and fair trade”. But blinded by their hatred of Trump, the media is apparently unable to understand the true significance. Here is what is actually happening. The USA, which has been the Hegemon for almost 100 years, is attempting to confirm its hegemonic position by demanding that “free trade” also be “fair trade”. Having been the Hegemon since WWI, the USA has always been in favor of free trade, as am I. But “free trade” requires all countries to play by the same rules. China has not done so. It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long-term the best investment is...

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These are Interesting Times – A Hegemon Struggle Not a Tradewar

Posted by on Jul 11, 2018 in Ned Massie, Perspective | 0 comments

Introduction: While on vacation I read seven books. My favorite was the book entitled “Safe Passage” by Kori Schake. Ms. Schake researched the history of Hegemons, the one country so dominate at any point in history that it exercises control over the actions of all the other countries in the world at that point in time. In history there have been a number of Hegemons. Think of the Babylonian Empire, Alexander the Great, The Roman Empire, etc. From her research the transfer of power from one Hegemon country to another occurred via military conquest, except for one instance. In her book Ms. Schake discusses the single peaceful Hegemonic transfer of power… from Great Britain to the United States of America (USA) over the period of 1823 to 1923. Those dates are derived from two treaties that she feels bookend the transfer that was actually finalized as a result of the ripple effects of World War I. For over 150 years Great Britain ruled the world because of its empire and its dominate military. Significantly, the shift to the United States of America being the Hegemon ended the age of European Empires as the USA exercised its Hegemonic position to replicate around the world our values of democracy, self-determination, and free trade. Armed with the information in “Safe Passage”, one realizes the significance of the disagreement over trade that is currently occurring globally between the USA and China, Europe, and NAFTA. This is not a simple “trade war”, this is a Hegemonic Conflict. The outcome is critical to our economic future. We will explore what that means over the next few weeks. It is critical to remember that land is the source of all wealth. Every product that we humans consume originates with land. Not all tracts of land are equal in quality and portfolio management requires every investor to hold some cash for liquidity. But historically, long term the best investment is land....

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