Thursday, September 29, 2011

Crisis and Crisis

We are all informed about the financial crisis that we are in. The news outlets are full of this topic. We easily forget that this is not the only crisis we are in. We have to put this financial crisis into perspective. It will make us poorer, but we will not die due to it.

The planet is also in a hunger crisis. Right now 925 million people suffer hunger. See the hunger statistics here, most data is from the United Nations. More than 5 million people die each year of hunger. According to UNICEF, nearly one in four people, 1.3 billion live on less than $1 per day, while the world's 358 billionaires have assets exceeding the combined annual incomes of countries with 45 percent of the world's people.

We should be aware of this and not forget one crisis due to the other. And then there are peak oil, the environmental crisis, social crisis, ... Despite all of this we have plenty of reasons to be happy and appreciative of what we have.

Tuesday, September 20, 2011

US worse than Greece

That the US is more in debt than Greece is nothing new, but it rarely makes it into CNN. Also, because of its size and power the destiny of the US and Greece will not be the same. Greece will be torn into shreds while the US has several options not available to Greece due to its dominance of the Dollar currency, the military strength, and political/military control over the oil supply.

The article suggest a new tax plan for the US eliminating the personal and corporate income tax and basing everything on a 17.5% sales tax. The Purple Plans are 5 plans out of which one is the The Purple Tax Plan. The name purple is used as a middle ground for red (Republicans) and blue (Democrats).

Monday, September 19, 2011

Gold Mining nationalized in Venezuela

Hugo Chavez nationalized the mining of gold in Venezuela. Private mining becomes illegal. Why? Apparently many poor mine in the rainforest causing income/tax loss to the government while destroying the environment. Read here. At the same time he announced that Venezuela will bring home $11 billion in gold bullion currently held in vaults in various oversea banks such as JP Morgan. Now that is an interesting move. Is the gold market becoming illiquid? Will this cause a run on physical gold? It is easier to control at home in the National Bank of Venezuela than abroad. It could be a safeguard to avoid having it confiscated by other nations or being blackmailed through political sanctions. Either way it seems a smart move. Or it could be a requirement by China, Russia or Brazil to have the gold bullion at home as a security or guarantee for the loans of $30+ billions received from these 3 countries over the last couple of years. Here are some more thoughts on the Why.

Friday, September 16, 2011

Political Philosophy

I started reading the Tao Te Ching, the booklet attributed to Laozi. While reading through this scripture, the foundation of Taoism, I realized the link to today's libertarian political movement. The Tao Te Ching holds clues to how a country should be governed. Vincent Shen writes in the Encyclopedia of Chinese Philosophy on pp. 359 (Section Laotzi):

Laozi’s political philosophy concerns mostly the art of governing, which, for him, should refer to the dao, follow the dao, and unfold the de of all people and all things. An ideal state is, negatively, a state with no political domination and, positively, a place where people and things can spontaneously unfold their own virtue. The unfolding of the creative abilities or sponta- neous virtues of the people is therefore the greatest wealth of a state. In order to attain this, the ruler should adopt a politics of nonaction (wuwei). This does not mean ruling without any action; rather, it means ruling according to the dao—that is, no particular action or no action of particular interest but universal action, acting for all things; no artificial action but spontaneous action. The politics of nonaction is a politics of nonintervention.

Isn't there a clear correlation? As we know all things are connected. All ideas are recycled and built upon. Often without knowing it we base our thoughts on century old ideas.

Sunday, September 4, 2011

Gold vs. Oil

Both resources oil and gold are interesting from an investment perspective. Both are natural resources and interesting options in times of change. Oil took quite a nose dive over the last weeks and gold is up by 30% YTD. Why is that? The answer nobody can know for sure but there are certainly many factors ranging from economic growth, economic forecasts, resource discoveries, exploration costs, speculation, global stability, wars to political signals. Here is an interesting up-to-date chart comparing oil to gold. On the chart one can quickly see that the oil to gold ratio has doubled ion just one year (2008 to 2009) and is overall quite volatile.

Saturday, September 3, 2011

GMO losing Effect

Monsanto's genetically modified corn no longer protects against pests. The corn bug has become resistant against the GMO plant. This is one of the first proven cases that biotech GMOs lead to superbugs and superweeds.

Instead of rethinking the issue Monsanto and other companies only take it a step further. Monsanto and Syngenta are now researching how to use a medical breakthrough called RNA interference to, among other things, make crops deadly for insects to eat. If this works, a bug munching on such a plant could ingest genetic code that turns off one of its essential genes. I guess they are creating super GMO leading to a super-super bug in the following phase.

Read the Wall Street Journal article here or here.

Friday, September 2, 2011

Gold as Safe Haven?

While the article "'Safe Haven' Assets Start to Look Risky" does not have a lot of facts and hard data it gives some common sense perspectives on safe haven investments in current times. It does a light comparison of gold, Swiss Francs and government treasury notes.