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STRATEGIC MACRO INVESTMENT INSIGHTS

MACRO ANALYTICS

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SEE VIDEO: MACRO WATCH: FLOWS & the Liquidity Gauge

Richard Duncan

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Saturday
April 26th
2014

TREACHEROUS MARKETS AHEAD

 

Richard Duncan

 

 

SPECIAL GUEST: RICHARD DUNCAN , Economist, Author & Publisher of RichardDuncanEconomics.com.com

OPEN ACCESS

ABOUT RICHARD DUNCAN

Richard Duncan is the publisher of Macro Watch, a video-newsletter that analyzes trends in credit growth, liquidity and government policy in order to anticipate their impact on asset prices and economic growth.

He is also the author of three books on the global economic crisis.  The Dollar Crisis: Causes, Consequences, Cures (2003); The Corruption of Capitalism (2009); and, The New Depression: The Breakdown Of The Paper Money Economy (2012).

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok.  He also worked as a consultant for the IMF in Thailand during the Asia Crisis.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio.

TREACHEROUS MARKETS AHEAD

The Fed Taper is Presently Too Tight

SPECIAL GUEST:

Richard Duncan

33 Minutes, 34 Slides

According to global economist Richard Duncan, there are treacherous markets ahead in 2nd half 2014 and investors need to be on heightened alert.

TREACHEROUS MARKETS AHEAD

The reasons for caution is that the liquidity drain in 2nd half 2014, due to the Federal Reserve's Policy implementation of Taper, will potentially take the floor out from under US equity markets. Because of this Richard Duncan strongly believes the Fed is highly likely to reverse policy when equity markets inevitably begin weakening.

WHAT NOW MOVES CURRENCY MARKETS

Quantitative Easing within the global fiat currency regime has ushered in a new methodology for determining currency changes that is not fully appreciated.

CHINA'S ECONOMIC CRISIS

Richard is extremely concerned about China and feels its growth model of export-led and investment-driven is now in crisis. He illustrates why the current distortions in gross fixed capital formation and investment are unsustainable and the precarious position it leaves modern China in.

There is a lot to consider in this 33 minute video supported by over 34 originally researched slides.

 

 

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Saturday
April 19th
2014

PART II

What the Technicals Are Telling Us

 

Bert Dohmen

 

 

SPECIAL GUEST : BERT DOHMEN , Publisher of The Wellington Letter and President Of Dohmen Capital

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DOHMEN: What the Technicals Tell Us!

Part II

with Bert Dohmen & Gordon T Long

13 Minutes, 22 Slides

Bert called the recent market weakness and sell off on CNBC Asia on March 23rd. He said it was going to be a race between Wall Street getting the backlog of IPO's out and the market caving in. He was very specific in identifying the extreme warning signals in the NASDAQ and Small Cap stocks and the identification of a key reversal on March 21st in the S&P. A key reversal day which he feels is always seen at major tops.

Though Bert feels a near term bounce is likely the week of April 14th he doen't believe it will be sustained. The smart money has been and will continue to take full advantage of any market strength to exit.

Bert had taken full advantage of the prior parabolic run-up with a strategy of buying those stocks with no earnings as he believed those stocks would rise the "fastest and mostest". That period he feels is now over for the year. He exited all long positions on March 24th which is an unusual position for Dohmen Capital to take but they feel so strongly about the degree of risk now at hand.

THREE PEAKS AND A DOMED HOUSE

Last November at a webinar Bert warned of what he referred to as Three Peaks and a Domed House (below). He felt it was eerily similar to 1929.

Join Bert Dohmen and Gordon T Long as they assess the risk presently inherent in the US equity markets.

Bert Dohmen cautions that global government's are not yet finished their attempts to keep assets prices up and therefore investors must be 'on the alert'.

 

 

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Saturday
April 19th
2014

PART I

Baltic Freight, Shipping Credit and China

 

Bert Dohmen

 

 

SPECIAL GUEST : BERT DOHMEN , Publisher of The Wellington Letter and President Of Dohmen Capital

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BALTIC FREIGHT, SHIPPING CREDIT

& CHINA

Part 1

with Bert Dohmen & Gordon T Long

23 Minutes, 37 Slides

Bert Dohmen who recently authored "The Coming China Crisis" is now warning about Chinese shipping credit and what he sees in oversea freight rates. He believes there was a major dividing line that was crossed in June 2013 when overnight bank lending rates abruptly tripled. Though government actions quieted things down on the surface (at least temporarily), below the surface an avalanche of credit issues has ensued.

CHINA

Bert predicted much of what is currently occurring in his book and describes it as China hitting the "Great Wall of Communism". As an export led economy being capital investment driven it is now time for innovative entrepreneurs to take over, but they can't. 41% of Chinese GDP is primarily foreign capital investment which has slowed and new investment from investment savings is not occurring. "It has gone as far as it can go!" according to Bert Dohmen.

The basic reason is mal-investment due to corruption and the unregulated and massive shadow banking system which has taken hold of the Chinese economy. With $21T of loans outstanding the unregulated shadow banking system has funded half of these loans and is now facing escalating levels of default.

Most troubling is the level of corruption and the control that the government owned "SOB" exercise. Only recently has the scale of the corruption began to made visible outside of China.

BALTIC FREIGHT RATE & SHIPPING CREDIT

Chinese government economic numbers are manipulated and therefore shipping levels and their rates are the actual measure of the real global trade which investors need to study.

The Chinese private sector is in recession and has been for some time which can be seen in the 40% decline in one month in the Baltic Freight rates. This was made clear last month when 300 tons of Soybeans could not get a shipping letter of credit. Additionally, financial leverage being employed regarding the use of imported commodities as loan collateral became public.

The shipping credit 'canary' is very reminiscent of exactly what preceded the 2007 global financial collapse.

US ECONOMIC "DEMAND ENGINE" IS STALLED

China's export lead and investment driven economy has been powered by the US consumer. However US and European retail sales and real disposable income is sending an unambiguous message that slowing growth and even contraction lay ahead. US Money velocity has been steadily falling as US businesses continue to resist investment. This does not bode well for for an already tenuous problem in China.

Bert sees turbulent times directly ahead as the realities of slowing global trade come home to roost in China.

 

 

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Saturday
April 15th
2014

THE GOLDEN ERA OF LOW HANGING FRUIT

 

Charles Hugh Smith

 

 

Regular Co-Host: CHARLES HUGH SMITH , Author & Publisher of OfTwoMinds.com

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THE GOLDEN ERA of

LOW HANGING FRUIT

with Charles Hugh Smith & Gordon T Long

26 Minutes, 36 Slides

The US and China may have both passed their Golden Era's where the low hanging fruit of prosperity has been picked. Though very different situations with different challenges, both global industrial powerhouses exhibit some surprising similarities. Also, both face challenges and hurdles that may not be surmountable without great social readjustment.

USA - A Former Export Led and Now Consumption Driven Economy

The 1950s/60s in the US should not be considered as "normal"-- but rather as a one-off, extraordinary anomaly. The era was extremely unique. Unfortunately, many unsustainable assumptions became inculcated into the fabric of American culture based on false expectations. This has subsequently led to massive distortions as a result of futile fiscal and monetary attempts to sustain a society consuming more than it produces.

The distortions are now in plain view as the Wall Street financial engine and its financialization has completely disconnected 'Wall Street' from the realities of 'Main-Street America'.

CHINA - An Export Led but Investment Driven Economy

China's problems may be different but their unprecedented growth of credit is not.

When China's economic (in purchasing power parity (PPP) or nominal dollars) GDP was $500 billion, an expansion of $50 billion equated to 10% a year. Now that China's PPP gross domestic product is around $13 trillion, a 10% growth rate would require an expansion of $1.3 trillion--roughly the entire GDP of Spain or Canada.

Obviously, fast growth is easy when low-hanging fruit was abundant, but becomes progressively more difficult to maintain as the economy expands. This is especially true when you realize that China's GDP has been investment driven. The investment growth now required is no longer mathematically possible as is the rate of moving to a more consumption led growth. The Chinese people are savers, not the consumers that Americans are.

Chinese savers and investors have historically, instead of consuming, invested heavily in housing. Unfortunately, Chinese housing is showing major signs of cracking. Both Charles and Gordon see the Shadow Banking system as the commonality which is being used to sustain the imbalances and distortions - at least temporarily.

It is clear the Chinese and American economies are facing new era's where the low hanging fruit is gone and the 'heavy political lifting' lies ahead.

 

 

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Saturday
April 5th
2014

MARKET DISTORTIONS:

Buybacks & Dividends

 

Lance Roberts

 

Special Guest: LANCE ROBERTS Lance’s investment strategies and knowledge have been featured on Fox 26, CNBC, Fox Business News and Fox News. He has been quoted by a litany of publications from the Wall Street Journal, Reuters, The Washington Post all the way to TheStreet.com as well as on several of the nation's biggest financial blogs such as the Pragmatic Capitalist, Zero Hedge and Seeking Alpha.

OPEN ACCESS

MARKET DISTORTIONS : Buybacks & Dividends

with Lance Roberts & Gordon T Long

23 Minutes, 31 Slides

Corporate stock buybacks and dividends are great strategies to drive up stock prices and rewards shareholders, but there is a dangerous downside when this is primarily the result of temporary cheap money and 'manufactured earnings' from creative accounting magic.

Lance Roberts and Gordon T Long with the aid of 31 charts highlight why this is happening, how reported earnings are disconnected from the underlying economy and the risk to investors that has emerged as a consequence. Lance categorizes this period as the biggest 'reverse Robin Hood effect' in history with wealth over the last 5 years being transferred from the middle class to the upper wealthy class.

Stagnate sales growth in the top line is a direct result of low levels of corporate capital. The capital investments being made are primarily targeted at cost reductions in labor. With labor at historic lows, as a percentage of record profits, corporations may be ill prepared to maintain current levels of earnings, dividends and buybacks.

In this wide ranging conversation on the future of buybacks and dividends, the subjects explored include:

  • Productivity and exploding automation advances in the service sector,
  • A slowing rate of global aggregate demand growth,
  • Shrinking real disposable income levels,
  • Current corporate cash flow levels but falling EBITDA flows,
  • Off balance sheet borrowing for buybacks and dividends,
  • Asset to Debt levels showing the degree of growth in leverage to manufacture earnings.

Consumption doesn’t create a strong economy. Wealth doesn’t come from consumerism.

Wealth is created as a result of capital spending which has plummeted!

Both Lance and Gord believe strongly that more deflation is still ahead before broad based inflation takes hold. Money velocity continues to fall with wage inflation frozen and commodity price inflation showing only in pockets.

The global economic slowdown we are presently seeing will put pressure on corporate earnings and their ability to maintain current buyback and dividend levels.

Lance warns of risk and how important and little appreciated "Loss of Capital" and "Loss of Time" is to most individual investors.

 

NOTE: 24 hours after this show was taped, Trim Tabs announced that new stock buybacks in Q1 2014 fell to $134.4B from $214.4B in Q4 and were the lowest in 5 quarters.

"Corporate actions have turned less supportive of stock prices. The decline in the volume of buybacks is a cautionary sign, as buyback volume and the S&P 500 have a high positive correlation."

TrimTabs Chief Executive David Santschi

 

 

 

 

 

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Saturday
March 29th
2014

What Country Will Blow Up Next?

 

Gordon T Long

 

SPECIAL GUEST: Financial Survival Network Radio

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What Country Will Blow Up Next?

with Kerry Lutz & Gordon T Long

AUDO ONLY: 24 Minutes

From the Financial Survival Network:

Gordon T. Long appeared on the show today. We took a trip around the world surveying the vast landscape of malinvestment and insane government policies. So many countries are on the edge that it’s impossible to know which one will implode.

  • In Japan their money printing and demographics are a sure recipe for disaster.
  • The US’s student loan bubble and auto loan craziness can’t end well.
  • The EU is sinking money into US treasuries.
  • Russia is determined to sink the dollar.
  • China is seeing defaults and is now starting to see its first bank runs.

So flip a coin, your guess is as good as ours.

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Saturday
March 22nd
2014

UKRAINE:

Financial Warfare

 

John Rubino

 

SPECIAL GUEST HOST: JOHN RUBINO, Author & Publisher of DollarCollapse.com

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UKRAINE: Financial Warfare

with John Rubino & Gordon T Long

23Minutes, 50 Slides

Starting with a discussion of the history of the Crimea and with the aid of 50 slides, John Rubino and Gordon T Long show how intractable the problem in the Ukraine really is. As a result the current political actions are highly likely to lead to serious unintended consequences.

ESCALATING & DESTABILIZING SANCTIONS

The globally interconnected financial world is not prepared for a new version of the cold war. An escalating cycle of economic and financial sanctions has unknowable consequences to all parties. Shocks to any part of the global financial system will quickly cascade and lead to unexpected and potentially uncontrollable contagion.

INTENDED / UNINTENDED CYBER WARFARE RISKS

The worrisome wild card in the Ukraine situation is the use of cyber attacks which has already been witnessed. Whether employed by the sovereign powers involved in the conflict, or by disruptive political activist groups, the damage can be dramatic and destabilizing. The "Snake" virus already coursing through the electronic network veins of the Ukraine has left "Denial of Service" as the new replacement acronym for "Shock and Awe!"

DEBT SIZE versus COMPLEXITY & FINANCIAL FRAGILITY

Global debt is now so large that the risks associated with financial fragility leaves the entire global financial system exposed to elements of unknowable complexity.

The Ukraine situation is much more serious than the media is portraying. This is not another Georgia. The Ukraine is an Economic, Energy and Military choke point that financially none of the players can concede nor walk away from.

Russia's very existence may be at stake in this first financial battle of the 21st century.

 

 

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Saturday
March 8th
2014

UKRAINE: Energy, Economic & Military Choke Point

 

Charles Hugh Smith

 

 

Regular Co-Host: CHARLES HUGH SMITH , Author & Publisher of OfTwoMinds.com

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UKRAINE: Energy, Economic &

Military Choke Point

with Charles Hugh Smith & Gordon T Long

22 Minutes, 25 Slides

Gordon T Long and co-host Charles Hugh Smith discuss the current situation in the Ukraine from the perspective of what westerners must understand about the escalating crisis. As usual it is about Power and Money and has little to do with the needs of the Ukraine people. The public must not confuse the needs of sovereign powers with the strategies of the 'elites', or as Charles Hugh Smith refers to as the "Deep State".

AN ETHNIC DIVIDE

The Ukraine area is actually two countries ethnically, with historically the Crimea always been part of Russia. This ended abruptly when in the 50's a reportedly drunken President Nikita Khrushchev (the only Ukrainian Russian President) annexed the Crimea to the Ukraine. As a result of this decree, which was chronicled to have taken less than 15 minutes of consultation, a large Russian population and the Russian Navy's only southern warm water port was annexed to the Russian Ukraine.

When we refer to the Crimea we need to fully apreciate we are talking about a central core of Russia and not a peripheral territory. It is no surprise that the infamous summit at the end of WWII between Roosevelt, Churchill and Stalin was held in Yalta, within the Russian Crimea. From this strategic region the three global leaders planned the future of the post WWII world.

It should therefore be no surprise that any Russian President is not going to allow the Crimea to be controlled through a NATO agreement with the Ukraine.

THE PETRODOLLAR & LNG

Critically and little appreciated is that the US Petrodollar strategy is at stake in this fight. LNG is not oil which the Petrodollar is based on. LNG distribution and pricing in US dollars therefore must be achieved at all cost. This is a central reason for the regime change in Syria. LNG sold only in US dollars from Saudi Arabia / Qatar (and soon also through Africa) will halt Rubble:Euro exchange and instead require the use of the US$.

There is a lot going on below the surface in the Ukraine. It is a choke point from an Energy, Economic and Military perspective.

This is all laid out clearly in a fast paced 22 minutes with 25 detailed slides.

 

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Saturday
March 1st
2014

MACRO WATCH: Flows & the Liquidity Gauge

 

Richard Duncan

 

 

SPECIAL GUEST: RICHARD DUNCAN , Economist, Author & Publisher of RichardDuncanEconomics.com.com

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ABOUT RICHARD DUNCAN

Richard Duncan is the publisher of Macro Watch, a video-newsletter that analyzes trends in credit growth, liquidity and government policy in order to anticipate their impact on asset prices and economic growth.

He is also the author of three books on the global economic crisis.  The Dollar Crisis: Causes, Consequences, Cures (2003); The Corruption of Capitalism (2009); and, The New Depression: The Breakdown Of The Paper Money Economy (2012).

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok.  He also worked as a consultant for the IMF in Thailand during the Asia Crisis.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio.

HALTING A US RECESSION

The Fed Taper is Presently Too Tight

SPECIAL GUEST:

Richard Duncan

22 Minutes, 25 Slides

According to global economist Richard Duncan, since 1952 every time Total US Real Credit Growth fell below 2%, the US has experienced a recession. This correlation has been marked on 9 separate occasions. We are now below 2% and as a consequence the Federal Reserve will soon have little choice but to make a course correction in the current "Taper" monetary policy.

$2.3 TRILLION IN TOTAL US Y-o-Y CREDIT GROWTH REQUIRED

Approximately $2.3 Trillion in total Y-o-Y credit growth is required. According to Richard Duncan's very detailed tracking at Macro Watch, the Fed will be between $500 and $1T short.

PROBLEM COMPOUNDING QUICKLY

There are a number of developments that have placed the Federal Reserve and its new Chair Janet Yellen in this awkward policy quandary.

Sub 3% global growth levels have traditionally been a reliable indicator of recessionary economic troubles in the US.  As 25% of the world economy, a US recession has historically been the catalyst for sub 3% world growth. Today with Emerging Markets being more than 50% of the global economy, the reverse may be a new contributing development.

SUB 3% WORLD GDP GROWTH

Another consequential development is falling foreign direct investment. FDI is now at unprecedented Bear Stearns and Lehman lows and getting worse fast!

DRAMATICALLY SLOWING US FOREIGN FLOWS

CONCLUSION

The chart below, taken from a survey of 222 fund managers responsible for a collective $591 billion in assets under management conducted by BofA Merrill Lynch between Feb. 7 and Feb. 13, 2014, shows where investors think we are in the global economic cycle right now. We have overlapped it with our work and sense we are highly likely in the midst of a major inflection point.

 

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Saturday
February 22nd
2014

WHAT BLOWS UP FIRST?

Part II

China? A Wealth Confiscation Shock Wave?

 

John Rubino

 

SPECIAL GUEST HOST: JOHN RUBINO, Author & Publisher of DollarCollapse.com

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WHAT WILL BLOW UP FIRST?

Part II

China? A Wealth Confiscation Shock Wave?

with John Rubino & Gordon T Long

17 Minutes, 20 Slides

In Part II of this two part series John & Gord continue on their around the globe review in assessing what is most likely to blow up first. The problems in China dominates the discussion as does what can only be described as a Wealth Confiscation Shock Wave.

CHINA?

The Shadow Banking which was central to the 2008 Financial Crisis is now orders of magnitude larger in China with even less regulatory oversight.

As a consequence Non Performing Loans (NPL) are now skyrocketing.

Despite attempts by China to bring some control to the Shadow Banking activities it appears to be too little, too late.

WEALTH CONFISCATION SHOCK WAVE ?

What Should Individuals Do?

  • Monetary Expansion is Currency Debasement

Nothing More Than Wealth Confiscation to Finance Excess Debts

  • Macro-Prudential Strategy of Financial Repression

Accelerating Government Wealth Confiscation

 

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Saturday
February 22nd
2014

WHAT BLOWS UP FIRST?

Part I

Europe?, Japan?, Emerging Markets?

 

John Rubino

 

SPECIAL GUEST HOST: JOHN RUBINO, Author & Publisher of DollarCollapse.com

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WHAT WILL BLOW UP FIRST?

Part I

Europe?, Japan?, Emerging Markets?

with John Rubino & Gordon T Long

20 Minutes, 30 Slides

In Part I of this two part series John & Gord takes us an around the globe review in assessing what is most likely to blow up first. There was no shortage of troubling destinations!

EUROPE?

It is clear that Europe is headed for yet another recession unless the ECB adopts its version of Quantitative Easing - FAST! The Bundesbank's surprising capitulation on ECB sterilization is indicative of the seriousness of the accelerating problem.

JAPAN?

Japan has been running huge public sector deficits for two decades and now has more debt as a percent of GDP – 220% – than any other major country. Possibly more than any major country ever. Japan then decided in 2013 to inflate away its debt by forcing the Bank of Japan to engineer an inflation rate of at least two percent

ABENOMICS is not working:

    • Growth is slowing
    • Trade deficit high and rising
    • 43% of this year’s federal budget will be borrowed
    • Debt-service will consume 24% of federal budget

IMPLICATIONS: A currency crisis waiting to happen.

EMERGING MARKETS - SUB-PRIME COUNTRIES?

Hot money from developed world debt monetization caused asset bubbles and excessive borrowing in India, Thailand, Turkey, Brazil, etc. Now the how money is flowing back out, removing support from artificially-inflated asset prices. Emerging market currencies plunged, forcing most of them to impose capital controls and/or raise interest rates.

Brazil’s overnight rate now 10.5%, Turkey’s 12.5%. Emerging markets are the sub-prime borrowers of this cycle, the first to lose access to cheap credit in a crisis.

Developed world banks are on the hook for hundreds of billions to these countries. If they implode, it will be another “Lehman Moment,” forcing the Fed, ECB and BOJ to choose between bailing out everyone in sight or presiding over the death of the global financial system.

GLOBALIZATION TRAP

Gord additionally illustrates how these scenarios fit within the work conducted at GordonTLong.com regarding the GLOBALIZATION TRAP outlined in their Free Thesis 2014 report.

 

    • Part 1 - Europe, Japan & Emerging Markets
    • Part 2 - China and The Wealth Confiscation Shock Wave
 

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Saturday
February 15th
2014

EDUCATION: The USA's Problem & Its Solution

 

Charles Hugh Smith

 

 

Regular Co-Host: CHARLES HUGH SMITH , Author & Publisher of OfTwoMinds.com

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EDUCATION: The USA's Problem & Its Solution

with Charles Hugh Smith & Gordon T Long

25 Minutes, 27 Slides

Charles Hugh Smith discusses his latest book "The Nearly Free University &The Emerging Economy" with Gordon T Long. Charles describes his book as a critique of the US higher education system.

A CRITIQUE OF THE US HIGHER EDUCATION SYSTEM

The Current System of Higher Education is in Crisis:

  • Rising Cost of Higher Education,
  • No Jobs For the Investment of Time and Money,
  • A Declining Yield

We MUST therefore urgently reconnect higher education with the EMERGING ECONOMY and those parts of the economy that are growing and flourishing

THE LEGACY SYSTEM IS OBSOLETE

  • Media and knowledge are no longer scarce—both are essentially free,
  • Students no longer need to be congregated in classrooms to hear oral lectures; the lectures can be distributed at almost no cost via the Internet,
  • The factory model of teaching the same texts and curriculum no longer makes sense; every digital device is a library and a display for oral lectures,
  • Lessons and methodologies of learning can now be tailored to individual students (adaptive learning) via interactive software,
  • The need for live oral lectures as the primary (and presumed to be best) mode of teaching has vanished.

THE DIMINISHING RETURN PROBLEM

THE FUNDAMENTALS HAVE CHANGED

  • Colleges must separate Research and Educational funding,
  • Education versus Occupational Training must be differentiated,
  • Internships versus Apprenticeship must be understood and why corporations are no longer training,
  • "Time is the New Competitive Dimension" and the educational systems needs to understand what this means,
  • The New Economy as a consequence requires Soft Skills such as Collaboration, Life Time Learning, Innovation and Entrepreneurial.

FOUR CENTRAL STRUCTURAL PROBLEMS

Gord overlays four arguments regarding the USA's central structural problems which supports Charles' book:

  • The Education System MODEL is wrong,
  • The US CULTURE  regarding educational expectations is wrong,
  • Educational FUNDING for specifically training is inappropriate and wrong,
  • The FINANCING infrastructure is on a path towards collapse as $100Bs of student loans will soon begin to default in waves. Which is obviously also wrong!

Enjoy this fast moving 25 minute video supported by 29 slides.

 

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Saturday
February 1st
2014

MACRO WATCH: Flows & the Liquidity Gauge

 

Richard Duncan

 

 

SPECIAL GUEST: RICHARD DUNCAN , Economist, Author & Publisher of RichardDuncanEconomics.com.com

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ABOUT RICHARD DUNCAN

Richard Duncan is the publisher of Macro Watch, a video-newsletter that analyzes trends in credit growth, liquidity and government policy in order to anticipate their impact on asset prices and economic growth.

He is also the author of three books on the global economic crisis.  The Dollar Crisis: Causes, Consequences, Cures (2003); The Corruption of Capitalism (2009); and, The New Depression: The Breakdown Of The Paper Money Economy (2012).

Since beginning his career as an equities analyst in Hong Kong in 1986, Richard has served as global head of investment strategy at ABN AMRO Asset Management in London, worked as a financial sector specialist for the World Bank in Washington D.C., and headed equity research departments for James Capel Securities and Salomon Brothers in Bangkok.  He also worked as a consultant for the IMF in Thailand during the Asia Crisis.

Richard has appeared frequently on CNBC, CNN, BBC and Bloomberg Television, as well as on BBC World Service Radio.

MACRO WATCH: Flows & the Liquidity Gauge

SPECIAL GUEST:

Richard Duncan

26 Minutes, 25 Slides

Richard believes we no longer have Capitalism driving economic growth but rather Creditism. In the past, economic growth was driven by saving and investment. It doesn’t work that way any more. Now, the economy is driven by credit creation and consumption. Capitalism has evolved into Creditism! As a result credit growth today drives economic growth, liquidity determines the direction of asset prices and the government attempts to control both to make sure that the economy continues to grow.

Understanding this new dynamic is critical to making investment decisions within the current Fiat Currency regime environment. In this video Richard Duncan outlines what he believes the Federal Reserve will be forced to do in 2014 and 2014 to avoid as US and potential global recession. More Quantitative Easing is on the horizon.

THE 2% CREDIT GROWTH FLOOR

Since the end of WWII, every time the US has fallen below 2% credit growth the US experienced a recession and prompted a shift in Monetary Policy. The tenuous global economic environment couldn't handle a US recession and the Federal Reserve is acutely aware of this and will do everything in its power to forestall such a possibility.

THE MACRO WATCH LIQUIDITY GAUGE

$2.3 TRILLION IN LIQUIDITY REQUIRED

Richard analytically illustrates why the Federal Reserve must add an additional $500B to $1T in liquidity over current "Taper" estimates. Investors shouldn't bet on QE Ending in 2014!

Based on the current Fed Taper schedule, Liquidity will become tight in the third quarter of 2014 and there will be a significant liquidity drain beginning in the fourth quarter. If the Fed sticks with this schedule, interest rates are likely to rise by mid-2014. Higher interest rates would cause a fall in property prices, stock prices and net worth, which would cause the economy to fall back into recession. To prevent that, the Fed is likely to create more fiat money through QE than its taper schedule suggests.

This is must listening for serious investors.

 

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Saturday
February 1st
2014

THE RETAIL CRE DOMINO

 

Charles Hugh Smith

 

 

Regular Co-Host: CHARLES HUGH SMITH , Author & Publisher of OfTwoMinds.com

 

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THE RETAIL CRE DOMINO

 

with Charles Hugh Smith & Gordon T Long

28 Minutes, 27 Slides

Gordon T Long and Charles Hugh Smith lay out the looming domino they see in the US Retail CRE (Commercial Real Estate) space due to the advancement of online and robotic technologies. The rapidly advancing ramifications are both startling and alarming.

EXAMPLES DISCUSSED

    1. Store Replacements: Redbox Model
    2. Instore Kiosks
    3. Applebee's "Waiter Terminator"
    4. Smoothies "Automated Dispensers"
    5. McDonalds's "Smart Restaurant"
    6. The "Brown Truck" Store

AN 'OVER-STORED' AMERICA

The Retail building boom in America has created yet another bubble - The Stealth Retail CRE Bubble.

SHADOW BANK FINANCING

Gordon outlines how the Shadow Banking system has 'morphed' since the 2008 financial crisis. He explains why Commercial Real Estate financing is presently seriously exposed to a crisis in short term funding disruptions, in a similar fashion to Residential Real Estate prior to the 2008 crisis. He shows the new instruments that are now being used and why they will be the new acronyms of the next financial crisis.

 

 

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