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EUROPE got "devastated" today, their stocks crushed.  European banks were very weak, especially Deutsche Bank.  GREECE seems to "be back", how did we forget about Greece?

US stocks getting crushed.

US and German bond yields going way down (meaning value of their bonds going way up).

"Devastation" may be the word of the week.

Have to highlight this article from ZeroHedge. Sounds like a very familiar thesis 

http://www.zerohedge.com/news/2016-02-09/if-knowledge-power-it-also-wealth

Read zerohedge only for 1 week and you will see what I`m talking about. They have plenty of sources.

Alright, then take it step by step.

Which part you dont believe? That pension funds are used to give out loans and buy treasuries? Thats obvious.


Why do you think it matters if Lehman Brothers goes bankrupt? Why do we care? Sure some investors and depositors (mainly the asset management sector of the bank where they managed rich peoples money) gets wiped.

But that overall doesnt seems like a catastrophe, sure it hits a few rich people and they lose their wealth, but that is not exactly an ECONOMIC DEVASTATION?

The real shit happens, when they default on their obligations towards other asset managers, namely big pension funds.


So a bank that big with high credit rating probably took out huge chunks of loans from many pension funds equities, since they had big credit rating the PF just give out huge % loans from their equity. Once they collapse, they lose millions of people's savings.

All it takes is 1 major bank to collapse with their pension fund loans, and your grandpa will be on the streets begging for bread and water.

Its that easy to wipe out the entire pension system.

Next one in line: Deutsche Bank @ nice european pensions getting wiped out  + Now the global treasury market is also on the verge of collapsing, so the other half of the pension system is also going to get wiped out.

The fantastic pensions of 2000-3000 euro that some wealthy EU contries enjoyed for the past years will soon become 10 euro + 1 bread+ 1 bottle of water pretty soon....

You will see many old folks begging on the streets with a cup, like in Greece.

My first post over there:

I think it is really crucial to note that aminorex and I are not debating whether some are better leaders and organizers than others, but rather whether time preference can be predicted perfectly (i.e. without friction a.k.a. with a priori omniscience).

So I am not envisioning a world where every person is their own boss. No. I am envisioning a world where leaders have to weigh the cost of time into their time preference decisions.
I am talking about reality. Aminorex is talking about delusions (e.g. Communism) where something (e.g. diversity) that isn't free of cost is assumed to be free of cost.
One thing Jason Hommel taught me is you can't give away for free that which is not free.

OROBTC, Argentina just elected a privatization President. I am getting even more interested in Argentina but the southern hemisphere that would be free of the dreaded Chagas infection (although keep in mind the coming Mini Ice Age 2020 forward, which should make central Argentina much cooler ... but perhaps either much more arid or too much rainful, mudslides, etc). I had spoken to a real estate broker in Argentina in 2015 and he said if the privatization President won, then the business sector (conservatives, libertarians) in Argentina would take over and thrive.

Peru seems to be perhaps behind the curve (what do you expect from these highly indigenous demographics countries formerly ignorant natives who are mesmerized by mirrors ... they are behind the curve of understanding these matters ...). Morales @ Bolivia was just (barely) denied an exception from term limits.

I agree Latin America is inherently more socialist (Ecuador! Venezuela!), but they don't have an age 60+ baby boom generation that is vested in government, thus they perhaps can make the shift as they learn from their naive mistakes.

China's problem is that the love of strict governance is deeply cultural. Also China destroyed their youthful demographics with the one-child policy, so they have an aging society that will vote for BIG government over the coming decades. China is trying to bully all the other countries in the South China Sea for the natural gas and other fuels that may be under the sea bed. China will mature into a consumer economy and consume a lot from the rest of the world (and become net debtor like the USA was), thus the largest growth will be the smaller countries that supply the innovation in the Knowledge Age. Investing in China will be very difficult any way, because we are not Chinese. China has a walled off economy, even for example they prefer to make their own internet (social media) sites than use the ones that are popular in the west. China doesn't understand how to be an integral player in the information age. They want to control the information age and dominate it. Sorry they will lose.

So what I am saying is that if you want to invest low and sell high, prepare to invest into South America, Southern Europe after the coming implosion 2017 - 2024. The Italians will surely be very creative in the Knowledge Age (also Argentina is significantly populated by Italians).

The Philippines has also bozo candidates for the 2016  Presidential election, except for Davao City mayor Duturte. If he is elected, he will surely eliminate corruption and crime nationwide as he did in Davao City, but the first 6 months will be (in his own words in the recent televised debate) "very bloody" and tumultuous.

Trump is a reflection of the insolubility of the USA's divide between true Libertarians/conservatives and the rest of the population. The USA must break apart in order to appease this insoluble philosophical divide. Melting pot no more. This is essentially what Trump's reading of the "snake" represents politically and economically.

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TPTB

I would not put all of your eggs into Argentina.  The politics of the place are very cyclical (Armstrong would have a field day studying that place, so much material...).  They had, not really long ago (about two economic downturns) a pretty conservative (though corrupt) president (Menem), who a lot of the world thought would change the place (for the better).  He did not.

Argentines will usually vote for whomever promises the most S for the FSA!

Re Italy, well you're onto something there.  They are very creative, they (generalizing) love education & languages.  They are world leaders (maybe THE world leaders) in various forms of the fashion industry.  Who designs sexier sports cars than Italy?  I do not know the state of IT & software engineering in Italy, but Italy is a country worth putting on your "Short List" of places to live and thrive.  Um, if they can keep out the Muslim & African Hordes...

Just because there is a lot of Italian blood in Argentina does not mean that "translates well" in important matters like economic & political freedom and creativity.

There is a reason for all of the Argentine jokes, even told by Peruvians...  

Q:  What is the biggest dollar value of anything known to mankind?
A:  The difference between what an Argentine thinks he is worth vs. what anyone else thinks he's worth...

^--- But, that's being mean.  Argentina IS full of well-educated people and much of it is very nice & civilized.  There is also a lot of crime and lots of con men there.