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Money matters:
Graham Macdonald MBMG International Ltd.
The New World
Let us look at why we are in the situation we are now in.
Marc Faber, of Gloom, Boom and Doom fame, says that between them, Greenspan and
Bernanke have managed to achieve what no-one else in history has managed to do -
create a bubble in everything, all at the same time and everywhere in the world.
We had the most leveraged asset bubble and credit bubble ever seen. It was not
just limited to housing but the corporate sector as well. These are now in the
process of all bursting at the same time amidst the biggest de-leveraging since
the 1930s.
People are still under the impression that this will all be sorted out now that
the G20 has met in London and, supposedly, waved its magic wand. Anyway, back in
the real world, this will not be a V-shaped recession lasting six months. If we
are lucky then it will be a U-shaped one which will go on for a couple of years.
However, given the risk of a financial meltdown, as per Japan post 1990, the
idea of an L-shaped recession cannot be excluded. Let’s face it, what financial
system there was has broken down, nobody has faith in the authorities any more
and there is a complete lack of confidence in anything to do with the financial
system. As Montek Ahluwalia said, “Confidence grows at the rate a coconut tree
grows. It falls as the rate a coconut falls.”
The recent announcement that the Fed will start to buy up US Treasuries so as to
push down interest rates and give better liquidity has been met with mixed
reviews. Equities shot up as did many other assets including certain
commodities. One thing dived - the US dollar. Not surprising really as what it
means is that the US Central Bank will purchase its own debt. This means it is
basically printing money.
However, it does seem that they have forgotten one small thing. Currency is like
any other asset - when supply increased when there is still a demand then the
price will go down. Gold came to the rescue by going up by almost five percent.
Would that the UK could have taken advantage of this but good old Gordon Brown
sold it all when it was at USD260 per ounce - great Chancellor!
Nonetheless, now that the US money supply is getting ever bigger do the Western
developed nations really believe that the rest of the world is going to sit on
their collective backsides whilst their exports get kicked into touch by cheaper
US products? Not in a month of Sundays is the basic answer.
Byron Wien, a Wall Street veteran of fifty years, recently commented that the
present crisis has been building for decades and that from an “economic
standpoint, the worst is not behind us”. Marc Faber also echoes these
sentiments. He believes the worst will not be over until 2011 and it may take
ten years to sort out this mess. Without a doubt, what will happen is that
interest rates will go up and there will be massive inflationary pressures.
Back to Wien who thinks that gold will be USD1,200 per ounce by the end of the
year and oil will be USD80 per barrel. He also believes that the European Union
may break up and that there are a lot more problems for the euro on the horizon.
We all know the situation is not good. The chart on this page gives an idea of
how bad it is. The diagram shows that twelve month earnings have declined by 80%
which is the biggest drop ever. Also, the S&P500 achieved its first ever
quarterly negative earnings. As well as this, the Q4 losses were more than the
index had ever earned in any 90 day period.
The head of investment at Invesco Perpetual, Neil Woodford, foresees there will
be no recovery for four years. He is another one who reckons the UK and US will
really suffer in the near future. He said, “The scale of debt build up is
unprecedented. The process of rebalancing the world economy will take many
years. We could be in a weak economic environment for three or four years.”
Woodford also believes that there will be a continued period of falling prices
so deflation should continue this year and next.
Bill Gross is the boss of Pimco which is the largest bond fund in the world. He
believes there will be a ‘New World’ which will include de-leveraging and
re-regulatory decisions for the financial system worldwide. He is sure that
investors will have to change their expectations though as there will be an
increase in risk premiums as well as more volatility. This will result in lower
asset prices.
This is definitely true but people will probably still have to invest even if
they do not want to as bank rates will be giving pathetically poor payments.
Gross says that, “We are all children of the bull market... a bull market of
free-enterprise productivity and innovation, yes, but one fostered by a bull
market in leverage, deregulation and globalization that proved unsustainable in
its excesses. We now must view ourselves as chastened adults, forced into
acknowledging a new reality that is dependent upon bear-market de-levering and
debt liquidation to deliver us to our new and ultimate restructured destination
- wherever it lies.”
However, as stated above, there are still places to make money, multi-asset
class allocation is the best way - as advocated by Martin Gray and Scott
Campbell - and one that shows positive results, even in these days.
Just like Irving Fisher’s “permanently higher plateau” of prosperity that was
quickly turned on its head in 1929, those who would forecast a “permanently
lower valley” of despair are also off the mark.
As Kyle Bass of Hayman said, “People will look to ‘old-fashioned’ stores of
value - those which represented money long before green pieces of paper backed a
promise existed.” These are also the thoughts of our fund advisors, Miton Asset
Management, which is exactly why we use them. We are lucky in the fact that we
have the sole rights to sell their funds in Thailand - they trust us and we
trust them.
So, how to make money at the moment? Multi-asset class allocation. What is the
only really safe currency at the moment? The only answer is Gold.
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The above data and research was compiled from sources
believed to be reliable. However, neither MBMG International Ltd nor its
officers can accept any liability for any errors or omissions in the above
article nor bear any responsibility for any losses achieved as a result of any
actions taken or not taken as a consequence of reading the above article. For
more information please contact Graham Macdonald on
[email protected]@mbmg-international.com.comm.com.com
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Snap Shots: by Harry Flashman
Electrography and Kirlian cameras
 Kirlian
photography is not new, despite claims to the contrary. What should be
more correctly referred to as the ‘Kirlian effect’ was demonstrated at
the end of the 19th century and was then known as ‘electrography’.
However, it did not get the publicity it needed to catch on until
Russian electrical technician Semyon Davidovitch Kirlian and his wife
Valentina Kirliana published a paper in 1950 in the Russian Journal of
Scientific and Applied Photography in which they described the process,
now known as Kirlian Photography.
‘New Age’ followers seized upon this as being able to photograph the
‘aura’ of a person, and, at long last, show to the unbelievers that all
the ‘bio-energies’ had a basis in science. Kirlian photography has been
linked to telepathy, orgone energy, N-rays, acupuncture, ancient eastern
religions, and other paranormal phenomena.
I am not going to get embroiled in semantics as to whether the Kirlian
effect and the aura can be used for medical diagnosis (as is claimed),
or whether Reiki practitioners have sparks coming out of their fingers
when they are ‘healing’. However, I can reveal what is being recorded on
film, and what you need to have your own ‘Kirlian’ camera.
First off, the Kirlian effect is ‘real’, but what is being recorded is
not paranormal. It is a phenomenon called ‘Corona Discharge’. Corona
discharge is seen in lightning and the sparks that come off your fingers
after you walk on nylon carpets. This used to be done as a party trick
by Nikola Tesla (1856-1943) who used to introduce new discoveries with
his body glowing and sparks flying from his fingertips. Tesla, by the
way, was a brilliant inventor, and it was he who introduced the concept
of alternating current, used today, rather than Edison’s direct current.
The corona discharge that is recorded by the Kirlian photographers
requires the object being subjected to an electric current and the size
and color depends upon moisture that is present on the skin. This is why
inanimate objects do not give off a discharge as do animate ones.
Terence M. Hines, a psychology professor says, “Living things (like the
commonly photographed fingers) are moist. When the electricity enters
the living object, it produces an area of gas ionization around the
photographed object, assuming moisture is present on the object. This
moisture is transferred from the subject to the emulsion surface of the
photographic film and causes an alternation of the electric charge
pattern on the film. If a photograph is taken in a vacuum, where no
ionized gas is present, no Kirlian image appears. If the Kirlian image
were due to some paranormal fundamental living energy field, it should
not disappear in a simple vacuum,” he said.
One team that spent some time examining the Kirlian effect has found a
list of 25 factors that can affect a Kirlian photograph, including
thickness of the skin, recent physical activity, and yes, mental stress.
All of these affect the amount of moisture on the skin. Other factors
include voltage level, voltage pulse rate, atmospheric gasses, the
internal force and angle of the object held against the film, and
barometric pressure. In effect, a single person can come up with
different ‘auras’ simply by changing finger pressure and the amount of
moisture found in the skin. That’s the science. As for the psychic
energy claims, you can make up your own mind!
To make your own Kirlian photographs you will need a high frequency
generator, as well as a camera, and ‘fortunately’ the old Polaroid SX70
works well here. A quick check on the internet came up with the
following outfit that you can buy. The price includes HV/HF generator,
Polaroid camera body, camera case, sample instant Polaroid film (3.25" x
4.25", type 669 or equivalent), instruction manual (click to view pdf
file-81KB), interpretation guide (click to view pdf file-540KB),
11x17inch Laminated Poster, and “Life’s Hidden Forces”. Specifications -
Shipping Weight: 7lbs, dimensions: 15in x 11 x 6, Power: 110/120V or
230/240V, please specify). And all that, which will allow you to make
money at ‘alternative’ fairs will only set you back USD 745.
Modern Medicine:
by Dr. Iain Corness, Consultant
Mobile phones - the next killer?
Remember the first mobile phones? We used to have to carry a
suitcase full of batteries and needed three months at Thor’s gym to lift the
thing. Who would have believed that one day we would be able to slip the
mobile phone into our shirt pockets.
However, new developments always bring out the soothsayers and harbingers of
doom. Forget attacks by extremists, we are all carrying a loaded time bomb
in our mobile phone pockets. Well, you could be excused for thinking that
with all the shock-horror headlines in the popular press.
I read a banner headline the other day which claimed “Hours of chatting on a
mobile phone are suspected to be slashing male fertility around the world,
new research shows.” It went on to say that “Men who use mobile phones for
more than four hours a day produce fewer and poorer quality sperm, according
to results of a study released at an American Society for Reproductive
Medicine conference in New Orleans.”
I mean this is so serious, we should never keep mobile phones on our laps,
or heaven help us, slipped between your legs as you drive the car. Can’t you
see the headlines, “Driver’s gonads blown to bits by mobile phone!” Next
time you are standing at the urinal, don’t shake it, Willy the wonder wand
might fall off, if we are to believe all this “research”.
If that was not chilling enough, Australian scientists are investigating if
children are more vulnerable than adults to the effects of radiation from
mobile phones. This should have us worried, as Thailand has one of the
highest usage rates of mobile phones. Every Thai, from the age of two, or
the age of being able to speak, has one. Every child takes one to school.
Even the national way of greeting has been changed to suit the mobile phone
fad. The traditional ‘wai’ is now done by holding the mobile phone between
your palms and bringing it up to touch your nose. True, just look around
you.
The study of 110 adults at the Australian Center for Radiofrequency
Bioeffects Research has apparently confirmed mobile phones cause a change in
brain function by altering our alpha waves.
The center is now investigating the effect on 40 children aged 12 to 13, and
20 people aged 55 to 75 years.
Associate Professor Rodney Croft, from the centre, said while studies had
been conducted on adults, the effect on children had, until now, remained
untested. “Although there’s a tiny effect on healthy young adults, there is
a possibility that it could be much stronger in children or the elderly,”
said the worthy Professor.
Now, mobile phones are hardly new technology, although the latest 3G variety
seem to be able to do everything from cleaning the house, watering the
garden and washing the dog, as well as making and receiving telephone calls.
There have been claims that using mobile phones produces brain cancer
because people with brain cancer have used mobiles, and that is about as
stupid as claiming that shoes are the greatest killer in the western society
because 99 percent of people who died last year wore shoes.
What is not said in all these shock, horror headlines, is that these
research chappies in the hallowed halls of academia need finance to keep
going, and they are all in competition with each other to grab a slice of
the research dollar. The more shock, horror headers they can get, the more
likely they are to get further funding. It is the money train again.
Now there are groups doing genuine research into the malaises of mankind,
and the influence of cholesterol on cardiac deaths is a classic example. The
Framingham study kicked it all off many years ago, and it has been
progressively studied since then. High cholesterol is an adverse factor as
far as your cardiac condition is concerned. Believe it. And is unaltered by
mobile phone use. Believe that one too. And get your cholesterol levels
checked as well.
Beware of ‘scientific breakthroughs’ reported in the popular press. It may
just be fishing for funding.
 Heart to Heart with Hillary
Dear Hillary,
Can you tell me just what goes on in a Thai girl’s head? I have had this
relationship with one of the girls in the local bar. If she wants a night off, I
pay for her bar fine, and she comes home with me. We have a great time and I
usually take her for som tam or something on the way. The other night I felt
like seeing her, but when I went to the bar and suggested I pay bar for her she
said no. I stayed for a while and then another farang came in and off she went
off with him all lovey-dovey if you please. Are they all like this? I thought I
had a pretty good understanding with the girl, but it must have meant nothing to
her.
Confused
Dear Confused,
Let me tell you like it is Petal, and you won’t be confused in the future. “This
relationship” as you call it, is nothing like the “relationship” as she sees it.
You are as free as the proverbial bird, come along, pick up, put down and here’s
a bowl of noodles. And be thankful. She sees one customer who she can get to buy
her out when she’s got no better offers. The other farang was probably offering
two bowls of noodles. A much better business deal if everything else is equal.
Your girl in the bar is a businesswoman, Mr. Confused. That’s where you are
going wrong. Your relationship does not “mean nothing to her”. It represents an
“off” for the evening and a bowl of som tam and some small change. No more, no
less. Stop confusing business with pleasure.
Dear Hillary,
I’ve done what you suggested and stopped looking in bars for someone to share my
retiring years. She’s an older lady with a small business. A widow for many
years and we get along fine. What I want to know, am I still supposed to pay a
bride price if we do get married, or even if we start living together. She has
indicated that we could both live in her house, but I don’t know how to bring up
the dowry thing. What should I do, Hillary?
Blushing Bridegroom
Dear Blushing Bridegroom,
I am so glad you have taken my advice about the heart to the heart, so to speak.
At your ages, neither of you is a nervous teenager, and I would suggest you just
go along and play it by ear. She will tell you what should be done, and even if
there is a suggestion of a dowry to keep up appearances, it will be a modest
one.
Dear Hillary,
The Songkran festival is coming up. Stay indoors and away from the danger,
Hillary. We need you. Now, what do you think of the suggestion to ban alcohol
over Songkran? Do you think it will help or not? We have had some hot and heavy
discussions on this subject at my watering hole, and I think we need some
guidance on this, before it turns nasty.
Songkran Sam
Dear Songkran Sam,
Thank you for asking me to be referee. As I see it, any legislation banning
alcohol sales over Songkran could not possibly be enforced. How do you stop the
Mom and Pop stores selling alcohol? Simple answer - you can’t - without having a
policeman checking purchases at every shop. Totally impractical.
The death toll is horrendous, with most fatalities being motorcyclists driving
under the influence of alcohol. However, the alcohol itself is not the problem,
drinking and driving is the problem. There is legislation on the books allowing
the police to breath test and apprehend those over the limit, and that is what
the police should be doing, not standing outside grocery stores. An equally
impossible to enforce solution would be to ban motorcycles! So the proposed
alcohol ban legislation would neither help nor hinder. It just isn’t
enforceable.
Dear Hillary,
Do you find this new social habit of kissing everyone three times a turn-off? I
think that social kissing is not romantic, and surely shaking hands is better
and more hygienic. This three kiss routine is just people making an excuse to
slobber all over you. It is ridiculous! How can I avoid it?
Henry
Dear Henry (Kissinger?),
Are you kissing me (sorry kidding me)? This is not something new on the social
scene as you are suggesting. This is a long time greeting in Europe, that has
been brought out here by the several handfuls of Europeans that have settled in
Thailand. By the way, there are also certain ‘local’ rules in Europe as far as
two kisses, three kisses and even four kisses are concerned. There are also
different customs with men kissing women, women kissing women and men kissing
men. You have to be a little careful, here, Henry. However, if it all is a
little too much for you, all you have to do is to grab the other person first
and make kissy-kissy noises beside their ear, while muttering, “Don’t get too
close to me, I’ve got a social disease.” They will leave you alone after that.
No problem!
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
State of Play:
US/ UK, Crime/ Drama/ Thriller – With Russell Crowe, Rachel McAdams, Ben
Affleck, Jason Bateman, and Helen Mirren. Handsome, unflappable U.S.
Congressman Stephen Collins (Ben Affleck) is the future of his political
party: an honorable appointee who serves as the chairman of a committee
overseeing defense spending. All eyes are upon the rising star to be
his party’s contender for the upcoming presidential race. Until his
research assistant or mistress is brutally murdered and buried secrets
come tumbling out. Based on the BBC mini-series of the same title, a
team of investigative reporters work alongside a police detective to try
to solve the murder of a congressman’s mistress.
The International: US/ Germany/ UK, Crime/ Thriller – With Clive
Owen and Naomi Watts. An Interpol agent attempts to expose a
high-profile financial institution’s role in an international arms
dealing ring. In this gripping thriller Interpol Agent Louis Salinger
(Clive Owen) and Manhattan Assistant District Attorney Eleanor Whitman
(Naomi Watts) are determined to bring to justice one of the world’s most
powerful banks. Uncovering myriad and reprehensible illegal activities,
Salinger and Whitman follow the money from Berlin to Milan to New York
to Istanbul. Finding themselves in a high-stakes chase across the
globe, their relentless tenacity puts their own lives at risk as their
targets will stop at nothing – even murder – to continue financing
terror and war. Rated R in the US for some sequences of violence and
language. Mixed or average reviews.
Crank: High Voltage: US, Action – The indestructible hopped-up
hitman Chev Chelios, played once again by Jason Statham, returns in
Crank 2, picking up where the first film left off – except this
time, Chelios is chasing a Chinese gangster who hijacked his heart and
substituted it with a mechanical one that needs to be jolted regularly
with an electric charge to stay pumping. Rated R in the US for frenetic
strong bloody violence throughout, crude and graphic sexual content,
nudity, and pervasive language.
Race to Witch Mountain: US, Adventure/ Fantasy/ Sci-Fi/ Thriller – A
perfectly acceptable and innocuous action/ adventure film for children
(mostly) with all the standard chills and thrills, chase-movie suspense,
and wisecracking humor – and a few slam-bang action setpieces. Well
done of its type, and the ex-Rock Dwayne Johnson is (mostly) charming as
a Las Vegas cabbie who enlists the help of a UFO expert to protect two
children with paranormal powers from the clutches of an organization
that wants to use the kids for their nefarious plans. Mixed or average
reviews.
Monsters vs. Aliens: US, Animation/ Sci-Fi – Has gotten some rave
reviews from a number of reviewers, and some highly critical. I found
it half imaginative and amusing, half irritating – the really irritating
part being Reese Witherspoon’s shrill voice and creepy character. Mixed
or average reviews.
Sassy Player / Taew Nak Te Teen Rabert: Thai, Comedy/ Drama – A gay
teen soccer comedy in the vein of “Satree Lek” (Iron Ladies).
There’s a little bit of everything in the film – something for
everyone. It’s fun. Directed by Poj Arnon (Bangkok Love Story).
A girl’s school decides it wants to field a team to contest
national secondary school football championships, and calls for
applications from young men. It ends up with 16 applicants, seven of
whom are katoey - not ‘real’ men at all. Can football players of the
third gender prove their mettle on the pitch? See the movie to find
out.
Rahtree Reborn: Thai, Horror/ Romance – Starring Love of Siam
heartthrob Mario Maurer, and Cherman Boonyasak, who played his putative
sister in that film. It’s a sequel to Yuthalert Sipapak’s famous horror
films Bup Pha Rahtree and Rahtree Returns, set in the same
haunted apartment. Surrounded by the tranquility of the apartment, a
horrible spirit in room 609 is lurking, soon to be awakened. This time
the terrors are tripled. Directed again by Yuthalert Sipapak. Straight
razors and a barber’s chair are featured prominently in the posters for
this film. Shades of Sweeney Todd, again!
Make It Happen: US, Drama – Embarking on a journey to fulfill her
dreams as a dancer, a young girl discovers a new style of dance that
will prove to be the source of both conflict and self-discovery. From
the writer of dance movies such as The Step Up and Save The
Last Dance.
Knowing: Australia/ US, Drama/ Mystery/ Thriller – Just a lot of
fun, and well-done. A teacher deciphers a message in a time capsule
that has been dug up at his son’s elementary school; in it are some
chilling predictions – some that have already occurred and others that
are about to – that lead him to believe his family plays a role in the
events about to unfold. Starring Nicolas Cage.
Khan Kluay 2: Thai, Animation/ Adventure – The legendary elephant
is back in action in this sequel to the animated movie Khan Kluay.
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