Over the weekend, I had an opportunity to catch up on some reading. A few of the articles I read were particularly helpful to understand what is going on in the world. The first 3 articles are also related to my recent posts about China and the outlook for the US dollar. The last article falls into the category of Christian theology and offers interesting perspective on the outlook for the US dollar, and by inference, for domain names as a global asset class.
Advice from Grandma
Thomas “The World is Flat” Friedman’s latest Op-Ed piece starts to throw cold water on the whole Pacific Century thesis saying that the US remains an innovation powerhouse and will come back. He then back-pedals and says that globalization has made the US sovereign borders less relevant, and goes on to draw a parallel between Arnold Schwarzenegger’s roll in governing the de facto bankrupt State of California, and President Obama’s declining credibility as savior of US global hegemony:
“A lot of the disappointment settling in among Obama voters today is prompted by their dawning realization that maybe, like Arnold, he can’t.”
This is notable because Mr. Friedman is a respected pundit who has supported Obama in the past. The next 2 months leading up to the January State of the Union address to Congress are pivotal for the Presidency and Democratic-controlled Congress.
United States Economy At Zero Hour To Service Debt Mountain
Simply stated, the article makes the case that the world largest importer is approaching an impasse with the largest exporters. The formula that worked brilliantly for the past decade is starting to crack.
Many countries that relied heavily on exports as a growth strategy are now geared up to provide goods and services to heavily indebted countries that no longer have the will or the means to buy them.
The article includes some useful trend charts, and draws some parallels between the US in the 2000’s and the Japanese in the 1990’s. Having lived in Japan, I would draw some distinctions between the US and Japan: (1) The Japanese cultural norm is one where there is a huge social duty to pay one’s bills in full and on time. In fact, Japan is still mostly a cash economy. (2) Japan maintained a healthy export machine while moderating its imports. And (3) the Japanese never had the luxury of producing an international reserve currency.
Gold Market Reaching The Breaking Point
I received this article from domainer — and fellow skeptic of fiat curency — Ramsay Devreux with whom we are developing names like EmergencyFood.com, ModelShips.com, among other active projects. The article raises some familiar questions about the accounting of physical gold. It is almost 100% certain that a lot of physical gold has been sold multiple times, and that if everyone who owns physical gold actually took delivery on the gold they think they own, there would be a run on gold. While it was never the intent for a physical commodity to get levered, it turns out that it was. Here is an interesting visual from the article:
All the gold that has ever been produced would fit in a solid cube of about 19 meters on each side, and this cube is only expanding by about 12 centimeters a year (2%).
I also thought this statistic to be telling:
Statistics from United States Geological Survey show that the united states has exported 5000 metric tons of “Gold compounds” in last two years, and the US Census Bureau has assigned an astronomically high value to these exports.
One emerging conspiracy theory is that the “compounds” are composite of Tungsten, which conveniently has the same density as gold, but costs just $10 per pound, versus $1,030 per ounce for gold. That’s one reason why some people are buying older numismatic gold and silver coins that were produced long before there was a need to “inflate” physical gold.
The Coming Epiphany
I came across a slightly dense eBook that is worth a read. The book is a primer on Christian End times theology. Revelations is pretty hard to parse due to heavy symbolism. This book does a decent job of interpreting Scripture though it makes for slightly gloomy reading. Page 251 addresses the author’s academic analysis for why he thinks February 22, 2010 is judgment day for the US Dollar. You can download the eBook for free here at Lulu.com, the self-publishing platform.