Silver took a big tumble today, so I’m slowly getting back in.
I had sold on the way up – about 3 weeks early as it turns out. The price went up about another 8% without me – but at least I was out for today’s drop.
I’ll look to scale into a larger position if it continues to move down. Long term, silver is one of my more bullish views.
Bloomberg reports on Ben Wattenberg’s book “Fewer“. This long term trend appears to have the academic rigor of reliable thinking, but the global financial impact is dwarfed by another long-term global population trend toward free markets.
Generational decreases in total population are occurring at a slower rate than the growth rate of the number of people living in free market societies. The number of people who are participating in the global economy has increased by 3 billion since 1990, and the shrinking population effect is negligible relative to trends of that magnitude.
For investors, this probably means that global consumption will continue to increase even if the population as a whole may slowly decline.
Posted in Commodities, Economics, Investment, Public Policy, The Future
Tagged commodities, consumerism, macroeconomics, population
Verizon prevented municipal WiFi networks in Pennsylvania based on ‘unfair competition.’ Verizon has a clear reason: municipal wireless broadband would obviate the phone lines. It would obviate cable companies, too.
Ubiquitous broadband – no matter who provides it – will mean that voice, video, and data services are available through the air. Traditional phone, radio, cable, and other media distribution is disintermediated. Storage servers and a pretty front-end indexed by search engines could handle all of recorded media. Interactive media on TCP/IP replaces and moves forward phones, video conferencing, etc.
What does it cost to serve wireless broadband? Because of the ease of offering secure access to wide geographic areas, competition will rapidly draw the price toward the cost. The total revenues of these firms are negligible compared to the cumulative revenues of phone companies, cable companies, cellular and DSL providers, and radio companies (including satellite).
The consolidation of industries and shrinking pie are bad enough, but the elimination of barriers to entry and the fall of the profit margin make the shift a major net detraction financially. The breadth of industries are waving investment warning flags. There may be winners as well as losers, but how long is it going to take you personally to migrate from your cable bill, phone bill, cellular bill, ISP bill, and satellite radio fee toward VoIP phone in your PDA and a media server in your PC at $50/month?
To make matters worse, the access fee might drop to free when the service bundles hosting and storage. If they get to track you, target advertising, and other applications, they could reasonably pay consumers to be in their network. In other words, the money is in the nodes not the lines between them.
I’ve talked about the debt and inflation before, but the following might scare you:
Although the level of deficit is the largest in history, it is not the largest when measured as a percentage of GDP. The current deficit is about 4.3% of GDP. This is high by historic standards, but has been exceeded in 6 of the fiscal years since 1962. BUT the private sector is larger than it has ever been, and issuing more debt than ever before. Total $US debt when combining private and public debt is about $35 trillion, or 300% of GDP.
Don’t think that inflation is soley a function of public debt. No, foreign investment is a competition among all capital securities, and it is net US debt interest owed as a percentage of GDP (as well as US GDP as a percentage of global production, and other factors) that underly inflation.
Posted in Bonds, Commodities, Economics, Investment, Public Policy, The FED
Tagged commodities, credit, debt, inflation, money, trends, USA
These are some of the best election maps I’ve seen. They demonstrate a very strong relationship in the 2004 Presidential election, and I’d love to hear some insight:
Why is population density so clearly related to political affiliation?
Should we be surprised that progressive politics are so highly related to economic progress? What can we learn from that?
Why are such large parts of the population voting against their financial self-interests? Wealthy cities and the major financial centers are voting against the party that will lower their capital gains and dividend taxes. Financially troubled states are voting against the party that will provide national health care and invest in their children’s educations.
Is morality really the question? Massachusetts has the lowest divorce rate of any of the 50 states. And Texas has the highest. Are words more important than action? How is it that speaking softly and doing the right thing can be painted so badly?
Finally, how is it that the kindness, thoughtfulness, hard work, and generosity of the Democratic Party can be portayed as weakness? How is it that the Republican Party with those same qualities is portrayed as heartless? Is it still about cowboys vs. indians, suits vs. hippies, us vs. them? Has anyone noticed that we’re on the same team and there are plenty of real bad guys out there?
Posted in Economics, Just for fun, Psychology, Public Policy
Tagged politics, population, trends
Dan Von Kohorn 