on the Steps of Madness

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					                                                            On the Steps of Madness
By Phil Manhire
                                                             It doesn’t stop there. Led by Obama’s pet, Ben                 In Australia, the voters are faced with a Federal
                                                             Bernanke, head “guru” of the Federal Reserve and his           election some time soon. Will the Aussies opt for more
                                                             ECB counterpart, “Super Mario” Draghi, these key               of the same big-spending, ever-expanding government
                                                             central banks will be running their money presses 24/7         and government-incurred debt or will they choose the
                                                             – with no end in sight to this particular madness.             alternative – a weakly-led conservative government?
                                                                                                                            Who knows? I’ve certainly given up trying to judge
                                                                                                                            and/or predict voter habits or mentality, particularly
                                                                                                                            when they are faced with a clear-cut choice between
                                                                                                                            responsible government and its alternative.

                                                                                                                            So what else could twenty-thirteen have
                                                                                                                            lined up for us?

THE YEAR AHEAD                                               Consider for a moment their apparent philosophy....
                                                             “STEP 1. Let’s go into debt even further;
                                                                                                                            Fast internet? Nope. Maybe in another couple of
                                                                                                                            years......maybe. Until it becomes a reality, a working
That age-old question – “What is the next year                                                                              actuality, Vanuatu will continue to experience the
                                                             STEP 2. Let’s print some more paper money so that its          frustrations of a very expensive and inefficient Internet
going to mean to me?” Will it be a “good one”?
                                                             value (purchasing power) goes down;                            service as well as poor communications infrastructure.
Although there are always “circumstances beyond our                                                                         The absence of high-speed communications will
control” to blame, the actual reality in being part of
                                                             STEP 3. Carry on with Steps 1. and 2. ad infinitim so
                                                                                                                            continue to sap the potential for greater business
                                                             that we can afford to re-pay our debt with the extra
human society is nearer to the truth – “Life is what                                                                        investment into Vanuatu.
                                                             paper money;
you make it”.
                                                             STEP 4. Boost up our own treasure chests with gold so
                             And that leads me to
                                                             that, when the economy totally collapses, we’ll STILL be
                             THINKING. It strikes me         in control of the money!”
                             that one of the greatest
                             achievements must be to         It’s quite possible that in 12 months’ time, we won’t
                             be     an     accomplished      have seen much change in our local economy while all
                             thinker. By accomplished, I     the above “geniuses” continue to do their thing. That
                             mean to be able to put          means more local businesses going out of business,             A “Black Swan” event? If I knew the answer to that
                             one’s “outside-the-square”      lower property values as the banks continue their fore-        question, (a) I would be as rich as hell and (b) it
                             thought      into    actual     closures, continued Government mismanagement of                wouldn’t be a “black swan” event now, would it?
                             existence. Yes – I totally      their financial responsibilities, more WTO-related issues      The past twelve months presented us with a number of
                             believe in the “Necessity is    and more AID-donor scrutiny and ”hold-backs”.                  ugly and potentially even uglier situations that could
the mother of invention” adage, though, there have                                                                          have very well spilled over into major wars, national,
                                                             GOLD. As of two days ago, the gold price closed at
been those great “thinkers” who have contributed                                                                            international or civil. Although faced with rapidly rising
                                                             USD1,663.90/oz, an increase of USD9790 or 6.25% for
greatly to the betterment of humankind overall. In the                                                                      unemployment levels in most countries, riots in the
                                                             the year to date. I admit it – I was too optimistic in my
past I have spoken about great minds like that of                                                                           streets of Europe, ongoing crises like the civil war in
                                                             predictions for the rise in price (15-60% plus). That’s
Nikola Tesla but at the same time, ignored espousing                                                                        Syria, North Korea and its “in-your-face” and “up
                                                             what can happen when you under-estimate the enemy
the genius of people the likes of Leonardo da Vinci.                                                                        yours” approach to international relations, a pissing
                                                             – the politically-controlled central banks.
Do you realize, however, that we still have our great                                                                       contest between China and Japan over a couple of
                                                                                   Nevertheless, GOLD will have             rocks and so on, all had the potential for disaster on a
“thinkers” in today’s society? Surprisingly, many of
                                                                                   its day. I still recommend the           grand scale. Thankfully, they didn’t come about but
them are the “back-yard” inventors. Some will succeed
                                                                                   accumulation of it during 2013           that in itself, should perhaps act as a warning to us –
at their ventures; others will fail. The corporate world
                                                                                   and beyond (SURPRISE!), by               be prepared.
hasn’t been slow to pick up the “thinkers”, often at
                                                                                   both individuals and by the
post-graduate level...or even before. These minds will                                                                      Remember the “Lehman Brothers” black swan event?
                                                                                   Australian and Vanuatu central
also be put to the test and....some will succeed and                                                                        2008 – GFC? Fundamentally, the global economy has
                                                             banks – the RBA and RBV respectively.
some will fail.                                                                                                             worsened since then. This has created an ideal
And so it is with life in general, I guess. You win some,    Onto “Health”. All the money in the world is no good           breeding environment for a financial black swan to
you lose some. The key, of course, is to keep on going,      to you if your health is stuffed. Whether that be your         hatch.
preferably with a defined sense of purpose. We shall         physical health, mental health or spiritual health, it is
                                                             more difficult to maintain “good health” if you are
                                                                                                                            Natural disasters? Once again – no idea. It’s cyclone
return to the “thinkers” another time, meanwhile......                                                                      season for our region. Even as this goes to print we are
                                                             subjected to undue stress in your daily life. It stands to
Most of us will be concerned about three major aspects                                                                      carefully watching the development of a Coral Sea
                                                             reason that, if your “Happiness” level is high, then
of our lives – “Health, Wealth and Happiness”.                                                                              cyclone. Many places within the Pacific “Ring of Fire”
                                                             your health is far more likely to be okay too.
With this in mind – back to the year ahead with the                                                                         could well “blow their top” – no notice given. That’s the
first subject on the agenda being the financial outlook      Stress can also take root if you are concerned about           way it is. It would be nice to have a year free of major
for 2013.                                                    your access to quality health services. Of course, in an       disasters, though.
                                                             overall sense, we don’t have any such thing in Vanuatu.
Unhappily, the global economy looks no better now                                                                                                     A Reminder to all the “Game
                                                             You want high-quality health services? Then you had
than it did at the start of 2012. Example: The table         better get into Parliament so that you can head off to                                   of Thrones” fans out there –
                                                                                                                                                            st
below compares various countries’ Public Debt figures        the nearest Aussie, Kiwi or New Caledonia medical                                        put 31 March into your diary
      st             th
from 1 January to 30 September, 2012 (in USD):               facilities when you need treatment – all at the tax-                                     now – the launch of Series 3.
Australia            392.147Bn         395.171Bn             payers expense, of course. Anyway - “happiness”.......         WHATEVER “TURNS YOU ON”, I sincerely wish all
America           10,113.004Bn      11,558.293Bn             Our individual and communal happiness levels are               the best for you and those who matter to you in 2013.
UK                 2,018.112Bn       2,225.960Bn             determined by a number of factors, not the least of
China              1,128.026Bn       1,330.721Bn             which is the functionality or otherwise of our families
                                                             and neighbours. If either of these factions is under
France             2,273.790Bn       2,335.472Bn
                                                             financial stress or the trials of dysfunctional leadership,
Germany            2,795.500Bn       2,795.111Bn
                                                             then a state of happiness is all that much harder to
Russia               139.300Bn         165.043Bn             obtain and maintain.
These figures show that, with the exception of the           That of course leads me to comment on politics. 2013
Germans, the world’s leaders continued on the road to        promises to be a volatile time early in the year, locally.
greater debt as if there were no tomorrow. Morons!           The present government, I believe, will come under
Notice that I haven’t mentioned Japan’s economy?             enormous pressure from many quarters – the
Well theirs is a completely different story – a fairytale    Opposition, the voters and the Courts. We are facing
turned to horror story. And the disease is contagious.       by-elections in various government-held seats as well
More on that story next year.                                as Provincial elections and frankly, I shall be surprised if
                                                             we don’t see a change of government – soon. Although
The looming “FISCAL CLIFF”. On New Year’s Eve, the           the majority of voters appear somewhat cynical about
US will reach its statutory USD16.39Trillion debt limit.
                                                                                                                            UNTIL NEXT YEAR.......
                                                             the chances of cleaning up the government and
Congress will no doubt agree to an increase in this limit    heavily-politicized public service, it is my view (and         “HAPPY INVESTING!”
going forward. The “penalty” that Obama’s                    inherent hope) that the gathering-steam anti-
government will have to pay is that of dramatic                                                                             phil@themoneyconnection.vu
                                                             corruption forces will prevail to some degree and as
spending cuts along with moderated tax increases. At         such, will result in having someone in power who will
least, that’s how I see the outcome of Republican Party      “give it a go”.
negotiations.

				
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