Financial, Economic and Social Mood Update (July 30, 2017)
The US stock market continues to be profoundly robust – the Dow Jones 30 Industrials Index reached a new record high of 21,841 on July 28, 2017. Other major indices including the NASDAQ Composite, S&P 500 as well as the Wilshire 5000 “Total Market Index” did so one day earlier on July 27, 2017.
The remarkable success of Amazon.com (led by its CEO Jeff Bezos as being one of the richest people if not the richest person on earth depending upon the day) has finally attracted the notice of potential anti-trust legislation by the US Congress and of President Donald J. Trump, Sr. This after the announced purchase by Amazon.com of Whole Foods – an upscale supermarket chain which ranks among the 5 largest supermarket chains in the USA. Such anti-trust legislation has nothing to do with “wrongdoing” but with negative social mood. Something similar took place with the breakup of AT&T, banking deregulation and airline deregulation in the late 1970s and early 1980s (Presidents James Earl Carter and Ronald Wilson Reagan). Ditto with the breakup of ALCOA (Aluminum Corporation of America) during the Great Depression of the 1930s – these companies did nothing “wrong” per se other than be very big and very successful (President Franklin Delano Roosevelt. The end result of such anti-trust legislation may even be bad in the long run – history will be the judge. Banking deregulation gave us much more risk, much higher service fees, many more bad loans, illegally aggressive sales marketing (ala Wells Fargo Corporation) and airline deregulation has given us much lower ticket costs albeit with much poorer service – “sardine can” coach, economy and “last class” service.
Bitcoin Investment Trust (GBTC)
I was finally able to “purchase” Bitcoin in the form of GBTC (Bitcoin Investment Trust) via a large commercial and investment bank on the East Coast of the USA. This appears the way to go – forego the new tech firms and go through a reputable stock broker instead. The coming seismic changes in the global economy will likely crush paper fiat currencies and give rise to the electronic crypto currencies. The same seismic changes will shift the balance of power, both economic and military (i.e. financial and geo-political). The USA (North America), the EU, Eastern Europe including the former USSR and Japan will lose clout. The most competitive regions will be the Indian Subcontinent (2.3 billion people in 2017) and greater Mainland China (1.4 billion people). Africa (1.1 billion people) has gained in competitiveness, but it clearly lags both India and China. I do not see Africa closing this critical gap. Japan, the Philippines, both Koreas and Taiwan would be smart to hop on China’s bandwagon by keeping good and peaceful relations with the government in Beijing.
Both the Islamic world (1.4 billion people) and Latin America (600 million people) are clearly behind Africa in their developing competitiveness – a very bad thing for both of them. Australia continues to lose its manufacturing base much like has happened in the USA. New Zealand is attracting high end immigration from both Asia and the USA – much to the dislike of its local population. New Zealand’s attractions include its isolation (i.e. safety) and its high level of development).
As mentioned in a previous monthly financial update post, American-born children can barely get themselves accepted to the best American universities and colleges anymore (Ivy League schools, the best public universities such as the UC system in California and even into the second tier of public colleges and universities on the coasts such as the California State system). This due to the fact of so many foreign born high school students from large population countries such as Mainland China and India who consistently earn “perfect” grade point averages – in other words, many other countries are graduating high school students in both massive quantity and in flawless quality.
