Worldview Investing - Ruminations on the World Economy

Source: Shutterstock.com     So wrote Sun Tzu the famous Chinese General (born in 544 B.C.). T here is plenty of chaos around the world today including the continuing hostilities between Israel and Palestine and Russia's war in Ukraine. Trump has added to the chaos. He has grabbed the President of Venezuela (kidnapped), seized multiple foreign owned oil tankers (piracy on the high seas), dropped bombs on Iran's nuclear development site, Somalia, Nigeria, and Syria (acts of war), threatened Iran's and Columbia's political leaders with military attack for their drug dealing, corruption, and violent suppression of protests ("war mongering"), threatened the chairman of the Federal Reserve Bank with criminal charges for his reluctance to lower interest rates as demanded (intimidation) and threatened to seize Greenland, the protectorate of a NATO ally. His belligerence toward and tariff attacks on Canada push his neighbor to the north into the welcoming arms of Chin...

Source: Shutterstock      One of Donald Trump's major goals is to return the many tens of thousands of US jobs lost to overseas manufacturers. He hopes to make those jobs available to American workers, revitalize the US economy and ensure the US is less dependent for essential goods on often-hostile foreign nations. It is possible that some of those jobs can be returned to the US, but it will be a fraction of the total that have been lost over the last thirty years.      There are two reasons for this. First, few Americans are willing to work in sweatshop-like conditions for 10-12 hours a day, as are third-world workers who happily left behind the hardships and penury of rural subsistence farming. US businesses can build multi-million dollar factories to sew leisure wear and Nike trainers or assemble cell phones and other consumer goods, but they will despair at finding people willing to work grueling shifts. Second, US wages (hourly rates plus cost of bene...

  Photo source: Wikipedia     In January, 1848, the California Gold Rush began. Thousands of people thronged to the "Golden State" seeking their fortunes. Only a tiny fraction of them got rich. The vast majority suffered severe hardship, lost their money and were forced to abandon their efforts. It is commonly noted that the few who made money during this period did so by selling provisions to the miners: pick axes, shovels and denim wear.     For the last several years the new gold rush has been Artificial  Intelligence. Companies have spent vast sums of money building out AI infrastructure. Microsoft, Meta, Alphabet, and Amazon have collectively spent hundreds of billions of dollars building new data centers hoping to cash in on the presumed AI fortunes to come. This gold rush took off in 2022 when Chat GPT 4 was released. It was swiftly downloaded by millions of people hoping to u...

  H. Lawrence "Known Unknowns and Unknown Unknowns"       Donald Rumsfeld, former US Sec. of Defense, used these phrases in a 2002 press conference. He was warning of the vastly under-appreciated dangers associated with the latter category.  The above chart is a tongue-in-cheek effort to debunk the common belief that we possess sufficient information to know what is coming in our social, political and financial futures. The truth is we are  all feeling our way forward in a dark room hoping to avoid falling into an open pit.       Many think that because they read newspapers, watch the "news" on TV, subscribe to a financial publication or two, and have read an investment or political treatise they are well prepared for what is to come. However, we learn on a daily basis that much of that information is unreliable (e.g., employment and CPI data) and some is utterly false. There is no source of information that tells us with any level of ce...