Worldview Investing - Ruminations on the World Economy

  18th Century imagining of Emperor Qin Shi Huang     We have addressed the many financial, economic and social ills facing the US, England and various continental nations. None of these problems are being seriously addressed by those in political power. So, they will not only continue to fester but will grow at an increasing pace. Looking East, one sees many of the same problems. China     A little history is useful to appreciate the miracle of present day China. In the year 221 BC, Ying Zheng unified China and declared himself to be Emperor Qin Shi Huang. We use the term "unified" in the historic sense meaning he "defeated and subjugated" the former seven states comprising China. He initiated nearly 2000 years of imperial rule and is credited with important economic and political reforms, including building a national road system and playing a role in the construction of the Great Wall. He died in 210 BC and was followed by 559 emperors who ruled throug...

                        Source: Federal Reserve Bank of St. Louis      Governments around the world have proven themselves to be utterly unable to manage their affairs. The above chart shows the rapidly rising US federal government debt. All developed nations are doing the same thing to a greater or lesser extent. The US government has no honest means to repay its debt. It hopes to continue selling newly issued debt to raise enough money to repay maturing debt (plus extra debt to cover constant budget deficits). At some point, investors will become leery of the rising debt and the government's ability to service it.  The government will then have to raise interest rates to attract buyers. The consequence of doing so is that annual interest payments on the growing debt will consume an ever-larger portion of government revenues. At some point the house of cards collapses.      Prolific...

                                                               By:  Joseph Siffred Duplessis, 1767         Benjamin Franklin was one of the founding fathers of the United States. He attended the Constitutional Convention and signed the document that set out strict parameters for the nascent, national government. After exiting the convention, a woman (possibly Elizabeth Willing Powell) approached him and excitedly asked what kind of government they had established. He famously responded, "A republic, if you can keep it." A republic is the form of government in which supreme political power is vested in the people, to be exercised  on their behalf , by elected representatives. His remark was a warning that the new republic's future was uncerta...