Post By Memphis – Emailed To Dinar Recaps
Watching What Smart People Do
Memphis: Have you noticed the shift that has taken place in the dinar community? True, the topic of greatest interest has not moved, it remains a simple "when?" but BEYOND that...
Many have noticed the shifting (for months now) and can feel an immediacy and have thus progressed in their thinking to asking questions that truly matter, that can profit us.
Such discussions on the reality of having money (wealth) and the responsibility that this will bring often carries a very real tension and anxiety.
Most readers can surely relate to those words and while this is a good thing from the perspective of motivation we should be careful to advance beyond such emotions, to proceed slowly and with confidence.
Confidence may seem an elusive thing right now (as evidenced by all the questions!) but it will come. Our obvious best friend towards this end is knowledge and as we grow in THAT, our confidence will soar.
One aspect that seems good to point to here is that this road has been traveled before and by more than a few. None of us is so special here that we will be asked to blaze a new trail.
No, just like the richest man in Asia (more on him later), we each are simply searching for that path forward, both personal and financial, that best suits us as individuals.
The direction that I go will be my own and to attempt to follow me there would not be custom tailored to your family and likewise I could only follow you so far before I would need a detour.
You get my point here, this is an exciting (once in a lifetime) opportunity for us to sow, plan, steward, grow, harvest, prepare, etc and it needs to be, it must be, suited to our own dreams and goals.
My intent today is simply to give pause and to ponder these realities for there are many factors to indicate that such pondering might soon pay dividends.
Yesterday is now being dubbed as "Black Thursday". Wow what a day to be a student of the macro financial picture! My mind is still doing cartwheels. Bloomberg had this to say about this huge movement in the Swiss Franc:
"...among largest ever [single day currency movement] in [the history of] foreign exchange"
Not to go off on a tangent here but let's recognize that currency pairs and movements within them are creations of man. While they normally move within a small range (delta) they can, as creations of man, be manipulated, forced to move, way beyond the norm.
As evidenced just yesterday, a single nation's currency can (and occasionally does) experience a sudden and extreme jump in value.
Have you noticed anyone questioning this huge increase in the Swiss money? Anyone crying foul and calling for a do over? No, tho many people lost a lot of money Thursday (shorting the Franc in various ways), the whole world just accepted it as the new norm.
I have often commented that when the IQD is re-priced, regardless of the value assigned, the entire world will simply begin to immediately act upon it without question. Such is my belief anyway and the SNB has just helped prove my case.
The following came from Simon Black yesterday and I am confident that it will further open up this entire line of thinking for many as we get a glimpse into the actions (financial and personal planning) of a rather smart guy.
I could write blogs nonstop for weeks about current trends and events but today it simply seems good to encourage us all to take one step further towards education and it's bedfellow...confidence.
What can you learn from the richest man in Asia? By Simon Black
It was nine months ago when we reported that Li Ka-shing, the richest man in Asia, had sold all of his major assets in China. LINK
In 2013 when he started dumping his Chinese property holdings he was being ridiculed and criticized. Everyone was bullish on China’s real estate market.
It turns out you don’t want to bet against a man with a track record like Li’s.
Li Ka-shing’s grasp for major trends is unmatched. And he demonstrated his shrewdness and insight yet again when China’s real estate market went into correction mode last year.
He got out right at the peak of the market.
He recognized that China’s major credit bubble isn’t sustainable. Behind closed doors, the bosses in Beijing know it too.
A recent report by the chief economist at the Bank of Singapore reveals that the Chinese leadership is desperately trying to conceal the effects of excessive credit and engineer a ‘soft landing’.
And yet Chinese credit expansion continues.
Data from the Bank of International Settlements shows that in 2014 credit expansion’s share of GDP growth soared by 14%.
Since the end of 2008, credit expansion has accounted for 79% of China’s GDP growth.
Historical data and analysis shows that such levels of credit expansion inevitably lead to a lot of bad debts that can’t be repaid.
We’ve already seen first ever Chinese corporate defaults as a result of these policies, and we can expect more.
The long-term trend for China is of course, positive, but this doesn’t mean it’s going to be a smooth ride along the way. Nothing goes up or down in a straight line.
Right now, renminbi assets are falling and renminbi is weakening. Capital is fleeing China in fear of a major credit crunch.
Li was one of the first to spot this trend, and he got out.
Moreover, he’s hedging his bets across the board.
His most recent move is to restructure his investment companies and move them to the Cayman Islands.
Li is being very prudent-- moving his money and his assets far away to safe, stable locations so that no single government has control over him.
Until now he was very much dependent on a single jurisdiction. He resides in Hong Kong and has Hong Kong SAR citizenship. His business interests were centered in Hong Kong and China as well.
Now, Hong Kong is an incredible place. The banks are well-capitalized, the government is solvent, and there’s a lot of economic opportunity.
But no matter how safe you think your home country might be, it NEVER makes sense to be completely dependent on one place.
Li understands that. Hedging your bets is crucial.
He has already acquired a second passport (Canada), and now he’s moving certain business interests and cash assets abroad.
In doing so, Li is also making sure that the wealth he worked to build over his entire life will be properly safeguarded for his family.
It’s hard to imagine he’ll be worse off for doing any of this. And if the worst happens, Li will be much better off for following his instincts.
This is good advice for anyone.
Remember: rational, successful people have a Plan B.
Rational, successful people take steps to minimize their downside risk.
Until tomorrow, Signature Simon Black Founder, SovereignMan.com