The size of the workforce decreasing, and longer life expectancy, makes the current pension system unsustainable. The shrinking workforce has no chance to pay for the promises that have been made on their behalf. This could mean there are real challenges coming for both pensioners and workers as there is a large retirement savings gap.
Years of low interest rates and cheap money have pushed up asset prices and have increased debt around the world. As you can see, global debt has grown from US$87 trillion in 2000 to US$199 trillion in 2014. Corporate and government debt have almost doubled in that period.
So, what's bitcoin's real value? The truth is, no one can agree. But that’s what two economists recently tried to determine during a night out, that is, they tried to figure out bitcoin’s value. They called their process Côtes du Rhône theory. Yep, you guessed it, that’s the wine they were drinking.
For the first time in the history of capitalism, we are seeing a generation that will be worse off than their parents. This is all exacerbated by low interest rates. The fact that interest rates have remained low means that this huge debt is not a burden…yet. Interest rates have never been this low for this long. We are living through a new experiment…and we don’t know how this will end. For now, there is ‘prosperity’…for the few.
As the crypto revolution takes off, we will be able to leave a broken financial system behind. The slow, inefficient and expensive system that caused the GFC and the dotcom bubble. And by staying in the right cryptos, there is a way to profit from the revolution.
Even with all of this innovation, our economic growth is slowing. The reason for this, Vern argues, is that we have failed to be adaptive in our economic model. And now we are drowning in debt and are struggling to keep our economy stable. Although we are accustomed to our GDP always rising, and our living conditions becoming ever-better, it’s an expectation that we need to rethink.
‘Doctor Doom’ Marc Faber is down in Melbourne to discuss where the world is heading. Is a stock market crash on the cards? Or is it something else? ‘Where is the World Going?’ was the theme of Dr Faber’s presentation today. And around the world we went. Dr Faber had so much to say, we can’t fit everything in. But Dr Faber is quite well versed in the Chinese economy...
Why are cryptos so interesting for the area? Apart from the attractiveness of recent gains, inflation and hyperinflation are both quite common in the area. As Bloomberg reports, trading volume in cryptocurrencies has increased quicker in countries with capital controls and weakening currencies.
The housing market is very different from a few months ago. Back then, buyers were getting into frenzied auctions, spending more than what they had budgeted for and properties were going above the reserve. In other words, we could be seeing the switch from a seller’s to a buyer’s market.
Blockchain is definitely allowing people to think about the future of money and how we use that money. And the rise of parallel currencies could increase competition for central banks. That is, if the central bank printed too much money and devalued the currency, people could flock to a more stable private currency.
The investigation into the tax office, which was conducted in partnership with Fairfax and former employees of the ATO, depicted stories of small business owners and individuals who were alleged to have been ‘aggressively pursued’ for debt that they didn’t owe. The exposé highlighted the far reaching powers of the tax office and how they have the potential to be abused.
There are currently 1.2 million people employed in construction, around 9% of Australia’s total labour force. The truth is that infrastructure spending is booming in Australia. The boost in infrastructure spending could be supporting Australia’s economy for the next few years as other sectors in the economy slow.
What the spinoff brings back into focus is how companies best use their capital. Although Coles generates around one third of Wesfarmers’ earnings, it ties up around 60% of its capital. By separating Coles, it should allow Wesfarmers to better use its capital elsewhere. The other issue though, is what Wesfarmers will do with all that extra capital.
While we technically have the whole world at our finger tips, our world can become one-dimensional and limited. This is something really risky for investors. Hearing one view, confirming what you already think, can be dangerous for your investments. You are not seeing new ideas or challenging your own.
A trade surplus is way down on the list. Far more important is the control of revolutionary technologies. It’s why China has been rapidly increasing their patent applications. It’s also why China has created 17 technological innovation zones. To become the world’s future super power, China knows the most important ammunition will be technology.