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Money matters:
Graham Macdonald MBMG International Ltd.
Practicing the Golden Rule is not a sacrifice; it is an
investment
Part 1
Last year we profited from core holdings of cash combined
with active management and pragmatic asset allocation. The question that we keep
being asked this year is, “How much higher can gold go?”
While we do not profess to have a crystal ball, we certainly think that it can
re-claim USD2,000 per ounce - yes, re-claim - because gold did previously reach
more than USD2,000 per ounce - with a little help from inflation.
Everyone remembers the last gold Bull Run - from 1971 when gold was selling for
USD35, through 1975 when it hit USD196, until 1980 when we saw UD850.
But wage inflation since then has increased by almost four times. House
inflation has gone up by more than five times what it was thirty years ago. The
cost of living is also up by around the same as inflation.
The Daily Reckoning calculates that just allowing for inflation, USD850 in 1980
would be worth USD2,176 today. However, take account of other factors and this
becomes as high as USD38,349 per ounce!
They point out that for a good part of America’s history every dollar in your
pocket was a dollar backed by gold. So it is not so crazy to ask yourself, if
America has 8,180 tons - nearly 261.7 million ounces - of gold in reserve then
how many dollars does that buy?
The answer will shock you.
When dollars became unhinged from gold, the printing presses at the Fed cranked
up. By 1980, for every ounce of gold in America, the financial system carried
USD6,966 in cash. That is USD1.8 trillion total. But get this - by the end of
2005, the total real money supply shot to over USD10 trillion.
That is USD38,349 in circulation for every ounce of gold in reserve!
Of course, it is even higher now. The printing presses are gathering ever
increasing speed as we head into the second quarter of 2009. Only now, it is
much harder for you to know how fat the actual money supply has gotten. Go back
a few years to March 23, 2006, the numbers had become so embarrassing that Fed
actually “retired” a number, “M3,” which was the most reliable measure of how
much cash floats around in the system.
USD2,000 per ounce fits in also the Dow Gold ratio - during an equity correction
this tends to fall to 2 - 2.5 X 1. In other words, gold at USD2,000 equates to a
DJIA of 4,000 - 5,000. That is probably about right for the bottom of the
market. Whichever way you look at it, gold is much better value then stocks and
shares right now.
Let us look at this in more detail.
The main reason investors buy gold is because it has a very long track record of
preserving the real value of wealth. Gold is usually thought of as an inflation
hedge within the global market. It is also very liquid.
For many years there has been a falsely held belief that gold only went up with
rising fears of inflation. This is wrong. In reality, when gold has done well it
has not always been because of high and rising inflation. A good example of this
is World War I which brought in the modern age of fiat money as governments
successfully introduced it on a broad scale.
In those days, the monetary systems that were in place were initially fully
gold-backed, then fractionally gold-backed and finally, not gold-backed at all.
In the 1920s and 1930s the global economy relied on the gold standard where fiat
money was fully backed by gold. Within these two decades, price deflation was
actually the great fear of the day - not inflation. In fact, it was the Great
Depression which brought about the first bull market in gold in the modern fiat
money regime.
Looking back, the link between gold and deflation was obvious. The boom of the
1920s brought great wealth to people. Production grew massively but the money
supply was still linked to gold output - this could only increase slowly. As one
economist said, “As a result, prices had already begun to fall in the 1920s, but
the Great Depression that followed sharply accentuated the price decline.”
To be continued…
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The above data and research was compiled from sources
believed to be reliable. However, neither MBMG International Ltd nor its
officers can accept any liability for any errors or omissions in the above
article nor bear any responsibility for any losses achieved as a result of any
actions taken or not taken as a consequence of reading the above article. For
more information please contact Graham Macdonald on
[email protected]@mbmg-international.com.comm.com.com
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Snap Shots: by Harry Flashman
Weddings - and how to avoid the pitfalls
 Anybody
who owns a reasonable camera will be asked, at some stage, to photograph
a friend’s wedding. To avoid the major pitfalls, find a dying maiden
aunt that you have to visit that weekend. You have been warned. If that
has not been enough of a warning, keep reading.
One very experienced wedding photographer even went so far as to call
the craft, “Hours of controlled patience, punctuated by moments of sheer
terror and intense bursts of creativity.” However, to make it less of a
terror, here are some guides to photographing someone else’s ‘big day’.
And it is because it is someone’s big day that it becomes so important
to get it right. Wedding photographers talk about the three P’s -
preparation, photography and presentation. My idea of wedding
photography and the three P’s are pain, persecution and panic.
However, looking at the accepted “preparation”. This is very important
and will make your job so much easier. This would include going to the
church, temple, registry office or whatever before the great day to see
just what you can use as backgrounds, and where you can position the
happy couple, and their parents, and their bridesmaids, and their
friends, and the neighbourhood dogs and everything else that seems to be
in wedding photographs. Just by doing this, you at least will know
‘where’ you can take some photographs.
Preparation also covers talking to the couple and finding out just what
they expect to be taken. As pointed out at the beginning, when you take
on photographing a wedding, you are taking on a huge responsibility.
Also part of the preparation is to make sure your cameras are
functioning properly, so test them before the big day. Note too, that I
said ‘cameras’ because there is nothing more soul destroying than having
a camera fail during an event such as this. Preferably, the second
camera will be the same as the first, so that your lenses will be
interchangeable. Yes, lenses! You will need a wide angle (say 28 mm), a
standard 50 mm and a short telephoto (say 135 mm). The wide angle is
needed for the group shots and the standard for couples and the tele for
“head hunting”, looking for those great candid shots.
Now comes the actual “Photography” itself. You have already written down
all the shots that the couple want, make a list so you can cross them
off your list as you go. One series of shots should be taken at the
bride’s residence, and this includes the bridesmaids. Many of these will
be indoor shots, so do take your flash and bounce the light off the
ceiling to soften the effect of the flash burst. Make sure you have new
batteries, and a spare memory card!
Now you have to scoot to the church or wherever the actual ceremony will
be, so you can get the bride outside, ready to walk down the aisle with
her father, or whomever is giving the bride away.
With that shot out of the way, now you can go and get the ceremony and I
do not recommend that you use the flash for these photographs. For some
religions, this is a solemn time and flash bursts are very intrusive.
Cross off the rest of the shots as you cover them - the signing of the
register, emerging arm in arm, confetti or rice and then the formal
shots of the wedding groups.
After all this, everyone is dying for a beer and head for the reception.
However, Mr. or Mrs. Photographer, you must wait a little while yet.
There is the ceremony of cutting the cake to be done yet, and
photographs of the guests enjoying themselves (other than you).
Having crossed every shot off the list, make for the drinks department.
You’ve earned it. After all, you have probably taken around 200 shots by
now!
The final ‘P’ is presentation. Photograph albums are inexpensive, so put
the best shots from each series into a couple of albums and present them
to the couple as your gift. And as your final job, make the mental
resolve to never photograph another wedding as long as you live!
Modern Medicine:
by Dr. Iain Corness, Consultant
Tree hugging for amateurs
I am not a tree hugger. I am sure trees, like us, have their
bad days too, but they have to get their hugs somewhere else I am afraid.
Not from me. I once knew a tree hugger who stopped the man with a bulldozer
tearing down a tree at the rear of her house. 12 months later the tree fell
over on top of it, demolishing the kitchen and half the dining area. Trees
have obviously no sense of moral gratitude. I am not a tree hugger.
What I am, is a conventionally trained British/Australian style medical
practitioner who has spent a lifetime practicing EBM, otherwise known as
Evidence Based Medicine. Practices that have been proven to work.
I am proud of my training. Six years at an Australian university that had a
good name, and still does, despite undergraduates like me attempting to
besmirch it during the aforementioned six years. I am also proud of my final
exams taken in the Royal Colleges of Physicians and Surgeons in London. I
have the honor to have my name listed in the ‘great book’ with luminaries
such as Hunter, Jenner and Lister. I am also indebted to my tutors during
the 12 months of ‘pre-registration’, where you apply your knowledge under
the supervision of accredited specialists. An arduous road, but one that is
a safeguard for you, the general public.
Another safeguard is called ‘peer review’ which medical doctors have to
undergo. The ‘powers that be’ are also ensuring that we keep up to date with
a process called Continuous Medical Education (CME). That medical education
continues through to today, with CME lectures being attended by my
hospital’s doctors, and myself. Fortunately for me, the slides are in
English, even though sometimes the lecture is not.
Those ‘powers that be’ also ensure that we prescribe drugs that are
efficacious, that have been tested, and the evidence points to this. It is
not anecdotal evidence, but true scientific evidence shown by research in
many countries, with hundreds of thousands of patients. It is following that
type of evidence that I can recommend with all good faith, that 100 mg of
aspirin a day is good medicine. I also know that if I prescribe a ‘statin’
drug it will lower your cholesterol levels. They have been tested. And these
days, very rigorously indeed.
I am also the first to admit that we have sometimes managed to get it wrong.
The Thalidomide story still has living examples of this. However, the
medical world-wide network is cohesive enough to ensure that this drug was
withdrawn. It is the checks and balances system that has kept western
medicine afloat. This is not to be equated with the checks and balances
system that have been incorrectly applied in the banking industry that sees
the institutions on the brink of sinking!
I am often asked my opinion on “alternative” medicine, and all its diverse
areas of ‘specialization’. As a non-tree hugger I try to avoid direct
confrontation over this. If devotees have found that they can diagnose
tumors by looking at patient’s auras through their third eye in the middle
of their foreheads, then I am genuinely pleased, in fact delighted, provided
that they have subjected the method to scientific scrutiny.
If various groups can cure cancer, epilepsy, halitosis or lock-jaw by
inserting dandelions into a fundamental orifice, then again I am delighted.
This is a medical break-through, but as such, must be subjected to medical
scrutiny. If the method stands true scientific examination (not to be
confused with anecdotal ‘evidence’) then it will be adopted by everyone,
complete with thanks to those clever people who picked the dandelions in the
first place. After all, penicillin was tripped over, not designed. But it
has had a very rigorous scientific scrutiny since.
As far as the majority of ‘folk’ remedies is concerned, I work on the
principle that if you ‘think’ it is doing you good, then it probably is. But
don’t ask me to endorse something that has not been scientifically tested.
When the ‘alternative’ group spends more time proving their methods, instead
of complaining about non-acceptance, EBM practitioners will give them more
credence.
 Heart to Heart with Hillary
Dear Hillary,
Your writer who called himself Tim the T-man last week, complaining about Thai
girls front development hasn’t got all that much to complain about. It’s what’s
in the head that counts, not what’s in the bras, Tim.
Harry the H-man
Dear Harry (the H-man),
I was a little unsure of whether to publish this, my Petal. I didn’t want to see
a full scale war here, but I suppose by publishing it you have managed to get
something off your chest, at least. I agree that the person is much more
important than physical attributes, or lack of them. With today’s cosmetic
surgery, any apparent lack of bra filler can be corrected. Perhaps Tim the T-man
might like to start a Treasure Chest charity?
Dear Hillary,
I know that you deal more with affairs d’amour, but you seem to know most things
for most of your readers. I need to know where I can buy larger size dresses
here. I am a lot larger than these Thai girls, but I still want to be stylish. I
have tried getting clothes brought over by friends, but the styles aren’t “me”
and anyway I need a different sized top to the skirt. Any suggestions? I don’t
mind going out of the city.
Fashionable Fiona
Dear Fashionable Fiona,
Don’t worry about asking me questions like yours, us girls have to help each
other out in this world. However, Petal, the answer is staring you in the face.
It is called “a tailor shop”. You can get any style you want, made to measure,
and much cheaper than off the peg at home. Ask around at the expats girls clubs
and you will get some names. Otherwise you can drop me a line again and I can
advise you privately.
Dear Hillary,
I met a great gal in a bar in January on my first trip over. She impressed me so
much I can’t get her out of my head. She tells me she needs some money, so I
want to send her some like she suggested, but I’m not sure exactly how. Are the
banks safe in Thailand? Or should I mail her a check? Is that safe? Can she cash
it over there? I send her emails and she says just to do a money transfer into
her account number and it will be OK, but as I say, I’m not too sure. Can I use
my credit card so she can draw on it from over there? You got some ideas,
Hillary?
Max
Dear Max,
I sure do have some ideas, Max, and the first is that your credit card is going
to get max’d out if you are not careful. You are dealing with a girl who is a
professional in these money transfer situations. She has done it all before, and
may even be running several of you impressionable guys at the same time. Max,
Petal, you’ve met this amazing woman once, and here you are trying to send her
money. Why? You have had a deep and meaningful relationship, in your mind, but
that’s not the way she sees it. She’s more interested in how deep your pockets
are. Did she give you some reasons why she needs the money? Her brother fell off
his motorcycle? The family buffalo poorly again? Her mother needs an operation?
We’ve heard them all before. Max, you had a great time in January, and you can
have more great times next January, but don’t spend your money between now and
then. Save it! Just tell her that you are not in the position to send anything
right now, and watch the frequency of the emails dry up.
Dear Hillary,
Can you help our 25 year old son? He is planning on coming over to Thailand
after Songkran to visit his father and me and I am worried that it will not be
good for him. He is a quiet boy and keeps to himself a lot. I am worried that a
friend of his stayed over with us a couple of months ago, and while he used to
be a reserved Baptist boy too, when he came here he changed. Some nights he did
not even come home and other days we could smell alcohol in his room the next
morning. Our son will have spoken to this other boy. What should I do about all
this?
Concerned Mom
Dear Concerned Mom,
The first thing you have to change is not your baby boy’s nappy, but your
attitude. How old is this lad? Since he is old enough to travel on his own, he
is old enough to go out at night on his own. It is time to untie the apron
strings and let him run free, or you will never be a grandmother. On second
thoughts, you are making such a performance out of this one that I shudder to
think what you would do with a grandson! So third thoughts, keep the boy at home
to watch TV with you. You could also teach him knitting while he is here. It is
a very good way of keeping idle hands busy, as you know what mischief idle hands
can get up to!
Let’s go to the movies:
by Mark Gernpy
Now playing in Pattaya
Revolutionary Road:
US/ UK, Drama/ Romance – This is a brilliant 2-character drama set in
the 50’s based on a novel by Richard Yates, with brilliant performances
by Leonardo DeCaprio and Kate Winslet, brilliantly directed by Sam
Mendes. In other words, just brilliant! I loved it. However, it’s
done very badly at the box office here in Thailand – about as bad as
possible – probably because it’s mostly talk. But what great talk!
Between two actors at the top of their form, together again for the
first time since their legendary performances as the Titanic’s doomed
lovers. It’s a real pleasure to watch them interact on the screen.
They are both just very good actors.
Kate Winslet received
one of her two Golden Globes this year for her performance in this film
– as best actress. It received three Oscar nominations: supporting
actor (Michael Shannon – for a brief but potent turn as a mental patient
who sees through the phoniness surrounding him), and for art direction
and costume design for its pristine recreations of 1950s fashion and
design. Indeed, the careful attention to the details of 1950’s life is
one of the joys of this film. Or one of its horrors, if it brings back
bad memories.
The story: Frank and
April Wheeler live a life of suburban plenty that seems on its surface
to represent the essence of the post-World War II American dream. In
reality, however, the pair is haunted by the thought that they have
betrayed their youthful dreams and are trapped in a conventional
lifestyle that falls far short of the more bohemian existence they had
imagined for themselves. Determined to identify themselves as superior
to the mediocre sprawl of suburbanites who surround them, they decide to
move to France where they will be better able to develop their true
sensibilities, free of the consumerist demands of capitalist America.
I highly recommend this
film, and urge you to see it. Rated R in the US for language and some
sexual content/nudity. Generally favorable reviews.
The Wrestler: US
Drama/ Sport – Mickey Rourke’s portrayal of an over-the-hill athlete has
won him many accolades, including a Golden Globe win and an Oscar
nomination as best actor. I think it’s truly quite a wonderful
performance of a loser of a professional wrestler who you wouldn’t
ordinarily care about. But you end up caring about this man
considerably. Directed by Darren Aronofsky (The Fountain).
Rated R in the US for violence, sexuality/nudity, language and some drug
use. Seems heavily censored and about 10 minutes shorter than the US
release. Reviews: Universal acclaim.
Knowing:
Australia/ US, Drama/ Mystery/ Thriller – A teacher opens a time capsule
that has been dug up at his son’s elementary school; in it are some
chilling predictions – some that have already occurred and others that
are about to – that lead him to believe his family plays a role in the
events that are about to unfold. Starring Nicolas Cage.
Khan Kluay 2:
Thai, Animation – Khan Kluay, the legendary elephant, is back in action
in this sequel to the animated movie Khan Kluay. Set after the victory
at Ayuthaya against the invasion of the powerful Burmese Empire, when
Khan Kluay is appointed King Naresuan’s royal elephant.
Valkyrie: US/
Germany Drama/ History/ Thriller – A well-crafted, thinking-person’s
action movie, with a really very good script; it’s intelligent, makes
sense, the dialogue is terse and expressive, the plotting is solid, and
it’s tense and exciting. About the near-miss assassination of Adolf
Hitler by a ring of rebel German army officers in 1944, starring a
restrained and excellent Tom Cruise. For many reasons, a movie to be
seen. Mixed or average reviews.
Bolt: US
Animation/ Comedy/ Family – John Travolta does a superb job voicing
Bolt, a canine TV star convinced of his superpowers who sets out on a
cross-country journey to find his owner. I found it a complete delight,
containing many moments of real heart. If you at all enjoy animation,
don’t miss this one. Great for kids – and adults! Generally favorable
reviews.
Watchmen: US/
UK/ Canada – Action/ Drama/ Fantasy/ Sci-Fi/ Thriller – This film simply
blew me away! I think that once you accept the violence and the
comic-book origins, you will find it a monumental film. If you liked
The Dark Knight or A Clockwork Orange, you should appreciate
this. Amidst all the blood there’s a lot of philosophy, and a lot to
think about and debate before you see it again. Rated R in the US for
strong graphic violence, sexuality, nudity, and language. Mixed or
average reviews.
Miss You Again /
A-Nueng: Thai, Comedy/ Drama – The third entry in director Bhandit
Rittakol’s popular teen romance series. In Thai only.
Meat Grinder/ Cheuat
gon chim: Thai, Horror – A slasher/horror, torture-porn thriller
about a noodle-shop lady who serves up a special meat with her dishes.
Shades of Sweeney Todd!
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