So, It’s Monday again, the weekend is behind us, fun over for another 5 days of slog…
And after thinking about my week-end, I got to thinking about money, and recent posts I’d made. Thanks too to those now following events here…
As I recently mentioned IBM, I’ll kick off with that. As I previously mentioned, IBM’s sales in China are down 40% on last year, and that begs the question.., What is happening with the other American Tech behemoths?
If you’re a stock-market Trader, or Options, CFD’s, or Spread-Trading specialist, this might be the time to do a little digging to see if there are shorting opportunities. (I know this is contentious for some people, but it provides liquidity, and makes prices lower to buy, or sometimes just exposes risks that are not yet so widely known)
Anyway, this whole NSA scandal is making news, as a European Parliament commission headed over to the U.S. last week, for talks with legislators to get answers to questions, and raise concerns of Privacy, Security, and Industrial Espionage – after all, with so much technology in use worldwide, if one country can just skim the internet for traffic, and store that away in some digital bunker, while they sift through it, because they have the technological edge, then the rest of the world might begin to mistrust that country, and that can affect international trade, and also spark developments outside the country, which might in itself lead to the very concerns that led to WW2, in the aftermath of WW1…
We already know that many middle-eastern countries mistrust the U.S., and the Russians, and Chinese have a long standing concern over American dominance, it is not outside the bounds of possibility that if unemployment rises world-wide, through lowering of trade, this will not only affect stock-markets worldwide, but also likely increase QE*, which many already believe is anathema, and lead to digital isolationism, protectionism or worse.
We have to remember though, that the Americans are becoming just a little paranoid – the Twin Towers attack, was the modern equivalent of the Pearl Harbour attack, and that woke the slumbering beast, with disastrous consequences for the country that did it… (I wouldn’t be surprised to learn that the reason that the Americans dropped the two bombs on Hiroshima, and Nagasaki, was because of feelings of retribution… Anyway perhaps we shall see in the fullness of time)
Some say that the U.S. isolationism, is at the heart of their problems, because so few Americans travel overseas they lack perspective. I worked there in the Tech-boom, at Dell HQ, in Roundrock, Texas, and to be honest the people I worked with were lovely – especially a certain lady, half of European ancestry, and half Native-American – If you’re out there – I’d love to hear from you btw, but their media, was only interested in the U.S., or if the President ventured overseas. It’s a no wonder George Dubya, struggled with his geography. (amongst other things)
So back to money matters. The U.S. gained prominance on the back of its technology. The DARPA agency (Defence Advanced Research Projects Agency) began research into the use of computer communication in 1969, which ultimately led to the internet, and to U.S. dominance of the tech-sphere, but it could be coming to an end, as India and China now have space exploration programmes, and their high-tech grads are making serious intellectual improvements – I heard recently that India has a Mars mission planned, so perhaps some research into Indian Space Technology Corporations is in order. (If you get a sniff of any, perhaps you’d let the rest of the followers here know – NO mere plugging though without supporting information)
Anyway, this post has rambled on for far longer than I imagined, so Until next time.
* QE – Quantitative Easing if you’re not already aware – A euphemism for printing more money to dilute the buying power of all existing currency by debasing the currency and thus raising the cost of goods through price inflation. Incidentally, for non-historians – Germany, Zimbabwe, Yugoslavia, Austria, and Argentina, have all tried that to detrimental effect with Hyper-inflation.
(Read my book mentioned below if you want a fuller explanation – mentioned in one of the later chapters)
As Southern England recovers from the overnight ‘breeze’ – OK, wind speeds DID reach almost 100MPH, but as reports come in, apart from the 14year old boy who was dragged from a harbour wall by a passing wave yesterday – Sincerest condolences to his family btw, – no-one else has been reported as killed or injured, though trees were blown over, and there appears to be little long-term effect.
I was working in Southern England the last time that a Hurricane (that wasn’t – at least according to Michael Fish) passed by.
As the aftermath unfolded back then, and Britain counted the costs of fallen trees and debris strewn streets – Sevenoaks in Kent, lost six of the seven oaks of their namesake, the stock market, which had also been at record highs back then began to fall just two days later… (If you’re a Technical Analyst – check out the weekly RSI figures, as this suggests that the market is “toppy”)
Look out below.
And as the spat between Germany’s Angela Merkel, and the US’s, NSA, continues, the spy saga takes another turn. In a recently read column, in which the writer discussed things technological with LINUX originator – Linus Torvalds, he as good as confirmed that the NSA had asked him to insert a “back-door” into the kernel of the operating system – LINUX.
This begs the question whether Microsoft, Apple, Google, Oracle, and other Tech giants have had similar requests, and whether these software giants complied with them…
Maybe those outside of the U.S. might be reconsidering their technological options.
IBM, once known for its computer hardware and now principally its software and services has already reported a 40% decline in its Chinese business, down from last year’s highs. Perhaps Edward Snowden’s releases will have the biggest effect on America’s global dominance, as people outside America eschew American technology for security reasons.
There seems to be a growing distrust of all things American, and this can not do the US dollar any good in the longer term. As China recently suggested we need to see a “de-Americanised” world, perhaps this might be the straw that broke the Camel’s back as the saying goes.
The USD/EUR rate currently stands at 1:1.3810, and the GBP/USD is 1:1.6196 (as at 09:25).
We shall see where these trend to in the medium term. And if the dollar does decline, this can only strengthen those other alternatives to currency – REAL MONEY – Gold and Silver.
Gold currently stands at $1350.34, and Silver at $22.58 both down slightly on the day, but up from recent days.
Until next time.