Charlie Munger - when copying the worst of democracy

 

5 minutes of hard truth and wisdom from Charlie Munger on democracy as a defective system for economic development. He was asked if a democracy like India could grow like Singapore, another democracy?

The answers were a dose of hard truths that was a bit difficult to swallow for India.

Arab World seizing the moment...Evil American Empire planning to strike back

For the last few decades after WW2, the Americans have been lying and bullying the Arab countries by shouting peace but fixing them up for endless wars against each other and building up Israel to lord over the Arab countries. The Americans were never for peace. They want every country to be fighting each other, they want the whole world to be destabilise except North America.

It is not that the Arabs were stupid and did not know they were had. They were just too weak to resist. It is only now that the combined forces of China and Russia were strong enough to give them the backing and confidence to stand up against the control and manipulation of the Americans. Now they could push for peace and development, even ending petrol dollar.

Saddam Hussein and Gaddafi tried but were killed by the Americans and their countries invaded. The Americans could not lie about what they had done to Iraq and Libya and all the Arab countries. The Arab countries are crying for the Palestinians but could not do much against the might of the Americans and the West with Israel as the fighting dog.

Given this chance, the Arab countries are not going to lose it and are in together to break free from the oppression of the evil American Empire. It is now or never. They seized the chance to have their freedom back and to chart their own future, in their own interests, not in the interests of the Americans, the West or Israel.

 Anonymous 

Now the Americans may want to do the unthinkable, to take down the Arab countries again, starting with Saudi Arabia. The Saudis are prepared for it, with DF21Ds, YJ21s, drones etc etc and with assurance from Russia and China to come to their defence.

An attack by the Americans or Israel on Saudi Arabia or any Arab countries would be an attack on the Arab and Muslim world and on Russia and China. The Americans and the West would not be allowed to take out individual Arab countries one at a time like Iraq, Libya, Syria etc etc anymore. Russia has put the first stop in Syria.

Why taking down the US dollar is easier said than done - part one

From the moment the US weaponised the dollar to impose near-unprecedented financial sanctions on Russia after its invasion of Ukraine it was obvious that other countries, most notably China, would try to reduce their own vulnerability to similar sanctions.

A recent spate of agreements that China has struck to use its currency directly in trade deals, and similar efforts by less-developed economies to substitute their currencies for transactions that have more commonly been executed with dollars, have intensified discussion about the end of the US dollar’s dominance.

Since the invasion of Ukraine and their seizure of about half of Russia’s $US640 billion ($944 billion) of dollar-denominated foreign exchange reserves, China and Russia have been conducting most – about two-thirds – of their significantly increased trade in their own currencies. The yuan is now the most traded currency in Russia and Russia also now holds about a third of the world’s yuan-denominated foreign exchange reserves.

China has struck a deal with Saudi Arabia to pay for oil purchases in yuan – the first time in nearly half a century that the Saudis have been prepared to accept anything but the dollar in exchange for their oil. It is seeking similar deals with other Middle Eastern oil producers.

Last week, China’s China National Offshore Oil Company and France’s TotalEnergies struck the first deal for a LNG cargo denominated in yuan.

Also last week, China and Brazil announced they would use their own currencies to settle trade and that Brazil would connect to China’s fledgling international payment system, its alternative to the US-dominated SWIFT international payments and messaging system.

India is trying to do more direct deals that reduce its exposure to the dollar. And in Latin America and South-East Asia, countries are also trying to circumvent the use of the dollar by doing more deals in their own currencies.

There’s even been talk of the creation of a “BRICs” (Brazil, Russia, China and India) reserve currency, perhaps backed by a basket of commodities.

The sudden surge in interest in what has been a perennial topic, the erosion of the dollar’s status as the world’s reserve currency and the global hegemony that confers, and China’s central role in most of the de-dollarisation that is occurring, has led some to believe that the end of the dollar’s post-war dominance is within sight.

While it is likely that, as has been the case since the turn of the century, the pervasiveness of the dollar in global trade and financial transactions will continue to wane, it is improbable that the end of dollar dominance will occur any time soon.That dominance is built on a number of critical foundations that no other economy has. The US runs large trade deficits and therefore creates more dollars than its domestic economy requires, it has very deep and liquid markets to absorb the savings of those countries with big trade surpluses, the dollar floats freely with very limited capital controls and it has a legal system that the rest of the world generally trusts.

Anonymous 

Why taking down the US dollar is easier said than done - part Two

While China is seen as the major threat to the continued dominance of the dollar, it has none of those things and is most unlikely to change its economic model to run large trade deficits to absorb the rest of the world’s savings, or completely liberalise its financial markets, or abandon its managed exchange rate policy or its capital controls, or create a transparent and trusted judicial system.
That’s probably why, even though the dollar’s share of global foreign exchange has fallen from about 72 per cent at the turn of the century to about 59 per cent, China’s currency accounts for just under 3 per cent of those reserves.

Only about 2 per cent of global trade is conducted in yuan/renminbi against more than 40 per cent for the dollar. The dollar dominates global foreign exchange transactions with a share of almost 90 per cent and about two-thirds of all global securities issuance is in dollars.

The reality is that there is no conventional alternative to the dollar as the world’s reserve currency and, while China might have ambitions to chip away at that dominance, it is inconceivable that the Communist Party would surrender the tight control of its financial system, economy and even society that would be the price of a real tilt at grabbing that status.

Europe (about 20 per cent of foreign exchange reserves) might once have held ambitions for the euro but the disparate and at times dysfunctional nature of its individual economies and the nature of its trade policies – historically the European Union has run significant trade surpluses – has worked against it.

The trade issue is a fundamental one. While the dollar’s dominance benefits the US financial sector and enables the US government (and America more broadly) to borrow more cheaply than it might otherwise be able to do, it makes US non-financial businesses less competitive and has wiped out traditional jobs as they have shifted to developing economies such as China and India.

The reserve status is therefore both an “exorbitant privilege” and an increasingly exorbitant burden because running persistent large trade deficits – and America is probably the only economy and financial system that could absorb such a large share of the world’s trade surpluses – means increasing trade and fiscal deficits and debt and the winnowing out of much of the country’s less sophisticated elements of its industrial base.

It is conceivable that, decades down the track, the world’s trade will have more of a multipolar appearance to it as various blocs develop trade in their own currencies. It is also conceivable that regional or international digital currencies, backed by gold and other assets with low volatility, might emerge.

It is difficult, however, to see anything emerging that ticks all the prerequisites required to either displace the dollar as the world’s reserve currency or be a genuine alternative. If it did, it would require a dramatic, traumatic and probably quite destructive reconstruction of the global economy and trade.

Anonymous

Singapore is going to be an Angmoh tua kee country

SINGAPORE: A large majority of Singapore-born citizens believe that an English test should be part of the country's citizenship application process, according to a CNA poll.

About 80 per cent of the 500 respondents were in favour of the test, following a suggestion in Parliament last month that has sparked spirited public discussions.  CNA

80% of 500 respondents wanted English test for citizenship application. Who are these 500?  Are they representative of the Singapore population? Presumably, since the poll was conducted by CNA and in English, the respondents are all English educated.

I asked 100 ah peks and ah sohs in the kopitiams and markets and 100% said no to English as a requirement. So how? Are the ah peks and ah sohs representatives of the Singapore population? 

Can the Chinese media conduct a similar poll and see what kind of result would it get? 

Just less than 40 years ago, China was still a very poor and underdeveloped country and many Asean countries looked down on China and the Chinese language was even banned in some Asean countries. Today, Asean countries are still developing countries, but China is already a super power, the number two economic power and going to be number one. The Chinese language is going to be one of the most important language. Some Asean developing mentality and mindset still cannot see how far they have been left behind by China and still think so highly of themselves and still thinking China and Chinese are below them. What simpleton!

The China Space Station is using Chinese and foreign astronauts would have to learn Chinese. And here we have simpletons still living in the 20th Century and thinking the world has not changed, and wanting English as a must language to be a citizen? Some even have the same mindset as those in Hong Kong, wanting Singapore to be like a British colony, speak English, the language of the colonial masters and be very proud of it. By the way, the colonial masters are now heading to oblivion. They are being wiped out from the continent of Africa.

It is ok for India to stick to English as they did not have a common language to communicate with each other. Singapore chose to be a multi lingua society to capitalise on our ability to speak more languages. In the region, Malay is equally important to communicate with our neighbours. English is convenient but must not be raised to a status to determine citizenship. 

PS. Italy banning the use of English in their country while Singapore is so proud to make a non native language a must to be a citizen.  What is the meaning of pride of one's own language and culture?

EU country’s ruling party fights ‘anglomania’

The Italian government is considering a ban on the use of foreign words in official communication.
A group of legislators from the ruling Brothers of Italy party has proposed banning the use of foreign words and terms in Italian public administration, schools, and universities.