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Wednesday, April 04, 2018

Interesting Readings 02-April-2018

John Mauldin picks Lacy Hunt's chart on velocity of money. Here it is.
This is what has been the problem all along. I explained this 2013 article on this blog titled About Money Supply and Inflation. This is the reason why unprecedented stimulus did not result in inflation. But velocity is weird variable. If it turns up then we will quickly go into high inflation.

Jared Dillian has a great newsletter. He believes we are entering a trading zone. Volatility is good for trading not for investing. Investors need to keep cash on hand for opportunities that may arise. They may have to move quickly. Interesting times. 

Here is a bit of advice from Jared Dillian's boss. Worth keeping in mind. 
There is a relationship between volatility and liquidity. When the Fed adds liquidity to the system, it suppresses volatility. When it withdraws liquidity, volatility rises.
FT ponders which company will beat 1 Trillion Dollar valuation. It points to how Scott Galoway jinxed Amazon, Morgan Stanley jinxed Microsoft. In the article FT jinxed Apple. Interesting read.

World War Watch
Various South Korean artists are in North Korea on a diplomatic mission. The tour, titled “Spring is Coming,” is billed as a gesture of goodwill and includes k-Pop artists. Red Velvet a famous K-Pop band also sang their song called "bad Boy". It went well with Kim but the Economist was worried about exactly that and its implication for diplomacy:
Red Velvet’s “Bad Boy” could be an unorthodox injunction to nuclear diplomacy: “Oh your edgy style is a bonus/ I love the boring way you talk/ let’s push and pull.”

Interesting analysis. Raja Mohan believes Kim went to China to “inform” Xi of his decision, “promise” to keep China in the loop and “seek” the Chinese leader’s blessings. This is a position of strength for Kim. Raja Mohan states that the two polar opposite outcomes of Kim-Trump accord are bad for China. If it succeeds there will be more US presence in North Korea - closer to Chinese border. If it fails drastically again there will be a war near China border. But any outcome that increases US cooperation with North Korea seems problematic for China. That means only acceptable option for China is North Korea determined to be anti-US but pro-peace and pro-denuclearisation. Hmm.....

IS with small resources is thinking up newer tricks to battle with trained armies. These new strategies are being watched carefully. Armies need to be prepared to counter-act such tactics or develop them for self-defense. Imagine what can China do. India needs to keep an eye on Arunachal and Kashmir. The future looks dangerous.

Very important read. US needs to do more to be assertive in the region. There is another aspect. US has always appeared to be lot closer to being beaten that it really is. Japan came close but fell back. The US resilience is rooted in democracy-capitalism complex. That is at its weakest. But it can be strengthened. Once done, it will unleash another wave of creativity and growth leaving many behind.

Caroline Weaver explains the history of Pencil in a short 4min TED video.