Massive Changes Coming To Gold And Developed World - By Julian Phillips (26/2/13)

Julian Phillips

Tuesday, 26 February 2013 11:54

FinancialSense In the last five years, we have seen the start of the decline of the developed world and the real impact of the economic rise of China on that world. What lies ahead? James Wolfensohn, the ex-president of the World Bank gave a short lecture in which he forecasts what the world’s cash flows would be like in 2030: •    For the last century and far more, 80% of the cash flow of the world flowed to what we know as the developed world where 20% of the people lived. Twenty percent of the cash flow went to the underdeveloped world where 80% of the world’s population lived. •    By 2030 these numbers will have changed dramatically, with 35% of the cash flow of the world going to the developed world and 65% of the world’s cash flow going to the ‘emerging’ world, primarily China and India. •    In addition, he says that there will be 1 billion middle class people in China by 2050 –a figure we had previously put at 300 million. This is more than the total population of the U.S.A. and the Eurozone put together. Worldwide there will be 3 billion people in the middle classes with two thirds of them in Asia. Think for a moment what this will mean to you individually and the world in which you live. Unless one tries to understand them, we will become a victim of the changes. The ramifications are vast; they become almost impossible to detail in advance. We can forecast principal and principle changes but will almost certainly be wrong in specific details. We then look at the changes that will affect the precious metal worlds, but even here we can only make broad sweeps. Uncertainty & Instability We can be absolutely sure that man cannot weather these changes without uncertainty and instability on a scale not seen since the World Wars. This is the first ingredient that we must factor into the future and man’s way of coping. The fact that the Prime Minister of Britain has taken a huge delegation this week to India shows that the developed world is starting to try to adapt to these coming changes. Britain is even minting gold sovereigns, a coin with emotional connotations in India. But we do not see Asia turning to the developed world as partners in the future. The pattern to date has to mimic the developed world’s skills, and then do it cheaper at home, exporting the products back to the people who taught them at a lower price! So the wealth and power of the developed world seeps across to the East and will continue to do so until emerging world income rises to the same level as developed world income or developed world income fall to that of the emerging world. It’s clear that Asia is not an ally of the developed world nor are they committed to helping the developed world. The saying is true that nations have interests, not friends. This will be the case between the two sides of the world. Asia sees its first priority in lifting itself up and using developed world markets to help do that. The developed world may see only flat growth in the medium-term, reminiscent of the postwar-era when Britain, with its outdated equipment, was quickly overtaken by Japan, where after the war everything was built new, from scratch. Both China and India are in a similar position now. As a result, manufacturing will continue to go east. As the pressure grows on the developed world, the developed world may be pressured into protectionism to survive. The initiation of the U.S./European Free Trade Zone this month is the start of such survival techniques. Consequently, economic pressures will escalate into tension between East and West in global trade. The arrival of the Yuan onto the global stage will exacerbate these. Change in the Monetary World But the direct point of impact of these growing pressures will be in the monetary world. This was highlighted last week in the G-7 and G-20 meetings where quantitative easing was justified and its direct impact on the exchange rates minimized. This attitude directly undermines stability in foreign exchanges and, worse still, makes acceptable the undermining of the foreign exchange rate system itself and the need for currencies to be reliable measures of value. We have no doubt that the self-interested positions that this demonstrates will continue to grow and worsen to the detriment of the global economy. After these statements, we’re seeing sterling continue to fall. Expect to see the Yen fall to 100+ against the USD. Since the last war the developed world has interlinked with the U.S. in a tight knit monetary system based on the dollar, the only currency with which to buy oil. With Asia rising and with the Yuan shortly to make its appearance on the global reserve currency table, the dollar will lose a great deal of its control over both oil and the global monetary system. It will retain its hold over O.P.E.C. but not over Russia and if it agrees on a defined trading range between the euro and the dollar will ensure Europe pays for its non-European oil in dollars still. It’s likely, however, that Russian sales of oil and gas to Europe will be made in Rubles or euros, not dollars. Therefore, there will be a loosening of both the U.S. grip over oil supplies and the dollar’s grip over the monetary world. We cannot see the developed world willingly cooperating with any demands made by rising Asia as this will probably be at the expense of the West’s influence and power over the monetary system. For instance, in order for Asia to get the voting power it would warrant in line with its rising power, it would request that it get a good chunk of the voting power. It would also request that the I.M.F. lower the number of votes needed to pass a resolution from 85% to say, 70% with it getting a similar number of votes as the U.S. Its alternative is to set up an equivalent body to the World Bank and the I.M.F. –a process it has already started. Overall expect to see the world fragment into a series of blocs with their trading partners reliant on them. This would inevitably lead to more protectionism and monetary fragmentation. Alongside this and to reinforce the fragmentation and consolidation of self-interest in these groups, another worldwide development will begin. Both these blocs and all the nations left out in the cold will have to turn to Capital and Currency Controls to hold on to their country’s capital. The ‘carry trade’ of borrowers in low interest currencies and lenders into high interest rate nations would be controlled to prevent the probable tsunamis of capital sloshing between the blocs. The Capital controls that are seen in Iceland at the moment are the consequences of such crises. These will become increasingly common across the world. But the most life-changing facet of these changes for the developed monetary world will be that the damage done to the credibility of the leading currencies, the dollar and the euro. They will lose their current percentages of global reserves, being replaced to some extent by the Yuan and possibly other Asian currencies. The current weakening of the Yen, Sterling and Swiss Franc are making this point right now. This process has to continue as nations, in the cause of growth, will progressively weaken their currencies and provoke retaliation from the nations who lose their advantage because of such moves. The process of fragmentation will create currency volatility that undermines confidence in the entire monetary system. The current discussion of a Currency War will morph into a revolution against the corporation we saw in the past and see to a large extent now. We reiterate that this entire process will be exacerbated by the arrival and growth of the Yuan as an increasingly important global reserve currency. In turn, there will be a rising need for non-national, liquid, internationally acceptable assets that would support global currencies when used internationally. We know of only one at the moment and that is gold.

Is Time Money ?

Are Malaysians truly gluttons for punishment? 

Reading the latest DOS (Department of Statistic- http://www.statistics.gov.my) figures on Inflationary movements and Consumer Price Index increases reminds me of the analogy of the 5 blind men who were asked to describe the size of an elephant.

Because all of them were lead to touch different parts of the same elephant, all 5 assumed only their version of what an elephant was, was correct- based on the parts of the elephant they were allowed to touch.

Of course, in truth, we all know the real appearance of an elephant was very different.

It was also much bigger.   So, what am I babbling about?

Let’s take the most fundamental issue at hand today (to most Malaysians) in reconciling that above statement.  

Let’s talk about money. Money as an instrument can be issued as income, as debt and as collateral.

Most people think of money as simply a medium of exchange that makes economic transactions more convenient, but the truth is that it is much more than that.  Money is also a form of social control. 

Governments and corporations use money to regulate our daily lives. They use credit ratings to indicate your ''position'' in life through their absolute control of the financial system.

Just think about it.  We spend a great deal of our lives pursuing the almighty ringgit, and there are literally millions of laws, rules and regulations about how we earn our money, about how we spend our money and about how much of our income is taxed by the government. 

So far, so good. Money is not a bad thing in itself.  It helps regulate our lives and gives us hope and ambition. Without money, it would be really hard to have a modern society. 

Unfortunately, our money is also based on debt, and personal debt levels in this country have exploded to absolutely unprecedented levels in recent years.  These are not based just on my remarks but based on Bank Negara reports.

The borrower is the servant of the lender, and if you are like most people, nearly every major purchase that you make in your life is going to involve debt.  Do you want to get a marketable skill / education so that you can get a "good job"?   You are told to get a student loan. 

Do you want a car?  You are encouraged to get an auto loan and to stretch out the payments for as long as possible.   Do you want  to buy a house?  You going to end up with a big fat mortgage. 

The cold, hard truth of the matter is that most Malaysians are debt slaves. 

See the poverty level in between races circa 1999-2009 -@under ''KAUM''

Most of us spend our entire lives trapped in an endless cycle of debt that we never escape until we die, and meanwhile our years of hard labor are greatly enriching those who own our debts.

Another caption that delineates the poverty level disparity between Indians and others in Melaka

What I mean to say is that:

The rules have been changing lately, in case you did not notice it. 

Take the concept of making or working for money, for instance.

Once upon a time, my fore fathers who were south Indian coolies were transported here to Malaya by the British to work in the plantations and farms. In return for their labor, they were accorded the privilege of an estate community, living quarters and toddy, away from the prying eyes of whatever it was these individuals were trying to escape back in their homelands. 

This form of ''supervised living'' resulted in them going into indentured living or debt bondage with the plantation owners. 

Which resulted in generations of people enslaved to the plantation style of living, and being at the whims and fancy of the plantation owners-their owners and bosses.

I see this happening all over again here in Malaysia. Only this time, we are indebted to the Banks, Credit companies and Ah Longs of this new world. (The leasing & finance companies or even those loan providing companies that are licensed by our very own Bank Negara). 

The problem you see is that they all follow the time honored system of using ‘interest charges’ to enslave us.

‘’They’’ are the reality of our present world. The investment firms and insurance companies and their share holders are the elites who own your life, who get every last dollar you make.

This should put the term “slaves to the system” in perspective. This is a new form of indentured living.

A new government endorsed ''KANGANI'' system (supervision system)' if you will.

Everything is owned by a few elite monopolies. What if your bank was a subsidiary of a parent company that owned not only your mortgage-lender, but also your health-insurance company, power-company, water, sanitation and even telecommunications-company, & food-supply distribution companies.  All these are listed companies. You just need money to have controlling share of their boards of governors.

What if they also made a killing out of the import business, selling you all kinds of goods that you don’t need and that took away the jobs that you do?

What if they also owned the news and media that you watch and the entertainment-industry that keeps you distracted from seeing what they’re really doing to you?

I believe all this news about countries and banks going broke is an illusion. It is an attempt to incite more troubles across nations so the shysters can come in later to control and ‘liberate’ the marginalized and the poor. Problems that they created and caused.

Let me explain.

The concept of time backed by labor / effort is money is correct.

But '' interest ''charged backed by the ticking of a clock isn't.

It’s usury (riba) and creates money out of thin air.

For example, should you take out a 30-year $100,000 mortgage at 4-percent interest this month, then in the first year, the mortgagee pays approximately $1760 toward the principal-real amount and gives $3968 to usury-time.

This hardly seems fair, but they've convinced us this is how business works, in this “one for you and two for me” scheme.

In reality, this thing they call time based interest steals money, because the interest-clock ticks away every second of every day. The catch phrase “time is money” is a great way for ruthless, “entitled-to-your-money” people to sleep at night.

It’s a mantra for the financially insane, who think they deserve the wealth, because they one upped you. Who really deserves that $3968 interest installment?

‘’The Financial Institutions because they took the risk of borrowing to you’’ they say.

They are now using risk as a factor to bluff you.  Risk is only a factor when you think on an individual level …not on a societal level. 

We are a society of men and not just individuals.

You may think, “That’s just the way the banks operate and they've got to make money.” 

Well, they do take money. 

If you put $100 in your savings account, they loan out $90 of it with their “fractional reserve” hocus-pocus-fraud in a “now you have it, now you don’t” scheme, because banks make engineered bad investments. 

They know where the money goes, just like the magicians know where the rabbit goes. .. you do not.  

Remove time based usury (perpetual interest charging) as a factor and the debt can be managed. 

Your loan charges from the banks and financial Institutions are a cheating game.

These banks are fine being filthy rich, along with their thug politicians supporters, while fraudulently bankrupting entire countries and impoverishing millions in a “time is money” interest scheme, using their policy-enforcers, aka the Financial System, to enforce their insane policies.

They are getting away with crimes against humanity, as millions become homeless and evicted, while an entire generation of people suffer.  If you do not understand what I’m expounding here, you’re still going to hold onto the idea that banks need to charge interest to make money, because that’s all you know, or have been told.

Perhaps you think you need to earn interest on your money to keep up with inflation, when the reality is that the interest causes the inflation and you can never catch up, because the system owners take their cut, meaning that the interest will never equal the inflation.

From my personal observations, many Malaysian Indian families are suffering without realizing the reason for their low income, high despair life. Dig a little deeper into their generational under achievements and lack of educational propensity and you discover some stark facts:

·               High level of poverty is because there’s only a single earner in a family,  (normally a women doing menial job);

·               Lack of savings and a clear lack of ability to save;

·               Their debt equals a quarter of their income in monthly  repayments;

·               43% of income goes on essentials - transport, food, rental, etc

Having no interest/usury means stable prices and that your savings will buy the same in 50 years as the day you saved it.

Banks create money and plug digital numbers as journal entries. There is no security or labor backing to the interest-component of this computerized system.

I ask you to ponder on this, my friends. Why can’t financial and trend experts develop a plan for the benefit of all? Instead of being a peacock in front of a camera, explaining or interpreting the insanity, they could use their intellect to help reset the system, instead of supporting it with their mind-boggling analysis.

They've orchestrated all this misery on purpose to do just that.

They have never saved the day.

By the way, the world isn't in Debt, because time isn't money.

It’s time to remind everyone that usury is against God’s Law, and it was forbidden, and still is.

It absolutely goes against the Commandments of “Love Thy Neighbor” and “Do Not Steal”.

God knew the injustice of this system & forbade it, and warned against it: If thou lend money to [any of] My people [that is] poor compared to thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usury (Exodus 22:25).

There are many references in the Bible and Quran about how usury (interest) is against the Law.

This market-money beast system is a time bomb. If you don’t think it’s coming to an end, you are dead wrong.

But think what good we could do by diffusing it, instead of letting it explode, by changing it for EVERYONE. Will we do it?

Time will tell.

Interview with Datuk Ali Rustam

In a recent interview, The Chief Minister of Melaka, Y.A.B. Datuk Seri Hj. Mohd. Ali bin Mohd. Rustam spoke to us on his visions and hopes for Melaka in terms of ‘Tourism Appeal’ and he broached on the subject of having moreQuality Product and Services offered to the visiting tourists from Melaka business men and women.

He stressed the importance of equating a good service sector to not just appearances but also a higher quality of products on offer.

He reminisced with us the differing standards that Melaka had on offer then and now. With the added attraction that the Unesco Heritage City acknowledgement has provided to our fair city many businesses had partaken in the benefits of tourism since and Datuk Seri hopes to see more quality pamphlets, business sign boards to be put up by local business men in Melaka to give the city state a fresher more modern , cheerier outlook.

With our beloved city state Melaka receiving more visitors year on year, we have moved up on the radar of tourism appeal in terms of selection for business visits and family outings by in bound tourists and although we have also moved up the ladder in terms of types of tourism products available, Melaka can now safely be said to be no longer a low cost destination nor are our services only catered to the lower end tourist market.

He was quick to point out though ‘’That does not mean this city is too expensive but  that it is now offering  a higher range of services for those seeking that particular market. Melaka is still relatively a cheaper destination compared to our southern or northern neighbours’’.

As an example Datuk Seri mentioned the recent Melaka World Heritage Europe International Golf tournament between business men in Melaka and Europe in which the Melaka side won 38-15. He was happy that with the advent of such games and sporting events, more people from around the globe will come to appreciate the beauty and tourism offerings of Melaka

Personally, he cited that one of the reasons Melaka is able to go up the rung in the services and business ladder is due to the private sectors strong support to the state governments’ policies and action plans i.e. the recent agreement between business owners and the state Govt to ensure all Front Liners use Kebaya’s and Batik’s whilst performing their duties.

He ended this interview by adding ‘’In terms of taxes collected from these businesses, the heritage tax had accumulated a RM 1.7 million collection last year and a portion of these monies had been disbursed back to the industry through Non Governmental Organisations, public facility upgrade and promotions’’.

Casa del Rio Festive Flavor

The Chinese New Year festive mood is still evident throughout the city state of Melaka on this day,which I was wrong to assume would quiet down by now. Can you believe it took me an hour just to clear Jonker Street traffic on my way to Casa del Rio Hotel?

My wife and I have been looking forward to this occasion where we could wind down to the splendor of the CDR's river grill service and sumptuous scenery for a relatively quiet valentine's celebration. Under the invitation of the marcom- Ms.Nellie, our dining privileges for this auspicious valentine day was to begin within the most romantic setting in Melaka on this February 14th.

CDR Lobby

We met many friends and former colleagues here,who are now working for the resort and it was an obvious decision to share with them our Yee Sang platter in celebration of a better year ahead for everyone !

The fast and hectic memories of the past week seemed to melt away within the confines of this Portuguese inspired building fronting the cascading waters of the Melaka River.

CNY  Yee Sang with the  Managers of CDR

It is times like this that one realizes and give thanks to the many blessings that life has bestowed upon us here in Melaka, and the recent flurry of family gatherings which we attended with great joy and anticipation plus visits from friends and colleagues to help us cheer the holiday moods together, enliven our mundane daily lives such that this collection of pictures in my blog do little justice to the great feelings of happiness, joy and spirits of sharing we share with the people that surround us.

Tiger prawns in Superior XO Sauce

Seafood with Braised Mee Suah

Roasted Chicken

Mee Suah

Wok Stirred Bak Choy in Garlic sauce

May such days be many but our troubles few, may all of God's blessings descend on all of us and we find peace and the ability to forgive within us. And may we all find what we seek wherever we roam.

Luncheon in Hatten Hotel on 3rd day of CNY

Lion Dance Performers during the luncheon

For the longest time, it has been customary amongst cultures, societies and individuals to share their joy on happy occasions with their loved ones, friends and colleagues. Here in Melaka, it is the same.











Many companies and their supporters are feted throughout this CNY duration by those who have had a good year or are wishing for a better year ahead !

 

Abalone Yee Sang

It is their way of saying: ''I hope that you will be happy and that you will prosper at whatever you do. Thank you for supporting us and being there for us  all this while''.

Shark Fin Soup with Fish Maw

Narendra Kumar Reddy of Dataran Pahlawan Mall,Hatten City did the same for Michelle and I recently when he invited us to partake in their companies corporate luncheon in their Hatten Asset Management 's Chinese New Year bash for their corporate clients and supporters.

Steamed Soon Hock Fish

The luncheon was located on their 11th floor Ballroom and in attendance was Datuk Eric's political strongman-the Governor of Melaka Tun Datuk Seri Utama Mohd. khalil Yaakob and the Chief minister of Melaka, Datuk Seri Haji Mohd Ali bin Mohd.Rustam.

The full splendor of the Hatten Group was on display here this afternoon for the viewing pleasure of the VIP's and all other invited guests.

Braised mushrooms and Asparagus in oyster sauce

Starting with the luxuriously massive carpeted walkway and entrance to the ballroom foyer, leading up to the entrance of their 100 table ballroom and their signature God of Prosperity welcome team for the invited guests, the  extensively VVIP preparation and groups's welcome  for everyone was indeed a sight for sore eyes here in Melaka.






Being the premier developer here in Melaka we would expect no less but even then the last time we'd seen such Grand Welcome accorded to the guests was in KL @ the old Hotel Istana !









The Luncheon was short on speeches but long on traditional entertainment -provided by the 2012 award winning Lion and Dragon dance team in malaysia.

But clearly a 4 hour luncheon was stretching the patience a liitle bit !

Anyways we were honored  when Kumar brought us to the first table in the entire Ballroom and we found ourselves sharing the table with Datuk Seet Tiang Chye.

The memorable luncheon and good company provided was evident throughout the rest of the day as Michelle was seen beaming at the privileges and honor accorded to us.

The fact that Narendra looks up to me as a mentor and guide was not lost to my wife during this afternoon and it felt good to see her beaming at me with pride in her eyes.

2nd day of CNY 2013

This picture of David preparing the salad in our Kitchen is the
only picture we have of the events of the night
as Michelle forgot to take any other picture after this !

Chinese New Year Eve Dinner 2013

Looking back at my pages here, I sometimes muse over what has been a "rich and exciting life” it has been, looking for and seizing every opportunity for a visibly fruitful and wonderful life experience, which hopefully, I have successfully captured in this blog "for posterity’s sake".

Many a days has been spent gallivanting in enjoyment and spent frivolously but without regret as life in this city state is always good and meant to be enjoyed. What has made it all the sweeter and memorable has been the times spent and shared with friends and like company here in this little hamlet I call Home.

Come February every year, its Chinese New Year time again in these parts of the world and a whole spectrum of society would be busy celebrating with family and friends the start of a hopefully auspicious new lunar year. For this year it's supposedly represented by the water snake and i believe, many Malaysians Chinese would have by now read or consulted with their Geomancers on the particular fortune and destiny of their individual selves for the next 365 days!

Whether the coming days would be good or bad for me and my family, I do not know for sure, but as God is my guide and witness this year started off with very good vibes as Michelle and friends decided to celebrate the chinese new year eve with a seafood dinner @ the kensington-which is a western /fusion food establishment located at Taman Kota Laksamana.

The 11 of us had a very good time partaking in the special New Year sea food platter/dish the restaurant had prepared for us. With my daughter,Shoryn and the other kids in tow, the night was made more special as we started off the main course with some tasty raspberry wines that were brought in by Sandra to complement the bottles of South African Chardonnay and Rose that Michelle and I bought .

 The conversations were flowing fast and furious that evening as all of us were in very high spirits and were enjoying each others company tremendously. Before we realized it, we found ourselves to have conquered almost 3 bottles of red and rose wines while still halfway through Dinner ! Luckily the corkage was only
RM 20.00 for all the bottles we brought and did not sting that much.

 Though the whole meal came to a whopping RM 440.00 that night (excluding the wines) it  was thoroughly enjoyed by all. Pleasant company does make the time pass unnoticed and soon it was time to call it a night from the restaurant.

As we were leaving the restaurant, there was a beautiful display of fire crackers in the night sky, from melaka raya, which made the entire evening and dinner feel even more wondrous than usual. The kids and I stopped in our tracks to watch the beautiful display of fire works when shoryn purportedly pointed out to us a rather funny shining light that was hovering about a mile up. She wanted to know what it was and to be honest, the only answer I had was that it was a UFO !

All of us later adjourned to Sandra's bungalow in Trenquerah for some more drinks and  a continuation of the evening's merry making before michelle and I called it a night around 12.30am,since we had a rather tight schedule visiting the relatives in the morning. The best part of that particular drive home was the lighted night skies around melaka, which came alive with the loudest bangs and beautiful dazzling pyrotechnic lights of the Fire works even though technically speaking, setting off or playing with fire works is banned in Malaysia !

                               
                                 A very good start to a wonderful new Year !