Today's global financial system is characterized by a curious mixture of freedom and manipulations. Between the two main currencies of the world, the US$ and the Euro, we have a free float. But between the dollar and a lot of other currencies, especially in Asia, we have a dirty float, or fixed exchange rates, the goal being to maintain the exchange rate at an abnormally low parity to the dollar.
To make matter worse, a lot of those countries (especially China and India) have decided to make their currency inconvertible. This would not matter if these currencies were small and irrelevant, but they are increasingly less so by the day. This state of affairs leads to profound price, and volume, distortions, some well understood (i.e.: the RMB is undervalued and can only go up) and some not as well understood. It also triggers a number of important questions. Namely:
* What distortions does the intervention of non-market players in the Asian foreign exchange markets engender?
* Are the distortions abating? Or accelerating?
* How long can those distortions last?
* If/when the adjustment comes, what assets will be most at risk?
Of all these questions, the last one is probably the most important. As we never tire of writing, money management is often more about avoiding the assets that implode, and diversifying amongst the rest, than about picking outsized winners.
While it may be tempting to adopt a very defensive posture in the face of such blatant distortion, there are many reasons to believe that the current overall positive growth environment will continue over the coming years. In The End is Not Nigh, we push some of the themes developed in Our Brave New World a little further and review the reasons that have led us, in recent years, to shy away from prophecies of doom and why we remain positive on global financial markets.
Book Description
Product Details
Would you like to update product info or give feedback on images?
|
Customer Reviews
|
Share your thoughts with other customers:
|
||||||||||||||||||||||
|
Most Helpful Customer Reviews
16 of 21 people found the following review helpful:
5.0 out of 5 stars
The World as seen from Hong Kong. Refreshing!,
Amazon Verified Purchase(What's this?)
This review is from: The End Is Not Nigh (Paperback)
The authors' location in Hong Kong gives this book a refreshing point of view which I appreciate because most of my financial reading is America centric. The book analyses the present financial and economic balance between the major economic blocks and explores various potential scenarios should things change.
The authors divide the world into four economic spheres for the purpose of their analysis: 1.- Asia, the workshop of the world with tightly controlled exchange rates to keep their currencies devalued. A change of that policy would have world wide repercussions. 2.- The Anglo world, leader in profits. Should the world economy blow up, the Anglo world will not be the detonator. 3.- Euroland, the socialist disaster waiting to happen. 4.- The rest of the world, essentially a bystander, mentioned only in passing. In a sense, this is a sequel to "Our Brave New World" and if you have not read it, it would be good place to start before reading "The End Is Not Nigh." I would suggest two corrections. On page 132 they show a graph "Tangible and Financial Assets as a % of Total Assets." If those numbers rely on GAAP accounting, they are wrong, I don't know by how much, but wrong they are. GAAP accounting expenses R&D which means that Windows, for example, is on the books at Microsoft at zero dollars. Clearly that is absurd. Windows is a capital investment for Microsoft, an investment that is producing revenue and profits. Windows should be included as "heavy" capital. The same applies to all other technology companies like Oracle, Apple and so on. The second correction has to do with stock buybacks, page 136. I believe they should subtract "exercised stock options" because a lot of the buybacks are designed to simply hide the stock dilution created by the options. All the talk about doing the right thing for the stockholders is just that, talk. Let them pay dividends instead! ;-)
1 of 1 people found the following review helpful:
2.0 out of 5 stars
Good Read, Well Written, but Way Wrong,
By
Amazon Verified Purchase(What's this?)
This review is from: The End Is Not Nigh (Paperback)
With the benefit of hindsight the premise of this book is very wrong. I read this awhile back thought it made a strong case for continued good economic times. A few of the main ideas required a significant leap of faith, which again has proven to be a mistake. The authors says it's okay that the liability side (corporations, governments etc) is going up because the asset side is going up more. Wrong, now that we clearly see the asset side was phony, corrupt and inflated with more leverage than anything real and lasting. Another big idea that made me cringe was the idea of letting certain people make massive amounts and to not complain when the amounts seem out of whack with any sense of fairness. Well, again, now we know very clearly though we knew some of this before, that much of this notion is a massive insider's game and many of these people detract value from society instead of adding any benefits, and really are only looking out for themselves.
Share your thoughts with other customers: Create your own review
|
|
Tags Customers Associate with This Product(What's this?)Click on a tag to find related items, discussions, and people.
|
Sell a Digital Version of This Book in the Kindle Store
If you are a publisher or author and hold the digital rights to a book, you can sell a digital version of it in our Kindle Store.
Learn more
