We can succeed inspite of the politicians

Looking forward to the future of business

This post is overwhelmed by the growing passion in taking sides in the current political campaign:  both national and local elections.  All ready there is a frenzy for campaigning for the elective positions.  Onc can guess that this is so:   1.  To the victor belongs the spoils, or as claimed 2.  Many are being paid.

But there are also real fanatics who wish to hitch their wagon to their political candidates.   I know of one FM loyalists who cried when FM was deposed.  And even blamed Cory Aquino for his misfortunes (he was not looking for a job)

Change can not come from the political leaders without the support of the followers.  Change can not come from the top -  it can only come from our own personal changes.  How far are the political candidates from the  populace.  And the truth is when the politician gets elected.  I found this out after helping a former mayor become a governor.  We helped him by:   1.  campaigning for him among the subdivision buyers of the subdivision we built.   2.   We claimed that the road built by us (there  was a promise that we will be reimbursed) was done by the good mayor  (We were never reimbursed)   Well the good mayor got elected.  But his post never got past his fat secretary (she has died)

Did the good governor help me as a person or as a businessman.?   No.  He let me struggle with his successor who objected to his previous approval.  

What about you as person?   Can he get you a job.\?   May be if our are related to his leaders.  But for only for three months.   If you are at the lgu level, then maybe you can get occasional ayuda from the Barangay Chairman  or the Town Mayor.   But dole outs and alms can not make you successful.

You alone can make a success of yourself.   Never believe the false siren song  of politicians.  Change the govt and change your life.   FM changed the govt to parliamentary.  Did we change the course of the nation.   

We amended the constitution of 1935 to that of 1987.  Did the destiny of the nation change?   We never will know. But if we were to listen to the  critics, it never improved.   

But mind you our economy did improve not because of the govt but because there are many hard working Filipinos:   1.  who became OFW and remitted billions of dollars, almost 1/3 of  the Phil GDP

2.  who joined with foreigners for the BPO   3.   who became entrepreneurs and investors.

We can succeed irrespective of the  President, and policies  

Countries succeed inspite of corruption as in Italy (one of most corrupt) Indonesia and Japan.  This post condemns corruption, but to make it as an excuse not to move forward in unacceptable.

Rather it is us to us to change our mindset of fiefdom or feudal relationship with politicians.  We campaign but we expect the politician to pay sometimes with their own lives.  We extract every bit of ayuda an PHP from the elected politicians furthering the  graft that happnes in the govt.  He has to extract and  skim from all contracts so that he can feed the masses milling to his house to get all sorts of ayuda.   The masses, themasses force the uppen echelon to steal to feed the hungry millions - to continue committing graft.  We abhor graft, but we like the ayuda.  We do not relect people who are stingy with ayuda.

Many cling to BBM because of promise of great wealth to the supporters :  the FM gold bars and the Tallano wealth (not true?)

https://www.youtube.com/watch?v=6Z0BEDfov3I

Banks not as piggy banks but as creators of money - a magical event happens

Ateneo Professor on Entrepreneurship

Rizal Philippines
July 23, 2019

How banks create money

I did not finish a business course while in college... I was naive and untutored in the world of business and finance.  Our first project after I quit working for someone was to establish a savings and loan association.

My first idea was that banking was a zero sum game, namely that if Bank A has deposit and a new bank, Bank B were to be established, the deposit that may be generated would be equal to or more than the deposit of A.  (A piggy bank concept)  Little did I understand that a bank does more than that -  it creates money.  Thus after one year,  the rural bank bank A had P2 million in deposits, and Bank B which we established had P5 million in new deposits.   Theoretically, our total deposit would be not more than the starting point of Bank 1. -  1 million deposits.

Why is this so?  Because the savings and deposit activity of the bank, creates (although not minting) money.   We thought that only the BSP can create money.  Yes banks create money.

When a bank lends, and assuming the community is a community of savers (there are no cash hoarders) the money lent is paid to  others in the community who again  deposits the amount of the bank.  And depending on the reserve requirement, the remaining free portion is relent and so on.  In a community where the reserve requirement is 20%, the multiplier effect is five times (inverse of the reserve requirement)  So the P1,000 deposit from loans becomes 5,000.   Thus when there is a bank run, banks run out of cash because the jump from P1,000 to P5,000 is a result of magic from fractional reserve system...

The Central Bank does even a greater magic when it prints money.  Who says there is a gold backing for our money. There is none..!!. Under the fiat or currency system, a gold reserve is not mandated.  The CB may buy from the money or credit it created gold bullions for security, US treasury notes or other valuable asset. but other than that, a central bank creates money from nothing.  All are purely
accounting entries

      1. To print money, CB does this accounting magic say P1 billion php

           Bills and coins                             P1,000,000,000.00

                             Bills and coins payable      P1,000,000,00.00  Just like that from nothing

    2.  From loans and discount operations;  CB lends to banks

          Loans and discount say                   P500,000,000.00

                            Deposit of banks                          P500,000,000

    Thus our BSP which has only P10B in equity may support total assets of trillions creating something out of nothing.

      Thus to grow a business, you have to create your own currency, IOUS (money is a liability of the Central Bank and the CB governor and the President are the signatories)

      1. At the business level, this could be gift certificates, (that can be negotiated and sold) as
          what SM did before

      2. Your own credit card  (say of Walmart, Shell etc)

If you do not know this magic, then you will be left behind.

Gold to hit $1,900@ounce by year end?

 For those who are interested  in getting wealthy it may be worthwhile reading this prediction on movement of gold.  Many currencies, as eg, dollar is dumped as international reserves, many are accepting gold, gold certificate as trading currency, the gold price may rise.


HSBC: Gold to Hit $1,900 an Ounce by Year End

Protect yourself from Financial Uncertainty - Buy Gold

 


Mikhailovich: Be Safe — Buy Physical Gold and Stash It

Mikhailovich  suggests that physical gold be bought as a hedge against uncertainty in the financial market.  Gold is a storage of value.  It never increases in value;  it is that the financial instruments decline in value.

Gold should be stashed safely and separately from other financial assets.  Everything is so interrelated that one variation in a financial instrument affect the other.  For instance,the European markets watch closely what is happening in US and vice versa.  One decline causes the decline in other markets. 

As an entrepreneur, would you follow the advice?  Is it a sound advice?

Gold to Hit $2,500/ounce, S P to Low of 1,000?

Promoting Entrepreneurial Revolution

This is the latest feed from Newsmax.  David Tice, President of Tice Capital predicts gold price to go up to $2,500.00/ounce and  S P to low of l,000.  Gold is currently at $l,650 and S P at l,400.  The blame is on loose government spending and loose monetary policies, high inflation rate which send investors flocking to gold and precious metals.

The Fed initially to fight deflation after collapse of the credit markets, (2007 subprime mortgages) sgovt spent like there is no tomorrow on stimulus package.  The result is a weak dollar and inflation.

There is now a call for a gold standard (vs the fiat currency.  But it is kind of late.  China corners the gold, the precious metal.   There is no way that the currency in circulation and the size of the economy can be matched by gold.  China survived on a fiat monetary policy but simply exercised disciplined monetary policy, like requiring all gold producers to sell to China central bank all their produce.  China finances exporters who must pay back in hard currency, hence it was able to have  large hoard of foreign reserves.)

What are the opportunities in these events/

How can you make money?

How do you protect your investments?