The authors of this book are Bill Bonner & Addison Wiggin who have been writing the free daily newsletter, The Daily Reckoning for more than 10 years now. The newsletter covers a lot about the daily economy, world politics, investment strategies, gold, stock market etc.  Bonner is also the founder and president of Agora Publishing.

The authors believe that the America of today has left the values of its founding fathers far behind and has become an imperial power instead of being a country.  Bonner also believes that the end of America is also coming soon.  The author talks about the dollar crisis, the coming end of the US economy. He writes about how successive US governments have gone to war and wasted all resources, the decoupling of the dollar to the gold standard, the federal reserve under Alan Greenspan with his inflationary policies totally wrecked the US economy.

Quoting from Amazon,

Bonner and Wiggin view ancient Rome as the classical model of empire. Running an empire was an expensive business; the folks in the homeland needed to be mollified with government handouts (bread and circuses), while a large military had to be maintained in the frontier. Rome used its military power to exact tribute from neighboring states; it was a protection racket, no different from the Mafia. Nevertheless, this scheme generally kept the central state solvent and the territories at peace. The United States is also an empire, Bonner and Wiggin maintain, but it does not follow the classical model. It placates its citizens with massive distributions of government largess while using its powerful military to exert influence and keep peace abroad. However, “[i]nstead of getting paid for providing protection, the United States is on the receiving end of loans from its tributary states and trading partners ” (p. 77). This is how the United States became the Empire of Debt.

Empire of Debt: The Rise of an Epic Financial Crisis
Authors – Bill Bonner & Addison Wiggin
Pages – 384
Publisher – Wiley

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“There is a drop both in the number and the quality of Ph.D. applications, more noticeably in the last two years.” says Anand Sivasubramaniam, professor of computer science and engineering, Pennsylvania State University (Penn State). “This year, of the more than 700 applications we received from prospective graduate students worldwide, the number of applications from top Indian institutes such as the IITs and IISc was in the single digit. Less than three years ago, this number was in the double digits,” he says. An article this February in The Chronicle of Higher Education reported a 50 percent decline in the number of new Indian graduate students this Autumn at the University of Georgia. The computer science department at California State University (Long Beach) saw a spate of prospective master’s students from India abandoning their application process midway.

“It’s the beginning of a trend, an indicator that something is happening and that Indian students are not coming here like they did in the past,” laments Dr. Nathan Bell, director of research at the Council.
You don’t have to look far to find the reasons for this. With the US economy in a shambles, there are severe budget cuts at state-funded universities. The prospects of obtaining a full waiver of tuition fees are slim. Dwindling grant money also means that local students stand a better chance of getting a research fellowship than foreign students. So, many Indian students end up working for free. Last semester, Atulya Prasad, a master’s and Ph.D. candidate in biomedical engineering at New York’s Stony Brook University, worked as a research assistant sans the stipend.

The situation doesn’t improve upon graduation. The growing political backlash against the loss of American jobs, and the rising anti-immigrant sentiment means that getting a work visa — let alone getting a job — is as tough as it can get. So much so that now, even the lure of a US-located son-in-law is starting to fade. “The classic America-educated son-in-law syndrome is almost nonexistent as students, especially from tier 2 schools, hardly get jobs in the US after they graduate,” says Satyavrata Samavedi, a Ph.D. candidate in tissue engineering at the Virginia Institute of Technology (Virginia Tech).

Full article here

Above picture courtesy: Associated Content

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Also the author tries to explore if the main reason of the US going to war in Iraq was to get cheaper oil? And if it was the reason, then the US failed miserably.  Also its agenda of foisting its belief of democracy on the middle east has come apart.

Neither is the world any safer.  We are much more under attack from the jehadi groups. Looking at the attempts at hijacking planes, and attempted bombings of the countries, its only safe to say that there hasn’t been a worse foreign policy than what was pursued under the Presidency of George Bush.

Readers may be surprised to learn just how difficult it was for Nobel Prize-winning economist Stiglitz and Kennedy School of Government professor Bilmes to dig up the actual and projected costs of the Iraq War for this thorough piece of accounting. Using “emergency” funds to pay for most of the war, the authors show that the White House has kept even Congress and the Comptroller General from getting a clear idea on the war’s true costs. Other expenses are simply overlooked, one of the largest of which is the $600 billion going toward current and future health care for veterans. These numbers reveal stark truths: improvements in battlefield medicine have prevented many deaths, but seven soldiers are injured for every one that dies (in WWII, this ratio was 1.6 to one). Figuring in macroeconomic costs and interest-the war has been funded with much borrowed money-the cost rises to $4.5 trillion; add Afghanistan, and the bill tops $7 trillion. This shocking expose, capped with 18 proposals for reform, is a must-read for anyone who wants to understand how the war was financed, as well as what it means for troops on the ground and the nation’s future.

The book written by none other than Nobel prize winner for Economics, Joseph Stiglitz goes deep into how the US govt repeatedly fudged accounts, gave out wrong assumptions and projections of money to be spent on the war.  The Defense department according to Stiglitz is one of the most opaque organization in the US govt with no proper audit in place or specification of the money being spent.

According to the most conservative calculations by Stiglitz, the US govt has spent more than 3 trillion dollars on the war in Iraq and Afghanistan.  This when then book came out last year or the year before.  Billions more have flown down the drain.  Some more estimates peg the money spent at almost 4-5 trillion dollars.  All these money could have been invested in the US economy itself and the world wouldn’t have had this economic recession.

The book gets a bit bogged down into the numbers, but is a shocking read at the policy mishaps under the Republican regime.

The Three Trillion Dollar War
Authors – Joseph E Stiglitz & Linda Blimes
Pages – 336
Publisher – WW Norton & Company

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The book is by legendary investor, Peter Lynch.  Its actually a book for beginners to investing.  Peter writes about the importance of investing early in life, and he puts forth his case of why equities are the place to invest in.  He is more bullish on investing in Equities than Gold, Real Estate, Bonds, Mutual Funds and other investments.

According to Wikipedia, Peter Lynch is currently a research consultant at Fidelity Investments and has a net worth of US$ 352 million.  His other two books, One up on Wall Street and Beating the street are considered must reads for anyone interested in investing.

The book is all about basics of investments and business.  And if you are interested in reading about the origin of business in the US, the reason for America to go the capitalist way, the earliest billionaires in the country…it makes for a fascinating reading.

Though the book is completely based on the American business and economy, the book does give you a lot of much needed information of how to go about investing, how to read the balance sheet, the basis of investments etc in a very easy to read manner.

If you want to inculcate the habit of investments and savings in your kids life while they are young, this should be one of the earliest books for them to be introduced to.  Its a good book for grown ups too who want to enter into the world of savings and investing.

One of the best managers in the history of mutual funds, Lynch is certainly the person to help people choose the right stocks and understand the market. More so than One Up on Wall Street or Beating the Street, this Lynch book is for beginning investors of all ages. Lynch and coauthor John Rothchild are family men who are worried that teenagers aren’t learning enough about the importance of American companies in improving lives and creating wealth. Lynch questions why students are taught that Hamlet was a tragic hero and Napoleon was a great general, but they don’t know that Sam Walton founded Wal-Mart. In fact, Lynch’s grasp of the past is one of the strengths of the book. One of the best chapters is “A Short History of Capitalism,” a witty and homespun look at characters like Karl Marx, the Communist who believed capitalism was doomed, and the robber barons, the shrewd railroad magnates of the late 19th century who amassed huge fortunes by manipulating the markets.

Unlike the robber barons, beginning investors, Lynch says, should stick to the basics: get in the habit of saving and investing and putting aside a certain amount every month; develop a strong stomach because the stock market is going to fall and there’s no way to anticipate it; do a little homework so you can understand the reasons to own a particular stock; and buy shares in solid companies and don’t let go of them without a good reason.

Peter Lynch – Learn to Earn: A beginner’s guide to the basics of investing and business.
Authors – Peter Lynch & John Rothchild
Pages – 270
Publisher – Simon & Schuster

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Back in the early stages of the financial crisis, wags joked that our trade with China had turned out to be fair and balanced after all: They sold us poison toys and tainted seafood; we sold them fraudulent securities.

But these days, both sides of that deal are breaking down. On one side, the world’s appetite for Chinese goods has fallen off sharply. China’s exports have plunged in recent months and are now down 26 percent from a year ago. On the other side, the Chinese are evidently getting anxious about those securities.

But China still seems to have unrealistic expectations. And that’s a problem for all of us.

Read the full article here.

Lots of work related pressures mean that iam quite sporadic here.  As for the little time i have on hand, iam sometimes found here.

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For a country whose Presidents were known to keep slaves while in office till Abraham Lincoln abolished this practise, its indeed a great day.  Let’s keep our prejudices apart and hail the man who with his sheer determination has come where he has today.

Its not going to be an easy ride for Obama. And he has repeatedly indicated the same in all his speeches.  At least we can be happy that a warmonger is not in power in the US.  Hope Obama over the next 4 years of his tenure will repair the image of US that has been battered courtesy George Bush.  Hope he will crack down on rogue nations (Pakistan) who like to use terrorism as a tool to destabilise the neighbourhood.

Obama has promised to close down Guantanmo Bay, but not indicated what he will do with all the prisoners there.  There are already indications that the prisoners will be moved into some other facilities.  A 16 month target to get out of Iraq is also in place.  Hopefully he will flood Afghanistan with more troops so that Pakistan and its rogue army that is in the forefront of supporting terror in the world and the Taliban will be put in place.

Fixing the economy is a priority for the Obama administration.  Hopefully the trillions that they are planning to flood the markets will kickstart the economy and  push the world forward.

My only wish: To see an Indian Prime Minister or a President with a 6 pack ab someday.  Meanwhile we seem to have a 81 year old (LK Advani) dying waiting to replace a 78 year old (Manmohan Singh) as the Prime Minister.  Did anyone say that we have the world’s largest pool of young people?

Above cartoon source: Twenty22

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America is bankrupt. American government bonds are extremely overvalued. “The world’s last bubble.” America is in debt for over 13.000 billion (13 trillion) dollar and adds a 1.000 billion dollar debt each year. According to Rogers this can not continue for long. Therefore, he went short in long-term US goverment bonds. “These bonds have peaked.” By the way: Rogers owns Dutch government bonds. “They are safe.”

“The fact that the dollar is gaining rapidly is only temporary”, Rogers says. “All hedge funds were short on the dollar and because of the appreciation of the dollar there is a short squeeze for the dollar. Managers have to close thier positions and they have to buy dollars instead.” “This is temporary, within a year you have to get rid of the dollar. Fundamentally it is a drama.”

“The question is not if the price of a barrel of oil will increase again, but how expensive a barrel of oil will be eventually?”

Rogers is not a big fan of Bernanke, the president of the Federal Reserve. With a big smile Rogers tells us: “Bernanke will continue to print money until there are no trees left in America.”

According to Rogers, farmers have a bright future. “within a few years farmers will drive Maserati’s and all stockbrokers will be cabdrivers.”

Read the full article here and also watch the interview with Jim Rogers here

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After a 8 year hiatus, the Democrats are back in power.  Looking at the way with which the previous Democratic President, Bill Clinton left, its a no-brainer to see that the Republican government under George Bush has screwed up not only America, but the whole world itself.  Its been a systematic destruction of ‘Brand America’ by George Bush and his government.

Though Bush has been the best President when it came to India-US relations, it needs to be seen how Obama would take the already warm relations further.  It would be an interesting first 100 days to see how Obama would start attacking the domestic as well as foreign issues facing America.  The economy is in the ICU, the war in Iraq is still continuing, Afghanistan is on a boil with active support of the Taliban by the rogue Pakistani intelligence unit, ISI. North Korea behaves erratically.  Russia under Putin has transformed radically.  There are indications of a new cold war starting.  China is still dumping goods into the US.  America is not loved globally as before. Every terrorist group on this earth wants to have a go at the US.

The real challenge for Obama was not winning the elections. The anti-incumbency factor assured his victory. His real challenges start now.

Above picture courtesy: BBC

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The one picture on the website of Huffingtonpost sums up the crisis the world markets, wall street is in.  Bush has in his 8 years of Presidency not only ruined America, but also the world economy.

I wont be surprised if the BSE Sensex hits the lower circuit breaker at least once today.

Bulls make money, Bears make money, Pigs get slaughtered – A wall street saying

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If we spend that money at Wal-Mart, the money goes to China.
If we spend it on gasoline it goes to the Arabs.
If we buy a computer it will go to India.
If we purchase fruit and vegetables it will go to Mexico, Honduras and Guatemala.
If we purchase a good car it will go to Germany.
If we purchase useless crap it will go to Taiwan and none of it will help the American economy.

The only way to keep that money here at home is to spend it on prostitutes and beer, since these are the only products still produced in US.  I’ve been doing my part.

More about Marc Faber at GloomBoomDoom

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