Games that People Play (5) - Fueling a Giant Stock Market Bubble

This post is self-explanatory...
Click on the link for more details...

Deutsche Bank "Raises The Warning Flag": 
What The Most Important Chart For The Market Reveals

Entire five year market rally has been due to the Fed

Is the Fed Fueling a Giant Stock Market Bubble?
(Yes, of course)


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Other Games that People Play


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Personal Finance (2) : Retirement Fund Excel Tool

Continue from Part 1:<-

As human perspective tends to focus on the short term events and, to most people, retirement seems to be something that is very far away. As the time keep passing by... and when it come close to their "official age" of retirement, most will get a shock that they are not ready for it.

Click to Zoom In

Another reason for people to ignore the retirement fund issue is as what Dr. Albert A. Bartlett had said:"The Greatest Shortcoming of the Human Race is our Inability to Understand The Exponential Function." That is most people cannot easily imagine in their mind that how big the number would get into with the compound inflation rate (and it now climbing proportional to the rate of Money Supply.)


To over come this challenge, here is a tool, Excel Worksheets, that was designed to help in putting all these figures down on paper. It can help individual to figure out how much it would require for him/her to be financial independent/freedom at a target date.


In the worksheet 1: just need to fill in the following data:


In the worksheet 2: one would need to fill in the details of expenses in various categories into the various fields as circled in the following diagram. It will then compute the ultimate retirement found figures with compound interest/inflation rate.




In the worksheet 3: Well, lot of people like to buy lottery and hope to retire now. This worksheet will tell you EXACTLY HOW MUCH you need to set the figure for achieving your goal -- that is the amount of money that you need to have in order to retire immediately. :-)


When someone is prepared early, this will not be his scenario:-



Here is link for the downloadable Tool in Scribd:->
Personal Finanical Tool:Retirement Fund Calculation

By the way, just some points for ponder....

* Why is there an "Official Retirement Age", and why many people follow? Are you plan to follow this "rule"?

* If making enough money can retire early, why many politicians and businessmen do not retire early and choose to work till the last day in their life?

"If you continue to think like what you always thought,

you continue to get what you always got."

- ?

Personal Finance (1) : Retirement Fund

Recently, I had come across two articles on the subject of personal finance regarding retirement fund. Both articles are trying to project the amount of money that would be required for retirement with the goal of financial independent in mind. The first article is from the US and the second is from China.

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The first article was a summary from a survey with 226 registered investment advisors, and attached Table is the findings: Source URL Link :-> $1 Million Doesn't Cut It for Retirement

The second article is from a Professor, Prof. Zhong, in Financial Research Center, Beijing Pedagogical Academy, China, stated that: “For those who, stay in the first-line cities (such as Beijing, Shanghai, & ShenZhen), are going to retire in 2027, having a sum of 10 million (RMB) might not be enough.”

“北师大金融研究中心一教授钟伟在《英才》杂志发表文章，称一线大城市的居民，2027年退休的话，预备1000万元养老恐怕也不够。”

Source URL Link:-> 白领存款1000万未必够养老

The article by Prof. Zhong had created a series of criticism in the web and media, as far majority of the people do not believe that they stand a chance to make 10,000,000RMB in their entire life. While Prof. Zhong defended himself by commenting that this would be the end result of continuous growth in Money Supply (or better known for the term as keep printing more money).

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I think that these articles are of good intention to alert people in starting to plan for their retirement early. And, the following will add some mathematical charts to demonstrate why these article make perfect sense...

Albert Einstein had said:

“The most powerful force in the universe is compound interest”

And, this has proven been true as Warren Buffett made himself one of the richest man by compounding his fund - Berkshire Hathaway - with an average of 20 over percent over the last few decades. The following Chart (click on the chart to ZOOM) illustrate how money can growth in an exponential form want one learnt how to use the wonder of Compound Interest...

But, this is a double-edge sword. If one does not know how to invest and when the inflation rate keep climbing up directly proportional to the money supply grow. Then the Value of the Cash on hand will depreciate accordingly. The following is the chart to illustrate how fast the value (buying power) would evaporate over the years...

So, with both chart above, it clearly show that if one were to retire with the peace of mind... He/she really need to has a skill to earn more to cover both the expense plus capital depreciation due to inflation. Or else, at the age of 65, he/she will become the 95% of the people show in this diagram. :-> "What's Preventing Most People from Financial Freedom".

(...to be continue...)

"The Greatest Shortcoming of the Human Race

is our Inability to Understand

The Exponential Function." -

Dr. Albert A. Bartlett


"Some people spend more time planning a two-week
vacation than they do retirement planning."
~ Anonymous

Link to more relevant articles<:-


<Go to HOME Page>

The New Economy

Someone had forwarded me a hilarious story to illustrate how the US Economy works today:-

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It is a slow day in the east Texas town of Longview. It is raining, and the little town looks totally deserted.

Times are tough, everybody is in debt and everybody lives on credit.

On this particular day, a rich tourist from the East is driving through town.

He enters the only hotel in the sleepy town and lays a hundred dollar bill on the desk stating he wants to inspect the rooms upstairs in order to pick one to spend the night.

As soon as the man walks up the stairs, the hotel proprietor takes the hundred dollar bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to pay his debt to the pig farmer.

The pig farmer then takes the $100 and heads off to pay his debt to the supplier of feed and fuel.

The guy at the farmer's co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has lately had to offer her "services" on credit.

The hooker runs to the hotel and pays off her debt with the $100 to the hotel proprietor, paying for the rooms that she had rented when she brought clients to that establishment. The hotel proprietor then lays the $100 bill back on the counter so the rich traveler will not suspect anything.

At that moment, the traveler from the East walks back down the stairs after inspecting the rooms.

He picks up the $100 bill and states that the rooms are not satisfactory, pockets the money and walks out the door and leaves town.

No one earned anything. However the whole town is now out of debt and looks to the future with a lot of optimism.

That, ladies and gentlemen, is how the United States Government is conducting business today.

What do you think....

(Author Unknown)

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Now...

One might think that though the story is interesting, but how does it related to the real world?

See...

The rich tourist is the FED, it printed the money and circulate it around and eventually goes back to him through various methods... Such as all kind of taxes that you already known, plus the invisible one-->the inflation. “Inflation is taxation without legislation.”--Milton Friedman.

And after that what happen?

There will be $100 more in the Money System.

When the FED keep doing this, they will be more and more money in the system.

(As show in Picture one... Money Supply Keep Increasing in an exponential rate!)

While the products or services can not keep up with the rate of increase...

(As show in Picture two... Depletion of finite Natural Resources, such as energy, clean water, farm land,etc., keep reducing.)

=> The Buying Power of Money keep reducing or so called Hyper Inflation.

(As show in Picture tree... Relationship of Value of Dollar Vs Money Supply.)

In the attached videos, it explains clearing how this hyperinflation can and will happen, and using the Zimbabwe case as an example. It also provides some suggestion as a solution for individual in how to deal with it... Must Watch...

By the way, the rich tourist here can be your government too. :-)

Why not take a minute to google and find out how much "Money Supply" is produce by your rich tourist last quarter?

Bless You.

KH Tang

"Inflation is always and everywhere a monetary phenomenon.

To control inflation, you need to control

the money supply."

Milton Friedman,

Nobel Laureate in Economics.

What's Preventing Most People from Financial Freedom (Part 3)

... continue from Part II - Understanding How The System Work
@What's_Preventing_Most_People_from_Financial_Freedom_part_2

Part III - Money Supply

The best way to get people to understand more about Money Supply and how does it ties with Inflation is to watch a short animated documentary: "Money as Debt" - by Paul Grignon, in his website: http://www.moneyasdebt.net/.
Which describe How Money is Created... and more....

Or it can be view from YouTube:

Money As Debt I by Paul Grignon

Money As Debt II  by Paul Grignon

Money As Debt III  by Paul Grignon

One can't escape from the prison, if he doesn't know that he is in one. And, when one is getting to aware of the Truth, then that is the starting point in getting back his freedom.

"3 Steps To Success"

* Find out the thing you love to do and then do it.

* Specialize in some particular branch of work and know more about it than anyone else.

* Be sure that the thing you want to do does not redound to your success only, and it must benefit humanity!

— Dr. Joseph Murphy: The Guru on "Subconscious Mind"

Link for other Relevant Articles on:-> Financial Freedom <- span="">

What's Preventing Most People from Financial Freedom (Part 2)

... continue from Part I - Introduction

@ What's_Preventing_Most_People_from_Financial_Freedom_part_1

Part II - Understanding How The System Works
The System that we lived-in is systematically guide us to the path of conformity through the public education

This physical world, that we live in, is a SYSTEM designed to be as it is, by the governments of the world. And the main tool to control the public is through the controlling of "Money Supply".

Human being  had created the concept of Money for thousand years, and the rulers had been controlling it since then. In today industrialized society, "Money" is even more important, and basically it is the "Life-Force" for the public to get the very basic necessary stuffs to maintain the livelihood
.
The "Money" in today, is simply an "Electronic Figure" or "Printed Paper" that are created based on the decision by a very minority group of people who control the system.

Take for example, in figure 1, it is a picture of an ancient Roman War Ship. Basically, it is a system consists of a commander, some soldiers, with many salves as the "propeller engine", and it can make use of the wind-power when the timing is right(consider that as natural resources).  For the ancient system like the Roman War Ship, the commander mainly controlled the slaves by forced through the soldiers, such as beating them with cane, etc.

While in this modern society, theoretically all people are equal, and no slaving is allowed. And, the question is that, by changing the ruling system from "autocratic" to "democratic" or "equal" or whatsoever... It will still require energy to move the system forward.  Again, let use the war-ship analogy; it needs a certain amount of the population to row the boat continuously. So, how should the rulers go about achieving it???

The answer would then be, in the corporation term, of course, "Motivate them" with the "Money" or "Position Ranking", etc...

In order for the rulers to get the ship moving, all they need to do is just to create something call "jobs" and tag a "Job Titles with Attractive Packages" onto the seat... Many people will fight over for the positions to sit and start to row hard.

So, once a person is sitting on to a designed position, he would need to spend most of his time rowing the ship.  Therefore, he would then have no time or not much time to "Think" or "Learn". -> Comformity.
But, then, people usually believe that they are very smart too. When they have a job, they would start to punch the key pad of a calculator/computer to calculate how much they would need to save in order to get into retirement and enjoy life..
.
On the other hand, the rulers would do something to make sure this "Terrible Scenario" can never happen. Why? Just imagine that if a most public can just simply work hard for a few years and have enough for retirement... Who would then go to drive the public transport, who would want to manage a factory operation, who would want to be the sales to promote the stuffs that are really not necessary to others..., etc...?!

So, the rulers had designed a system in such a way that: -
1) It can not afford to lose these "good people" from working in the system. In order to keep them continuously working and not going for retirement, strategies must be in place to ensure that they will never save enough to retire.
2) It must also ensure that the system will just spit out some money to these "good people",timely, so that they can survive and do not start another revolution to destroy the system.

There are many tactics to achieve the goal of keeping people continue to work, and here are some of the common one:

1) Inflation: By generating more money supply year by year, it will have yearly inflation, most people would not feel the immediate pain, but their saved money would shrink over time.

2) Tax: Almost everything the people do or don't do, it involve tax...

3) Promotion for better "life-style" to public ego: To many people, they do earned quite a lot and have the possibility of early retirement. One way to keep them to stay on the job is to make sure that they spend much more... When their life-style continue to grow to meet their income, they can never retired from their jobs. (Unless they have multiple-streams of passive incomes)

4) Wealth transferring machine (Stock Market): Stock market is basically a wealth transferring machine - from public to manipulators. In all the public who participate the market, 90% will lose money eventually. (And, if one don't participate in the market and just save the money, the inflation will de-value the cash.)


To be continue...
@Part 3 - Money Supply

"Let us never negotiate out of fear. But let us never fear to negotiate."

— John Fitzgerald Kennedy: was the 35th President of the U.S

-------------------------- Relevant Picture added on 9 Aug 2012 ------------------------

-------------------------- Relevant Picture added on 9 Jan 2013 ------------------------

 

----------------------- Relevant Picture added on 14 Sep 2013 ------------------------

 

           -------------------------- Relevant Picture added on 16 Apr 2024 ------------------------

What's Preventing Most People from Financial Freedom (Part 1)

Part I - Introduction
Interesting Statistics

I had done some research on the statistics of how many percent of people would achieve financial freedom at the age of retirement in this planet... And here is one of the earliest published results, in the richest country at it time during mid 1900, by Earl Nightingale, in his work -"The Strangest Secret":-
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"Some years ago, the late Nobel prize-winning Dr. Albert Schweitzer was asked by a reporter, "Doctor, what's wrong with men today?" The great doctor was silent a moment, and then he said, "Men simply don't think!"
It's about this that I want to talk with you. We live today in a golden age. This is an era that humanity has looked forward to, dreamed of, and worked toward for thousands of years. We live in the richest era that ever existed on the face of the earth ... a land of abundant opportunity for everyone.
However, if you take 100 individuals who start even at the age of 25, do you have any idea what will happen to those men and women by the time they're 65? These 100 people believe they're going to be successful. They are eager toward life, there is a certain sparkle in their eye, an erectness to their carriage, and life seems like a pretty interesting adventure to them.
But by the time they're 65, only one will be rich, four will be financially independent, five will still be working, and 54 will be broke - depending on others for life's necessities. " - by Earl Nightingale.

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The Strangest Secret in the World - Earl Nightingale Conant 1950's Original Record:-
https://www.youtube.com/watch?v=UygnXqoKrC4

According to Earl Nightingale's research, he referred to those people who did not succeed was mainly because that they had fall into the trap of conformity.
And here is my finding of why most people, regardless of which level of education, would easily fall into the trap of conformity.

To be continue...
Part II - Understanding How The System Works
@ What's_Preventing_Most_People_from_Financial_Freedom_part_2

"The purpose of life is a life of purpose."
— Robert Byrne: A leading chess player and newspaper columnist