Home Blog Page 1059

Food – Wars and Pharma – Trailblazing the Way to Human Demise

By Peter Koenig

In this article, Peter Koenig connects the dots and sheds light on how food, drugs, and bombs all play together in the grand plan of the masters of the western world. Read on as the author calls out, “Be aware and stop falling into the trap.”

 

“ “What the Health” – is the groundbreaking follow-up film from the creators of the award-winning documentary Cowspiracy. The film follows intrepid filmmaker Kip Andersen as he uncovers the secret to preventing and even reversing chronic diseases – and investigates why the nation’s leading health organisations don’t want us to know about it. With heart disease and cancer, the leading causes of death in America, and diabetes at an all-time high, the film reveals possibly the largest health cover-up of our time.”

This is the introduction to the trailer of one of two new documentary, “What the Health”, and “Food Matters”, purportedly showing how the food and pharma industries are conspiring to keep us lingering along sick and unhappy, drug and pharma addicts, consuming more and more unhealthy food saturated with sugar and fat, to lead to increasing pharma- and drug consumption – a spiral ending at the graveyard.

“What the Health” – trailer (2 min)   https://vimeo.com/ondemand/whatthehealth
“Food Matters” – trailer (3 min)  https://www.youtube.com/watch?v=r4DOQ6Xhqss  

What do these food-war documentaries have in common with the holocaust-type wars and destruction in Iraq and Syria; the devastation of Libya, Afghanistan, Ukraine, the chaos in Sudan, Somalia, all of Central Africa, the destabilisation and attempted destabilisation of Pakistan, Venezuela, Iran, Ecuador, Bolivia, all of Central America, the Philippines and countless other countries that could make up an entire United Nations by themselves?

Russia and China, are of course, also in the crosshairs of the evil empire. To achieve Full Spectrum Dominance as per the neocons bible, the PNAC (Plan for a New American Century), all opposition to the New World Order has to be tamed, come hell or high water – or even a nuclear holocaust.

These wars have everything in common. Everything. They go all hand-in-hand. They want humanity subjugated, suffering from diabetes, cancer and heart diseases, and dying at an increasing pace to have a real impact on population reduction.

Are we blind? Why are we still jumping up and down in front of our TV, in our comfortable armchairs, watching the evening news – watching how countries are destroyed – in far-away places, gobbling up the lies of the commentators – cursing about Venezuela, Russia, Iran and even China, because that’s what the news commentators teaches us to do – why?

They want humanity subjugated, suffering from diabetes, cancer and heart diseases, and dying at an increasing pace to have a real impact on population reduction.

Well, this killing is not for us, we are safe, we are protected by our democratic governments military and police, they take good care of us – so we keep swallowing heaps of fat-dripping cheeseburgers, French fries, ice creams, and mega-litres of sugar-loaded sodas.

 

The food war like the pharmaceutical war fit perfectly the pattern of the Dark State that masterminds Washington. They are joining the war of bombs, canons and guns. These wars show clearly that there are deeper and darker forces at play than we realise. The world population needs to be reduced drastically that the elite can live happily with the limited resources our planet will leave behind. Kissinger and the Rockefeller sponsored Bilderbergers have been advocating this for a long time. We pay no attention. They eat well. Look how old they become? That’s not by accident. Not only that, a smaller population is easier managed, enslaved than a large one.

Remember Kissinger’s infamous saying in the early seventies: “Who controls food, controls the people, who controls energy controls entire continents, and who controls money controls the world”. Kissinger is just a spokesman for the Deep Dark State. A patsy. A convinced patsy and a well remunerated patsy. He has conveniently stayed in the background for decades, since Laos, Vietnam and Chile. But, lately he is coming to the fore again. As a chief Zionist, he is a welcome advisor for the neocons, especially as they are strategising for their last blow.

 

Why Are We Blinded?

None of the people in the two trailers, the people who spoke up, scientists, who seem to be so awake – none of them mentioned the end-goal of the elite as responsible for our unhealthy, outright killer food and equally killer medication intake, what we eat, drink, swallow as palliatives for our pains – poisoned by toxins, by GMOs, by fat… you name it.

Do they not know? – Do they not know what could in a very immediate future be implanted in GMOs as long-term debilitating diseases, that will reduce the function of our brains, our vital organs, liver, kidneys, pancreas, and finally our heart – but not before we have tried hard with medication and drugs – and our hard-earned money – to stay alive, albeit miserable, but alive – until the stoppage of the heart does us part. Literally and figuratively. Do they really not know? Or do they not dare to tell?

Tsipras knows, he could stop it all by just stepping out of this criminal organisation called EU with their fraudulent currency, called euro. He doesn’t dare.

The fear factor. It always reminds of Greece. Everybody on this planet who has a half-wit brain, knows that the destruction of Greece is purposeful, and not recoverable, never as part of the EU and the Euro. Everybody knows that. Tsipras and his entourage stooges know that they are complicit in not only destroying their country, but also the lives of their countrymen.

Yet, nobody says anything. Tsipras knows, he could stop it all by just stepping out of this criminal organisation called EU with their fraudulent currency, called euro. He doesn’t dare. Fear. Because he may have been told by the dark masters of the universe what may happen to him, his family, if he doesn’t behave – or worse, if he talks? – Yes, we know what happened to many of those who haven’t heeded the warnings of the dark manipulators.

The same about the food and pharma industry.

Do these scientists who warn us really believe it’s the fast-food and pharma lobby alone behind it all? Do they not suspect more sinister forces behind this human calamity? Do they not see the connection between bombs, food and pharma? – Have they not read Orwell’s1984 – which is being played out in our full sight?

The food and pharma lobby are semi-gods, accompanying the war god, and closely modelled according to the deep dark great god of Satan. They follow his dictum. They are agreed patsies who cash in huge profits on the way to the human graveyard. Population control by government repression, transiting to population reduction by food, wars, drugs, by implanted diseases, genetic diseases… and since lately, by forcefully imposed mass vaccinations.

The Macrons and Gentilonis of this world are the French and Italian “trailblazers” to show the rest of the western world how to deal with a resisting population. It’s already happening in Italy. In France, the law is already prepared, waiting to be approved by Macron’s parliamentary majority after the summer vacation. To most awakened people it’s clear – you can put anything into a vaccine – as well as into a genetically modified food crop – long-drawn-out diseases, genetic diseases that will be difficult to trace back to vaccines or GMOs generations from now. And if – it will be too late.

And we keep having no clue. And if we had a clue, we have lost the sense of solidarity. Without solidarity, without joining hands with other resisters, friends and comrades, against this miserable neocon NWO lot, we are lost. And they know it. That’s why they keep dividing us, with markets and with greed. Be aware and stop falling into the trap. Reach out in solidarity, to others who want to resist.
People have always been lied to by the masters, but the extent of deceit planted upon us day after day, hour after hour, has never been as strong and as intense and Machiavellian as today – when we are, as I said in an earlier article – probably in the “final phase”.1 The recent G20 summit in Hamburg was just a trial balloon – taking the temperature of the resisters, a benign beginning of the horrors that may come.2

 

Go to top

About the Author

koenig-webPeter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research, ICH, RT, Sputnik, PressTV, The 4th Media, TeleSUR, TruePublica, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.

References
1. http://thesaker.is/are-we-in-the-final-phase/
2. http://www.globalresearch.ca/the-g20-is-the-west-governed-by-psychopaths/5598160

The Crisis of Trust in Democracy and Globalisation

By Graham Vanbergen

Crimes of the rich and powerful elite have led to a global crisis of trust. In this article, the author elaborates on how societies have now lost their confidence and faith to established authorities and governments. But in a globalised world where there’s no trust and only fear, how can we expect the future to be bright?

 

Trust is in crisis all around the world. The four key institutions of trust in business, government, NGOs, and media have been in decline for years. So much so that the majority of respondents to the Edelman Trust Barometer1 now believe that the overall system is simply no longer functional and does not work for them.

The consequence to such an environment of suspicion and cynicism is that people’s concerns over globalisation,2 the pace of innovation, employment prospects, immigration and eroding social values are turned into fear. And fear-factor politics has become endemic. The consequence is evidenced in the rise of political figures such as Donald Trump, the rise of extreme political parties across Europe, the collapse of establishment politics in France, the failure of the Italian referendum, Brexit and then the Theresa May election debacle. All these events are inextricably linked because they were all decisions that were fundamentally driven by a lack of trust. According to reports, Theresa May was warned not to proceed with a snap election by her campagin guru Lynton Crosby CEO of the CT Group elections consultancy.

All these events are inextricably linked because they were all decisions that were fundamentally driven by a lack of trust.

The Barometer revealed nothing less than a malignancy sweeping across democratic nations in particular. Trust in the media is now at an all-time low. Government is now the least trusted institution in half of all 28 nations in the survey. Even trust in business leaders has collapsed globally, plummeting in every country studied – whilst right at the very bottom of the survey results, government leaders retain the title of least credible.

This should really come as no surprise. In the last ten years the scandals rocking democracy have been epic. The global financial crisis that emanated in America, swept around Europe like an uncontrollable fire – austerity its only strategy of resurrecting the lifeless corpse of what was once a vibrant economy. Bailing out the banking behemoths on Wall Street and the City of London, Paris, Rome and Athens, all paid for by the less well off is cited in so much anger.

Financial crimes, mass money laundering tax havens, ponzi schemes, privatisation of state assets, cover-ups and the looting entire countries, the list goes on and on. But in truth, these are the crimes of the rich and powerful and people know it.

 

The survey found that 53 percent believe the system is rigged, unfair and has failed them. Worse, only 15 percent believe the system is working at all and another third aren’t sure. Just think about that for a moment. Of 28 democracies, only 15 percent of the population believe that their lot is OK.

Tellingly, the survey actually asks the financially well off, the elite, what they think of the very system they are exploiting and even they agree the system has failed. In addition, 48 percent of the top quartile in income, 49 percent of the college/university-educated and a majority of the well informed (51 percent) also agree that the system has actually failed.

To recap, less than one in five of the mass population and only half of the elite think democracy and the institutions that supports it is now functional. And yet, the gap between the trust held by the informed public and that of the mass population has widened to 15 points, with the biggest disparities in the US (21 points), UK (19 points) and France (18 points). The mass population in 20 countries distrusts their institutions, compared to only six for the informed public. It’s interesting that the establishment have been seriously challenged in all three of those countries with the biggest disparities.

Search engines are now providing more news delivery than human editors from the traditional sources of news.

As you read the 66-page report and survey findings, it becomes apparent what the real state of “the system” really is in. Dire and critical are the words that come to mind.

Fear of destabilisation is driving sentiment. Corruption tops the list,3 but immigration, globalisation and eroding social values along with the pace of innovation all follow close behind. These fears are well founded and manifest themselves in the most sudden of political change, hence the failed Italian referendum, Trump, Brexit and even new French president Emmanuel Macron.

The highly publicised emergence of “fake news” has not helped of course. The dramatic rise of social media and huge use by billionaires and corporations to push their message with micro-ads to manipulate elections and referendums is feeding the fear. Search engines are now providing more news delivery than human editors from the traditional sources of news.

People are now trapped in their own “echo chambers” that only makes matters worse and they are now known to reject any notion that they don’t believe in, reinforcing the lack of trust.

 

Figure 1: Credibility of Leadership Crisis

Source: The 2017 Edelman Trust Barometer

Proof of this can be seen in one part of the report that confirms that a person like yourself is now just as credible a source of information as is a technical (60 percent) or academic (60 percent) expert, and far more credible than a CEO (37 percent) and government official (29 percent).

“People now view media as part of the elite”, said Richard Edelman, president and CEO of Edelman. “The result is a proclivity for self-referential media and reliance on peers. The lack of trust in media has also given rise to the fake news phenomenon and politicians speaking directly to the masses. Media outlets must take a more local and social approach.”

One should not forget that the mass population make up nearly 90 percent of the global population and half of them live on less than $2.50 a day. Globalisation has not rescued them from poverty,4 and the Eurozone has been described as a “poverty machine” as its economy continues in stagnation mode.5

The mass population mistrust of government is prevalent in Italy, Spain, Germany, France, UK, Sweden and Poland. All of these European countries now present systemic political risk to the establishment. The US and Australia are included and surprisingly, so is Canada.

Trust in the British media has fallen 4 places in just one year to seventh from bottom, only just behind, Turkey, Poland and Russia. Trust in NGOs has fallen in 21 of 28 – Britain again falls four places to seventh. In all these findings there was the real sense of injustice. Then there was a lack of hope; a lack of confidence and a desire for change and it was the government who is predominantly the cause of all this anxiety. In 2017, 50 percent of the countries in the barometer have reported a complete loss of faith in “the system”. The US ranks 13th from last, the UK 10th last, Germany 9th, Italy 2nd and France last. In contrast, Russia, China and the UAE rank the top countries for faith in their systems.

 

Figure 2: Fears Further Erode Belief in the System

Source: The 2017 Edelman Trust Barometer

Corruption is now feared by 77 percent of respondents. And 79 percent are fearful about globalisation, 83 percent are concerned about social erosion and 72 percent about immigration. The pace of innovation concerns 68 percent – no doubt this will increase over time with continual reports of the rise of robotics and technology such as artificial intelligence.

As for the UK’s decision to leave the European Union; 54 percent said that the system had failed them and that they were fearful for the future. That fear dropped to 27 percent for those that voted to remain in the EU.

Traditional news and broadcast media are now showing the steepest declines in audience of all mediums. 53 percent of people do not listen at all to people or organisations that they do not agree with, with 59 percent finding the information they want from search engines. Contrary to what the government’s say, 64 percent believe in leakers and whistle-blowers, but only 36 percent believe in corporate press releases and company statements.

Globalisation is notable as 50 percent agree it is taking them in the wrong direction with 60 percent fearing; loss of jobs to foreign competitors (60%), immigration (58%), jobs moving to cheaper markets (55%) and automation (54%).

53 percent of people do not listen at all to people or organisations that they do not agree with, with 59 percent finding the information they want from search engines.

Here we can see how protectionism is now dominating the political arena. 72 percent in the survey say the government should protect their jobs, 69 percent the government should prioritise their own country needs and 50 percent say we should no longer sign trade agreements.

All of the survey findings are leading towards the understanding that there is a fundamental shift going on right now. Influence and authority that came from the traditional elite supported by experts and their institutions has fully inverted as people start to reject established authority.

“The implications of the global trust crisis are deep and wide-ranging”, said Edelman. “It began with the Great Recession of 2008, but like the second and third waves of a tsunami, globalisation and technological change have further weakened people’s trust in global institutions. The consequence is virulent populism and nationalism as the mass population has taken control away from the elites.”

As Edelman eludes, change is coming from the people because change was made for them without their consent.

Featured Image: Thousands of people gathered in central London to demonstrate against the UK government’s economic policies. (source: http://www.bbc.com/news/uk-40468881)

Go to top

About the Author

graham-webGraham Vanbergen’s business career culminated in a Board position in one of Britain’s largest property portfolio’s owned by one of the world’s largest financial institutions of its type. Today, he writes for a number of renowned news and political outlets, is the contributing editor of TruePublica.org.uk and Director of NewsPublica.com.

References

1. 2017 Edelman Trust Barometer: http://www.edelman.com/trust2017/
2. The Grim Realities of Globalisation: http://www.europeanfinancialreview.com/?p=9975
3. Corruption I the European Union: http://truepublica.org.uk/eu/corruption-european-union/
4. Poverty – global facts and stats: http://www.globalissues.org/article/26/poverty-facts-and-stats
5. Eurozone is a turning into a poverty machine: http://www.telegraph.co.uk/business/2016/10/24/the-eurozone-is-turning-into-a-poverty-machine/

Be Truly informed. Breathtakingly Inspired

The readers of The World Financial Review are salvaged from the pretences of orthodoxy. Because we don’t tell our readers what to think. We only show what some of the world’s smartest people are thinking about.

Are We on the Verge of Becoming Western Money Slaves?

By Peter Koenig

Masked by economic “innovations”, the New World Order continues work its way to total world manipulation. In this article, Peter Koenig elaborates on the Order’s intricate and imprisoning strategies in its attempt to enslave all of us through its financial systems.

 

Electronic money, a cashless society, is perhaps the ultimate and most direct means of the New World Order (NWO), also called One World Order (OWO), to control us all via its financial system. A system that the NWO would like to maintain as the world’s financial system, albeit, it has already been reduced to the western world’s financial system.

Why reduced to the Occident? – Because the Orient, China, Russia and the other countries belonging to the Shanghai Cooperation Organisation (SCO) and to the Eurasia Economic Union (EEU) have already largely delinked themselves from the western dollar-based system of fraud. They are saved from slavehood.

This reminds of one of the oldest and world’s worst criminal agent against humanity – still alive and kicking – Henry Kissinger: “Who controls food, controls the people; who controls energy controls entire continents; and who controls money controls the world.” He is, of course, right on all fronts, and has given us this clue already more than 40 years ago. But nobody has really seriously taken it to heart and acted upon these edicts.

Many, including me, have written about freeing the world from the NWO money control.1 Deglobalising would be a first step towards freeing us all from the bloody claws of the Washington implemented, and Dark State directed NWO.

Critics often talk of an overhaul and reform of the system. This monetary system cannot be reformed. It is privately owned and rotten to the core. None of the private owners, the Rothschild, Rockefeller clans et all, would allow interfering with their wealth, usurped off the back of the world’s workers and populace at large. Former attempts to bring the FED under national reign, have resulted, for example, in JFK’s early death.

They don’t want to kill Europe altogether, good old Lady Europe, because they need her as a stepping stone for subjugating the rest of the world, for vital trade that helps justifying and generating the unlimited dollar machine – and, as a cushion to the East.

Compare the dollar-based monetary system to the European Union – which cannot be reformed either. Any “reform” is just fiddling at the margins – as is inherent in the term “reform”. And that’s not good enough. As we know by now, the EU was not the construct of Europeans, per se, but an idea behind the “deep state”, already at the onset of Phase II of the Great Hundred Year War (WWII – September 1939 to September 1945). Phase I (WWI – 1914-1918), as well as Phase II were induced to weaken Europe, to make her ready for full domination.

Imagine a “Picador” of a Spanish bullfight, whose job it is to weaken the bull to the point where the torero and matador have a relatively easy task subduing and killing the bull. Well, Europe is the bull. They don’t want to kill Europe altogether, good old Lady Europe, because they need her as a stepping stone for subjugating the rest of the world, for vital trade that helps justifying and generating the unlimited dollar machine – and, as a cushion to the East, where massive military troops and weapons can be stationed in the name of NATO, to eventually launch, what they would like to think, is the final blow on the East, starting with Russia.

For all this the European (non)-Union was created, her Brussels hub, dominated by the non-elected European Commission (EC) which also dictates most of the rules imposed on her 28-member states – and which are all not-so-coincidentally run by neoliberal, some close to neofascist governments. Of course, by adhering to the Brussels dictate, they have become devoid of national sovereignty. That is a must. A sovereign country would not submit to the horrors of police state and militarisation that are in the coming. The euro with the Wall Street (Goldman Sachs – GS) run European Central Bank (ECB) is just a logical add-on to the fake EU. By now, many serious scholars have concluded that neither the EU or the euro are sustainable, but are doomed to collapse sooner or later.

The EU and the euro are a complex construct, largely manipulated and carried forward by the Dark State’s main secret services, CIA, NSA, Mosad, MI6 with close collaboration of Europe’s national secret services. Hence, the creation of a complete political and monetary vassal, the European Union and her currency, equally fraudulent as its master currency, the US-dollar.

The euro with the Wall Street (Goldman Sachs – GS) run European Central Bank (ECB) is just a logical add-on to the fake EU.

It is not by chance that today’s western US-dollar based monetary system, with its centre, the Federal Reserve (FED), has been created just at the onset of Phase I of the Hundred Year war, i.e. WWI. In 1910, Rhode Island Senator, Nelson Aldrich, with his heart close to the world of bankers, organised a “hunting trip” for five top Wall Street (WS) bankers to travel in disguise by train to Jekyll Island, off the coast of Georgia, where they concocted in a few days the concept of the modern FED – which was to become the “mother” of the new dollar-based world monetary system, now reduced to the western monetary system. The Federal Reserve Act was signed into law in December 1913 by President Woodrow Wilson.

On his death bed, in 1924 Wilson apparently declared, “I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilised world no longer a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and duress of a small group of dominant men.”

The FED, the Bank for International Settlements (BIS – also called the central bank of all central banks, manipulating gold prices and currency exchanges), as well as the related dollar-machine are totally privately owned. On top of the owner pyramid are the Rothschild and Rockefeller clans. Henceforth, all international monetary transactions had to transit through a WS bank, be it in New York or London. This is the only reason why the US government, i.e. Washington and its dark handlers, are able to hand out economic and financial “sanctions” as they please, to control those, who do not want to bend to their dictate.

“Sanctions” in terms of blocking trade with a Washington-destined country and punishing everyone who does not observe the sanctions, plus, confiscating a country’s foreign assets – are totally illegal before any international court. But there is no international court that is not bought by this sham monetary system. By the same token, this same deceitful banking-monetary scheme induced the last artificial economic “crisis” 2007/2008 – and counting, allowing WS to launch a worldwide globalisation of banking which de facto, puts worldwide private banking under the oppressive wings of the FED and WS. This, all the more as the World Trade Organization (WTO) a few years earlier made banking deregulation mandatory for any new WTO wannabe member.

How to get out of this slavery before we are totally locked into a system from where to escape may be nearly impossible? The solution sounds simple enough in theory, but of course is much more complex, as it confronts politics, which is controlled by the “dark deep state” of the NWO, or the One World Order which more appropriately describes what we are faced with.

Nations and societies that want to get out of the killer-claws of those who control the NWO, have to start thinking out of the matrix – “deglobalising and de-dollarising”.

The first step is thinking in a new paradigm. Greece would have had an excellent opportunity to show the world how to become free of those abusive financial vultures, and regain her sovereignty. Hélas, Greece didn’t. She may have not been “allowed” to do so. A huge dark killer sledgehammer was and still is hanging over the country.

“Local production, for local markets, with local money, and local public banking for the promotion of the local economy” is the name of the “simple game”.

Beyond this approach, trading between regional friends, culturally similar countries, “think-alike” peoples’ nations, respecting each other’s comparative advantages, would be a normal next step. Trading would become again what the original meaning of the word says: An exchange of goods among equals, where, contrary to the current system, each trading partner is a winner. A good example, still in its infant steps, but progressing, is ALBA (Spanish acronym for Bolivarian Alliance for the People of Our America; “alba” also means appropriately “dawn” in Spanish). This alliance was launched by Venezuela and Cuba and today comprises some 11 Latin American countries, including Bolivia, Ecuador, Nicaragua and a number of small Caribbean nations.

The US-creation of the expression “win-win situation” is certainly correct for any trade between a western industrialised country and a developing country following the rules of WTO. The “win-winner” is always the west.

The concept of ALBA could be replicated in many parts of the world. ALBA in many ways is a modern barter system which uses a virtual currency, the Sucre. The currency’s value is the weighted average of each member country’s economic output – plus the US-dollar. – Why the US dollar? I was told by one of the member country’s Minister of Finance that keeping the dollar in, would help avoid a massive boycott of the nascent system by Washington. We can only hope he is right. ALBA needs to gain more strength and new members.

Only half a century ago, this type of trading “within neighbours” was common, and it was OK. It was certainly more equal than today’s WTO-led and globalised trading system, where the “small” – i.e. developing countries, always lose out, for the benefit of the domineering west. The US-creation of the expression “win-win situation” is certainly correct for any trade between a western industrialised country and a developing country following the rules of WTO. The “win-winner” is always the west. And yet, most developing countries are eager to join the “club”, lest, they fear, they may become isolated trade-wise. Well, I am not sure. There are alternatives à la ALBA. Unfortunately, many of their “leaders” (sic), are buyable.

Stepping forward into the old system, may be unthinkable for today’s generation, as they have not known – and have been brainwashed to think that “Globalisation is the best”.

With GREXT, local money and a new public banking system – detached from Wall Street and European BCE-linked banks, Greece would be already on a fast-track to recovery, regaining their strength as a sovereign proud economy, whose philosophers have, after all, offered the world the concept of “democracy” some 2,500 years ago.

Local public banking is key. Just look at the Bank of North Dakota, a state owned public banking institutions which had kept North Dakota out of the 2007/2008 crisis. Except for Ellen Brown, President of the American Public Banking Institute, hardly anybody talks about this success story.

Why? – Because it runs counter what the FED-WS dominated private banking system is doing.  This private banking system is NOT working for the people, or for a country’s economy. It is working for private banking profit – and for the wealth of a few – and for eventually dominating the world’s financial system, so as to enslave the population, by totally controlling their financial resources, their livelihood. Case in point is that Germany’s private banks have made a profit of 1.34 billion euros on the Greek misery, just recently admitted by the German Minister of Finance.

That’s the deadlock we have to break. – How? With an ever more propaganda and lie-infested media that ever more controls the populace? – Imagine, the blood-dripping fangs that keep us hostage are not going to loosen their grip, come hell or high water. We, the People, have to break loose, peacefully, non-violently, by thoughtful actions. The deglobalisation concept is akin to the concept of “Resistance Economy”.

We have to promote the concept of Resistance Economy by all means we have available; talking and writing about it to as wide an audience as possible; by having alternative media, like RT, Sputnik, TeleSur and others, promoting the idea; and by strongly and firmly always-always thinking that a drastic change is possible, that darkness doesn’t rule the world – that light can and will shine, if we, The People want it – we eventually may make a difference. What We, the People, are still missing is organisation and solidarity. Against the dark state’s constant effort to divide to rule, an initiative in solidarity may move mountains, by steering the vessel from the shade into the sun. All is possible. Never give up.

And Light is Peace.

 

Go to top

About the Author

koenig-webPeter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research, ICH, RT, Sputnik, PressTV, The 4th Media, TeleSUR, TruePublica, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.

Reference

1. http://www.globalresearch.ca/globalization-is-the-demise-of-humanity-towards-an-economy-of-peace-with-an-alternative-monetary-system/5545014

Why Jobs Growth No Longer Induces Wage Growth in America

Or The Eclipse of the Phillips Curve in America

By Dan Steinbock

While the Fed’s continued tightening may suppress growth in emerging economies, US labor market may not be as strong as recent reports suggest.

 

US experienced strong job growth in June, when the economy created 222,000 net new jobs, which exceeded analyst expectations. At the Federal Reserve, the jobs report boosted confidence US economy is on the track for new rate hikes in the fall.

As the unemployment rate is barely 4.4%, the Fed expects that the US economy can cope with further tightening. Yet, despite the solid performance, not everything is in place for sustained job growth.

 

Temporal and Structural Constraints

In June, some jobs were fuelled by temporary drivers. The June gain of 35,000 jobs in state and local government was preceded by a loss of 8,000 jobs in the sector in May. Other June gains reflect school districts’ new hires for the fall. Moreover, the retail sector added over 8,000 net new jobs; but only after losing almost 80,000 jobs between February and May, as a result of the ongoing shift to online retailing.

Much job growth was due to hiring in healthcare, social assistance and local governments, which are coping with America’s aging and ailing population.

Usually, when unemployment is low, employers tend to increase wages to attract new workers and keep existing ones. That’s not the case today. Instead, some of the biggest job gains are taking place in lower-wage sectors, such as healthcare and temporary workers, which keeps wage growth down.

US recovery also suffers from structural constraints. The unemployment rate is relatively lowest among whites (3.8%) and Asians (3.6%), higher among Hispanics (4.8%), twice as high for blacks (7.1%) and far higher for youths (13.3%).

Usually, when unemployment is low, employers tend to increase wages to attract new workers and keep existing ones.

Moreover, the labor force participation rate – the number of people who are employed or actively looking for work – peaked at 67% in the early 2000s, but is less than 63% today; where it used to be in the mid-1970s.

Unlike labor force participation rate, the employment-population ratio is not as affected by seasonal variations or short-term fluctuation. In the US, it used to be almost 75% in the early 2000s; but today it is barely 60% as fewer young Americans are looking for work and baby boomers are retiring.

End of Phillips Curve – and Yellen

The current Fed believes in the so-called Phillips curve; a historically inverse relationship between rates of unemployment and corresponding rates of inflation. In this view, decreased unemployment goes hand in hand with higher rates of inflation.

In the past three decades, the rates have shrunk to zero. Yet, even though job growth is no longer accompanied with wage growth, Yellen continues to rely on the Phillips curve to guide monetary policy.

Consequently, as US unemployment rate is now only 4.4%, that should correlate with progressively rising inflation. And yet, the reality seems to be precisely the reverse. Until early 2017, unemployment rate did steadily decrease, while hourly earnings climbed close to 2.9%. But in the past few months, unemployment rate has remained around 4.4%, whereas hourly earnings have decreased to 2.4%.

Historically, a short-run tradeoff between unemployment and inflation reflected the postwar Keynesian era when the rates climbed from 2% in the 1950s peaking at 20% in early 80s. In the past three decades, the rates have shrunk to zero. Yet, even though job growth is no longer accompanied with wage growth, Yellen continues to rely on the Phillips curve to guide monetary policy.

Instead of new hikes in the fall, the Fed would need a rethink. If the theory associated with the current policy path is untenable, it cannot provide appropriate guidance. In fact, new data is likely to reflect soft inflation and lingering wage growth. As a result, spring 2018 is likely to witness not just the removal of the Phillips curve from its protruding seat at the Fed, but the replacement of Yellen and Fischer at top.

In international view, a rethink is also vital. A single-minded focus on rate hikes that are likely to result in much collateral damage in emerging markets is dangerous when those emerging economies account for most of global growth prospects.

The original version was published by Shanghai Daily on July 17, 2017.

Featured Image: US Federal Reserve Chairperson Janet Yellen image courtesy of SRC Stock Charts

 

Go to top

About the Author

Dan Steinbock is the Founder of Difference Group and has served as Research Director of International Business at the India China and America Institute (US) and a Visiting Fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). For more, see http://www.differencegroup.net

Limitless Vision Infinite Possibilities: The Story of Allied Wallet CEO Andy Khawaja and his Multi-Billion Dollar Company

“Keep on climbing, the sky is the limit and believe me you will never reach the top because it’s endless.” In this interview, CEO Andy Khawaja of Allied Wallet shares to us the story behind the most successful payment processing company across the globe. Read on and witness the power of vision, courage, and integrity.

 

The name Allied Wallet has been known in the industry for quite some time now, how does it feel to be one of the most successful CEOs in the global arena and can you give us some background on how your journey began?

It feels great to be the most successful CEO in the e-commerce and the fintech arena, but a lot of work has to be done. It’s very important for a CEO to be hands on, to know what’s going on internally and to work along with the team members of the company, with the employees – work with them, not work above them. Of course you have to monitor daily operations, you have to know what’s going on but you also need to step in and help and make sure that your sleeves are rolled up and that you’re working, trying to help out and trying to make them understand and trying to add to their knowledge rather than just being one of those CEOs who’s on the go, if you know what I mean.

 

Tell us how did you gain interest in a payment processing company?

At that time, when I started Allied Wallet there wasn’t much going on electronically online and I wanted to build something that can secure online payment. I wanted to be able to make sure that people can sell their products online. I found myself always thinking about it, it was just eight or nine years when the Internet had begun before I started Allied Wallet.

I wanted to be able to create independent careers. I wanted to help others conduct electronic business and help them expose their products to the world and be a part of something big.

Was it in 1991?

Correct, we’re talking about 24 years ago when the Internet began and some years after that there was pretty much nothing online. If you have a store on the street you’d just put an ad on the Internet for the website, “This is where we are located”. But as I was saying, you can’t buy any product, there were no web developers to add products online, no one to give you an option to do online transactions and sell your products online. So I thought about all that and I wanted to do something.

I wanted to be able to create independent careers and I wanted to bring entrepreneurs out there and let them start their online business be independent, let them have their own businesses, be their own bosses. And that’s part of the reason why I created the company, to help others conduct electronic business and help them expose their products to the world and be a part of something big. I wanted to be part of it, I wanted to be one of the starters who build this engine; to enable people to connect electronically across the globe and that’s the reason why I wanted to start an online payment company.

 

What does Allied Wallet do exactly?

Thirteen years ago I built the platform which is a virtual gateway. It is able to take credit card from the consumer, encrypt the cards and pass it to MasterCard for approval or decline. The most important thing here was security, that’s the whole engine of Allied Wallet from the start, to secure credit card data and credit card numbers and make sure there will be no fraud taking place and that consumer identity is 110% protected, that was my goal.

 

How do you maintain such a level of security?

Security is very important because before I went online I spent about ten years in the retail business and we used to have a lot of people come in and they had physical plastic cards that were counterfeit, they were just copies. You know, they were even able to redo the magnet on the back of the card so when you swiped, it read the card but actually they were all fabricated cards, and I dealt with a lot of that and there were a lot of people across the world that were becoming victims of credit card fraud.

And that got me to be concerned. I thought, “What is it going to be in 10, 20, 30 years?” It was 13 years ago and I said I need to build an engine to protect these consumers. And then we started to build the Allied Wallet gateway and we saw this potential way to generate profit by adding merchant processing to it at the same time, and that’s how the company started – from one merchant to two merchants and so on. Before we had a few customers, and now we serve millions of consumers worldwide, 116 million from 58 countries around the world.

Was there any significant obstacle or blockage that you and the company encountered when you first started?

Yes, from the start, absolutely. This is the only company in the world in technology or fintech that didn’t want investors – the only company. And when I mentioned that, the boys at Goldman Sachs, Merrill Lynch, JP Morgan all started dancing and saying, “Are you kidding me? I’ve never heard of that before”. We are the only company in the world that started from a no dollar investor, we never took a penny from any third party investor. Look at Stripe, PayPal, and Square, massive investments and the tens of millions of dollars invested into the platform and we never had an investor because I don’t want investors, I had investors lined up knocking at my door to give a cheque; sorry, not interested, I’d like to keep the company for myself.

 

Did you really just tell investors that you weren’t interested? Why?

Absolutely yes, not interested. We had investors with $400 million, $500 million cheques at the start but I just don’t want it because my whole strategy wasn’t to grow with the speed of light. I wanted to grow gradually, slowly, and I wanted to learn myself and I wanted to educate my team. The whole concept of Allied Wallet is not just to make fast money, we’re not just a bank that wants to make fast money to show the investors, “Hey, there you go, look how much fast money we’re making!” We don’t want that because we’re not greedy, we’re not into being a fast money making machine to please the investors.

Because that’s what happens when you take investors’ money, you have to give returns back, you constantly have to take short cuts to make fast money to show your investors, “Look, we’re growing.” But that’s not the interest of Allied Wallet, the interest of Allied Wallet is to serve the community, the interest of Allied Wallet is to gradually grow and make sure consumers are benefitting, make sure our merchants are benefitting, make sure that whoever works on our platform are benefitting and they’re growing with us. We’re not just out there to get their money and charge them high fees and to show phenomenal growth, that’s not the direction I wanted to take. And because I took the right direction, to be frankly honest with you, interestingly, we grew pretty quick just by word of mouth, we are the best processing out there and the best CEO in the business today.

 

Which challenges do you consider as the company’s biggest?

A big challenge is that you have to constantly be in compliance. You have to obey the rules and regulations in each country. Each one has local jurisdiction, say if you were in the UK or in Germany or in Spain and you conduct business, there’s a lot of compliance and regulations on how you can do business. Like, what sort of businesses you can take, what types of businesses are you allowed to accept based on the rules and regulations of the country. And your hands will be full just trying to be compliant in one jurisdiction.

So imagine us, we’re doing 58 countries around the world, so 58 different jurisdictions. We are pretty much the bible of compliance and risk and AML, anti-money laundering.

We earned the respect of government agencies all around the world because we can see the bad things, and we report these. There are things which they can’t figure out themselves because some law enforcement agencies don’t have the manpower to be able to go after it. But all these go through our system, we track it down and we just give it to them on a gold plate. So we built that reputation and pretty much the door into any jurisdiction we want to get into because governments respect what we do and they respect the company’s profile, and that’s an important part.

If you ask me the question is China a good market for e-commerce I’d say it is today and the next five years. I would probably say that they will dominate the world of electronic payments, absolutely.

You’re one of the people who anticipated profitability in China’s economy, do you have any future plans concerning China or Asia or do you plan on ventures to other business sites or innovations?

We’ve been working with China for the past nine years, China is very interesting, it’s a growing market and I think it’s going to grow bigger and bigger. The dominator of China isn’t MasterCard, it’s CUP, China Union Pay, it’s the dominating card over there, so they have 2.5 billion cards and in fact when I first started to work with China Union Pay nine years ago people were looking at it and thinking why would you want to work with a Chinese card, who cares? And I said, “You watch out what’s going to come out of China.” Some call it a hunch but we’ve always predicted that and now we have a great relationship with them, we do a lot of consumer transactions in China and outside China. If you ask me the question is China a good market for e-commerce I’d say it is today and the next five years. I would probably say that they will dominate the world of electronic payments, absolutely.

 

They’ve got the population and the consumer demands. What do you see in Allied Wallet’s future, how will it continue to thrive in the coming years and what are your strategies?

The way I see the company, we’re just constantly growing. I want to be in more jurisdictions, and more regions around the world. Right now I’m looking at the African market, I’m interested in entering Africa, I know there’s a lot of products and banks which don’t want to enter Africa – from North America, from Latin America and from Europe because they’re very concerned about fraud. So first of all I want to implement my system in Africa to eliminate these fraudulent transactions and make it more safe and secure for non-Africans to transact. So my next step in 2017 will be to enter the African market, no particular country, just the whole continent.

 

What about all the rapid and radical technological changes today, how do you yourself as CEO keep updated? Do you have business habits you can share with us?

I’ve got 20 brains and developers, I have five PhD dot net coders which are constantly ahead of the game. We are the ones that invented the organisation about nine years ago, an organisation that’s been out there six years and a lot of people are catching up to it but we invented it nine years ago, so we’re pretty much at least two to three years ahead of the game in front of everybody else in the market today.

The reason why I do a lot of travel myself and I visit a lot of tech companies and fintech companies across the board in Japan, Hong Kong, China, Germany, the UK, and many in America, I go to a lot of conventions and I see the future of the technology and I try to combine that together and I put a map and I pretty much bring it back to my senior PhD dot net coders, Microsoft developers. I’ll be like, “this is what’s out there, this is the combination of six or seven countries, that’s what they’re going to be working on in the next two years, what can we do to beat it, we’ll come up with a better plan and we’ll code it.” We do a lot of analysis on the market and how the market is going to be looking like and we always improve it and we’re pushing two or three years ahead of its time.

 

In terms of company culture what is it like to be part of Allied Wallet, how do you keep excellence and innovation in your team’s spirit?

It’s amazing, people love it here, 80% of the company’s employees have been here for more than ten years, 20% are the youth, some of them want to work hard, some of them want to work and play. This is not a place to not grow, so we give you the opportunity to grow but you have to put your share in it. So if you work hard and you produce we give you stock options, you get increase in payroll, we even have free lunches.

Keep on climbing, the sky is the limit and believe me you will never reach the top because it’s endless.

How do you decide who gets stock options?

We do evaluations based on performance. Each team has its leader and the leader evaluates and we always see what you’re producing, what you’re adding to the company. These things are very important; we do evaluations once every six months and once a year we do the money evaluation – if your pay deserves to be increased and if you’re eligible for stock options.

So we do a lot of these things which are very important. Hardworking people always deserve to be rewarded and people who don’t want to work hard, don’t deserve to be rewarded. In every company in the world you have the good and the bad, it’s just the way it is, you just have to monitor the data to make sure that everybody is producing somehow.

 

Would you like to leave a message to other up and coming CEOs and business leaders?

Absolutely, I would say my message to them is to keep on climbing, the sky is the limit and believe me you will never reach the top because it’s endless.

For more information about Allied Wallet, please visit their website: https://www.alliedwallet.com/

China’s Position on Climate Change – Truly Sustainable?

By Kerry Brown and Benjamin Barratt

Back in 2009, the world would not have thought that China will be taking a leadership role in humanity’s struggle against climate change. Today, Kerry Brown and Benjamin Barratt discuss how China’s position has transformed and why it will stick.

With the election of Donald J. Trump as president of the USA in 2016, the issue of the global effort to combat climate change underwent a potential transformation. In his campaign at least, Trump had been at best ambiguous, and at worst antagonistic to the idea of human activity impacting on temperatures, and the potentially disastrous consequences that might come from this. While not withdrawing from the Paris Convention at the time of writing (May 2017) the US has gone from being proactive and engaged in this space to being passive, and possibly even opposed.

That immediately opened up space for the Chinese, the other essential constituent in the international effort. This in itself is a remarkable moment. In a key area, China, not the US, is displaying leadership. This is one of the most powerful illustrations of just how prominent China has now become, and how global the read of its influence.

This in itself is a remarkable moment. In a key area, China, not the US, is displaying leadership.

It is ever more noteworthy because less than a decade ago, when the Copenhagen Summit was convened in 2009, China would not have been placed amongst the more positive and co-operative players. Despite recognition domestically, by politicians and academics within the People’s Republic, that climate change was a serious problem, and that more needed to be done in terms of use of clean technologies and reduction of reliance on fossil fuels (the key contributor to greenhouse gases), the attitude remained that economic growth was the priority, and that it was the responsibility of the developed world, and in particular the US and the EU, to take the lead in cutting emissions.

At Copenhagen, China was accused of leading a 77 strong cohort of developing nations in opposing a stronger joint communique at the end. This wrecking role attracted savage criticism. China was painted as a spoiler, a nation that was standing between the rest of the world, and the attempts to find a sustainable solution to combatting climate change. By 2014, a series of events started to disrupt this narrative, marking the transition in a short period to China being a leader, rather than opponent, for global efforts.

There were three key moments in this path to change. Firstly, from the elevation of Xi Jinping as party Secretary in 2012, China’s whole domestic political story changed. GDP growth started to slow down. The government proposed that economic growth alone was not the key thing. There were other equally important targets. One of these, conveyed in the China Dream idea, was of a clean, pleasant environment. Chinese cities blighted by thick smogs that threatened lives became a huge and very visible impediment to this. This meant that the government started to reprioritise and place providing a better living environment at the heart of its programme.

That led in 2014 to the surprising joint agreement between China and the US on the side lines of the Asia Pacific Economic Meeting (ASEM) that year to mutually agree a cap on carbon emissions. For the first time ever, China legally committed to having a peak by 2030, and then aiming for reductions after then. That the two most important players in this space were willing to signify their work together was a huge symbolic and practical step.

It was a step like this that made the even more dramatic events in Paris a year later possible. In front of the rest of the world, China reversed its strategy from Copenhagen in 2009 and played a proper leadership role, making a meaningful international accord possible.

What were the reasons behind this change, and will it prove sustainable? All signs at the moment are that for Xi Jinping and his government, regardless of what the Americans eventually do, they will abide by their commitments made in Paris, and that they will continue to support further efforts. This might seem generous and altruistic. But in fact, it is simply an acceptance of the overwhelming scientific evidence of a clear link between human activity and rising temperatures, and, more importantly, a clear acceptance that as a global problem, China has to take a major role in this whatever the rest of the world might think.

If we take air quality, the reasons for why China might take this more proactive stance are clear. Within China, air pollution in the form of thick, obscuring smog, has become a widely publicised side effect of a rapidly evolving economy dependent on fossil fuels and heavy industry. What is a present, but largely invisible threat to public health in Trump’s America, has become a visible symbol of environmental degradation in China.

It is simply an acceptance of the overwhelming scientific evidence of a clear link between human activity and rising temperatures, and, more importantly, a clear acceptance that as a global problem, China has to take a major role in this whatever the rest of the world might think.

The most recent Global Burden of Disease estimate for deaths associated with air pollution in China stands at 1.6 million per year, a problem that will become more acute as its population ages and becomes more susceptible to disease. Such a high number reflects the severity of the situation. Daily average concentrations of PM2.5 (fine dust in the atmosphere small enough to enter your lungs when breathed in) across China frequently exceed 250 µg/m3, which is 10 times the World Health Organisation guideline (25 µg/m3). After initial reticence to publish data, the Chinese government has rapidly expanded its network of air quality monitoring stations and issues smog alerts when levels exceed certain thresholds. These data also provide a means to evaluate, and publicise, its efforts in bringing down pollution levels via a raft of emissions control legislation. As many of the main culprits for this public health crisis, principally coal burning, are also high on the list of climate change contributors, improvements will have dual benefit; a win-win situation for climate and health.

As a government focussed on delivering more for the rising urban based, service sector working, high consuming middle class, ignoring the very clear impact this has on the health and quality of life of this core group would be political folly, even in a non-multi party system such as the one China currently has. The Chinese government therefore has a profound reason for addressing these concerns. If it manages to clear up the air across China, and particularly in its cities, it will, to put it more simply, be more popular. If it fails to do this, then its legitimacy will be questioned. And it might be one of a number of issues that create the sort of accumulation of grievances that might threaten the stability of the one party state.

It is intimately linked to its own vision of how to maintain its power, and to the creation of what it calls its central mission – a rich, proud and strong country in the next decade.

This stark possibility means that China’s commitment to combatting climate change is very unlikely to weaken or change. It is intimately linked to its own vision of how to maintain its power, and to the creation of what it calls its central mission – a rich, proud and strong country in the next decade. Having polluted cities and ill, resentful inhabitants would be a massive barrier to achieving this goal.

That it has such domestic importance is a good thing for the rest of the world. While Trump in Washington can dismiss the lobbying of most groups around needing to combat climate change, it is unlikely he will be able to push away the intercession of his largest trading and economic partner. China has unique leverage here. And the fact that its president, Xi, draws such a strong link between his domestic prosperity and addressing this issue is a good thing. It means that he has, and will, continue to support not just China, but America and the rest of the world in their efforts to fight climate change. This, above all else, is why the Chinese position on this issue is unlikely to change, and is sustainable.

Featured Image: A solar farm in Xinjiang. China has pledged to generate 20% energy from sources that are not fossil fuel, including solar, by 2030. © Gilles Sabrié

Go to top

About the Authors

Kerry Bown (left) is Professor of Chinese Studies and Director of the Lau China Institute, King’s College, London. Benjamin Barratt (right) is Senior Lecturer in Chinese Environment at the Lau China Institute and in the Division of Analytical and Environmental Sciences at King’s.

Singapore: Designing the Future in the Midst of Uncertainty

By Lester Gunnion

The Singapore government has a vision of transitioning to higher-value-added industries, and thus boosting productivity, by focussing on skill development, innovation, and global integration. However, this process is likely to face both external and internal challenges.

 

Singapore’s real GDP growth has slowed in recent years. Average annual growth rate in 2016 and 2015 was less than half that in 2014 and 2013. The slowdown links back to sluggish global trade – a critical factor driving Singapore’s economic performance. However, the recent uptick in global economic growth and business sentiment is spurring an improvement in global trade. This is likely to support slightly quicker real GDP growth in Singapore in 2017. While an improving external economic environment is important for the near term, the overarching narrative over the medium to long term will remain centred on Singapore’s internal transition to its future vision of the economy. The Singapore government is planning a transition to higher-value-added industries by focussing on skill development, innovation, and greater global integration. This assumes importance as low-skilled, low-cost manufacturing and services are more likely to shift to developing economies in Asia with abundant labour pools. The planned economic transition also focusses on boosting productivity, especially because Singapore’s population is aging rapidly. This process is likely to face both external and internal challenges.

 

A Review of Recent Economic Performance

In 2016, Singapore’s real GDP grew 2.0 percent from a year ago, about the same as in 2015 (Figure 1). The manufacturing sector recovered in 2016, growing 3.6 percent after declining 5.1 percent in the previous year. Manufacturing growth was supported by growth in the electronics cluster and the biomedical cluster, particularly in the final quarter of the year. Electronics manufacturing was supported by growing demand for semiconductors due to a cyclical upswing in the global information technology industry. The biomedical cluster was supported by an increase in demand for pharmaceuticals and medical equipment. Growth in the construction and services sectors of the economy moderated in 2016 compared with 2015. The goods-producing and services sectors of the economy each contributed 0.7 percentage points to overall real GDP growth. Ownership of dwellings and taxes on products accounted for the remainder.1

Consumption, both private and government, slowed relative to the previous year. Private consumption grew just 0.6 percent, down from 4.6 percent in 2015. Gross fixed capital formation declined in 2016 after weak growth in the previous year. Exports and imports also slowed relative to the previous year. Exports of goods and services grew 1.6 percent, down from 2.6 percent in 2015.2

 

 

In Q1 2017, Singapore’s economy contracted 1.3 percent quarter over quarter on a seasonally adjusted annualised basis. Manufacturing declined from the previous quarter, but the electronics cluster continued to be buoyed by strong demand. Construction recovered relative to the previous quarter but remained weak relative to a year ago due to continued weakness in private construction. Service industries also declined relative to the previous quarter.3 Total exports, measured in constant 2012 Singapore dollars, declined from the previous quarter, but exports in the first four months of 2017 were up 5.7 percent relative to the same period a year ago.4

An Uptick in Global Trade and Singapore’s Plan for Growth in the Future

In its latest World Economic Outlook (WEO) report, the International Monetary Fund (IMF) indicates that global GDP growth is likely to strengthen to 3.5 percent in 2017 from 3.1 percent in the previous year.5 Brighter prospects for economic growth in developed economies, particularly in the United States and European Union, are important factors behind the projection of quicker global growth. Additionally, quicker economic growth in the first quarter of 2017 in China has temporarily allayed fears of a sharp slowdown there. Another factor behind the improved outlook is improving business sentiment, backed by improved corporate earnings.

The uptick in trade is likely to benefit Singapore’s economy in the short run. With trade (exports and imports) accounting for 320 percent of GDP,8 robust global trade will remain critical to the success of Singapore’s future economic plans.

All these factors augur well for global trade. In the WEO forecast, global trade volume is projected to increase 3.8 percent in 2017, up from 2.2 percent in 2016.6 Other indicators, such as the container throughput index, international air freight volumes, and the global purchasing managers’ index (PMI), all point toward improving global trade in the near term (Figures 2a and 2b). Even the World Trade Organization’s World Trade Outlook indicator notes that global trade momentum is likely to continue at a moderate pace through the second quarter of 2017.7 The uptick in trade is likely to benefit Singapore’s economy in the short run. With trade (exports and imports) accounting for 320 percent of GDP,8 robust global trade will remain critical to the success of Singapore’s future economic plans.

 

 

 

The Singapore government has put in place a focussed strategy to maintain economic growth. This strategy includes building workforce skills, developing industry transformation maps, enhancing innovation, enabling digitisation, and deepening international connections. The government has targetted five clusters for growth: advanced manufacturing, applied health sciences, smart and sustainable urban solutions, logistics and aerospace, and Asian and global financial services. These clusters are areas in which Singapore has existing comparative advantage; they are also areas where the government projects will generate demand in the future.

As Singapore attempts to move up the value chain, it is also moving away from a reliance on low-skilled, low-wage foreign labour. The government has set quotas for foreign workers in certain sectors. Furthermore, businesses are required to pay a tax on each foreign worker employed, dependent on the worker’s qualification as well as the foreign worker quota imposed on the sector. Tax rates are lower if the worker has the necessary academic and skill-based qualifications. The quota and tax system is designed to regulate the number of low-skilled foreign workers in Singapore, boost wages, and increase overall productivity by encouraging skill development.

 

Likely Challenges to Singapore’s Transition Strategy

Singapore’s planned transition to an economy of the future comes with challenges. First, there are external challenges; the momentum in global trade could be dampened if developed countries adopt a protectionist stance. Global policymakers are beginning to show some concern about this. For example, the IMF’s WEO report states that pressures for “inward-looking” policies are growing in the developed world due to low productivity and income inequality.9 China’s broad slowdown also poses a risk. Improved growth in Q1 2017 is unlikely to reverse the broad slowdown in growth. Weaker global trade could hamper Singapore’s plans of both achieving growth through export-oriented future growth clusters as well as fostering deeper international connections.

There are internal challenges to the plan as well. At the top of the list is Singapore’s aging population. Increasing life expectancy and a decreasing fertility rate mean that Singapore’s population will have an increasingly large proportion of old people. The old-age support ratio (OASR) is the ratio of working-age Singaporeans (20 to 64 years) to those 65 years and older. The OASR in 2016 was 4.7. By 2030, the OASR is likely to fall to 2.3.10 While an aging population is one of the reasons behind Singapore’s transition strategy, it is also likely to deter future growth, especially since the focus is on boosting productivity rather than expanding the workforce, which would put the city-state’s infrastructure under strain. Unfortunately, productivity growth has been weak and has been outpaced by growth in average monthly earnings (Figure 3), though an improvement in Q4 2016 offers hope. Year-over-year growth in output per employed person has averaged just 0.5 percent over the last eight quarters.11 Year-over-year growth in average monthly earnings averaged 3.6 percent over the same period.12

 

 

The Short-Term Outlook

Singapore’s short-term economic outlook will be determined by the future path of global trade. Trade policies in the developed world as well as fiscal and monetary accommodation in China are key factors in the near to medium term. If trade momentum holds up, then business sentiment is likely to rise, which, in turn, will support business investment. Budgetary measures such as expanding tax rebates and providing support to businesses faced with higher wage payouts are also likely to lend support. Furthermore, starting public sector infrastructure projects early is likely to compensate for weak private sector construction spending in the near to medium term. Singapore’s private consumption expenditure, which has stalled in recent quarters due to low consumer confidence and rising labour force redundancies, is likely to remain subdued in the near term. However, improved access to on-the-job training and likely gains in real wages due to a tight labour market could help improve spending in the medium term.

Singapore’s short-term economic outlook will be determined by the future path of global trade. Trade policies in the developed world as well as fiscal and monetary accommodation in China are key factors in the near to medium term.

Despite some favourable developments, real GDP growth in Singapore is unlikely to be significantly higher than in the previous couple of years. The Ministry of Trade and Industry forecasts growth of between 1.0 and 3.0 percent in 2017.13 This is likely to be the new normal for Singapore as it grapples with an uncertain external environment and internal structural challenges in its transition to an economy of the future.

This article was originally published by Deloitte University Press on the 20th of June 2017.

Go to top

About the Author

Lester Gunnion is an Economist and a Senior Analyst at Deloitte Research, Deloitte Services LP. He contributes to Deloitte’s Global and Asia-Pacific economic outlooks, covering the economies of Russia, South Africa, Singapore, Thailand, and Vietnam. Lester also contributes to Deloitte’s economics blog, Behind the Numbers, as well as thoughtware on economic issues in the United States in the quarterly periodical, Issues by the Numbers.

References

1. Ministry of Trade and Industry, Economic Survey of Singapore, 2016, February 17, 2017, https://www.mti.gov.sg/ResearchRoom/SiteAssets/Pages/Economic-Survey-of-Singapore-2016/FullReport_AES2016.pdf.
2. Ministry of Trade and Industry, “Singapore’s GDP grew by 2.5 percent in the first quarter of 2017”, April 13, 2017, http://www.singstat.gov.sg/docs/default-source/default-document-library/news/press_releases/advgdp1q2017.pdf.
3. International Enterprise Singapore via Haver Analytics, “Singapore merchandise exports, percentage change year-on-year, NSA, millions of 2012 S$.”
4. International Monetary Fund, World Economic Outlook, April 2017, http://www.imf.org/en/Publications/WEO/Issues/2017/04/04/world-economic-outlook-april-2017.
5. World Trade Organization, “Latest trade indicator signals sustained momentum in second quarter”, https://www.wto.org/english/news_e/news17_e/wtoi_15may17_e.htm.
6. World Bank, “Trade (percentage of GDP),” http://data.worldbank.org/indicator/NE.TRD.GNFS.ZS?locations=SG, accessed May 31, 2017.
7. International Monetary Fund, World Economic Outlook.
8. Population SG, “Singapore’s population challenge in a nutshell”, October 31, 2016, https://population.sg/articles/singapores-population-challenge-in-a-nutshell.
9. Department of Statistics via Haver Analytics, “Singapore productivity: Output per employed person, percentage change year-on-year, SA, 2010=100.”
10. Department of Statistics via Haver Analytics, “Singapore: Unit labor costs: Overall economy, percentage change year-on-year, NSA, 2010=100.”
11. Ministry of Trade and Industry, “MTI maintains 2017 GDP growth forecast at 1.0 to 3.0 percent”, February 17, 2017, http://www.singstat.gov.sg/docs/default-source/default-document-library/news/press_releases/gdp4q2016.pdf.

 

G20 – Is the West Governed by Psychopaths?

By Peter Koenig

In this article, the author elaborates on the contentious first agenda of the recently held G20 summit at Hamburg, Germany. In a world where the Masters fom the West have created, funded, and armed these “terrorist” groups, how could they plan to fight it, too? Peter Koenig boldly predicts, it’s just a matter of time before the West completes its suicide.

“Welcome to Hell!” is the slogan with which G20 protesters greet the self-appointed leaders of the world to their summit on 7 and 8 July 2017 in Hamburg, Germany, under Madame Merkel’s auspices to discuss the calamities of our globe and how to resolve them. Never mind that the distress of Mother Earth has been mostly caused by those who represent the West, and now pretend to fix it.

How utterly arrogant – and hypocritical!

In the wake of the summit, police were beating on aggressively against the demonstrators, most of them peaceful, unarmed; but some of them violent and hooded, as old tradition dictates, so they will not be recognised as police themselves or patsies of the police. Many people were hurt, several to the point of hospitalisation. And the meeting just began.

At the onset of the summit, Donald the Trump, the chief-psychopath, is running amok declaring with echo, “America First” – “America First” – trying to justify his decision for the US to quit the Paris Climate Accords. In a cheap attempt to hit Russia under the belt, he offered Europe gas sales, so Europe would no longer be “hostage” to Russia. How arrogant, again. The Donald doesn’t seem to have a clue what he is doing, other than thinking the world is his puppet. By far most Europeans rather buy hydrocarbons from Russia than being in the bloody and ruthless claws of the United States of America – and those dark forces that pull the strings behind Washington.

It remains to be seen to what extent the psychopath-in-chief will have his European, Australian and Canadian vassal-psychopaths lined up and dancing to his tune.

Before the summit, “informal” talks between the odd couple, Donald Trump and Angela Merkel, took place. They apparently focussed on North Korea, Syria, and Ukraine – all countries where the US is intent to destabilise and push for “regime change” – the sort of interference in sovereign nations’ affairs Trump promised during his campaign he would abandon as President. The dark one-eyed Masters didn’t allow it. And he isn’t man enough to stand up for what he was elected. Well, let’s face it – he could lose his job, or worse.

Nobody has elected the G20, nor the G7. “G” stands for Grand or Great. That’s how they see themselves. Everybody takes them for granted, the self-appointed megalos. Nobody seems to question their legitimacy. People only protest against what they stand for. That the G20 are sidelining the official body, the United Nations, is of no concern. Perhaps, because the UN has itself become a puppet of the invisible Masters, manipulated by their executioners, the US of A. So, has any international court that otherwise could hold them accountable for the crimes they committed over the century, or longer and keep committing. The G7, embedded in the G20, are the aggressing driving force for wars, destruction, merciless killing and perpetual chaos.

How hypocritical: you create them, fund them, and you fight them. Lying to the people. How much longer will they swallow the lie?

The G7 – Canada, France, Germany, Italy, Japan, UK and the US – all western nations (Japan follows the western game plan), are also the main creators of terrorism. They fund, feed, train and arm such reputed Islamic terror groups as ISIS/IS, Al Qaeda, Al Nusra – and others that fit the model of their war strategy (sic) of the moment.

Yet, it just emerged – would you believe – that the number one item on the rather fuzzy Hamburg agenda was fighting worldwide terrorism. How hypocritical: you create them, fund them, and you fight them. Lying to the people. How much longer will they swallow the lie?

This reminds of the prominent former German Chancellor, Helmut Schmidt’s words, shortly before his death, in an interview on terrorism to the German paper “Die Zeit”, on 30 August 2007: “I suspect that all terrorists, whether they represent the German RAF, the Italian Brigate Rosse, the French, the Irish, Spanish or Arabs, are relatively modest in their disdain for humanity. They are largely surpassed by certain forms of state terrorism.” – When the journalist asked back, “Are you serious? Whom are you referring to?” Schmidt: “Let’s leave it at that. I really mean what I say” (http://www.zeit.de/2007/36/Interview-Helmut-Schmidt/seite-7 – in German).

Only western megalo-psychopaths could have thought of “creating”, of nominating themselves into an alliance, of which the ultimate goal is to forge a New World Order (NWO), at times also called, One World Order, referring to an unspoken One Anglo-Zionist Government. That’s where we are headed; towards military oppression and financial subjugation of a small Zionist-headed financial and military elite.

It’s still time to wake up, to take our lives into our own hands, shed the mainstream propaganda and blood-thirsty lie-media, ignore them; get out from under the fraudulent privately owned fake dollar monetary system. There are alternatives available. We have to see them, then choose them. It is up to us to let go of the ever oppressing west. But each one of us, has to see the light, the little spark, that tells him or her – that there is something drastically wrong with the life we live, have been living for the last hundred years, that peace is just around the corner, but we have been duped into wars, after wars, after bloody conflict – and wars again. We are dozed with the idea that conflict and aggression is the Big Normal, as it is always inspired and provoked by “others” – mostly by the east. Yes, we believe it. It’s comfortable, and it would be inconvenient having to admit that we have been living a lie – a blatant lie all or most of our lives. Admitting it, and standing up for justice, would be saving ourselves and civilisation – maybe even humanity.

We are dozed with the idea that conflict and aggression is the Big Normal, as it is always inspired and provoked by “others” – mostly by the east.

What and who are these G20? They are the G7 enlarged and disguised in their evil intentions, by 13 other economic power brokers, also often referred to as “threshold countries”, including Russia, China, Brazil, India, Indonesia, Argentina, Mexico, South Africa, Australia, South Korea, Turkey and the EU. Spain is a permanent observer. Of course, the (western) world’s key financial enablers and political institutions, like the IMF, World Bank, Federal Reserve and the UN with its regional sub-hubs, are not missing in Hamburg.

The G20 control two thirds of the world population, 90% of the globe’s economic output and 80% of world trade. Their agenda in Hamburg is semi-secret, except for the items that might interest the populace at large, like fighting terrorism. But certainly, under the guise of “security and terrorism”, they will also discuss, led by the Trump team, how to subdue renegades, such as Iran, Venezuela, Bolivia and, of course, the eastern most link of the new axis of evil, North Korea. Fortunately, there are Russia and China at the table, and Trump with all his arrogance, may have to watch out for not becoming the laughing stock of the summit.

NATO, economy and terrorism go hand-in-hand. Without terror no wars. Without wars no production of weapons, and without military-security industrial complex, the western world’s economy has reached a dead-end. The US depends for more than 50% of its economic output on the war and security machinery with its associated services. Europe, if she continues her status as a US vassal, will in no time march along the same footsteps. Hence, terrorism is a must. Peace is a no-go.

Soon NATO forces facing the Koreas? – Why not. NATO sounds good; the alliance of the willing – led by Washington, hiding behind the NATO emblem. In the land of the lawless, impunity is borderless.

Did you know, that at the opposite end of the globe, Washington’s foremost neocon vassal, the President of Colombia, has asked NATO for support in the fight against “delinquency” – i.e. the FARC, with whom they signed a fake, make-the-world-believe peace agreement, largely disarmed them as part of the deal, and now FARC has been tricked. President Santos (the Peace Nobel – sounds like Obama and Kissinger!), and his Washington Masters want to completely wipe out that important peasant movement, the only resistance against the US supremacy over their land, and against Washington’s continuous support of the drug cartels.

As the illegitimate G20 and G7 – NATO is just taken for granted. But be aware – it’s a criminal institution made for killing societies and subordinating sovereign nations.

Never mind that NATO has nothing to do with South America, or with Asia, or the Middle East, for that matter. The atrocious NATO killing machine will do their work in the process of subjugation anywhere in the world, while most people just close their eyes and ears, and remain mute. As the illegitimate G20 and G7 – NATO is just taken for granted. But be aware – it’s a criminal institution made for killing societies and subordinating sovereign nations. Washington’s current plan is controlling Russia, via NATO’s eastern European border aggressions, and China, by constantly provoking and threatening North Korea’s sovereignty.

That’s why the G20 will not miss talking about NATO prerogatives in war and conflict resolutions and, of course, in fighting terrorism. Surely, Russia and China will not fall for it.

After debating supportive mechanisms like wars and the lie-propaganda – Goebbels would be proud – economy and finance will have centre stage. How to speed up financial globalisation to attain in the shortest span of time “Full Spectrum financial and monetary Dominance”? – The western economy is running on empty – its main thriving force is greed and instant profit by a few. Privatisation of all state assets is part of the final run. The people are left behind. The people, the lot that needs to consume to fulfil for an ever-tinier elite the abject target of greed for “more and more”, the insatiable appetite. These people will soon vegetate in a sucked-dry space, robbed of social infrastructure and welfare.

What’s left is the enslavement by debt. To survive, people may commit to the “debt-row”, gradually converting into the death-row. As un-behaving countries are forced to do – swallowing debt against being fed minimal rations for survival. Greece is the epitome of this razors-sharp knife that slashed throats as well as the last goblet of the lifeline to survival. Solidarity is nowhere.

The dying beast is lashing out, right and left and above and beneath. It is desperate; itself on death-row, but if it must die, then dying we must all – the deadly grip of the rabies-diseased dog that won’t let go. And won’t let go. And won’t let go to the last minute – or until death reigns over us all. That’s the risk we are running. A nuclear holocaust where, as Mr. Putin said already on a number of occasions, nobody will survive. The G20 know it.

But never forget – whatever the G20 do and decide is without legitimacy, as they themselves are not legitimate. The police in Hamburg has no right to suppress a movement against the illegitimate power of insane dictators that formed a conglomerate of illegitimate gangsters.

What’s left is the enslavement by debt. To survive, people may commit to the “debt-row”, gradually converting into the death-row. As un-behaving countries are forced to do – swallowing debt against being fed minimal rations for survival.

The oppressive police in Hamburg, ordered by Merkel, to suppress dissent, is but a forewarning for what is to come when Europe is being fully militarised. For those who are not aware, there is currently a “ghost town” being built by the Bundeswehr in collaboration with NATO, for hundreds of millions of euros, in one of Germany’s most modern military training camps, in Sachsen-Anhalt, not far from Hamburg. Starting in 2018, the artificial town will be ready for training NATO and EU military forces for urban warfare, to suppress possible upheavals and protests in the wake of neofascist economic measures – à la Greece – being forced upon Europe. Merkel and the NATO “leaders” (sic) predict that the people may not just take it.

Therefore, the preparation to suppress possible dissent in European cities. Police and military will not shy away from killing their own brothers. We are witnessing how this is done, and has been done for the last seven years to an entire nation – beautiful Greece, the land that has given us the philosophers, mathematicians and scientists we still laud and admire – and the true concept of democracy which the west has used and abused for its trickery and deceit. Today, what’s left is a pipe-dream; and a powerful slogan being used by the most undemocratic tyrannical nation and her vassals to accuse those who do not bend to their dictate.

The G20s are playing the game as long as they are allowed to. Most of them are aware that it may be their end-game, that the future is in the East, that the West is passé, that it is just a matter of time before the West completes its suicide with greed, aggression and lies.

Featured Image: G20 summit 2017 in Hamburg, Germany.

Go to top

About the Author

koenig-webPeter Koenig is an economist and geopolitical analyst. He is also a former World Bank staff and worked extensively around the world in the fields of environment and water resources. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research, ICH, RT, Sputnik, PressTV, The 4th Media, TeleSUR, TruePublica, The Vineyard of The Saker Blog, and other internet sites. He is the author of Implosion – An Economic Thriller about War, Environmental Destruction and Corporate Greed – fiction based on facts and on 30 years of World Bank experience around the globe. He is also a co-author of The World Order and Revolution! – Essays from the Resistance.

Navigating the Investment Minefield

By H. Kent Baker and Vesa Puttonen

Fraudsters are always on the look out for prey – investors they can manipulate and take advantage of. The authors discuss 8 traps you should look out for in navigating through the investment minefield. After all, vulnerability, if not gullibility, and can be costly.

The investment world can be a scary place, especially given that some people want to take advantage of you by setting investment traps. A trap is something that can lead to losses of capital or opportunities to make productive investments. Given that many investment traps are difficult to detect, what chance do investors have navigating the investment minefield and emerging unscathed? The answer is not much unless they become aware of the traps that are strewn along their path and sidestep them. Although succumbing to such traps is unlikely to be fatal, it can seriously harm personal wealth, affect achieving financial goals, and damage self-esteem. Our purpose is to expose eight common investment traps so that you can avoid falling victim to them.

Trap 1. Becoming a Victim of Investment Fraud and Other Scams

Have you ever been a victim of investment fraud? If not, you probably know someone who has. The countless number of investment frauds, scams, cons, schemes, and swindles demonstrates how easily skilled fraudsters can dupe unsuspecting investors. In his book Swindling Billions: An Extraordinary History of the Great Money Fraudsters, Kari Nars estimates that fraud victims around the world have lost hundreds of billions of dollars in the last decade to investment fraud.1 Anyone with money is at risk of investment fraud. Even highly successful, financially intelligent people can fall prey to investment fraud. For example, Bernie Madoff’s infamous Ponzi scheme fooled thousands of individuals, including celebrities, as well as financial institutions and universities. A Ponzi scheme is a form of investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.

People also have a psychological need to feel special. Fraudsters play upon this need by convincing them that they are part of an “exclusive club” and are being given special access to an investment opportunity.

Investors fall for scams for many reasons. Some people are gullible so fraudsters prey on their trusting nature. Other investors are irrational and driven by emotion, which makes them particularly susceptible to becoming victims of investment fraud. Because investors are attracted to financial gain, the lure of “get-rich-quick” schemes flames their innate desire to become financially better off. In an uncertain financial environment, investors often turn to others who appear or proclaim to be experts only to have these people take advantage of them. On other occasions, investors can be overly optimistic, which makes them more likely to be hoodwinked than others. People also have a psychological need to feel special. Fraudsters play upon this need by convincing them that they are part of an “exclusive club” and are being given special access to an investment opportunity. Finally, investors are more vulnerable when they believe they are knowledgeable. Although this sounds counterintuitive, those who have some experience in investing or believe they are experts are more susceptible to investment fraud than others. Such investors think they know more than they actually do or that they are too smart to fall for a scam.

To avoid being scammed, you should be aware of several major warning signs. One common warning sign is someone touting an investment with high guaranteed returns with little or no risk. Claims of huge gains with almost no risk are illusions or “phantom riches” for unsuspecting investors. All investments carry some degree of risk. Fraudsters dangle the prospects of easy money to entice you to buy. Investments that seem too good to be true probably are. Another red flag is an investment hyped as a “once-in-a-lifetime deal”. You should also be suspicious of claims that “everyone is buying” and resist pressure to buy quickly. No reputable investment professional should push you to make a quick decision. Although not applicable to all investments, you should be suspicious of investments, such as common stocks or equity mutual funds, providing consistently stable returns regardless of market conditions. Returns generally vary over time due to market volatility. A final warning sign concerns investments or strategies that are overly complex. If you don’t clearly understand the investment, walk or better run away.

Trap 2. Misrepresenting Risky Products as Safe

Many investors are attracted to investments promising stable returns. This desire helps explain why so many “stable returns”, “capital guaranteed”, and “low volatility” products are available in financial markets. Although these descriptions may accurately describe some products, less scrupulous individuals or firms may misrepresent risky products as safe. Risky investments offer the potential of high returns but they also have a large chance of loss of capital or underperformance. As Robert Arnott, an American entrepreneur, investor, editor, and writer, notes, “In investing, what is comfortable is rarely profitable”. In most cases, you can’t eat your cake and have it too. Investments always involve risk-return trade-offs.  

Many examples are available around the world in which various parties have misrepresented risky products as being safe. Notable examples include mortgage-backed securities in the United States, preference shares in Spain, money market funds with floating rate notes in Finland, and Minibonds in Hong Kong. Let’s examine the case of Minibonds, which is a brand name for a series of structured financial notes. Using the term “bond” to describe these products is misleading but was intended to inspire confidence. The return paid by these structured products was linked to a basket of shares, a stock market index or the creditworthiness of various publicly-listed corporations. Both the return and the consumer’s original investment depended on the ability of the issuing investment bank to make the payments due under the structured product. Lehman Brothers was the investment bank. In total, more than 43,700 consumers bought HK $20.23 billion (US $2.6 billion) worth of Lehman Brothers structured products through retail banks. When Lehman Brothers collapsed in September 2008, the supposedly “low-risk” Minibonds generated huge losses for individual investors.

Trap 3. Making Unrealistic Return Expectations

Having unrealistic return expectations is a common investment trap. This is especially true of new or inexperienced investors who enter the market at a time of extreme exuberance because they become disillusioned when they start experiencing paper losses. The possibility of missing out on such high returns is simply too much to bear. However, investors, even professionals, are notoriously poor market timers. Greed and overoptimism have been the ruin of many investors. You would be wise to heed the warning provided by investment firms that “past performance does not guarantee future results”.

Investors need to be aware of several misconceptions that lead to making unrealistic return expectations. One fallacy is that a good company such as one that has experienced rapid growth in the recent past makes a good investment. In fact, shares of “good companies” may or may not turn out to be “good investments” by providing good returns. Although good companies might have generated excellent past returns, the current valuation should reflect all company features. Therefore, any good firm characteristic that is priced by the market is associated with lower, not higher, return expectations.

Another fallacy is that economic growth is good for stock returns. This misconception leads to the belief that investing in countries with strong economic growth such as emerging markets offers better returns to equity holders than countries with less vibrant economies. The faster growth is typically associated with stronger earnings growth, which many investors associate with higher expected stock returns. This misguided idea of excessive return expectations has been a major sales pitch for emerging market mutual funds. This growth trap seduces investors into overpaying for the equities in emerging markets. Empirical evidence on the link between economic growth and returns to shareholders shows that shrinking industries and slower-growing countries offer some of the best-performing investments.2

Trap 4. Falling for Mutual Fund Traps

Although mutual funds offer many advantages, some traps can snare unsuspecting investors. One common trap is investing in past winners. Mutual fund companies generally advertise their best-performing funds.3 This tactic creates a relatively one-sided image of the company’s offering of mutual funds and directs investor attention toward past performance reinforcing the habit of selecting mutual funds with the highest realised returns. For most investors, buying past winners is not a value enhancing strategy after expenses and fees. Top performers do not typically stay on top for very long. Thus, this year’s top funds can easily become next year’s duds. Still, research indicates that investors should avoid poorly performing funds because their performance may persist for many years due to high expenses and fees.4

Additionally, some conventional wisdom about investing in mutual funds lacks empirical support. For example, investors are often encouraged to buy established mutual funds with experienced portfolio managers that have good long-term track records. Although this might seem like sound advice, recent evidence shows that young actively managed funds tend to outperform their older peers because the new entrants are more aware of the latest techniques. Furthermore, performance tends to deteriorate as funds grow older. Researchers find that funds with three years or less in age actually outperform funds with more than 10 years of history by almost 1 percentage point annually.5 Thus, investing in younger, rather than older, funds may be less risky.

Trap 5. Overpaying for Products and Services

You’re probably familiar with the saying “you get what you pay for”. In commercial transactions, the quality of goods and services often increases as the price increases. That is, paying more can mean getting better quality merchandise. However, paying more for investment products and services does not necessarily lead to higher performance or returns.

A recent phenomenon in the mutual fund industry is closet indexing. Closet indexers are funds that closely track a benchmark while claiming to be active and charging fees similar to those of truly active managers. You can achieve a similar result by investing directly in a less expensive index fund. In some cases, funds become closet indexers as they grow in assets. This fact helps to explain why some superstar managers fail over time. Buyers should be wary of funds charging a fee for active management but whose performance barely varies from the index. Research shows that closet indexers are doomed to underperform after considering fees and that closet indexing is rife in US active funds.6 

A fund of funds (FOFs) is an investment strategy in which a fund invests in other types of funds. This strategy applies to any type of investment fund, from a mutual fund to a private equity fund to a hedge fund. In general, a FOF strategy tries to achieve broad diversification and appropriate asset allocation with investments in different fund categories. FOFs appeal especially to small investors who don’t want to invest directly in securities. A drawback is that investors basically pay double for an expense that is already included in the expense figures of the underlying funds.

Trap 6. Investing in Complex Products

Never invest in something you don’t understand. If you do, you are inviting disappointment. The amount and complexity of different kinds of investment products available in today’s markets can be overwhelming. The complexity of financial products has increased steadily, even after the financial crisis of 2007-2008, and is more prevalent among distributors with a less sophisticated investor base. Additionally, financial complexity increases when competition intensifies.

Never invest in something you don’t understand. If you do, you are inviting disappointment.

Although the typical investor should avoid investing in overly complex financial products, this may be easier said than done. Structured products have been a success story in retail finance. Low interest rates drove investors in search of structured products apart from traditional asset classes such as equities, fixed income, and real estate. Structured products tend to have complicated contract terms making the valuation of the product difficult for retail investors. Conditions can include different averaging methods for starting and ending values and caps limiting the maximum price increase of the underlying asset (e.g. stock index) in which the investor will participate. The proper valuation of these products requires complicated financial modelling, which results in the product-issuing financial institution having a clear information edge over its clients. Evidence shows that financial complexity in European markets has been steadily increasing. The more complex a retail structured product is, the more profitable it is for the bank.

Trap 7. Engaging in Gambling Disguised as Investing

According to some Wall Street skeptics, the stock market is the capitalist casino, a place where gambling wears a thin mask called investing. However, this cliché doesn’t adequately differentiate between gambling and investing and represents a misinformed view. Investing isn’t simply gambling by another name because gambling is a no-win venture whereas investing isn’t. Despite some superficial similarities between the two concepts, major differences exist between gambling and investing. The main difference is that an investor’s expected return is positive whereas a gambler’s expected return is negative. Two areas where gambling is disguised as investing, at least for individual investors, involve foreign exchange and excessive online trading.

Currency trading is a zero-sum game. This means that in FX trading, one’s win is always another’s loss. In fact when accounting for commissions and other expenses, FX trading becomes a negative-sum game. Online trading platforms targeted to unprofessional investors are gambling disguised as investing. After going online, investors tend to trade more actively, more speculatively, and less profitably than previously. Evidence shows that individual investors destroy value through active trading.

Trap 8. Relying on Unsupported Promises

Some financial products are sold using marketing claims unsupported by evidence. For example, long/short equity funds claim that they can provide a “free-lunch”. The phrase “there’s no such thing as a free lunch” is often used to describe situations in which investors are unable to consistently make large profits without bearing the risk of a potential loss. Other examples of unsupported promises involve investment letters and investment clubs.

This diverse market of newsletters consists of around 1,300 different newsletters in the United States and Canada with an annual industry revenue of more than $3.4 billion. These numbers indicate a clear demand for investment newsletters. Several studies on investment newsletter performance find that securities recommended by investment newsletters don’t outperform appropriate benchmarks and thus don’t generate positive abnormal returns. The media attention given to a few well-performing investment clubs created a public consensus that investment clubs tended to outperform the markets. Evidence suggests the opposite. One academic study denounces the widely suggested claims of general outperformance of the clubs. Of a sample of 166 investment clubs, 60% underperformed the market.7

Lessons Learned

Heeding the following lessons should reduce your chances of becoming a victim of investment traps.

Don’t let anyone talk you into buying a financial product you don’t fully understand. You may recall the admonition, “If something sounds too good to be true, it probably is.” Although this is good advice, the problem is determining when “good” becomes “too good”.

Don’t assume that laws in place will automatically protect you from any kind of foul play. You are responsible for checking the true content of the offering.

Do your due diligence and don’t simply rely on those making the claims. You should ask questions and keep a healthy sense of skepticism. If someone makes a questionable claim, ask for evidence. Being inclined to easily trust anyone who is trying to sell you something gives way to vulnerability, if not gullibility, and can be costly.

Check with relevant regulatory authorities for any complaints or investigations involving those offering the products.

Don’t assume that laws in place will automatically protect you from any kind of foul play. You are responsible for checking the true content of the offering. 

Don’t let greed overcome your good judgment. Although not speaking about investments, Stephen Hawking, an English theoretical physicist, cosmologist, and author, notes: “We are in danger of destroying ourselves by our greed and stupidity.” If your internal alarm bell rings, listen to it and find another investment. 

This article draws on some themes from the authors’ book Investment Traps Exposed – Navigating investor Mistakes and Behavioral Biases published by Emerald Publishing in 2017.

Go to top

About the Authors

H. Kent Baker, CFA, CMA is University Professor of Finance at American University’s Kogod School of Business in Washington, DC. He is the author or editor of 28 books and more than 165 refereed journal articles. The Journal of Finance Literature recognised him as among the top 1 percent of the most prolific authors in finance during the past 50 years. Professor Baker has consulting and training experience with more than 100 organisations. He has received many research, teaching and service awards including Teacher/Scholar of the Year at American University.

Vesa Puttonen is Professor of Finance at Aalto University School of Business in Helsinki.  He has published 16 books and more than 30 journal articles on different aspects of Strategic Finance, Risk Management, Behavioural Finance, and Investing. Professor Puttonen has worked as Senior Vice President at the Helsinki Stock Exchange and as Managing Director at Conventum Asset Management (Helsinki). He is a faculty member of MBA Programs in Helsinki, Hong Kong, Singapore, Poland, China, Iran, Taiwan, and South Korea.

References

1. Kari Nars. 2009. Swindling Billions: An Extraordinary History of the Great Money Fraudsters. London: Marshall Cavendish Business.
2. Jay R. Ritter. 2012. “Is Economic Growth Good for Investors?” Journal of Applied Corporate Finance 24 (3), 8 – 18.
3. Jonathan J. Koehler and Molly Mercer. 2009. “Selection Neglect in Mutual Fund Advertisements.” Management Science 55 (7), 1107-1121. Congsheng Wu. 2009. “Mutual Fund Advertisements.” Investment Management and Financial Innovations 6 (2), 68 – 76.
4. Matthew R. Morey. 2016. “Predicting Mutual Fund Performance.” In H. Kent Baker, Greg Filbeck, and Halil Kiymaz (eds.), Mutual Funds and Exchange-Traded Funds – Building Blocks for Investment Portfolios, 349 -363. Hoboken, NJ: John Wiley & Sons, Inc.
5. Lubos Pastor, Robert F. Stambaugh, and Lucian A. Taylor. 2014. “Scale and Skill of Active Management.” NBER Working Paper No. 19891. February.
6. Antti Petajisto. 2013. “Active Share and Mutual Fund Performance.” Financial Analysts Journal 69 (4), 73 – 93.
7. Brad Barber and Terrence Odean. 2000. “Too Many Cooks Spoil the Profits: Investment Club Performance.” Financial Analysts Journal 56 (1), 17 – 25.

1...1,0581,0591,060...1,125Page 1,059 of 1,125

EDITOR'S PICK OF THE WEEK

CFO's new mandate. CFO explaining the presentation

The Performance and Transformation Orchestrator: The CFO’s New Mandate in the Age of AI

Anglea 0
By Terence Tse CFOs are evolving into AI-driven transformation orchestrators, balancing finance, technology, and strategy while upskilling teams, managing risks, and driving measurable business value. A key insight from this year’s AI for CFOs event, organized...
Read more

WISE DECISION MAKER GUIDE

POWER INFLUENCERS

Emerging Trends

BUSINESS AND INNOVATION

FINANCE & BANKING

The Future of Global Trade

© 2025 The World Financial Review | Empowering communication globally