Kannu
Happy Special Day to you. I was so happy to see you cook and
cook well. I shared the photos of your dishes and our talk about my
presentations on FB and boasted about how proud and happy I am with my adorable
son who has turned out so well. Well, for most of the things, but he still goes
out into the public without his mask. You will get a scolding for it. You don’t
wear a mask for yourself but for others! And he doesn’t know how to put the
compost bag back together properly. Now that you have been scolded, good work
son on being well balanced with the lockdown, working and eating and looking
after the girls. And not too many explosions at the internet quality. I love
you and happy special day. I hope you are having your yogurt and vakult
thingamabob? What happened to you visiting the doctor for your tummy?
Anyway, I thought of sharing this article, well more like an
extended essay.
I have quite a lot to say about this but I think you and
Diya should take some time to read this through. You know my concerns about
national debt. USD 17 Trillion is the estimate that is being made for how much
governments have spent over the past 2 months on trying to handle the corona
virus. The Debt GDP ratio for OCED is now going to go beyond 100%. Whilst we
are good to keep investing in the USA (I still think it’s the best investment
opportunity), other countries, without the benefit of the USD as the reserve
currency are going to suffer. As you mentioned, the UK has given up all the
gains for the past 4 years and lord only knows where it will be going. Well, we
do know where it will be going, it will be going into money printing like a
nutter. That said, the negative interest rates are a puzzle and not quite sure
why that is going on.
The interest payments on all that debt is also lower now so
I think the British Government will load up more debt. Which will slowly mean
that as they start cranking the money presses open, inflation will rise and
then try to deflate away the debt. UK still has loads of good assets like good
education, good infrastructure, good people, trust is there, etc. etc. so it’s
not too bad a place. But for the next 30-50 years of your life and the
remainder of your parents lives, it will be beset with major political and
economic upheavals. So you have to be prepared hugely.
I know you are investing in equities and stocks, but you
should start thinking about diversifying a bit as well. Especially into real
estate and government bonds, and also in other countries to diversify your
investments. Also investing in yourself, kids. Much much work to be done there
over the coming many moons, but what I meant was that you need to think about
diversifying your sources of income as well. Either by writing something or
investing in other companies or starting your own, etc. etc.
This isn’t new as the author says, this has happened so many
times. Every empire has over-extended itself and then fights break out. Which
is terrible. I am sure Diya might have heard about the Thucydides trap, where a
rising power (Athens) fights an older power (Sparta) and then both become
weaker hugely. In that case, Sparta won but then dribbled away into
insignificance. People tend to refer to China and USA as one of the Thucydides
trap examples but I think that is needlessly limited, China has seen many an
economic model, many political models, many different enemies and is still
alive and rising. Not many empires can claim to do that. Think about it, which
other empire has been up to that extent so many times? Not many, once an empire
goes out, it goes out, very little is left of it. What’s the difference? The
people, education, its inventiveness, its ability to create new things and buzz
with energy. USA also has that so I wouldn’t bet against it either.
Anyway, take some time to read the article Kannu (and you
too, Choti, you will need to know this. Don’t forget to setup the trading
account, ok?
Love
Baba
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