BOOM as at 26th April 2020

THE FUTURE — A VIRTUAL WORLD

There is a future economy waiting out there Post Covid-19. What industries will be irrevocably changed?

Air travel and tourism, of course. However, most would agree that the entertainment industry will not return to normal for some considerable time. Self entertainment is already a big new trend and it is gathering pace in the stay-at-home world we are now living in. BOOM sees inter-activity as a crucial change with the days of static entertainment fading.  Thus computer simulations and inter-active computer entertainments seem poised for greatness along with a social media aspect to that where fans can inter-act with each other.

The technologies upon which this coming revolution is based are Virtual Reality, 360 Video and Augmented Reality.

All three immerse the audience of one into a new world where, instead of being passive observers, they now have agency. Agency is the capacity to act in a given environment. In other words, they are in charge of what they want to see. While inside an event, they can actually move the camera by using their mouse or their touch screen. At music concerts, for example, they may choose to watch the audience or just one member of the band. They can look up and down and rotate the camera in 360 degrees. It is as if they are on the stage, but invisible to all other participants.

In future, viewers will be able to walk through major art galleries and choose to just look at one painting of their choice, then up at the ceiling, then down at the mosaic tiles on the floor, then out the window — all while listening to the music of their choice. Or they may choose to just watch a specific Oboe player in an orchestra as they struggle with a particularly difficult passage in a symphony. With sports, they can keep the camera on just one player, watching how that player reacts and moves strategically. Electronic sports events will become common where the viewer is inside the game, playing with many choices being  presented sequentially in 360 degrees.

Large companies will soon switch on to this future in entertainment. They will produce events and locations aimed at experience rather than observations. Cinemas and theaters will be seen as remnants of the past when the audience simply watched while the content of the event was imposed upon them. Already, BOOM rarely watches modern movies because of their lack of agency.

360 Video, Virtual Reality and Augmented Reality will also have many applications in healthcare and education. A Brave New Virtual World is coming.

ACCURATE OBSERVATIONS FROM BOOM — THREE YEARS AGO —

BOOM saw the future with great clarity in 2017, three years ago. On 30th January, 2017 BOOM wrote this in the Weekly Editorial.

QUOTE:     “…. we can expect the Fed to now move towards more radical policies — maybe negative interest rates (eventually) and more QE programs. The definition of madness is doing the same thing over and over again and expecting a different outcome. So many more Trillions of new US Dollars will probably be “printed” in the future or created as loans by the commercial banks and forced into the US economy.

These initiatives will be even more imperative if the US moves to impose international trade barriers as Donald Trump has forecast. Global trade has a current annual growth rate of just 1.2%.  A trade war with other nations would almost certainly cause great harm to the US economy.  And if such a trade war erupts, Donald may well find that he has no power over the reactions of other nations.  The planet’s economy could easily slide towards global contraction and it could happen quickly.”    ENDQUOTE.

And later in 2017 — QUOTE:    “Last week, BOOM explained that if our monetary system is not changed, then there appears no option but for the major central banks to print many, many more Trillions of dollars and dollar equivalents. These Trillions will be needed to meet massive unfunded future fiscal, pension, health, energy, interest and debt rollover payments.”   ENDQUOTE:

SILVER GOLD DIVERGENCE

The divergence between the US Dollar price of Sliver and the price of Gold is now impossible to ignore. It began when the Corona Panic began. Initially, they both fell sharply until mid March but then Gold continued to rise strongly while Silver has only recovered half its price fall and refuses to follow gold skywards. They are both essentially precious metals that have no yield and are expensive to store and insure. So they can’t both be right. One price is false and the other is true. Which is it? BOOM suggests watching this dynamic closely in the coming weeks.

OIL PRICE COLLAPSE

You may have noticed the price of gasoline at the pump lately. The price of oil has collapsed. And the futures price went famously negative last week. So what has happened?  It all started in the very first week of 2020 when the price of oil stood around US$ 65 per barrel, that was when it started falling and falling and falling. Last week, it reached a low of $ 6.50, a ten fold collapse in price in less than 4 months. To BOOM this looks like a manipulated event, possibly pre-arranged, artificial and notable that it started well before the Coronavirus appeared. This will cause a massive dis-inflationary force worldwide if it continues. What are the possible consequences if such low prices persist for 6 months?

1.  The destruction of the fracking (tight oil) industry in the US which needs an oil price far above these levels to service its huge debt levels and survive
2.  The destruction of Saudi Arabia’s economy which is totally dependent upon oil revenues
3.  The destruction of the conventional American oil industry
4.  The end of the US Dollar as the sole currency for settlement of oil
5.  The end of the US military presence in Iraq and Syria
6.  The end of the “Petro-Dollar” protection of Saudi Arabia by the US
7.  A huge cost reduction for energy inputs into the world’s economies
7.  The continued decline for US Dollar currency dominance in global settlements

RELIABLE TEST RESULTS

In the Corona Panic, the mainstream media and the politicians in charge seem fascinated by tests and test results. But they have no familiarity or expertise in dealing with such matters. The tests being used for the new Coronavirus are PCR tests for genetic material (nucleic acid tests) and Lateral Flow IgG/IgM tests (tests for immune system antibodies). PCR stands for Polymerase Chain Reaction. IgM is immunoglobulin M — an indicator of recent infection. IgG stands for Immunoglobulin G — an indicator of past infection. The reliability of all pathology tests is questionable. Thus, to determine reliability, we need to know the specificity, sensitivity, accuracy, precision, reproducibility, false negative rates and false positive rates of all tests. It’s not a simple matter.

Positive test results may or may not be significant. The clinical state of the patient is the critical other consideration. Are they symptomatic or not? Is the test accurate or not? PCR tests can detect the genetic material of micro-organisms when no symptomatic illness is occurring. And positive immunoglobulin tests may just indicate prior infections, long gone as a disease threat to the body. Plus they may not be a reliable indicator of immunity, depending upon the virus under consideration.

The mainstream media continually report the novel coronavirus “case” numbers which presumably refers to positive tests. They sometimes use the term “tested positive” but give no indication of the clinical state of the cases. They never explain how many of those “cases” are actually ill (and, if so, how ill) or how many have no symptoms. Lately, to their credit, some media outlets have begun revealing numbers of hospitalized patients. That provides a little more clarity but is still not enough information. BOOM cannot understand why the mainstream media simply refuses to examine and present the available information in a more transparent manner. Of course, the old adage comes to mind “Don’t let the facts ruin a good story”.

The inventor of PCR testing, Karry Mullis, who won the Nobel Prize in Chemistry in 1983 said this about his invention —

These tests cannot detect free, infectious viruses at all…The tests can detect genetic sequences of viruses, but not viruses themselves.

RELIABLE DEATH RESULTS

It is the same in regard to death numbers. The media never tell us if a death was caused by the new Coronavirus as the major causative factor or not. Someone could die of a heart attack in hospital but, presumably, if they had a positive test result for the new Coronavirus, there would probably be some mention of that on the death certificate in the current climate of fear and anxiety, especially if there was some incentive to do so. But that would not provide any clarity on the actual cause of death.

Death certificates are complex by their very nature and guidelines about how to complete them vary from nation to nation, state by state. Again, it’s not simple.

MEASURING DEATH AGAIN

BOOM has previously mentioned a website called Deathmeters that uses source data from World Health Organization estimations to list the number of deaths from the top 20 causes Worldwide during 2020.

It gives the Daily Total estimates for deaths and the Cumulative Total so far this year (to the current date).

It currently shows almost 3 million deaths from Heart Disease (Cardiovascular Disease) since January 1st this year, over 2 million deaths from Stroke (Cerebrovascular Disease), over 1 million deaths from Lower Lung Infections (pneumonia) and over 1 million deaths from Chronic Obstructive Pulmonary Disease. The cumulative total for those 4 causes alone is already about 7 million.

Another 7 million have died of other major causes of death such as Diabetes, Tuberculosis, Road accidents, Liver Diseases, Kidney Diseases and various Cancers.

In the same time frame, about 200,000 have died from the new Coronavirus (or with it but not as the prime cause of death).  This is clearly an epidemic of panic fueled by the mainstream media and the politicians, and not an epidemic of death.

14 Million versus 200,000.

MMMMMmnnnnnnnn …….. Which one is more fearful?

Source:   http://deathmeters.info/

HOW MUCH IS A LIFE WORTH?

This question is being considered all the time in healthcare settings. If we spend many Millions of Dollars keeping one elderly person with multiple co-morbid diseases alive on life support ….. never “giving up”, and never “heartlessly putting a price on life” then we simply deny that amount of healthcare to younger, more viable people who may be suffering reversible morbidity (illness that is not terminal).

BOOM addressed this issue in the editorial on 12th April.  There is a well known methodology called QALY (Quality Adjusted Life Years) —

Whichever way you look at QALYs, the fundamental question always comes down to ‘How much can we afford to pay for one QALY?’ In the UK, the current answer is that NICE recommends interventions which cost less than £30,000 ($36,933) per QALY“.

My fear is that, if we are not very careful, the actions we are taking will result in significantly more deaths than we are trying to prevent.

Source: https://www.rt.com/op-ed/485110-covid-19-lockdown-deaths/

NICE is the UK’s National Institute for Health and Care Excellence.

The Australian government has planned expenditure of almost $ 300 Billion so far to fight the economic effects of the virus. To date, Australia has seen 75 deaths so the cost is about $ 4 Billion per death. That is over 100,000 times more than the QALY recommendations made by NICE.

The massive economic damage being caused will be long lasting and will deny us a great deal of future healthcare.  But no-one seems bothered by spending $ 4.2 Billion on each death that may (or may not) have been caused by the new Coronavirus.

SUICIDE

There is growing concern about the psychological impact of lock-downs and media campaigns that generate fear. In particular, there is a concern that domestic violence and suicide numbers could increase.

48,000 people die from suicide each year in America. The media, the politicians generally don’t seem too pre-occupied with that statistic.  In comparison, 50,000 Americans have died with a new Coronavirus positive test result.  The latter figure is often described by media commentators as “staggering”, “horrendous”, “tragic” and is apparently sufficient reason to smash the economy and render millions unemployed and destitute but the former figure is accepted as “normal”, an annual event.

In Australia, 3,000 people die from suicide each year. Only 75 deaths have been associated with the new Coronavirus test.

Source: As Coronavirus Pandemic Hits U.S., Experts Worry About Rise in Suicides

https://www.usnews.com/news/health-news/articles/2020-04-15/as-coronavirus-pandemic-hits-us-experts-worry-about-rise-in-suicides

SAVE THE PLANET — Read the Link — and send it to your politicians and central bankers. Quantitative Boosting Explained 

In economics, things work until they don’t. Until next week …………  Make your own conclusions, do your own research.  BOOM does not offer investment advice.


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EMAIL: gerry {at} boomfinanceandeconomics.com

Return to the BOOM Main Website –  BOOM Finance and Economics at  http://boomfinanceandeconomics.com/

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HOW MOST MONEY IS CREATED

BANKS CREATE FRESH NEW MONEY OUT OF THIN AIR (but they always need a Borrower to do so)

THERE IS NO SUCH THING AS A DEPOSIT
BANKS PURCHASE SECURITIES, THEY DON’T MAKE LOANS

BANKS DON’T TAKE DEPOSITS, THEY BORROW YOUR MONEY
Watch this short 15 minutes video and learn as Professor Richard Werner brilliantly explains how the banking system and financial sector really work.

https://www.youtube.com/watch?v=EC0G7pY4wREhttp://

How is Most New Money Created ?

LOANS CREATE DEPOSITS — that is how almost all new money is created in the economy (by commercial banks making loans).

From the Bank of England Quarterly Bulletin Q1 2014    —
“Whenever a bank makes a loan, it simultaneously creates a matching deposit in the borrower’s bank account, thereby creating new money.

“Most money in the modern economy is in the form of bank deposits, which are created by commercial banks themselves”.

Most economists are unaware of this and even ignore the banking & finance sectors in their econometric models.

On 25th April 2017, the central bank of Germany, the Bundesbank, released a statement on this matter —

“In terms of volume, the majority of the money supply is made up of book money, which is created through transactions between banks and domestic customers. Sight deposits are an example of book money: sight deposits are created when a bank settles transactions with a customer, ie it grants a credit, say, or purchases an asset and credits the corresponding amount to the customer’s bank account in return. This means that banks can create book money just by making an accounting entry: according to the Bundesbank’s economists, “this refutes a popular misconception that banks act simply as intermediaries at the time of lending – i.e. that banks can only grant credit using funds placed with them previously as deposits by other customers”. By the same token, excess central bank reserves are not a necessary precondition for a bank to grant credit (and thus create money).”

The Reserve Bank of Australia (Australia’s central bank) has also contributed to the issue in a speech by Christopher Kent, the Assistant Governor on September 19th 2018.
“…… the vast bulk of broad money consists of bank deposits”
“Money can be created …….. when financial intermediaries make loans
“In the first instance, the process of money creation requires a willing borrower.”
“It’s also worth emphasizing that the process of money creation is not the result of the actions of any single bank – rather, the banking system as a whole acts to create money.”
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MOLS Denmark

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