The Wealth of the World and Adam’s Laws

A New Understanding of How the World’s Wealth Works

By Adam Simonett

IntroductionThe following presentation offers a new understanding of the global financial market. It ties Micro Finance to Macro finance, and even suggests there are similar further micro and macro interrelations in all conducts of behavior.

I have only taken the analysis as far as it’s implications to the current financial and political systems, but I believe the comparisons could help explain how technology, politics, science and wealth can be expected to change.

As Newton said, “If I was able to see further, it was because I stood on the shoulders of giants.” I owe a great deal of this theory to the analysis of David Wiedemer, Robert Wiedemer, and Cindy Spitzer in their book, Aftershock. In a sense, they predicted I’d come up with it. This is merely the science of economics they proposed and the resulting political changes that will accompany it. From here, it is quite easy to predict the future. Perhaps they even did already.

The Wealth of the World is Fixed• There is a limited amount of everything on the planet at any given

moment: – People = 7 Billion– Geniuses = 140 million– Houses in the United States = ~130 million units– Gold = ~120 K to 140 K tons above ground– Kanye West's = 1– Currency = $75.8 Trillion at the end of 2010, more now

• There are 3 different types of wealth that interrelate:1. Raw Materials:- Trees- Capital- New Ideas

2. Transformation Ability:- Labor- Investing- Entrepreneurship

3. Products:- Houses- Returns on Investments- New Companies/Services/Products

• The total wealth of the world can increase or decrease over time, but there is always a fixed amount at any one moment.

The Global Value of Wealth is Determined by Supply and Demand

• Global Supply and Demand determine the Real Value of every type of wealth in any closed system. – Remember Beanie Babies?

1. Supply and price were low, then demand soared 2. Price went up, the more rare (lower supply) the higher the price3. Production increased, supply increased, demand fell, and the

price crashed.

The Wealth of Nations is More Complex

• Nations are a lot like individuals:– They earn money by producing stuff (GDP)– They can save whatever portion they want (Taxes)– They can take out loans (National Debt)– They can invest their money in whatever they

want (Infrastructure, defense, welfare)– They can buy stuff (Government Expenditures)– They are expected to pay their loans back (Debt

repayment)

The U.S. is currently like your super successful friend that makes a ton of money but is still broke because he bought way too much crap by taking

out adjustable rate loans when he had great credit and now has no way of

realistically paying them back without saving more AND cutting expenses.

Who would you rather to lend to?

SamAnnual Salary: $1 millionAnnual Raise: $0Total Annual Expenses: $1.5 millionTotal Cash Savings: $15 millionTotal Debt: $32 million in credit card debt

JoshAnnual Salary: $25,000Annual Raise: $5,000Total Annual Expenses: $20,000Total Cash Savings: $20,000Total Debt: $10,000 left to pay on his house

Now imagine you heard Sam saying he was unwilling to cut his expenses AND unwilling to find a new job to increase his salary?

All the comparable financial statistics for nations are publicly available through the CIA factbook.

• Earnings = GDP (Purchasing Power Parity)*

• Annual Raise = GDP Growth

• Annual Savings(Expenses) = Budget Surplus (Deficit) achieved through Tax Revenue > (<) Gov’t Expenditure

• Accumulated Savings = Broad Money Supply

• Accumulated Debt = Stock of Domestic Credit

• Type of Debt = Shorter maturity means more adjustable rate, longer term means more fixed rate.

*Purchasing Power Parity (PPP) adjusts regular GDP as if all products were sold at their prices in U.S. dollars. It is a better measure of relative earnings because it sets all produced goods as if they were sold at the same price free of currency exchange differences. It sets all production to U.S. prices and is a better measure of relative production in the minds of economists.

The U.S. Is a Lot Like Sam Compared to Other Nations, Some of Whom Are a Lot Like Josh

Source: CIA World Factbook

GDP (PPP)GDP Real

Growth RateBroad Money

Supply (A)Stock of Domestic

Credit (B)Money Supply Less

Domestic Credit (A-B)Public Debt as %

of GDP

European Union $14,900 1.8% $11,170 $22,650 -$11,480 NAUnited States $14,720 2.7% $12,390 $32,610 -$20,220 58.9%China $9,872 10.3% $10,080 $8,156 $1,924 17.5%Japan $4,338 3.0% $18,300 $16,390 $1,910 225.8%India $4,046 8.3% $1,290 $1,164 $126 55.9%Germany $2,960 3.6% $4,288 $5,200 -$912 78.8%Russia $2,229 3.8% $651 $550 $101 9.5%Brazil $2,194 7.5% $1,522 $2,104 -$582 60.8%United Kingdom $2,189 1.6% $3,344 $5,151 -$1,807 76.5%France $2,160 1.6% $2,292 $4,319 -$2,027 83.5%*All values in Billions

• Missing from this graph compared to the example of Sam and Josh is the annual expenditures (comparable to annual government budget surplus or deficit).

• The U.S. brought in tax revenues of $2.092 Trillion in 2010 and spent $3.397 Trillion in the same year for a net loss of ~$1.3 Trillion. These deficits are expected to increase in the coming years.

• Still, the solution is not as simple as cutting spending or raising taxes. The correction must take place, in order, to devalue the dollar, raise lending rates, and decrease the price of U.S. goods abroad.

There is No Way we Can Easily Pay Off Our Debt

• Cutting Expenses– If we cut expenses, government jobs plummet. A recent CNN Money article said the shutdown

would immediately un-employ 800,000 people.– Cutting taxes will greatly put a burden on government workers who will likely need the

government support that taxes provide. http://money.cnn.com/2011/04/06/news/economy/federal_workers_shutdown/index.htm

• Raising Taxes– Raising taxes means people will spend less, period. They will have less to spend, and seniors with

401Ks will withdraw less waiting and hoping taxes will go down.– The last time we had debt like this was post WWII, but taxes were at 75% during the war, demand

was up huge for everything around the world to rebuild, and the U.S. was the only country in the world with the transformation ability. Our currency also wasn’t overvalued, so our prices could be reasonable.

Both of these options will mean fewer dollars being spent, and discretionary spending plummeting.

What happens next is as predictable as what would happen to Sam and Josh

• When you borrow up to the amount of what you can pay back, there are consequences:

– People will reach a point where they stop lending to you because it doesn’t look like you have a realistic way of paying them back.

– If you do need additional financing, the riskiness of your financial situation demands a higher interest rate on new debt.

– The best thing to do is to cut spending AND try to increase revenue.

• Cutting Spending and Increasing Revenue will mean a HUGE slowdown in our economy.

• Doing either one solely is not enough to pay back what we owe.

We owe $32 trillion as a nation, about $10 trillion publically. We earn $2 trillion in taxes each year and spend $3 trillion.

Here’s where the meat is…• In the long run, we’re fine. In the short run, everyone holding dollars is

screwed because they are diluted compared to international relative values.

• The “invisible hand” of the market will use the following levers unbelievably predictably:– Long Term Inflation Rates by Country– Long Term Interest Rates by Country– Long Term Stock Prices and Asset Values in Any Market

• Yes, I am honestly saying these things are predictable in the same way that you can predict distance knowing speed and time.

Back to the fixed wealth of the world…

• Because every raw material at some level is fixed, like the amount of gold or oil or the number of hardworking geniuses in the world, the value of these items is the same across all markets.

• However, the price of these items will vary based on how much of a given currency is in circulation and how easy they are for the global market to access.

• This is why the gold standard used to work.

Let’s look at this closer with a story…Imagine an island with three people on it (Josh, Sam, and Kim) and three kinds of wealth: coconuts, gold, and a pad of paper (all raw materials). The coconuts are up in the trees though, so two other forms of wealth are instantly created – the ability to climb trees to retrieve coconuts (transformation ability) and a coconut on the ground (finished product).

Lets say Josh, Sam, and Kim each have one ounce of gold each for a total of 3 ounces. Sam decides he is hungry, but seeing as his feet are burning from the hot sand, he doesn’t want to climb the tree himself. He decides to offer Kim a portion of his gold in exchange for a coconut on the ground. Since breaking apart the gold would be too difficult, they all decide to tear out ten pieces of paper and write their names on them. Each piece of paper would be a claim to that person’s gold. Since there are a total of 30 pieces of paper and 3 ounces of gold, gold’s value to paper at this time is 10 pieces to an ounce. They agree that one piece of paper will be worth a retrieved coconut.

As time goes on, Sam wants more coconuts but still doesn’t want to work for them and he quickly uses all his “SAM” paper. He decides to tear out ten more pieces of paper and write his name on them as well. But, when he goes to hand in a SAM paper to Kim, she tells him that SAM papers are only worth half as much as KIM papers, so the price of the coconut is now 2 SAM papers.

All at once we see inflation and price increases. Similarly, we can predict future values of raw materials – coconut trees that yield the most fruit; transformation abilities – a machine that picks the coconuts for you; and the effects on the cost of the finished product. If the number of coconuts available is replenishable, increased ability to access them will result in a decrease in price of a coconut on the ground because they’ll have greater supply but demand will be constant. New raw materials (cooking coconut knowledge), new transformation ability (fire, fancy tables) and end products (a coconut restaurant) will be created.

You can see how this model can be adapted to a number of economic events. In markets today, all the information is there, but international currency exchanges are not based on a sole standard like gold. It gets complicated when you add in lending and borrowing, but the same principle applies to all types of wealth including the ability to borrow capital, it has a relative value….

I know this is long, but read it because I reference it often here on out.

The New Economic Principles – Adam’s Laws (What did you expect me to call it?)

• The total real value of something is determined by the supply and demand for it in the total global market (until we meet aliens and begin interplanetary trade – then it’s the galactic market).

• Total Real Value for all of the World’s wealth at any moment is a fixed number. Increasing a country’s currency without a change in total real value will lead to inflation of that currency. All currencies should inflate equally or currency arbitrage will be possible.

• The relative national value (local price) of something is based on three things:– Global supply and demand for it (it can be any form of the three forms of wealth)– The real value of that nation’s currency compared to other nation’s currencies all based on a common standard (gold or

International Monetary Units for example).– The amount of total real value required to transfer the real value to someone in another nation (call it transferability). The less

amount of total real value required to transfer something, the more transferable it is, and the higher the relative national value.

• Whenever the relative national value of something increases or decreases, market forces will work to move it back in line until it is consistent with it’s total real value.

The Cycle of Moving Money• When anything has a relative national value that is not in line with the

true global value, money moves too much in the corrective direction, causing a predictable steady incline, followed by a sharp rise in demand, followed by a bubble of price and demand that supply will catch up to, followed by a dramatic decline in relative price when the new surplus cannot be sold fast enough.

• Ultimately, the asset’s relative value falls below it’s true value and the cycle will repeat.

How the Invisible Hand Pushes

• The invisible hand is as predictable as the human body. Just as if you don’t sleep or eat you will get tired and hungry, if you disobey equality in finance interest rates, prices, and inflation will catch up to you.

Relative National Prices Rise

Local National Prosperity for Businesses and Individuals

Debt/Leverage Interest Rates Rise

Foreign Investment due to Lower Foreign Prices

Foreign Growth/Foreign Prices Rise/Foreign Inflation

Local Inflation

Foreign Purchasing of Local Goods and Services

Relative National Prices Rise

The important piece to remember is that each step HAS to occur for the next to start.

• In order for our U.S. goods to be in demand in foreign markets, where the majority of our labor has shifted, their currencies need to become stronger relative to ours.

• Right now, the U.S. is trying to prevent inflation but still creating more dollars.

• The longer this goes on, the bigger the corrective action will need to be – the more inflation will have to catch up to where our dollar truly stands against global fixed assets like gold and oil.

An Example of This in Action• Why foreign labor prices were cheap:

– The real value of a finished shoe might be $100 in the U.S. The labor required to transform the raw materials into the shoe has a total real value, too, but the relative national value of an hour of work to produce the shoe was different in the U.S. than it was in Asia due to supply and demand.

– There was a supply of unskilled labor in foreign countries, but the raw materials and the managers were based in the U.S.

– Manual Labor had high transferability costs – someone had to move, change cultures, etc. – if U.S. companies were to produce goods overseas. People prefer not to move. As the demand for labor to produce U.S. goods increased though, market forces caused two progressions:

• The demand for decreased transfer costs gave way to international shipping based on oil and combustion engines.

• Until the transfer costs decreased enough to make foreign labor’s relative national value the same as the Total Real value and less than the U.S. relative national value, labor demand remained in the U.S.

– Once unskilled labor had too low of a demand in the U.S., relative national value decreased and the relative national value of skilled labor increased.

– And what happened? Education skyrocketed to meet up with the demand of increasing someone’s skills.

– Likewise, this led to the computer, the internet, and telecommunications to then transfer the relative national value of the new skilled labor to foreign markets.

How This Predicts Future Trends• Because we know that there is a fixed amount of some things, we can

look at what is undervalued and move our money there.

• We can create model values for currencies and assets, buying undervalued assets with undervalued currencies.

• We move one step ahead of the overreacting masses and know when the relative value of something has exceeded it’s true value global value – then it’s time to leave.

• We can do this with:– Currencies– Stocks (Goods and Services)– National Debts Owed

What This Means for Us Now• There will be a natural correction of relative values of capital between

nations.

• There is too much U.S. capital without a corresponding increase in an ability to pay it back or underlying assets relative to other nations; to correct this, interest rate increases and inflation have to occur.

• This does not mean that we won’t pay it back, we have to. It means that we can’t borrow more money so interest rates will go up if we try to borrow more.

Why will inflation occur?• The U.S. is currently able to pay too little in foreign markets for the same service. The value

of a good employee has a true value globally, but grossly unequal relative national values:– Tech workers in India– Labor in China

• Prices were low and supply was high so telecommunications were necessary to reduce the transfer costs of the tech market in India.

• Once capital flowed in, though, the new Indian middle class (for one example) began to grow and spend all of the national wealth domestically

• There are only so many great Indian tech workers, and now that the global economy was demanding their relatively low wage abilities, the demand increased and naturally the price of a good Indian worker increased.

• The cost savings that occurred originally made prices look even better in the U.S., but now, with more affluent people globally, demand for all fixed items in the world will increase.

• The price of Indian labor will increase, so companies using it in the U.S. will have to raise prices as well to pass the increased costs onto consumers.

• There should also be a corresponding increase in the price of oil, gold, and all items where the supply is fixed. Total Dollars / Total Amount of Fixed Asset = ACCURATE price of asset

Inflation will occur in two ways because everyone in the world is asking for more dollars for labor AND there are too many dollars compared to the

Nation’s actual reserve of wealth!

Just Like the Island Example, There is Only so Much Money on the Globe

• The total Broad Money Supply is the economic indicator for how much of a particular currency there is.

• Adding all broad money supplies together, we get the total amount of money in the world.

Top nine countries make up ~87% of the total worlds money supply.

The U.S. has about 24% of the paper money.

So why is Yen a good buy if there is so much of it?

• Because they still have their gold!• Remember, in the island story, SAM papers were still backed by his ounce of gold. If he had

spent all that too, it would have taken a lot more SAM papers to convince Kim to go get a coconut for him. In fact, SAM papers would become promises for work in return only.

• The U.S. has no value left, where as Japan and China are pretty much the only countries that do. How many IOUs would you take before you tell a friend no more?

• This is the major difference between the current situation and the great depression – back then we still had a federal government with a gold standard, so when inflation soared, they had gold to spend against.

GDP (PPP)GDP Real

Growth RateBroad Money

Supply (A)Stock of Domestic

Credit (B)Money Supply Less

Domestic Credit (A-B)Public Debt as %

of GDP

European Union $14,900 1.8% $11,170 $22,650 -$11,480 NAUnited States $14,720 2.7% $12,390 $32,610 -$20,220 58.9%China $9,872 10.3% $10,080 $8,156 $1,924 17.5%Japan $4,338 3.0% $18,300 $16,390 $1,910 225.8%India $4,046 8.3% $1,290 $1,164 $126 55.9%Germany $2,960 3.6% $4,288 $5,200 -$912 78.8%Russia $2,229 3.8% $651 $550 $101 9.5%Brazil $2,194 7.5% $1,522 $2,104 -$582 60.8%United Kingdom $2,189 1.6% $3,344 $5,151 -$1,807 76.5%France $2,160 1.6% $2,292 $4,319 -$2,027 83.5%*All values in Billions

This is National Gold

The ratio of Money Supply to National Value determines how much correction is needed.

Inflation will naturally cause the currency corrections, interest rate changes will naturally change the debt problems. This is the natural and predictable flow of wealth from undervalued to overvalued. Dollars are relatively overvalued as is low yielding U.S. debt.

GDP (PPP)GDP Real

Growth RateBroad Money

Supply (A)Stock of Domestic

Credit (B)Money Supply Less

Domestic Credit (A-B)Public Debt as %

of GDP

European Union $14,900 1.8% $11,170 $22,650 -$11,480 NAUnited States $14,720 2.7% $12,390 $32,610 -$20,220 58.9%China $9,872 10.3% $10,080 $8,156 $1,924 17.5%Japan $4,338 3.0% $18,300 $16,390 $1,910 225.8%India $4,046 8.3% $1,290 $1,164 $126 55.9%Germany $2,960 3.6% $4,288 $5,200 -$912 78.8%Russia $2,229 3.8% $651 $550 $101 9.5%Brazil $2,194 7.5% $1,522 $2,104 -$582 60.8%United Kingdom $2,189 1.6% $3,344 $5,151 -$1,807 76.5%France $2,160 1.6% $2,292 $4,319 -$2,027 83.5%*All values in Billions

The U.S. has the second highest amount of paper money and the least amount of Gold,

Meaning HUGE INFLATION ahead!

Imagine if anyone had to pay up immediately…

• The only nations left with money would be those with positive balances.– China– Japan– India– Russia

• We would need to either:1. Produce a ton of finished goods (which they basically can pay cheaper

prices for because the demand will be so low).2. Borrow more money – the demand for loans would be so high that

interest rates would soar.

• Likely, we’ll end up doing a combination of both – producing a ton of stuff while borrowing at high interest rates.

2012: Our Dollar is Going to Inflate Like Crazy, Our Unemployment Will Soar, Our Interest Rates will be Extremely

HighArmageddon?!

• Not even close. Best possible scenario, actually.

• You can bet all your money that Warren Buffet will sit calmly and say everything is fine, because he couldn’t be in a better position for when the predictable hands push wealth back around.

• You know why? Because all these things mean U.S. businesses are in the best place possible….

In the Short Run, People Will Panic, BUT the dollar can be in a terrible position while our economy is in a great one!

• In the short run, investments will flow out of dollars, leaving most of the U.S. left holding cash with nothing.

– Unemployment will happen because there simply won’t be much global demand when the U.S. stops buying stuff.

– The U.S. has to stop buying, we can’t afford to.

• As global demand falls, oil price will fall globally, but inflation will make gas super expensive. So, in today’s dollars, oil could drop to $20 a barrel because no one can afford it, but a dollar today will be worth next to nothing, so you can expect oil to be at least $100 - $150 per barrel still.

• As people panic and pull out of U.S. investments, stock prices will fall for a short amount of time. Almost everyone holds their money in index funds these days so when they pull out all stocks will be hurt equally.

In the Long Run, U.S. Companies Will Make a Killing

• If the dollar is undervalued, that means that all things that provide value that you can currently buy in dollars are actually undervalued. Consider this….

– A shoe today will cost $100, in ten years maybe $200?– A share of gold index GLD today will cost $142, tomorrow $300?– A share of Apple stock today will cost $182, BUT the price will fall when people pull out

of the U.S. market, mostly because everyone invests in S&P 500 index funds and will exit in mass. In reality, this stock is worth $360 by the same logic, maybe even more due to potential growth.

• How is that possible?– Foreigners have more money and will still buy U.S. stuff. – The buying power of their currencies will make U.S. goods super cheap for their

currencies. – U.S. goods demand will go back up, but smart moves by Apple will restrict production

claiming they can’t meet demand, so they’ll be earning relatively the same amount of money in foreign currencies worth even more back home.

So how do we profit the most as individuals?

1. Get rid of all variable debt - don’t be like the U.S. and get stuck with high rates!

2. Short long term U.S. treasuries with low yields.– No one will want a 2% yield on 100 million when interest rates are at 15%. These will be

junk.

3. Buy Gold, Yen.

4. As the masses see this begin to happen, they will panic and rush to Gold and Yen. Wait until S&P prices are at historic lows, then buy strong U.S. companies with an International Presence (those whose good or service can be easily transferrable to international markets).

5. As Gold plummets back towards its True Global Value, investors will see the unbelievable gains by U.S. companies and come back, starting the whole thing over.

The Best Companies• The new way to value companies is not by looking at just their earnings in dollars.

We have to identify how much they earn in each country and assess how much total real value they are creating, adjusting for mispriced currencies.

• Because we can now predict the relative values compared to true values and therefore the true value of currencies, we can identify companies that will be in demand based on whether they have a true advantage in one of the areas of wealth.

1. Raw Materials:- Companies holding large amounts of foreign currency (Foreign Companies) currently- Companies with gold- U.S. dollar loans with low fixed interest rates- New ideas will be huge- Patents and trademarks that are in demand overseas

2. Transformation Ability:- Any U.S. company that is the best in the world at what it does. (Apple)- Companies that are the most efficient at what they produce- Companies that can bring goods to foreign markets

3. Finished Products:- Companies that transfer and sell their services and goods in foreign markets- Products that are popular overseas- U.S. companies whose products are resistant to inflation and can pass inflationary costs on (are not discretionary spending).

Is it all Preventable?• Some of it is.

• The dollar value will have to fall (inflation) and U.S. interest rates have to increase, simply because their relative national value is too high compared to their true global value.

• A world currency with a constant amount of total money available will be necessary along with international lending standards to prevent the ensuing bubbles and future ones.

• Bubbles will continue to flow as they do now until someone steps in and takes over the world’s money.

What will Happen Politically? • The big question is whether the panic will happen before or

after the 2012 election and whether the masses will believe Obama and the people exploiting their panic that everything will turn out fine for them.

• Some necessary things will need to happen though:– We’ll need to pay our debts. So taxes will have to increase especially

on those who are making a ton of money on this. What could also happen is that rich individuals loan the government money instead, taking advantage of inflated dollars and high interest rates.

– We’ll have to support the unemployed, which will be a lot of people.

Why should you believe me when I have no masters in Economics? If it’s so simple how come someone hasn’t

come up with it already? • This page is not to be arrogant, merely defensive and convincing because these are usually the first

questions I get even though they have nothing to do with what I’m saying.

• First I think other people do know all this, or at least the parts. I think currency arbitrage is the most original idea I have here. They have just chosen to sit back and profit from it.

– Warren Buffet uses this strategy excellently in the U.S. buying relatively undervalued items that are the best at what they do. Remember when he bought railroad stocks and everyone laughed? He said he bought them because they move stuff throughout the country more efficiently than anyone else. Just wait until gas is $10 a gallon and trains will run on electricity. You can see his portfolio at the following address. Looks a lot like companies that are relatively undervalued for what they can do to me.

– http://www.tickerspy.com/pro/Warren-Buffett---Berkshire-Hathaway?refer=yhoo_4901_berkshire – If he wanted to be greedy, he could do the same with currencies and interest rates as well.

• I’ve done my homework. I’ve read every book on the topic, I’ve clearly run the numbers, I’m willing to think about possibilities and not just take an “expert’s” advice (like in 2007 when every economist said everything was fine and housing could go up forever), and I know from going to school that the completion of degree is a good indicator that someone completed classes but doesn’t say how well they did or whether they have ulterior motives.

• Most importantly, not having a degree does not change my analysis, and above all, that’s what I am, an analyst.

Where did I get the ideas?• My first job in offshoring made me wonder how we could possibly be able to pay someone in India

1/5 what we pay in the U.S. and they weren’t upset. How could it really be that different when they do the same thing?

• Then I read The Four Hour Workweek by Timothy Ferris (second edition) where he said that since publishing his first novel the demand for virtual personal assistants based in India had gone up so much that they couldn’t meet demand and the quality of the virtual assistants was going down.

• This is when I realized the effects of transferability and how prices raised due to demand of foreign work relative to national work. The increase in foreign labor meant inflaiton was coming.

• The book Aftershock gave me the foundation for a lot of this. I can’t emphasize that enough. What I’m adding is really just the idea of predictable flow and that currency and wealth are fixed so there shouldn’t be currency arbitrage opportunities.

• I wanted to figure out how it was possible that the experts seemed to make a ton of money off the last crisis even though they all said it was unpredictable.

What if I’m wrong?• There are multiple scenarios in which I could be wrong, but I don’t think

they are likely:– The CIA could be reporting fake data to the whole world.– China and Japan decide to just tell us not to worry about our debts and we don’t have to

pay our credit card bills and the banks give us low interest rates anyway still. – The U.S. could be buying foreign currencies. That would be like Sam trading in SAM papers

before Kim knew they weren’t worth as much. In that scenario the dollar would fall instantly still, but we could avoid some of the government debt issues because we could pay it off with Yen or whatever.

– U.S. billionaires could combine their wealth and offer to pay taxes on our Nation’s behalf.

• I’m not asking for your money, why would I lie about all this? Why would I go out of my way to tell everyone I care about this stuff knowing that if I’m wrong everyone I know will think I was nuts.

So what am I doing?

• My money is where my mouth is…– I’ve shorted long term treasury bonds.– I have the rest of my money in overseas funds and gold.– I am holding nothing in U.S. dollar savings or money

market accounts.

Something to consider…

• Before I left my job, I shared an early version of this with my boss and he sent me the following:Adam,

For the record, it's not that I'm unconvinced, I'm merely uninformed. I'll read your materials and see what's what.

I do sincerely wish you good luck with this. And I do believe it is possible to see patterns that others have missed.

Sliced bread was a 20th century invention, despite the fact that both bread and cutting utensils had been around for 5000 years, and the industrial revolution had occurred in the 1800s. New information yields new patterns.

We'll see what this yields!

Questions?

• I can be reached via email at the following address:– AdamSimonett@gmail.com