The Bank of Israel will begin today a pilot program to invest a portion of its foreign currency reserves in U.S. equities.
The investment, which in the initial phase will amount to 2 percent of the $77 billion reserves, or about $1.5 billion, will be made through UBS AG and BlackRock Inc. (BLK), Bank of Israel spokesman Yossi Saadon said in a telephone interview today. At a later stage, the investment is expected to increase to 10 percent of the reserves.
A small number of central banks have started investing part of their reserves in equities. About 9 percent of the foreign- exchange reserves of Switzerland’s central bank were invested in shares at the end of the third quarter, the Swiss bank said on its website.
The investment will be made in equity index trackers and will include between 1,500 to 2,000 shares, among them stocks like Apple Inc. (AAPL), Saadon said.
If the events in EU nations such as Greece, Spain, and Italy are any indication, the U.S., with its massive debt to GDP ratio (real debt includes entitlement programs), is looking at one of two possible scenarios: default, austerity measures, and high taxes, or, hyperinflation, and then default, austerity measures, and high taxes.
. . . . . .
Black markets give the citizenry a means to protest the taxation of a government that no longer represents them. In a country stricken with austerity, these networks allow the public to thrive without having to pay for the mistakes or misdeeds of political officials and corporate swindlers.
Several months ago, I was invited by Sean Park to be a Venture Partner with Anthemis Group, a new financial services group with an aim to totally reinvent finance from the ground up.
(Sean was a generous backer for the Future of Money Project I co-created for a SIBOS conference, and we’ve met up several times in the past few years for animated conversations about the changing nature of money, value and wealth.)
I was delighted to accept the offer, and be a part of this exciting initiative by bringing attention to financial startups that just might help change the world for the better. If this is you, let me know!
Check out the video above to hear more about the goals of Anthemis and an overview of our emerging global financial landscape – presented last week at the Lift12 conference. Below is a brief post Sean wrote up about his presentation, and a great prezi as well!
—
Last Thursday I had the great privilege of having been invited by the remarkable Laurent Haug to present a snapshot of our vision of the new emerging universe of “digitally native finance” at the wonderful Lift12 conference in Geneva. Twenty minutes is not a long time (and thank goodness Laurent indulged me with a couple minutes more) to convey both the context and the substance of what we believe to be a fundamental shift in the paradigm of the financial services industry, but I hope I was able to give at least a good high-level overview. Most importantly, I hope I was able to convey the excitement we feel at the vastness of the opportunity and the win/win/win (for the customers/companies/economies) available to those who embrace the opportunity for technology-enabled disruption in financial services by introducing them – however superficially I’ll admit – to just a handful of companies who are at the vanguard of this wave of change.
For those that are interested, my presentation is below:
This appears to be another piece of the larger trend toward the complete failure of all governments — the most sophisticated governments have now become the most inept and the most corrupt (in the holistic sense of the term). This does not bode well for humanity.
Security giant G4S is the second-largest private employer on earth
BusinessInsider, 26 February 2012
With more than 625,000 employees, this listed security giant is the second-largest private employer in the world(behind Wal-Mart). While some of its business is focused on routine bank, prison and airport security, G4S also plays an important role in crisis-zones right around the world.In 2008, G4S swallowed up Armorgroup, whose 9,000-strong army of guards has protected about one third of all non-military supply convoys in Iraq (it's also notorious for its wild parties and for having Afghan warlords on its payroll).
But the combined group has a security presence in more than 125 countries, including some of the most dangerous parts of Africa and Latin America, where it offers government agencies and private companies heavily-armed security forces, land-mine clearance, military intelligence and training.
Drexel University engineers have found a way to improve upon ordinary Portland cement (OPC), the glue that’s bonded much of the world’s construction since the late 1800s. In research recently published in Cement and Concrete Composites the group served up a recipe for cement that is more energy efficient and cost effective to produce than masonry’s most prevalent bonding compound.
Drexel’s “green” variety is a form of alkali-activated cement that utilizes an industrial byproduct, called slag, and a common mineral, limestone, and does not require heating to produce.
According to Dr. Michel W. Barsoum, A.W. Grosvenor professor in Drexel’s Department of Materials Science and Engineering, this alternative production method and the ubiquity of the mix ingredients, lessens the cost of materials for Drexel’s cement by about 40 percent versus Portland cement and reduces energy consumption and carbon dioxide production by 97 percent.
“Cement consumption is rapidly rising, especially in newly industrialized countries, and it’s already responsible for 5 percent of human-made carbon dioxide. This is a unique way to limit the environmental consequences of meeting demand,” Dr. Alex Moseson, one of the lead researchers on the project, said.
The last time oil went in this direction, it caused a slowing in the global economy that led to a global financial panic.
What's causing it? Peak oil, Chinese growth and lots of potential oil disruption. Pretty much the same factors that caused it last time.
The pipeline disruption is a little different this time.
Israel
The headline player is Iran due to its nuclear program. But Iran isn't actually disrupting the production system, they are merely making threats.
If you unwind this a bit, it's pretty clear that the countries actually sending shockwaves of fear through the markets are Israel and the US. However, of the partners in this relationship, Israel is in the drivers seat. They are calling the shots on the timing of an attack on Iran and they will take the world along for a ride.
Sun Tzu or Bismarck: Who will Prevail in the 21st Century?
[Note: this first appeared in Time's Battleland Blog (here)],
The first three chapters in Sun Tzu’s timeless classic “The Art of War” describe how to make net assessments by comparing your strengths and weaknesses and those of your adversary and how to formulate strategy. Near the end of Chapter 3, he sums up his advice, saying, “Know your enemy and know yourself; in a hundred battles, you will never be defeated. When you are ignorant of the enemy but know yourself, your chances of winning or losing are equal. If ignorant both of your enemy and of yourself, you are sure to be defeated in every battle.”
The fundamental problem in the American military and foreign policy elite lies in an incestuously amplifying, self referencing orientation that makes it ignorant of both of Master Sun’s categories of knowledge. (I explain how incestuous amplification hijacks a decision cycle in this essay.) Briefly, the American policy elite’s self-referencing Orientation causes it to Observe what it wants to see.
This kind of one-way shaping isolates the decision-making mind from what is really going on in its external environment. As the American strategist Colonel John Boyd showed, Decisions flowing out of an Orientation that overwhelms Observations become disconnected from reality, and therefore, the Actions consequent to those decisions inevitably become irrelevant at best, and more often counterproductive, in that they amplify themselves to drive the collective decision cycle or Observation – Orientation – Decision – Action (OODA) loops ever further away from reality.
Left uncorrected, the result is an inexorable descent into disorder, and eventually a magnification into chaos leading to overload and collapse. (Interested readers will find a short summary of Boyd’s theory in the last part of this essay. A more extended description of the man and his work can be found in Robert Coram’s excellent biography, Boyd: The Fighter Pilot Who Changed the Art of War, now in its 7th printing. Boyd’s entire Discourse on Winning and Losing — his art of conflict — can be downloaded here.)
Self-referencing behavior is clearly evident with regard to ourselves, for example, in the entirely predicable — and predicted — chaos of the Pentagon’s uncontrollable long-range budget plan (which is grounded on a combination of inwardly focused power games as well as a deliberately corrupted accounting system — explained here, here, and here). Put bluntly — we know that we do not know ourselves — indeed the evidence I compiled during my 25+ years of research in the the Pentagon’s pathological decision making practices, while employed in the Office of the Secretary of Defense, suggests we do not want to know ourselves and will go to great lengths to avoid doing so (unclassified reports can be found here).
Not only does our elite not want to understand itself, it also does not know its adversaries. That was clearly the case in Vietnam and Iraq and currently in Afghanistan. Consider this farcical, were it not so serious, report in Sunday’s New York Times; it describes how the Taliban and impostors are scamming us in Afghanistan. Bear in mind, this report is just the tip of a huge iceberg of evidence describing the self-inflicted — dare I say incestuously delusional — ignorance: see, for example, like that described by Lieut. Colonel Daniel Davis in his 87 page report, “Dereliction of Duty II” (a summary by ace investigative journalist Gareth Porter can be found here).
But Sun Tzu is a voice from 500 B.C., and his musing may be irrelevant in the 21st Century. Perhaps that’s because, as Otto von Bismarck is alleged to have predicted, just before he died in 1898, there is a “special providence for drunkards, fools, and the United States of America.” As Francis Urquhart would say: “You might very well think that. I couldn’t possibly comment.”
