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Behold The Lamb Of God

March 24, 2013

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Compound Interest Addiction

Let us review a real estate investment over a very long period of time – 384 years. This length of time includes several complete business cycles of the Kondratiev type including booms, busts and depressions. It also shows the value of real estate in a country (the United States) that has not experienced the destructive force of war on its continental heartland. The Dutch bought Manhattan Island for 60 guilder (~$24) in approximately 1625. The 23 square mile (14,528 acre) island of Manhattan now has a recently assessed value of $189 Billion (not including buildings) A similar 14,000 acre parcel in Suffolk County, Massachusetts is currently for sale for $3,500,000. What is the return on investment for these two properties over the very long timeframe? Let us consider the Future value of a single deposit FV=PV(1+i)^n A Manhattan island investment over 384 years yields - 6.12% A similar investment in ocean front property in Suffolk County yields - 3.15% In the long term, in my experience...

Japan's Central Bank Responsible For Most Of Stock Gains In 2016

BOJ increases its sway over Japan's financial markets The Bank of Japan, already notorious as the biggest holder of Japanese government bonds, has now earned the dubious title of the largest "whale" in the domestic equity market. The BOJ purchased 5.58 trillion yen in exchange-traded funds in fiscal 2016, an 86% leap from the previous fiscal year. The total puts the bank above corporations and international investors as the single biggest buyer of Japanese equities. Last July, the BOJ decided to double the annual purchases of ETFs tracking the Nikkei Stock Average, Topix and other indexes to 6 trillion yen. Each round of ETF purchases by the bank lifts the Nikkei average by about 30 points, according to estimates by Nomura Securities. That translates to the Nikkei average receiving an aggregate boost of roughly 1,700 points after the current ETF policy was adopted. The Nikkei average added 2,150 points in fiscal 2016, meaning the BOJ's purchasing progra...

Dollar Will Rise As Euro Collapses

The Horrible Truth Starts To Dawn On Europe's Leaders Excerpts from a well written article by Ambrose Evans Pritchard follow: The entire European Project is now at risk of disintegration, with strategic and economic consequences that are very hard to predict. In a speech this morning, EU President Herman Van Rompuy (poet, and writer of Japanese and Latin verse) warned that if Europe’s leaders mishandle the current crisis and allow the eurozone to break up, they will destroy the European Union itself . “We’re in a survival crisis. We all have to work together in order to survive with the euro zone, because if we don’t survive with the euro zone we will not survive with the European Union,” he said. Well, well. This theme is all too familiar to readers of The Daily Telegraph, but it comes as something of a shock to hear such a confession after all these years from Europe’s president. He is admitting that the gamble of launching a premature and dysfunctional currency wit...

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Behold The Lamb Of God

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