In order to be able to think originally, you have to risk being offensive, I am rather sure of that.
And this is an important thing for me, because I bounce my ideas off people hoping for their feedback, risking me being imposing and offending, but if you can take me as I come, we’ll have a meaningful exchange. I am good, have a dinner with me, you will not regret it – it will make both our minds richer.
The opposite of original thinking is political correctness, which is the elevation of sensitivity over truth - it’s when something irrational is forced to become normal. The good part is – it never lasts long. Bad part - it tends to happen every day.
Sad thing all this, but part of life.
I was reading Bloomberg news in the Le Café du Marché when the waitress dropped a bottle of water and I caught it in mid air. She looked at me and said: “you should relax”.
“No, I don’t. I feel better tense.”
And they had absolutely nothing interesting to say about the world, the Bloomberg staff. A bunch of people with no sense of harmony and no sense of time.
I was sitting there eating my Fish and Chips and thinking what Benjamin Franklin once said: there are three kinds of people in the world. The immovable, they are stuck in their ways. The movable, who can be excited by ideas and they follow, and then there are the ones who make things move. Take your choice who you are, its not an easy one.
Now to the current world, and how the levee is breaking.
Repo rates have gone through the roof hitting 10% last week forcing the Fed to intervene. As a note, overnight financing (REPO rate) is a basic function, which holds the economy together.
Now, what does that mean? REPO stands for repurchasing rate and this is how it works – say you hold a $100K in government bonds, and now you’re willing to let it go for $90K, just to get back the cold hard cash.
This simply means the shortage of money, lack of trust in the government paper too.
Interest rate shows the demand for credit, the repo rate shows the demand for cash.
The intervention of the Federal Reserve into the REPO market is the result of a global dollar shortage on a monumental scale. We have a liquidity crisis unfolding because of massive uncertainty.
About 70% of physical paper dollars are now circulating outside the USA. There are more $100 bills in circulations than $1.
And most of Swiss 1000 franc bills are held at homes (highest value paper currency there is in the world).
If you pay attention, you should see a pattern.
There is a shortage of understanding what money really is, but only in the media - people on the street seem to get it right away. When money was gold based, you had in your hand a weight of metal with defined value, no matter where you went in the world.
With the introduction of paper (fiat) money, which is really just computer strokes, two risk factors were introduced.
First is the confidence in governments backing it up, second is the confidence in banks not failing.
Both weak arguments, so people hoard cash in times of uncertainty.
The coming boss of the European Central Bank, Christine Lagarde thinks that the solution to Europe’s problem is a cashless society – everything will be electronic, visible and taxable.
Good luck with this idea, lady.
What will happen when the levee breaks?
I believe in a brave new world, which I am actually looking forward to.
For all the world improvers out there, hear me out - sometimes you meet your destiny on a road you chose to avoid.
“Sono Otto, sono Otto di Catania”, or I was trying to be him for the long September weekend after I landed at the Catania airport, the steaming mount Etna visible from the airplane miles ahead.
The city once built a castle strategically located on the seashore. Then the Etna erupted and the lava filled up the bay.
Now the castle is about one kilometer inland.
All this strategic work for nothing, huh? The castle still looks great but clearly there is a zero chance of us against the Mother Nature. At the end we, humans, only occupy about 3% of the planet.
Let me switch to my best Italian to start:
“Cari spettatori”, dear spectators,
“amitci del variete”cabaret lovers,
“calorosissimo pubblico buana sera gia stella matto”, it’s a wild world, but you’re in for a good time.
“Come on in,” said the dark haired guide from the EtnaTribe agency as she opened the door of the van, “get ready for the adventure of your lifetime”. She was Italian in the best quality, Sicilian, she would say. The smile, the temperament, the sense of humor and the body. As a man, I can only say this – the moment you stop looking, you’re dead.
We drove as far up the mountain as we could. We took the teleferico (line car) up and then a custom-made off-road bus, which showed that the rough volcano business worked out swell for Mercedes. And then it was only walking, the “Mama” exploding from time to time creating tension, older craters still fumanti with smoke.
Etna lies above the convergent plate margin between the African Plate and the Eurasian Plate and it explodes easily. The lava from an eruption 17 years ago was still warm if you dig into the ground as I did going up. Imagine all that.
Mount Etna is in a constant state of activity, her name is derived from a Greek word that means "I burn".
Or, as Bruce Springsteen would sing it “I am on fire”, as if “I can take you higher”
which is the premise of the song. A guy promising something to a girl.
The next day, driving south down the coast I stopped in Syracuse, a city founded by ancient Greek Corinthians, a place that became a very powerful state on it’s own. Described by Cicero as "the greatest Greek city and the most beautiful of them all” it equaled Athens in size. It has a Cathedral built around the old Athena temple from five centuries before Jesus. All of the sudden He becomes the new guy, as I realized sitting on the patio in a restaurant in front of the spectacular church.
Like “who? Say that name again. Jesus, yeah, John the Baptist’s cousin. ”
Which is true, by the way.
I went inside, looking at the bright interior, ancient columns, dark top in a combination of honey and brown. The cathedral is dedicated to Santa Lucia, the patron of Syracuse. I was looking at her figurine thinking – “ pay attention to what I say. I choose my words carefully and I never repeat myself. I hope you will mention me when the time comes, but no pressure.”
Now imagine this - the cities on the coast are built of a soft stone, which assumes a honey tonality under sunlight. Have a meal and a glass of local wine in the middle of that and see how you feel.
Later, I was eating dinner in the fishing village of Marzamemi, on the Ionian Sea cost, an Arab settlement from ancient times and the September night came fast.
Then it was time to leave, early in the morning the next day. The smoke from Etna was red in color, but she was quiet that day.
“Amici grazie, grazie per venire”, thanks for reading.
“E' molto special,sono arrivato di mia iniziativa”I am in the place I always wanted to be.
It is good here.
Note: “Otto di Catania” is a song by the long running Swiss duo Yello. The Italian lyrics are from the song. Give it a listen, you will not be disappointed.
As legend has it, Japan was founded around 660BC by a direct descendent of the Sun Goddes, hence the name “Land of the Rising Sun”.
Now, I don’t get excited about China taking over the world; it’s Japan that is important. As I see it, most of us are following the wrong show. While the media was focused on secretary’s Xi’s celebrations, Japanese voters granted Japanese Prime Minster Shinzo Abe an overwhelming parliament majority. Sure, Xi Jinping is disrupting and reshaping Chinese political corruption to better suit him, but Shinzo Abe was able to get his anti-war, Buddhist coalition partners to support his efforts to expand the role of Japan’s military forces. It is Japan, not China that boasts the world’s second most formidable navy, second only to the United States in the number of aircraft carriers floated (Japan claims those carriers are only for helicopters but if you believe it, I have the Eifel tower to sell to you).
Abe is the first Prime Minister who seems likely to become the longest-serving leader in modern times. But perhaps most important is the shift in Japanese society toward a more nationalistic, assertive position both regionally and globally.
Japan is a vibrant democracy with no minorities to speak of that has relocated most of its industrial base to the territories of its foreign customers and boasts a leader who is genuinely popular likely because of his militant stances. What do you make out of that?
Add to the issue the festering hatred of Japan throughout Asia for World War II that simply will not go away. It is even hard to find a Japanese restaurant in anywhere in South East Asia.
The Japanese recently slapped South Korean with export restrictions that will cause delays for materials that are critical to the advanced Korean semiconductor manufactures. And this is unusual, as a trade war is generally initiated by a deficit country, which simply means there is more to it here.
In retaliation Korean boycotts of Japanese goods have sprung up. Both sides have since withdrawn the other from their respective “white lists” – a classification that enables trade in sensitive technologies without the need for time-consuming and cost-intensive permitting. The Koreans are threatening to cease intelligence sharing (the agreement expires in November), and from their side Japanese said that they would not renew it anyway. In the old days the US would told them to cut the nonsense out the day it surfaced, but the days of global US management are going away.
Now, the Indian Summer topic.
Last weekend I drove to Annecy, which is town in southeastern France, where Lake Annecy feeds into the Thiou River. It’s known for its Vieille Ville (old town), with cobbled streets, winding canals and pastel-colored houses.
Overlooking the city is the medieval Château d’Annecy, once home to the Counts of Geneva.
I was staring at the sun sitting on a patio by the river with an espresso cup in my hand, which is a bad habit of mine, the staring part I mean. I never wear sunglasses and sometimes I can no longer tell the difference between things I say and things that I just have in my mind.
Some people call it a gift, but it’s a brain reflection just the same.
“Where are you from?” asked the waitress. She was a dark haired handsome French woman with tasteful tattoos on her arm.
“Toronto, and don’t pronounce the second T, that’s how the city is known to the locals.”
“Got it”, she smiled.
"But by now I am as Swiss as the Pellegrin white wine."
“Do you miss what you’ve left behind?” she asked.
It took me w while to come up with the answer.
“I am trying.”
I rode my motorcycle to Gstaad lately, and it was a beautiful drive through the Alps - take the highway 9 to the end of the Leman Lake and then cross the Alps going east.
The views are fantastic, nothing compares for me and I’ve been around.
Driving in the mountains, I learned to lay low on the motorcycle to take the curves faster. Sounds like a small thing, but it's not, it took me a year to learn.
On the way there I stopped in Vevey for a coffee, which is the city where Charlie Chaplin lived up his retirement, but others had too in this area.
David Bowie was my favorite.
He drove this 262C Bertone Coupe Volvo, which is one of the finest designs in the car business. I think that this is the car he meant singing “it gets me to the church on time”.
And his “Let’s dance” is possibly my all time favorite song.
Put on your red shoes and dance the blues, shall we?
And it doesn’t end there - at some point I was a neighbor with Phil Collins in a village in the hills, I don’t think I ever mentioned that.
Some interesting people live on the Swiss Riviera.
Back home later that weekend I was checking the news, which is a weakness of mine, but also a quest to understand the world. Not much I can do about it.
I am convinced that the Middle East is changing right in front of our eyes, and this is an important region – the energy to run the world is there.
It concerns me a bit, but it could be just a natural progression.
Iran's foreign minister visited China at the end of August to finalize the strategic partnership, of which central pillar is that China will invest $280bn in Iran's oil, gas and petrochemicals sectors. And another $120bn in upgrading Iran's infrastructure. They will send up to 5,000 Chinese security personnel on the ground in Iran to protect Chinese projects, and there will be additional personnel and material available to protect the eventual transit of oil, gas and supply, where necessary.
Anew world is shaping up in Asia too - Hong Kong was under a serious threat lately. Chinese military vehicles had gathered in Shenzhen, a city in Mainland China bordering Hong Kong. But they never went ahead with the invasion, which would be a simple operation for trained troops. I think one needs to appreciate the restraint and willingness to play along.
Let me end with a great scene from a movie coming out this November. It's called "The Irishman".
They were sitting on a patio of a lakeside restaurant having lunch on a nice afternoon.
“Do you believe in God?” she asked.
“I don’t” he said, and she wouldn't let him go with her eyes knowing that this is not the whole story.
“But I am afraid of him.”
“You talk to him sometimes?”
“I talk to someone. Last he said was this – you might be demonstrating the failure to show appreciation”
She laughed quietly.
“What are you saying?” she asked eventually.
“If someone isn’t seen for what they truly are, it could be dangerous.”
“What don’t I know?”
“This life isn’t for me, but now it’s a bit late for that.”
They were leaving the restaurant when the waiter said behind their backs – guy likes to talk, don’t he?
Tom Kubiak is the author of The Traveler