Monday, November 29, 2010

The Music Business is in Really Sad Shape

I must admit that I am not the first to follow trends (gee...what would have been your first clue?), but I can now see what sorry shape the music industry is in. I just had my first experience of Taylor Swift...HOW BLOODY PATHETIC! A skinny, ordinary looking teenager with a thin, nasal voice who can't carry a tune. Unbelievable!

It certainly points to the power of marketing. Perhaps the marketeers could make me the new sex symbol. Yeah, right!

Thursday, November 18, 2010

Economic Normality

This morning Dr. Alan Bollard, the Governor of the Reserve Bank of New Zealand was addressing a conference of business executives on the state of the economy. About the recent past he commented, "...we learnt that recovery to economic normality can be a slow, fragile and uncertain process, with temporary set-backs and aftershocks."

Throughout the world economic forecasters and politicians are anticipating and jaw-boning a return to "business as usual." THERE WILL BE NO RETURN TO THE ECONOMIC NORMALITY OF THE PAST! NEVER! There will intead be the development of a rather radically different new normality, with reduced growth rates, no real estate boom and significant shifting of economic power. John Maynard Keynes is long since dead, god rest his soul. The growth-at-any-cost policies engendered by his theories have brought us to where we are today. The ride up was good for quite a few, but the law of economic gravity...

What goes up can (and probably will) come down."

has come into effect. I commented in 2000 that we would have a major economic crash before George W. Bush left office. I described the US economy as a bit like the coyote in the Roadrunner cartoons. In an attempt to catch the roadrunner, coyote runs out off a cliff. He keeps going until he looks down and then.... Yep, you got it. In 2007 someone looked down and we haven't seen the bottom yet.

Almost 50 years ago I tried to introduce the concept of two kinds of wealth - real wealth and paper or fiat wealth. Real wealth is where the activity adds real value to the economy - mining, manufacturing, and agriculture. Fiat wealth is derived from services like accounting and legal as well as the speculative profits of money marketeers. The entire financial system has become a gigantic slot machine with a major exception - the biggest players can alter the odds, just like at the horse races with, however, the opposite effect - they can alter them in their favour. In the long run fiat wealth can only exist on top of a foundation of real wealth. In the last 50 years the USA and western Europe have allowed their real wealth to atrophy and decline so that fiat wealth is all that remains. The result of that has been observed over the past 3 years. Amazing how fast fiat wealth disappears. The ongoing effects are yet to be seen and it won't be pretty!