North Point of View

In this episode, Mark Hall and Dr. Walter Kemmsies discuss the Panama and Suez Canal.

Excerpt:

Mark: Two months ago, it felt like we were in borderline panic. Panama canal dried up, and the Houthis have taken over the Suez Canal, and it was a major threat to the East Coast.

Walter: The Houthi rebels received a lot of weaponry from Iran and they used the the weaponry to shoot at defenseless commercial ships. It's just an act of cowardice and stupidity. China made some kind of peace with the Houthis, and then the Houthis turned around and shot a Chinese container ship. They're pirates and they're not very smart pirates. In the very beginning, they shot a ship that had been leased by the Israelis. Then at the end of the of the year, it had been released to a Chinese entity. The Chinese were sailing it through the canal and the Houthis, took potshots at it. China is like, what the hell? We're not Israel, because the Houthis were only shooting at Israeli ships at the time. What happens is the database they were using on which ships are registered to whom you can read on the ship, the AIS signals. Well, there's AIS signals that come off the ships and you can go online to marinetraffic.com and you can see which ship it is. The problem is your ship registration database is old by about three months and so ooops.

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In this episode, Mark Hall and Dr. Walter Kemmsies discuss Inflation Reduction Act (IRA) and the failure of a four year college degree and student loans.

Excerpt: Walter: Some months ago on one of our podcasts, I'd said to you that I felt that the student debt for a lot of students, not every student, but for certain students, it should be forgiven. They borrowed money because the college education was going to give them a higher income so that they could pay off the debt. But I think the vast majority of students, they got this education and they can't use it to make enough money to pay off the debt that they have.

So the university system has effectively stolen money and wealth from kids who went to their colleges. It’s insidious the way universities and colleges do it. The students weren't properly trained. They weren't set up to have a career. The point of going to college was to get educated so you could do things. Now you go to college simply to get a diploma that says, I graduated from college.

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In this episode, Mark Hall and Dr. Walter Kemmsies discuss the 2023 recession that never happen.

Excerpt

Walter: I said, I don't think there was a recession. In fact, I think the 2023 recession was everywhere but in the data. But we don't have the last bit of data for the last two months. Right. Let's get him to come on. So he got up and the first thing he did was we have to apologize as there was no recession. So during the Q&A, I referred to it to him as being on the apology tour. So now everybody say no recession for this year (2024). That's the consensus view.

Mark: The soft landing, which of course, when everybody says it, then that's when I get worried.

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I've had a Roomba now for almost 15 years. Often times it gets stuck. You got to pick it up. You got to move it. You've got to give it a kick. Well, you know, it is kind of primitive software. But then I thought, you don't need very complicated software. You just got to make sure you've got enough sensors and the sensors, conveying location information, then we should be fine. To me, that's the problem with the robot. So the more sensors you put in there, I think the better it will operate because, they can't see. The technology is blind. Read The Singularity, a book by Ray Kurzweil. He basically says around 2040 we'll have machines that will be able to repair themselves, but also to invent themselves. This is also where you get a little worried about those, doomsday science fiction stories where the machines take over the world.

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It's not just Evergrande who just blew up, but the number two and number three, they've also all crashed and burned. Then when you go down to the much smaller developers, it's a raging forest fire. People are trying to get their money back from the bank because deposits they made for the construction of apartments or houses, it's not happening. These developers don't have the money and they can't proceed. When you go to the bank to get your money, you can't get your money. What we've seen in the last six, seven, eight months is actual protests outside the banks and in the streets. In China, that's a no no. The population is getting angry and picking up sticks and clubs and whatever they can, because, you know, this is how revolutions get started.

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You and I talked about this a few years ago. One of the videos about the slowing population growth rate. And I was lucky during most of my career, the population growth rate for the US was one to 2%. It was 2% and it dropped towards 1.41%. But that was enough to sustain GDP growth of 2 to 3 and a half percent. And so I could do a lot of good calculations based off of demographic growth. Look at Japan, they have positive GDP growth, but they have negative population growth.

Negative workforce growth is still shrinking. Japan is what I've been looking at the most and all the adaptation that they've had to do. The simple example is in Japan, they don't have enough medical people. We don't either but you go online in Japan and you say, I'm sick, and then the A.I. comes and this is ten years ago.

It's not just recent, not this A.I. bullshit, that we're talking about these few years. This goes back then because doctors are viewed as encyclopedias. You list the symptoms, the symptoms are consistent with these diseases. Then you ask a few more questions to narrow it down. And these last two diseases get the same medical treatment. Then it's reviewed by a nurse. And if the nurse isn't sure, they check with the doctor. But basically the nurse clicks the box and prescription sent to the pharmacy, and then the pharmacy then deliver it to your house. That's where we need to go.

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In this episode, Mark Hall and Dr. Walter Kemmsies discuss the fundamental structural pieces that are in place for 2024 and some weaknesses in the overall structure.

Excerpt:

The Department of Defense for decades has had a list of essential industries. I was on the government's corona virus task force in 2020, and we needed to know what really, really had to be protected. My contribution was included the DOD website.

We were extremely dependent on China for our supply of active pharmaceutical ingredients. That didn't make sense to be 95% dependent on a single country. That's stupid. What happened during COVID proved exactly the point that you shouldn't be so dependent. China shut down exports of a lot of things, and especially in the medical area. There's no judgment there on China, its just that and any country could have done that.

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2024 is still going to be very volatile. The Houthi attack in the Red Sea isn't going to be solved in the next few weeks, so it walks into 2024. The situation with Israel is not going to be resolved that quickly either. We've got at a minimum, several months or could be years. So it's a very volatile year. Just looking at it from that perspective, no end in sight with Putin and the war in Ukraine. It’s also an election year and the politics in the U.S. are kind of ugly, but what do we tell people about the stock market during the election year? Buy stocks. They always did better in election years than almost any other years. So you've got these two forces against each other. I'm going to stay in the stocks and biting my nails and trying not to look at my 401k.

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When COVID hit us, we flopped like a rock. We gave Americans five and a half trillion dollars. That boosted the economy way above the trend line and we've been trying to get back to that trend line since. In in 2019 we were at $500 billion a month of retail sales. One would have said that by 2023 we're going to be maybe at $550 billion but we're currently at $600 billion a month and we've been there now for 18 months. Right now it's still nail biting territory for retails companies like Macy's, Walmart, Amazon or Target. The big fear is how do we converge back to the trend line? And if you do converge, is it by sales falling like a rock, recession or is it by over time where the difference begins to fade away?

Tune in to find out what grade Jerome Powell and the Federal Reserve get from Prof. Kemmsies.

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A zero percent inflation rate may look elegant mathematically, but the mathematical model built represents no universe that any human being has ever lived in.

Back then, Milton Friedman, the Nobel laureate, said that he thinks inflation target should be two percent. He didn't say zero, and there were a lot of economic commentaries about this. If you target zero percent inflation, you're making it really, really hard for a new company to emerge and drive productivity growth through the economy and take us into the future.

In today's economy, two percent may not be the answer either. So how much inflation is good?

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