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TechVest ECONOMIC REALITIES ECONOMIC REALITIES FOR A FALLING WORLD FOR A FALLING WORLD October 2011 October 2011
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Techvest Oct 2011 Presentation 10 25 11 Selection

Dec 14, 2014

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Update of TechVest Econometrics View of Deflationary Trends
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Page 1: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

ECONOMIC ECONOMIC REALITIES FOR A REALITIES FOR A FALLING WORLDFALLING WORLD

October 2011October 2011

Page 2: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

MismanagementMismanagement

Collapsing Collapsing the Private Economythe Private Economy

www.techvest.comwww.techvest.com

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We are in a We are in a time of time of

desperatedesperate manipulationmanipulation

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??Wither… Western Civ

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TechVest

Unfunded Liabilities in EntitlementsUnfunded Liabilities in Entitlements

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??

Deflation

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TechVest

Dawning DeflationDawning DeflationOctober 2011October 2011

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Just Just Dawning: Dawning:

Hope is not Hope is not an an

Investment Investment StrategyStrategy

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Just Just Dawning:Dawning:

Debt Debt Destroys Destroys

EquityEquity

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Just Just Dawning:Dawning:

Borrowing Borrowing is is TakingTaking

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Just Just Dawning:Dawning:

Government Government crowds out crowds out

Private Private SectorSector

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TechVest

Govt Growth Inverts Long Term GDPGovt Growth Inverts Long Term GDPSimply: as government spending has gone up, economic growth has gone down.

KEYNESIANISM “WASTES” GDP

Page 13: Techvest Oct 2011 Presentation   10 25 11 Selection

Just Just Dawning:Dawning:

Debt Debt Destroys Destroys

EquityEquity

Page 14: Techvest Oct 2011 Presentation   10 25 11 Selection

Just Just Dawning:Dawning:

Debt Debt Destroys Destroys

EquityEquity

Page 15: Techvest Oct 2011 Presentation   10 25 11 Selection

Asset Asset DeflationDeflation

(Credit Contraction)(Credit Contraction)

&&Cost InflationCost Inflation

(Consumption Cost Expansion)(Consumption Cost Expansion)

Page 16: Techvest Oct 2011 Presentation   10 25 11 Selection

??Deflation Avoided or Coming?

Page 17: Techvest Oct 2011 Presentation   10 25 11 Selection

The End of Inflation ?The End of Inflation ?Housing Started It All, that Deflation is Not Over

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??Nowhere to Hide?Nowhere to Hide?

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DeflationarySpiral

THINGSCANGET

WORSE!!!

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??

Deflation

Page 21: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

Problem: Keynesian Clue-Problem: Keynesian Clue-LessnessLessness

Congress without a Budget for 2.5 years

Page 22: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

Debt Problem Insoluble by Spending Debt Problem Insoluble by Spending FreezeFreeze

Interest Cost the Hidden Danger

Page 23: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

Investment Velocity – Debt Too Investment Velocity – Debt Too HighHigh

VELOCITY < 1.0 has ARRIVED

ZERO VELOCITY is IN 2014 ?

Page 24: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

Iceberg Excess Reserves – Rational Iceberg Excess Reserves – Rational FearFear

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Global Global CoolingCooling

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Deflation = Deflation = Deferred InflationDeferred Inflation

Freeze = Freeze = DeflationDeflation

Page 27: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

Debt Productivity – Frozen MoneyDebt Productivity – Frozen Money

VELOCITY < 1.0 has ARRIVED

ZERO VELOCITY is IN 2014 ?

Page 28: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

Endless Job Recession – Deeper and Endless Job Recession – Deeper and WiderWider

Far to Go …

Page 29: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

We are now following Hi-Debt Japan We are now following Hi-Debt Japan CurveCurve

Page 30: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

Fed Tax 2011 2010 Likely Max Possible~ Maximum Impact per $1m Profit

Estate Tax 0 55 55 -$550,000

Dividend Tax 15 20 39.5 -$150,000

Cap Gains 15 20 39.5 -$150,000200+ Income

Rate 35 39.5 44.9 -$100,000

MediCare Tax 0 3.8 3.8 -$38,000SSA 7.5%

Max 72k 150k No limit -$75,000

Net VAT Tax 0 1% 5% -$50,000Health Tax

/empl. 0 750 2000 -$2,000 ea

Inflation 4% 6% 10% -$100,000

Dollar Value PPP 100 90 80 -$200,000Gasoline Increase $3 $4 $5 -$20,000

EPA CO2 Tax 0 1% 2% -$20,000Deductions Reduction 1% 3% 5% -$50,000

Small-Biz Tax Increases: Wipe-Out of any Typical $1m Profit

TotalHit !93%+MoreTaxes

ITCANGET

WORSE!!!

Page 31: Techvest Oct 2011 Presentation   10 25 11 Selection

??Currency Deflation

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TechVestPart 2:Part 2:

HOW TO HOW TO AVOIDAVOIDDOOMDOOM

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Higher Gold is Higher Gold is a Bad Signa Bad Sign

Is it already Is it already too late?too late?

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??

Gold is Hedge Against Gold is Hedge Against MismanagementMismanagement

GOLD = MONEY

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??

Gold is the New World CurrencyGold is the New World Currency

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??

BUT the Dollar CAN be Worth Gold BUT the Dollar CAN be Worth Gold !!

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TechVest

Assume the Will to Reduce Assume the Will to Reduce Entitlements:Entitlements:

… IF there are jobs

false savings

considered too radical, but in fact the MOST we can do

insufficient

impossible

Page 38: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

Labor Force Growth – Good for the Labor Force Growth – Good for the USAUSA

… IF there are jobs

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??

Green = LT EconoSocial GrowthBlue = LT EconoSocial FreezeGray = LT EconoSocial DeclineRed = LT EconoSocial Flashpoint

World 25-year Outlook

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??

We are Our Own Worst EnemyWe are Our Own Worst Enemy

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??

We are Saudi Arabia and Libya in We are Saudi Arabia and Libya in OneOne

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??

The Little Engine That Could … The Little Engine That Could … RestartRestart

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??

Productive Engine That Could… Productive Engine That Could… TechnologyTechnology

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SolutionsSolutionsChange the EngineChange the Engine

Stop BorrowingStop Borrowing

Energy & Energy & Technology Technology

Productivity WealthProductivity Wealth

Drill Baby Drill !!!Drill Baby Drill !!!

Page 45: Techvest Oct 2011 Presentation   10 25 11 Selection

Sample Solutions:Sample Solutions:

• Balance BudgetBalance Budget• end Regulationsend Regulations• 75% 75% Jobs CreditJobs Credit

• cut Corporate Taxcut Corporate Tax• no Minimum Wageno Minimum Wage• Raise Interest RatesRaise Interest Rates• Suspend Davis-BaconSuspend Davis-Bacon• mandate job re-trainingmandate job re-training• enforce illegal-hiring lawsenforce illegal-hiring laws

• hire 200,000+ border guardshire 200,000+ border guards• restrict unemployment benefitsrestrict unemployment benefits

• eliminate accredited investor limitseliminate accredited investor limits

ITCANGET

BETTER!!!

Page 46: Techvest Oct 2011 Presentation   10 25 11 Selection

TechVest

October 2011October 2011

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TechVest

November 2011November 2011

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TechVest

November 2011November 2011

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??