The calling of the Lord

A few nights ago the Lord God called out to me the name of a manager I had known some 30 years ago. The call was in a serious tone and I had trouble waking up to respond to our Lord. The next night I heard the same voice calling out to me this manager's name. When I woke up the voice stopped. It happened on the third night too but I wanted to tell the Lord God to let me go back to sleep as I was too tired. When the Lord God called me on the fourth night I woke up, a little bit shaken by the constant calling and I promised the Lord I will write about this. I finally understood what he wanted me to write about and this is why a few days later I am writing this article.

President Trump, when I was a young engineer working in the American semiconductor industry our old manager left and a new manager was flown in from the USA to take over operations. This manger, although he was rather smart stopped all the previous manager's policies and projects. He undid everything done by the previous manager. Then he proceeded to do what he thought was the correct policies and projects. I could not say if they were a reversal but I was told that this was the game the managers play to get credit for themselves. Anyway to make a long story short, he did not last a year and was sent back to the USA. Then HQ in USA sent over someone from Europe to manage us.

Looking back at the Great Recession

Let's go back to 2009 when I first began to write to help the Americans to recover from the Great Recession. I had invented an Alternative Theory of Economics that could predict stock and commodity movements up to 2 to 3 years into the future. Unlike existing economic theory mine was very mathematical and I had used Probability Theory and Wave Theory to explain price movements and developed equations to explain these movements. I even showed that the probability of an event could be greater than 1 or 100%. For example events could occur with 200% probability. I showed the relationship between Probability Theory and Wave Theory and even showed how you could use accounting data to predict the outcome of a company's profits a few years into the future. All the accountants I knew just added 10% to current income to project next year's income which is very inaccurate method.

The Americans knew of my research work as I had written many letters to the Malaysian Prime Minister during the 1998 Asian Financial Crisis to guide them. My letters were photocopied and widely circulated around Malaysia. I was the one who informed the then Prime Minister that the currency should be stabilize at RM3.80 to USD$1.00/- and the government pegged it at that value.

I had explained to them that the banks should stop repossessing cars and houses during a recession. The government then set the NPL period to 6 months instead of 3 months. I am the one who coined the term the 'Real Economy' back in 1998, to differentiate between human endeavors on the ground and gambling on stocks and commodities. I use the term gambling as many took risks without understanding what was happening or the consequences. I even explained that it was not the risk people took but their exposure that kills them and destroys their lives. This was when many American universities were teaching high risk is dangerous. No, risk is never dangerous. It is the amount of exposure you have to the risk that is dangerous. I can tell you a lot more stories about the events of those years but let's focus on my publications and advice to the American government.

During the Great Recession, President Obama, Hilary Clinton, the Federal Reserve, and many politicians in congress, CNBS & Bloomberg listened to my explanations. They would ask me question through these TV news channels and I would respond on my blog. There were times when I would stop blogging as I was trying to earn a living and then our local newspapers would publish that President Obama or Hilary Clinton was coming to Malaysia even though that was not their intention. When I saw such news I would re-start my blogging.

My computer was stolen

Oh by the way, Mr. President, if you do get a copy of all the documents I wrote please forward me a copy. Back in 2011, my mom's house was robbed and they stole my PC and all my backups. See problems problems and more problems. This meant I lost one year of work. I made a police report but the police refused to check the house for finger prints. Did you know that every Malaysian from the age of 12 has their finger prints recorded in a database? Every foreigner working in Malaysia has the finger prints recorded too. This is because all of us have to carry an identity card that holds our picture and finger prints. That means if you have finger prints you can determine who the thieves are within minutes. Unfortunately, the police refused to scan items for finger prints. My mom got very upset with them for not doing so. Some of my friends suspected that very powerful people had organized the theft to pirate my technology and had instructed the police not to look for fingerprints. Everything is hushed up.

The House of Israel

Enough of the digression. I wrote many articles on my blogs to explain to President Obama my economic theories and based on these theories what to do. Most times I would pray to the Lord God for guidance before writing anything because I did not want to say anything that could go wrong in America. The Lord God would always address the USA as the "House of Israel" because the Americans had done a lot to protect Israel. Should America withdraw support for Israel I would think that the Lord God will allow America to go into decline. Please ensure that the 10 commandments are taught in every school in America. Please do get a copy of all the articles I wrote and go through them as some of my older blogs were deleted by Yahoo and I had to start blogging on new sites.

More Economic Explanations

I explained the mechanism of the Flash Crash, how prices of houses collapse during a recession due to the fault of the banks. The banks did not understand what they were doing and were creating more problems and making the recession more severe. This was the reason the banking system had to be investigated and fixed. Once America implemented these fixes the rest of the world followed. Even Malaysia implemented many of these policies. This is because many countries wanted to protect themselves from next recession or depression.

President Obama did a lot of good work even though he had a lot of difficulty from the Republicans. At times, during those years from 2009 to 2011 I began to suspect that the Republicans did not want the American economy to recover because he was the President.

I am the one who explained that during those difficult times it was not worth spending a lot of money on rebuilding roads as these operations hardly created jobs. You can see how they built roads in Malaysia. They have 4 or 5 unskilled labourers manning the machines for hours on end and taring hundreds if not thousands of miles of roads. That was why the US government introduced other job creating policies.

Today, Mr. President, a great opportunity lies before you

President Obama searched and implement many new ideas and job creating policies. I had explained that some of the old techniques would not work as America progressed from the 1930's, their first Depression. During the Depression labour was unskilled and intense. Today labour is used to operate high speed automatic machines that are precise, consistent, controlled and multiple times more productive than manual labour. You are now given the opportunity to build from this base. You have an advantage in that you did not inherit a crashing economy but one that is on the mend. In my book I tell people do not look back, look forward as the future lies ahead.

The American coal industry

Look at the America coal industry, they have gone from employing a few hundred thousand people to a few thousand people for a similar output. It is an industry in its twilight years. Similarly, the petroleum industry is slowing. People are turning to alternative fuels which is creating a lot more new jobs than the coal or petroleum industry can.

Mercy for the Dakota Indians and leaky pipes

Taking about the petroleum industry have mercy on the Dakota Indians. Nobody wants the petroleum pipelines to come even close to their lands because contamination of the water table and water source can bring untold misery to the people nearby. Have you ever see a pipe that does not leak? Eventually all pipes will leak due to aging or acts of nature.

In Malaysia, only a few years ago, 25% of the water supplied to towns, cities and households leaked through the pipes. Eventually those petroleum pipelines will leak. The rich can fly away to New York, London or Paris and live there and enjoy a wonderful life but where will the poor in Dakota go to when the oil spill into the water table? This is their homeland and there is nowhere for them to flee to. Are the petroleum companies going to pay compensation to clean up the mess to a 100 generations who will be poisoned by the leaks? Will the petroleum companies pay the people's salaries as the Dakota Indians will not be able to hunt, cannot till the soil, cannot ranch and cannot earn income for many generations? That is not the American Dream, is it?

Distribution of Wealth Model

I introduce the concept of the Distribution of Wealth and showed that helping the rich people will not create much demand. If you need America to grow then you need to provide opportunities for those on the right hand side of the graph, shown below, because the bulk of the economic demand in the Real Economy comes from the not so rich people. People must have money to satisfy their needs and create demand for goods. I believe this was the reason many countries switched to giving out small amounts of money to the general public. Releasing small amounts of money into people's hands allowed them to carry on buying goods and thereby keep demand going through the recession. Even Japan implemented this idea.

If you are successful at this, China will be at your doorstep desperately trying to sell their goods to the Americans because the Chinese in China cannot afford them. China has serious problems.

This is the reason austerity drives are the worst medicine during a recession. It weakens demand and makes people poorer and reduces consumption and business revenues. Europeans implemented austerity in Europe and now the average European (including the British) are paying the price. Lower incomes and lower standard of living.

Talking about China

That reminds me be very careful when dealing with the Chinese. They believe that they are superior to all other races. They worship money and not the Lord God. They are very cunning, and can be merciless and brutal. Furthermore they will use every trick in the book to hold you to ransom.

It happened to me. I was working in a factory and had got quotations for some heavy industry machines. My investor/partners were Chinese and they had insisted that we were only allowed to buy from Chinese suppliers or from China, nobody else. We were not allowed to purchase American or European products. All of them knew the prices of these equipment as I had circulated the quotations. Then one day they told me to go back to the supplier to check the machines before they make the purchase. So I arranged for another meeting but nobody wanted to come with me to meet the supplier. I went alone to meet the Chinese supplier. He increased the price of the machine. I did not know that the Chinese in my company had arranged for the price increase so that it would look like I had negotiated a private markup deal with the supplier. When I returned to office they told me I had made a side deal with the supplier for a higher price. See they were trying to destroy my credibility and hold me ransom for making this fictitious deal and use this fictitious deal to blackmail me when I was the one inventing new technologies and creating new products and markets. Very dirty behind your back, behind the scenes tactics.

I have seen the Chinese go all out to destroy non-Chinese business so that only Chinese business survive. The other trick they play on Europeans coming to Malaysia is to give them one of their Chinese women to sleep with. They don't care if the European is married or single. These women then keep an eye on what the European is doing, follow them everywhere and report back to the Chinese boss. After that they slowly take over the European's inventions and work and claim it belongs to them. The European is trapped and cannot escape.

Be very careful when dealing with the Chinese. Here in Malaysia the Chinese developers will only sell new properties to the Chinese so that these Chinese buyers can immediately mark up the property price by 30% and sell them to the other races. That is how they ensure only the Chinese become rich from property sales. Please be very careful when dealing with them as they always have an ulterior motif and are only friendly with people whom they can earn money from.

Demand creation by the rich

Rich people in general do not create demand, they create supply. For economic growth you need to create demand. The rich save their money to invest in underpriced investments like housing, apartments, land, hotels like you did, Mr. President Trump, and wait 5, 10, 20 years for the value to appreciate. Nothing will happen for a very long time. Giving them huge tax breaks, in general, will not work either and most likely they will hoard that money for better times.

President George W. Bush and Paulson

Do you remember those days in 2008 when the US stock market began to crash? President George W. Bush was still in office. I quote Wikipedia wikipedia on Presidency of George W. Bush about President George W. Bush "Later that year, he signed the Medicare Prescription Drug, Improvement, and Modernization Act, which created Medicare Part D and made other changes to Medicare". His cabinet were trying to save the banks but in the end they could not save all of them and Lehman Brothers had to go. Please see news articles on Hank Paulson this is what it was like to face the financial crisis.

Please see wikipedia on Henry Paulson. I quote Wikipedia which quoted him. "As we work our way through this turbulence, our highest priority is limiting its impact on the real economy. We must maintain stable, orderly and liquid financial markets and our banks must continue to play their vital role of supporting the economy by making credit available to consumers and businesses. And we must of course focus on housing, which precipitated the turmoil in the capital markets, and is today the biggest downside risk to our economy. We must work to limit the impact of the housing downturn on the real economy without impeding the completion of the necessary housing correction. I will address each of these in turn. Regulators and policy makers are vigilant; we are not taking anything for granted."

They were in a desperate situation and were clutching the bible and asking others to pray for them. President Trump, do you remember how panicky President George W. Bush's cabinet was during those days. When banks are too big to fail and they collapse, the whole American economy crashes with a loss of trillions of dollars of wealth. They did not know what to do. Their theories could not explain why markets crash and what to do.

Mr. President, you cannot undo the bank reforms or the systems set up to warn or to prevent banking failures. If you do it will eventually lead to catastrophic collapse of the Real Economy in the US. Please do not undo Dodd Frank wikipedia on Dodd Frank Wall Street Reform and Consumer Protection Act it is there for the protection of the American people. What about the Tobin Tax?

Health and medical care

Furthermore I quote Wikipedia again "Paulson identified the wide gap between the richest and poorest Americans as an issue on his list of the country's four major long-term economic issues to be addressed, highlighting the issue in one of his first public appearances as Secretary of Treasury.

Paulson conceded that chances were slim for agreeing on a method to reform Social Security financing, but said he would keep trying to find bipartisan support for it."

I never liked insurance people as most of them are money crazy. They charge too much and deliver very little. Worse still is that hospitals charge extra if you have an insurance policy so it defeats the purpose of insurance. When insurance becomes compulsory many hospitals and car repairers over charge exorbitant fees. Please see my article on high cost of insurance premiums. The greed for huge profits blinds these people from providing a reasonable service. Even the Lord God hates these cheats. Worse still there is no one monitoring how much premiums are. Insurance premiums go through the roof as insurance companies have been losing tons of money speculating on markets which forces them to charge higher and higher premiums to the policy holders. Can you see the whole system is interlocked? Dodd-Frank would go some way to alleviating this problems. As the American population begins to age hospitalization and medical care becomes very important and must be affordable to all. It cannot be allowed to become an Unaffordable Care Act because people in their 70's and 80's or older are too old to work and cannot work and cannot find employment.

Furthermore, no one is checking on the high fees doctors are charging which cause the premiums to climb further. It's a runner away situation. If you are covered by insurance the doctors charge higher fees which results in higher insurance premiums which in turn forces the insurance companies to gamble more on the stock markets to provide a comparable if not reasonable return on invest. That is another vicious cycle that gets out of control.

When I suggested that US should start up free or low fee government run hospitals many Republicans were outraged by the idea. Such hospitals work wonderfully in Asian countries. They act as a safety valve. They provide an alternative to high fee, insurance based medical care - competition in a monopolistic insurance world. When insurance premiums are too high people reduce spending on other goods and services and even food and entertainment. Eventually, the economy will slow down and people will begin losing jobs because there is no demand for non-medical goods and services. You end up in another vicious cycle of slowdowns. Remember that every household has a finite amount money to spend and they have to make choices as to what to spend their money on, when hospitalization and medical care becomes too expensive. The situation snowballs until politicians wake up to the realty that car sales, computer sales, furniture and housing sales . etc have dwindled. By then it would be too late to take corrective measures and another recessions begins. When this happens insurance companies and banks will trade larger and larger amounts of money on the stock markets to win some more money and finally lose everything. Then they will come running to the government to bail them out. Wouldn't that be a repeat of the 2008 Great Recession?

Do you remember that from 2008 onwards the banks were evicting home owners from their own homes? Many set up tents in fields and parks as they had nowhere to go. Did the banks get paid after they evicted the owners? No. Could they sell the properties after the eviction? No. So why did the banks evict owners? The banks had their own out of control debts and needed to collect cash to pay off their debts so they began evicting homeowners to force them to pay up. How could the homeowners pay up when they had lost their jobs because the banks had caused a financial crisis in the first place? The banking failures were so great that no one could help the homeowners, instead the government had to bail out the banks with government funds - that is tax payer's money.

Please talk to all these people who experienced the 2008 Great Recession, talk to President Barack Obama, talk to Paulson, and talk to Ben Bernanke and others in the Federal Reserve. Talk to people on the street who suffered through the Great Recession that was not of their making. Who is going to protect these people during the next Great Recession? Who will protect the economy from the next Great Recession?

Please do show me your appreciation of this article by Buying me a coffee.

And do get the "I Won" t-shirt