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It’s pretty obvious there’s no this kind of thing as being able to see the near future. Or is there? From what I can gather there is no Grays Sports activities Almanac like in Back to the Future Component II, with the outcomes of events in the future.

But some extraordinary people have an uncanny ability to predict what is going to happen in the future. Currency Wars author and Strategic Intelligence Strategist Jim Rickards is one such individual.

And what Jim’s uncanny ability appears to be is predicting what’s going to take place in world economies. Sometimes I think Jim might even have a secret copy of Grays Economic Almanac and he’s just not letting on

While the world was calling for the US to hike rates in September Jim suggested they wouldn’t. And beneath you’ll see exactly why he made that call — and was right.

Furthermore you will also see Jim’s long term strategic view of the Fed’s actions, and the 5 choices he thinks they’re going to have. And then whatever the Fed does wind up doing will be a tradeoff between their credibility or catastrophe.

Regards,

Sam

The Price of Interest Rate Manipulation

By Shae Russell, Editor, Strategic Intelligence

‘The Fed will not raise interest rates. That’s some thing I’ve said for a long time.‘

This declaration is familiar to customers of Strategic Intelligence. It sounds exactly like something, their strategist, Jim Rickards would say.

In fact, it’s exactly what he said to the ABC around the Monday night before the Generous party changed leaders.

As most Aussies were tweeting ‘libspill’ memes, Jim was chatting to The Business about the ramifications of the looming Federal Reverse Bank meeting this week.

I recommend you watch the interview.

Now, this interview took place before the Sept Federal Open Markets Committee. When you watch the interview, it is clear that Jim was confident there’d be absolutely no rate increase from the Fed that month.

However, he do discuss something called the ‘October Surprise’.

Now the actual Fed meets eight times a year. But they only hold a press conference four times a year. As a general rule, the Fed tends to raise rates simultaneously a press conference is actually scheduled.

After this last meeting, the Fed won’t have an additional press conference until Dec this year.

Yet, as Jim describes in the interview, last year the actual Fed had a teleconference practice run during the Northern hemisphere spring.

The markets — and most in the mainstream for that matter — wouldn’t expect it because there’s no scheduled push conference. Hence, the October surprise.

At the time, Jim experienced the Fed may danger saving face and get rid of an October Surprise on the US market.

In saying that, he or she believes any rate rise this year is unlikely. 2016 is still possible, however, as Jim told subscribers of Strategic Intelligence on Thursday, the Fed have till March 2016 if it’s dependent on economic data.

While Jim’s telling you to look out for the actual unexpected, he reckons the Given missed the boat to raise rates.

They could have done so progressively over 2010 and 2011. If the central bankers had used this opportunity to raise rates, there’d be room in america economy to tighten financial policy today.

The fact is, they didn’t.

Today the US is faced with frail financial numbers. Jim says the actual, ‘Employment rate has come down, but labour force participation is lousy. The labour force declined last month and actual wages are going nowhere. In fact, monthly job creation is going nowhere. If you look at the information behind the happy talk, the [economic] data is very weak in america.‘

As a result, Jim believes the Fed has five options.

1. Fire up those printing presses and start printing money once more.
2. Establish negative interest rates. Although Jim thinks this move is extremely unlikely.
3. ‘Helicopter money’. This is where the US operates bigger budget deficits and also the Fed buys the bonds. Money printing with a purpose, Jim calls it.
4. The Fed changes its forward guidance. Since spring the Federal Book has put the ‘market on notice’ that a rate rise could happen at any moment. Jims says the Given could change the talk to being ‘data dependent’ rather than this tough talk we get now.
5. And the ultimate tool — currency wars. That is, cheapen the actual dollar at all costs. The problem — because Jim explains in the job interview — is that this move will put pressure on countries like Australia and China which are trying to weaken their currencies.

In saying that, the Fed may have these choices, but Rick doesn’t see the Fed using them at this point.

However, the biggest take away in the ABC interview is what occurs if the Fed doesn’t increase rates after all the tough talk.

Jim sees it coming down either to causing a meltdown in the US and emerging markets by increasing rates, or accepting they lose their credibility.

‘The Given have to choose between their credibility or a catastrophe. People are stating if they don’t raise prices, when they’ve been talking up for so long, they’ll lose their credibility. However the information is weak so if they do raise rates they’ll cause a disaster.‘

Pushed on the point further, Jim tells the ABC: ‘They will have to leave their credibility in shreds to avoid a catastrophe.?This is the price of manipulation.‘

Regards,

Shae Russell

Editor, Strategic Intelligence

Ed Note: the over article first appeared as a Strategic Intelligence weekly update (16 September 2015)

The United States — the world’s dominant superpower — is actually lying on its deathbed.

For many years, the US was a good friend around the world. After the Second World War it opened up its arms to freedom. Former US President, Ronald Regan notoriously said to the world, ‘tear down this wall‘ from West Berlin.

Years later on, Germany was reunited. Communism failed and capitalism exploded.

US geopolitical, economic, monetary, and military power had been completely unchallenged. And it would stay that way for years.

Unfortunately, the times have changed.

The US economy is weakening. Its debt amounts are high. And its interest rates are hovering around historical lows.

Soon, within this decade, the united states will no longer hold the reserve forex status. And this means that substantial changes are on the horizon…

The first change will be geopolitical

It’s really unfortunate which US politicians don’t pay attention to their founding fathers. George Washington said in 1796 at his farewell speech:

‘The excellent rule of conduct for all of us in regard to foreign nations is within extending our commercial relations, to have with them as little political connection as possible. So far as we’ve already formed engagements, allow them to be fulfilled with perfect good faith. Here let us stop.‘

Of course, the politics religion of?US The president — and most of the?political course?– is that it’s America’s?ethical duty?to be involved in additional nations’ business.

Today, the US remains the planet’s leading military power. But its dominance is rapidly becoming chipped away. It’s ‘my method or the highway’ attitude has discouraged many nations. Especially nations in the Middle East…

Historically, US participation in the Middle East has ended within disaster. The past year has proven no different…

In the last 12 months, All of us forces have conducted over 7,000 airstrikes in Iraq and Syria. The official mission is to wipe out Islamic State (IS).

Awkwardly, this particular hasn’t happened.

Instead, US airstrikes possess caused more harm than good. With bombs and missiles flying everywhere, the actual Syrian refugee crisis was born — a situation that is gone from bad to worse.

Unfortunately, there’s been no official response to this humanitarian turmoil. Other than to keep bombing Syria, that is…

And no doubt, this action will lead to much more chaos.

Especially now that Russian warplanes are involved in Syria.

Russia started bombing Islamic State on 30 September. And while US authorities have accused Moscow of acting inappropriately, it only took the actual Russians 24 hours to do what they couldn’t. At least according to Euro Major General Igor Konashenkov, as reported by RT:

‘Our flight handling group over the past day offers destroyed two militant command centers, 29 field camps, 23 fortified facilities and several troop positions with military hardware.‘

There’s just one goal in Syria…

The US really wants to topple Syrian President Bashar Hafez al-Assad. This plan won’t change. The US wants to set up its own puppet politician in Syria. Other Western leaders have climbed aboard with this policy.

And — surprise — the actual mainstream media is backing the official political story. A tale that accuses Assad of attacking their own citizens with chemical weaponry.

That’s despite the fact that there’s no proof that this ever happened. The real proof points towards a terrorist attack. This is why Russia, a vital ally of Assad, along with The far east have opposed military intervention inside Syria.

With this barrier in place, Barrack Obama has had no choice but to enforce their ‘no boots on the ground’ policy. Of course, this policy goes against the wants of the US government — and Obama himself. In time, there’s no doubt in my mind that it will change.

In the actual meantime, there’s been no shortage of tough talk by Traditional western leaders. And to stir the pot, US officials happen to be forced to come up with other ideas. Such as spending nearly US$500 zillion training Syrian rebels to fight IS.

Unfortunately, this didn’t turn out as planned.

General Lloyd Austin, who leads the US military’utes Central Command, recently told the US Senate Armed Services Committee:?‘The [number of Syrian rebels] that are in the fight, we are talking four or five.’

What an absolute things up. For the price of fifty percent a billion US dollars, you will find ‘four or five‘ Syrian rebels fighting Islamic State.

Following the big amount of attention on this bad policy, and Russia’s effective army operation, the US recently hanging this program.

Instead, it will airdrop ammunition in the middle of the desert. And it simply dropped 50 tonnes associated with ammo out of the sky. (Which you hope gets in the hands of the right people.)

According to the Whitehouse, it was an effective mission. Anti-Islamic State coalition spokesman Colonel Steve Warren told the ABC:

‘[The airdrop reached] Syrian Arab-speaking groups whose leaders properly were vetted by the United States and have been fighting to get rid of ISIL‘.

Don’t blink an eye…

While I’m not sure what will happen next, one truth is guaranteed — this story isn’t over.

In fact, it’s likely that the actual worst is yet to come.

Times are changing. The old framework in the world — a system dominated by the federal government, US banks, and the All of us dollar — is coming to an end.

The All of us Empire and economy are declining. If history is actually reliable, their ‘leaders’ will do whatever needs doing to stay in power.

And typically, when an economy turns down politicians march their people off to war. I don’t want a world war to happen any more than you need to do, we’re talking about politicians that are detached from the modern day globe.

I’ll be talking about this story in more depth next week in Resource Speculator. There are fortunes to be made for those who understand these trends and therefore are able to get out in front of them. I’ll recommend one or two Aussie stocks that you can use to do just that. When this war takes a change for the worse, these companies ought to profit immensely.

If you want to know much more, you can start here.

Jason Stevenson,

Resources Analyst, Resource Speculator

From the main harbour Phillip Publishing Library

Special Report: If you want to get ahead in this world, it pays to have powerful friends in high places. With this new advisory, you’ll make 1. A portfolio manager at the West Shore Group, as well as adviser on international financial aspects and financial threats towards the US Department of Defense. Jim Rickards isn’t any ordinary financial newsletter writer.?And Strategic Intelligence is no ordinary newsletter… (more)

The last six months saw the double crash on the market.

Now there is a double bounce.

The double crash lasted longer than most people expected.

The question now is whether the double bounce will last so long too, or whether this is just a blip before the double accident resumes…

From the end of April right through to late September, the Aussie S&P/ASX 200 index fell from 5,982 points to 4,918.

Over exactly the same timeframe, the Aussie buck fell from 80 All of us cents to 69.Nine cents.

Since then, both have bounced. The stock index expires 7.4%, and the Aussie dollar is up 4.8%.

The good times are back, right?

Not so fast. It’s not so much because of something good that’s happened to the Aussie economic climate, it’s because of something that hasn’t happened to the US economy.

What performs this ‘double bounce’ mean?

Here’s a chart showing how the index and the forex have performed over the past 6 months.

Source: Bloomberg

You can see the slump and also the rebound.

There’s no difficulty knowing why. One of the biggest reasons is that for most of this year, marketplaces have assumed that the All of us Federal Reserve would raise rates of interest.

That put downward pressure on the Aussie dollar. That’s because the eye rate differential between the Aussie buck and the US dollar would have shrunk.

As for the stock market, slipping commodity prices and the anxiety about a recession pushed the Aussie market lower.

But since the finish of September, the Aussie market and Aussie dollar have reversed course. Both are up.

After worse-than-expected job numbers in the US, the markets started to downplay the chances of a US Federal Reserve interest rate rise this year.

For instance, bond futures markets now just factor in a 10% chance of the actual Fed raising rates this month. As recently as August, the markets had listed in a 50% chance.

As for the Fed’s December meeting, the chance of a rate rise has fallen to Thirty eight.8%. That’s down from a close to 50% chance as recently as July.

So, does this mean a US rate increase is off the credit cards?

Not so fast…

Do it!

As this statement from Bloomberg notes:

‘Federal Reserve Vice Chairman Stanley Fischer said the U.S. economy may be sufficiently strong to merit an interest-rate increase by year end, while cautioning that policy makers tend to be monitoring slower domestic job growth and international developments in deciding the precise time of liftoff.‘

What does that mean?

It means the actual Fed is ready (almost) to raise interest rates…perhaps!

And that’s simply it isn’t it?

Regardless of the scenario, whether the market is feeling bullish or bearish, confusion continues.

As Joyce Alter, global head of study at JPMorgan Chase & Co informed Bloomberg, the Fed ‘should get it more than with‘.

She’s right. But it goes to show just how nervous the Fed would be to do anything. It wants a lower market, so it has the reason to restart its bond-buying as well as money-printing program.

However, after witnessing the crashing markets over the past couple weeks, the Fed may now be less eager to engineer an accident. If that move was the market’s reaction without an rate of interest rise, what could the marketplace do if the Fed increases rates?

The Fed wants a lower market, but it doesn’t want it to go too low.

As for what this means for the Aussie market, well, it’s anyone’s guess. We’re certainly not about to give up on the ‘crash protection’ strategy.

In fact, with doubt and instability set to carry on through to at least the end of the year, now is exactly the time when you think clearly about protecting your investment portfolio.

The Aussie market offers bounced nicely. It would be great if it continued higher. But some thing tells us that investors should not get too excited about a brand new bull market yet.

Bottom line: stay invested, but stay cautious.

Cheers,

Kris.

PS: You can find out the details of our ‘crash protection’ strategy here.

Well it’s official. Global growth is slowing down. That’s the latest from the Worldwide Monetary Fund’s (IMF) World Economic Perspective anyway.

The IMF — once again — downgraded it’s forecast for global development in 2015 from 3.5% to 3.1%. With under three months left in the year, the actual Fund’s perpetually optimistic economists were running short on time to get their numbers straight.

And while they were in internet marketing they offered a rather demure forecast for China too. According to the report, China’s growth will be at 6.8% in 2015, as well as average 6.3% over the subsequent five years.

Now when I read this forecast I had two thoughts. First, that’s quite an driven time horizon to be predicting growth in one of the world’s quickest changing and most opaque financial systems. You have to wonder what exactly these boffins do and did not include in their modelling for the regional geopolitical scenario in 2019.

But as our aged buddy Dan Denning writes over at Capital & Conflict from our affiliate office in the united kingdom, ‘I suppose if you’re an economist at the IMF, you have to do something for a living. You might as well make a guess about Chinese GDP growth.’

My second believed was that 6.3% annual growth is nothing to sneezing at. Sure it’s nicely below China’s 10.82% average rate of growth from 1989-2015, as cited through Trading Economics. But you have to take into account that this growth is coming off a much larger foundation.

Using IMF data and factoring rising cost of living into the mix, China’s current Gross domestic product is approximately 22 times larger than it was in 1989.

You may think of that as a go up. If a small balloon, say with a volume of one cubic metre, develops 10%, the new volume is 1.1 cubic metres. In this case you have added 0.1 of the cubic metre to your…err…economy.

Now if you start with a balloon that is 22 times larger — Twenty two cubic metres — and it grows by only 6%, the new volume is 23.3 cubic metres. Or perhaps an extra 1.3 cubic metre distances. That represents 13 times more real growth than you have with the faster-growing, smaller balloon.

Targeting the right Asian markets

I point this out for a reason. Even though China’s development is slowing on a relative level, as it must, there’s still an enormous amount of new wealth that will be created over the subsequent five years.

And investors who know how to target that growth stand to do quite well.

Take Treasury Wine Properties [ASX:TWE] for example. The stock hit a new high last week at $6.70. (Currently it’s trading at $6.65.) Have a look at the chart below. It exhibits the share price movement forever of August.

Source: Yahoo Finance

You’ve got to admit, that’s a nice looking chart. Especially when you compare it to the performance of the ASX Two hundred over the same period.

Source: Google Finance

Treasury Wine’s shares move in almost reflection image to the falling ASX Index. What’s their secret? Largely a growing demand for their product from Asia.

As reported through Business Day, ‘Asia growth lifts Treasury Wine shares’:

‘Treasury gives hit a record on Tuesday, despite wobbles in global marketplaces that have caused the larger Australian share market to shed more than 13 per cent previously six months. Treasury shares, trading around $6.70, have moved beyond the buoyant levels of $6.47 in May 2013.‘

According to Chief executive Mike Clarke, ‘The accelerated momentum in our business continues to be delivered across all regions, most notably Asia.‘

Of course this came because no surprise to our emerging marketplace expert, Ken Wangdong. Here’s what he wrote last week to subscribers associated with his premium investment service, New Frontier Investor:

‘The truth is, we know 2015 growth is going to be lower. China has been slowing for some time now. This is old news!

‘What this recycled information has succeeded in doing is actually driving asset prices lower in most emerging markets. The far east in particular is very cheap at today’s prices. Right now china market appears to have reached the bottom. Some stocks are already starting to regain their worth.

‘Not according to many in the mainstream media, of course. But the press will always distort information… However i can’t blame those who have not really spent time in China to have a hard time distinguishing facts through media hype. How can they?

‘For example, how can you know how Apple [NASDAQ:APPL] is doing in China if you don’t know how conspicuous Chinese consumers are over Apple products? Or that most Chinese use Didi instead of Ultra.

‘It doesn’t matter if China develops at 7% or 6.5%. Apple will do well, Apple Music will do reasonably well, as well as Didi will do well. Yum Brands [NYSE:YUM] (which own KFC, Pizza Hut, and more) derives over fifty percent of its revenue from The far east, and it is becoming under-valued.

‘But if you depend on the mainstream financial press for your investment news, you would never know this. You need to be familiar with China to know it.’

That’s, of course, where Ken comes in. Not only is he a skilled investment analyst, however he knows the ins and outs of Chinese language culture, allowing him to identify breaking trends. And he moves back to China from their home in Sydney regularly to meet with local connections. That allows him to keep their finger on the proverbial heartbeat.

This week he’s recommending two new stocks to their readers, taking advantage of sectors which should handily outpace any average development figures. You can find out more about Ken’s function here.

Oh… cash!

Back here in Australia it seems that cash is headed for exactly the same fate as the cheque book. At least if my current interaction with a Myers’ clerk is anything to go by.

You see, I bought a few shirts at the nearby Cheltenham outlet last week. Nothing extravagant. The total came to $225. But when I counted out the bills in cash it felt like I was paying with dinosaur eggs.

The young woman behind the counter hesitated before uttering, ‘Oh…money!‘

To which your editor wittily responded, ‘Umm…yup.’

Her eyes were wide because she took the book paper bills from me. Her unfamiliarity with hard forex was clear in the length of time it took to safely shop my five $50 notes within the ‘cash register’ and return the proper change.

It was obvious that almost all associated with her customers pay digitally. A trend that — enjoy it or not — is sweeping the world. The Age ran an article now reporting on how more and more local and international companies are operating cash free businesses.

‘…in Denmark, they are considering becoming the first country to stop using notes as well as coins from 2016. Norway’s central financial institution estimates Scandinavians use cash to cover less than 6 per cent of transactions…’

The article goes on to say that according to the latest research findings by Westpac, ‘The bank’s Cash Free Statement recently predicted Australia’s dependence on mobile phones will see it cash-free by 2020.’

Now I’m not sure that 2020 is a realistic target date. But I do know that with ever more money transacted via mobile phones, hackers will go to excellent lengths to break in and help themselves. And as technologies gets more sophisticated, so do internet criminals.

That’s one of the reasons our in-house tech guru, Sam Volkering, has been examining and hunting down the best listed companies involved in defeating these hackers. Sam’s been on top of this particular trend for years. And he’s recommended a group of companies to subscribers of Revolutionary Tech Investor that he calls the ‘Defenders’. Despite the hit that the wider tech field has taken in the markets lately, the Defenders are still up typically 21.8%.

You can find out more about Sam’s function here.

Regards,

Bernd Struben,

Managing Editor, Money Morning

From the Port Phillip Posting Library

Special Report: The End of Australia Vern Gowdie’s new book is called The End of Sydney: The Real Story Behind Australia’s Financial Collapse and What You Can do to outlive It. We are mailing free copies of the book to anyone who demands one online. It does not make for cheerful reading. But the idea is that you’ll be safer (and much wealthier) in 10 years’ time from receiving a more sober and realistic analysis of what’s going on…what happens next…and what you should be doing about it right now… (more)

I borrowed $2.2 million once.

I couldn’t pay it back.

But it wasn’t my fault.

It was the coloured family down the road. They had borrowed $40,000, and couldn’t pay that back.

They ruined it for everyone. Not me.

OK. That’s not a true story. Not in the way I have told it. But there’s an even more unbelievable version. Trouble is, this particular story is true. And it’s set to have dire consequences…

Let’s place some numbers in framework.

By 2013, total world debt was US$223.3 trillion.

That had been 313% of world GDP.

Of which, US$157 trillion was Western financial debt. US$66.3 trillion was rising market debt.

Keep those numbers in mind as you take in this comment from the International Financial Fund (IMF), as reported in the Age:

‘Governments and central banks risk sparking a fresh global financial crisis, the actual International Monetary Fund has said, as it called time on a corporate debt binge in the developing world.

‘Emerging market companies have over-borrowed by an estimated $US3 trillion ($4.Two trillion) in the last decade, threatening to trigger a sharp capital crunch and capital outflows in economies that have already been hit hard by low item prices, the fund cautioned on Wednesday in its latest Global Financial Stability Statement.‘

It’s typical of a Western institution. On one hand, it’s saying Traditional western nations should go further in to debt. At the same time, it places blame the developing world for the worldwide debt binge.

It’s a new take on blaming ‘foreigners’ for everything that goes completely wrong. It’s like a bad 1970s sitcom…blame the ‘darkies’ for stealing all the jobs! In this instance, it’s blaming them with regard to incurring all the debt.

In actuality, just as immigrants don’t take all of the jobs, the emerging markets haven’t incurred all the financial debt either.

IMF tries to shift the actual blame

But relative to the size of the Traditional western world’s debt, the ‘over-borrowing’ through emerging market companies is the equivalent to them borrowing an extra $40,000 while the West binges upon $2.2 million of debt.

And bear in mind the IMF has this to say of the actions of the US Federal Reserve, once again from the Age:

‘“Monetary policies in crucial advanced economies must remain accommodative and responsive,” the IMF said.

‘The report called around the US Federal Reserve to hold away on its first rate of interest hike in nine many for the authorities in the eurozone as well as Japan to continue with unparalleled stimulus measures.‘

The word ‘hypocrite’ comes to mind.

So let’s get this straight: rising market companies have borrowed $4.1 trillion more than they ought to have (according to the IMF). The IMF wants them to stop borrowing.

At the same time frame, the IMF says Western government authorities should keep pumping out debt, and Western central banks should keep buying it.

Something isn’t right.

It’s a clown show

This whole story has a certain ring into it.

Think back to the 2008 crisis. What or whom did the mainstream media as well as Wall Street blame for that crash?

They blamed subprime mortgage borrowers. Many of whom lived paycheque to paycheque. But the banks told them they could afford multi-hundred thousand-dollar mortgages.

It wasn’t the borrowers who were to blame. It had been those in government, at the main banks, retail banks, and investment banks who come up with conditions for the subprime meltdown.

Subprime debtors couldn’t get into such a mess on their own. They needed the facilitator. The facilitator had been Wall Street.

Subprime borrowers had been the victims of the last turmoil. Emerging market companies will be the victims of the next turmoil. But they’ll still policeman the blame.

In truth, blaming emerging market companies for the coming financial crisis is akin to accusing a rape victim to be attacked, or blaming a patient for a doctor’s malpractice, or native Africans for the barbarity of the servant trade.

The IMF is a clown show. And people running it are the greatest Bozos you’ll find within any government or financial institution.

But the latest report from the IMF confirms one thing that people already know: a major financial crash is coming, and the IMF is powerless to stop it.

In fact, it’s thanks to the IMF that the next turmoil is certain to happen.

Cheers,

Kris

‘The two enemies of the people tend to be criminals and government, so let us tie the second down with the chains of the Metabolic rate so the second will not become the legalized version of the first.’

Thomas Jefferson

If you’re a long time Money Morning reader, you’ll know that our publishers aren’t exactly government cheerleaders. Actually, the idea that ‘the best government is the fact that which governs least’, is a concept every one of our editors shares…to varying degrees.

I state ‘to varying degrees’ for a reason. I’ve always been a supporter of little government. One that taxes much less, spends less, and lives within its means. And i have always believed that you should be able to perform as you choose, so long as that doesn’t directly harm anyone else.

For most of my life this view was considered fairly extremist by my friends and former colleagues. That is until I signed on as the managing editor of Port Phillip Publishing two years ago. Then my libertarian ideas all of a sudden bordered on mainstream.

Last 12 months I found myself in a discussion with our publisher, Kris Sayce. And I was at the odd position associated with arguing that of course we do need ‘some’ government, including a small police force to handle real offences. Not Nanny State offences mind you, but criminal measures that directly harm others.

Now Kris didn’t come out in support of murderers and thieves. But he did stick to his weapons, insisting that any and each time government becomes involved it only makes things even worse. Whatever the government can do, the free market can do better. This is a bold statement. But it’s one that is hard to refute.

Until last week, that is. At least if you live in Victoria.

I’m talking, of course, about the AFL Grand Last Long Weekend…or Footy Friday. The extra holiday — Victoria’s 13th annual day off — was one of Leading Daniel Andrews’ promises. And one he really came through on.

Now I’ve heard various figures tossed around about how much this will have cost the economy — as much as $1.5 billion apparently. And I don’t have to tell you that Australia’s economy has seen better days. But you should take these kinds of estimates with a healthy dose of scepticism.

Remember who’s putting them together. Company groups who don’t want to spend penalty rates. Some of them actually closed up shop…as well as enjoyed this brand new government shipped holiday.

No holiday for aircraft pilots…yet

One profession that didn’t enjoy a relaxing Footy Friday off was pilots. In fact they struggled to get any time off around the three day weekend. Here’s this particular headline from ABC News: ‘AFL grand final: West Coast Eagles fans race to find tickets, fly via Asian countries to reach MCG’.

The article goes on to state:

‘Virgin has added an extra 6,500 seats on it’s existing flight schedule between Perth and Melbourne.

‘Qantas will offer one more A330 service while its spending budget arm, Jetstar, will put on bigger aircraft for its four planned flights between the two capital cities, improving its combined passenger figures by 2,500.

‘Despite the extra services, Darren Wright from booking broker Flight Centre said fans would pay a premium of more than $1,000 just to fly there one-way direct…

‘Others willing to cough up much more cash can choose to fly via Asian cities, and there is even anecdotal evidence a few are flying via London.‘

That’s a lot of extra passengers, meaning procuring pilots in the air.

And according to Boeing, the actual demand for pilots is set to undergo the roof. The company estimates which 558,000 new pilots will be needed inside the next 2 decades. As you can see in the graphic beneath, courtesy of the Wall Street Journal, Asia makes up the biggest share of this new demand.

Looking at these numbers, you’d think becoming an airline pilot would provide you with tremendous job security for life. Not too fast.

As Sam Volkering, our citizen tech guru, likes to remind us, the pace of technologies are advancing at an exponential price. That means that over the coming years we could see technology progress further than it has in the past hundreds of years.

Check out this recent article about pilotless planes in Business Day:

‘Google has trialled driverless cars and Singapore has driverless locomotives. Now the airline industry is tinkering with the idea of pilotless passenger planes…

‘On an industrial flight these days, whether an hour-long hop between Sydney and Melbourne or a 14-hour flight over the Pacific, it is possible a pilot will expend as little as one minute touching the control stick…

‘Back in the Nineteen fifties, commercial aircraft typically experienced five cockpit crew people: a captain, first officer, flight engineer, navigator as well as radio operator. But by the 1980s, the numbers needed on the flight deck had been decreased to two because computers could fulfil many of the tasks formerly done by humans…

‘The second, much more dramatic scenario is moving to fully autonomous aircraft procedures. In the nearer future, it is more probably in the freight market compared to passengers… [Qantas Captain Richard] de Crespigny, who’s deeply interested in technology as well as systems, believes sentient machines duplicating human consciousness and conjecture could be developed by 2025, paving the way in which for pilotless aircraft to be in production about 2040.’

I’m not sure how comfortable I’d feel flying by having an empty cockpit. You might feel the same way. But the reality is, regardless of how we feel about it, the future is coming. And pilotless planes will be a part of that.

One thing that will be incredibly important in the future is cyber security. The pilotless planes of tomorrow will need iron clad internet defences to ensure hackers can’t go ahead and take controls. And the revolutionary companies pioneering these defences today stand to make huge gains out of this ever growing trend.

This trend hasn’t been lost on Sam Volkering. Sam’s investigated every listed company in this field. And he’s recommended the very best of these stocks to his subscribers over at Revolutionary Tech Investor. He or she calls them ‘Cyber Defenders’. You can find out more here.

Surviving the transition

Vern Gowdie, our wealth preservation specialist, has been following a rapid pace of technological change as well. You’re likely familiar with Vern. Among other feathers in his cap, he’s the actual editor of The Gowdie Letter and the author of The End of Australia.

If you haven’t read it yet, I urge you to do so. You can order your free paperback copy online here. But don’t wait too long. We’ve given away 15,752 copies so far. And that’s out of an overall total print run of 17,000.

Despite the title, it is not all doom as well as gloom. Vern offers you a number of strategies to protect your wealth from the coming meltdown. And, as he authored in a recent Gowdie Letter update, one thing to get ready for is how the technological trend is going to impact employment.

‘In accessory for a change in the world power base and the domino effect this has around the global economy, we have a technological revolution that is going to significantly affect the employment landscape.

‘The Committee with regard to Economic Development of Australia (CEDA) launched a report in June 2105 entitled “Australia’s Future Workforce?”

‘This is an extract from the foreword written by CEDA CEO Professor Stephen Martin (emphasis is mine):

“Technological alter over the last two decades has been extremely fast and that is likely to continue. This means that a significant portion of Australian work that exist today will no longer appear in 20 years’ time.

“In fact, modelling in this report has found that almost five million Australian jobs – around 40 per cent from the workforce – face the high probability of being replaced by computer systems in the next 10 to 15 years.“

‘I probably have that in time we’ll adjust to all the upheaval that the next day brings…we always have.

‘But the actual resilience of the human race is not the issue. It’s about surviving the time of transition. The debt-fuelled success of yesterday was made feasible by conditions that were vastly different to the ones we face tomorrow.‘

To learn more about how you and your family can survive the period of transition, you can order your totally free copy of Vern’s book right here.

Regards,

Bernd Struben,

Managing Editor, Money Morning

From the Port Phillip Publishing Library

Special Report: The End of Australia Vern Gowdie’s new book is called The End of Australia: The actual Story Behind Australia’s Economic Collapse and What You Can do to Survive It. We are mailing free copies of this book to anyone who requests 1 online. It does not make for cheerful reading. But the idea is the fact that you’ll be safer (and much richer) in 10 years’ time from receiving a more sober as well as realistic analysis of what’s happening…what happens next…and what you should be doing about it now… (more)