Geopolitical Events And Investment Opportunities

This is our history – from the Transcontinental Railroad to the Hoover Dam, to the dredging of our ports and building of our most historic bridges – our American ancestors prioritized growth and investment in our nation’s infrastructure.  – Cory Booker

The vast Pacific Ocean has ample space for China and the United States. We welcome a constructive role by the United States in promoting peace, stability and prosperity in the region. We also hope that the United States will fully respect and accommodate the major interests and legitimate concerns of Asia-Pacific countries. –  Xi Jinping

Keep your dreams alive.  Understand to achieve anything requires faith and belief in yourself, vision, hard work, determination and dedication.  Remember all things are possible for those who believe.  – Gail Devers

By three methods, we may learn wisdom: First, by reflection, which is noblest; second, by imitation, which is easiest; and third by experience, which is the bitterest. – Confucius

WHO IS JOE

We will briefly review Joe’s background in High Technology so that the reader will recognize that Joe recognizes High Tech opportunities and has brought products to market that have changed the world.  In this article, he identifies a project that will change the world and affect everyone on earth over the next generation – – – or two.

Joe was raised in Virginia and Pennsylvania.   He put himself through college on scholarships and by working multiple jobs.  He attended VMI and U.VA., then joined the Air Force, was stationed in Florida at Patrick AFB where he worked as a launch officer on the Minuteman development program and participated as an officer in over 50 launches.  This developed the Minuteman I and II program of multiple reentry vehicle thermonuclear weapons that has kept this nation safe since the 60s.    After the USAF, he joined IBM where he worked on the Saturn V Moon Rocket launch at Cape Canaveral.  This was the rocket that put the man on the moon.  He then returned to school at the U. PA Wharton School where he earned a Ph.D. in Economics and Business.

In his career, he worked as an engineer, engineering manager and executive – including CEO. He left IBM for about 10 years and worked for other hi tech companies. As a manager, he brought many products to market such as the IBM Point of Sale Systems; TELXON hand held computers; Honeywell X.25 packet switching system, TENERON encrypting modems and California Microwave’s IEEE 802.11 wireless Point of Sale systems.   He worked high tech and state of the art because he understood and enjoyed high tech.   The technology was always changing and challenging.   He gained enough knowledge that eventually, he started and ran his own consulting company, Raven Communications. The company was active for 10 years.

Finally, he left his consulting company and rejoined IBM as a Global Services Competency Principal for Communications, Security and Business Resiliency.   IBM calls mainframe back up “business resiliency”.   He worked with large banks and institutions in the financial sector across a 13 state region in the Midwest.  He is technically current as a certified IBM Communications Consultant specializing in communications systems, networks and security systems.

RETIRED

Once retired from IBM, he moved to Las Cruces, NM where he got involved in Constitutional Education.   After seeing the mess that our politicians have made of this nation and seeing the trend toward centralized New World Order Government, he felt that he should try to educate others on how important the Constitution and the Bill of Rights were to this nation. The founding fathers were adamant that the individual was king in this new land.  They got their rights from God and they only looked to the state to protect those rights.  That was not the way that it has evolved in the last 100 years.  The state was superimposing its views which were specified by elected and non-elected government officials on the American people in – education, medical care, environmental regulations and private enterprise regulations.  This was not in the American constitution nor in the libertarian tradition of the founders of this nation.

In Las Cruces, he co-founded a TEA Party – Las Cruces Sons of Liberty, http://www.lcsonsofliberty.com, which had about 5,000 inquiries per day when he left.   He had fun doing this; in fact so much fun that he missed the signs of a market collapse in 2008, which cost him most of his “retirement cushion”.

Joe then decided that he must replace that “cushion” so he looked around to his abilities and his constraints.   Among his abilities were his detailed and salable knowledge of IT – especially communications, networks and DES encryptions techniques. He wrote a Handbook for Network Consulting on that topic which is on his site, www.ravencomunicatons.com.  In additions, he was also knowledgeable in Economics.   On the constraint side, he did not want to travel.  He wanted to work from home.  He wanted to “retire” and enjoy life.  Since consulting was out of the picture due to his not wanting to travel very much, he looked elsewhere and discovered Multiple Level Marketing and the internet.  He lost more money in his search for an education in this area but did get some good advice from Ryan Nelson, a successful pioneer in internet marketing. Ryan told him to “Find Your Passion and Start Writing.”   This was good advice.

Internet Marketing introduced him to what is called the “application layer” of the internet.  Heretofore, he had worked at the communications layer of IBM’s System Network Architecture.  He was quite familiar with SNA since it was the architecture used on the IBM Point of Sale System and he helped create it.

The TEA Party provided him an audience and he made frequent presentations on the principles upon which this nation was founded.  It also made him do deep research into Constitutional principles, the founding fathers and current events surrounding what the press calls the New World Order and was called for by G.W. Bush in one of his speeches.   He considered this nonsense but went about trying to understand what was happening.  The result was that this effort fed his natural desire to focus on geopolitical events.  Geopolitics became his Passion.

GEOPOLITICS AND INVESTING

Joe then created a website – www.ravengeopolnews.com – and started writing.  He has 100 free articles posted there and 100 paid for articles written fo his weekly newsletter, THE RAVEN REPORT.   Every week, another 5 – 20 page article is published.

The focus of the articles written for this site is education – the education of the reader – on current events in economics and global geopolitics with insights into where the reader should invest and why.   He recently started a daily Facebook Site – What is Going on in the World which is a daily commentary on current news events.

Economics is the study of man in his everyday life. Geopolitics is the study of a sovereign nation in its everyday life. A geopolitical event concerning a nation state generally has a reflection into the economy of a sovereign nation.  That in turn affects where and why one should invest or not invest.  Raven geopolitical news stays focused on geopolitical events that affect your investments.

GEOPOLITICS

Let us review how Geopolitics affects the Economics of the sovereign nation.  The Economics of the nation vary from Communist dictatorship, kingships, religious centralized control, and socialist state control to capitalist free market states.  Each geopolitical event associated with a nation affects the nation state differently but provides investment opportunities dependent upon what type of economy exists.  The investment opportunities have risks associated with them.  You could lose your money.

Let us be specific about Geopolitics.  It is the study of the sovereign nation state in its everyday interaction with other nation states.   Geopolitics include –

  • Sovereign state history, culture, religion, chosen economic model, geographic parameters, language and government model used in the sovereign state.
  • It includes the history of the state’s relationship with adjoining sovereign states.
  • It includes the history and events related to the sovereign state in its relations with the big political and military powers of the period.  Currently, these are the U.S., Russia and China.
  • Sovereign state economics – Economic systems that are accepted and manage the world’s nations are free enterprise, kingships, socialism, communism, dictatorships and variations of these.

INTERNET MARKETING

Internet marketing intrigued me for a number of reasons –

  • The profession was only 13 years old and new.
  • It was the most rapidly growing segment of business in the world with 1 billion people online and 2 billion users.
  • Internet marketing is expected to create 10 million new millionaires over the next 10 years
  • It can all be done from home.

Being an old “fire dog” for bringing new products to market, I was intrigued. I had already decided that as a retiree, I wanted to work from home, which I knew would curtail my “technical consulting” because that required too much travel. Becoming an “online marketer” sounded ideal because I could learn a new technology, use my years of experience to help others, write about my obsessions – geopolitics, financial education and economics – and make money.

JOE’S WHY

Joe’s career in corporate American led him into teaching because for 40 years he was always involved in bringing new products to market.  This requirement to educate the field force and customer base gave him a broader experience than engineering – – – how to teach the best ways to present new material.    As a manager, he set up educational programs for products in four Fortune 100 companies.

He is still evolving his ideas about his personal site. He found his WHY and it fits his Passion for Geopolitical Education and investment advice. His WHY –

“I help explore the truth in what is possible so that others can actualize their full potential.”

So far, we have explained Joe’s path to becoming an Internet Marketer, writing about his Passion, Geopolitics, so that he can fulfill his WHY to educate people as to what is going on geopolitically so that they can invest more intelligently and make more money.

Now let us explore some specifics.

GEOPOLITICAL HOT SPOTS TODAY

There are a number of geopolitical hotspots today that point to opportunities for investment. Let us look at two.

I. DEFENSE SPENDING

Military Defense Spending – Obama depleted the US Arsenal. He moved a massive amount of monies from defense into social programs and nation building.  The list was long – Iraq, Libya, Syria and Afghanistan.  Factually, our military hardware is worn out or broken.  Our military personnel are tired and have been dramatically reduced in size and the nation’s defense is approximately that of 1940.  It must be replaced and rebuilt.  Trump has already made budget moves of reducing social programs by $58 billion / year and increasing defense spending by $58 billion/year.   This will occur over the next few years.

NATO Defense Spending   Trump has issued multiple warnings to NATO members, “Pay your dues!”   What are they?  They are 2% of their GDP annually.  Today only Estonia, Greece and UK are paying 2 % or more of their dues. This is significant since it is annual dues.  On average, they are paying roughly 1% amounting to $254 billion.   Thus, another $250 billion / year is still due.  The US can tap this money when they are defending these nations.  More important, this is money that flows to defense contractors.  This means employment.  The US defense contractors are about 80 % of the recipients.  As the countries begin to meet their obligations, expect defense industry sales to start increasing by an additional $250 billion / year.

Saudi Arabia – This event was little noticed in the press.  Last week, Trump authorized Saudi Arabia to buy $358 billion in armaments from the US.   Over 5 years, this is about $70 billion / year.

The postelection rally in the aerospace/defense industry continues across many sectors.  The marketplace optimism stems from the expectation that the Trump administration will usher in an era of accelerated growth for the industry.

Generally speaking, a broad-based correction is needed and it would help the industry. However, the next 3 to 5 year investment window, based on a geopolitical analysis appears to be relatively golden for this industry.  This is a simple geopolitical analysis. It showed that the industry stands to gain an additional $378 billion per year in orders.  Moreover, this could continue for at least five years.  If Trump is reelected, it could continue for 8 years.

INVESTMENTS

The Federal Reserve (a privately held banking cartel) controls ALL financial institutions in the United States.  This has been true since the passage in 2010 of the Dodd Frank act. They are about to start quantitative easing (QE) again.

In the 2008 – 2013 time period, the Fed created the QE series, QE1, QE2, and QE3, which put $4.5 trillion into the economy.  The stated purpose was to stimulate the economy.  It did not do so.

The real purpose was to make the Federal Reserve Bank’s balance sheets look more positive. They were filled with toxic Mortgage backed security bonds.  The Fed set out to correct that problem.  This did this by creating money out of nothing.  This was accomplished by the Fed creating money out of nothing and buying toxic bonds and treasury bonds from its Federal Reserve banks.  They bought at an $80 billion a month rate.  Now the Federal Reserve Banks balance sheets look good because they replaced the toxic bonds with cash and on the advice of the Fed and bought stocks in Europe and the US.   They also deposited 1/3 of the cash in the Federal Reserve itself for 0.5 – 1% interest.  Those stocks have now gone up since the market was seeing $60 billion in new money each month for years.  As a result, the assets on the books for the banks look good.  The toxic bonds now reside on the Federal Reserve balance sheets.  However, they are not worth the face value paid for them by the Fed.

Now for the final play in the Fed game to get the public to assume the debt.  The Fed recently announced that they were going to start selling the $4.5 trillion in toxic bonds starting in October / November.   When this happen, you should expect this to happen

  • The sold bonds will remove cash from the economy and M2 will decline.
  • This will put pressure on the economy to decline.
  • The purchased toxic bonds will soon be discovered as not worth the face value paid for them – – – probably 30 – 40% less.
  • Upon discovery, the new purchasers will try to dump them causing mass selling.
  • Large selling on the bond market will drop prices and raise interest.
  • The Fed will force their Fed Reserve banks to buy back a significant portion of these toxic assets.
  • The net result will be
    • Interest rates will rise
    • Bonds will fall
    • Fed Reserve banks balance sheets will be worse off
    • The Fed’s balance sheet will look better

At this point, the economy will start “correcting” negatively and the Fed will say that they must step in to “boost the economy”.   They are “one note Charlie” and only understand that they can propose another QE, which will again help their banks but not the economy.  However, this time they will call it Quantitative Tightening.  You will start hearing about this in the fall.

That should leave us in a cautious mode.  The Fed’s policy will make no sense for the citizens but they will have to live with it until the Private Banking Cartel called the Fed is removed.  Is that possible?  Yes, but will it be done by Trump?  No one knows.

The new QT will put us in a recession.  This is what the Fed wants. It makes Trump’s goal of stimulating the economy and employment at the expense of the New World Order central government more difficult. The Fed is Trump’s enemy.  Further, they have the tools that can make Trump look bad – very bad.

Investment should consider your investible assets.  First, exclude your house equity, your business equity, and your kid’s savings for college.  That leaves your savings.  You should consider multiple categories as investments.   The stock market is just one.   I will not go into why in this paper but this is how I would apportion the investments.

  • CASH – 30 % – Warren Buffet is out of market and has $87 billion in cash
  • US Treasury – 5%
  • Gold and Silver – 10-15% not paper
  • Real Estate – commercial or second home – 10%
  • Private Investment Funds – 20% – Private Businesses
  • Stock Market – 20%

The message is that only 20% of available savings should be in the market.   Within that, diversification is also required.

INVESTMENT TARGETS

Given that we know that European and US governments will increase net spending to the defense industry by roughly $400 billion dollars per year over the next five years, then it would be wise to invest in the aerospace, defense industry.  Right now, the prices are high and it would be wise to wait for a pullback and then invest.  The president’s promise to focus especially on national security and defense has driven the stocks that we want to own. Although it may take several years to see the full culmination of profits from these new defense orders which should start next year, it would be a wise decision to invest in this industry.  Accordingly, it would be wise to select a certain perfect percent of your personal folio to invest here. Upon choice of that percentage and associated dollars, one could then by either equally or in a weighted proportion depending upon the investors views from the following mix of aerospace stocks.

  • Lockheed (LMT)
  • General Dynamics (GD)
  • Northrop Grumman (NOC)
  • Raytheon (RTN)
  • Huntington Ingalls (H I I)

Although, there are ways to predict the rate of growth and how this amount of additional orders will affect the stocks, it is beyond the scope of this article.

II- CHINA’S BELT AND ROAD INITIATIVE

I am introducing China’s belt and road initiative in this article as a Geopolitical event that will affect every nation it touches. This initiative is as significant is putting a man on the moon.  However, in the Western press. It has been generally or completely ignored. This is wrong.  The initiative is created and if the US participated in it could lead to two generations of peace on earth.  Why? People from all over the earth would have to work together to make this happen.  If you are working on something that will benefit you as well as others, it is less likely that you will be fighting. 

It is my intention to write a series of articles on this topic and eventually create an e-book.  I will identify investment opportunities in that book.  Let us look at what it proposes.

Wikipedia relates that – The Silk Road Economic Belt and the 21st-century Maritime Silk Road, also known as the Belt and Road Initiative (B&R) and The Belt and Road (B&R).

This is a development strategy proposed by Chinese President Xi Jinping that focuses on connectivity and cooperation between Eurasian countries, primarily the People’ Republic of China, the land-based “Road Belt” (Silk Road Belt – SREB) and the oceangoing “Maritime Road” (Maritime Silk Road – MSR).  It is modeled after the 12th Century China Silk Road.  It is clearly visionary and has been promoted by Lyndon LaRouche for 20 years.  It is ready to be implemented.

The strategy establishes giant tentacles from all parts of the earth into China –

  • The Silk Road Belt will contain highways, railroads, telecommunications channels, maintenance, cellular towers, fiber optic cables, airports and high-speed rail connectivity,
  • The Maritime Silk Belt will contain new ports, rebuilt ports, and ability to handle large freight carriers as well as rail into and out of ports. In China, they will be connected to the Chinese ports of Tianjin, Guangzhou, Shanghai and Hong Kong.
  • Today China has 10,000 miles of high-speed rail (300 mph) and intends to extend that to 20,000 miles by 2030.
  • Each of the nations touched by this infrastructure expansion will have their electric power upgraded, roads created or upgraded, communications networks created or upgraded.
  • Each country will be given 50 year low interest development loans form China or the Asian Development Bank or the BRICS development bank to support the development.
  • This reenacts England’s 18th Century Mercantile Economic system imposed on the modern world.  Ship raw materials to China and they will ship finished goods back to other countries.

The above will revolutionize global transportation. Nothing will be the same and China will be a world leader. China’s wants to take a larger role in global affairs.  Their proposal is already underway and being implemented in multiple areas of the world.  It creates a way for China to maintain and increase its leadership in the manufacturing sector.   This is the One Belt, One Road initiative

President Xi Jinping

This is a very visionary picture of the world if we had world peace rather than war.

  • China in red, Members of the AIIB in orange,
  • The six corridors in black and blue
  • The Belt and Road initiative is geographically structured along 6 corridors, and the maritime Silk Road.
  • Eurasian Land Bridge running from Western China to Western Russia
  • China–Mongolia–Russia Corridor, running from Northern China to Eastern Russia
  • China–Central Asia–West Asia Corridor, running from Western China to Turkey
  • China–Indochina Peninsula Corridor, running from Southern China to Singapore
  • Bangladesh-China-Myanmar Corridor, running from Southern China to Myanmar.
  • China – Pakistan Corridor, running from South-Western China to Pakistan
  • Maritime Silk Road, running from the Chinese Coast through Singapore to the Mediterranean

Investment Required

This project is just the beginning.  There is also proposed a tunnel between Asia and Alaska, a Road that runs the length of North America, through the Isthmus of Panama and to the tip of South America.  Further, there are plans for extension into Africa with railroads inter-connecting the continent.

It is estimated that the total project would take about $20 trillion over a 20-30 year period.   This is a project that would link the world to a common path, provide jobs for 30 years, advance technology, and most important provide PEACE.

There will be a massive amount of investment opportunities in building, funding and maintaining these networks.  It is beyond the scope of this paper to expand on this geopolitical event and pick companies because they have yet to be engaged.  The Asia Infrastructure Bank will be critical to all investments.  It is backed by China.

Asian Infrastructure Investment Bank

  

Prospective members (regional)

Members (regional)

Prospective members (non-regional)

Members (non-regional)

The Asian Infrastructure Bank, first proposed by China in October 2013, is a development bank dedicated to lending for projects regarding infrastructure. As of 2015, China announced that over one trillion Yuan ($160 billion US) of infrastructure projects were in planning or construction.

On 29 June 2015, the Articles of Agreement of the Asian Infrastructure Investment Bank (AIIB), the legal framework, was signed in Beijing. The proposed multilateral bank has an authorized capital of $100 billion, 75% of which will come from Asian and Oceania countries. China will be the single largest stakeholder, holding 26% of voting rights. The bank plans to start operation by this year.

CONCLUSIONS

This paper briefly reviewed the author’s background by following him in his career path.  This showed how he grew into geopolitics as his passion.  The paper further shows how geopolitics is related to the economics of the sovereign state and can be used to identify investing opportunities in the sovereign state.

This article shows how a passion for geopolitics can lead to articles and products that be sold which means monetizing your passion. Everyone has a passion. It could be fishing, crocheting, sewing, hunting – anything. That passion can be monetized if the individual follows through identifying his passion, writing articles about his passion, creates products such as e-books or affiliates himself with similar passion products then   post them on websites and sell them.

Joe’s why is “to explore the truth in what is possible so that others can actualize their full potential”.  In this instance, the author shows that an individual who has a passion for any topic can learn to monetize and make money from it.  In the world of the Internet, there are 1 billion nodes and 2 billion users. Someone will also be interested in your topic created by your passion and would be willing to pay you money to explore and expand upon your knowledge.

The paper provides two examples of how geopolitics can provide investment opportunities for you the reader.  In the first instance, we examine military defense spending across the free world, which includes the United States and Europe.  We found that defense armaments have been depleted due to the continuous wars promulgated by our elected politicians on both sides of the Atlantic.  These policies have now led to the necessity to spend an additional $400 billion a year for roughly 4 to 8 years.   This is an investment opportunity. We identified five companies that should benefit from replenishing the armaments for the free world.

The second initiative that we looked at is China’s Belt and Road initiative.  In this instance, all we can do is note it as a geopolitical event that will change the lives of everyone on earth, and that it will take roughly 20 to 30 years to accomplish as well as $20 trillion in investment.  We outlined the scope of this initiative and did not get into investment details. It is too early.  However, those opportunities will grow dramatically over the next four years…

If the United States joins China in this effort, then peace may finally come to the earth for 2 to 4 generations.  This is the fight currently going on behind the scenes. Mr. Trump is in it also.  It is too early to say when or if it will occur but let us hope that the United States joins China in a common endeavor to make mankind’s life better.

 

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