Reset all, what is wrong with us and a see breeze

I've just finished reading this book: The Big Reset by Willem Middelkoop.  The author is Dutch and I've been following him for a while (on twitter) and was eager to learn what he had to say in his latest publication. The book was first published in English (so good news for you all) but I waited for the Dutch version to appear (lazy as I am). It has the benefit that it was already slightly updated as it includes some reference to the recent tensions on the Crimea. This may make you wonder what the book is about. Well it is about finances and more specifically about the Dollar as the world's reserve currency, how this has given the US a major advantage over the rest of the world, how the US has and is doing everything to keep their status and - this is the interesting bit - how this is all coming to an end. Hence the title 'The Big Reset'. Whilst I did not learn much new, it is still enlightening to read it all in one book which connects all the dots and makes you look at some events in a different way. If you think this book is about some wild complot theory you'll be disappointed. If you think you'll read about the upcoming financial armageddon, you'll be disappointed too. It does present you with many facts and does point to what may happen next. It is not so pretentious that it gives you a scenario of the world financial future, nor does it give a timeline of what will happen when. And that's good, if the author would have done that, he would have lost all credibility. But the facts do lead to a certain direction our financial future will take and understanding this is of utmost importance for our (individual) financial future. And, not unimportant, it is an easy read as it is written very fluently avoiding financial speak.

Look at this mind boggling infographic. Things like these are often used to show the speed of development and technological progress. But to be honest, it scares the hell out of me. Millions of people don't have access to drinkable water but we do have an average of 3 connected devices per person on this planet. What is wrong with us?

In the mean time, researchers found for the first time an Earth-like planet in a habitable zone around a star (see here). And it is close by, only 500 light years away which is neglectable in the infinity of our universe. The atmosphere seems to be all CO2 so breathing for us might be a problem. But as it will take a while before we get there, we'll probably have mutated by that time so that CO2 will smell like a fresh see breeze.

What's wrong with this concept and Canberras

So the drama queens in the US made a last minute deal. And they found their inspiration on how to solve the crisis over here in Europe: don't solve it, postpone it. So all what happened on Thursday was giving the can one massive kick and it rolled further until February 7. That's when the US will hit their new debt limit: 17 trillion $. For those of you who think all those Armageddon stories about the end of the financial system if the US would default (even if only technically and for a couple of days) is nonsense, here is what Jim Yong Kim, president of the World Bank, said just after the deal was reached: "the world economy escaped a potential catastrophe". So we can all breathe now for a couple of months and go through the same flirting-with-disaster again early next year. In the mean time you can be sure that some parts of the world have drawn their conclusion. I highly recommend reading what China published in Xinhua (China's official press agency): U.S. fiscal failure warrants a de-Americanized world - see http://news.xinhuanet.com/english/indepth/2013-10/13/c_132794246.htm Bottom line, the US Dollar will no longer be the reserve currency of the world.

But don't we live in a strange world where we all hope the US will continue making debt so they and the rest of the world can continue to prosper? Isn't there something thoroughly wrong with this concept?


The bad thing about going to conferences (like I did past two week), is that they can be very boring. The good thing is you get to chat to some interesting people. One lunch I found myself talking to a former RAF pilot who flew the Canberra. It is one of those post-war designs that had a very long service life. The English Electric Canberra B2 started service with the RAF 101 Squadron in January 1951. It bowed out of service 55 (!) years later when the PR9 variant did a flypast at RAF Marham on July 28, 2006. The Canberra was still used extensively  in Iraq and Afghanistan. I've only seen the Canberra once. The picture below is from an airshow in Koksijde in the nineties. The awkward nose is because this is a  T Mk 17 electronic warfare variant (apologies for the grainy picture - film roles had to be developed in those days so no 10 Mb pixel quality).

And one more picture, this is from the model I have in my own collection: a Martin B-57 which was a license-built version of the Canberra for the USAF.

Please pay us, cut your flesh or someone else's, surely they can do better than that? And a tribute.

I'm starting to get worried that my blog will rise on the anti-US hitlist... It's really not meant like that. And I'll make up for it at the end (well... a little bit anyway). But it's not me that is spewing criticism, it's Joe Stiglitz. Sitglitz is a US citizen, Nobel price winner, former chief economist of the World Bank, author of several books and one of the most influential thinkers of today. And what he said last week was not open for interpretation. He said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve's - in which regional Feds are partly governed by the very banks they're supposed to police - it would have raised alarms: "If we had seen a governance structure that corresponds to our Federal Reserve system, we would have been yelling and screaming and saying that country does not deserve any assistance, this is a corrupt governing structure."

No further comments but you can read more here: http://www.huffingtonpost.com/2010/03/03/stiglitz-nobel-prize-winn_n_484943.html

In the mean time the US is still in shutdown. This also affects the National Weather Service where about 4000 employees are continuing working but without being paid. The NWS amongst others provides the weather forecasts for airports. The Anchorage office issued last week this forecast, including a message to its government (see red box):

But then yesterday, the big whammy hit those of us who live in the eurzone with thanks to the IMF. I wrote before (here) about the bail-in becoming standard procedure in case of a bank default. Saving accounts will be stripped above a supposedly guaranteed amount of 100000,- €. The IMF has just taken this a step further and proposes to levy a one-time tax of 10% on all saving accounts of the 15 countries of the eurozone. I repeat: the IMF proposes to levy a one-time tax of 10% on all saving accounts of the 15 countries of the eurozone. The idea is not new and has been floated by other groups and a (Danish) bank CEO (by the way it seems the Danish banks are in need of > 15 billion € to meet capital rules - see Bloomberg - now I don't believe in coincidence, do you?).

The idea is included in the IMF Fiscal Monitor of October 2013 under the chapter "Taxing our way out - or into? - trouble". I copy the relevant text for you below:

So is this just some brainstorming thoughts of economists who don't have their feet in reality any more? Hmmmm, not sure. It becomes difficult to further tax industry without killing it completely. It is equally difficult to further tax the income of employers. Substantially raising the VAT would have equal detrimental effects. So what is left is that enormous amount of capital that is 'hiding' in saving accounts and is low taxed (or not at all below a certain level). If I take Belgium's example: the total amount on saving accounts is 246 billion €. Yes largely untaxed (only if your interest rises above 1880,- € / year, you pay taxes). But bear in mind I only get to keep half of my salary (50% is taxed away) and VAT is 21% so anything that I manage to save is already after our government took the bulk of my gross income (in addition my employer pays another 30% of tax on top of my gross income). Now this 246 billion € of savings, you need to offset it against Belgium's debt: 370 billion €. So a 10% tax levy would substantially lower it. Very tempting for politicians and I bet they would already have done it if they thought they would get away with it. So far it hasn't happened but the pressure is rising. Every budget control our government does look with watering mouth to these savings and you can hear them think "if only...". Of course scaling down the government expenditure would be another way of making savings but of course that doesn't even cross their mind. If you had the choice what would you do: cut your own flesh or someone else's? So read that IMF proposal again and draw your conclusions.

One of my fellow twitterers pointed me to an article on helicopters of the future (this is the kiss-and-make-up part with the US) . The Pentagon is running several projects looking a couple of decades ahead. Four companies have been selected to refine their initial designs: Bell Helicopter, Sikorsky Aircraft, AVX Aircraft and Karem Aircraft. One particular design study from AVX caught my eye. I love new technology, and gazing into the future mesmerising what might be possible is fascinating. And the US has often been the birthplace of many new technologies, so the Pentagon projects promises to be very inspiring. But when I saw the AVX, I had a flash-back.

Picture courtesy of AVX

It immediately reminded me of an iconic rotorcraft: the Gironef! The Gironef was first used in 1945 (The Island of Amoras), designed by professor Barabas. Ok ok it's from a (Belgian) comic strip (Suske en Wiske - or Spike and Suzy in English - for other languages see http://en.wikipedia.org/wiki/Spike_and_Suzy).I know both designs are not identical (double main rotor, canards, ducted fans, tailplane) but that's only because the AVX design is just a first study and needs further refinement :-).

From the album 'The Island of Amoras'

But let's be honest: if we Belgians thought this one up back in 1945, then surely the US can come up with something better than this?

This morning I heard the news that Scott Carpenter died at the age of 88. He was one of the Mercury Seven, the second American to orbit the Earth and the fourth American in space, following Alan Shepard, Gus Grissom and John Glenn. As a small suggestion  to all of you who won't be watching football this evening (like me), I suggest to watch the epic movie "The Right Stuff" (watch it here or here) which tells the story of the Mercury program. As a tribute to Astronaut Carpenter.

God bless the United States of America, Costa Europe and landing at stall speed

The greatest nation on earth is setting us quite an example. Those who want to bomb the rest of the world to democracy has again shown us their democracy actually... does not function all that properly. Their politicians couldn't agree on the annual budget, one of their basic responsibilities, and so the government shut down. It closed, no one works (except NSA, CIA, FBI, ...).
And it's not that the USA doesn't have some problems to sort out. Allow me to give you some numbers:

• With 716 prisoners/100000 habitants, they are worlds number 1. For reference, Greenland is the first European country on 25th place with 340, Iran is 39th with 284, and Belgium 146th with 100 (data from wiki)
• 15% of the population is on food stamps (see here)
• With an infant mortality rate of 5,9/1000 births, the US stands at a 51st place (Nr 1 is Monaco with 1,81 and number 2 Japan with 2,17, see here)
• Possesses 7700 nuclear warheads (see http://www.fas.org/programs/ssp/nukes/nuclearweapons/nukestatus.html)
• Still has 3150 tonnes of chemical weapons (wiki and also here)
• Government debt about to reach 16,7 trillion $ (remember those zero's?), that's 1 trillion$ more than its GDP...

Talking about that debt, in about 2 weeks it is crunch time again between Democrats and Republicans because the US will hit that 16,7 trillion $ ceiling and the politicians thus have to agree to raise it or do some drastic cuts. Maybe that's why they shut the government down? So they can't spend any more!

In any case the CEO's of America's biggest banks are worried, because half a dozen of them paid Obama a visit on Wednesday. And Treasury Secretary Jack Lew wrote a letter to Congress saying if the debt ceiling is not raised by the 17th of October the government will not be able to meet all its financial commitments, such as making payments to US debt holders, government contractors and social security recipients: “If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history.”. (see http://www.politico.com/story/2013/10/debt-ceiling-treasury-final-extraordinary-measures-97690.html). In other words: please let me continue my money printing.

But let's not be cocky about it. Our politicians are not a lot better either. Italy went through its regular political turmoil, the Portuguese government lost heavily in local elections, the anti-eurocrats won 31% of the votes in Austrian elections, in Greece - the cradle of democracy - government is jailing opposition leaders, the Spanish Prime Minister Rajoy was grilled by Bloomberg during an interview in NY about his party’s alleged role in the Bárcenas campaign funding scandal and its destruction of vital evidence relating to the criminal case (see http://www.youtube.com/watch?v=SBgCpnlHBSE#t=169) and Mutti is still struggling to form a government after her big win. So sssssh, give Merkel some time. Once she has her own government sorted, cruise ship Costa Europe will have its captain back. After all the Costa Concordia was winched upright recently as well.


If you think US politics are up for a challenge, what about landing at Yrausquin Airport in the Dutch Antilles! There's a challenge for you. Watch this video of a Twin Otter doing a perfect landing (stall warning goes off at touch down), at the 1300 ft (396 m) long runway:

Questions I like to see answered, Noam Chomsky, designed by hand and crash tests

Seems that nor the politicians nor the media are asking the right questions about Syria, let alone answer them.
So in an attempt to help them out here is what I like to have answered (truthfully if possible):

1. Can we believe the US this time when they claim they have irrefutable evidence?
2. Is it really so that the US and some European countries are appalled that chemical weapons have been used?
3. Or is it just a good excuse and is there a different agenda (gas pipeline?)?
4. If chemical weapons are so inhumane why has the US not disposed off its own chemical weapons yet? (It is working on this, but they still have a stockpile left according to wikipedia: The Chemical Weapons Convention signed in 1993 stipulated a deadline of April 2012 to fully dispose of all chemical weapons, the US missed the deadline and the Pentagon indicated that they are looking at a 2023 target!!! http://en.wikipedia.org/wiki/Chemical_Weapons_Convention)

I am sure that the media will keep us informed over every nitty-gritty detail leading up to the US Congress discussion and vote on Syria. Whilst you are watching that theatre, bear in mind the words of Noam Chomsky (he doesn't need an introduction - but for those who have never heard of him see http://en.wikipedia.org/wiki/Noam_Chomsky). He made some remarkable statements during his keynote address at the Deutsche Welle Global Media Forum in Bonn, Germany, 17 June 2013: “In the past, the United States has sometimes, kind of sardonically, been described as a one-party state: the business party with two factions called Democrats and Republicans. That’s no longer true. It’s still a one-party state, the business party. But it only has one faction. The faction is moderate Republicans, who are now called Democrats. There are virtually no moderate Republicans in what’s called the Republican Party and virtually no liberal Democrats in what’s called the Democratic [sic] Party. It’s basically a party of what would be moderate Republicans and similarly, Richard Nixon would be way at the left of the political spectrum today. Eisenhower would be in outer space.”


Now, today's blog may give you the impression I am US-basing. That's not the intention.
As a small token of appreciation, I include two movies. The first one has a big wow-factor for me. In my student days as engineer we were still drawing on paper when designing something. We also had some courses on computer drawing but they were rather rough. Elon Musk (the founder of Paypal and current CEO of Tesla and Space X) posted a movie where they design pieces of a rocket in 3D with hand gestures (!) and then print it in 3D. He speaks of a revolution and that is exactly what it is. (The more critical reader would say that Elon is a born South-African, so this is not an example of how great the US is, but Elon's businesses were started, nurtured and grown in the US, so see it as a tribute to the good-old American Dream).

The second movie is posted by NASA doing a crash test of a helicopter on August 28. The research is aimed at improving the survivability of helicopter occupants. A very and much needed, noble goal. I am particularly intrigued in this test as I worked in car industry for 12 years, mainly dealing with car safety and have witnessed a lot of car crash tests and in my current job, I am amongst others responsible for helicopter safety. So this really is an interesting combination of my two worlds! I would love to see the readings from those dummies. Especially the two dressed in white (as they only had lap belts!).

You probably guessed the song that has to go with it: Crash Test Dummies - Mmm Mmm Mmm