Open for Localism

Why is our ability to economically coexist together so dam complicated? If we are so smart, why is our economy so stupid? Future contracts, derivatives, insurance. Did we build this global economy house of cards, or did we inherit it? Either way, can we please take it down before it crumbles?

With China raising interest rates twice in the past month; and oil, electricity and gold perpetually rising in US Dollar terms, the purchasing power of the US Dollar is nearing panic mode. A frenzy-like rise, if you will. Gold is trending like it may even be the next Google, or will it be oil? The continued rise in oil specifically, will have dramatic effects across the U.S. and Europe’s economy that will be felt for years to come. It is no help that our seemingly long time best bud, China, is now in control of world interest rate levels, and on their way to world economic dominance. In my opinion, such a rising interest rate environment will instantaneously crater what’s left of the fragile US housing market, bankrupt Wall Street (again), and take down our interest-tied, debt-ridden municipalities with it.

Personally, I find myself at odds with the whole thing. Please let me explain. I saw and bought Gold at $400 per ounce in 2004 and hung tight with it as it tripled in price, right up until this moment. And in my opinion, as the U.S. and Europe are forced to borrow more and more to pay for increased borrowing costs (higher interest rates), and caught in a perpetual cycle; Gold is ripe to double or triple in price again from this point forward. However, I am at the point where I am fearful to root for Gold’s rise any longer. You see, I am betting my personal investment savings on Gold, and as Gold rises in price, the dollar is plummeting in relative terms; and although it seems like I am “winning” the financial poker game, I view myself truthfully shortsighted in my financial glory. I am very concerned that if Gold continues to rise further and further, the economic riches that find their way into the American economy will be gone for a long, long time; and potentially chaos may even pursue.

I am fearful of such an outcome; the unknown of it all. But inside, I hope things will turn out different. I hope we won’t depend on bailout funds this time around, because the tens of trillions of dollars required won’t be there. I hope we consciously shift our intentions now, so there will be a new outcome, while the U.S. Dollar’s purchasing power is still trusted. I hope we become  aware of our economic reality, embrace a different financial strategy, and start saving some usable acorns like renewable energy just in case its a long, long winter.

In my opinion, we have two choices: 1.) we can freeze-up and hoard our tremendous personal and institutional savings, which will only create more panic, more empty houses, more unused cars and higher unemployment, or  2.) we can invest it calmly and intelligently to our own benefit. You see, our weakness is also our strength. As I described above, the economic system is currently very weak, so a strategic attack or aggressive investment now would be both economically and financially advantageous. Makes sense, right?

Attached is an outline of such a strategic attack called a Local Investment Fund, with a focus on renewable energy and real estate. As investors, our timing to acquire local assets at rock bottom prices, as well as create energy competition in the local markets, is impeccable. Remember, only a 5-10% allocation of our savings towards such a fund would dramatically shift the economic energy to the local economy. The local economy will soon prove to be the best place to protect our savings while improving our lifestyle and happiness. The Local Investment Fund will be invested locally, in front of our own eyes. Such a local investment strategy allows us to physically touch and feel the assets that comprise our savings, actually explain how our financial return is generated, and personally meet the team that is responsible to protect and grow our savings; all the while igniting local job growth and lowering cost of living.

Happy New Year!

In a land called…

In a land called Nacirema, things are a bit backward from what you might expect.

Imagine walking down the street mid-day in Nacirema and a complete stranger stops and asks you to give him your hard-earned money. Not just all the money in your pocket, but all your life’s savings. He introduces himself as the “money-keeper” of the Nacirema tribe and promises you that he’ll watch over your money. He cannot tell you exactly where that is for security purposes and although you can’t see or touch the money once you give it to him, you are assured it will be safe. Since you’ve never met this person before in your life, he pulls out a small piece of paper and writes down three little letters “I.O.U.” to ensure you that he is good for it, and then asks you to sign it. He says you can present this piece of paper to him every time you want some of the money back or to give him more of your savings in the future.  He further reassures you that he has possession of many, many Naricema people’s hard-earned money and again promises that your money is safe in his hands.

“This is crazy” would be an honest first reaction. How could anyone in their right mind give their life savings to a complete stranger? But as mentioned, everything is backwards in Nacirema, and if you flip the letters around you’ll learn that Nacirema backwards spells American. In America this complete stranger is better known as a “bank”. But unlike in Nacirema, we do not even get the privelege to meet this stranger on the street. However, we somehow accept this mysterious “bank” entity as being safe and secure, just because…

Perhaps it is time we reconsider this false notion by trusting and investing our money in ourselves and our communities so as to protect the very livelihood we’ve worked so hard to attain. Or would that be considered “crazy”?

Pluranomics University Lecture

Doug Wolkon, author of “The New Game: A Strategy to Reinvent the Economy” presents his unique economic perspective to University of Michigan students. Wolkon walks us through practical strategies and explains his Economic theory to re-balance our economy. Enjoy a visual interpretation of Doug Wolkon’s vision and learn how Mini-Stock Markets, Renewable Energy, Stable Rents, & Local Trade emerge in a timeless economic system where Pluralism transcends Capitalism.


The Sushi Paradox: A True Measure of Inflation

Did you ever wonder why the poor man’s food of white rice has been coupled with the rich man’s delicacy of raw fish to make sushi? Quite the paradox, no? Colorful, super-fresh fish, packed with raw protein derived from the depths of our diverse, oceanic ecosystem gently laid on a bed of white, stale, and nutrient-stripped rice.

In any case, the last few times I have eaten at my choice sushi spots, I can’t help but notice that there is more and more rice in relation to raw fish in my sushi. I keep hearing that there isn’t any inflation in the economy, but the growing rice to fish ratio in my sushi is clearly telling me otherwise.

Pluranomics Film

Dear Michigan Economics Society (MES),

Thank you for the opportunity to teach economics at the University of Michigan. The questions were insightful and thoughtful. We sincerely welcome you to further our discussion on this blog.

Attached is the Pluranomics Film that we presented to you at the close of the lecture. Thanks again.


Go Blue!

Doug & Genna Wolkon

What Happens When Housing Supply Meets Demand

So often I am asked if I think home prices are going up or down. I remember in 2004 sitting around a big conference table with my private equity partners answering this same question (we financed large condo projects and bought raw land parcels to resell to home builders). And even with the 30%+ drop in housing prices in America from their peak in 2006, my then most unpopular answer has not changed, its still “down”. Continued »