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The Great Crash Ahead
Strategies for a World Turned Upside Down
Table of Contents
About The Book
Now available in paperback, from the bestselling author of The Great Depression Ahead, a book that continues to show readers how to weather the storm in these tough economic times by cautioning against the misguided beliefs that lead to bad investment decisions.
With incisive critical ana lysis and historical examples, The Great Crash Ahead lays bare the traditional assumptions of economics, outlining why the next financial crash and crisis is inevitable, and just around the corner— coming between mid-2012 and early 2015. Widely respected in the financial world for his accurate forecasts, Harry S. Dent, Jr., shows that the government doesn't drive our economy, consumers and businesses do; that the Fed does not create most of the money in our economy, the private banking system does. This necessary and illuminating book gives very clear strategies for prospering in the challenging decade ahead . . . a world turned upside down.
It wasn't supposed to be like this. For over 30 years Patti, the godmother of my [Rodney Johnson's] children and wonderful friend, took the steps that were supposed to ensure not only her success, but also her financial security. She graduated from Tulane University and worked her way up in several organizations, in which she consistently beat client expectations. She earned six figures, of which she saved and invested quite a bit. She worked overtime and weekends and traveled exhaustively. She was a "hot property." Then she was fired in the summer of 2010.
Fired, laid off, downsized—whatever it was called, the latest company where she worked was acquired by another. During the process of integrating her unit into the succeeding firm, she and other executives were dismissed. It was typical. You get called into a meeting with higher-ups, at which you are told that the company is moving in a direction for which your services are no longer necessary. You are escorted to your office and a human resources representative watches you pack your things to ensure that you do not steal from or harm the company that you poured your life into for years—the company that you helped to make a success story and an acquisition target. Finally, you are marched off the premises like any other nondesirable who might have wandered in off the streets. Such is the way of corporate life.
If this had happened during the ordinary course of company evolutions in normal times, when mergers and acquisitions typically create gains and losses for investors and employees, perhaps it would not have been such a blow. But these are not what most of us would consider normal times. Patti walked out of that company in the summer of 2010 as a 50-year-old woman and into a job market that already held over 14 million unemployed people. She left with her savings and investments greatly diminished after the crash of 2008–2009, and she carries the burden of a home that continues to fall in value. It wasn't supposed to be like this, but it is. Patti is just one of millions of casualties in what is a continuing economic catastrophe. The economic meat grinder is taking its toll, reducing not only what we as consumers and workers have in terms of gainful employment and assets, but also taking away some of our ideas of what we can achieve. In short, for many, tomorrow looks grim.
As we sat around Patti's kitchen table discussing this state of affairs, she was downtrodden but defiant about her employment. This stint of work was over, for all intents and purposes, but she would live to work again. Like the mythical phoenix, she would rise up in perhaps a different form, developing a niche to service groups like her previous clients, writing a book about her area of expertise—on-boarding large corporate clients for complex services—or simply find a similar position in another company. This was not her first rodeo. She had successfully reinvented herself before. While the work situation definitely caused her concern, it was nothing compared to the financial loss in her portfolio and her sheer lack of clarity about her financial future, which caused something closer to despair.
"I should have spent it," she said. "Instead of socking it away, meeting with my financial advisor on a regular basis, and tweaking my investments, I should have blown it on all the vacations I wanted to take. Even though I was responsible, saving and paying my own bills, never spending beyond my means, I'm suffering for it. Other people blew up their own situations, and at the same time the government did absolutely nothing to stop financial institutions run amok. Here I am paying the price."
We just witnessed the greatest credit and real estate bubble in modern history. Just as debt, housing, stocks, commodity, and business values skyrocketed, they will now collapse and create the greatest deflationary environment since the 1930s. Do you know how to invest and navigate your business and career in an environment that you have never seen before?
Patti's points are well taken, and her sentiments are shared by many across the country and around the globe. While most people understand some of the events and trends that led us here, it is still hard to grasp why this situation has become so much bigger, so much more encompassing, than anything since the Great Depression.
Patti not only can survive, but she can thrive, as will a minority of Americans and citizens around the world. Even everyday citizens in China and India will feel this global deflationary crisis. Patti will continue to keep her financial house in order, working more and saving more than she would have otherwise. But the questions and doubts she raises deserve answers. We have just lived through the greatest economic bubble in the history of the world, and now we are dealing with the aftermath as that bubble deflates. The bones and debris are scattered everywhere—investments, jobs, education, retirement, politics—nothing is left untouched. Our net worth has been greatly reduced. The median family earns less income today than 10 years ago. We are going backward.
As we go through what will be a long and difficult period of adjustment, we have choices. We can choose to bury our heads in the sand, ignoring the changing world around us and hoping for the best but doing nothing. Or we can choose to recognize that the era we just left—that time of growth and seemingly easy prosperity that marked most of the past three decades—is over. What lies ahead will be difficult, but through education and proactive efforts, we not only can see what lies ahead but also can profit from it. As you might expect, this book is all about choosing education and prosperity!
The trends for the coming decade are crystal clear: we are going to experience a deeper downturn and deflation in prices, not inflation. We call this the Winter Season; it comes predictably once in a lifetime, currently every 80 years, which means that very few people will understand what is happening.
• The largest generation in history will be spending less and saving more for retirement, which are trends that follow aging. The continued aging of our population as well as of the populations of developed countries around the world is deflationary—just ask Japan.
• The greatest credit and real estate bubble in history will continue to deleverage and deflate. The US government and most world governments have implemented extreme stimulus measures to prevent financial systems from melting down as they began to do in late 2008. These measures will fail, probably by early to mid-2013 forward and certainly by early 2014. We will undergo the first extreme deflationary crisis since 1930–1933, with all major investments crashing. We will suffer business, bank, and job losses unlike anything we have ever dealt with in our lifetimes. Crashes of this magnitude won't be repeated for another 60 years or more.
• China is leading a global bubble by greatly overbuilding industrial capacity, real estate, and infrastructure. Most of the emerging world, along with Canada, Australia, and New Zealand, is feeding China's bubble with materials and energy. The bursting of China's bubble together with the peaking of a very reliable 29- to 30-year commodity cycle will make this a global downturn despite long-term rising demographic trends in the emerging world.
We're here to wake you up to the greatest financial crisis of your lifetime and to get you onto our lifeboat to save your family and business from financial ruin before it's too late!
This book can be thought of as having four sections. The first part (Chapters 1 and 2) discusses how we got here, including the driving forces of demographics and consumption. Starting in the Roaring Twenties boom, demographics quickly became the key driving force in the world economy, as middle-class living standards spread. This force will continue to accelerate among emerging countries as billions of people see their income and consumption levels grow. Economists do not understand the impacts of this most critical factor, which is why they did not predict the magnitude of the global boom and why they now do not perceive the magnitude of the inevitable global slowdown ahead.
The second section of the book (Chapters 3 through 5) describes where we are now: in an economic Winter Season, with a massive debt overhang that must be worked out. We are referring to the debt bubble that occurred primarily in the private sector, not to the US federal debt, which is huge on its own. From 2000 to 2008, private debt more than doubled, from $20 trillion to $42 trillion, whereas government debt grew from $5 trillion to $10 trillion over the same period. Unfortunately, government debt, which has since grown to $16 trillion, continues to rise. The most pressing problem in the government sector is $46 trillion to $66 trillion in unfunded liabilities for Social Security and Medicare/Medicaid. Our system cannot continue to function and certainly cannot make any real attempt at a recovery with all of this debt! In the next decade, particularly between 2012 and 2015, we will undergo the greatest debt restructuring in history, and that destruction of debt will actually cause deflation, not inflation. This is what makes the coming economic Winter Season so different from the last extended downturn in our economy, from 1969 to 1982. That period represented an economic Summer Season, in which we experienced a wave of inflation and innovation. The investment and business strategies that work in a deflationary period are very different from and are often the exact opposite of what works during inflation.
The third part (Chapters 6 through 8) illustrates why we will not be coming out of this crisis anytime soon. We identify that the emerging world, led by China, has its own bursting bubble, which includes commodity prices. We also look at why the seemingly successful policies of the government have only "kicked the can down the road," making the debt crisis and mortgage crisis worse. These policies cannot work against the massive downward trends in demographics and debt deleveraging.
In the final section (Chapters 9 through 11), we discuss how we as a nation, as investors, as business owners, and as citizens can best position ourselves in order not just to survive the next several years, but to thrive! The adversity we face today is simply a different set of opportunities and challenges than those of yesterday. As the weather reflects the seasons, we see winter coming and prepare by stocking up on firewood, buying coats, et cetera. We store away the water skis and bring out the snow skis! Every season has its opportunities and challenges. You simply need to change your strategies for each season. We finish in Chapter 12 with a look at not just big changes, but sweeping, revolutionary-type changes that are occurring here and around the world. Just as the Industrial Revolution radically changed the world starting in the late 1700s, the Information Age is not even close to finishing what was started in the 1970s and 1980s.
Twenty years ago we forecast an economic Winter Season that would stretch from 2008 to 2023. The season has arrived, and it brings with it great challenges and great opportunities. Once we understand what is possible and let go of yesterday, we can begin rebuilding.
How We Got Here: 25 Years of Economic History in a Few Short Pages
Looking back, the trajectory of the "bubble economy" is obvious, but at its height, many people were describing it as unprecedented progress. The typical way of describing how we got here is usually done by chronicling business and policy developments of the last 25 years. It goes something like this:
In the mid-1990s our economy was doing well, as we had moderate interest rates, rising government revenue, and a well-functioning capital market. The United States had shaken off the problems of the 1970s and early 1980s and was riding the wave of productivity and earnings that came from the invention of desktop computing and the advent of the internet. The possibilities seemed limitless.
As the internet craze took off, there was a mad rush to take companies public, which was met with an equally mad rush on the part of investors to get in on the speculative investment boom. This was fueled not only by the obvious game-changing nature of the internet, but also by what the internet brought us: day trading and instant access to our investments. Suddenly, people were discussing stocks to buy just like they would discuss dinner choices at a restaurant ("I think I'll have some Cisco and Yahoo!, but I'm torn because the Intel and the JDS Uniphase sound so good!"). Yields on bonds were falling, so equities seemed to be the overwhelming choice for growing wealth.
After languishing through the 1970s virtually unchanged, the Dow Jones Industrial Average (Dow) shot higher over the next two decades. The index increased by 325% in the 1980s and then by over 400% in the 1990s. By 1998 and 1999, CNBC was a household name, Amazon no longer was just a river in South America, and a sock puppet (Pets.com) was quickly becoming the most reviled figure on television. The rush to capitalize on the internet and investment frenzy led to the dot.com bubble and eventually to the bust of 2000–2002, which ended with many portfolios in shambles and a recession to boot. Fortunes were lost, and retirement plans were wiped out. To help the economy recover, the Fed lowered interest rates in early 2001. It didn't help much. The economy did not fall much further, but it also did not make big gains. The year 2001 was spent eating through excess capacity and dealing with a short, shallow recession. Then tragedy struck: 9/11.
The markets were closed for four days. The world was in a panic. There were wild estimates as to what would happen when the markets did reopen. One thing was sure: interest rates would be dramatically lower. The Federal Reserve took swift, dramatic steps to flood the US economy with enough buying power to keep a questionable situation from turning into a cascade of bad events.1 The Fed had already lowered short-term rates from 6% to 3.5% over the course of 2001 leading up to 9/11. After that fateful day, the Fed lowered short-term rates another 1.75% in a matter of months and yet another 0.75% during 2002 and 2003, finally allowing short-term rates to bottom at 1% in that cycle. In just over two short years, the Federal Reserve lowered interest rates from 6% to 1%. It was determined to make our economy move, and move it did—although perhaps not in the way that the Fed intended.
As the Fed was aggressively lowering interest rates, lenders were aggressively stepping up their efforts to shovel money out of the door. Cheap dollars meant that loans were easy to afford, so borrowers could take out bigger and bigger loans. What to do with all of those borrowed dollars? Buy the biggest leveraged asset possible, of course! Americans went on a home-buying, condo-buying, investment-property buying binge, especially after they had lost in tech stocks and were looking for what seemed to be more solid investments. Although a family might be able to afford a $1,500 mortgage payment, the total size of their loan would change depending on the interest rate. At a 7% mortgage, the family could afford to borrow $250,000. At 5%, the same family, for the same $1,500 monthly mortgage payment, could afford to borrow over $350,000! It seemed like magic! Suddenly Americans were flush to buy the highest priced, most leveraged asset they would ever own! The housing boom was on!
Lenders were competing with US government–backed lending institutions Federal National Mortgage Association (FNMA, or Fannie Mae) and Federal Home Loan Mortgage Corp. (FHLMC, or Freddie Mac), which could get really cheap dollars because of their implicit, and later explicit, government backing. FNMA and FHLMC got most of the prime loans, those loans taken out by borrowers with good credit who were purchasing traditional homes to live in and who were putting down 20%. Other lenders charged a slightly higher interest rate but made loans to people who had lesser credit scores, who were buying investment properties, who were making a smaller down payment, or who had some other nontraditional aspect to their loan.
As time went on, the falling interest rate environment had a curious impact on the value of homes. As buyers could afford bigger sale prices, they bid up the price of homes. This caused the development and sale of real estate to become the hot industry and caused existing real estate to shoot up in value. Loans that were backed by real estate were seemingly bulletproof, as the default and foreclosure rate plummeted. Who would default on a mortgage when the property had increased in value? Just sell it! At one point Wells Fargo actually had a negative cost of foreclosure, meaning that the bank made money on homes they took back from borrowers.
Through the impact of lower interest rates and lenient standards, the traditional ratio of income to borrowing power for home mortgages was expanded dramatically, as we show in Chart 1-1.
Are you aware that the average household's borrowing capacity for a mortgage went from 3.3 times household income to 9.2 times income in just the 6 years between 2000 and 2006? We have never seen anything remotely like that in modern history!
At the same time, the lending industry took the opportunity to greatly expand the cash-out refinance business so that current homeowners could unlock the value of their homes and use the funds for anything they wanted. Homes no longer were just long-term investments or places to live, but also were really big ATMs.
The beauty was that anyone could play the game. As values continued to climb, lenders fought over borrowers. Lending standards went out the window; ever more exotic loans were developed to allow more borrowers to qualify for bigger and bigger loans. Of course, banks no longer really financed loans. They simply originated loans and then sold them to other institutions. Because the banks did not hold the loans, there was no limit on how many loans could be made. Also, the motivation for making loans was not to ensure repayment but to get as many loans out of the door as possible.
The Federal Reserve began raising rates in 2004, but the snowball was already rolling downhill, gaining in speed and size. The housing market juggernaut, with all of its baggage, was moving at light speed. Then, in late 2005, it started to slow down. The pool of borrowers was not growing as rapidly, and the building industry had ramped up its efforts to the point that inventory was coming online very quickly at higher and higher prices. By 2007 there were questions about many of the subprime mortgages and about the ability of the borrowers to pay.
Chart 1-1: Borrowing Power of a Typical Home Purchaser, 1995–2008
Data Source: Amherst Securities
In early 2008, when the music stopped, large financial companies began to shudder: first Bear Stearns, which was followed by FNMA and FHLMC, Lehman Brothers, and too many banks to mention. The US government got in on the act in May 2008 with a $168 billion stimulus plan and then took over FNMA and FHLMC that summer. At the height of the credit crisis the government implemented the Troubled Asset Recovery Program, or TARP. The White House changed hands, Congress passed an $800 billion stimulus program, and in March 2009 the United States became the largest shareholder of General Motors and AIG.
So far, this narrative posits credit—the creation of it, the access to it, and the misuse of it—as the genesis of our current crisis. If that were true, then a simple correction to our credit markets would be able to put the United States back on a sustainable economic path. This is exactly the type of policy that the United States has pursued, seeking to make dollars even easier to get through interest rates that are now at zero, creating tremendous reserves at banks ($1.5 trillion on hand), and trying to force lenders to make loans. But it's not working. Instead of taking on more debt in order to buy more things, consumers have turned away. Those who are creditworthy have chosen a more frugal path and are no longer swayed by the idea of a bigger home, a fancier car, or simply more stuff. What happened? To hear typical economists describe it, consumers are fearful. Their current lack of trust in the future is causing them to hold back on purchases, which slows down the business cycle and causes the economy to drag.
There is a reason that consumers are fearful: their gut tells them that something is very wrong. The entire debt of the United States has more than doubled in the last decade to well over $100 trillion, as Chart 1-2 shows. Our total debt as a percentage of GDP is roughly 5 times as great as it was in 1929 before we entered the Great Depression!
Chart 1-2: US Debt Creation, 1980–2009
Data Source: The Chart Store, St. Louis Fed, Treasury Direct, US Treasury
We will cover the topic of debt in great depth in Chapter 3, but to summarize, the greatest problem is not the Fed's stimulus of $2 trillion plus or even our federal debt, which is approaching $15 trillion and forecast to reach $20 trillion to $25 trillion even in a rosy economy in the next decade (which won't happen). The greatest problem is a double whammy of the private debt of $42 trillion in our economy (more than double the level of debt we had in 2000) and the unfunded entitlement programs of Social Security and Medicare/Medicaid, which have increased more than three times since 2000.
There Is More to the Story: What You Will Not Hear from the Mainstream Media
Is this really what happened, and is it an accurate picture of where we are? Did we simply get pulled into a debt-fueled spending spree and then get scared? If only it were so simple. Like so many things, the reasons are more complex, and the time frame is much longer. This was indeed a bubble—in fact, the greatest bubble in history; however, the bubble did not start with stocks in the 1990s or home prices in the 2000s; it started with people. In particular, it started with little people, babies, over 60 years ago.
The incredible surge in births from about 1937 to 1961 was called a baby boom, and those children came to be called baby boomers, particularly those born from 1946 through 1964. They also became known for their behaviors and views on society. This huge group of people came of age in the 1960s and 1970s and then went about the rest of their lives. At every single stage of life, this outsized group has turned markets and institutions on their head. When this group was going to elementary school in the 1950s and 1960s, we could not build schools fast enough. When they entered the workforce in the late 1960s and 1970s, there were not enough jobs. We saw the greatest inflation in modern history because it is expensive to raise kids and then integrate new workers into the workforce (a severe, prolonged lack of productivity growth). In the 1980s, they started families, bringing about the term "soccer moms" and driving demand for SUVs to carry all of those people and all of that stuff. As this bubble of people, the boomers, went about living their lives, they drove demand for goods and services in very predictable ways at very predictable ages and stages of life. This generational explosion eventually fueled demand and consumption approximately 46 years later, when the typical household is at the height of its family spending.
The reason the spending patterns of this group of consumers, or any group of consumers for that matter, are so important is that personal consumption makes up 70% of gross domestic product (GDP) in the US and a similar percentage in most developed countries. Over two-thirds of our economic activity in any given year is directly related to the choices made by consumers. When consumers spend more, businesses make investments to expand their capacity to satisfy the increasing demand. This also leads to rising tax revenues for governments (sales tax, income tax, property tax, fees, etc.), which allow for greater government spending. So when the largest group of people (boomers) inside the largest spending group (consumers) makes a change, everyone pays attention. The remainder of the GDP is split among businesses (15%), government (20%), and the net of imports/exports (–5%). (Currently we bring more into the country than we sell to other people, so this last number is negative.) Recently, businesses have been spending much less and the government has been spending much more. Even so, it is changes to personal consumption that are the most important, as consumers drive the entire train over time.
We will explain this in greater depth in Chapter 2. Our economy rises and falls on an approximately 46-year lag to the birth index, as greater numbers of people in a new generation such as the baby boom generation reach their average predictable peak in spending, which we show in Chart 1-3.
As the largest group of consumers in our society reached the peak of their personal demand for consumption around late 2007 (as we forecast 20 years ago that they would), they were desperate for the "fuel" needed to spend, which was credit. The industry responsible for creating credit was working overtime to meet the incredible demand. When the credit bubble—which was an outcome rather than the cause of the rise in demand—fell in on itself, the consumption demand of the boomers was already starting to flatten out. This trend line of demand will naturally decline for many years. The credit crisis just accelerated the slowdown in baby boom spending that was already in the cards, because it was put in place almost 50 years ago. The first phase of the slowdown demographically was a flattening in spending that has already begun, similar to what occurred from 1966 to 1970 in the last generational peaking process 40 years ago. Back then we saw more serious recessions in 1970 and 1973–1974. The last of the baby boomers' kids are likely to leave the nest by late 2011, creating the next serious economic downturn between 2012 and 2014.
Chart 1-3: The Spending Wave, Births Lagged for Peak in Spending
Data Source: HS Dent Research, US Census Bureau, Bloomberg, 2012
This is an important point. Although spending peaks at age 46 on average, there is a plateau into age 50 while the kids are leaving the nest. The average kid is born to the average parent around age 28. The kids who enter the workforce after high school will leave the nest when their parents are about age 46. The kids who go to college won't leave until their parents are age 50. It is this 4-year plateau in baby boom spending that we have seen from late 2007 through late 2011. From 2012 forward, we should see a more serious decline in income and spending by baby boomers, especially after the top 10% peak in 2012.
The last time a generation peaked in its spending and a long downturn and stock decline followed was in 1968. That was a 44-year lag on births for the Bob Hope generation, which got married a bit earlier. There was a major stock crash and recession into 1970, but then the Fed stimulated the economy as Keynesian economics had finally come into vogue. The economy and market bounced, with stocks going to slight new highs in late 1972. Then the largest crash occurred in 1973–1974. There is a plateau in spending as people's kids get out of either high school or college. After that plateau wears off, then stimulus programs fail to keep the economy going as spending drops off dramatically as it did in 1973. This time there is an added twist. The top 10% of households have risen to a dramatic 40% of income and spending, as you can see in Chart 1-4. And they peak in spending about 5 years later than the average household. We have an economy where most people have peaked, but this small segment is still spending. However, they should drop off more dramatically after 2012. Hence, we expect government stimulus programs to fail increasingly from 2013 forward.
Chart 1-4: Dow Adjusted for Inflation, Comparison of 1968–1974 with 2007–2013
Data Source: Yahoo Finance, 2012
Now we are in a completely different type of environment. No longer are we working in an economy with an ever-growing appetite for consumption. Things have changed. The boomers are now focused on saving and paying down debt, although they splurged a bit in late 2010 and early 2011 after cutting back so much from late 2008 into the summer of 2010. They have taken their credit cards and gone home. The boomers have followed a very predictable path, spending more incrementally as their children got older and peaking in their spending just as their children were getting old enough to leave home. From that point forward, the game becomes all about preparing for retirement. The boomers may take the occasional vacation, refurbish the bathroom or kitchen, or throw a big party, but by and large the focus of those in their 50s is to save enough to retire comfortably. Achieving that savings is possible because as their kids leave the nest, they do not have to spend as much on daily living; fewer people are in the house to support. So what happens when the largest group in your economy changes from being spenders to being savers? Suddenly, your economy goes slack. Just ask the Japanese, who went through this transition in the early to mid-1990s. As that large generation moves on to the saving phase, what's left behind is a marketplace with too much capacity and too few consumers. There are not enough people in the next generation, Generation X, to fill the shoes of the boomers—especially in housing, the largest and most debt-intensive purchase.
This type of economic analysis, based on demographics, is exactly what we do at HS Dent. For over 20 years we've been explaining to audiences and readers how our economy changes based on people. As much as we would like for people to do what we want, it is much more likely that they will do what they want. This is critical to understanding our economy, and yet economists pay little attention to demographics!
Much of the economic theory used by the US government to try to grow our economy is based on consumers behaving rationally. Unfortunately, the government's idea of rational behavior is reacting to interest rates and price movements in a vacuum, with no regard for the current situation of the individual consumer! What person decides to spend more or less without thinking about things like raising their kids, saving for retirement, or job security? This makes no sense! When creating incentives, government should try to assess where consumers are in their lives, but it doesn't. This is the biggest failure of economic theory and government intervention today!
Most people are going to make a decision based on what's happening in their household, not on what's going on in the larger economy. This is why we can go through so many difficult things in our economy, like wars or terrorist attacks, and yet people will continue to spend. No one likes these types of events, of course, but if we still want guitar lessons or new clothes for our children, or if the tuition for after-school care is due, we are going to pay for it. As the children leave home and we're no longer burdened with these responsibilities, we begin to focus on the next change in our future, which is retirement. Let the savings begin!
But China and the Emerging World Will Save Us, Right? Think Again!
Many claim that the rising demographic trends of younger populations in the emerging world and the spectacular growth of China will keep worldwide growth more robust, offsetting the slowdown from demographics and debt deleveraging in the developed world. First, note that over 65% of world GDP is still generated in the developed world, despite the remarkable growth in the emerging world. Our standard of living in the United States is more than six times the standard of living in China, even adjusted for purchasing power. As we will cover in more depth in Chapter 8, China's government has been creating the last great bubble in this unprecedented global bubble boom. To keep its populace happy with an unelected government, it has been building roads, railways, and real estate developments, including cities like Ordos, a complex that can house up to one million people but is completely empty! China's capacity for major industries, from cement to aluminum to steel, has expanded to 20% to 40% more than its current production and world demand. China's economy is not driven largely by growing consumer demand like it is in the United States. Instead, in China 35% of the GDP is driven by exports and 50% or more is driven by fixed-capital investment, largely by the government.
In short, China is building at a hurried pace for a future that will not materialize as a result of a slowing world economy and the rapid aging of its own population. China will be the last bubble to burst. That bursting will slow down the emerging countries in Asia, Latin America, the Middle East, and Africa that are supplying China's unprecedented infrastructure boom with materials and energy. Excess capacity and an eventual slowdown in China's purchase of commodities will bring the next commodity price collapse between 2012 and 2015, which will hurt the economies of most emerging countries. This will be a bust and deflation crisis worldwide, not just in the developed world.
You can get free access to Harry's very popular webinar "Understanding the Economy and What Lies Ahead" by visiting and registering at http://www.hsdent.com/webinar.
Demographic cycles peak around every 39 to 40 years, as we show in Chapter 2. However, commodity cycles, which are more likely to drive economies and exports in most emerging countries, occur every 29 to 30 years on average. Our reliable 29- to 30-Year Commodity Cycle, shown in Chart 1-5, is set to peak between mid-2008 and late 2011 or so. This cycle is not likely to turn upward again until the early 2020s, which indicates a slowdown in most emerging countries in the decade ahead, despite continued growth in demographic trends. We will cover this topic, along with the very different factors that drive emerging country economies and growth, in Chapter 8.
Chart 1-5: The 29- to 30-Year Commodity Price Cycle
CRB Index (PPI before 1947) 1913–2040
Data Source: Bloomberg, 2012
Emerging countries from Asia and Latin America to the Middle East and Africa will be the clear growth areas of the world for decades to come after the developed countries age and slow demographically. However, the next concerted growth surge for the world and emerging countries is not likely to reemerge until 2020–2023. India is more likely than China to be the rising star of the next global boom as time moves forward.
The Government's Response: Anything But Pain
For consumers in the United States and most developed economies, the change from an economy based on consumption to one based on savings might sound reasonable (especially given the aging of the baby boomers). However, such change is not what governments want, especially not the US government. Why? Because it's economically painful to the nation as a whole in the short term—just look at what happened in the United States from 1930 to 1933! As we shrink our economy or deleverage the credit outstanding, there will be a dramatic slowdown and even a temporary decline in the standard of living. This shows up in many ways—such as higher unemployment, failing banks, falling business activity, and falling asset prices—that impact household net worth. While everyone supports more financial responsibility, they support it more in theory than in reality. When these undesirable side effects arise, there is an outcry for the government to fix the situation. When unemployment runs high, people always ask what the government will do to fix it.
While it might strike you as odd for anyone to suggest that more borrowing and more spending are the answer to a situation that arose from too much borrowing and too much spending, that is exactly what the government is doing, in addition to using the other tools at its disposal. The government can and has directly intervened in many ways throughout history and in the present downturn, but its most useful tools are still interest rates, taxes, and spending plans. To ease the pain that many people are feeling because they are unemployed, as their homes decline in value, or both, the government is doing its best to raise the level of economic activity and to bring back jobs as well as increase home prices. As we will explain later, these governmental actions ultimately will not work. No government has ever been able to prevent a major bubble from deflating or to stop an aging generation from saving, but it can slow the process and ease the pain temporarily—however, only at great expense, as Japan has proven over two decades of economic malaise.
The government is taking on more debt through its own borrowing and its own activities in an effort to stimulate lending and spending. In short, the US government wants us to do a lot more of what got us into trouble in the first place. This does not mean that our representatives do not understand the situation. Instead, what we have been told is that we should work toward an economic recovery quickly and then work on our fiscal responsibility later. What if "later" never comes, as has been the case for the Japanese economy for the last two decades?
The hope is that you and I as consumers and business owners will suddenly feel more confident and will spend more of our money as well as grow our businesses. However, that assumes that the reason we're not spending today is because of a lack of confidence, which isn't true. The reason we are not spending is because our kids are leaving the nest and we as consumers are now more interested in saving for the next stage of our lives: retirement. This trend of kids leaving the nest will accelerate from 2012 forward, making the demographic downtrend more obvious and the government's efforts to fight it more difficult. Businesses, having recognized that our spending patterns have changed, have lowered their output to match the new level of demand. Stimulus programs were begun back in May 2008 and have taken several forms over the past two years. None of the stimulus programs so far has had lasting effects. While some have had a dramatic immediate impact (think of the Car Allowance Rebate System, aka "cash for clunkers," or the First-Time Home Buyer Credit), none has done the job that it was intended to do, which was to stimulate greater demand that would last well beyond the program.
Regarding the larger stimulus plan, which was passed in spring 2009, $800 billion has flowed to many different corners of the country and the world. Unfortunately, much of that money has gone to entities such as cities and states that were poorly run to begin with. Cities and states not only are facing annual budget deficits, but also are under contract to fund tremendous obligations, such as pensions and health care for retired workers. Local governments simply do not have the money to fund such obligations fully. Many states borrow money just to balance their books on an annual basis. Sending even more funds to entities that were running deficits to begin with does not solve the issue; it simply pushes it down the road to be dealt with another day.
To handle our current economic situation more effectively, the US government should instead look toward reducing the amount of debt outstanding in the private sector. While economic activity has slowed of its own accord due to the changing situation and goals of the boomers, the depth and breadth of the downturn have been made dramatically worse because of the explosion in debt that occurred in the 2000s.
In order to erase the unprecedented bubble of the Roaring 2000s, we anticipate devastating losses in housing and business values. Bringing down debt to match this decline would require a write-off of up to $20 trillion in private debt (roughly the amount incurred in the United States from 2000 to 2008). Such a write-off would create savings of well over $1 trillion in interest and principal payments a year for consumers and businesses; now that's a stimulus program that keeps paying off year after year for decades! That level of debt deleveraging is greater than the entire federal debt, which is now approaching $15 trillion.
This overhang of debt and its eventual deleveraging will make the next economic downturn even more painful, just like a detox program is for a drug addict. However, it is the only long-term solution. If the government does not deal with the problem and allow these debts to be written off, as occurred in the early 1930s, we will experience a very-long-term economic malaise, just as the Japanese have experienced for 22 years. Japan still has a weak economy and ever-rising government debt and debt ratios. History will not look kindly on Japan for its unwillingness to make hard decisions about major debt restructuring after its massive real estate and debt bubble of the 1980s!
The US economy and stock market are on "crack." Government stimulus has been a major factor in fueling the greatest credit and real estate bubble in history, and now the government is desperately trying to keep the bubble going at all costs. Funds from the even more desperate second quantitative easing stimulus program (QE2), which the federal government put in place from late 2010 into 2011 (and a third likely in 2012), have not been going to consumers or into bank lending, but have been flowing directly into higher yielding bonds, commodities, and stocks. This misdirection of funds has led to a third and final bubble that will burst between early 2012 and early 2015 but is likely to burst the most between early 2013 and late 2014.
On the employment side, we should pursue activities that would help to rebuild America. That rebuilding is not just about building roads and bridges and shoring up physical infrastructure, although that is important to do. It is also about rebuilding our electronic data infrastructure, including health records and educational reform. The idea is to help those who are currently unemployed through this difficult economic Winter Season while at the same time providing tangible results that improve the nation over time and generate revenues that can pay off the debts required for the investment. This is infinitely more attractive than temporary stimulus programs that create debt for only short-term results at best.
Businesses and Consumers: What We Can Do Right Now
The government has a lot on its plate, but so do business owners. Is now the time to expand? Should you be taking out a loan? What about that office building that suddenly got cheaper? All of these are questions that business owners are asking themselves. Our advice is to remain very conservative through at least 2013 and possibly through 2014 if the government drags out the artificial recovery a bit longer. This is a time to conserve your assets, meaning cash and credit lines. Create a business plan as to which competitors you would like to buy or which clients you would like to have. In the months and years ahead, you should be able to expand your business using your cash and credit to buy those competitors that overextended or that were inefficient to begin with. Expanding in good times is easy; there is plenty of growth for you and your competitors to share. Living and managing a business during a downturn with a shrinking economic pie is very difficult and comes with hard decisions, such as firing long-term employees and shedding lower-performing businesses and assets. Business owners who make it through such bad times should be well prepared when the next season of growth begins and are likely to gain market share, dominating their markets for decades to come.
The personal side is not much different—each of us is running a business: our personal household. During the current economic Winter Season you should not be looking for as much growth in your portfolio and assets, because this season is marked by deflation and low returns, especially on the typical fixed-income investments that are best for retirement. Instead, you should be using the time to generate and cultivate streams of income. The idea is first to preserve the capital and assets you have, and then to receive or create as much income as possible, thereby growing your capital base as prices fall. This will set you up to buy assets at even lower prices in the years to come, which will prepare you for the next economic season.
Now is a crucial time for those who are close to college age. Unfortunately, much of the advice that you will receive will be based on the recent past. Many vocations or career paths that will be suggested will follow the assumption that our economy is going to bounce back quickly. You should call into question even the basic determination of whether to go to college. Is it worth it for what you want to do? Is an Ivy League education worth pursuing if it means accruing hundreds of thousands of dollars of debt? These questions become more important when the possibility of high-income growth in your working years is less certain.
As we contemplate the previous two decades, we should recognize them for what they were: a period of high growth that was driven by the concerted earning and spending patterns of the baby boom generation, exaggerated by an unprecedented debt bubble. We have since moved to a period that is marked by greater savings, less spending, and the deleveraging of debt and that could last well into the next decade. This change in economic season will have profound effects in many areas of life, including employment, income, personal portfolios, business valuations, health care, and education. If we understand what led us to this point, we may be able to manage the situation not only to protect what we have, but also to assist those who are in need. If we do not recognize the factors at work, which are mostly driven by individual demands and desires, then we risk throwing the wealth of the nation into programs and efforts that are doomed to fail. Just as "China will save us" is not the answer, neither is hoarding gold or Swiss francs. Investors who have done well in these investments are simply projecting out recent returns and could end up meeting the same fate as those who thought real estate couldn't go down in the 2000s. We are likely to see gold start to decline, as we warned in March 2011. It may rise once more in 2012 over the Iran conflict before collapsing for years ahead, much as oil did from 2008 onward.
The aging of massive baby boom generations among nations across the wealthy developed world and the deleveraging of the greatest credit bubble in history will lead to deflation in prices. The 1970s was what we call the economic Summer Season, characterized by rising inflation (like rising temperatures) because of the sluggish productivity that accompanies the integration of large numbers of young adults into our economy. We are entering an economic Winter Season, similar to that of the 1930s, in which deflation (or falling temperatures) is the trend, as populations age rapidly in the still-dominant developed countries from Europe to North America to East Asia.
While some analysts and forecasters see this debt crisis for what it really is, most still think that the massive stimulus from the government is going to create inflation due to the unprecedented printing of money and low interest rates. They are wrong, and their strategies for the future likewise will be wrong. Deflation requires personal and business strategies that are entirely different from strategies used during other economic trends—and that is what we will be talking to you about in this book.
In Chapter 2 we look at the primary argument that we have been making for over 20 years: that the main trend that drives economic growth, inflation, home buying, and almost everything else is demographics. We will show how people do predictable things as they age, affecting every facet of our economy, and why the largest generation in history will be saving more, spending less, and causing deflationary trends as they increasingly retire.
1. Historical Changes of the Target Federal Funds and Discount Rates: 1971 to Present. Online chart, updated December 12, 2008. Federal Reserve Bank of New York. Accessed March 2, 2011. Available at http://www.newyorkfed.org/markets/statistics/dlyratesfedrate.html.
Product Details
- Publisher: Free Press (September 11, 2012)
- Length: 368 pages
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Emirates To Grow African Operations By 40% In Coming Decade
Emirates is placing a strategic focus on Africa in the coming decade by increasing operations by over 40%, says Tim Clark, President of Emirates Airline.
Speaking at the Africa Global Business Forum held in Dubai on 1 – 2 October, Clark said that Africa has been a great growth story for Emirates.
"Today, Emirates fleet investment in Africa tops $7 billion with operating costs of over $2 billion. We will add around 10 destinations in the next decade and will continue our investment and commitment to introduce more frequencies to our existing points to provide critical links to emerging markets from Asia, the Middle East and Australia," said Clark.
Clark noted that Africa is still an under-served market. "Emirates will continue to channel traffic through the Dubai hub which has already become a key gateway for the African continent," he said.
Statistics provided by Emirates indicate the airline has carried over 1.6 million passengers and 40,000 tons of cargo between Africa and China in the past five years.
By 2020, Emirates expects to provide an additional 8.5 million seats to its African capacity.
In addition, there are over 500,000 African nationals now residing in Dubai. Over 800,000 Africans visited Dubai in 2013 alone and it is estimated that by 2020, tourism from Africa to Dubai will reach over 1.5 million visitors per year.
Emirates currently operates 22 passenger and 6 dedicated freighter destinations to Africa.

subset: commoncrawl


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Jackson Diner
This is one of those "they used to be good" places. But I wouldn't know that
first hand, as this was my first experience and I must confess
little-to-average knowledge of Indian cuisine. I'm not fussy about it, don't
know the nuances between regional styles and can't detect if Bangladeshis
are manning the kitchens, creating an inauthentic version. So, it was fine.
We tried typical fare like a mixed tandoori grill and lamb vindaloo. The
chutneys were much fresher and spicy than I was used to, the garlic naan was
top notch and the coconut-crusted chicken cutlets with mango chutney were a
nice break from pakoras and samosas. (7/6/02)
Due to off timing, I never seem to be able to take advantage of lunch
buffets. I'm sure that's for the best. But we got our act together this
Saturday and opted for the biggie, Jackson Diner, though there are probably
better choices. Crowded doesn't necessarily equal quality. And yes, it was
packed. There was a line just to get plates and start in.
This buffet had a little flair due to the cooked on demand dosa station, but
a majority of the set up was steam table style. Another table was filled
with condiments, little round chickpea fritters and a giant bowl of what
looked like square fried wontons. Choices included tandoori chicken, basmati
rice, naan, chicken curry, goat curry, a shrimp curry (yes, I'm using curry
generically–I'm unsure of the nuances) with whole hard boiled eggs (I'm
still not down with the Asian fascination with hard boiled eggs). There were
also vegetable dishes like palak paneer, a mixed curry, daal, and something
I'd never seen before, kadi pakora, which was the only dish that made me
kind of think.
The pale yellow color, sour and slightly sharp flavor and mystery main
ingredient reminded me of jackfruit curry I became enamored with a New Asha. As it turns
out the base is yogurt sauce and the pakora is well, a pakora, but chopped
up and mixed in. I had no idea. Kadi pakora is akin to samosa chat, which
is another confusing crisp/smooth mix that's way beyond fritters and dip,
but too thick to be a soup. I tend not to think of curries as yogurt based
because I have a S.E. Asian culinary bias (and a yogurt bias on top of that.
I often buy some little containers for lunch and they end up going bad in
the refrigerator because I never eat them), but that's really what this dish
What a crazy thing. I'm trying to think of an equivalent, it's not like
dumplings in soup because those are doughy and this is crispy fried. It's
more like Chinese crullers going with congee, but both of those components
are kind of bland and these are contrary. Maybe the smooth/crunch contrast
is the appeal of kadi pakora. Or maybe I just like anything fried and fatty,
which I imagine this must be. (11/5/05)
Jackson Diner * 37-47 74th St., Jackson Heights, NewYork


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I get this question a lot. And you know what, it makes a lot of sense. I think people are pressured into purchasing a higher priced digital SLR (that most of them don't need) because they're under the impression that you need to have a really expensive zoom lens to take a nice looking portrait or landscape. Nothing could be further from the truth, and in this article, you'll learn why.
First of all, let's ask ourselves a fairly simple and straightforward question. What, exactly, would we like to get out of a nice portrait of a friend or a beautiful landscape? Most of us would probably say we want a lot of detail, and that's totally true. In fact, that's why we think we need to zoom in. We figure that by zooming in we somehow improve upon detail.
Now that's true to a certain extent, but that isn't the real reason why you should or should not zoom in. Details can't be found in your zoom lens. The image sensor is responsible for them. The better the sensor, the better the detail, no matter how much more you're zoomed in. For most people, a six megapixel sensor is enough to get all the detail you need. You can zoom in or out all day long, and it simply won't matter when it comes to image quality.
So what does matter?
Photography is art, and art is about choices. You need to ask yourself the following:
- What do you want to keep in the photo?
- What do you want to reject?
- What draws attention to your subject?
- What takes attention away?
By zooming in or out, you are making a creative choice. You are deciding what to include and what to exclude.
Will you see more detail in your kid's face if you zoom in? Yes you will, but only because you've decided not to include everything else in the scene. It's no different with a camera than it is in everyday life. If I really want to investigate something, I walk right up to it and get a closer look. Zooming in only helps if you are making the right creative choice. You need to include what truly matters in a scene.
Zooming 101
Here's a pretty basic rule. Zoom in as much as you need to zoom in to get everything that's important into the scene. If you're talking a picture of your Nephew Tim, just include Tim in the portrait. This leads to another creative choice. How much of Tim do you want to include in the photo? Is his face the only important thing, or is he standing at the ready with a tennis racket in hand? Pick what's important and zoom to fit it into the scene.
The same goes with landscape shots. What do you want to include, and what do you want to exclude? If there's a really interesting tree in the foreground, but nothing else catches your eye, zoom in enough to get the tree while excluding everything else. Landscape photos only make sense when you give them some kind of context. Don't just photograph some random hillside. Include a landmark or a person in the foreground, something to set the scene and tell a story. The photographer in the example image to the right did a great job of picking what's important and what isn't. In this photograph, the image is only zoomed in enough to fit the mountains and trees into the frame.
Zooming and the rule of thirds
As you'll learn, there are a lot of "right" ways to make a creative choice in photography. For every subject, there are multiple ways of fitting it into the scene and producing a visually pleasing image. One handy way to find them is to use the rule of thirds.
I know I've talked about the rule of thirds before, but briefly: Imagine dividing your image into thirds, both horizontally and vertically. You should have about nine different sections. According to the rule of thirds, the most visually pleasing arrangements happen when you place your subject where any of the horizontal and vertical thirds meet. That could be in the top left, top right, bottom left, or bottom right thirds of the image.
Now, when you're zooming in or out and deciding what to include or exclude, you simply need to add an extra bit of thinking into it all. Ask yourself if you can keep what you want to keep while remembering to place your subject in some space where those thirds meet. When you have one subject, it's easy. But as you add more and more subjects, it starts to get more complicated.
The above photo takes advantage of this principle. Notice how the right tree is pretty close to the right third, and the left tree is fairly close to the left third. The photographer only zoomed in enough to get both photos into the frame while keeping the rule of thirds in mind.
Sometimes it's better to abandon the prospect of capturing two or three subjects in order to really focus on the one that's the most important. If you just can't get the two subjects to work with the rule of thirds, it's a good indicator that you might want to give up and try something that will turn out more visually appealing. As tempting as some types of shots might be, you need to know when to focus on something else.
Other ways to make a creative choice
There are other ways to choose what you want to put in and what you want to keep out of your shots. One of them is the aperture. When you pick a wider aperture (one with a lower f-number), the background appears more out-of-focus. Similarly, when you pick a more closed off aperture (higher f-number), more of the scene appears in-focus. Just by choosing the aperture, you can decide if you want to emphasize the background or draw attention away from it.
This can be especially useful when taking portraits of people. I can't tell you how many times I've photographed people in front of a distracting background because I had no other choice. By simply opening the aperture, you can blur out the background and draw attention to your subject's face. That's a creative decision worth making over and over again. For example, the background on the image to the right would be very distracting had it not been placed out of focus with a wide aperture. Also note the great use of the rule of thirds placing the boy on the left third of the image.
And remember, you are your best zoom lens
Your portraits aren't going to turn out much better when you buy that fancy zoom lens. If you don't have a good zoom lens, and you want better portraits, why not walk up closer to your subject? That's all zooming does anyway, and assuming there is no obstacle between you and your subject, it ought to work just fine.
If you are a point-and-shoot user, you'll still need to zoom in as far as your camera allows. That's not because you need to, it's because it flatters the face a lot more. The more you zoom out, the more distorted faces will become. By zooming in as much as your camera allows, you're removing lens distortions that can make faces look a little strange.
So, with that said, get on out there and make the right creative choices. Decide what's important and what isn't. Zoom in, walk, climb, or swim to your subject to get everything in the frame that matters. Don't spend your money on a new lens. Spend it on a new pair of shoes.
Most people think this post is Awesome. What do you think?
Although the article was aimed at the use of the camera, I am surprised there was no passing note referring to the various editing procedures, some of which are in cameras, as cropping, resizing/enlarging, etc.


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Similar to the six species display unit, with teak added, this handsome display unit sits well on a showroom top, offering customers an at-a-glance reference of all seven wood species. The one-piece tray itself is crafted of 3″ thick butcher block with a large ogee edge. Routed slots hold each of the 6″ x 6″ sample blocks in place. Laser engraved logo lets customers know they've specified the original Wood Welded Butcher Block. Also available as a five species and six species unit that excludes teak.
• One-piece tray crafted of 3″ thick ogee-edge maple butcher block
• 6″ x 6″ block sample set: Ash, Black Walnut, Cherry, EcoLyptus, Maple, Red Oak, Teak
• Laser engraved logo


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Just a wee P.S….One of the things we enjoyed most about Japan was looking at the traditional, modern, creative and diverse fashion statements made by young and old, male and female. Here are some of our favorites.
Tag Archives: Japan travels
Last Day in Kyoto
In ending this Japanese segment of my mgprontheroad blog, I would like to thank my co-travelers for this extraordinary experience. The tone of these posts differs from my European posts, as traveling with eight other people kept me too busy to actually enter my day to day reflections. It was rewarding speaking about these daily experiences with each other. Let it suffice to say that nine more congenial people couldn't have been found to share this adventure. Thank you Mei and John for including me, and Mei for the hours and hours of organization that made for a such a memorable trip.
On our last day, we decided to divide and conquer and spend our day either exploring new places or returning to places that touched our hearts. I shall begin with Wendy's journey, as it began 46 years earlier. She and Ed set out to discover the convent where Wendy had rented a room 19 years ago, in hopes of finding Sister Moe who lived there when she did and was her "partner" in laughter and great fun. They did indeed find the convent, which is now renamed on a street which has also been renamed. Talk about when there is a will there is a way. The new nuns had just seen Sister Moe earlier that day, and knew that she was at a nearby hotel celebrating her 84th birthday. When Wendy and Ed found her, leaving the ballroom of her party, their reunion ended with Sister Moe saying, "We'll save all our stories from these many years until we meet again in heaven." Needless to say, there were lots of tears of joy and a contented nun who will undoubtedly always remember her 84h birthday, as will Wendy.
As for my day, I returned to Maruyama Park where I spent the day in meditation and gratitude for the life I am now living.
Our Last Supper was celebrated at Kikunoi Maruyama Kyoto — a three star Michelin restaurant that is tastefully designed within the Maruyama Park. The service and presentation were exquisite. As for a three star restaurant experience, so many of our meals were elegantly presented and prepared, so we were a tough crowd to please at this point. But it was lovely, and provided our group yet another magnificent venue in which to circle around the table sharing sentiments of extreme gratitude and love.
Dinner at Yamabuki Temple Preceded by a Visit to Todai-Ji Temple and Ninja Museum of Igaryu
Our second to the last day in Kyoto was busy and full of adventure. It began at the great Todai-ji Temple, a national treasure first constructed in 710 -794 AD, which is known for its chief object of worship — a magnificent Vairocana Buddha (Buddha that shines throughout the world like the sun). The Buddha is 49' tall, resting on a Lotus petal that stands 10' tall. The Temple serves both as a place of peace and affluence on earth, as well as a center for Buddhist doctrinal research, which has produced many famous scholar priests. The statue of Vairocana Buddha is made from cast bronze and plated with gold. It has been damaged and repaired numerous times and the current rendition is 33% smaller than the original structure, yet still ranks as the largest wooden structure in the world. Seeing this Buddha was awe-inspiring to say the least.
Entering and leaving the Temple park, we were greeted by deer who only had eyes for John…
The afternoon was spent engaging in quite a different experience at the Ninja Museum. At first it was hard to imagine why this visit was included on our tour, until we heard the history of these nationally celebrated secret agents. Little did I know that our modern day Ninja is based on such an important cultural phenomenon. I'll let the photos tell a thousand words about this adventure. For me the best part was seeing the Ninja house with secret doors and rooms and compartments where Ninjas could hide from the enemy and escape. Dinner was a traditional meal at Yamabuki Temple. Very elegant, subdued and offered a wonderful opportunity for us to recap our visit and gratitude in preparation for our last day in Kyoto.


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MIDLAND — It really is like stepping back into a magical time.
Families looking for a special festive treat that won't break the bank might want to head to Midland's Sainte-Marie among the Hurons later this month.
The 17th-century, French Jesuit mission hosts First Light for three consecutive nights, beginning Nov. 29. The must-see event features a great lineup of family activities and performers, all amidst the spectacular amber glow of over 5,000 candles.
"It's very magical," explains general manager Jan Gray. "It's multi-sensory. There are so many things to hear, see and experience. It's very, very family-oriented. It's different on the historic site."
Now entering its 13th years, First Light has become a popular draw for both locals and those from away.
"When we started, there were only 1,000 candles and 1,000 visitors," Gray says, pointing out the event now attracts more than 6,000.
Visitors follow candlelit pathways set up alongside the site's many reconstructed wooden buildings that feature costumed interpreters welcoming guests with traditional activities in the blacksmith shop, church, chapel, Jesuit residence, cookhouse and a native area featuring authentic longhouses.
Besides Sainte-Marie staff, there's also plenty of community involvement with an abudance of great music all three nights thanks to delightful school and community choirs singing in both English and French, chansonniers performing Franco-Ontario folk songs and lively Native drumming, singing and storytelling as well as an eclectic mix of other musical acts coming from as far away as Burlington and Brantford.
For the younger set, there's a bevy of kid-friendly activities throughout the site from making corn-husk dolls and beaded bracelets to creating fleur-de-lys key-chains and special notes using a quill pen.
But Gray is quick to point out the special, quaint feel of the site combined with the high-quality entertainment also makes the event a great draw for those attending without children.
"It's perfect for all ages," she says. "It's pretty amazing. There's a little bit of everything for everybody."
The event, which runs irregardless of weather, is also very walkable given how compact Sainte-Marie is compared to other historic sites like Fort William in Thunder Bay.
"This is an event that continues to grow," Gray says. "We are finding that people are coming up from the GTA for it. It's considered one of the top 100 festivals and events in Ontario."
Event coordinator Peter Vyvyan has been involved with First Light since its inception.
"It's really a community event," says Vyvyan, adding it takes staff about three hours to ensure all candles are lit and fires are roaring in the buildings.
"It really brings our staff together. Regardless of what department you work in, everybody works First Light."
There are also activities involving other groups like the nearby Wye Marsh Wildlife Centre, which has a birds of prey demonstration, and reenactors, one firing black-powder muskets and another offering glimpses into a colourful historic encampment.
And for some early holiday shopping a bevy of craftspeople will be selling their wares while the site restaurant transforms into a French café featuring performances by a traditional francophone family group.
First Light also serves an important role for a local food bank since attendees are encouraged to bring a non-perishable item.
"The local food bank really depends on this event," Vyvyan says, noting large birchbark canoes where items are placed need to be emptied each night to make room for the next day. "This event collects about 6,800 pounds of food."
Andrew Philips is a freelance writer based in Toronto.
GOING First Light runs Nov. 29, 30 and Dec. 1 from 5:30 to 9 p.m. Admission costs $8 per person (5 and under free), with a non-perishable food item donation.
SLEEPING The historic site is teaming up this year with the local Super 8 location to offer a special package. Starting from $125, guests get hotel accommodations, breakfast and up to four First Light admissions.
WEB SURFING saintemarieamongthehurons.on.ca.


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"Okay, how 'bout a sheep. Would you have sex with a sheep?" I asked.
"Mmm," Ryan replied. "Boy sheep or girl?"
"Like it matters?"
"If it's a boy sheep, that's gay. Okay, let's say I bought a hamburger, would you eat it?"
"Nope," I said, "No way."
"For a hundred dollars?"
This was twelve years ago. Ry and I were driving Route 1 down from San Francisco, winding through Big Sur as the sun and clouds painted patterns on the Pacific. We had loads of time to dream up sophomoric questions.
"Would you eat a person for a hundred dollars?" I replied. "Like a manburger?"
"How about for a million?" he continued. "A million bucks?"
"Still no. Would you eat your dog for a million bucks? Like if I ground up Clipper's little ears and paws and cute nose and tail and stuffed 'em in a sausage skin?"
"Well, maybe not the nose."
"Okay, say we take out the nose," I said. "Clipper sausage for a million bucks?"
"Throw in the sheep and you've got a deal."
Six months later I was in Tokyo. I hadn't eaten meat for more than a decade, and after a while, the thought had come to disgust me. I mean, who amputates a limb and then starts gnawing on it—-what're you, a zombie? That's pretty gross. But I also knew being a vegetarian in Japan, where even miso soup is swimming with fish stock, was basically impossible. And I had no intention of moving to this country only to sequester myself in the back of Indian restaurants and vegan cafés. So I cut a deal. I'd eat seafood. Any seafood. Okay, and eggs. And milk. But that was it.
Being a Vegetarian in Japan
So I was at this yatai near Idabashi station. It's basically half a rundown shack with red paper lanterns and like eight stools. Maybe you've been there. It was night, and winter, and I was having hot sake and oden, which is a mix of steaming broth with daikon radish, fried tofu, shitake mushrooms, and a hard-boiled egg. Sure, other combinations are possible, but that's not the point. Anyway, after about an hour chatting with other customers, the proprietor leaned over the counter. She was a sweet and horribly decrepit old lady who appeared to be about a hundred and forty. She laid a skewer of grilled chicken in front of me.
"Service," she said. That's Japanese for "On the house."
I looked down at desiccated pieces of some bird's body, stuck through with a wooden poker and tortured over a fire, like a little chicken Jesus on my plate.
"Oh, uh, thanks," I replied. I'm nothing if not polite. It was disgusting, but I ate him, washed his little body parts down with a bottle of Asahi beer. Then I thanked the kind old lady, paid the bill, and calmly descended into Idabashi station and puked in the bathroom. So that didn't work out too well.
What Gaijin Eat
But it's good to make friends in Japan, and my objective's always been to just be a regular guy. Speak Japanese, drink beer, eat . . . a bowl of lentils and broccoli. Ah, there's the rub, hey. So when my neighbors Shun and Makiko invited me to dinner at their apartment, I went. I brought three cans of malt liquor and half a bottle of shochu. I mean, you can't show up empty handed. "We're having curry!" Shun proudly announced. I looked into the big earthenware pot, bubbling with carrots, onions, potatoes, and lurking somewhere deep under the surface, pieces of meat. But the last thing I wanted was to make everybody adjust for me. And I was conscious of being, you know, a foreigner.
Because here's the ever-present dialog: You foreigners don't shower before bed, right? You people can't use Japanese squat toilets, right? You don't brush your teeth after lunch, right? You people don't like hot baths, right? You don't eat raw fish, pickled vegetables, or rice, right? Japanese folks love to probe for ways that you are different, and Seeroi Sensei's not trying to reinforce any stereotypes. But how're you gonna fit in to Japan, unless you fit in? Aside from language, food's about the number one thing people people connect with.
So when Makiko ladled out a hot bowl of rich, brown curry, I gratefully ate it and said it was good. Actually, it was good. To be honest, curry's so damn strong it doesn't much matter what's in it. I'm pretty sure Japanese moms have accidentally knocked in a few kitchen sponges over the years and no family's ever been the wiser.
Traditional Japanese Food
So that was the start of the end of my vegetarianism. What's the emoticon for sighing? Eh, I'll look it up later. Anyway, Ken Seeroi came to Japan with sky-high ideals and pie-eyed notions of what Japanese people were like. This, by the way, did not include the fact that they eat every damn thing that moves, and are crazy for meat. So over the years and entirely against my will, this is what I've wound up eating:
Bear soup
Snapping turtle soup
Wild boar curry
Raw horse
Raw chicken
Whale meat
Whale tongue
Shrimp with the head, tail, shell, and all
Sting ray
Sea snake soup
The flesh off a live fish still writhing and staring at me
The flesh off a live squid whistling and struggling to breathe
Pickled squid innards
Cow innards stew
Fish eggs
Fish sperm
Fish eyeballs
Some horrible sluggy thing like a giant escargot
A mouthful of tiny fish that swim around as you swallow them
Whatever the fuck this is
And here's the question Japanese people ask because I'm "a foreigner": Can you eat . . . natto?"
Soybeans. Seriously. That's your test? Did I mention I'm starting to wonder if Japanese people are actually retarded? I did? Oh, right.
Being a Vegetarian in Japan
After all that, I still didn't eat meat, and I still don't. I mean, except for fish, and even then I feel a bit guilty. But over the years I've been invited to hundreds of dinners, welcome parties, and goodbye parties, and nobody seems to notice if I go heavy on the edamame and pick around the bacon in the potato salad.
So last Friday night, I went to an end-of-the-year party with a bunch of coworkers. Hard to believe it's that season again, but sure enough Christmas music was blaring and the pine trees were all decked out with lights and tinsel. Very traditional about their Christmas, the Japanese. I was seated at a table with three other folks, and we were slugging down beer and bantering. Things were going great, and then the waiter set down a small wooden platter with four pieces of bruschetta carefully arranged into a diamond shape. And on top of each one was a thin slice of ham. I really wanted to lift it off and stash it somewhere. Like maybe in a planter. But then everybody picked up a slice of bruschetta, and I did too, and we ate them. It didn't kill me. Probably can't say as much for Wilbur the pig, however. Sucks to be him.
And Michiko to my left turns and says, "You people love bruschetta, right?"
I was like, "Well, um. Some people do, I mean, I guess. But, you know, ham . . ."
"Right?" said Shohei, sitting across from us. "They love ham. And bacon, any kind of pork. For Christmas, they eat ham and turkey and sausage." And then he launched into a story about living with an American family as an exchange student.
Everyone nodded like mad and made that Japanese sound of heeeey, which means "Oh really? Very interesting." And I did too, of course. Because it was interesting. I've learned many amazing things about foreigners since coming to Japan. Including the fact that you guys eat some really weird foods. Miracle whip, Cheese Whiz, Sloppy Joes, raw mushrooms, kale, baby carrots, Hamburger Helper, macaroni and cheese, meatloaf, green bean casserole. I don't understand it, but hey, apparently you people love that stuff. Right?


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By The Numbers: MLB's Top 10 Practically Unbreakable Records
By Father Gabe Costa
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Numbers are fascinating. Mathematicians and statisticians love them. And, in a real sense, the only way to understand baseball is from a quantitative approach.
In their classic book, "The Hidden Game of Baseball" (ISBN13: 9780385182843), authors John Thorn and Pete Palmer write: "Baseball may be loved without statistics, but it cannot be understood without them."
While growing up as a kid and hanging out with my friends on the corner of Second and Monroe Streets in Hoboken, when we weren't playing stickball, boxball or touch football, we would be talking sports. Since baseball was our favorite sport, a lot of our conversations centered on the National Pastime.
And certain numbers always came up; numbers, such as, 714, 892, 3508 and 2130.
None of us even had to reference or contextualize these figures. Everyone knew that these four numbers represented Babe Ruth's lifetime home run total, Ty Cobb's lifetime stolen base total, Walter Johnson's career total of batters he fanned, and Lou Gehrig's consecutive games played record, respectively.
Not one of us figured any of these marks would ever be surpassed. They were Magic Numbers.
Well, decades later, we certainly know better. Hank Aaron and Barry Bonds have both hit more than 714 home runs. Rickey Henderson, for one, has left Ty Cobb in the dust.
Nolan Ryan and others have far surpassed the Big Train in total strikeouts. And we all know that Cal Ripken has bettered the Iron Horse's skein by about 500 games.
Still, it always came down to the numbers. And, of course, thanks to Bill James and many, many others, we have had the advent of sabermetrics… talk about numbers!
Lately I've been wondering whether there are any truly "unbreakable" records. That is, I asked myself if there are numbers so "magic," that they will never be surpassed? To get some input, I contacted some of my old pals from Hoboken – John Conforti, Bobby Lemke, Kenny Riordan and Jimmy Vincenti – to ask them to give me some suggestions.
In this episode of By The Numbers we list, a la David Letterman, some seasonal and career records which range from very difficult to virtually impossible (?) with respect to being overtaken.
These are some of the records we came up with:
10. Most RBIs in a season (currently held by Hack Wilson with 191)
9. Most career strikeouts by a pitcher (currently held by Nolan Ryan with 5714)
8. Most career steals of home (currently held by Ty Cobb with 54)
7. Most wins by a pitcher in a season (currently held by Jack Chesbro with 41)
6. Most consecutive games with a hit (currently held by Joe DiMaggio with 56)
5. Most consecutive games played (currently held by Cal Ripken with 2632)
4. Most career shutouts by a pitcher (currently held by Walter Johnson with 110)
3. Highest career slugging percentage (currently held by Babe Ruth with .690)
2. Most career complete games by a pitcher (currently held by Cy Young with 749), Most career wins by a pitcher (currently held by Cy Young with 511), Most career losses by a pitcher (currently held by Cy Young with 316)
1. Most consecutive no-hitters pitched (currently held by Johnny Vander Meer with 2)
Can these numbers be surpassed? Will these records ever be broken? Let Father Gabe know in the comments below...
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text: My in-laws generously gifted us a trip to the Bahamas for Christmas. It was a 3 day cruise on Royal Caribbean out of Port Canaveral with stops in Nassau and Coco Cay. We talked a lot about the boat in advance of the trip to build excitement and answered A LOT of questions — especially


text: Birds are naturally curious and playful. Unfortunately, they don't know what is and isn't safe for them. Therefore, it's very important for people with birds to make their homes safe for their feathered friends. Here, a Pasadena, MD vet discusses birdproofing your home. Windows/Mirrors Many pet birds have seriously injured themselves by flying into windows or mirrors, as they don't recognize glass surfaces as barriers. Drapes or shades will help keep Polly from doing this. … Read More


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words // Luis Sanchez
One of the lower-priced Nike Basketball shoes Eastbay has to offer, the Air Visi Pro II, is finally here in the perfect color combination for this upcoming season. The Nike Air Visi Pro II utilizes a full leather and mesh upper, while still providing maximum breathability. Maximum comfort is provided in the form of a heel Air unit, combining with a full-length Phylon midsole. As for the colorway, we see the classic Magic-inspired combination of black, white and varsity royal. Black and white takes care of most of the upper, while varsity royal covers the outsole and liner.
The Nike Air Visi Pro II is now available from Eastbay.


text:
I haven't known many good fathers. It's a difficult position to fill. It may be partly due to the way we've raised boys for the last 50 years–mothers tend to do too much for them and be too soft on one hand, or be disengaged on the other. Fathers tend to be either disengaged or harsh and controlling–not having good fathering themselves, they don't have a healthy blueprint.
I've said before parenting is hard! You may have a picture of who you want to be, but being it feels so foreign. We have to concentrate and be purposeful if we want to change much from how we were parented. However, it is important and worth the effort. There is nothing more important than raising emotionally and spiritually healthy children. They grow into adults who can care and serve, improve the lives of others and society, be strong enough to make change for good.
I love it when I see people putting in the effort and time to be present with their children–being intentional, engaging them in conversation, holding boundaries, having clear and stated expectations, and showing affection. Such parents are my daughter and her husband. Yes, the one I called out here. I also said he was a good man. He treated me well when I met him, he included me in their plans, and opened up and shared his heart. God knew I would need that information for the potholes on the road ahead.
He seems to be always thinking about how he can grow his four sons into good men. He models service and takes them with him to keep the lawns and flowerbeds around their church looking good. He engages their help on projects so they can learn how to handle tools and themselves. And he usually takes them one at a time either to help him or run errands. They love being with him. And that speaks of his respect for them.
I remember before they got married asking the two oldest if they wanted them to get married. (It was pretty obvious–they had been praying for him to come over for six months before he did, but I wanted to hear what they would say.)
They both said a feeling yes, so I said, "You like the way he treats your mother?"
And the younger said, "We like the way he treats us!" I was so impressed to hear a 7 year old say that!
Their step-dad sold his beloved motorcycle because "it wasn't the time of life" for one. He got a motorhome so they can all go camping. He's a busy man but he has gotten an old truck so he and the oldest can fix it up together for when he is ready to drive–about two years from now. He is capable like my daughter's father, and can do most anything. He will be a great teacher for her boys. But the best part is that he wants to be. And even better than that, I know he prays for help and direction daily.
There isn't a more influential position, no more powerful job than parenting. And fathering is so important that Jesus was purposely planned to be born in a stable, most likely a cave, so he could be birth-bonded to Joseph, his stepfather. The father-love of God would be his favorite topic, and he needed to have a good earthly experience of that from birth. Joseph obviously died before Jesus was 30, but by that time, Jesus had formed such a powerful, real connection with God, his biological father, that he transitioned that loss well.
He modeled for us the relationship we can have with God as our own father. So don't despair if your father was less than good. Satan has worked very hard with his forces to distract fathers and discourage them from filling their roles well, because he knows how important it is to our maturity.
Consequently, many of us didn't have great fathers. But we do have one in God. And He is just as available to us as He was to Jesus while he grew up here as a human man. Abba pursues you more ardently than any human father would or could. You can talk to Him at any time, in any place no matter what. All you have to do is want to. No, you don't even have to want to. You can choose to even without the feeling. He honors any tiny step toward him no matter how feeble, any tiny choice for Him no matter how flimsy, and takes a huge compensating step toward you.
He will give you what you need, what you want in a father, the approval and structure you crave, even to a sense of his personal presence holding you. You never have to feel rejected or alone again because He loves you as if you are His only and His own. Make a special time to be with Him and He will be there for you; you will feel His smile.
In the words of Kristine D'Marco's song, "He is my father; I never wonder if His plans for me are good, if He'll come through as He should; for He is provision, and enough wisdom, to usher in my brightest days, to turn my mourning into praise. I am who He says I am. He is who he says He is. I'm defined by all His promises, shaped by every word He says. I am no victim. I'm not a poor man. With the King I have a home, the kingdom's now become my own. He is my father. He is provision."
If you want to get a good look at the father-love of God read episode one of Love's Playbook!