Our Non-retirement Accounts Are Up 34.3%

All statistics are in US Dollars (USD) unless normally stated. This month saw a record gain in net worth in US Dollar terms, because of the carrying on rise in the Australian Dollar mainly. Net worth also increased in Australian Dollars terms. Underlying investment performance was also strong – strong enough to result in investment gains in Australian Dollar terms despite the drag exerted by the appreciating currency.

Trading results were negative but improving. US3,944. This calculation is useful for forecasting future expenditures. 13,280) included a refund of relocation expenses from Snork Maiden’s employer. She got paid by her previous employer also. We’ve told them to avoid paying and we might need to pay this money back, but also for the brief moment I am keeping track of it as income. 784) also started kicking in (in theory – we only got the application forms for her superannuation today!).

8317 from the carrying on rise in the Australian Dollar. 948 if exchange rates had remained constant. In AUD terms non-retirement accounts gained and retirement accounts lost for the month. Investment return in US Dollars was 5.21% vs. 3.92% gain in the MSCI (Gross) World Index, that i use as my overall standard and a 1.59% gain in the S&P 500 total come back index. Non-retirement accounts gained 6.41%. Returns in Australian Dollars terms were 0.49% and 1.67% respectively. The earnings on all the average person investments are net of foreign exchange movements.

Foreign currency benefits appear at the bottom of the desk together with the sum of most other investment income and expenses – mainly net interest. The Google and Amazon investments were two of the negative contributors. Symbion also fell in the wake of ongoing shenanigans orchestrated by Primary Health, which is attempting to block the merger with Healthscope. Nice gains were observed in listed and unlisted money and some specific stocks and shares (e.g. Rick’s Cabaret). Index trading only saw small gains. See the trading report.

100% Equity is not essential. I concentrate on this option since it is, in truth, cleanest, and I want to make the case that 100% collateral is possible and reasonable. You accept that Once, then 75% collateral can work too. It would be just about bulletproof: the institutions would need to be vulnerable to shedding 75% of its value before a run could start. To point out, not absolutely all debts or set value debts is similarly dangerous. Your gas bill is a fixed value claim, but the gas company can’t bankrupt you tomorrow if they call and say “we want our money” and also you don’t pay up.

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The transition seems hard. Issuing gobs of equity noises costly. But again, take a look at structure (3). No new money is necessary. We are simply just changing debt with equity. In fact, a day we’re able to do it in. The Bank’s current liabilities are transferred to the fund, in substitution for newly issued equity. Nobody has to go to the market! That’s not necessary, but I believe it makes clear that we don’t need more money or a complete great deal of discombobulation.

In fact, I believe banking institutions would gradually redeem personal debt for collateral without much trouble. Michael, as a manager of a bond fund, emphasized the necessity of large banks with global reach to be reliable counterparties and market makers on a variety of assets. But equity-financing helps them! If equity financed, banks can be as “big” as anyone desires, without causing dangers.

We don’t need to split up the banks or fear size. Michael Keen gave a great introduction to tax issues. The tax code is also a lot of patches applied to cure the consequences of other taxes. He pointed out that the total tax wedge includes the taxes paid by the lender, and the taxes on interest paid by investors.