Are Swiss Racists?

The  Swiss  Handshake

Just some of the many benefits of having a beautiful, 22-year-old daughter who is a recent graduate of the left-wing / ALP / Greens / student union dominated Adelaide University is that I’m often reminded, amongst many other things:

  • how much I don’t know;
  • how truly evil guns are (sadly, she wasn’t there long enough to also learn how truly evil large white trucks are as well!); and
  • how politically incorrect and insensitive I am.

I was at an ‘Edge Church’ function at Feliciano’s Restaurant in Gilbert Street, Adelaide a few weeks ago and was distracting Dom, the owner, from his important pizza making duties.

During my discussion, Dom asked me if I considered myself to be a racist.

It didn’t take me long to answer Dom’s blunt question with a “Well  ……………  yes and no” answer.  I then continued:

“Dom, the daughter of one of my closest friends in the whole world married a Pakistani Muslim about 4 years ago.  When ‘Jill’ first started dating ‘Jack’ (needless to say, not their real names) about 6 years ago my friend ‘Adolf’ (not his real name either) was somewhat apprehensive about his daughter Jill being involved in a relationship with a practising Muslim.

However, after a while, Adolf mentioned to me that Jack is actually ‘quite a nice bloke’ and Adolf asked me, given Jack’s professional university qualifications, if I could do anything to help him obtain a job as something better than a taxi driver or restaurant kitchen hand, as he was then.

 Not questioning for a moment my friend Adolf’s assessment of Jack, I arranged for Jack to be interviewed (and, later, employed) by a business with which I was then closely associated.

 6 years on, Jack is still gainfully employed at the same business and Jill is delightfully happy with being married to Jack.

Jack will often come out to dinner with Adolf and me for our Friday evening “blokes’ nights” and although, and fair enough, he passes on having bacon on his hamburger, he is now ‘part of the furniture’ and an integral and important part of Adolf’s extended family.

On my understanding, Jack goes to a mosque occasionally and observes fasting during the Ramadan feast  –  but he doesn’t make a big deal of it  –  and although he seeks mild concessions from his employer (such as starting and finishing earlier than usual) it’s barely noticed by any of the people with whom he works.  Jack doesn’t make a big deal of being hungry every day!  He certainly no martyr about it all.

When Jack and Jill were married they had a Muslim service on a Friday evening at an Adelaide mosque and then a non-denominational Western civil service the following afternoon, followed by a very traditional Western reception at a popular Italian restaurant in Adelaide.

In short, Jack has consciously and intentionally integrated himself into a traditional Australian family and he is welcomed with open arms by just about every Australian with whom he interacts  –  except when Pakistan is beating Australia in cricket! J

Accordingly, when it comes to Muslims like Jack I do not consider myself to be racist in the least but, to the contrary, both welcoming and accommodating.

Compare Jack to ‘Mustapha’ (yes, his real name!) who I had the displeasure to know for a short while in 2014.

Mustapha made it very clear to me that the only reason he would talk to me was because he was forced against his will into a situation where he had to.

During Ramadan, Mustapha expected the world to revolve around him and bend over backwards to make concessions for him given the obvious and regularly professed pain and agony that he endured during the tortuous, month-long fasting process.

Because I did not share Mustapha’s religious beliefs he was constantly scornful towards me and made it quite clear that he considered me to be lower in status than a bug upon which he might step whilst walking down the street.

Mustapha constantly boasted that it was preordained (that’s my word, not his) by his family that he would have many wives in Australia and somewhere between 10 and 15 children  –  all of whom, to his great and constant amusement, would be fully supported by the Australian government.  Mustapha had no interest whatsoever in ever obtaining a job and he was only interested in researching Islamic theory and beliefs – and he considered radical Islamic views and ideology to be his sole source of inspiration in life.

ISIS had only become known of in Australia a few months before I had my unfortunate association with more stuff – but even then, he considered their actions to be admirable.

The concept of socialising with a non-Muslim was repugnant to Mustapha and he could think of no worse a future than having to interact with non-Muslims on a regular basis.

So, when it comes to Muslims like Mustapha I do, absolutely and proudly, consider myself to be a racist and not the least welcoming or accommodating.”

Dom could not think of a reason to disagree with my views on racism  –  even though I pleaded with him to show me any error(s) in my views, if he could, in fact, see one or more errors.

Dom then, finally, went back to making his pizzas for all who were in attendance.

The Swiss ‘Experiment’

It was only shortly after this conversation with Dom that I became aware of a situation that has recently occurred in Switzerland – and it made me think that, sometimes, it’s the little things that are most telling.

In Switzerland it has long been customary for students to shake the hands of their teachers at the beginning and end of each school day.  In short, it’s a sign of solidarity and mutual respect between teacher and pupil and one that is thought to encourage a positive classroom atmosphere.  Swiss Justice Minister Simonetta Sommaruga felt compelled to explain in some greater detail that shaking hands was “a part of Swiss culture and daily life”.

HandshakeThe reason that Minister Sommaruga felt compelled to speak out about the handshake was that two Muslim brothers, aged 14 and 15, who have lived in Switzerland for several years (and thus are familiar with its values), in the town of Therwil, near Basel, refused to shake the hands of their teacher, a woman, because, they claimed, this would violate Muslim teachings to the effect that contact with the opposite sex is allowed only with family members.

At first, the school authorities decided to avoid trouble, and initially granted the boys an exemption from having to shake the hand of any female teacher.

However, an uproar followed and, as Mayor Reto Wolf explained to an international news service “The community was unhappy with the decision taken by the school.  In our culture and in our way of communication a handshake is normal and sends out respect for the other person, and this has to be brought home to all of the children in school.”

In this regard, and for independent verification, you can read this international news service article HERE:

Therwil’s education department reversed the school’s decision, explaining in a statement in late May, 2016 that the school’s exemption was lifted because “the public interest with respect to equality between men and women and the integration of foreigners significantly outweighs the freedom of religion.”  It added that a teacher has the right to demand a handshake.

Furthermore, if the students refused to shake hands again “the sanctions called for by law will be applied” – which included a possible fine of up to the equivalent of approximately US$5,000.

This uproar in Switzerland, where many people were enraged at the original exemption granted to the Muslim boys, did not end after that exemption was itself overturned by the local Educational Department.

The Swiss understood quite clearly that this was more than a little quarrel over handshakes – it was a fight over whether the Swiss would be masters in their own house, or whether, in the alternative, they would be forced to yield, by the granting of special treatment, to the (and I, Peter Kerin, say “distorted”) Islamic view of the proper relations between the sexes.

It is one battle – small but, to the Swiss, significant – between bleating, complaining and ungrateful Muslim immigrants on the one hand and the indigenous Swiss on the other.

Needless to say, once the exemption was withdrawn, all hell broke loose among Muslims in Switzerland.  The Islamic Central Council of Switzerland, instead of yielding quietly to the Swiss decision to uphold the handshaking custom, criticized the ruling in hysterical terms, claiming that the enforcement of the handshaking is “totalitarian” because its intent is to “forbid religious people from meeting their obligations to God.”

That, of course, was never the “intent” of the long-standing handshaking custom – which was a nearly universal custom in Switzerland – and, in Swiss schools, had to do only with encouraging the right and positive classroom atmosphere of mutual respect between instructor and pupil, of which the handshake was just one aspect.

The Swiss formulation of the problem, namely, weighing competing claims, will be familiar to residents of many Western countries who are versed in Constitutional adjudication.  In this case “the public interest with respect to equality” of the sexes and the “integration of foreigners” (who are expected to adopt Swiss ways and not force the Swiss to exempt them from some of those ways) were weighed against the “religious obligations to God” of Muslims, and the former interests were, quite sensibly in my opinion, found to far outweigh the latter.

What this recent event shows is that, even at the smallest and most seemingly inconsequential level, Muslims are challenging the laws and customs of ‘the Infidels’ among whom they have been allowed to settle, all with a view of, in due course, a stealthy jihad towards the dominance of sharia law.

Each little victory, or defeat, will determine whether Muslims will truly integrate into a Western society or, instead, refashion that society to meet and appease Muslim requirements.

Thankfully, the handshake has been upheld and, what’s more, a stiff fine now will be imposed on those who continue to refuse to shake hands with a female teacher.

This is a heartening sign of non-surrender by the Swiss – but the constant challenges of the Muslims within Europe to the laws and customs of the indigenous residents and citizens have no logical end and, I fear, will not stop.

I also suspect that the greater the number of Muslims that are allowed to settle in Europe, the stronger and more frequent their challenges will be.  They are attempting not to integrate, but rather to create, for now, a second, parallel society, and eventually, through sheer force of numbers from both migration and by outbreeding the Infidels, to fashion not a parallel society but one society – which society is dominated by Muslim (ie: sharia) law and customs.

The Swiss handshaking dispute has received some, but not enough in my respectful opinion, press attention.  Presumably, it’s been deemed too inconsequential a matter to bother with.

However, the Swiss know better  –  and so should we in Australia where we are constantly besieged by unrealistic left-wing (and in particular, Green) politicians who are besotted with the idyllic and naive notion of letting in tens (if not hundreds) of thousands of Muslim refugees who, like those resident in Switzerland, will, I believe, constantly challenge Australia’s values and way of life, little by little and step-by-step.

A lawyer at Finlaysons in Adelaide recently reminded me that there is an old Scottish saying that in one variant reads: “Many a little makes a mickle.”  That is, “the accumulation of many little things leads to one big thing”.  That’s what’s happening in Europe today.

The Swiss result was one victory for the side of sanity.  There will need to be a great many more.

In Australia this comes back to, amongst many other things, these people refusing to stand in Court.  In my respectful opinion, fines  –  and possibly jail time  –  should be introduced as it’s just not acceptable.

I’d like to remind the unrealistic left-wing (and in particular, Green) politicians in this country of the essence of a saying that I read many, many years ago that had been penned by a Jewish survivor of the Holocaust in Europe in the 1940s, and that saying is along the following lines:

“………………………  and those who constantly shouted ‘appease, appease’ were the first to be slaughtered by those whom they tried to please.”

If taking these prima facie hard-line views makes me a racist in accordance with the popular, leftist and ‘politically correct’ definition of the word – then I’m proud to be called a racist.

That said, if more Muslims like ‘Jack’ come along, I’ll continue to be welcoming, encouraging and generally supportive of them.

Peter Kerin

Peter Kerin

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Deutsche Bank Collapse

The  Impending  ‘Deutsche  Bank’  Collapse

This article is a little long – but it’s a complex and important issue!  Please persist until the end!

The legendary share investor Warren Buffett describes derivatives as ‘weapons of mass destruction.

With this description I can well and truly agree  –  primarily as a result of having been made a ‘victim’ of irresponsible and undisciplined derivatives trading in late 2007 when (lunatic) Leonard Joseph Abrahams in Melbourne ignored and then broke every element of a conservative trading mandate that had been given to him – resulting in the reckless loss of just on $400,000 in two trading days!

Notwithstanding his description of derivatives, ‘The Oracle of Omaha’ says one thing and does another  –  as evidenced by the fact that Berkshire Hathaway has billions of dollars worth of derivatives on its balance sheet.

At some point in the future, these ticking time bonds may well erupt and splatter Berkshire Hathaway with searing and destructive flows of derivatives lava.

When financial markets close (as they did for 5 months during the First World War) or become victims to huge volatility (as they did during the Global Financial Crisis of 2008/09 {even though it really started in late 2007}) huge problems can, and generally do, arise.

At the end of the day the global derivatives ‘game’ is a horrible, ugly, unpredictable game played out  –  almost invariably with other people’s money  –  by immoral and ravenously greedy institutional (though some private) traders, which ‘game’, from a risk perspective, makes Russian roulette with live ammunition seem about as risky as sitting in front of the TV and watching ‘Sesame Street’!

In my respectful opinion, the global derivatives ‘game’ will wreak havoc on the world in the not too distant future.

Fortunately though, there is a way to survive and prosper.

In (almost) the words of Senator elect Pauline Hanson, “Please (let me) explain”.

A European Financial ‘typhoon’ is nearly upon us

With the mainstream media focused on global growth concerns after the sensible and successful ‘leave’ Brexit vote, please, let’s all face reality, even if only for a moment.

I believe that the Brexit vote will, in all likelihood, prove itself to be a major and positive turning point in British history.

Europe is heading towards a major ‘financial contamination’ event.

The European Commission (EC), firmly believing that it’s an elitist hierarchy, has overstepped the line to a considerable and unreasonable degree.

The undemocratic and unelected EC bureaucracy has tried to federalise (and, almost, nationalise) Europe by means of its sheer political (and, largely, hidden) agenda.

For example, roughly two thirds of all the ‘laws’ that apply in ‘the UK’  –  most of them being unfavourable to the UK  –  are linked to the EU.  On the 23rd of January, 2014 the London published “Financial Times” reported, amongst other things:

Britain suffered a serious defeat in its campaign to limit the power of EU financial watchdogs after Europe’s highest court dismissed London’s attempt to prevent Brussels from winning powers to ban short selling.

In a keenly awaited ruling with broad implications for how the EU regulates financial services, the European Court of Justice threw out a legal argument Britain has relied on for decades to prevent Brussels from extending its powers.

The judges rejected all four of Britain’s pleas in a finding that will cast a shadow over the UK Treasury’s recent strategy of asking courts to overturn unwanted rules it failed to block during the EU legislative process.

If the UK had voted to remain in the EU, when the sovereign debt crisis hits, this law would have destroyed London, the city that is considered to be the financial capital of Europe.  Without access to short selling, many institutions, hedge funds, investment banks, corporates and pension funds would have done business elsewhere.

Fortunately for the UK, it voted to remove itself from this EU / EC dictatorship.  Despite the scaremongering by the global elitists in recent months, London should be able to survive and prosper.

However, the EU has neglected the strong will of the European people for far too long and this is why the majority of Europeans have turned against the bureaucrats in Brussels.

By voting itself out of the European Union, Britain regained its sovereignty.

Now, eight more countries that have also had enough want to hold referendums to exit the EU.  France, Holland, Italy, Austria, Finland, Hungary, Portugal and Slovakia might all leave.  This spells disaster with a capital ‘D’ for the European Union.

With the writing on the wall for Europe (and the EU in particular), a huge amount of capital will want to escape its borders.  When this happens, the US dollar  –  the world reserve currency  –  may well (and, should) become a distinct beneficiary and soar way higher.

The European banking collapse is next

The International Monetary Fund (IMF) well knows that a major financial meltdown is looming.  Of course though, it will never admit or tell you that!!

In a report it published last week  –  entitled ‘Financial System Stability Assessment’  –  the IMF wrote, with my emphasis added:

Domestically, the largest German banks and insurance companies are highly interconnected.  The highest degree of interconnectedness can be found between Allianz, Munich Re, Hannover Re, Deutsche Bank, Commerzbank and Aareal bank, with Allianz being the largest contributor to systemic risks among the publicly traded German financials.

Both Deutsche Bank and Commerzbank are the source of outward spill-overs to most other publicly-listed banks and insurers.  Given the likelihood of distress spill-overs between banks and life insurers, close monitoring and continued systemic risk analysis by authorities is warranted.

In other words, if Deutsche Bank  –  currently Europe’s largest bank  –  becomes bankrupt, it would trigger a very ugly ‘infection event’ across all of the world’s banks and life insurers.  Needless to say, this isn’t great news  –  in particular considering that Deutsche Bank failed a US ‘banking stress’ test as recently as Thursday of last week, the 30th of June.  The BBC bluntly and objectively reported this disturbing event as follows:

While all 31 large US banks passed the (banking stress) test, Morgan Stanley only got conditional approval and has to submit a new capital plan by the end of the year.

For Germany’s Deutsche Bank it was the second year that the subsidiary of the German lender failed the test while for Spain’s Santander it was the third time.

While the Fed noted improvements for the two banks, the regulator said there were continued substantial weaknesses.

Hmmmmmmmmmm  –  “continued substantial weaknesses”  –  and they’re the words of the US Federal Reserve, not me!

However, this shouldn’t really come as a shock.  Again, please let me further explain.

In its 2015 annual report Deutsche Bank boasted a notional derivatives exposure of €41.9 trillion, yes, trillion, NOT billion (which is approximately US$46.5 trillion and approximately A$62 trillion).  This comprises about 10% of the total global derivatives market which currently stands at approximately US$493 trillion.

In comparison, the current market capitalisation of Deutsche Bank is only approximately €17.46 billion  –  yes, billion, NOT trillion.  In other words, Deutsche Bank is leveraged around 2,399 times.

Imagine promising to buy a house for $239,900 but with assets behind you of only $100!  Yes, it’s laughable  –  but this is the degree to which Deutsche Bank is exposed to the derivatives market.

Admittedly, a reasonable percentage of these derivatives are hedged (ie: there’s a buyer and seller for each contract) but what happens if one side can’t pay up during the almost inevitable times of chaos that are in front of us?

This is exactly what happened during the US sub-prime crisis of 2008.

For this reason, the IMF notes that Deutsche Bank “………………………  appears to be the most important net contributor to systemic risks.

Indeed, Deutsche Bank is connected to just about everything.  Will it be the first domino to fall?

The end of Deutsche Bank is near

When Deutsche Bank goes under  –  which is likely to happen once the European financial septicity takes off  –  I believe that there will be massive bloodshed across world financial markets, and  FAR  more so than when Lehmann Brothers (a relative ‘minnow’ when compared to the {current} size of Deutsche Bank) collapsed in September of 2008.

Looking at the globally connected game of counter-party derivative contracts, if Deutsche Bank fails, I believe that everyone else will follow suit.  The IMF reported (again, my emphasis added):

Notwithstanding moderate cross-border exposures on aggregate, the banking sector is a potential source of outward spill overs.  Network analysis suggests a higher degree of outward spill overs from the German banking sector than inward spill overs.

In particular, Germany, France, the U.K. and the U.S. have the highest degree of outward spill overs as measured by the average percentage of capital loss of other banking systems due to banking sector shock in the source country.

Check out the IMF prepared chart below.  It shows clearly the key linkages of the world’s riskiest bank:











I believe that when the European banking crisis hits, it will unleash a fiscal tidal wave of terror across the entire financial world.  Unlike as was the case at the time of the onset of the 2008/09 GFC, global central banks are ‘out of ammunition’ (ie: financial reserves).  In this case, we should expect a global infection event to unfold.

On this note, check out the IMF chart below showing the riskiest banks in the world:



On the basis of this chart, if Deutsche Bank goes under, HSBC should be next.

The Source of this Graph?  Once again, none other than the IMF itself!





Unfortunately, the next financial meltdown will tear the financial world apart.  If history is a good road map, the banking crisis may well transition into a global sovereign debt meltdown.

A possible solution?

When resource stocks crash (together with, I suspect, bonds, stocks and, possibly, real estate / property) you should, in my opinion, have access to ‘real’ cash and precious metals  –  and then wait to pick up the best resource stocks for mere cents in the dollar, your best option being to stick with speculative stocks.

Remember that, researched properly, speculative resource stocks can make you huge gains, despite market conditions, because the world will always need resources  ………………………  and in particular food!

Even though, in my humble opinion, the next financial meltdown will tear the financial world apart, at the end of the day (or, more to the point, at the end of the month or the year) the sun will continue to shine and the world and its 7 billion+ population will go on!

Hopefully though, once the extent of the next financial meltdown has been manifested, there will have been a massive clean-out of the immoral and inequitable banking and investment practices of the last 25 to 30 years.

Hopefully all of the financial ‘weapons of mass destruction’ will have been detonated or, more to the point, imploded given their complete lack of real-world reality.

Hopefully then, what is left of the financial markets can return to some realm of reality, respectability and decency  –  until, that is:

  • the generation after next fails to heed or, more importantly, learn from the mistakes of the turn of the 21st century; and
  • the next generation or two of greedy, self-indulgent and narcissistic ‘slick-suited’ Wall Street executives agree amongst themselves to ‘give derivatives trading ago ………………………  just for a little while!

Right now, my best advice is that if you, your friends, your family or your business have anything to do with  –  and in particular any exposure to  –  Deutsche Bank, eliminate that exposure NOW.

Also, even if you and your business don’t bank with or have any apparent direct exposure to Deutsche Bank, ask your bank what exposure it (and its financial reserves) have to Deutsche Bank.

Peter Kerin

Peter Kerin

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Posted in Advice, Banking, Business, Peter Kerin, Strategy, Uncategorised | Tagged , , , , , | 12 Comments

Your Money’s Safety

How  Safe  is  Your  Money?  …………..  Really!!

In recent years, we’ve all heard people (ie: the perennial “armchair experts”) talk about financial crises  –  though mostly about those crises happening in Europe, China, and the US.

As residents of the great ‘down under’ land of Australia (where we can’t even get a federal election right!) discussions always seem very detached and very removed, as if ‘crisis’ is a very distant, hypothetical situation.

The fact is that it’s been so long since Australia had a recession  –  in fact, about 25 years since Paul Keating proclaimed that we were then in “the recession that we had to have”  –  that many people here have never lived through one  ………………………  or, quite simply, just don’t remember one.

This lack of hardship has understandably led the majority of ‘the sheeple’ of Australia to believe that money in the bank is safe  ………………………  and will always be available.  You may also feel the same way.

However, please be aware things can change very quickly.

In 2008, after a mild ‘bank run’ scare, the Australian government established the deposit guarantee.

The government is currently guaranteeing deposits up to $250,000 per approved institution.  However, there are fears that the government may not be able to honour its promise.

What the government-dependent, mainstream media doesn’t tell you is that the deposit guarantee (as the legislation currently stands) is limited to $20 billion per institution  –  yet the big four banks each have deposits in the hundreds of billions of dollars.

Even an arithmetical dummy can see there’s no way that $20 billion is anywhere near enough to protect all deposits.

More to the point  –  and what I particularly want to share with you today  –  a bank guarantee does not ensure that you will be able to actually access (ie: withdraw) your money during a deposit freeze.

So, can a deposit freeze happen in Australia?

While this may sound like an unlikely scenario to you today, please be aware that anything can happen  –  even if it is a low odds event at this stage, and I stress, at this stage.

The next financial global crisis, coupled with a loss of confidence in financial institutions, could see another, very severe ‘bank run’ here in Australia.  Depending on the severity and duration of the run and banks’ own assurances, the government might do nothing or it might decide to actually increase the deposit guarantee  –  but if that measure fails, it’s highly likely that the government will impose a deposit freeze.

So, what might a deposit freeze actually look like?

Before I get to that, in the words of ABC24’s finance presenter Del Irani, “Let’s have a quick look at the markets”.

World Markets

Markets in the US continued to rebound on Friday the 1st of July, 2016.  The Dow Jones, the NASDAQ and the S&P 500 all closed up.

European markets were in the black as well.  The FTSE 100, the DAX and the French CAC 40 all clawed back some of the heavy losses that they all suffered in the days following the Brexit decision of just 12 days ago!

In our corner of the world, most of the Asian domiciled markets were up last week.

The Aussie dollar is hanging around the 75 US cents mark and in commodities, West Texas Crude is trading at around US$49.00 per barrel and gold is at around US$1345.00 per ounce.

I don’t know about you, but I cannot believe that Brexit all happened just 12 days ago given all the sh#t that’s happened within the British government since then!

I can just see that, any month now, both Boris Johnson and Nigel Farage will be lying in lazy boys on a beach in the Bahamas knocking back cocktails and laughing at all the poor schmucks back in the UK dealing with just the very beginning of the decade-long fallout of their successful “leave the EU” campaign!

Anyway, now, where was I?  Oh, yes, that’s right, an Australian nationwide deposit freeze.

Lessons from the Argentinian ‘Corralito’

Argentinians long ago learned the hard way that having money in the bank does not ensure its safety.

In 2001 Argentina was immersed in the ‘corralito’.  The word comes from ‘corral’ and refers to the pen that keeps farm animals in.

In short, the ‘corralito’ is a deposit freeze.

Argentinean banks kept bank deposits effectively locked inside their banks to prevent a ‘bank run’.

Towards the end of this week I’ll publish another (and far more lengthy) article that is specifically entitled “Lessons from the Argentinian ‘Corralito’”  –  so please stay tuned to your Facebook and LinkedIn accounts for my riveting insight into the historical financial affairs and tragic circumstances of that South American (and borderline Third World) economic sh#t hole.

Deposit guarantees can fall short

Again in short, while Australia’s deposit guarantee does offer some benefits, it does not mean that you will be able to access your money during a deposit freeze  –  or that a currency devaluation (while your money is frozen) will not affect it.

So, does this mean you should take all of your money out of the bank?  No!  Well, at least not yet.

Most importantly, you should be aware of the warning signs to look out for – signs that indicate a deposit freeze may be in the works.

In Argentina’s case there were a number of warning signs flashing well before the ‘corralito’ was implemented.

Argentina’s net trade balance had reduced (ie: imports surpassed exports due to an overly {and unjustifiably} strong currency) and this lower net trade balance drastically decreased the country’s financial reserves.

Another tell-tale sign was the increased amount of debt levels relative to GDP.  Argentina became debt-dependent to maintain an unsustainable growth model  –  and the country’s financial system crumbled like a poorly constructed shanty when they could not take on any more debt to sustain it.

Further in short, the country of Argentina was living beyond its means and, eventually, that always catches up with everyone.

Imagine trying to live off of your credit card without having either any disposable income or a sensible, rational or credible plan with which to pay it off.  That’s what a succession of Australian governments have been doing since “Kevin ‘07” tragically came into power in late 2007.

Not even the population of the country of Argentina, let alone foreign governments or the World Bank, were prepared to loan the Argentinian government money with which to sustain itself!  In the words of the classics, Argentina was ‘le screwed’!

Does anything in the immediately above 5 paragraphs sound familiar to you in the context of the Australian economy in the last 5 to 10 years?  If not, with respect, you need to take more notice of what is really going on around you.

Add to all of this the inevitable level of distraction with which the eventual government of this country post last Saturday’s federal election (whoever that may be) will face  –  in particular because significant percentages of politicians’ time will be devoted, more so than ever, to keeping themselves in a job instead of extracting the Australian economy from the true quagmire in which it is stuck at the present time  –  and it seems highly likely that very few people, if any, in government will be focused upon saving the Australian economy from its current position of financial peril.

If you’re worried about the mess that central bankers and government officials are making of our financial markets, you can call me on my mobile phone number of 0419 223 556 to find out more about how to protect your own wealth.

Do you have a defined strategy in the event of a deposit freeze?

Wildly waving your ATM card at the supermarket checkout operator will do you no good if your account has been frozen.

Ask yourself these questions:

How much ‘real’ cash (ie: folding bank notes) do you have lying around the house?

How long will whatever ‘real’ cash you do have actually last?

Do you have any gold, silver or platinum bullion?

In the alternative, how long will it take you to melt down your and your grandparents’ gold wedding rings to be able to buy the essentials of life in the event of “electronic money” no longer existing?

Just some ‘food for thought’ – if you have the ‘currency’ with which to buy any, that is! 😉

Peter Kerin

Peter Kerin

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Allocating Marketing Resources

Effectively  Allocating  Your  Marketing  Resources

During the 1990s marketers (ie: advertisers) had no choice but to pay tens of thousands of dollars each year for print, TV, radio or other forms of conventional (ie: ‘traditional’ pre 2000’s) advertising, so they had to carefully decide which media to pay for  ………………………  and why.

The good ones had a strategy.  The rest, I suppose you could say, merely ‘dabbled’.

In a digital world however, it seems like just about every second day or two there emerges another type or form of media that, if used correctly, can  –  and often for free  –  expand the market reach and appeal of a business.

Almost weekly there’s a new platform to try  –  and another marketing conduit:

  • onto which the consumer public’s eyeballs are focussed; and


  • that someone will try and convince you is the very best place where you / your business should have a significant presence.

As a result of this business owners invest their time (which, of course, is not free) making significant decisions in relation to marketing tactics in the hope of making gains that, often, they haven’t yet clearly or adequately defined.

At the end of the day, strategy should still come before tactics.

Here are 7 questions to ask yourself  before  you allocate marketing resources

  1.   Why should I invest in this channel or platform –  and why now?;
  2.   How will this channel or platform benefit my brand?;
  3.   How will this channel or platform benefit my customers?;
  4.   How will I measure if it’s working?;
  5.   What’s the opportunity cost of devoting resources here and not there?;
  6.   What other opportunities exist to invest in growth by delighting my existing customers?; and
  7.   If this is the right thing to do, how am I going to be the best in the world at it?

In short, do you have a defined strategy  ………………………  or are you just dabbling?

Peter Kerin

Peter Kerin

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Customers’ Behaviour

Dealing  with  your  Customers’  Irrational  Behaviour

It’s sometimes difficult to spot examples of ‘irrational behaviour’, ie: decisions that are made that defy a rational explanation:

  • smoking notwithstanding the many health risks;
  • racking up credit card debt rather than dipping into our savings;
  • refusing to subscribe to an online daily newspaper for $1.00 a week even though we used to pay far more than that a day; or
  • baulking at buying a sandwich on a ‘Jetstar’ flight –  even though the cheaper fare saved you way more than the cost of silver service lunch,

are all examples of irrational behaviour.

It’s likely that these behaviours wouldn’t have struck you as strange unless they were pointed out to you.  Why?  Because they are part of the ‘normal’ way we go about life.

The problem is that if you can’t spot irrational behaviours  –  which are everywhere  –  it becomes difficult to design a business around them.

And why would you want to spot irrational behaviours?  Answer: because everything we do in business (and in life) is about getting people to do something  –  for example: read, listen, watch, stand up, walk, talk, click, read, buy or sell  –  and you can do it far more effectively if you know what sits beneath human behaviour.

There are three places you need to start looking for irrationality:  ‘Me’, ‘Them’ and ‘There’.

  1.   The “Me” Context: How your customer is naturally geared

These are the core behavioural tendencies that govern decisions – even when we’re by ourselves.  That means your customer will have these tendencies before they see your shop, marketing or product  –  and even before they are influenced by what other people might be doing.

Questions to ask yourself about your customer:

  • What are they using now instead of your product?
  • What do they have to give up to change?
  • How does this fit with their beliefs about themselves?
  • Is it immediately gratifying?
  • Can I create the right mood?
  1.   The “Them” Context: How your customer is impacted by others

Thankfully we’re not often alone on a desert island.  People usually surround us, and the “Them” context irrationalities are about how each of your customers’ behaviour is impacted by others.

Questions to ask yourself about your customer

  • What do they see others doing?
  • How will doing business with you affect their status?
  • Whose authority will be persuasive?
  • How can you ensure they feel unique rather than just another number?
  1.   The “There” Context: How your customer is impacted by their environment

Of the three domains the most obvious is the marketplace.  Here, behavioural irrationalities are shaped by the environment in which your customers’ decisions are being made, for example your website, office or shop appearance  –  and how things like lighting, noise, packaging, shelving, point of sale and competitor proximity impact.

Questions to ask yourself about your customer

  • How is your customer impacted by the environment in which they are deciding and consuming your product? For example by lighting, smells, noise, temperature, packaging, whether alternatives are available, your branding and your choice of typeface / font?
  • Is there a different way you can describe your offer to frame it to advantage?
  • What clues are you providing about whether you are:
    • a price sensitive shop, product or service (eg: ‘JB Hi-Fi’ that makes everything look like it’s always on sale); or
    • high end (eg: ‘Apple’ who never has any of its products on sale)

These three (3) contexts can improve your effectiveness.

By thinking through the ‘Me’, ‘Them’ and ‘There’ contexts you will start to paint a picture of how your customer is likely to behave  –  as a result of which you can be more deliberate and assured in how you design your points of engagement for the purpose of driving conversion of ‘prospects’ into ‘customers’.

Peter Kerin

Peter Kerin

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Brexit & Aussie Real Estate

What Brexit Might Mean for Australian Real Estate?

One of the many things that ‘Brexit’ has shown us is that uncertainty makes a great deal of noise.

The Brexit vote was almost completely unexpected by equity markets and, since it is only ‘advisory’, ie: it offers no guide to the (partially) ‘United’ Kingdom Parliament about how Britain should actually and logistically exit the EU, no one knows what it really means.

That uncertainty – which looks to remain for months (if not years) – creates a lot of room for speculation.  You could just about tell any story you want.

For example, I could speculate that Boris Johnson will become the PM, and then have a change of heart.  Rather than leave the economic community, he’ll move the British Isles approximately 300 kilometres west into international waters, leaving Europe only in a geographic sense.

That might (and hopefully will) be complete nonsense but, right now, it seems as likely as any other scenario on the table.

The Brexit vote was hardly resounding – especially for something as important as it is – and given there were no concrete plans for exit on the table anyway, it’s not clear that any two Britons had the same thing in mind when they went to vote.

So, just a few questions on my mind are these:

  • will the UK Parliament follow through on the “will of the people”?;
  • if so, how?;
  • will it be a ‘paper-divorce’ with all of the trade and legal structures remaining as they are?; or
  • will British leaders try and cherry-pick the agreements they keep and bow out of.

For example, “We don’t want to deal with the refugees thanks, but actually we would like access to your markets, please  ………………………  and cheese.”

That doesn’t seem likely either.  European leaders could be worried that Britain is the first domino to fall in a failing European project.  People are already talking about ‘Frexit’ in France and ‘Nexit’ in the Netherlands.  If “Gexit’ ever happens in Germany the EU is ‘a gonner’ – stuffed!

So the ‘kings and rulers’ of the EU will probably feel a need to ‘send a message’  –  and a stern one at that.  For example, “If you’re out, you’re out.  Leave the key in the letterbox and piss off.  Don’t think you can cherry-pick through the arrangements you like.”

And furthermore, don’t think you can rock up here at 3:00 AM after a night on the town looking for a bit of ‘company’.  In the words of Beyonce, “If you like it then you should have put a ring on it!”

At the end of the day, it’s not going to be an amicable divorce.  The money grubbing lawyers are going to get involved and make a meal of it.  Everything from tourist visas to foreign exchange markets will need to be revisited and renegotiated.

This is a mess that’s going to take years to clean up.

And as the uncertainty lingers on it will add another ‘swing factor’ to international markets.  Global markets were already volatile prior to Brexit but this makes things even worse.  Forget about the short-term swings we saw over the weekend after the referendum result was announced – which were actually pretty tame.

It’s going to be felt hard – and over the long run.

Why?  Because every time we have some sort of “event” – a currency crisis somewhere, or a debt-default somewhere else, the question will invariably be, what does this mean for Britain now?

And no one will know, so markets will just take a punt.  Outcomes will be all over the shop.

But can we look through the uncertainty and say something about the likely implications for Australian property?

The downside risks for property come through the financial markets.  London is one of the world’s most important financial centres.  It’ll be truly ‘big cheese’ if London is cut off from Europe – and they could well lose their place to another European centre.

So financial upheavals are likely.  Australian banks are particularly exposed to European financial markets, borrowing quite a bit to fund domestic lending.  So, if we see funding costs go up in Europe, we could see interest rates heading up here.

I don’t see this as likely, and it’s probably only a risk next time there’s an ‘event’ – but European financial markets aren’t as stable as they were.

But there are also a few positives I can see.

Remember that, since the GFC, real estate in Australia has taken on somewhat of a safe-haven status.

That is, as share markets suffered, and the gold bet on a devaluing US dollar went off the boil, investors started looking for solid assets in solid markets.  Australian property fit the bill quite well.

Strong foreign buying, especially from China, has been one of the dominant themes in recent years.

But Australia wasn’t the only property market to elevate to safe-have status.  The world was looking hungrily at mature, stable western economies.  That meant the US and that meant Canada  ………………………  and it also meant England.

But, perhaps, not anymore.

There’s a massive cloud of uncertainty over English property markets now – especially London.  If the London financial centre leaves with Europe, what happens to London real estate prices?

Uncertainty really undermines your real estate safe-haven status.

So, if England is out of the safe-haven league, that means we might see even more safe haven flows heading our way.  That will support residential property prices, as it has done in the past.

It should be noted that some of those flows will also come through larger-fund developer plays, perhaps adding to the heat in current apartment markets.  That might not be quite so welcome.

Anyway, the point is that, on balance, all this uncertainty and confusion might actually be a good thing for Australian property prices.

In the absence of other information, that’s the line I’m going to be holding  ………………………  for the moment anyway  ………………………  until Boris Johnson resigns from politics – leaving a complete vacuum in the office of the British Prime Minister! J

Peter Kerin - Owner

Peter Kerin


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Hello world!

Hello World!


Strategic and Business Advisory Services apologizes to all our valued friends and clients.

We were recently the victim of a Malware hack on our websites and lost all of our history and commentaries.

The site will soon be reborn, better than ever.

Our site went down, including our contact page but now we are up and running.

Our contact page is up for you to call or email us and our missing pages will reappear in the coming weeks.

Peter Kerin - Owner

Peter Kerin

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