Book Review: Jim Rogers' Street Smarts aka Thoughts from a Southern Gentleman

Jim Rogers has had one heck of a life. From a small town in Alabama to the Ivy League to all around the world on a motorcycle, his insights are never preachy. He covers a wide range of topics, including one particularly negative anecdote about his former co-worker, George Soros. (FYI: even back in the day, consent decrees were worthless.) 

Big on commodities, Rogers promotes farming as the job of the future. He reasons food prices have been too low, and--just as in gold/silver mining or oil exploration--low commodity prices usually cause fewer producers and/or lower production, often leading to a crash. As prices and producers decline, new (and presumably more efficient) investors, seeking profits, will enter, rebalancing the supply/demand equation. At some point, prices will rebound, and the higher prices will create a snowball effect for both buyers (no longer concerned with deflation) and producers, especially if banking institutions issue loans. The alternative, a government-controlled economy, is inferior because it generally will not allow entities to fail. An avowed capitalist, Rogers explains, "The cure for high prices is high prices. It always works...." "The Soviets did not have anything because nobody produced anything, and nobody produced anything because prices were set so low." 

To his credit, Rogers realizes the flaws in his own paradigm and lambastes the Federal Reserve's easy money policies. Excessive Federal Reserve economic intervention is harmful, he argues, excoriating both Greenspan and Bernanke. In Rogers' experience, capitalism provides a self-reinforcing mechanism for regeneration aka creative destruction. It's true Rogers is known as a "bear," which means he makes money when companies fail, but the characterization of bias is unfair--every hedge fund manager sells short. 

Readers interested in politics will enjoy Rogers' comments on domestic and international affairs, including details about his new home, Singapore, and his reasons for relocation. 

On the black market.

Two passages stand out: 1) "As recently as 1987 the United States was a creditor nation."; 2) "America is borrowing money to pay for military hardware that sits and rusts in the sun. The man who manufactures the hardware makes money, but after that, there is no beneficiary. The investment does not represent an ongoing source of production, the way a canal or a railroad does." 

There are too many jerks in the financial world, but Rogers seems to be one of the good guys, someone who's never forsaken or forgotten his humble Southern roots. 

© Matthew Mehdi Rafat (2017)

Bonus: Rogers shares a lot of information on Singapore. See below for excerpts.

The "genius of Singapore": public housing programmes for all.

HDB flats in Singapore (2018)

Flashback to 2001

As newspapers go, so do countries? From July 2001. 

Yes, I misspelled "embarrass." Sigh. 

The Internet and North America, Summarized in One Tweet

If a picture is worth a thousand words, allow me fewer to explain the following photo. The problem with modern society is not the internet or technology, but the lack of humility omnipresent in North American culture. Such a culture will provide fantastic entertainment but not much in the way of substance. Are you ready for the most North American comment ever? 

"I'm not a lawyer but this seems quite illegal." It's a Canadian speaking, so one might chalk it up to a desire to politely agree with the principle of equality, except for one thing: the ProPublica article referenced is fantastic. Even if you glean nothing else from it, a high schooler would, after three paragraphs, understand the ADEA is complex. Really, really complex. 

Unfortunately, most North American voters haven't realized they've outsourced justice to hordes of lawyers who continue to add complexity to protect their jobs and fees. Even if conservatives manage to cut laws, civil procedure and evidentiary rules will maintain a bulwark against common sense and the common citizen. It's not surprising democracy is reeling when the model isn't justice for all but deterrence through selective prosecution. 

In 2002, when I studied law in Singapore, also a common law country, I was struck by the humility of the educated class. None of my questions were deemed odd, and the one or two borderline insulting ones (about population control) were answered substantively. Working class citizens were social and content, and the worst a person could say about them was that their warmth exceeded their ambition. Despite lacking urgent reasons to worry about social harmony, Singapore's mostly Chinese elites, not to be accused of a lack of effort, were busy trying different programs to reduce income inequality. I'm not a Singaporean, but this seems quite lovely. 

Would the last intellectual out of North America please remember to turn off the lights? 

Conversation May 3, 2018: 

Me: "Do you know you have no privacy in America?" 

Very Nice 18 Years Old Cashier: "Yes." 

Me: "Does it bother you?" 

Her: [frowns, then shrugs] 

Me: "Do you trust your gov?" 

Her: [shakes head] 

Me: "I guess the problem is there's nothing we can do about it." 

Her: "Yes."

Singapore, Part Deux

My earlier post on Singapore received quite a few hits:

In Defense of Singapore

Here is an article from www.theonlinecitizen.com about Singapore's political system:

http://theonlinecitizen.com/2008/12/current-system-lacks-accountability

The existence of The Online Citizen shows that Singapore does indeed have forums for anti-government debate, and the highly connected nature of Singapore--both communally and technologically--limit the government's power to impose overly rigorous speech codes.

In Defense of Singapore

Investing requires some knowledge of international culture, because a truly diversified portfolio contains shares of international companies. Understanding Asian culture is especially important for Americans and Westerners because the spending behavior of Asian citizens, especially the Japanese and Chinese, may determine how long and deep an American recession will be.

One way to understand Asian culture is through the story of Gopalan Nair, who has returned to the Bay Area from Singapore. I wrote about him and the differences between Singaporean and American culture here: Post on Singapore (June 2008)

Here is what happened to Mr. Nair: http://www.insidebayarea.com/ci_11098813 [Link no longer works, but the following one does: https://www.eastbaytimes.com/2008/11/28/fremont-attorney-released-from-singapore-jail/] 

After Singapore found the Wall Street Journal to be in contempt of law, a Singaporean government official lambasted the WSJ in its own letters section (Dec. 4, 2008, Chan Heng Chee letter). To its credit, the WSJ printed the letter. A report on the dispute is here:

http://www.radioaustralia.net.au/programguide/stories/200811/s2431123.htm

Professor Tan explains the Singaporean government's position accurately:

PROF KEVIN TAN: The position of the Singapore law is that the media should censor itself to make sure you don't have things which are untruthful, defamatory or contemptuous going out there. I think that is indeed the case. Let us put it another way - if somebody writes a letter which is clearly defamatory of somebody else, the editorial ward of the publication should ensure that letter doesn't get published because if indeed the writer of the letter gets sued for defamation then you become an accessory to this whole defamatory process as well, you see, because defamation requires publication.

As I've said several times, Singapore has created an incredibly successful and diverse state and deserves the benefit of the doubt. There are two issues that ought to be discussed whenever mentioning Singapore's speech restrictions:

1. Singapore experienced racial riots in 1964 shortly before its separation from Malaysia. [Note: the previous sentence has been updated since the original posting.]  Singaporean leaders wisely remember their history and the violence that occurred fewer than 50 years ago. American newspapers almost never mention Singapore's history, which has caused it to place a premium on racial harmony over unfettered free speech. Behind Singapore's speech restrictions is a government that feels it would be negligent if it allowed a repeat of its devastating racial riots. Although Singapore's position is not entirely different from Germany--Germany bans swastikas and other racial symbols and speech because of its own recent violent history--Singapore is singled out for its attempts to maximize racial harmony. France has also ruled that its own citizens, such as Brigitte Bardot, may have their speech limited (see BBC on Bardot). Here's another writer's take:

http://library.thinkquest.org/04oct/00301/project%20thinkquest/pages/p8.html

At the end of the day, Mr. Nair is naive if he believes he can refer to any judge in any country as a "prostitute" and not suffer some consequence. American judges have jailed American citizens and sanctioned lawyers for insults much more benign.

2. The East-West cultural divide is neatly expressed in the WSJ-Singapore dispute. One possible reason for the dispute is that Westerners may not understand how much Asian culture values non-confrontation. In many Asian cultures, for example, it is a sign of immaturity to lose one's temper. In contrast, in Western culture, where individualism is highly valued, confrontation is not seen as immature or even terrible per se. This difference in cultural values has led to many misunderstandings between East and West.

At the end of the day, all Singapore is saying is that it does not want someone to criticize its judiciary with unfounded accusations. In other words, if someone is going to criticize its hardworking judges, that person needs to have evidence to support his or her allegations. That is not an unreasonable request in a country that has ranked consistently in the top five worldwide in transparent government practices and which lacks systemic corruption (See Transparency.org 2007 Report). The United States, in contrast, barely made the top twenty in the international government transparency rankings. Furthermore, the United States, unlike Singapore, has suffered several instances of judicial corruption--see, for example, the Dickie Scruggs matter: Dickie Scruggs, Judicial Corruption.

In addition to its world-renowned transparency, Singapore has other unique factors that make it highly protective of its judicial system. The relatively small size of the Singapore population and its even smaller legal population provide self-enforcing mechanisms for good conduct on all sides. The small legal community means that judges and lawyers interact more with each other, which creates a less adversarial system where lawyers are taught to be facilitators rather than zealous litigators. In a cooperative-style system, if Singaporean judges are going out of their way to work hard, read the papers, and to be fair, and there has been no evidence of corruption, why should they be subject to unfounded, baseless accusations?

From an Eastern perspective, the West's insistence on allowing unfounded accusations to harm peaceful, hardworking people is barbarism. The Western system forces hardworking people to spend time defending themselves against baseless public attacks rather than engage in productive activity. In contrast, Singapore's broad defamation laws create an incentive to work together and to avoid confrontation if possible. It is difficult to find fault with such a system in a country that is transparent, affluent, and diverse. Moreover, when accusations of human rights violations are leveled at Singapore from Americans--whose history includes judicially-sanctioned segregation (Plessy v. Ferguson), judicially-approved slavery (Dred Scott v. Sandford), nuclear weapon use against Asian civilians, far more abject poverty, and a sitting President who approved Guantanamo Bay--it must be especially galling.

From an investment standpoint, if you believe Singapore has a bright future, you can invest through the iShares MSCI Singapore Index. Its symbol is EWS and according to Yahoo Finance, it offers a yield of approximately 9.00%.

Disclosure: I own shares of EWS but my positions may change at any time. I am NOT providing investment advice, nor am I licensed to do so. You are responsible for your own due diligence.

Update on December 5, 2008: interested readers should check out the "comments" section of this post. One reader posted this link on Francis Seow:

http://www.singapore-window.org/1028judi.htm [Link no longer works, but the following one does: https://remembering1987.wordpress.com/whos-who/francis-t-seow-2/] 

I am not sure what to make of this and need more information, but it's quite troubling.