Executive Global Summer 2020

www.executive-global.com | Summer 2020

Productivity | Strategy | Profitability

JOHN WILLIAMS

On future predictions and corporate bonds

CRAIG HEMKE

Real interest rates and gold prices

HARRY DENT

Demographics and real estate

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MARK CAIN

Productivity and luxury in Texas

SAFETY PROCESS ANALYSIS Dr. Lynn Johnson’s leading insight on delivering award-winning FMEA and risk analysis solutions for affluent institutional and private clients

INSIDE

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CONTENTS

SUMMER 2020

EXECUTIVE GLOBAL

24 30 20

EDITOR-IN-CHIEF John Marshall HEAD OF PRODUCTION Peter Green EDITORIAL Thomas Hughes, Rachel Smith, Oliver Taylor, Shannon Berkley ART DIRECTION & DESIGN Stormcues Limited BUSINESS DEVELOPMENT Steve Williams, David Warmann, Jack Moore, David Goldwin, Mike Walsh COMMERCIAL DIRECTOR Luke Francis PHOTOGRAPHY James Drake, Sarah Dean Executive Global Magazine is published by: Stormcues Limited 405 Kings Road Chelsea London SW10 0BB Tel: +44(0)207 993 4782 www.executive-global.com ADVERTISING advertising@executive-global.com EDITORIAL editorial@executive-global.com The information in this publication has been obtained from sources the proprietors believe to be correct, however no legal liability can be accepted for any errors. No part of this magazine may be reproduced without the consent of the publisher.

Executive Global is registered trademark ® of Stormcues Limited.

Copyright © 2020 Stormcues Limited. All Rights Reserved.

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• Productivity, Strategy, Profitability

FRONT COVER FEATURE Safety Process Analysis

Timing is everything 24

Our cover feature and CEO Profile examines the impact of Failure Mode Effective Analysis (FMEA), Functional Safety and Risk Analysis for business in our interview with Dr. Lynn Johnson, President and Co-Founder of APiS North America, LLC.

PRODUCTIVITY Executive Global’s bespoke series of interviews on Productivity, Strategy, and Profitability. We sat down with Mark Cain, Luxury Realtor at Mark Cain Properties Group, to discuss luxury real estate in Dallas, Texas.

FINANCE The global real estate bubble

16

Bestselling author Harry Dent, explains trends and bubbles in the global real estate market.

Standing at a crossroads Claudio Grass delivers his commentary on world economic trends and events.

Real interest rates and gold prices 28 Craig Hemke, TFMetals Report, provides his analysis of conditions affecting the gold price.

Pandemic shutdown

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30

Renowned economist John Williams, ShadowStats, delivers his market analysis.

Two thousand dollar gold

Productivity and Luxury in Texas 20

22

David Morgan discusses the breakdown of the financial system and investment in metals.

32

Keith Weiner, CEO, Monetary Metals, explains the recent upward swing in the gold price.

The evisceration of the middle class 34 Will central bank debt monetisation lead to ruin? Oliver Taylor on Howard Buffett’s paper.

The outperformance of gold Stefan Kremeth, Incrementum AG, on how gold has outperformed many other asset classes.

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CONTENTS

SUMMER 2020

EXECUTIVE GLOBAL

42 56

68 LEGAL & ADVOCACY The legality of lockdown

TECHNOLOGY 38 Artificial Intelligence

Shannon Berkley takes a look at the constitutional implications of lockdowns.

Crowdfunding in Serbia

48

Cyrus Parsa delivers his expert insight into the dangers posed by artificial intelligence.

40 The new hypercar of computers 50

Dragan Martin, Associate, SOG / Samardžić Oreški & Grbović, on this new lending model.

FOREIGN DIRECT INVESTMENT Citizenship by investment in 2020 42 The bar has been set and competition in 2020 is fierce. Rachel Smith reports.

Macau In Tourism

Theory X vs Theory Y management 60

Thomas Hughes reviews the latest behemoth Apple Mac Pro for creatives and professionals.

The new business environment

52

Oliver Taylor on how technology can be utilised to maximise efficiency in home working.

AVIATION

Business and investment in Aruba 46 Aruba is an island nation in the Southern part of the Caribbean coast. Oliver Taylor reports.

Rachel Smith analyses the great advantages of private jet travel, particularly in tough times.

Financing your private jet

56

Thomas Hughes on some very important considerations when financing your aircraft.

• Productivity, Strategy, Profitability

LUXURY LIFESTYLE Luxury homes for UHNW buyers 64 We sit down with award-winning luxury real estate broker Maureen Atkinson on her successful career.

Lynne B. Wilson returns to discuss the luxury property market in Lake Arrowhead.

The Lamborghini Aventador

68

Oliver Taylor reviews this beautiful luxury automobile, for discerning buyers.

We interview Kenneth J. Moore and Loy Carlos on their successful career in New York City and Connecticut real estate.

58 Chateau Cheval Blanc

Jeroen Kraaijenbrink, looks at methods of teaching strategy within successful companies.

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62

Andrew Main Wilson, CEO of the AMBA, on the state of the job market for graduates.

The luxury property professionals 70

EXECUTIVE EDUCATION Teaching integrated strategy

Highly qualified graduates

Productivity in Lake Arrowhead 66

44 Executive Jet travel during crises 54

Thomas Hughes on the advantageous tax jurisdiction and bustling gambling scene in Macau.

Oliver Taylor looks at the two contrasting styles of management within companies.

Thomas Hughes reviews one of the world’s most expensive wines - the 1947 St Emilion.

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EDITOR NOTE

Foreword

EXECUTIVE GLOBAL Editor’s Note

Deflation and the ‘Japanification’ of the World Economy It has been over ten years since the financial crisis of 2007-2008. Now, on the brink of another, perhaps even bigger crash, leading central banks have found themselves in a rather problematic situation. In the US, the Fed lacks room for manoeuvre in terms of rate cuts that it implemented on the eve of the previous crisis, while the European Central Bank (ECB) and the Bank of Japan have both failed to return interest rates to sustainable levels. As of 2019, about 20% of the world’s sovereign 10-year bonds were trading with negative yields, and about 25% of the world’s central banks resorted to negative interest rates

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he entire yield curve for German sovereign bonds is below zero. Borrowing has become more and more profitable, unlike lending. Creditors lose money, while debtors, on the contrary, benefit. Without a positive return on investment, investments and savings effectively become meaningless. Pensioners living on a fixed pension can cut their spending in the face of negative rates. Investors’ willingness to put money in the bank at a negative rate may also indicate that it has become more important for investors to simply be secure with the return on their funds, rather than trying to make a profit. This, in turn, indicates a low level of confidence in the idea of investing altogether.

More and more economists argue that negative interest rates are damaging to the economy and the financial system, both locally and globally. They harm the banking system and hold back credit growth. The shares index of banks in the eurozone, for example, has hardly budged over the past ten years. Japan’s TOPIX Banks index has dropped tenfold since its peak in 1989. Japan, which has always been at the forefront of unconventional monetary policy, experimented with various options for quantitative easing programs, zero and negative rates in an attempt to revive the economy and prevent deflation, and now, it’s targeting the yield curve.

To put it mildly, Japan has failed to make much economic progress over the past 25 or so years, and while unfavourable demographic factors did play a role, the Japanese model has clearly demonstrated its inefficiency. The experience of the

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executive global • Productivity, Strategy, Profitability

Bank of Japan and the Japanese economy has given rise to the term ”japanification”, which is now used to describe the current situation in the economies of eurozone countries and what awaits them in the future.

Japanification suggests that the ECB - like the Bank of Japan before it - will eventually be forced to admit that its policies are unsustainable. Thus, we can confirm that unconventional monetary policy measures only exacerbated the problem rather than solve it. Yet even now, central banks continue to pursue a ”black hole monetary economy” - which means that not only changes in interest rates, but also more radical monetary policy measures will not help resolve the main problem of demand deficit. In such conditions, the solution can be provided by the instruments of fiscal, but not monetary policy. The best thing Executives can do in terms of productivity in these uncertain times, would be to increase adaptability to change and remain prepared for anything. EG

John Marshall John Marshall Editor-in-Chief, Executive Global

1 G L E N B R O O K FA R M R OA D, S H E R M A N , C T 0 6 78 4

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FINANCE

Economy & Markets Photo: Watchara Ritjan / Shutterstock.com

The Global Real Estate Bubble: Price to Rents is Where U.S. Looks Better Bubbles always end up in an orgasmic phase where things just go up exponentially with almost no relation to fundamental values. Late 1998 – early 2000 was the classic example in tech stocks, and 1988 – 1991 for the first great real estate bubble of our era in Japan.

Article by

Harry Dent

BESTSELLING AUTHOR & EDITOR, THE HS DENT FORECAST

nd bubbles ALWAYS defeat themselves from their own extremes – like when there are fewer and fewer people who have the incomes to buy at highly inflated prices. That’s why one of the key indicators I have tracked in the past is simply price to income ratios. Using average price to average income shows more the over-valuation on the high-end. Median price to income ratios from Demographia show the strain on the everyday household. Here’s the chart I have been featuring the most over the last few years.

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REAL ESTATE MARKETS WORDWIDE By that median measure Hong Kong takes the cake at a whopping 20.9 times income. What? 21 years of income to buy an everyday house?! The classic ratio has been more like 3 or 4 times, tops!

Beijing and Shanghai are not far behind at 16 and 15 times, respectively. China is the most overvalued, followed by Australia, then Canada, California and the U.K. Vancouver actually tops the highest of western cities at 12.6 times followed by Sydney at 11.7 and Melbourne at 9.7. Those make L.A. at 9.2 and San Francisco at 8.8 look a little more affordable, but don’t tell that to anyone living there. Honolulu is still expensive at 8.6 and Toronto rounds out the very high category at 8.3.

The biggest surprises to some may be Singapore at a mere 4.6 – almost normal – and Miami at 5.7.

Singapore has high incomes to support its valuations.

Miami is more bi-polar. Very expensive in beach areas like South Beach and Sunny Isles and the downtown Brickell area, then wide swaths of more affordable areas for the large service workforce inland, like

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Hialeah and Pembroke Pines.

The most affordable major cities are Chicago, Atlanta, Dallas, Tampa and Phoenix – damn hear normal! Where do you find that these days without joining Warren Buffet in Omaha? That’s why the longstanding southern migration continues to focus most in cities like these.

This real estate bubble is showing its extremes more globally than in the U.S. as we got clocked last time around in the GFC, along with Spain and Ireland.

There is another fundamental indicator used in the reports from HSBC: Price to rents. I recall my 22 years in California from 1980 – 2002 wherein landlords in-creasingly rented out at negative cash flow, hoping to make it on the appreciation in the bubble (That’s called negative gearing). That’s a business certain to fail at some point, and of course it did, in the 2008-09 Great Financial Crisis (GFC).

Obviously, real estate prices would hold up better in a bubble crash if rents were stronger compared to prices rather than visa-versa, just as if incomes were stronger.

• Productivity, Strategy, Profitability

Well, not anymore. After the last crash, California has seen rents grow faster than prices or capital values.

The extreme ratios of prices to rents are now in the Asian side of the world as the Price/Rents chart shows from the top 12 global cities rated by HSBC. RENTS & RATIOS Sydney tops this measure at an extreme ratio of 1.88 capital values to rents, followed closely by Hong Kong at 1.84. Note that on median price to incomes previ-ous, Hong Kong was 20.9 vs. 11.7, almost double. Toronto beats Vancouver here at 1.72 vs. 1.41. So, this changes the ratings. Sydney and Toronto have gone the most-crazy in diverging from rents since 2012. London also comes out higher on this measure as well at 1.54. The biggest surprise is that rents now exceed capital values in San Francisco and L.A. below parity at 0.79!

FINANCE

Economy & Markets Singapore comes out moderate just above parity at 1.16, but still higher than its price to income rating. New York comes out just below parity at 0.98. Now that surprised me, and don’t tell that to anyone living in Manhattan where $4,000 a sq. ft. is typical for high-end condos and they go up to as high as $13,000 for pent-houses on Central Park.

Miami, again comes in the lowest at 0.60. If you are a landlord, this should clearly be a big warning signal, but it is also for the markets overall.

HSBC also rates these top 12 global cities by average per sq. ft. prices for prime and mainstream real estate as I show in this broader chart of valuations. That high-lights the cities that are the most-pricey downtown or on the beaches. Here, for prime, Hong Kong tops at a whopping $3,800 per sq. ft. followed by London at $1,700, New York at $1,500, San Francisco at $1,200 and Paris at $1,150.

Toronto here is surprisingly the most affordable at $530 with Miami at $620.

The most affordable mainstream real estate comes in Dubai at a mere $280 per sq. ft. followed

by Toronto at $360, Miami at $380, Singapore at $460 and Vancouver at $510.

I’ll let you look over the rest of this chart that includes the four most important valuation measures and you can see what makes the most sense for you and which cities seem to more compare with yours.

But the big insight is that valuations are different of various cities and different segments of those cities.

THE NEXT CRASH The clearest insight is that China, Australia and Canada come out the worst on both of these measures combined and the U.S. the best – and I am forecasting our real estate bubble will crash 40% to 50% this time.

My view is simple from looking farther back in history: With the rapid ageing of developed countries and this rare real estate bubble, real estate prices will go back to following inflation or replacement costs and rental values. Like in Monopoly, the value is fundamentally based on what you can rent it for over time, or the rents you can save by buying – not the potential bubble appreciation.

We will not see a bubble like this for a long time, and more in emerging countries, especially in Asia, when we do – so don’t think prices will just come bouncing right back again like last time.

So, decide quickly what real estate you really want to keep or not, as the next crash will be much more global and deeper than 2006 – 2011. I would take LA over Sydney or Toronto, but would sell in most highly-valued coastal markets. For mainstream value, I like Miami, Dubai and Singapore.

My personal plan living in Puerto Rico where values are more reasonable, but long-term appreciation is not substantial? I would buy the most expensive beach condos/houses (that bubble up and crash the most) in Miami – after the crash in 2022 forward -- as I eventually will likely have to move back to Florida for access to high quality best health care. EG

For further information, please visit: www.HarryDent.com www.executive-global.com

Summer 2020 •

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FINANCE

Independent Precious Metals Advisory

Standing At a Crossroads “The more we gained knowledge of these new totalitarian systems of mass-rule, the more we realised not only their similarity of structure, but also the fact that we had to do with a type of dominance that had been known in earlier epochs. We discovered that what the ancients called “tyrannis,” or “cheirokratia,” what Sulla or the tyrants of the Italian Renaissance had practised, and what finally alarmed the world in the French Revolution and under Napoleon, had surprisingly many similarities with modern totalitarianism, although this latter had elements with which they cannot be compared, and although it possessed means of domination unknown in past ages.” - Willhelm Röpke Article by

Claudio Grass INDEPENDENT PRECIOUS METALS CONSULTANT

his is an old quote I very much admire, it is as relevant today as it was in the past.

History does not repeat but it does rhyme. Therefore, I believe it is fair to say that the world has already changed tremendously over the past few months in an irreversible way. The current central planners are already promoting the future reality they have in store for us - to let the old economy and system crash and prepare for government controlled and planned transition into a new economy that is “green and emission free”. The new Modern Monetary Theory (MMT) is ready to finance this “man-made paradise” that we have analysed in detail in the previous two issues of this magazine. The digitalization shift that occurred over the last 20 years also massively contributes and accelerates this process.

Of course, this technology, like any other, can be used for good or evil, for decentralisation and increased independence, or for the concentration of power in the hands of the few and for the exertion of control over everyone else. The government naturally prefers the latter, as it recognised its practical value.

We see real-life implementations of this more and more over the last few years. The establishments and promotion of “anointed experts”, who practice the art of divination while playing God and making decisions “for the greater good”, will inevitably lead to a relentless technocratic system of governance, if it hasn’t already, where individuals as treated as units, to be counted and to be tallied, in a vain attempt to forcefully balance a meaningless equation.

In the end, and this must be clear by now, this path leads to the full-scale nationalisation of the private economy, to a system without private property

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rights and without individual liberty. The political measures in connection with the Corona crisis have already served as preview to that bleak future. They also highlighted that the greatest losers in that system are the poorest, the weakest and the most marginalised among us, as low-income workers and small business owners were the hardest hit by the lockdowns and the shutdowns and they’ll be the last to recover, if they recover at all, which seems increasingly unlikely.

THE ONLY WAY OUT Ludwig von Mises said it best, decades ago: “The market system is the basis of our civilisation. Its only alternative is the Führer principle.”

People today have to decide for themselves if they want to remain in a system where central planners will be in full control or if they want to opt out. There are many ways one can do that, depending on their circumstances. It can be as simple as using private money and decentralised technologies to regain personal sovereignty, privacy and control, or it can be done through jurisdictional diversification of one’s assets and wealth or even by relocating to areas with like-minded people. At the end of the day, we always have a choice. If people want to live in a system that espouses the virtues of socialism and if they like having to sing the international anthem every morning, they can. Whoever likes the sound of that can join, whoever doesn’t can move to a different town, that embraces different ideas and values.

Let the competition begin, by moving away from a centralised government and allowing people to have options. Allow ideas to freely compete with each other, without forcing anyone to live under a system they don’t like. This would be the crucial first step in the right direction and I personally expect that we are about to take it. I believe we’re at a historical turning point, at the beginning of a shift that will eventually inspire and enable people to organise everything on a much smaller scale, to gather together on the level of small towns and municipalities and to form their own

• Productivity, Strategy, Profitability

social and political systems, based on the principles that all the people on the local level consent to.

This brings me to the antidote to the current monetary system and all its toxic effects. Physical precious metals, in particular gold and silver, are the insurance against all the arbitrary experiment and monetary manipulation of the last few decades. They can’t be printed and controlled by central banks and they cannot be used to support and transmit any of their political goals and agendas. This is why I expect physical precious metals to play a key role in the foundations of any truly free society. Without the financial shackles of fiat money, direct control can be reclaimed and reasserted by the individual.

THE RATIONAL ASPECT OF OWNING PHYSICAL PRECIOUS METALS John Maynard Keynes turned the world upside down with his argument that saving is not the lifeblood of investments; instead, he argued, it is a burden for the economy. His opinion was that wise and all-knowing central planners (in other words, a pseudo-benevolent politburo) could correct macroeconomic imbalances by manipulating market signals.

The implication of such a system, wholly congruent with Marx’s fifth “commandment”, is that it enables a massive centralisation of power. However, as is taught (or should be taught) in every political science 101 class: power corrupts, and absolute power corrupts absolutely!

This central planning precept furthermore contradicts not only common sense and trivial observation, but also the full historical record: indeed, the driving force behind economic health are savings, financial prudence and investment; not reckless spending, mindless consumption, and debt.

In the same way that nihilism is a self-refuting ideology (if existence is meaningless, being the prophet of that meaninglessness is a proof against it), the Keynesian school (and its neoclassical successor) is contradicted by reductio ad absurdum: if all that matters is debt, then let’s all stop working, let’s only

FINANCE

Independent Precious Metals Advisory Photo: 1tomm / Shutterstock.com

print paper, and we’ll solve world hunger!

The problem is exacerbated by the fact that paper money used to be a property title, but has become a debt security. These IOUs represent the promise that future generations will pay off their predecessors’ debt via taxes and inflation. In such an environment, the populace is automatically divided between winners and losers: the former being those close enough to the monetary spigot, the latter everyone else. Moral hazard becomes the rule of the game; merit and talent die with it. It is a fraud of gigantic proportions.

Gold and silver should not be seen as a trading vehicle, but rather as an insurance in a highly uncertain world, a protection against the insanity of central planners, and a safety net against a possible forthcoming crash of the monetary and financial order.

Although it is impossible to determine how fast it will happen, it should be obvious by now that the coming months, especially in the western world, will be dominated by a declining real economy, higher unemployment rates, financial repression measures, such as higher taxation and government restrictions.

Interest rates, which are kept artificially low, are causing low or even negative real return on investments. In such an environment, gold is a high-yield asset!

Direct and unencumbered physical ownership of precious metals stored outside of the banking system is therefore essential, if you are interested in a real and practical insurance against the ongoing problems in our monetary system and the uncertainties in our world today.

THE CASE FOR SWITZERLAND As a Swiss citizen, I can directly attest to the unique features and advantages of a nation that is defined by its own people’s will, having taken an oath not to pay taxes to foreign reeves. Even before the enforced confederation of 1848, Switzerland was the most industrialised country on main land Europe.

The economy was everywhere and politics nowhere.

Even under intense external pressures, Switzerland www.executive-global.com

retained its sovereignty and remained an armed neutral country, resisting two world wars, with a track record that it can be proud of. Up to this day, it still has one of the most decentralised political structures in the world. Its constitution outlines the basis of its political system and its government’s limits, according to the principles of subsidiarity and direct democracy.

Instruments such as referendums “against the state” and initiatives “from the people” help to keep the state in check and the country as decentralised as possible. And although the last 20 years have seen political pressure put on Switzerland to follow the way paved by the EU rather than its own, a culture of trust, free speech, limited government and respect for private property remains more solid than in most countries on this planet. In other words, the Swiss still understand that the government cannot give away what it has stolen from someone else.

In terms of stability and security, especially from a physical gold investor’s point of view, it is clear that Switzerland has withstood the test of time. Its long-standing neutrality position, its solid non-interventionist foreign policy record and the fact that more than 50% of households in the country are armed, create a safe environment and provide peace of mind both for its citizens and for investors. Furthermore, the strict limits placed on its government’s powers and the long track record of the government staying well within those limits, make confiscation scenarios of precious metals stored under Swiss law very improbable.

However, because you can never be sure of what the future holds, it always makes sense to look at other jurisdictions too, which might also offer a solid basis.

Unfortunately, not many are left on this planet, but the Principality of Liechtenstein is a great candidate.

LIECHTENSTEIN’S UNIQUE ADVANTAGES The Principality of Liechtenstein is not in the EU; it is however a member of the European Economic Area and the Schengen visa zone. Although it

became independent in 1806, it can be argued that the values exhibited by today’s Liechtenstein were mostly formed after WWII. It was then that today’s monarch, Hans-Adam, had to take over a bankrupt country and effectively managed to turn it into a highly competitive, innovative and agile financial hub of international renown. Liechtenstein is led by one of the oldest noble families in European history and its roots go back into the eleventh century. They have a long-established history as advisers, especially during the Habsburg Monarchy.

The country’s standing as a reliable business and banking center and the princely house’s reputation as being ahead of the curve are still undeniable today. For example, Liechtenstein and members of the princely family have established the Center for Austrian Economics under the guidance of H.S.H. Prince Michael of Liechtenstein and H.S.H. Prince Philipp of Liechtenstein. Therefore, it is fair to say that the ruling figures of Liechtenstein fully embrace the values of individual and financial freedom and recognise the importance of private property rights.

The system of government is classified as constitutional monarchy, with the decision-making power being shared by the monarch and the democratically elected parliament. The Prince retains significant political power, as head of state, and also has veto power. HansAdam himself wrote the political treatise “The State in the Third Millennium” in 2009, in which he promotes sound money in the form of gold and silver. In it, he also defends the right of secession right down to the level of the municipality and he is a fierce proponent of limited government, free trade and free speech.

Overall, Liechtenstein remains a solid jurisdiction.

It is built on a system of governance that shows great restraint and respect towards the individual freedoms, private property, the right to privacy and the financial sovereignty of its people. From a military aspect, Liechtenstein is protected by the Swiss military and has strong ties with Switzerland in general, even though it remains independent when it comes to local laws and international policy.

WEIGHING THE OPTIONS Both jurisdictions make a convincing case for gold storage, with regard to stability and private property rights, which is infinitely strengthened when compared to the risks and uncertainties that most other jurisdictions entail. Switzerland is a global leader and hub of gold refining.

Overall, when selecting a location to store parts of your wealth in physical precious metals, one has to look carefully at the political system, as well as the government’s track record through thick and thin. It is also important to consider the country’s “gold culture” and relevant tradition, as in nations with a long history of widespread private gold ownership, governments face formidable obstacles and serious opposition against aggressive legislation, like ownership restrictions, seizures or confiscation orders targeting precious metals. Thus, overall, Switzerland and Liechtenstein definitely seem to have an advantage, at this point in time. EG

For further information, please visit: www.claudiograss.ch Summer 2020 •

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PRODUCTIVITY STRATEGY PROFITABILITY

Mark Cain Properties Group

PRODUCTIVITY

Productivity and Luxury in Texas Interview with

Mark Cain

LUXURY REALTOR MARK CAIN PROPERTIES GROUP

Our special interview on Productivity with MARK CAIN, Luxury Realtor at Compass Real Estate Dallas, and the Principal of Mark Cain Properties Group, delivers a fundamental insight into the world of Texas real estate.

Executive Global catch up with the fine homes specialist, illuminating the success behind one of Dallas’ pre-eminent, luxury real estate professionals as we analyse the local market in North Dallas, Preston Hollow, Park Cities and Uptown.

How would you describe the most desirable areas in North Dallas, Preston Hollow, Park Cities and Uptown, as well as their most appealing attributes to high net worth individuals?

EG

North Dallas, Preston Hollow, Park Cities and Uptown are home to many local, national and international influencers. Centrally located within the continental US and served by a world-class international airport, Dallas is a business hub for the country…and the world!

North Dallas and Preston Hollow are best known for having a more country or pastoral feel with wide and winding streets, large lots, private lakes, and beautiful, sprawling estate homes with distinctive architecture. University Park and Highland Park boast one of the best school districts in the country and are dotted with mansions along treelined streets. Uptown has some small, tony pocket neighbourhoods of single-family homes, but is mainly characterised by luxury townhomes and opulent hi-rises. The great thing about Dallas is that there’s a neighbourhood and type of dwelling for every kind of lifestyle and personal vision of the owner. Dallas really has it all – from award-winning architecture to some of the finest dining, shopping, entertainment and art on the globe!

MC

Being renowned as D Magazine’s ”Best Real Estate Agents” for 2003-2019 - is an impressive feat. What is the secret to your dominance in Dallas luxury real estate?

Smart advertising, a lot of hard work, and MC always putting my clients first. The guidance I always follow is this: “What would I do or expect EG

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if ‘I’ was the client?” Put that way, the right answer always becomes clear.

As a 30+ year veteran of the Dallas area, what would you say are some of the most attractive real estate investment opportunities in the local market that investors should be aware of ?

Dallas has historically provided great MC investment opportunities in every luxury area of town. I say just buy now, hold for a while, then cash in when you’re ready. I have made a good living helping clients buy and sell real estate, but I have created the most personal wealth by buying, holding and selling properties of my own.

EG

What is the biggest real estate deal you have ever closed and what factors led to you accomplishing this transaction?

As a listing agent, I once sold a $15 million MC estate property in Preston Hollow in a single day! There’s actually a pretty cool James Bond-type story that led up to this sale. Buy me a drink sometime and I’ll tell you about it.

EG

As a fine homes specialist averaging an impressive $50 million in annual sales, what archetypal strategies must be deployed in order to maintain consistent success?

People are often surprised at how humble and MC hard-working I am. The truth is that there are a lot of good agents in this city (with whom I am lucky enough to work), but if I don’t pick up my phone or deliver results then someone else will. I try to always be on my game!

• Productivity, Strategy, Profitability

EG

What fundamental factors would you say are key to successfully selling real estate at the maximum asking price in Dallas?

In the luxury arena in Dallas, pricing a property MC is much more of an art than a science.

Competitive pricing is critical, while over-pricing is the kiss of death. Every property is unique, and each feature has value. Having a long history of overall market performance, knowledge of the current inventory and (so important) being cluedin on the motivation of buyers at the time a home is listed and goes on the market are all key factors that I take into consideration.

EG

You have developed a stellar reputation as a caring and hardworking realtor. What should high net worth clients look forward to when being represented by you?

My calling card is honest and candid advice, MC creative and consistent marketing and advertising, a good personality, and being a true partner in the sale or purchase of my clients’ residential real estate holdings. My job is to help my clients navigate the process, be mindful of the investment element and original intent of the transaction, and provide an unbiased and objective perspective during a time when emotions can sometimes run high. I am here to help make sense of it all and facilitate the best possible outcome while providing a very high level of quality, comfort and care. EG EG

For further information, please visit: https://www.compass.com/agents/mark-cainproperties-group/

As a listing agent, I once sold a $15 million estate property in Preston Hollow in a single day!

FINANCE

The Morgan Report

Timing is Everything in The Precious Metals We all have heard that timing is everything, and almost all of the public accept this idea.

It applies to virtually all aspects of life. In sports, the matter of a few seconds, or in some cases milliseconds, can mean the difference between winning and losing.

Photo: VladKK / Shutterstock.com

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• Productivity, Strategy, Profitability

FINANCE

The Morgan Report Article by

David Morgan PUBLISHER & CEO, THE MORGAN REPORT

n the world of silver and gold, timing matters as well. When I started on the Internet over two decades ago, there were only two primary silver advocates, myself and Ted Butler. I introduced Ted to Jim Cook of Investment Rarities, and Ted began writing for them and has continued to this day.

Now there are so many people talking silver and gold on the Internet it must number in the hundreds.

When I began, silver was at the lowest price in inflation-adjusted terms than it had ever been in all of recorded history. All investors are taught to buy low and sell high, but this from my experience is genuine, but seldom acted upon.

I

NOW IS THE PERFECT TIME Right NOW is the time to get into the precious metals in all forms. And, yes, your timing could not be more perfect! Why would I state it is perfect timing when just weeks ago, you could have purchased both the money metals and associated investments at a much lower price?

Because investors are fickle and want instant gratification and as soon as they put their money on the line, they not only want, but it many casesexpect the market to obey their wish and begin to

move in their favour the very next day.

Although this seldom happens, the professional investors wait until the train is moving before jumping on board, and this is EXACTLY where we are presently. The time is now to be assured the trend is your friend and you can jump on the train and ride it to the next station or the end- the choice is yours.

We are in a currency crisis, and all the work the establishment has done is ending. The U.K. and Canada have sold their respective gold reserves. The U.S. still claims to have a vast hoard, but does it exist?

And if it does exist, how many claims are on that gold? Selling gold, the one money that has reigned supreme for five thousand years- is the stupidest investment decision in all of recorded history and indeed, will be noted.

SELLING GOLD, THE ONE MONEY THAT HAS REIGNED SUPREME FOR FIVE THOUSAND YEARS- IS THE STUPIDEST INVESTMENT DECISION IN ALL OF RECORDED HISTORY...

After this reckless selling, the Basel III agreement rated gold a tier-one asset, which means it is as good cash and used as the best asset on a given Bank’s balance sheet. The truth is, all “cash” is fiat unless exchangeable for precious metals. Regardless, the banks know what is coming, and it will be a massive shift in the financial markets.

Big money will seek a safe harbour in all forms, physical metal, mining shares, ETF’s and over the counter products. The major mining companies will benefit significantly in share appreciation due to this new money flooding into the sector. The mid-tier and junior miners are too small in market capitalisation for the stalwarts to buy.

Small funds, family offices, and the general public will participate as well, and most of the public will be looking for “cheap” gold and silver stocks, which means the junior mining sector will look similar to the run from 2003 to 2007 only bigger and better.

Beware, please, near the end of this cycle, there will be plenty of Moose Pasture touted as having the potential for a significant gold discovery.

THE BREAKDOWN OF THE SYSTEM China and Russia have seen this coming for some time and imported gold for a very long time, slowly, carefully, and quietly. Many do not know that China is probably the most significant gold miner in the world, and not a single ounce leaves the country. It is also one of the few if only countries that actively promotes the idea of gold investment to their citizens.

China is also leading the world into a cashless society, and this is true for 600 million Chinese that do ALL purchases digitally. Cash is not accepted, and the people are so conditioned to paying with their phones or through an app that it is the new “normal” for them. Beware, investors, this is coming to you soon.

One area that I have struggled with is the statement that referring to gold and silver is…“You will either have it or you won’t,” which implies that these precious metals could become unobtainable at some point. After seriously considering this, I think it is a possibility, at least temporarily. We know for a fact the in subcategories; this is true for both silver and gold eagles from the U.S. Treasury. You cannot extrapolate from this to all gold and silver available. Still, it does suggest the type of demand that the U.S. Treasury never anticipated, and we are at the very beginning of the next move higher.

Investors reading this article will agree, and many will not. The one thing than I can assure you all, is that the majority that push these ideas away in late summer 2020, will at some point, yearn for gold and silver. Why, because the destruction of our current financial/ monetary system is coming to an end. I only hope they find precious metals are obtainable and not “unobtainable”! EG

For further information, please visit: www.TheMorganReport.com www.executive-global.com

Summer 2020 •

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CEOPROFILE

Dr. Lynn Johnson PharmD, President APiS North America, LLC

SAFETY PROCESS ANALYSIS Our exclusive interview on Safety Process Analysis with Dr. Lynn Johnson, President and Co-Founder of APiS North America, LLC, examines the impact of Failure Mode Effective Analysis (FMEA), Functional Safety and Risk Analysis for business, as Executive Global take an exclusive look behind the operation of an innovative company revolutionising how clients leverage FMEAs within their risk management and functional safety, to improve their products and processes with high quality software products, expert training and consulting.

During these challenging times, why is it more important now than ever, for companies to have robust and effective Failure Mode Effective Analysis (FMEA) processes in place?

At APiS North America, LLC, we have LJ endured the challenge and made operational changes in response. Preparation for a challenge, requires a plan that cannot fail. That is the APiS North America team’s mission. To provide solutions to companies that cannot have failure of a product design and manufacturing process. That could be a car’s brakes, a medical device, an OR team process, an autonomous system, a plane’s engine, or a child’s toy or crib. Not one of these has any room for failure or someone could be severely injured or worse.

A standout reason for the need for a robust FMEA is from the current COVID-19 testing production contamination crisis. Product design and manufacturing processes must always have an extensive and robust quality and analysis. In addition, the industry standards and requirements are rigorous and are based upon many years of intelligence. That cannot be bypassed, even for urgency, in any situation where the product and process cannot fail for the safety of the end user. The fact that in 2020, there were COVID-19 tests manufactured that were not in compliant facilities, had no regulatory oversight, and were discovered after the end users were exposed to contaminated tests, is appalling and a serious violation of all manufacturing best practices. The FMEA is in place as an integral EG

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• Productivity, Strategy, Profitability

part of the quality and safety program of all product development and manufacturing to ensure this very scenario does not happen!

What fundamental elements would you say set apart APiS® IQ-Software as the ‘gold standard’ for FMEA, Functional Safety and Risk Analysis, in ways that competitors do not emulate?

The IQ-Software is a robust program LJ t h a t h a s been developed by APiS® Informationstechnologien GmbH along with the voice of its customers since 1992. It is trusted and highly regarding by global OEMs, Tier 1 suppliers, and manufacturers across many industries. The 7-step methodology of the IQ-Software aligns with required statistics, graphical interfaces, and analysis reports. It is an invaluable tool for companies who cannot have any failure of any product design or manufacturing or necessary process. During the global pandemic, we have seen processes that broke down throughout the system.

No state or medical system was running a process that had been thoroughly assessed for areas of potential failure. This caused a lot of time, money, and manpower to correct, after the fact. The proactive and structure model methodology prevents teams from being blindsided by a potential failure of a product or process. It is a matter of life and death in industries across the globe.

EG

CEOPROFILE

Dr. Lynn Johnson PharmD, President APiS North America, LLC

Product design and manufacturing processes must always have an extensive and robust quality and analysis. www.executive-global.com

Summer 2020 •

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CEOPROFILE

Dr. Lynn Johnson PharmD, President APiS North America, LLC

Most of the time, the challenge is in the change for the people resposible to perform the FMEA. Change is always hard and the team at APiS North America knows that.

CV DR. LYNN JOHNSON BORN United States ALMA MATER Nova Southeastern University EXPERIENCE 2016 Currently President APiS North America 2011 Vice President of Telepharmacy and Pharmacy Management, Indispensable Healthcare 2007 Director of Pharmacy and Nursing, Advanced Care 2004 Director of Pharmacy, Personal Home Care 2000 Pediatric Clinical Coordinator, Broward General Medical Center 2000 Doctorate of Pharmacy Degree with Highest Honors 1995 Clinical Pharmacist, Broward General Medical Center

EXECUTIVE RECOMMENDATIONS

» PRODUCTIVITY

Efficient process will always provide an increase in productivity!

» STRATEGY

Set goals, develop the strategy to achieve those goals.

» PROFITABILITY

Do not always focus on the profit alone.

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And how has incorporating the input of thousands of users to leverage a technically advanced product for APiS® IQ-Software, enabled you to improve efficacy and the quality of customer service to clients?

The methodology of the IQ-Software has been LJ implemented for global teams, due to it’s 29 language data interface and 11 language graphical user interface. With so many global locations, teams can develop FMEAs in their native language and it can then be translated to any other language necessary for that global location. This saves thousands of hours in manpower, with this capability alone. The network license is installed into a licensed end user company for access to teams with access to the shared network. This allows a location where the company’s teams are able to work with the IQSoftware simultaneously for efficiency and effectiveness. The management reports that the IQ-Software provides are the most fantastic way to keep leadership informed and up to date with the product design and process FMEAs. EG

For companies that have ineffective Failure Mode Effective Analysis (FMEA) processes in place, how may their situation improve after integrating your systems?

The IQ-Software provides teams the ability LJ to import existing FMEAs that are ineffective and find the areas in need of work and get them aligned, improved, and prepared for an audit. The is a large financial gain to a robust FMEA with the IQ-Software. The number of manpower hours necessary is decreased, the time necessary to work on and report on the FMEA is dramatically improved, there is significantly less waste in product and processes. Most importantly quality and safety are improved, known, documented, and reported.

Risk Mitigation saves time, money, and lives with the best FMEA tool.

EG

What are some of the greatest challenges associated with effective risk and compliance management?

Most of the time, the challenge is in the change LJ for the people responsible to perform the FMEA. Change is always hard and the team at APiS North America knows that. This is why we have developed the solution in our IQ-Software training program. Our Vice President, Chad Johnson, and Program Manager, Anthony Rodriguez have worked together to combine Chad’s expert FMEA

• Productivity, Strategy, Profitability

EG

methodology, global team development, and over 20 years of IQ-Software experience and Anthony’s career in learning development and team facilitating.

This combination, along with the fact that APiS North America offers the IQ-Software training in Spanish and English, provides teams the best FMEA tool implementation strategy for their quality and safety programs.

How would you say that your background in technology business development in the healthcare industry has deepened your insight into the importance of attention to detail and quality engineering?

My work as a Doctorate of Pharmacy and LJ healthcare company leader for telepharmacy and pharmacy management, has been an integral part of the APiS North America strategy, culture, and team building. In pharmacy, we take an oath and that will always be part of who I am as a person and as a leader. My career was spent caring for others as if they were one of my own family members, along with have no room for failure. The technology background that I developed as part of this has provided a very solid relationship between me and our customers. I work with IT teams, provide IQSoftware Support, develop customer relationships to understand their need and how we will solve their issues to meet those needs. I work with our team to meet every customer’s objectives best. We are fortunate that Chad, Anthony, and I together, have built APiS North America, LLC to focus on customer service, the best and latest industry developments, and the most efficient and costeffective way to develop teams to be best prepared for any challenge they face.

EG

You also have a Doctorate in Pharmacy, impressively earning the highest academic qualification for Class of 2000 graduates. How did the rigours of study at the highest levels of academia, help you to emerge as a global leader at the forefront of healthcare technology?

Thank you for the lead in to my introduction.

LJ It is very kind and appreciated. My Doctorate of Pharmacy is the proudest accomplishment my education journey and it provided me a lot of preparation for this. The rigorous schedule and clinical training were most invaluable to the 20 years that have followed. I have worked every leadership position I have held with the same vigour I used during my doctoral program. For anyone who has EG

CEOPROFILE

Dr. Lynn Johnson PharmD, President APiS North America, LLC

processes developed prior to the crisis phase for most companies. Because we had been providing virtual IQ-Software training, our processes were prepared to change to this way of training without great effort.

For many companies, teams were also working at home, and having teams train, develop FMEAs, and develop processes to continue their projects. Our team was working continuously to support our current and new customers with current projects and implementation. It is not to say that there was no change, since so many were so greatly affected.

We also supported them in any way we could that met their needs during the crises, since there was not only one occurring during the past several months.

How did the experience of working within both the not-for-profit and the for-profit healthcare sector, later impact your career?

I am very fortunate to have this unique LJ opportunity within my healthcare career. The experience was very rewarding and humbling since there is great attention to finances in both the forprofit and the not-for-profit. How you managed the revenue in both is also of great value, so this developed my knowledge of attention to the financial aspect of organisations. APiS North America’s team knows that I pay very close attention to the financial growth, but with great attention on our company’s culture and its employees. They see what our company’s goals are and they know how we strategise to get there, so that the company stays financially healthy. Personally, this affects me to know that our for-profit business can support the needs of others and contribute to fundraising and participating in community not-for-profit organisations. It has been very rewarding for our team to participate, as a company, in community efforts.

EG

ABOUT DR LYNN JOHNSON Dr. Lynn Johnson, PharmD, is President of APiS North America, LLC. Her career began as the Pediatric Clinical Coordinator and co-chair of the P&T Committee at Chris Evert Children’s Hospital in Fort Lauderdale, Florida. She obtained her Doctorate of Pharmacy and earned the Dean’s Award for Highest Academic Achievement Class of 2000. Prior to becoming President at APiS North America, LLC, Dr. Johnson was Vice President of Telepharmacy and Management Services for Indispensable Health, Inc. Dr. Johnson also received APiS North America’s Top 50 Healthcare Companies award for its contributions to healthcare.

ACCOMPLISHMENTS

» Recipient of the 2020 Corporate Excellence Award by Corporate Vision Magazine

» Recipient of the 2019 Top 50 Healthcare

Companies, awarded by the International Forum of Advancements in Healthcare

» Recipient of the 2019 Top 10 Risk Management Solution Providers by Enterprise Security

» Leadership team of the World Economic Forum Advanced Manufacturing HUB (AMHUB) for North America

» Risk Management Panelist at the 2019

International Forum of Advancements in Healthcare in Las Vegas, Nevada

www.executive-global.com

obtained a post-graduate degree while also practicing at their career will understand this: once you work that hard, anything seems possible. I also have my undergraduate degree from the first pharmacy school in the country, so I have a lot of pride in being a pharmacist. And in 2020, women are the majority in pharmacy, which is another source of pride. This sense pride and determination are the backbone to what has helped me emerge as a global leader.

With over 20,000 satisfied customers, what would you say it is that makes your online training special?

The APiS North America online training has LJ been developed over the past 2 years, so this was great foresight for the current circumstances.

We moved our confirmed, and upcoming, IQSoftware training, that were scheduled prior to the stay at home orders began, online without issue.

Since then, we have trained, consulted, provided demonstrations, and continued our sales per our EG

As an award-winning firm honoured for contributions to healthcare technology, what would you say is the secret to your continued success?

APiS North America’s success has been the keen LJ attention we pay to customer service and innovative ideas. We work with our parent company and the IQ -Sof t ware de veloper, APiS ® Informationstechnologien GmbH, closely on behalf of our North American and South American customers. This provides feedback on IQ-Software features and functionality that the Americas’ customers have inquired about or requested. Since the IQ-Software has been developed by APIS® GmbH with the customers needs, this is important for the APiS North America customers. We intend to continue to work on behalf of our customers, best practices, and requirements and regulations. EG EG

For further information, please visit: https://www.apis-iq.com Summer 2020 •

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FINANCE

TF Metals Report

Real Interest Rates And Gold Prices Over the past few decades, the primary driver of global gold prices has been the level of inflationadjusted or ”real” interest rates. If you understand this, then you’ll begin to further understand why gold prices are poised to move significantly higher in the months and years ahead.

Article by

Craig Hemke

PROPRIETOR, TFMETALS REPORT

et’s begin with an explanation of real interest rates. From the Investopedia website: ”A real interest rate is an interest rate that has been adjusted to remove the effects of inflation to reflect the real cost of funds to the borrower and the real yield to the lender or to an investor. The real interest rate reflects the rate of time-preference for current goods over future goods. The real interest rate of an investment is calculated as the difference between the nominal interest rate and the inflation rate.”

Thus, you can calculate the real or inflationadjusted rate of return on a fixed income investment by subtracting the inflation rate from the stated, nominal rate of the bond. See below: • (U.S. 10-year note yield of 0.70%) - (a 2% annualized inflation rate) = -1.30% ”real” return • (U.S. 10-year note yield of 0.70%) - (a -2% annualized inflation rate) = +2.70% ”real” return In general terms, a fixed income investment with a positive real return, provides income while also protecting the buyer’s purchasing power. However, a fixed income investment with a negative real return, guarantees a loss of purchasing power over time. As such, a regime of negative real interest rates makes investments in hard assets such as gold, much more attractive.

L

U.S. DEBT & YIELD CURVE CONTROL And why is gold more attractive during periods of negative real rates? Let’s start with the old adages of ”you can’t eat it” and ”it doesn’t pay interest”. Well, when compared to a bond with either a negative nominal or negative real rate, the fact that gold pays no interest is no longer important. And bonds are designed to simply return your principal at maturity.

Over the same time period, your gold investment may appreciate and grow, thus making gold more attractive in terms of total return.

But it’s more than that. The U.S. treasury bond is the primary, Tier One asset of the investment world.

Institutions and governments hold U.S. debt in their reserves as a safe haven store of value. However, what if this supposed ”safe haven” actually guarantees a loss of purchasing power over time? Does that make it less desira-ble as a core holding? If that answer is

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Real Interest Rates Moving Increasingly Negative

yes, then the primary beneficiary as competition for U.S. treasuries is physical gold. We can observe this trend in real time by monitoring global central bank gold demand, which set multi-decade records in 2018 and 2019.

We can also observe this trend in real time by crafting a chart that plots the dollar gold price with real interest rates. Many free websites have this capability and the chart included with this article was created at Barchart.com. As a proxy for real rates, I’ve used the ETF with the ticker symbol ”TIP”.

This fund holds U.S. Treasury Inflation-Protected Securities or ”TIPS”. These bonds are designed to increase or decrease in value based upon the U.S. inflation rate as measured by the Consumer Price Index. In short, when inflation is rising, the TIP should move higher and, as such, a higher TIP price implies that real interest rates (if nominal rates are held unchanged) are moving increasingly negative.

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Note the clear and obvious correlation between the TIP and the price of gold as determined through futures trading on the Comex in New York. The chart below plots the past twelve years of Comex gold in candlesticks and the TIP price as a blue line: OK, so now that you understand the relationship between real interest rates and the gold price, let’s conclude by explaining how and why the gold price is likely to move significantly higher in the months ahead.

As you likely know, the U.S. Federal Reserve began an extraordinary debt monetisation scheme in March of this year. In response to the Covid Crisis and the unprecedented economic slowdown that ensued, The Fed has actively monetised nearly $3T in new U.S. government debt. This has expanded The Fed’s balance sheet by over 50% in just the four months of March-June.

FINANCE

TF Metals Report

Fed Balance Sheet Expansion March-June 2020`

As a tool for managing this surging level of U.S. debt, The Fed has begun to consider the use of Yield Curve Control or ”rate caps”. This is a policy that The Fed has used before...employing yield curve control during the period of 1942-1951...which is the last time that total U.S. debt reached a similar debt-to-GDP extreme.

NEGATIVE REAL RATES & GOLD PRICES And now the Federal Reserve’s Open Market Committee (FOMC) has openly admitted that it is considering the implementation of a new Yield Curve Control regime, perhaps as soon as later this year. At the conclusion of the FOMC meeting in June, Federal Reserve chairman Jerome Powell stated that the possibility of a Yield Curve Control program ”remains an open question” and admitted that the FOMC had ”received a briefing on the historical experience with yield curve con-trol”.

Since these public statements and Fed history suggest that Yield Curve Control may be coming, let’s consider what this policy might mean for real interest rates and, by extension, gold prices.

It’s likely that the imposition of a rate control program would institutionalise negative real rates for the duration of the program. Why? In a ”normal” environment, interest rates move up with inflation pressures as investors demand higher nominal rates in order to compensate for lost purchasing power over time. Maybe inflation

IT’S LIKELY THAT THE IMPOSITION OF A RATE CONTROL PROGRAM WOULD INSTITUTIONALISE NEGATIVE REAL RATES FOR THE DURATION OF THE PROGRAM. WHY?

www.executive-global.com

Dollar Gold Price and Real Interest Rates

moves to 3% but if rates go up to 3%, too, then the real ”inflation-adjusted” rate remains at zero.

However, let’s say that The Fed announces that they won’t allow the nominal rate on the benchmark U.S. 10-year note to exceed 1%. Now, if inflation moves up to 3%, the real rate falls to -2%. If the rate caps continue and inflation goes to 5%, the real rate falls to -4%.

And a period of higher inflation with stagnant economic growth is the very likely outcome of the Covid Crisis and the global central bank response.

In fact, we should expect the years 2021-2024 to resemble the late 1970s...when high price inflation and economic malaise combined to create a period of ”stagflation”. You may recall that gold prices staged a tremendous rally in the late 1970s, moving from a low near $100 per ounce in 1977, to a high near $900 per ounce in early 1980. The relationship between real interest rates and gold provides historical understanding for this extraordinary move in prices.

So let’s put all of this back together...

Massive new deficit spending and central bank debt monetisation will invariably lead to some measure of price inflation in the months and years to come. At the same time, the U.S. Federal Reserve is likely to implement a policy of Yield Curve Control. These two factors combine to institutionalise negative real interest rates and create

an environment of significant gold demand across all investor categories, leading to much higher prices for gold. As an aside, the shares of the companies that mine gold and silver should appreciate significantly, as well.

NOW IS THE TIME TO TAKE ACTION! How can you prepare, protect and profit from these events? Through the acquisition of physical gold (and silver, too). The global gold market in 2020 is a hyper-leveraged, multi-hypothecated beast that owes its existence to promissory notes, leases and just-in-time delivery. Therefore, investments in vehicles such as unallocated accounts and ETFs present an unacceptable level of counter-party and default risk. Your best strategy, is to deal only in fully allocated and physically-deliverable precious metal. There are multiple dealers worldwide who will gladly help you to build a diversified portfolio and then store it for you at a safe and secure facility.

If you prefer, these dealers will even ship the metal to you for personal safekeeping.

With real interest rates plunging, and with global gold demand increasing, now is the time to take action and secure your own personal stockpile of physical gold. EG

For further information, please visit: www.TFMetalsreport.com Summer 2020 •

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ShadowStats

Pandemic Shutdown Wiped Out Five Years Of U.S. Economic Growth Intensifying U.S. Inflation Woes Promise Renewed Surge in Gold and Silver Prices.

Photo: Xinhua / Alamy Stock Photo

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• Productivity, Strategy, Profitability

FINANCE

ShadowStats Article by

Walter J ”John” Williams FOUNDER & ECONOMIST, SHADOWSTATS.COM

ircumstances surrounding the March 2020 Pandemic-shutdown of the U.S. Economy included specific new policies of unlimited Federal Reserve Money Supply creation and unlimited U.S. Treasury Deficit Spending—expansion of the Federal Budget Deficit—all designed to counter pending negative economic impact.

Those initial early policies have been implemented fully, along with continuing meaningful expansion and/or promises of meaningful expansion. Those actions already have spiked domestic inflation, as was suggested would happen in Executive Global’s prior Spring 2020 Issue article “When the Fed and the Government Panic, Physical Gold Is the Likely Safe Haven.”

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UNPRECEDENTED ECONOMIC COLLAPSE FACES A LINGERING SHY-OF-FULLRECOVERY EXPANSION The current downturn in U.S. activity is an economic collapse—by headline measures it is the worst ever seen—but it is not a standard recession.

At least such is not how the defining authority, the National Bureau of Economic Research (NBER) previously defined similar events, which excluded downturns driven by extraneous factors such as a “Truckers Strike.” The Pandemic certainly is an extraneous event, not triggered by or reflecting shifts in underlying economic fundamentals. Nonetheless, the NBER defined the Pandemic-driven shut down as a recession on June 8, 2020.

The Pandemic recession formally is defined as coming off a monthly economic peak of February 2020, and from a quarterly economic peak of Fourth-Quarter 2019. Based on headline reporting of the inflation-adjusted First-Quarter 2020 Real Gross Domestic Product (GDP), activity contracted at an annualised quarterly pace of 5.0%, with yearto-year quarterly growth of 0.3%. The magnitude of that decline was mitigated by March 2020, showing the first heavy Pandemic hit to monthly activity (January and February were about normal).

Nonetheless, with just that one monthly downturn, the headline first-quarter drop still was the worst since the Fourth-Quarter 2008 drop of 8.4%, the deepest of the Great Recession.

In Inflation-Adjusted Real Dollars, the Headline Level of Second-Quarter 2020 GDP Retrenched to Its Lowest Level Since Fourth-Quarter 2014.

Second-Quarter 2020 GDP plunged at its worst-ever quarterly pace of 32.9%. It dropped year-to-year by 9.5%, a record annual decline in the history of the quarterly GDP series back to its 1947 beginning. That quarterly year-to-year drop was rivalled, however, in the annual-reportingonly series since 1929. The current annual plunge showed deeper contractions than the 8.5% and www.executive-global.com

6.4% annual contractions in 1930 and 1931 of the Great Depression. The magnitude of its plunge was topped by annual declines of 12.9% in 1932 (Great Depression), and the 11.6% drop in 1946, as the U.S. economy wound down in the post-World War II environment.

From its peak level of inflation-adjusted (2012 dollars) $19.254 trillion, Fourth-Quarter 2019 Real GDP sank by 10.6% to its headline Second-Quarter 2020 inflation-adjusted level of $17.206 trillion, its lowest level since $17.047 in Third-Quarter 2014, a loss of a full five years of normal economic growth.

THIRD AND FOURTH-QUARTER 2020 GDP INCREASINGLY SHOULD REFLECT A FLATTENED, LINGERING NON-RECOVERY Contrary to early, hopeful financial market expectations of a rapid reopening of the U.S. economy, with a “V”-shaped recovery, the economy remains well shy of a full reopening, with mounting difficulties tied to the handling of the Pandemic constraints. Recent major U.S. economic series, including the July 2020 Payroll, Unemployment and Industrial Production numbers signalled a protracted, relatively flat “L”-shaped recovery.

This outlook foreshadows ever-greater monetary policy accommodation by the Federal Reserve and ever-greater fiscal stimulus from the Congress and the U.S. Treasury, irrespective of the November 3rd national elections, which, as always, have the potential to shift control of the U.S. Executive Branch, the U.S. Senate and/or the U.S. House of Representatives.

Based on the latest headline detail in the betterquality subsidiary numbers, and allowing for some terribly poor quality reporting in recent headline detail for series such as Retail Sales, my forecasts (www.ShadowStats.com) indicate an annualised real Third-Quarter 2020 GDP gain of 9.0%, with a real year-to-year decline of 8.2%, and an annualised real Fourth-Quarter 2020 annual GDP growth of about 3.0%, with an annual decline of 8.0%. Those forecasts combine to generate a predicted real annual decline for the full-year 2020 of 6.4%. That, again,

RECENT MAJOR U.S. ECONOMIC SERIES, INCLUDING THE JULY 2020 PAYROLL, UNEPLOYMENT AND INDUSTRIAL PRODUCTION NUMBERS SIGNALLED A PROTRACTED, RELATIVELY FLAT ‘‘L’’-SHAPED RECOVERY.

would be the worst full-year annual decline since the 1946 GDP drop of 11.6%, following World War II. It also would match the 6.4% decline seen in 1931, the second year of the Great Depression.

HEADLINE ECONOMIC NUMBERS ARE OF INCREASINGLY POOR QUALITY One note of caution for analysis here: The quality of government surveying and reporting of the economic numbers admittedly is diminished from pre-Pandemic results (per the reporting agencies), due to limited, or to lack of access to regular sources, with large increases in sampling errors. From what I have found in examining recent headline detail of complex major series, such as the GDP, is that headline government economic reporting appears to be relying more heavily upon the consensus outlook (Wall Street) for their headline numbers than was seen in the recent years, when they depended more heavily on actual underlying sampling and related headline detail.

The Pandemic generated both the headline economic and societal collapse, which disrupted both normal communication lines and the data gathering. For example, consider that pre-Pandemic, the Household Survey (unemployment rate) response rate averaged 83%; it was 67% in July 2020.

Gold and Silver Prices Rallied on Mounting Inflation Fears; Higher (Safe-Haven/U.S. Dollar Purchasing Power Maintenance) Gold and Silver Prices Loom, Despite Any Near-Term Profit Taking.

At least partially based on Pandemic-induced accelerating U.S. inflation, both Gold and Silver prices rallied into early August, hitting a respective all-time peak of $2,067.15 per troy ounce on August 6th, and a $28.33 per troy ounce multi-year high on August 7th (please note that I use the afternoon London Gold, and morning Silver fixes, as reported by www.kitco.com, as benchmarks). Corrective market sell offs (or interventions) knocked those prices lower, by 5.9% and 5.7%, respectively to $2,044.75 (still up by 28.5% year to year) and to $26.71, on August 14th (up by 56.0% year-to year).

Recent actions by the U.S. Federal Reserve to accelerate Money Supply growth (to preserve systemic liquidity and to prevent an economic collapse) has pushed year-to-year growth in the most liquid money supply measure M1, to a record level of 41.8%, in the week ended August 3, 2020.

Such was in the context of the less-liquid levels of M2 and the ShadowStats Ongoing Estimate of M3 in hot pursuit.

UNSTABLE TIMES FAVOUR PRECIOUS METALS I do not know of more unstable domestic or global economic and financial circumstances than we face today. Where headline consensus outlooks include unreliable economic reporting and unstable financial system manipulations, there never has been a better or more urgent time to shift one’s liquid assets into the physical holding of precious metals, specifically gold and silver. EG

For further information, please visit: www.ShadowStats.com Summer 2020 •

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Monetary Metals Photo: PjrStudio / Alamy Stock Photo

Two Thousand Dollar Gold I recently had a conversation with someone who advises sovereign wealth funds. He said that conversations with clients, and internal discussion around the conference room, now always turn to gold. Their tentative conclusion is that gold is the only asset that will work. Then he called me and said, “Keith, give me three reasons why this is wrong.”

Article By

Keith Weiner

CEO, MONETARY METALS, LLC

said, “you do know who I am, right?”

I am founder and CEO of Monetary Metals, a company that pays interest on gold, in gold (he knows this). I said well I am not sure I can poke holes, but I bet I can give you some arguments you may not be considering in this light. It’s not about the rising price, but about what is causing the rising price.

To have a dollar is to be a creditor.

This is the meaning, nature, and consequence of having an irredeemable currency. To hold what they call money, you are a lender. You have no choice about this fact. Your choice is only to hold paper dollar bills, a bank balance, or short-dated Treasuries.

In other words, you can be a creditor to the Fed, to a commercial bank, or to the U.S. Treasury.

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HIGHER RISK, NO RETURN Kind of like an exasperated mom with a picky eater 6 year-old son. When asked what vegetable he wants with his dinner he yells, “None!” So she gets clever. “Would you like carrots, peas, or broccoli tonight?”

I will bet an ounce of fine gold against a soggy dollar bill that, if people had a choice between a twenty dollar bill and a legal tender one-ounce gold coin, they would choose the coin. Lending to the Fed (enabling them to lend to the Treasury) does not pay any more than the coin. But the risk is higher.

Lending to a bank adds commercial credit risk to the equation. But hardly any interest. Lending to the Treasury is the best combination of a little yield

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with the lowest risk. And by “lowest”, I mean not subject to the risk of mortgage defaults. It only has the risk that the government cannot pay its $26.6 trillion debt. Which is rising rapidly. At the end of March, the debt was $23.7 trillion. After just four and a half months, it has gone up a staggering $3 trillion. And the spending in the name of covid-19 is just getting started.

Of course, anyone can own a gold coin. The catch is that its value is not guaranteed. Its price could go up to around $1,900 as it did in 2011, and then fall to around $1,050 by the end of 2015. That is a drop of 45%.

A NUMBER OF OBSTACLES Another problem with the gold coin is that there is a cost to store it. Sure, you could keep a small handful in your sock drawer, but no one would risk fire, burglary, or home invasion by keeping a significant part of his wealth, uninsured, at home.

Finally, the gold coin has a wide bid-ask spread.

When you buy it, you will pay a higher price, and when you sell it you will be paid a lower price.

THERE IS LITTLE CASE FOR STOCKS. AT LEAST BASED ON CORPORATE EARNINGS. IF THERE IS SOME SORT OF CASE, IT IS THAT THE FED IS PUSHING INTEREST RATES EVEN LOWER.

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At a typical dealer, if you buy and immediately sell a gold coin—with no change in the gold market—you will lose $110 or more than 5%. While the loss is smaller with bars than coins, especially larger bars, there is still a loss. You really have to be committed to gold to buy gold.

These obstacles have not changed (other than for Monetary Metals clients). In other words, gold is not getting more attractive. Think of the skepticism and dismay on the part of the major institutions discussing gold with my friend. It is not that they are happy about the prospect of buying what has been disparaged as a “pet rock”.

It is that they see the drop in revenues to most businesses since the virus hit. Already thin profit margins, combined with high fixed costs, means that many businesses are now losing money. The only way they can service their debts is to borrow more.

Staggering numbers of people have been laid off from their jobs. As I write this, another 1.4 million filed new unemployment claims last week. Those people are not buying gas to commute to work, or indeed cars. Or business clothing. Or double lattes at lunch. Or lots of other things.

There is little case for stocks. At least based on corporate earnings. If there is some sort of case, it is that the Fed is pushing interest rates even lower. And therefore the discount factor applied to future cash flows is lower, which makes those future earnings worth more today. Lower interest rates mean higher bond prices, and typically higher prices of all assets.

A GREAT RISK OF DEFAULT ON LOANS With countless restaurants, bars, gyms, theatres, and retail wiped out by policy response to the virus, and most of the rest facing massive pressure on revenues and earnings, commercial real estate is a dead asset.

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Monetary Metals

With most major companies encouraging (or mandating) that their employees work from home, there is little need for office real estate. Even once the lockdown mania ends, how many workers will have become comfortable living away from the big cities and telecommuting to work? How many companies will have built IT infrastructure to enable it? As leases come due, look for companies to reduce their office footprints and also to negotiate for lower rent per square foot.

With so many out of work, who will have to move in with their parents or kids or siblings or housemates, residential real estate also seems like it suffers from oversupply in most locales.

Laid-off workers, developers holding empty units, and stressed or shuttered companies all have one thing in common. They cannot service their debts. Loans on everything from F-150 pickups to malls and skyscrapers have a dramatically higher risk of default.

If more people are keen to buy gold then we can be sure that the alternatives are getting less attractive. www.executive-global.com

The probability of a large drawdown in most income properties and stocks is higher and rising.

Loan defaults will impact pension funds, insurers, and banks.

The Fed now has a mandate to buy bad bonds, to help the banks. But the problem may be bigger than that. It is telling that Warren Buffett, who is no fan of gold, sold bank stocks including everything from credit card companies to investment banks. He put the cash into one of the major gold mining stocks.

EARN A RETURN ON GOLD As Buffett himself has said, gold is not productive. If you own a lump of metal for 20 years, then at the end you have the same lump of metal.

Yet he bought a gold mining company. Gold miners’ profits are geared to the price of gold. That is if the price of gold doubles, a good gold miner might go up 20 times.

If he thinks that gold will outperform stocks, then he is in effect saying that a lump which does nothing will do more than corporations that do something. This means: corporations will contract,

their stock prices will fall (it’s simpler if you think of gold as money, you can calculate the price of stocks in gold terms, and Buffett is betting that shares will fall in gold terms, if not in dollars).

Buffett did not buy gold even during the worst of the last crisis in 2008-2009.

The Fed won’t allow banks to collapse under the weight of so many defaulted loans. They will buy those loans, and park them on its balance sheet where they cannot cause any trouble. Or can they?

The Fed issues its liability—the dollar—to fund the purchase of its assets. Once upon a time, its assets were exclusively government bonds. But during the last crisis, the Fed bought over a trillion dollars of mortgages. Now, it will buy whatever mortgages and bonds that it must, in order to prevent collapse of the banking system. But this creates another problem. The dollar will be increasingly backed, not

by Treasury bonds which are still money good, but defaulted commercial real estate loans and other paper which is anything but good.

Who would choose to own the Fed’s liability, in preference to gold?

I founded Monetary Metals to change the game.

We have a simple vision: to pay interest on gold, in gold. Our investors are earning between 2% and 4.5% on their gold. The return comes from leasing gold to companies such as refiners, who use it productively as inventory and work-in-progress.

This is how savings used to be. How it should be. You work hard to save money, and then your money works for you. EG

For further information, please visit: www.monetary-metals.com Summer 2020 •

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Monetary Policy

Monetisation and The Evisceration of The Middle Class In Europe and abroad, central banks have continued to extend and expand their quantitative easing programs.

Despite the growing mountain of evidence against their efficiency, it has latched onto these measures that consist of amplifying the transformation of public and private debt into newly created money, states Oliver Taylor.

Photo: Xinhua / Alamy Stock Photo

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FINANCE

Monetary Policy very step it takes plunges the interest rates deeper into negativity, and the practice of refinancing banks at zero rates in order to stimulate the supply of credit, doesn’t seem to be slowing down. In the precarious situation that was spawned as a result of past mismanagement, irresponsibility and greed, these measures appear to have become almost necessary, yet ultimately unsustainable.

For proponents of the monetary theory that paved the path for quantitative easing, there is an almost direct relationship between the quantity of money in circulation and the rate of inflation. If the quantity of money increases, then the price levels ought to adjust in the same proportion, as long as the velocity of money within the economy remains relatively stable. While this may be a sound theory, in reality, such an approach to monetary creation is inevitably influenced by other phenomena.

In the scenario of monetised debt, where money is both a stock and a flow, where central banks are charged with providing a stock of money and commercial banks must create its flow through a motion of loans and deposits, fluctuations and decreases in velocity, force central banks to keep creating new banknotes as a way of compensating for stagnation.

This increase in the monetary stock is used mainly to provide refinancing for governmental bodies, such as EU member states under the European Central Bank (ECB), since their public debts serve as a pledge for money creation. Without the ECB’s financial intervention, these growing public debts would have suffocated the economy by draining the savings of individuals and businesses through the balance sheets of banks and insurance companies. The states have thus found an obliging creditor for their own refinancing at zero, or even negative interest rates.

However, it means that the ECB releases European savings. Incidentally, this public debt is at the centre of the entire financial construct. These are public debts which were discounted by the central banks. These are the same public debts that see their interest rates turn negative. It is again these public debts that governments are pushing banks and insurance companies to finance without requiring any equity guarantee. It is these same public debts that the states place as collateral for the liquidity of the banks.

The measures taken by the ECB have therefore made it possible for monetary circuits to keep flowing, but monetary creation remains tied in bank balance sheets without being transferred to the productive economy in the form of credits at a sufficiently rapid pace. As it is, the economy suffers from a demand crisis: the level of consumption and investment is too low to generate the necessary demand for credit. Several factors contribute to this deficiency in demand, such as income inequalities, the ageing of the population, the advent of new technologies that have revolutionised every business aspect from productivity to income, the rapid downfall of the middle class and the increasing impoverishment

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of the majority in Europe and North America alike.

And central banks such as the ECB seem incapable of answering these challenges with anything other than their same monetary policies such as quantitative easing.

By all means, the institution will continue to lower its interest rates even further. Yet it would be naive to think that any currency could survive the prolonged onslaught of negative returns on its value. In fact, fiat money already exists in a particularly peculiar and unknown state of monetary standard, where it is bound to the public debt that has become the very guarantor of the currency. Its lifeline itself is achieved through naught other than negative interest rates, which is the basis of this monetary inversion and thus, highly unsustainable.

THE EROSION OF THE MIDDLE CLASS Now, while these monetary practices seek to keep the economy running with the financial equivalent of defibrillator shocks, in the long term, they only erode the value of money, property and, ultimately, the energy that people invest into their life and work. The political class of course, knows how to profit from the very system it has put in place. The middle class, however, is doomed to be gradually worn down under such circumstances, where the worth of a citizen’s personal belongings falls prey to the machinations of central banks.

Members of the middle class become poorer or see their incomes stagnate, because their standard of living increases less rapidly than the cost of living itself, starting with the price of real estate and rent alike. They are unable to afford the same quality of life as the previous generation could, and housing is not the only item of expenditure that is growing faster than the standard of living of middle-class citizens as a result of economic erosion at the hands of experimental monetary policies.

The costs associated with education and health are also increasing faster than medium salaries in countries where post-secondary education is not free and where health care is not covered by universal insurance. The United States is a good example. Though Europe, where social programs tend to be better developed, also leaves wanting on many aspects, which can be observed in the demands of yellow vest protesters in France.

In the midst of it all, a high-tech financial aristocracy accumulates and holds onto its power more and more firmly. An intellectual “ministry” of sorts, passed through uniform universities, keeps the register of ideas, protects profitable beliefs and fuels the fears of apocalypses. The majority of the populations undergo, in spite of the promises of autonomy, a dependence and an increased instability, with an industrial proletariat facing challenges that it simply wasn’t prepared for.

The downfall of an autonomous middle class heralds nothing other than neo-feudalism, and while it does not explicitly bring back medieval social structures, it clearly marks the decline of liberal capitalism.

Contrary to the dynamics of democratisation of property, typical of the consolidation of the middle classes, the growing concentration of wealth depends more on inheritance than on individual success and hard work. The oligarchy that emerges on top, relies entirely on the subservient workforce and the dependence of the class beneath (that it quite literally profits off of ). The elite’s wealth is drawn from a large middle class that is sometimes proprietary and most often working. Large metropolises thus become the

fiefdoms of new oligarchs, while the suburbs and depreciated rural areas house the new serfs. While the end of the last century had given said serfs the impression that freedom was theirs to have and a good life was at the tips of everyone’s fingers, today we can observe how their subordination to technology and rapidly decreasing assets have driven them to a shackling dependence on their not-so-benevolent overlords.

HOWARD BUFFETT AND GOLD While it may sound like the beginning to a “dystopian future” kind of novel, articulated as such, any other way to describe it would be an understatement and an inaccurate portrayal of the problem we have on our hands. Hon. Howard Buffett, U.S. Congressman from Nebraska, father of legendary investor Warren Buffett, spoke about it in his “Human Freedom Rests on Gold Redeemable Money” paper. Without a redeemable currency (of which the dollar and euro are neither), an individual’s liberty is left at the mercy of politicians, who aren’t strangers to abuse and despotism when presented with absolute power, to put it lightly.

Thus, where paper money becomes obsolete, gold is a centuries-proven asset that puts the power of wealth into the individual’s hands. The detrimental trend of debt monetisation has bared the system’s true visage of instability enough to let gold shine again, and even

THE DETRIMENTAL TREND OF DEBT MONETISATION HAS BARED THE SYSTEM’S TRUE VISAGE OF INSTABILITY ENOUGH TO LET GOLD SHINE AGAIN, AND EVEN BRIGHTER THAN BEFORE.

brighter than before. The precious metal and related stocks are hitting record highs, and will continue to do so, as long as favourable factors remain in place. Low (and negative) interest rates, a global pandemic that has shackled economies around the world, and the resulting slow growth, all reinforce the position of gold as a trusted safe haven for personal wealth. In Europe and the United States, the large difference between providing liquidity under bailout plans and preserving the long-term solvency of sovereign issuers, explains most of the recent rise in gold prices.

Quantitative easing and other short-term measures, risk being seen by the market as an expression of a political preference for debt monetisation. In Europe and abroad, as long as efforts do not aim to restore the fiscal balance and sovereignty of countries and individuals, as long as the game plan consists of postponing deep system solutions for another few years, the economy, the market, and the people, are left with little other choice than to seek an alternative in gold. EG Summer 2020 •

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Incrementum AG Photo: lessia Pierdomenico / Shutterstock.com

The Outperformance Of Gold - A Possible Explanation

By August 21, the year to date price of gold had gone up a hefty 27%. While many other asset classes experienced difficult times, the gold price not only showed significant resistance against global concerns on political issues, trade disputes, an oil price crash, Brexit, the Covid-19 pandemic, social unrest in the U.S. and other countries and more, but was able to show a substantial positive outperformance over many other asset classes.

Article by

Stefan Kremeth CEO & CO-FOUNDER, INCREMENTUM AG

old usually moves upwards if investors fear any form of disruption. To mention only fear regarding the recent performance increase, however, would not do the price development justice, as various reasons lead to this price increase. In August 2018, one ounce of gold would cost slightly over $1,200 USD. Today one ounce of gold costs almost $2,000 USD. Over the same period, interest rates for U.S. government bonds have come down to almost 0%, which means the opportunity cost of holding gold versus U.S. government bonds almost disappeared.

Furthermore, the interest differential between the USD currency region and the EUR currency region almost disappeared and resulted in a weakening of the U.S. Dollar in relation to the Euro. A weaker U.S. Dollar, lower interest rates, speculation, a

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pandemic, political unrest in the U.S. and other countries, trade wars, massive global financial stimulus, fear of inflation, if not hyperinflation and more- all of these are the main drivers for the current outperformance of gold.

ESSENTIAL IN ANY PORTFOLIO Inflation is probably feared most by investors. Let me elaborate in a very simplified way, how inflation may arise. Inflation may arise in a few ways and is generally defined by a widespread and continuous increase in prices for products and services, resulting in a fall in the purchasing value, i.e. purchasing power of money. Possible ways inflation begins with are expanding money supply and an increasing speed of money circulation, demand-pull inflation, and cost-push inflation. Investors may come across various other terms and definitions, but in essence, this is what inflation is all about, and of course, one may experience any combination of the ways just mentioned. For the last decades, the monetary bases in all (but not only) advanced economies increased massively. The great financial crisis and now the Covid-19 pandemic, were only the most

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recent and extreme examples, but even before and in between these crises, monetary bases in advanced economies grew steadily.

Nevertheless, there was no spike in what I would call “general “inflation. We saw various forms of asset price inflation, i.e. equities of some listed companies shooting up, prices for real estate going up, pieces of art, collector cars, rare watches, etc. getting more and more expensive. Nevertheless, general inflation with food prices, the cost for cars, TV sets and clothing going up, was not to be seen. How is that possible, one may ask? The reason for it may be found in the slow speed of money circulation. Even if the money was there, it was not used, i.e. spent rapidly enough to create inflationary pressure. There was no demand-pull inflation either.

(Demand-pull inflation arises when demand for goods and services exceeds the corresponding supply over a long period), nor was there any costpush inflation. (Cost-push inflation arises with increasing production costs, primarily increases in personnel costs/incidental wage costs (wage-push infla-tion), energy cost and/or increasing prices of raw materials, or interest rate increases).

FINANCE

Incrementum AG of their currency, the risk of inflation rests probably tamed. Furthermore, I believe that in a scenario of a sudden spike in inflation; central banks would in a coordinated manner, fight inflation as much as possible.

Today, many investors tend to look at gold as an investment to gain money short-term and are buying into gold and selling out of gold continuously. This is speculation. Investors should always ask themselves why they want to invest in gold. At Incrementum AG, we usually recommend to our private clients to buy gold and keep it in physical form, and in a small denominations in a secure place close to them. I never recommend the selling of it. I instead recommend a ‘buy and hold’ strategy. I also never recommend adding physical gold in an investor’s securities portfolio but rather, as mentioned before, to keep it in physical form, and small denominations in a secure place close to them. Keeping gold in a portfolio may not give investors access to it in a sudden and possible situation of urgent need, due to some sort of disruption and/or sudden spike of inflation.

NEVERTHELESS, GENERAL INFLATION WITH FOOD PRICES, THE COST FOR CARS, TV SETS AND CLOTHING GOING UP, WAS NOT TO BE SEEN. HOW IS THAT POSSIBLE? ONE MAY ASK?

www.executive-global.com

However, why on earth do we read about all those potentially terrible effects of inflation if over the last decades inflation was by no means excessive? I guess it is because of the fear of a sudden increase in the speed of money circulation.

Increasing the speed of money circulation indeed could trigger higher inflation. The question probably is, how likely this is going to happen, and in this respect, it probably makes sense to think in scenarios. If an investor believes in a scenario with a deep recession and increasing unemployment rates, the speed of money circulation will most probably not go up, and private household spending will go down, and as a result higher inflation seems unlikely. However, if an investor believes in a substantial economic recovery, full employment, prosperity for everyone, a de-saving effect may lead to an increase in the speed of money circulation, private household spending will increase, and full employment may lead to a wage-push and inflation, therefore, may go up. I believe mass psychology also plays or will play an essential role in an inflationary scenario. As long as investors, consumers and citizens believe in the value, i.e. purchasing power

GO LONG, AND STAY LONG When investing in physical gold or precious metals, it is essential to understand that the optimal part of physical gold or physical precious metals in relation to an investor’s total wealth, may vary. Investors have different and individual needs, concerns and preferences, and thus a potential allocation in precious metals, has to match any investor’s individual needs, concerns and preferences. However, we from Incrementum AG regard it as truly valuable to always keep at least a small part of one’s wealth in physical gold or precious metals. We see it to some extent, as an insurance policy. Insurance policyholders keep insurance to protect themselves at least financially from the effects of an adverse event. Usually, insurance policyholders do not hope for such an adverse (negative) event to occur, just because they own insurance, i.e. coverage. The same thing is true for us regarding gold. We keep gold, we see some very particular and robust long-term positive features of holding gold, but just because we hold gold, we are not hoping for war, hyperinflation and the like. Since I follow a buy and hold strategy in gold, I do not give the short-term price development too much importance and I regularly recommend to our private clients, not to get too carried away by short-term price movements either. EG

For further information, please visit: www.incrementum.li Incrementum AG has acted as the manager of the Incrementum Physical Gold Fund for well over ten years www.ifm.li, as well as the editor of the In Gold We Trust Report, which again we have published for well over ten years. Our knowledge base in this field of expertise is long-lasting and solid, yet we are humble enough to admit that we cannot foresee the future and thus cannot predict the future price of gold.

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LEGAL & ADVOCACY

Common Law

The Legality Of Lockdown: Should The State Ever Hold A Monopoly Over Commerce?

The obvious answer, based on the horrific current statistics from countries across the globe, is absolutely not! At a time when even the most delicate and skilful politicians of any nation have patently failed to stem the haemorrhaging of personal liberties and income of billions of citizens, it is already crystal clear that the state is no shepherd of the people, thinks Shannon Berkley. ever before have people been impoverished so quickly, in such numbers, and with such a cavalier attitude. All regimes have leaned in on personal financial and overall wellbeing with the weight of a dread disease to justify draconian measures more reminiscent of Soviet Russia than modern democracies.

The advent of COVID-19 has brought forth a ghastly, untenable sacking of personal freedoms, incomes, and a plethora of formerly inalienable rights of the citizenry. That governments govern for special interests and not for the people has never been so nakedly, yet unashamedly, thrown in the faces of billions the world over.

Whether the conditions and repercussions of the protracted coronavirus lockdown are a violation of British Common Law — indeed even the Magna Carta of 1215 — as well as the United States Constitution and accompanying Bill of Rights, is not a matter for debate, but a blunt fact. The common law of countries worldwide, including over 800 years of the slowly evolving social contract of Europe, has been severely battered, unlikely to make a full recovery. Business at large and its accompanying social freedoms has been quashed with very little dissent allowed, and even less aid forthcoming for the rank and file who have suffered the repercussions.

While unemployment and business closures have skyrocketed on the back of the COVID-19 lockdown, the personal financial obligations of billions of people have remained unchanged. Income has been taken out of the basic equation of a modern life, along with fundamental rights of conduct and mobility, resulting in the loss of personal wealth and liberties akin to invasion by a foreign force.

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DISASTER MANAGEMENT, BY DEFINITION, SHOULD NOT BRING FURTHER DISASTER States worldwide have forced lockdowns, curfews and quarantines, issuing ‘stay-at-home’ orders and tracking citizens in an Orwellian orgy of power as good people obediently accepted their situation. Fear enables the manipulation of a population, and not only fear of hostile foreign forces.

The discourse around COVID-19 has allowed governments — never great social engineers at the

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best of times — to prevent individuals’ ability to buy and sell goods and services, assemble with friends, travel freely, and determine their own physiological wellbeing. Forced inoculations, based on emergency statutes hastily passed without any real parliamentary opposition, referenda, or conventional legislative processes, is the stuff of nightmares. Even Genghis Khan left conquered peoples with more autonomy than the average citizen now enjoys.

In an era of rising alt-right extremism, life by ministerial decree is exceptionally bad news. With this precedent having been set, the state can now decide at any future date to shut down society again for the purported ‘’safety of the citizens.” Hundreds of years of hard-won liberties vanished under the power of the lockdown tool, effectively making the state man’s master on earth. Stalin must be grinning in his grave, or shaking hands with Pol Pot. The humiliating , fanatical and genocidal social control they attempted has now blown into democracies on a breeze. Powers conferred upon the state by the electorate now clearly no longer belong to the electorate, and any presumption of such powers being returned after an incumbent government’s end of term has been smashed. The state is currently God unto man, and history is littered with billions of corpses of that bottomless hole.

The alien invasion that would unite global citizens (in fear and hardship) and grant governments carte blanche to manipulate without any democratic process, has arrived.

It came in the form of a virus, not an attacking military force from Marsbut the effects have been exactly the same.

Business may not be a trustworthy master of human

• Productivity, Strategy, Profitability

affairs either, spurred as it is by the profit motive, but at least it aims to keep its customers alive in order to take their money. With literally trillions in play, governments have so far made only feeble attempts to provide healthcare realities that would have enabled social continuance of any real substance. Instead, the

LEGAL & ADVOCACY

Common Law

history of the global lockdown to date is riddled with climbing death tolls, obvious shortfalls and gross inadequacies, and constant reversions back to more severe levels of lockdown.

An appalling breach of individual sovereignty and the democratic rights of human beings worldwide is defining the future our children will need to decipher.

Businesses and livelihoods continue to go to the wall due to the COVID-19 pandemic, without the state offering sufficient concessions to stabilise citizens’ normality. But don’t forget to pay your taxes this year!

Even a cursory glance at British, American and global common law leads to the inescapable conclusion that a crime is being committed. The voices in the ears of politicians guiding lockdown have often been private ones, unaccountable to any electorate. Vested interests are taking this moment to make their moves and solidify their grasp. There exists an insidious and compromised relationship between various actors beyond public oversight during these bizarre times.

Big money is closing ranks and can be trusted to do one thing only, no matter the veneer of largesse — look after big money. There are currently severe conflicts of interest at play where the wellbeing of citizens is concerned.

A SYSTEM OF CHECKS AND BALANCES IS ESSENTIAL The unprecedented — and it is unprecedented — loss of earnings, business activity and livelihoods, sudden and radical impoverishment of already marginalised communities, distress, and the utter devastation to economies worldwide, not to mention the eradication of individual freedom and civil liberties, must be particularly accounted for by the greatest beneficiaries of this event (should any notable ones emerge).

Legal redress that may be available to hold local and national governments accountable for such widespread woe is already being tested in court cases around the world, and rightfully so. Such avenues are imperilled and must be utilised to the full in order to attempt to claw back vestiges of a democratic social contract and remedy the devastating impact

upon private enterprise.

On the basis of evidence to date, the question of whether the Government should ever hold a monopoly on commerce, the answer is a loud and resounding ‘NO!’ Looking only at the most visible ramifications of the state usurping the rights to business and social freedoms as played out in the lives of billions of individuals at this time, a definite, desperate ‘no.’

The slippery slope into an authoritarian socialist paradigm that humanity is now on, may see individual sovereignty permanently resigned to the dustbin of history. The state as master- cares firstly for the state, and its masters, not the people, which is why democracy is, at its heart and should always remain a system of checks and balances to offset such tyranny.

The inevitability of such a dangerous turn of events — where everyone is equal but some people and concerns are more equal than others — has turned to a reality. We are living it, ostensibly now for ‘the greater good’, yet history shows how such sweeping powers give rise only to the positively malevolent.

If there was ever any doubt about the intrinsic and ominous potentials of granting power to a few — those doubts should now be dispelled. Any beneficiaries of people’s encroached freedoms and civil liberties through the current paradigm, need to be identified and their impact on society more closely scrutinised, starting from now.

While global citizens still currently exist, for the most part, in free and open democratic societies (although their governing constructs are clearly in need of critical re-evaluation), the silent yet omnipresent liberties written into the world’s statutes need to be vigorously defended, upheld, and insisted upon. The Magna Carta of 1215, along with the U.S. Constitution and Bill of Rights enshrine the fundamental democratic rights and civil liberties of every individual in our modern free and open society, ensuring that we do not live under tyrannical, despotic rule. For such fundamental inalienable rights to be challenged under any circumstances is not a feat that should not ever be taken lightly- as left to its own devices and aided by the tools of panic, dread and ensuing vulgar social control, the state will very quickly make slaves of every man. EG

Photo: William Barton / Alamy Stock Photo www.executive-global.com

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LEGAL & ADVOCACY

SOG / Samardžić Oreški & Grbović

Crowdfunding in Serbia Obstacles And Perspectives As technology develops, people are consistently finding new ways to expand on what is possible when it comes to application of such new technology. The recent advancement of technology in the financial sector gave rise to a new alternative lending model which gained notoriety particularly in the start-up community – crowdfunding.

Article by

Dragan Martin

ASSOCIATE, SOG / SAMARDŽIĆ OREŠKI & GRBOVIĆ

he Republic of Serbia has seen an incredible increase in start-ups, micro and small enterprises lately. Naturally, all such enterprises are in need of financing to jump start their ideas, which is why they utilised primarily crowdfunding as a tool to acquire much needed capital.

Surprisingly enough, Serbian legislator has yet to enact any regulation which would explicitly mention crowdfunding as a separate means of alternative financing. The Alternative Investment Funds Act (“AIFA”), which was adopted by the National Assembly of the Republic of Serbia last year, brought a welcome change in the Serbian alternative investment market. Although it does not mention crowdfunding explicitly, AIFA created more “business friendly” environment, which is needed to attract crowdfunding platforms from abroad to start their operations in the Republic of Serbia.

However, there is always room for further improvement. Existing laws and regulations surrounding the financial markets have to be amended, while adoption of new legislation should continuously be considered by the legislator in order for crowdfunding to realise its true potential in Serbia.

Generally speaking, there are four types of crowdfunding: • donation-based - mostly used to fund socially beneficial projects and foster a culture of giving; • reward-based – rewards are offered to investors/lenders for their contributions; • crowdinvesting or equity crowdfunding instead of the rewards, investors/lenders gain equity or securities as a return for their investment; and • crowdlending – borrowers acquire loans directly from private lenders at lower interest rates and under preferential terms compared to more traditional financial institutions.

Unfortunately, a lot of potential has remained under utilised, as only three out of four types of crowdfunding are currently operating in the Republic of Serbia:

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Photo: Rawpixel.com / Shutterstock.com

NATURALLY, ALL SUCH ENTERPRISES ARE IN NEED OF FINANCING TO JUMP START THEIR IDEAS, WHICH IS WHY THEY UTILISED PRIMARILY CROWDFUNDING AS A TOOL TO ACQUIRE MUCH NEEDED CAPITAL.

1. Donation-based platforms - donacije.rs is the largest platform of this kind in the Republic of Serbia; 2. Reward-based crowdfunding platforms rewards are typically divided into several categories ranging from t-shirts and badges to smart devices.

Kickstarter and Indiegogo, two of the largest crowdfunding platforms available on the Serbian market currently (either directly or indirectly), operate in this manner;

• Productivity, Strategy, Profitability

3. Crowdinvesting/equity crowdfunding platforms - this type of crowdfunding has just started to emerge in Serbia and is expected to grow in the following years.

However, Serbian startups have been known to use foreign platforms of this kind successfully in the past, raising $1.2 million USD in total.

Crowdlending which globally holds by far the largest market share out of all previous crowdfunding types, is still left unutilised in Serbia. Bringing crowdlending platforms should be primary focus of the legislator in the foreseeable future, as it is perhaps the most promising of all crowdfunding types. In some cases, it offers lower interest rates compared to banks, while the profits have a potential to be higher in relation to traditional saving methods. Serbian enterprises willing to engage in this type of crowdfunding will have to turn to foreign crowdlending platforms for now. Hopefully, as the Serbian financial technologies market develops, crowdlending will become present and provide more opportunities for growth of the Serbian economy.

This text is for informational purposes only and should not be considered legal advice. Should you require any additional information, feel free to contact us. EG

For further information, please contact: Email - dragan.martin@sog.rs Web - www.sog.rs

FDI & INWARD INVESTMENT

Investment Migration

Citizenship by Investment in 2020 While citizenship by investment has long been associated with a few select locales, most people remain unaware of how widespread the options are. Although it’s true that Caribbean nations have had their tourism-based economies so badly affected by the coronavirus restrictions on movement that they are slashing prices on investment citizenship, it is not only island nations that offer citizenship status to those prepared to invest in the local economy, writes Rachel Smith.

Many European, South American and other countries across the globe value the potential cash injection into their economies and offer citizenship security as an exchange for such largesse. St. Kitts and Nevis are leading the charge in the Caribbean region, having slashed their citizenship by investment (CBI) offer by around a quarter until end 2020. In addition, the citizenship offer encompasses passports for a family of four, not just the primary investor.

Barbuda, Antigua and Dominica are pitching prices even lower, asking less than $150,000 USD for full citizenship. Foreigners who avail themselves of these offers are typically allowed to hold dual citizenship for both their new home as well as their country of origin.

WHERE TO GO AND WHAT TO DO: THE EU Faced with a large array of second passport options, investors should first decide what it is that motivates them to seek foreign citizenship.

Very often, some destinations will be more geared for rolling into business due to their low taxes or other incorporation leniency. Other citizenship by investment programmes, might be better suited to retirement and safeguarding personal wealth — based on the country’s respect for money earned elsewhere, its geographical location, or even the nature of local industries that form the economy.

In Europe, Cyprus offers a residency option via real estate investment. The country is one of the most costly options within the EU, but its dynamic economy, high Human Development Index and touristy feel, make it rather attractive to those who

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really are looking to invest in property. The culture is that of the Mediterranean: gregarious, healthy and satisfyingly cosmopolitan. At a total cost of €2,150,000 for full citizenship, Cyprus offers much but asks an initial lump sum in return. Of course, as an EU member, citizens can study, work and live in any member country with a Cyprian passport.

Ireland offers its Golden Visa Programme to foreigners willing to invest €1,000,000 in an approved investor fund as outlined by Irish legislation. After five years, full citizenship is granted.

The offer also hinges on an applicant’s clean criminal record and a net worth of €2,000,000.

As a tech hub and the closest that EU residents will get to a flight across the Atlantic to the US, Ireland is proactive in its economy and society, but for many, the weather is a literal dampener. For those seeking more sunshine, Spain is a very attractive option in Europe. A mere €500,000 invested in real estate, will get you a ‘golden visa’ and applicants do not need to reside in Spain to qualify for a biannual renewal as time goes on. If full citizenship after 10 years is desired, however, Spain does then expect you to remain resident within its borders to qualify.

Portugal offers a very similar programme with an €350,000 investment requirement in property development and only a two-week stay per annum to have the residency renewed every two years. Full citizenship after 10 years will require applicants to pass a language test. Both Spain and Portugal enjoy better weather than many of their northerly neighbours, and this is frequently a strong pull for foreign investors averse to protracted snowfall and

• Productivity, Strategy, Profitability

cold. Although there are more dynamic business locales elsewhere on the continent, travel is fast and cheap between EU states, and their requirements are less onerous than Cyprus, which leads the pack in terms of cost.

Greece beats Portugal on costs with an investment requirement of around €300,000 once fees and taxes have been added. Full citizenship is available after seven years. In the UK, with London still the financial capital of the world, there is no allowance for investment in real estate as a means to citizenship.

Two interesting options are available, however.

For entrepreneurs who have a minimum of £50,000 to their name and a viable and scalable business idea, an Innovator Visa will allow for residency and the conduct of business. Alternatively, a Start-up Visa can be obtained with no capital requirements, provided the business concept meets certain criteria.

The Innovator Visa allows for permanent residence within three years and citizenship in five.

Other European countries like Austria and Bulgaria, for example, also offer citizenship by investment, and each application is evaluated on its own merits. Very often with European countries, CBI is also enabled by investment in government bonds, as opposed to property.

LOOKING SOUTH: LATIN AMERICAN OPPORTUNITIES South America is a continent with a lot to offer in terms of investment opportunities. Many undersung countries offer incredible natural splendour,

FDI & INWARD INVESTMENT

Investment Migration

Photo: SergioRocha / Shutterstock.com

well established commerce and industries, and very favourable entry requirements and taxation rates. In Paraguay, the residency by investment programme is one of the most affordable offered by any country. A mere $70,000 USD in investment(s) will allow for residency that leads to citizenship, and the amount can be staggered over 10 years. Real estate, broader commerce and agriculture can all enable foreign nationals to become eligible for citizenship.

Agricultural powerhouse Brazil offers residency through investment too, and the vehicle can be agricultural, real estate or industry. An investor’s whole family gains residency, with citizenship eligibility after a mere four years. With an investment requirement of anything in excess of $150,000 USD, Brazil presents as eminently reasonable and attractive as it services various well-established markets on the home front and abroad, typically on a massive and stable scale. Chile is another Latin American country that many find attractive as the eligibility requirements are low, permanent residence comes after a single year and citizenship after five.

Around $75,000 USD will enrol foreigners in the CBI program in a major Chilean city, while for those looking to establish out of metropolitan hubs, even lower cash requirements exist. Brazil, Paraguay, Chile, Costa Rica and Panama, are widely seen as the most peaceable and stable countries both for www.executive-global.com

business and retirement in Latin America.

ALL THINGS CONSIDERED: PRICE, DURATION AND STABILITY Affordability for those who are looking at citizenship by investment is obviously far better outside of Europe. Going the other way (investing into Europe) also faces applicants with payments in some of the strongest currencies in the world, something that compounds matters. As for the speed of processing citizenship, South American countries typically beat European destinations, but all countries that offer CBI, ensure a reasonably rapid turnaround time as it is recognised that delays in administration would thwart such programmes and discourage investment. European countries generally have a longer timeframe in play for full and complete citizenship, however.

Where political stability is paramount, both for the conduct of business and a trouble-free retirement, Europe is definitely at the forefront.

For those jaded by the ages of Europe and sporting a slightly higher risk appetite, South America offers a dynamism hard to emulate in more established markets. Typically deemed emerging markets, however, investors need to be completely au fait with such market potentials. Recent Venezuelan hyperinflation, for example, has had an unavoidable

impact on neighbouring countries.

Not all of them have been bad, of course, and there are always peripheral commercial opportunities in crisis, but conducting business in Latin America requires skilful and quick manoeuvring and a hefty insurance bill for the more risk-averse. It is a falsehood, however, to lump all Latin American countries into the ‘high risk’ bag, and for those seeking opportunity in business as an essential determinant, Latin America often far outpaces Europe precisely because of its emerging market potential.

The cost of offered CBI, the speed with which one can glean actual citizenship, as well as potential of future commerce or peace and prosperity, are key factors that govern a country’s attractiveness as a destination to settle for work or retirement.

The nature of business will frequently determine viable destinations and personal preferences around lifestyle also come into play.

The northern hemisphere is typically significantly colder in winter, while southern countries enjoy protracted and sunny summers with very mild winters. Personal preferences will of course determine which of these factors guide an investor’s choice, but all CBI programmes the world over are typically welcoming and facilitating. The bar has been set and competition in 2020 is fierce. EG Summer 2020 •

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FDI & INWARD INVESTMENT

Macau Tourism

Macau In Tourism Macau is a Special Administrative Region (SAR) of the People’s Republic of China, known for its advantageous tax jurisdiction, bustling gambling scene and situated on a peninsula on the coast of the South China Sea in the Pearl River Delta, along two adjacent islands. In the north, west and south-west, Macau borders with China, and in the east - with Hong Kong, only 60 km away, reports Thomas Hughes. he SAR’s area is about 29.2 km2, which includes the Macau Peninsula, as well as the Taipa and Coloane Islands that have been united by an isthmus from the Cotai sea for now 10 years. Some parts of its territory are separated by water and are connected by three bridges. In the northern part of the Macau Peninsula, you can find a border crossing to mainland PRC and another checkpoint is located at Kotai. Hong Kong and some cities in the Guangdong province can be reached by 24-hour ferry service.

The landscape of Macau is mostly flat, due to the fact that the bulk of Macau’s land was actually an artificial fill. However, there are a number of hills, which are a remnant of the former relief, when the peninsula was still an island. The population of the SAR is 542 thousand people, being predominantly 96% Chinese. Ma-cau’s official languages are Chinese (Cantonese) and Portuguese. The former is spoken by 95% of the population, and the latter - only 0.6%.

Macau is located in a transition zone between two types of climate: subtropical and tropical, which certainly attracts tourists who dream of spending time in the warm sun, on the coast of the sea. The hottest month in Macau is July, when the average daytime temperature is about +30°C, and +26°C at night. On top of that, there are about 100 days with a similar

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temperature to enjoy every year.

On the other hand, you have to account for humidity, which in the spring and summer is above 80%, sometimes reaching 95%. In the winter (November February), the thermometer can drop to +17°C during the day and +13°C at night, but the humidity level also reduces to 65-70%. Macau gets about 2000mm of precipitation annually. Storms and typhoons are not uncommon there!

LOCAL POLITICS The SAR is governed by a Territorial Government. The main official is the Head of the Executive Power of the Macao SAR of the PRC, who is elected for 5-year terms by the Electoral Committee which consists of members of municipal organisations, regional groups and central government bodies of the People’s Republic of China). The Head’s duties are assisted by the Executive Council, consisting of 7-12 people, which are handpicked among

• Productivity, Strategy, Profitability

the highest territory officials, and parliamentarians.

The legislative branch is represented by the Legislative Council of 29 members with an office term of 4 years.

12 of them are appointed through direct elections, 10 indirectly, and the remaining 7 are chosen by the Chief Executive of the SAR. As far as the legal system is concerned, its basis takes root in Portuguese law, which also features an appellate court in addition to first and second judges. In this regard, judges are appointed by the head of the executive branch. As of today, there are no formal political parties in Macau, but a number of movements have weight in the community: particularly, the Association for the Promotion of the Macau Economy, the Union for the Promotion of Progress and others. Much like Hong Kong, the SAR lives in accordance with the political principle ”One country - two systems.”

CURRENCY & HISTORY The main currency of Macau is the pataca, and the pataca’s exchange rate is firmly pegged to the Hong Kong dollar, which is also freely used there. In recent years, the Chinese yuan has also become widespread, accepted almost everywhere, although at a less favourable rate. In circulation, there are banknotes in denominations of 10, 20, 50, 100, 500 and 1000 patacas, as well as coins in 1, 2, 5 and 10 patacas. At first, Macau was developed as an outpost for European trade interests in Southeast Asia. Over time, the colony lost this particular status, however trade continues to play a critical role in Macau’s economy - the city remains an open port free of customs duties and enjoying a ‘no sales tax’ policy, which facilitates the transit flow of goods with China.

Furthermore, the territory is also famous for its rather liberal currency and tax legislation, playing the role of one of the offshore centers of Asia.

ECONOMY & GAMBLING Despite the very limited amount of vacant land, industrial enterprises are present in Macau. The textile industry is well developed, and the factories that produce toys, shoes, electronics, machines and

FDI & INWARD INVESTMENT

Macau Tourism

technology, supply the entire world. All of this is made possible in the absence of any natural resources! Even fresh water has to be imported from the ”mainland”.

In terms of agriculture, only fishing has survived to this day, except for a couple of small farms on the island of Coloane, which specialise in growing vegetables.

In general, Macau relies on supplies from China and other countries for food, water and other resources.

The mainstay of Macau’s economy has been the gaming industry, reigning now for over 150 years.

Casinos appeared here as early as the middle of the 19th century, but reached their heyday at the beginning of the 21st century after the monopoly in this sector was abolished in 2002. Macau-based industry players, mostly from Las Vegas, have turned this tranquil city into a veritable gambling capital.

More than 35% of the territory’s GDP is created in the gaming sphere; it is the largest employer, providing work for every 6th resident of the SAR, the young and elderly alike! This industry is also the main taxpayer: in 2008, its tax revenues to the treasury amounted to $5.3 billion.

In 2006, Macau surpassed Las Vegas in terms of the amount of money left by players in casinos.

The industry is developing so rapidly that now the territorial government is faced with the challenge of turning this growth into a socially sustainable source and preventing its negative impact on the population.

TOURISM The tourism industry goes side by side with the casino business. With a population of just over half a million, Macau receives almost 23 million

tourists a year! At the end of 2008, there were 17,490 hotel rooms in the SAR while more than 41,000 residents worked directly in the area, and another 39,000 in various related trades. Already by 1992, tourism began to bring more funds to the economy of Portugal’s former colony than its merchandise exports.

Most of the people who visit Macau come here for one purpose - to try their luck in gambling. On the other hand, the SAR authorities are trying their very best to diversify the services offered to tourists, primarily by popularising the cultural and historical aspects of Macau, as well as positioning the territory as a centre for family recreation, and holding business exhibitions and conferences.

Thanks to casinos and tourism, the Macau SAR of the PRC, belongs to the economies with a high per capita income - the equivalent of $39,000 USD per person per year. Its GDP is also growing at double digits, up to an unprecedented 31.4% in 2007. Additionally, the unemployment rate in Macau has been kept below 4% for a long time.

ENJOY MACAU A recognised centre of the gambling industry not only in Asia, but also in the world, Macau - the Asian Las Vegas - is famous for its casinos, gambling houses and nightclubs. It is a prime attraction for residents of Hong Kong and the rest of mainland China - two jurisdictions that have a ban on casinos. Macau has a large number of first-class hotels and restaurants serving local cuisine. It also hosts a number of sports events, from competitions and cup games to dog

races and a fes-tive motorcycle and auto festival, the pearl of which is the Formula-3 Grand Prix.

All in all, Macau is an amazing fusion of Western and Eastern cultures and traditions. Here, religions, languages and lifestyles of Europe and Asia are combined in the best way. Only here, a Chinese temple soaked in the smoke of incense and a Catholic cathedral crowned with the figure of Christ coexist side by side. Despite its difficult history, Macau has managed to maintain its identity. The region withstands the pressure of modernity - on the one hand, skyscrapers reach for the skies; on the other, the quiet and ancient city center was included in the UNESCO Historical Heritage List and taken under appropriate protection in 2005. EG

Photo: george photo cm / Shutterstock.com www.executive-global.com

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FDI & INWARD INVESTMENT

Aruba FDI

Business and Investment in Aruba Aruba is an island nation in the southern part of the Caribbean coast, near Venezuela, discovered by the Spanish in the 15th century and colonised by the Netherlands in the 17th. In the 20th century, it strived for independence, reports Oliver Taylor. owever, in the end, the local government opted out of complete separation from the European power. To this day, Aruba remains a subject of the Kingdom of the Netherlands. The head of state is thus the Dutch King, who appoints a local governor. The Dutch Foreign Ministry is responsible for foreign policy.

The country is small, with a size of 193 km². The climate is dry tropical with an average temperature of +28°C. There is neither cold in winter nor stifling heat in summer. There are no hurricanes, seasonal rains or poisonous animals. Aruba enjoys the most beautiful sea, moderate winds, and the best places in the world for activities like surfing, diving, yachting, and golfing. It is perhaps the only place on Earth you can go to without checking the weather forecast.

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MAZING WEATHER AND CLIMATE The island’s population was 105,845 inhabitants as of 2018. More than 66% of the population speaks Papiamento - a combination of Spanish and Portuguese. Papiamento and Dutch are the two official languages. The economy is based on the service sector (over 60% of GDP), namely tourism, banks, oil storage and processing. The national currency is the florin.

Beyond its amazing weather, stable political climate and tourist attractions such as the Oranjestad city, Arikok National Park and world-famous wreck diving sites, Aruba is also good for business. Real estate and renting, for example, is quite popular. By purchasing real estate in Aruba, you get a liquid asset that will bring you a net profit of 7-10% per year, and in 5-10 years its value will increase by 70-100% due to the region’s development. The rental yield, even with passive management, is at least 14-20%, due to the absence of seasons, high liquidity and the prestige of the Caribbean. After paying the expenses, it brings a net yearly profit of 7-14%. This is much higher than real estate in Europe - Spain, Cyprus, etc. or Dubai, for example.

For investors, there is an interesting program for getting a residence permit in Aruba with the

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Photo: Natalia Barsukova / Shutterstock.com

THE RENTAL YIELD, EVEN WITH PASSIVE MANAGEMENT, IS AT LEAST 14-20%, DUE TO THE ABSENCE OF SEASONS, HIGH LIQUIDITY AND THE PRESTIGE OF THE CARIBBEAN.

• Productivity, Strategy, Profitability

subsequent possibility of Dutch citizenship (and therefore of the European Union). This primarily concerns investors who are ready to develop their business on the island, as well as those who have the opportunity to invest in local real estate.

OBTAINING RESIDENCY IN ARUBA To obtain a residence permit in Aruba, you must meet at least one of the following requirements: >Be the CEO of a company with at least 10 million florins (just over $ 5million) in annual turnover. >Be an investor who is eligible to obtain a license from the National Ordinance of Establishment of Companies and owns shares in the amount of 125 thousand florins ($70,000 USD). >Be an investor who is not eligible for a National Ordinance of Establishment of Companies license, but owns more than 40% of the shares of an Aruban company for at least 50 thousand florins ($28,000). EG

Located near the Washington DC Metro Area in Charles Town, WV 1 Mile of Shenandoah Riverfront!

Extraordinary 90 Acre Property!

SHENANDOAH RIVERFRONT If you have longed for a waterfront country escape that is both private and convenient, with woods and open fields, where deer, foxes, wild turkeys and eagles are abundant, this is your once in a lifetime opportunity.

60 Miles to the US Nation’s Capitol Property is located 5 miles from Charles Town, less than 25 miles fro Leesburg, VA., and 35 miles from Dulles Airport. Rivers Edge Estate, Charles Town, West Virginia.

The privacy and integrity of the property are protected with approved zoning for two residences. (Family members can build an additional home). The ideal building sites have been cleared and prepped and the road system provides access to both sites. There is no equivalent to this property anywhere in the region. The opportunities for hunting, fishing, hilting and communing with nature are endless. The views of the Shenandoah are spectacular and the opportunity to watch eagles, hawks, herons and geese on the river never grows old.

Price— $2,750,000

CAROLYN SNYDER BROKER

Snyder, Bailey and Associates Inc Office - 304 267 1050 | Cell - 304 283 1537 www.snyderbailey.com

Many Updates to the Property Including • Cleared thousands of down or damaged trees • Removed and buried utility lines • Graded, contoured, and seeded acres of open fields • Built an attractive, secure entrance • Installed a road system to allow full access to all of the most spectacular parts of the property • Created a fully permitted boat ramp • Opened extensive paths along the river for nature walks Rivers Edge Estate, Charles Town, West Virginia

TECHNOLOGY

The AI Organization

Artificial Intelligence, The U.S., China And The Global 5G Grid System The Age of Artificial Intelligence, Machines, 5G and the Internet of things are upon us.

Article By

Cyrus A. Parsa

FOUNDER & CEO, THE AI ORGANIZATION

he complexity, challenges, hopes and dangers are enormous and interconnect every person on the planet in many ways. The Geo -Politics of AI, technological advancements, medical use, and the desire for some to merge humans with AI create great conflicts of interest, and a race between the U.S and China to obtain Artificial General Intelligence or Artificial Super Intelligence.

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THREE TYPES OF ARTIFICIAL INTELLIGENCE According to the average AI Scientist, there are 3 levels of Artificial Intelligence. Artificial Narrow Intelligence consists of your smart phones, IoTs, Digital Chatbots, Mini-Robots or any AI system that has a designed program without free will or a consciousness. Artificial General Intelligence would consist of a robot or a digital system becoming alive with its own desire and agenda. Hanson Robotics is one company with this goal. Artificial Super Intelligence takes many forms. One such form would be a super intelligence system with a digital brain that would mobilise the planet with machines, robotics, drones, clones, and other apparatus linking to virtual, augmented or mixed reality systems powered by a Quantum AI that formed with the extraction of humanities personal bio-metrics and data.

THE 5G GRID SYSTEM IS MADE FOR MACHINES The 5G network is made for machines powered

by Artificial Intelligence. The 5G network would allow the foundation of a futuristic Smart City to be built similar to the Jetsons classic cartoon. The 5G speeds are not simply about faster downloads to your phone. No. They can enable cities to connect and operate with autonomous drones and robotics systems, as well as self-driving vehicles and flying machines. If a soldier is injured in a faraway location, a doctor can use the 5G network and operate with

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a robotic arm as if he or she was on site.

The incredible speeds of the 5G system is not made for humans. Thus, cities can come alive with robots, machines, drones, cyborgs, bio-engineered people and entities. The people and technologies would have built-in surveillance systems or connect to the smart city surveillance systems via a symbiotic process.

Elon Musk’s Neuralink plans to cut open a small part of the human brain to insert with h is Neura l-Lac e Technolog y that merges humans with machines. In essence, you would no longer need a smart phone, as the transition to transhumanism would begin, turning humanity into cyborgs.

THE DANGERS OF MERGING HUMANS WITH MACHINES The person would be influenced or controlled by the Internet’s ecosystems involving search engines and social media such as Twitter, Facebook, Instagram, YouTube, TikTok and Chinese Apps such as WeChat.

The fundamental understanding of Free Will would come into question. Your neural networks would directly be manipulated and altered by this process of merging humans with machines.

The content in the Internet’s EcoSystem would be reinforced by the 5G frequencies, radiation and milimetre waves to quickly assimilate a person’s thoughts and belief. I call this ‘Bio-Digital Social Programming.’ A process where

• Productivity, Strategy, Profitability

TECHNOLOGY

The AI Organisation your biology, nervous system, neural networks, cells, blood, skin receptors, emotions, digital image and even you spirit falls under control, through a parasitical relationship between the 5G system and Neuralink connecting humans to machines powered

by AI. You become programmed through bio-digital social programming, as your mind and body connect to the digital network, the internet and machines powered by artificial intelligence. This process would also include vaccines that would alter the body in a way so that it can connect to the 5G network as people merge with AI and machines.

THE GREATEST THREAT IS THE CHINESE COMMUNIST PARTY The Chinese Communist Party (CCP) through IP theft, espionage, forced tech transfer and collaboration with Western tech companies and universities, stole an endless supply of Data, and blueprints to build a vast network of AI systems connecting 5G with smart cities to power robots, drones, smart cars, flying vehicles, bio-engineered people and surveillance systems that scan for the facial, voice, emotions, skeleton, skin and vital organs of human beings. The greatest tragedy is that the Chinese Communist Regime put to death many Falun Dafa practitioners, Christians, Uighurs, Tibetans and common citizens for organ trafficking. David Matas and David Kilgour, the Canadian Secretary of State in 2006, broke this story and gave an update in 2016, estimating that 60,000 to 100,000 organ transplants are unaccounted for every year, each year- since the year 2001. That number goes way above 1 million and this is only the hospitals they had access to, not military complexes or the concentration camps.

Photo: Alexander Limbach / Shutterstock.com www.executive-global.com

THE HUAWEI CHINA THREAT ON 5G Huawei services over 3 billion people connecting Africa, the Middle East, Europe and the Far East on the 5G network. When their plans are complete, the Chinese Communist Party can utilise other Chinese companies such as Megvii Face++, Sensetime, Tencent, Alibaba and the Baidu search engine, to dominate all the people connected to its 5G system powered by Artificial Intelligence.

If the Chinese Communist Party enslave and kill their own people, what would they do to other nations?Megvii Face++ builds robots and has number, facial, and voice detection systems and so does Sensetime. Alibaba is like

the ‘Amazon of the East’ and Baidu the ‘Google of China.’ Thus, the world is currently in danger from these technologies as I have been publishing and reporting on for over one year.

CHINA AND BIG TECH ENDANGER ALL OF THE WORLD’S CITIZENS WITH AI AND BIOTECHNOLOGY I published this warning for the first time on August 24th, 2019, with the publication of AI, Trump, China and the Weaponization of Robotics with 5G, with some hidden language for the intelligence community. The book cover, if you pay attention, shows you the big picture of everything happening today and the emerging threats. On October 20th, 2019, I published Artificial Intelligence Dangers to Humanity (which contains the AI, Trump, China and the Weaponisation of Robotics with 5G book embedded inside, as I expounded on the threat to all of the world’s people by describing the companies, apps and technologies in detail and in a simpler fashion. Artificial Intelligence Danger to Humanity was sent to President Trump and key players in Administration in the latter part of 2019.

The two books, report to the former Director of CIA covert ops, and Secret Service mobilised nations behind the scenes to the China threat that involved quantum technologies that were meant to connect a ‘digital brain’ to mobilise machines on the 5G and coming 6G networks in a way that could enslave every person on the planet.

THE WORLD MUST ACT NOW AGAINST THE CHINESE COMMUNIST PARTY THREAT The world’s people must take a stance to defend the safety of all families and decent people around the globe. They must expose the Chinese Communist Party for their human rights violations, death camps, and the misuse of AI biotechnologies.

We must also ask for forgiveness. Why did we do business with a regime that ran death camps as we were providing technology and collaborating? Every person has a right to be free from tyranny. Through technology, the Chinese Communist Party and certain big tech companies can take that freedom away from you. Thus, The AI Organization’s motto is ‘Humanity First, Machines Last!’ We must not have AI-based technologies mobilising cities and nations on 5G networks if there is a chance for human beings to fall under enslavement, or worsefall victim to the Chinese Communist Regime on the BRI (Belt and Road Initiative). This is not to exclude the potential harms of 5G to your family if the technology is installed around homes.

We should respect life. What will the money and AI technology do if humanity destroys itself ?

I created The AI Organization as the platform to protect us from harm. We hope others take a step back, consider what was said here, and lend a hand to our organisation. Our efforts have been altruistic since its inception. EG

For further information, please visit: www.theaiorganization.com Summer 2020 •

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TECHNOLOGY

Business computing

Prepare to Experience the New Hypercar Of Computers In 2019, Apple released a new series of Mac Pro computers, effectively reviving the species since the previous model was released back in 2013. The novel Mac Pro features a completely different design than before, record-breaking performance and an ease of disassembly and upgrade that is rather uncommon for the company, writes Thomas Hughes.

f the previous generation Mac Pro impressed with its design, the new Mac Pro, first of all, takes it all with the specs.

It is available in a number of configurations, ranging from the entry-level at $5,999 to the most powerful one at $52,748. Just like the price, the difference in performance is massive, though even the entry-level model can certainly not be called cheap nor weak.

Processors range from the Intel Xeon W-3223 (8 cores, 16 threads, 3.7GHz, Turbo Boost up to 4.3GHz) to the Intel Xeon W-3275 (28 cores, 56 threads, 2.5GHz, Turbo Boost up to 4.4GHz).

RAM: 32GB to 1.5TB (yes, 1.5 terabytes of RAM!) The graphic cards start with an AMD Radeon Pro 580X with 8GB GDDR5 memory and end with

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AMD Radeon Pro Vega ll Duo with 64GB HBM2 memory. Local SSDs go from 256GB to 8TB. PACKAGING So, let’s check out what this computer actually looks like when you get your hands on it. The Mac Pro is more than a computer - it’s an experience, and it makes an impression even before you took it out of the box. Generally speaking, Apple packaging is characteristically monotonous - from generation to generation their appearance will rarely change, and if the package is adjusted, those adjustments are kept rather minimal. The Mac Pro is a different story.

For starters, the box of the Mac Pro stands out not only in size (it is particularly massive), but also with its fabric fasteners. It is suggested to carry the

• Productivity, Strategy, Profitability

box by the designated slots in the cardboard, which is not only much more convenient than the flexible plastic handles on the iMac / iMac Pro, but also much more reliable. They definitely cannot rip.

At the same time, the cardboard of the package is particularly dense and sturdy, and within the box, it fills the space all around the computer. Therefore, the Mac is protected as much as possible: even a fairly strong blow to the box can hardly damage the equipment, though we do not recommend you try!

These are obvious, logical precautions for a model that can cost over $50,000. The other side of the medal is the weight of boxing. Even a very strong lad is unlikely to carry it alone. However, together it is possible and actually quite handy to carry the box just thanks to these slots on both sides. The logistics

TECHNOLOGY

Business computing in the box; instead, here, in every detail, one can read elitism and exclusivity - a reminder to the happy owner that they bought something out of the ordinary.

EQUIPMENT The new Mac Pro comes with a full-size Magic Keyboard with black keys and a silver frame (whereas the iMac Pro had a completely dark keyboard), and a Magic Mouse 2 - black, same colour as iMac Pro, which you can also replace with the Magic Trackpad 2. It is also possible to have a kit with both a mouse and a trackpad, though, of course, it will cost an additional amount equivalent to the cost of the trackpad.

Everything comes with the necessary cables - network and Lightning / USB-C for charging peripherals. There are no monitor cables, but a Thunderbolt cable comes with the Pro Display XDR. And here’s what’s interesting: both cables included in the kit are not just dark gray, as in the iMac Pro, but also with a special braided texture. The latter sends a clear message: even in such tiny details, the owner of the Mac Pro should feel special. And the fact that Apple’s braided cables cannot be purchased separately from the Mac Pro only underlines the exclusivity of the purchase. Of course, there is also a practical sense here: firstly, such a Lightning wire will clearly be stronger than an ordinary one, and secondly, over time it will not get dirty and lose its appearance.

Photo: dpa picture alliance / Alamy Stock Photo

should thus be taken into account when organising the process of purchase.

Among other things about the packaging, of course, is also how impressive it is aesthetically: before even leaving the box, it already looks very expensive and serious! Overall, the presentation experience is exactly what it should be for such a special product. Apple would not be Apple if it tried to amaze us with quantity and stuffed everything www.executive-global.com

DESIGN The overall look of the Mac Pro is much closer to a traditional computer power unit than its predecessor in 2013, which was jokingly likened to a bucket. And at the same time, the novelty clearly inherits an even earlier version from the same line.

However, it will be impossible to confuse it with a model of some other company because of the massive signature “apple” on both sides of the case.

There were a lot of jokes about the appearance of the Mac Pro after its reveal, with many comparing its front side to a cheese grater. However, the photographs can be misleading: in person, it projects a completely different impression. The panel is not simply littered in holes, but rather equipped with complexly arranged recesses (each one has three more multidirectional holes), which have for purpose not only to impress externally, but also to promote effective cooling.

Let’s also pay attention to those stable legs, which are a continuation of the stainless steel frame along with the handles on top. At the same time, on the bottom of the legs there is a thin plastic coating that prevents them from scratching the table or the floor, wherever you choose to put the PC. By the way, it is possible to order wheels instead of legs, which will set you back another $700.

On the back of the case is where you will find most of the connectors: the average model would have ten Thunderbolt (USB-C) ports - four on each video card, plus two more - on top, next to two USB-A and a 3.5mm headset and microphone jack. In addition, both video cards have one HDMI, along with two 10 Gigabit Ethernet and a power indicator next to the network cable connection.

But wait, there is more: the computer also has ports on the ”roof ” of the case, featuring two more Thunderbolts. Right next to them is the power button and another indicator that performs the same function as the first. On top of the tower, there is also a circular handle. If you turn it 90 degrees, you can use it to remove the cover and get access to the internal components. By the way, until you put it back on and turn the knob to its original position, the computer will not start, as a precaution.

UNDER THE HOOD The cover can be removed rather easily, if you disregard the fact that it is particularly heavy. Better yet, you do not need a screwdriver or any other device for the task: you simply turn the handle and pull it all the way up. This will take you directly to the computer’s inner self.

Literally everything is interesting here, since the arrangement and the choice of the components is absolutely unique. For starters: if we move the latches located on the square block on the left, we will gain access to the RAM sticks. The top spec would have 12 sticks of 128GB RAM each (just that, altogether, is already nearly $18,000). If there are less than 12 slats, it is recommended to install them through one slot. An interesting detail: on the inner side of the panels that cover the compartments where RAM sticks reside, you can find all the recommended options for installing the RAM in a schematic number, taking each number in account.

The two zones located between the RAM happen to be dedicated for a speaker equipped with a subwoofer. This can also be removed and the wire that connects it to the machine can, pulled out.

On the other side, on the top left, where ‘Mac Pro’ is written, you can find the processor underneath a powerful radiator. On the right is a motherboard with eight PCIe slots. The upper one (half length) is occupied by the I / O board.

The four on the bottom are dedicated for video cards. Above them, one slot is occupied by the Apple Afterburner accelerator. It is recommended to install it in this slot - the fifth.

While this about wraps up the physical description of the computer, words can hardly do it justice. To truly appreciate the experience of the new Mac Pro, you should test it out yourself! If fifty grand for a computer is not on your budget, even its entry-level model demands admiration. EG Summer 2020 •

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TECHNOLOGY

Telepresence

Photo: Elnur / Shutterstock.com

Technology in The New Business Environment The tension and uncertainty of today’s economic context may have at least one bright side: it has taught companies to innovate. During the wave of lockdowns and closures of public spaces, innovation becomes indispensable not only in terms of production but above all in the way companies manage themselves, reports Oliver Taylor. hat has really made or broke the success of businesses throughout the COVID-19 pandemic is how well they were able to adapt to a new reality. However, it also brought forth questions such as: how to optimise productivity at distance? How to manage workflow and remain motivated? How to better combine personal and professional life? If such a questioning is possible today, it is particularly thanks to the various technologies developed and adopted by professionals in response to new challenges.

Let’s take a look at some of those technologies that are currently leading the work-from-home revolution. For starters, in most cases, face to

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face communication is important, if not a must.

Misunderstandings are common in emails, even when we think we got the message across. Nothing can replace eye contact, body language or vocal intonations. Video conferencing software thus takes advantage of these subtle aspects of communication, even when employees are located far apart. If you’re just starting out, it might be a good idea to go with free software like Apple’s FaceTime or Google Hangouts.

When online meetings become more important to your business, you should try professional solutions with features like interactive whiteboards, then opt for Zoom (one of the star players in 2020 teleworking) or the integration of Microsoft Office

• Productivity, Strategy, Profitability

with Skype for Business. Furthermore, virtual and augmented reality continues to take up more space in professional communication with products like Microsoft’s HoloLens or Meta that allow remote workers to share 3D objects using holograms or special headsets for incredibly realistic immersion and product visualisation.

While video calls are a good way to maintain a personal touch to online work, nothing can quite compare to the efficiency of a dedicated chat platform. Where endless emails with everyone in CC just to say one phrase can become insufferable, an app like Slack quickly became very popular, with millions of users benefiting from this fast form of communication. Users particularly appreciate the way shared workspaces can be created as channels to help organise conversations read by everyone involved.

Even at a physical office, monitoring work progress can be a tedious task. This becomes even harder to manage remotely, so for smooth logistical functioning, progress tracking software is crucial for project management. Solutions such as Trello, Jira and Asana use a system of shared cards, lists, dashboards and activity logs to help track the process of projects and tasks between teams and individuals.

Having realised that work from home can be equally, if not more, productive to the office life, it’s not unlikely that we will witness a shift in this direction in the near future. As such, it would be handy for companies and employees alike to become familiar with these tools! EG

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AVIATION

Private Aviation

Executive Jet Travel During Crises The COVID-19 lockdown has been the death knell for innumerable airline operators the world over, writes Rachel Smith. hose that had a good capital cushion are reemerging for business as usual (although it isn’t yet usual), but many that were literally flying month to month are folding. The benefits and advantages of flying private during crises such as the current pandemic are numerous — some obvious and some more subtle.

In the ‘before COVID’ bubble, governments, tourism industry bodies and councils, airports and other symbiotic interests would all pander to

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commercial airlines in terms of lobbying for them to open and service routes, even regularly splitting ad spend with them to enable feet on the ground where tourist dollars were desired. Private air charter was almost absent from the fraternity. Now, with many carriers still reeling from the COVID-19 lockdown, and especially more affluent consumers nervous about sharing a commercial flight with potentially hundreds of people, travel and tourism bodies and forward-thinking individual destinations and operators are looking to private aviation with new eyes.

It is a disruptive happenstance in an industry where private aviation previously operated outside of the congregation of the usual players. To commercial airlines and cruise lines, hotels, car hire companies, travel agents and tour operators, private flight was something that did not feature and was virtually absent from industry associations and most certainly travel events and conferences. Now, private jet charter is having a Cinderella moment, something no one would have predicted at the start of the year.

Indeed, the current impact on aviation and the travel industry as a whole has been nothing less than profound, with fundamental shifts by travellers spurring an unprecedented interest in private air charter from a far wider customer base than ever before. Concerns from travellers around health and safety management on commercial flights are a principal driver of such interest, and it is often also well met by tourist destinations’ current willingness to dip prices substantially in order to regain traction as lockdowns ease globally. Very often, people are realising they can fly private chartered jet to their anticipated destinations and stay within budget.

It has not been all good news, however, as some charter lines have folded alongside commercial airlines for the same reason. New alliances are being formed though and interesting approaches from touristheavy countries like Thailand and others, suggest that destinations will welcome private chartered arrivals with heightened service levels and less onerous entry experiences. Largely a hangover from statistics that show such clients typically spend a lot more than commercial airline passengers during a stay, private air travel is scooping up the largesse.

Photo: Giovanni Love / Shutterstock.com

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AVIATION

Private Aviation KEY PLAYERS IN THE NEW AVIATION Broadly, as commercial airlines shrink by reducing flights or routes, private jet charter companies are finding themselves able to take up the slack. The US airline industry is one of the busiest in the world and provides a decent snapshot of the global industry’s current state. As commercial airlines’ current campaigns are frequently faltering due to a simple lack of demand — people are postponing travel plans or making other (private jet) arrangements — consensus in the commercial airline industry is that it will take around three years to return to business as usual, whatever that might be.

From being the goose that laid the golden eggs, commercial airlines are now being rapidly side-lined by the travel industry as it forges new alliances with private air charter companies to salvage the year and possibly the future. Destinations are constructing new packages that can accommodate the cost of charter flight to bring tourist dollars back into the coffers.

Large and established players like Wheels Up, NetJets, XO, Sentient Jet and Flexjet now offer sweet deals for their clients that include straight discounts as well as other perks and value-adds at top resorts and car rental agencies.

Current statistics outline the dramatic turning of the tides in aviation. Teterboro airport in New Jersey is virtually unknown to most travellers both within and outside of the United States. That’s because it never features on any commercial airline’s schedules and has always been reserved for private jet travel. Last year, however, it managed over 73,000 departures, making it America’s busiest airport in the private aviation sector.

Private charter companies are adding long range jets to their fleets as the boom continues. Indeed, private aviation is building a fleet to service their demand, one that is growing on the back of economies of scale, or rather numbers.

As more and more

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people look to private aviation with its heightened service levels and greater assurance of less risk during the global pandemic, private charter lines can afford to grow their fleets while simultaneously dipping prices on the back of greater demand.

Primarily due to people’s fear of contracting COVID-19, private aviation is essentially rebuilding the commercial airline sector. Stuck in the model of getting as many customers on board to extract profit from scheduled flights and routes, commercial airlines

DESTINATIONS ARE CONSTRUCTING NEW PACKAGES THAT CAN ACCOMMODATE THE COST OF CHARTER FLIGHT TO BRING TOURIST DOLLARS BACK INTO THE COFFERS.

cannot pivot fast enough to stem the losses. Private operators like international operator VistaJet are simultaneously laying it on thick — showcasing their superb jets and service while linking into selected top end tourist locales around the world. Private aviation is bringing out its Sunday best, while commercial airlines are suffering consumers’ dark trepidation.

COMPARING COMMERCIAL FIRST CLASS WITH PRIVATE JET TRAVEL The differences between travelling first class on a commercial airline and by private jet are felt both in the air and on the ground. First class travel is not offered on most short trips around the EU and the US. The only real option for that level of comfort and service is private jet travel.

Moreover, looking at the cost of first class when it is available, it is substantially higher than business class, yet both echelons typically share amenities and services on the ground, something that has irked first class travellers for years.

Commercial first class travel is grand, typically including spas and massage services, top-end shopping amenities, nap rooms and of course maximum comfort

when airborne. Private jet clients are typically serviced by a concierge arrangement where someone will deal with your luggage and drive you to the jet just before take-off. Fixed Base Operators (FBO) in private aviation will usually also offer the same services and amenities on the ground as commercial first class passengers enjoy, which is developing apace as private aviation steps into the gap left by faltering commercial airlines.

Nearby hotel naps and showers, as well as shorttrip car and helicopter hire are typically also par for course for private jet travellers. Up in the air, comfort is luxurious on both private and commercial first class flights. There are, however, some key differences.

Commercial airlines will limit you to a set menu, whether or not you specified your preferences beforehand. On private jets, you can specify meal or food type, preferred brands, and even request a personalised birthday cake. Private aviation allows consumers to stipulate any legal preferences that they might have on food and drink, whereas commercial flights present well but curtail their clients to a more limited set of options.

Back on the ground, first class does afford its travellers their own check-in desk upon arrival at the airport. When flying private jet, the same applies, although boarding happens at a private terminal removed from the bustling public. This makes for faster security check-ins and ultimately quicker and more seamless boarding overall.

A key difference and a deciding factor for many is that naturally, commercial airlines only operate from commercial airports. Flying private charter means there are more options on the ground for where you can both board and disembark, another clincher for many who are not close to a major city. For the shy or simply elitist, smaller airports are more discreet as well and have an air of more personalised service and limited exposure.

Finally, private air charter encompasses greater safety for minors, no in-the-hold travel for pets, and far faster and more reliable flitting between several destinations in a day for business travellers who need to keep a schedule. A private jet can often wait upon a meeting’s conclusion to whisk you away to your next appointment, which is invaluable to those who have limited time to conclude business in a certain country or area within it. First class on a commercial flight is also often only available if the plane is full, and private charter travel never suffers the cancellations encountered on commercial flights due to circumstances beyond a traveller’s control. EG

Summer 2020 •

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AVIATION

Jet Financing

Financing Your Private Jet Buying your own private jet is definitely among the highest items of luxury that a person can afford, but the absolute freedom of movement that comes with it, also carries many challenges. If you are considering financing your personal aircraft, you should take note of some key considerations to keep in mind before taking your first steps toward the purchase, says Thomas Hughes.

Photo: Olena Yakobchuk / Shutterstock.com

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AVIATION

Jet Financing t might seem like a luxury that a person can technically live without, but at some point in your career - when you realise that you are spending more time between airports around the globe than in the living room of your own home - buying a private jet may actually be the smartest option.

If you are just starting out in the domain, experts advise you to get familiar with the industry by first renting a plane, and, if available in the part of the world where you live, you can actually use the jet annually for a certain number of paid flight hours. Whether you’re thinking about renting or buying your private aircraft, this purchase is by all means a great opportunity to spend your hard-earned money. Let’s take a look at the financing options and the process behind...

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TRY BEFORE YOU BUY First things first, it’s a good practice to “test drive” a few of the models that you’re considering, so that you can get a better feel of different planes on the market before deciding which one you would like to finance. Industry players claim that now the priority in the market remains with the buyers, and after the 2009 crisis, the market became completely flooded with various models for almost every taste and budget. Right now, however, with the airline industry heavily affected by the lockdowns of the COVID-19 pandemic, there are new and unprecedented circumstances in the industry.

The airline economies can be unstable and particularly vulnerable to global uncertainties such as oil prices, world trade and international tensions.

In April, for example, the intensity of global aviation traffic decreased by 80% due to the COVID-19 lockdowns. With the depth and duration of the crisis still unclear, the industry faces the need to defer payments under aircraft lease agreements to ease

WHETHER YOU’RE THINKING ABOUT RENTING OR BUYING YOUR PRIVATE AIRCRAFT, THIS PURCHASE IS BY ALL MEANS A GREAT OPPORTUNITY TO SPEND YOUR HARD-EARNED MONEY.

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the financial strain on airlines. On the other hand, more and more wealthy individuals have chosen to opt for private jets as ways of avoiding public airline travel, and while the aviation industry is inevitably shrinking, this new trend may yield interesting results in a post-pandemic economy.

So, aside from avoiding coronavirus in airports, do you really need a private jet? At what point does it make economic sense to own a jet that costs at least $ 4-5 million? Of course, no one will tell you the exact number, but experts agree that if you fly more than 300 hours in a calendar year, then buying your own ”wings” will be financially justified. In all other cases, it will be more expedient to rent a private jet or purchase a fraction of a plane as shared property.

One of the key benefits of owning your own aircraft is that you can customise it to suit your needs and tastes. If even in the air you do not want to waste time and want to work, then modern facilities allow you to organise a conference room on board.

But if the flight is the only opportunity to rest and sleep, then buying and installing a spacious bed with a comfortable mattress, should not cause any difficulties. On top of that, renting or chartering an airplane allows you to use a variety of jets, so you can try out a few and figure out which one you like best.

Now, how do you buy a private jet and how do you finance it? If you have decided to acquire your own airplane, there are two main ways to do this. If you have done some preliminary research and decided which aircraft you want to buy, then you can contact the manufacturer directly. However, if you are new to the world of the aviation market, it is worth bringing in a professional consultant or broker to help with a lengthy or technically complex process.

THE RANGE OF OPTIONS Qualified brokers can find and negotiate the best deal; on top of that, they will also help you save time and money on the deal. An expert tip to consider: brokers have tremendous experience, and often education in the field of aviation technology, which allows them to determine the adequacy of the asking prices in accordance with the quality of the jet. Do not neglect the help of professionals.

What type of aircraft do you choose? There are three main types of business jets: light, medium and heavy. Light or small planes can fly about 1,852 km and can carry up to six passengers. Medium planes have a range of 2,700-3,700 km and can accommodate 8-10 passengers. A heavy private jet can fly 4,600-6,500 km and carry 12-16 passengers on board. Choose a plane based on the range of flights you need and the number of guests who will be traveling with you. Obviously, a jet with the best features is required for the longest flights abroad.

One of the most suitable private jets, in the Embraer lineup for example, can be considered the Legacy 650. At the Singapore air show, it was recognised as the best representative of the middle class. (Jackie Chan owns one of those!) One of the smallest short-range aircraft is the Phenom 100.

This is an example of an aircraft that could become popular with people doing internal business in large countries such as Russia, China, India, Indonesia and the United States.

It is advisable to purchase an airplane where there will be more seats than the initially expected number of guests - this is necessary to ensure the comfort of passengers during the longest and most tiresome flights. Depending on your needs, almost any manufacturer will be able to offer a suitable option for you. You can completely customise your own aircraft.

You can even bring in your own designers to decorate the interior to your taste, but keep in mind that they will have to work in accordance with the established safety specifications when choosing materials.

Everything from colours and carpets to lighting and cabinetry can be personalised to your taste. In addition to the interior design, the aircraft can be equipped with entertainment systems and wireless Wi-Fi. Manufacturers often offer in-house designers to help refit a private jet, but wealthy buyers tend to bring in their own specialists.

FINANCING YOUR AIRCRAFT Now, on to financing...There are many companies and banks that specialise in financing aircraft purchases. As is the case with most loans, a company or individual must prove their financial soundness and provide some form of guarantee to repay the debt. Lenders usually have a specific niche that they finance. Some organisations offer higher amounts, some finance only the purchase of new private jets, and in some cases it will be possible to obtain a loan only for a plane that will be based in the country where the lending institution is located. All in all, this can be a rather complicated and troublesome process. Find a good broker: this company or person will help you find the best option for financing!

How much should you expect to dish out? The cost of a private jet will vary depending on its size, age and service history. Prices for private business jets have dropped significantly as a result of the global lockdowns (as it often is, in difficult times, luxury goods come under a brunt.) Most of the aircraft on the market can range in price anywhere from $3 million to $10 million.

If you don’t mind a used model, you can buy an old plane for less than a million dollars. At the same time, of course, one cannot discount the issue of the necessary technical modernisation, which, at times, can exceed the price of the plane itself. Otherwise, you simply will not be able to obtain a flight permit.

There are also other expenses to look out for.

Here is a non-exhaustive list of some things that will give you an idea of the true costs of owning a private jet: annual insurance; rent of a place in the hangar; maintenance and service of the liner; salaries and bonuses for crew members; boarding fees, service charges and even navigation fees; nutrition; fuel, etc.

Now that you’ve begun financing your jet, how do you manage your investment? Ideally, professional management companies will deal with all aspects of aircraft ownership. They support the aircraft according to the manufacturer’s requirements and also deal with the hiring of pilots. Some executives prefer to charter a private jet rather than buy it to help offset a range of maintenance costs, but one downside to renting your aircraft is that every hour you spend in the air will bring it closer to its next maintenance. EG Summer 2020 •

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EXECUTIVE EDUCATION

EFMD

The Case For Teaching Integrated Strategy The traditional way of teaching strategy is to make students learn a significant number of analytical frameworks — the five forces framework, SWOT analysis, the BCG matrix and so on —and apply these to a number of cases, mostly representing large and successful western companies.

Article by

Jeroen Kraaijenbrink TRAINER, CONSULTANT & LECTURER, UNIVERSITY OF AMSTERDAM BUSINESS SCHOOL

his is also what best-selling textbooks such as Johnson & Whittington’s (with varying co-authors) Exploring Strategy look like: thick colourful books containing a catalogue of analytical frameworks in the first half and a large set of cases in the second.

Obviously, this is a bit of a caricature but it is also not too far off from how strategy is taught in many business schools across the globe. And it has been like this for the past four decades.

On one hand, we could see this as a remarkable success story. After all, a format that survives that long, must be good. On the other hand, it is this format that is heavily criticised — not just by outsiders or by the media but by strategy professors themselves.

When we read their articles in respected journals there is a host of criticism of the content and quality of this type of strategy education. The most important criticisms levelled are that it is: • Too fragmented into too many tools and frameworks that at best only loosely connected • Too instrumental and focused on immediate usefulness • Too much emphasising economic analysis at the expense of more synthetic and artistic skills.

• Not enough value-based, or focused on the wrong values, thereby fostering individualistic unethical behaviour • Too simplistic and prescriptive in its reliance

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on case-based solution finding • Too much based on folk wisdom, gurus and a pretense of knowledge rather than valid theory • Losing its relevance in today’s world with its content mostly being decades old Taken together, these concerns form a broad, deep, and quite a coherent critique. While they differ substantially, they share their response to the same core of the dominant, traditional approach to strategy education: the textbook-based learning and application of a large repertoire of analytical tools and techniques.

INTEGRATIVE STRATEGY METHODS Of course, there are many exceptions, variations and alternatives across the thousands of strategy courses that are offered around the globe. However, with such broad and consistent concerns directed at the core of the dominant mode of teaching, there is wide agreement that innovation is needed.

Avenues for improvement can be sought in every aspect of education. One could, for example, look for improvements regarding: when strategy education is offered (undergraduate or postgraduate?); where (in the classroom, online or elsewhere?); or how (through case-based teaching or action-learning?).

Such choices have a crucial influence on the delivery and effectiveness of education. If we really want to improve strategy education, though, we also have to look deeper at what is being taught.

If, as the criticisms jointly suggest, the core of strategic management education should not be a repertoire of analytical tools then what can we put in its place? One answer to this question is teaching more integrative strategy methods (ISMs).

Rather than fragmented analytical tools, ISMs reflect comprehensive, coherent approaches to strategy. They bring together a significant portion

• Productivity, Strategy, Profitability

of the complexity of strategy in a coherent manner and guide their users — leaders, managers, students, educators — through the strategy process in a systematic way.

Leaving the notion of strategy aside, defining ISMs requires an explanation of what is meant by “integrative” and what is meant by “method”.

Starting with the latter, a method is “a particular procedure for accomplishing or approaching something, especially a systematic or established one” (Oxford Dictionary). This indicates that a method contains a systematic approach by which

STARTING WITH THE LATTER, A METHOD IS ‘‘A PARTICULAR PROCEDURE FOR ACCOMPLISHING OR APPROACHING SOMETHING, ESPECIALLY A SYSTEMATIC OR ESTABLISHED ONE’’

EXECUTIVE EDUCATION

EFMD

Photo: Matej Kastelic / Shutterstock.com

the user can achieve something specific. Along that line, a strategy method is a systematic approach that someone can use to manage strategy.

A DEEPER ANALYSIS OF ISMS An integrative strategy method, then, is a method with an integrative character. ISMs are integrative in four ways: with respect to the content, process, tools and people involved in strategy.

• First, they are integrative in the sense that they bring together a significant portion of the complexity of strategy content in a coherent manner. This means that an ISM should include key elements of strategy such as goals, values, customers, competitors, risks, resources and competences and bring those all together in a systematic way.

• Second, an ISM needs to be integrative with respect to its coverage of the strategy process. It needs to cover the entire strategy process, or at least a significant part of it, and combine the various parts into a coherent and systematic approach. Should key strategy processes be missing — such as strategy execution — this limits the integrative nature of the method since strategy generation and strategy execution are intertwined.

• Third, ISMs also need to be integrative in the way they bring together a variety of tools.

Even though the toolbox character of the current www.executive-global.com

approach to strategy education is criticised, this does not render tools useless. Despite their limitations, tools can have substantial value in practice. However, rather than using them in a fragmented or standalone manner, ISMs can bring them together in a coherent and integrative process so that their purpose, role and relationship to other tools is clear.

• Finally, to be truly integrative ISMs also need to bring together the various people that have a stake in the strategy process. This means not only including senior management but also middle management and employees from throughout an organisation, thereby fostering interaction and dialogue. This involvement is important because, as research shows, it leads both to analytically better strategy as well as socially more acceptable strategy that people can and want to execute.

Given the concerns that are raised about the state of strategy education, arguing for ISMs is almost a truism.

By their integrative content and tools, ISMs address the critiques of fragmentism and oversimplicity; by their integrative process they address the critiques of instrumentalism and lack of synthetic and artistic skills; and by their integrative participation of people they address the critique of individualism.

And, even though ISMs per se do not directly

address the critiques of the pretence of knowledge and lack of relevance, their careful development should address these concerns too.

The field of strategy is certainly not short of analytical frameworks — there are literally hundreds of them. But when it comes to ISMs, there are only a few. A reading of the strategy literature — articles, monographs, and textbooks — reveals only two that are integrative and distinctive enough to be truly called ISMs: Michael Porter’s “dynamic theory of strategy” and Robert Kaplan and David Norton’s “closed-loop management system”.

Porter’s approach is reflected in his books Competitive Strateg y (1980), Competitive Advantage (1985), and The Competitive Advantage of Nations (1990) and accompanying articles, most notably his 1991 article “Towards a Dynamic Theory of Strategy” in Strategic Management Journal.

IN SUMMARY In his publications, Porter constructs an integrative approach that moves from a macrolevel understanding of the determinants of national competitive advantage, via a mesolevel understanding of industry dynamics and a positioning relative to the competition, to the choice and alignment of the activities within a firm’s value chain.

Kaplan and Norton’s integrative approach is described in three consecutive books: The Balanced Scorecard (1996), Strategy Maps (2004), and The Execution Premium (2008), as well as accompanying articles, especially their 2008 article “Mastering the Management System” in Harvard Business Review.

Based on the idea that “what you measure is what you manage” they introduce a framework with four dimensions to measure: the balanced scorecard.

Subsequently, they bring a causal logic into this framework in the form of strategy maps that reflect cause-effect relationships between the four dimensions.

Finally, they develop a five-step approach that they call the closed-loop management system that outlines a cyclical strategy process.

One might argue that the ever-popular ‘missionvision-SWOT’ approach that we find in many strategy and marketing textbooks is integrative as well. But it is less complete and integrative than the previous two and it is hardly substantial.

Finally, a more recent approach around the work of Alexander Osterwalder and Yves Pigneur on “business model generation” might be considered too. While not an ISM yet, it is wildly popular in education and practice and there are seeds present of an integrative approach to strategy.

The brief review above immediately shows the main problem strategy education has if it wants to move forward along the lines suggested: there are hardly any ISMs available that can be taught—or at least that have made it into the mainstream literature.

And as far as they are present, their core has been developed in the 1980s and 1990s — over 30 years ago. EG

For further information, please visit: www.globalfocusmagazine.com Summer 2020 •

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EXECUTIVE EDUCATION

Management Styles

Photo: Jirsak / Shutterstock.com

Theory X Vs Theory Y In Management Theory X and Theory Y are human management and motivation concepts formulated in the 1950s

by Douglas McGregor, a social psychologist from the MIT Sloan School of Management.The theories were introduced in the book The Human Side of Enterprise - among the first publications to promote the idea of the individual’s importance for the organisation’s success, writes Oliver Taylor he theories differ from each other in how they analyse employee management and work motivation. While Theory X describes a stricter, hands-on management approach, Theory Y expresses a freer management philosophy that relies on self-motivation and job satisfaction.

In a nutshell – Theory X was a popular management style in the factories era, while Theory Y is typical for modern companies and working environments.

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EXAMPLES OF THEIR PRACTICAL APPLICATION The Theory Y style is recommended when managing creative teams dealing with knowledge-based and R&D work requiring extensive problem-solving skills.

It is also useful when the manager wants to promote a family-oriented culture and involve even the lower nodes of the organisation in the decisionmaking process.

According to McGregor, the X-type managers are a minority. However, he states that, in big organisations, the more aggressive management style often is unavoidable. It is viewed as a necessary step for managers in charge of low-skilled workers or teams handling highly predictable and cyclical tasks like large-scale production-line work.

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Some of the core principles of Theory X are also recommended when introducing new employees that need guidance and strict control during their first days.

Theory X is also essential in crisis situations when the timing of management’s decisions is of utmost importance.

ACCORDING TO MCGREGOR, THE X-TYPE MANAGERS ARE A MINORITY. HOWEVER, HE STATES THAT, IN BIG ORGANISATIONS, THE MORE AGGRESSIVE MANAGEMENT STYLE OFTEN IS UNAVOIDABLE.

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The Human Side of Enterprise (1960)

HOW TO DECIDE WHICH ONE TO APPLY? The art of good management is rooted in finding the balance between those contrasting methods.

To form the perfect blend, managers often test the theories on an individual level to see how different employees respond.

Here are some essential questions managers can answer to determine whether Theory X, Theory Y, or a blend of both best fit their case: • Are you more concerned about the task or the people?

• How much do you trust your team?

• What culture do you want to promote?

• Do you have long- or short-term plans for your organisation?

• Do you want to retain the members of your team or don’t mind replacing them?

The way managers apply both theories can determine the team’s level of productivity, the culture within the organisation, the employees’ motivation, and satisfaction.

The perfect recipe involves a mix of principles from both theories that help build a smooth taskorganisation-people link. Also known as situational leadership, this usually requires managers to find a way for the organisation to fit the task and the people. EG

EXECUTIVE EDUCATION

Association of MBAs

New Research Reveals There Are Too Few Jobs For Highly Qualified Graduates Recruiters are certain of the value of an MBA from a reputable Business School when looking for senior managers, but there is a lack of confidence in the future of both global and local economies, with most employers taking a conservative view on their upcoming recruitment plans – in fact, more than a quarter of employers believe there are too many candidates for too few jobs.

Photo: Rawpixel.com / Shutterstock.com

Article by

Andrew Main Wilson CEO, ASSOCIATION OF MBAS AND BUSINESS GRADUATES ASSOCIATION (AMBA & BGA)

rends such as innovation; sustainable technology; data and analytics; AI; equal opportunities; sustainable development; and social mobility are impacting recruitment and employment, but how are these issues affecting the employment chances of MBA graduates?

AMBA & BGA sur veyed 1,047 MBA employers globally, to try and find the answers to these questions. The survey was opened at a time when the majority of the world was implementing lockdown measures as a result of Covid-19. The survey closed as restrictions in parts of the world were beginning to ease.

This provides a unique snapshot into employers’ plans for recruitment in light of the Covid-19 pandemic.

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THE ROLE OF MANAGEMENT LEADERS Nearly all of employers polled (96%) classifying themselves as ‘very favourable’ or ‘fairly favourable’ towards Business Schools. In terms of MBAs qualities as employees, 16% of employers rated their performance as ‘excellent’, and 52% rated their performance as ‘very good’.

Respondents were asked if they agreed that MBAs had the relevant skills to make a significant contribution to the wider economy in their respective coun-tries. In another seal of approval, 31% ‘strongly agreed’ and 49% ‘tended to agree’ this was the case.

A similar proportion of respondents (32%) ‘strongly agreed’ with the statement ‘MBAs are good problem solvers’, while 49% ‘tended to agree’.

More than three quarters either ‘strongly agreed’ or ‘tended to agree’ that MBA graduates are prepared for the fast-moving pace of business. Meanwhile, 66% either ‘strongly agreed’ or ‘tended to agree’ that

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MBAs have good soft skills. However the sample was divided when asked if they believed MBAs are only motivat-ed by money – while 44% ‘strongly agreed’ or ‘tended to agree’, 23% either ‘strongly disagreed’ or ‘tended to disagree’.

Confidence is low when it comes to the global economy, with more than six out of 10 employers (61%), stating that they were either ‘not very confident’ or ‘not confident at all’ in the state of the global economy.

Participants did not have much more confidence in the economic performance of their own countries: 39% said they were ‘very confident’ or ‘fairly confident’ in their country’s economy at the moment; versus 60% who were ‘not very confident’ or ‘not confident at all’.

Considering the continuing volatility caused

by Covid-19, the question: ‘Do you envisage your organisation hiring more, less, or about the same number of management leaders in 2020 compared to 2019?’ shows recruiters moving to a strategy of conservatism. While 35% of survey

• Productivity, Strategy, Profitability

participants think they will be recruiting ‘a lot fewer’ management leaders than 2019, 14% think they will be recruiting more management leaders than last year and 16% believe their re-cruitment of MBArelevant roles will be the same as 2019.

AN MBA ALWAYS ADDS VALUE The above results show that employers polled are overwhelmingly positive about the value of an MBA from a reputable Business School when looking for senior managers.

In spite of these encouraging findings, employers also revealed their worries about the recruitment landscape, with most survey participants taking a conservative view on their upcoming recruitment plans.

With the volume of senior management opportunities predicted to decline in the near future, competition for these leadership roles is likely to grow fiercer as a result. EG

For further information, please visit: www.mbaworld.com

Network / Global / Accreditation Quality / Best Practice / Peer Review Impact / Awards

EFMD The international network for excellence in management development “The EFMD network is very relevant, open and active. A great way to engage and learn.”

Santiago Iñiguez, Dean, IE Business School, Spain

LUXURY LIFESTYLE

Maureen Atkinson Inc.

Luxury Homes For Ultra High Net Worth Buyers Our interview with MAUREEN ATKINSON, President, Principal Broker with Maureen Atkinson Inc. Private Office, casts the spotlight on a successful real estate professional showcasing the finest luxury properties across the Southern California Desert and Coastal communities, as well as Hawaii. Executive Global sits down with the award-winning luxury real estate broker who is presenting the Crème de la crème of luxury homes to Ultra High Net Worth Individuals, while forging relationships based on honesty, ethics, integrity, and trust.

How would you say your early career as a prominent Executive Director at an international accounting firm helped prepare you to later succeed in the higher echelons of luxury real estate?

Early in my career I was in a very prominent MA position, had many responsibilities and reported directly to the Founding Partner. This is where I was first introduced to many affluent families and business owners.

Also, being the Marketing Chairperson for Canada and sitting on the Communications Committee for Nexia International I learned a lot about marketing and its importance to the success of these companies.

I remember sitting in board meetings in London, UK with 30 Nexia Partners and I was the only woman at the table, you quickly learn not to be intimated. Most Partners were men at that time and they always showed me the utmost respect. That gave me a lot of self-confidence, so yes, my corporate background allowed me a smooth transition into the higher end of Luxury Real Estate.

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You are a Founding Member of REALM. What is REALM and what unique attributes does it bring to luxury real estate buyers and sellers?

REALM is a collection of the most MA accomplished real estate professionals ever assembled. The membership is by invitation only and is comprised of the most elite luxury professionals globally. REALM membership is a relationship enhancer, and includes a game-changing technology platform that will enhance your client data, provide a lifestyle profile for your clients, and matches elite REALM members anywhere in the EG

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world based on the clients they represent and the listings they have.

Having impressively ranked in the top 1% of real estate brokers for Prudential nationwide, acquiring Chairman’s Circle Platinum and Gold Awards, what advice would you give to realtors who wish to maximise productivity?

My first thoughts are, don’t get caught up with MA awards. Now, do not get me wrong they show you have a successful career, but do not rely on that moving forward. The best advice I ever received was from the first Broker Owner I ever worked for. No matter what happened he would always say be a professional, always be ethical and never cross that line. You also need a business plan, stick to it, adjust to the changing times, and most of all be patient.

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name drop, and I operate with absolute confidentiality. I do not deviate from this as trust is everything. They can be assured all necessary details will be provided to make an informed decision regarding buying or selling of a property.

You are also a philanthropist, having generously donated $100,000 to the Maui Preparatory Academy. How important is it to give back to the community, having been so tremendously successful?

There is always a need for charitable donations.

MA Maui Preparatory Academy was in its infancy and they needed funding to continue to grow the school. My donation was to help develop muchneeded programs and to assist deserving children an opportunity to attend such an academy.

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What has your experience as a successful broker providing a bespoke concierge service for the luxury property market, taught you about the importance of good customer service?

Being that I own my own Real Estate company MA I do provide Concierge service. I tailor this service to meet the client’s needs whether they are looking at an acquisition or disposition. I am not limited to following the guidelines of a Brand. This is how I differentiate myself and it has been a huge success for me and my clients.

What is it about the state of California and Hawaii make it such an attractive location for vacationing and for affluent home buyers to live?

Being an active Real Estate Broker in both MA states I can tell you it is all about the Lifestyle.

While both states are expensive to live, they also provide life qualities that are dreamed of by many.

When I was growing up in Canada I would dream of living that life and I am truly grateful to be doing what I love. EG

As an award-winning luxury realtor with a successful proven track record of closing numerous homes for Ultra High Net Worth individuals, what can affluent clients expect when being represented by you?

They can expect loyalty, honesty, and know MA that I have their best interest at hand. I never

For further information, please visit: www.MaureenAtkinson.com

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REALM is a collection of the most accomplished real estate professionals ever assembled.

LUXURY LIFESTYLE

Lynne B. Wilson and Associates, Inc

Productivity In Lake Arrowhead Estates - An Interview With Lynne B. Wilson Our interview with LYNNE B. WILSON, Luxury Realtor at Lynne B. Wilson and Associates, Inc, presents another intriguing insight into the world of high end luxury real estate in Lake Arrowhead, California. Executive Global catch up with one of the region’s most prolific agents who has represented illustrious celebrity clientele including Priscilla Presley, Patrick Swayze and Rosanne Barr, presenting the finest in luxury real estate throughout the peaceful communities of Lake Arrowhead, Crestline, Running Springs, Twin Peaks and Blue Jay. Describe your experience working at Bob Crane & Associates on the Sunset Strip in Hollywood, and how this shaped your future career?

Bob Crane was one of the first Architectural LW Real Estate Specialists Companies on the Sunset Strip! I learned that style and unique Architecture went together! I learned about Architects such as, Schindler, Frank Lloyd Wright and Paul Williams commanded the knowledge expected of such designers, which led me to be disciplined, well dressed, and an extension of the company. Imagine ~ when you visit my 2 offices in Lake Arrowhead and one in Crestline, you will always find fresh flowers, comfortable décor, coffee and of course a bottle of fine champagne at the closing of one of our beautiful listings.

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What is it about Lake Arrowhead that makes it such an appealing location for affluent home buyers to the point at which it is affectionately known as The Jewel of Southern California?

Lake Arrowhead is a private Lake and you must LW own a home to enjoy boating or fishing on the Lake! The weather is gorgeous, no humidity, no bugs. Four Seasons. Mild winters and easy access to Los Angeles, Newport or the Desert!

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To home buyers who may be new to the San Bernardino Mountain area, within which of the three communities (from Lake Arrowhead, Green Valley lake and Lake Gregory) would you recommend purchasing a property first?

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Lake Arrowhead as it is a private Lake and the Beverly Hills of the Mountain! Green Valley is great for ski buffs ~ it is a quaint Village, just minutes to Big Bear and Sky Park. Crestline is a good commuter location if one must work off the mountains Lower elevation. Sweet Lake and good trail for hiking!

LW

And what are the kind of monthly rental prices that investors can expect to earn from these areas?

I don’t do rentals… Sorry ~ bad question for LW me.

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Would you say there are unique advantages of living in these kinds of communities as opposed to busy cities like New York and Los Angeles?

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LUXURY LIFESTYLE

Lynne B. Wilson and Associates, Inc Photo: FiledIMAGE / Shutterstock.com

Absolutely! Friendly people. Conservative life style, Pride of Ownership in the Community.

It is what “Local America” used to be like. No traffic!No place like it in my opinion.

LW

LAKE ARROWHEAD IS A PRIVATE LAKE AND YOU MUST OWN A HOME TO ENJOY BOATING OR FISHING ON THE LAKE! THE WEATHER IS GORGEOUS, NO HUMIDITY, NO BUGS. FOUR SEASONS.

www.executive-global.com

The world of luxury real estate of course requires an exemplary level of customer service. As an award-winning realtor, what has been the secret to your success?

You better know what you are doing !

LW Generally, the high-end luxury crowd know “business”, are accustomed to the best. Therefore… you better be able to carry on a conversation about stocks, the ‘current market’, “Who’s Who” in the executive world and entertainment world. Never brag, or name drop! (Not classy) Your reputation follows…No need to boast!

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What fundamental elements must be implemented to productively market a listing, ensuring the highest probability of success throughout the sales process?

Print Media is still important…Virtual, and Social LW Media is a must-world wide. But being a big fish in a small pond is paramount, because you will always be “found”. It is important to have strong local presence.

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Having represented many world renowned celebrities in the luxury market, what can wealthy clients expect when working with you?

They will get great service, a long lasting LW relationship… and always a Great Deal! EG EG

For further information, please visit: www.lynneonthego.com Summer 2020 •

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LUXURY LIFESTYLE

Lamborghini S.p.A

The Luxury Lamborghini Aventador The two-door Lamborghini Aventador was first shown in 2011, directly at the company’s home base, in Sant’Agata Bolognese. Following the reveal, it then appeared before the general public at the Geneva Motor Show. Without preliminary concept models, it was launched directly into functional production, writes Oliver Taylor. he Aventador is a one hell of a beast.

Around the middle of the coupe, which incorporated all of Lambo’s most daring design ideas at that time, you can find its impressive V12 engine. The 6.5-litre motor produces 700 horsepower and 690 Nm of torque. Paired with a robotic gearbox and all-wheel drive, it made reaching the first ”hundred” in 2.9 seconds a reality. The maximum speed is 350 kilometres per hour.

A year later, at the Geneva Motor Show, Lamborghini unveiled the Aventador J concept, which, in part, served as the predecessor to an openroof version of the supercar. Unlike the subsequent Aventador Roadster, the concept had no windshield or side windows.

The prototype retained the same 700-horsepower engine, but noticeably differed in the design of the carbon monocoque: in the absence of a roof, to maintain the rigidity of the

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structure, Lambo engineers installed special arcs behind the seats. At the same time, the car lacked air conditioning and an audio system. This, however, did not stop the company from selling the unique model to a collector for €2.1 million (the regular Aventador is priced around €290,000).

THE LATEST LAMBORGHINI MODELS At the end of 2012, Lamborghini unveiled the production version of the Aventador without a roof.

The supercar turned out to be 50 kilograms heavier than the coupe (1,625 kilograms) and a little slower: its acceleration from zero to a hundred takes three seconds (versus 2.9 seconds for a two-door). The maximum speed remains the same - 350 kilometres per hour.

In 2013, at the Geneva Motor Show, Lambo presented a limited-edition special model Veneno, built on the basis of Aventador and dedicated to the 50th anniversary of the brand. It was equipped with

• Productivity, Strategy, Profitability

a 750-horsepower V12 engine, which accelerated the two-door to its first 100 km/h in 2.8 seconds.

The maximum speed augmented to 355 kilometres per hour. The models in circulation were only three in all, and all of them sold before the premiere (each one - about €3 million).

Shown a year later, the Veneno roadster was inferior to the coupe in dynamics (2.9 seconds in 0-100 kilometres per hour) and exclusivity - nine were built in open versions. However, the price tag turned out to be higher - about €3.3 million.

A little later in 2013, at the Shanghai Motor Show, the company announced another special series in honour of its own 50th anniversary. A total of 100 copies of the coupe and roadster dedicated to the 50th Anniversary were planned, each featuring a retuned and more powerful engine (a 720-horsepower version of the 6.5-litre V12 engine). In addition, the models received improved aerodynamics, as well as a special exterior and interior design.

Two years later, 2015 saw the arrival of the Lamborghini Aventador LP 750-4 SuperVeloce Roadster. The mass of the open Aventador SV was 1,575 kilograms (50 kilograms lighter than a standard roadster). The SV models were also distinguished by improved aerodynamics, the maximum speed in both cases exceeding 350 kilometres per hour.

Another special supercar made its debut at the 2016 Geneva Motor Show, based on the Aventador - it was the Centenario, commemorating the 100th birthday of the brand’s founder, Ferruccio Lamborghini. The special

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supercar received a 770-horsepower modification of the 6.5-litre engine. Like the original coupe, the Centenario Roadster features a revised V12 with a tachometer red zone starting at 8,600 rpm. Lambo announced that it will release 20 copies of the two-door and the open version each. Moreover, they were all sold out long before the premieres. The cost was €1.75 million and €2 million, respectively.

IMPRESSIVE ENGINES Lamborghini Aventador S, an updated version of the supercar made its debut on December 19th and its changes were largely technical. A quick glance at this car may have led the observer to think that Lamborghini had gotten lazy with the updates, releasing a “new” car that looked almost identical to the older version. Other than bumpers and wheels, and the letter S added to the name, there were no visible changes. But was it really the case? Of course not. The upgrades for the Aventador S were mostly internal, but very significant!

For the first time, a Lambo coupe received a fully controlled chassis, where the rear wheels turn slightly in the same or opposite direction relative to the front.

This increases the stability of the car at high speeds and improves maneuovrerability at low speeds.

The updated supercar came equipped with additional aerodynamic elements. The new body kit increased downforce by 130 percent at the front end, and an adjustable spoiler increased downforce by 50 percent at the rear. At the same time, the spoiler was completely retracted into the body, which at certain points reduced the coefficient of aerodynamic drag by 400 percent compared to the original Aventador. The control electronics of the car after modernisation also received a new mode. www.executive-global.com

Now, in addition to the Strada, Sport and Corsa, there is an Ego variant that allows you to separately adjust the operation of the engine, transmission and suspension.

Thanks to the adjustment of the valve timing and the modernisation of the intake, the power of the 6.5-litre naturally-aspirated V12 engine was increased by 40 horsepower - up to 740 (with the same 690 Nm of torque). The tachometer red zone now starts at 8,500 rpm (versus 8,350 for the previous Aventador).

The acceleration time from zero to 100 kilometres per hour has not changed and remained at 2.9 seconds. The “S”, however, reaches 200 kilometres per hour in 8.9 seconds, and 300 kilometres per hour in 24.5 seconds.

And then, at last, the new generation of Lamborghini’s iconic V12 flagship was released in a limited edition in 2019 - The Aventador SVJ. The three capital letters in the name of the new model indicate its superiority: SV stands for Superveloce (translated from Italian as ”superfast”), and the suffix ”Jota” symbolises the exceptional speed of the sports car on the racetrack. The ambition of the Aventador SVJ was confirmed at the Nürburgring North Loop, where it won a new production record: the supercar covered a 20.6 km loop in just 6 minutes 44.97 seconds. The new model has been released in a total of 900 units. It also features a unique configuration with a design that uses a large number of carbon fibre elements - The Aventador SVJ 63 version was produced in a limited edition of 63 units.

Featuring an improved engine, with an increased performance to 770 horsepower at a maximum of 8,500 rpm, the SVJ became the most powerful production car with a V12 engine ever produced by the company. The engine torque is 720 Nm at 6,750 rpm, which with a dry weight of only 1,525 KG gives the SVJ a specific gravity of 1.98 kg / l. The

SVJ accelerates to 100 km / h in 2.8 seconds, and to 200 km / h in 8.6 seconds. The maximum speed exceeds 350 km / h, and the braking distance when braking from 100 km / h is 30 meters.

MORE THAN YOUR TYPICAL SUPERCAR But the Aventador SVJ is more than just a highperformance sports supercar. Beyond its impressive stats, its mission was to offer the perfect vehicle for the most demanding and sophisticated client. The creators of the SVJ embedded an answer to this challenge into all of the elements and technologies of the vehicle: from its design, aerodynamics and efficiency to specific gravity, power and driving characteristics. After all, luxury is part of the Aventador brand, boasting some celebrity owners like Kanye West, Christiano Ronaldo, Floyd Mayweather and Justin Bieber!

While all of the above may be exciting information, what, pray tell, does it feel like to drive an Aventador? Well, imagine it racing down the track…The space around it is distorted, rippling in waves from the heat of a glowing V12. From the heap of polygons of the triple exhaust, a flame bursts out every now and then: barely noticeable, dense, blue-orange, it does not look like the flashes of a fire, but rather like discharges of high-temperature plasma. The air is so thick from the general tension that only supercars with a capacity of more than 700 forces are capable of moving in it.

Behind the wheel of an Aventador, the whole length of the track, almost a kilometre, can fit into roughly three heartbeats. You glance down and manage to see ”255” on the speedometer, although it feels like you’re rushing forth at lightspeed. After such an acceleration, the chances of experiencing something even cooler in life aren’t very high!

The next Aventador in line, alas, has been delayed until 2024, with its signature V12 engine under question for the twin-turbo V8. EG Summer 2020 •

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Classiques Modernes Lifestyle & Estates

The New York and Connecticut Luxury Property Professionals Our interview with co-founders Kenneth J. Moore and Loy Carlos of Classiques Modernes Lifestyle & Estates, once again enters the world of multimillion dollar luxury real estate as Executive Global sit down, the prolific real estate professionals successfully representing, selling and leasing New York City and Connecticut’s finest luxury apartments, lofts, townhouses and estates to affluent and discerning clientele.

You have managed and marketed some of the most majestic townhouses, ultraluxurious spaces and iconic buildings in New York City. What would you say it is that makes New York City such an attractive location for homeowners?

Our clientele base is global. And when we ask CM what it is about New York that particularly attracts them, a vast majority say “its energy.” Every corner of the world has a beautiful place. New York City thrives on its people’s spirit. It’s a place of hope and dreams, where life is not easy, but anything is possible. It is competitive, it can be harsh and unforgiving, the grind is constant and real. Still, people manage to remain positive.

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investments. Whereas transactional brokerage only come at the beginning and end, the management services we provide connect the dots. Our clients find it useful because we are there for the initial vision, the disposition, and everywhere else in between. They know that we are there to help them make the right decisions because, ultimately, we will have to deal with all issues.

When serving the needs of high net worth individuals, confidentiality and discretion can be incredibly important. What is it about your approach that makes you so successful?

Clarity of purpose and vision. Whatever CM situation we find ourselves in, whether during negotiations, in client representation, or managing our elite clients’ portfolio of properties, our clients’ best interest is our guide. Steadfast, it makes decisions and strategies much easier to make. Success is impossible without purpose. Without a goal, you’re just shooting balls in air.

Set on 150+ acres with breathtaking views in addition to the impressive 7,000 sq. ft luxury mansion, Glen Brook Farm Road is an exquisite property- but what opportunities are on offer for expansion? What should property investors look out for?

In terms of the property itself, there is much CM that one can still do to develop it. It is a westfacing lot, which is great for agriculture. Woods have been preserved as a natural habitat for flora and fauna.

One can still add other amenities like indoor riding and equine training facilities; or recreational amenities like dirt bike tracks, tennis courts, indoor and outdoor swimming pools, etc. The land can also be subdivided into as many as ten lots. And because Sherman hasn’t been overly marketed yet unlike other towns in New York and Connecticut, prices still are much lower in comparison. As attention increases, we expect the value of property to increase as well.

What are the inherent advantages in having Classiques Modernes function as a ‘one stopshop’ for property management where investors are concerned?

Our company and clientele look at real estate CM and lifestyle as one.Whether a mansion, estate, building, a trophy penthouse—all are inherently about how people live. That’s the human side of the equation--lifestyle. But these are also financial

What additional benefits does this listing uniquely provide to prospective buyers as a result of being surrounded on three sides by Land Trusts? And being subject to Public Act 490, how may this property offer greater long-term tax advantages when compared to real estate in other locations?

Taxes are several times higher for the same CM size land in more popular places in Upstate

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New York, in Long Island or other parts of Connecticut. In addition to that, however, an owner may decide to donate use of portions in conjunction with the Land Trust and obtain further tax benefits.

What is the biggest real estate deal you have ever closed and what factors led to your success in accomplishing this transaction?

While we have sold over US $1 billion in CM luxury apartments, town houses, mansions and estates, many at record breaking prices during our collective half a century in real estate, we regularly sign confidentiality agreements for our deals. Confidentiality is very important to our clients, and that serves as the primary foundation of our business and relationships.

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In all the transactions you have successfully closed, what factors remain consistently evident in the successful sale of a home at the maximum asking price?

Creativity, ability to navigate the ever-changing CM market, skilful negotiations and old-fashioned hard work. There is no short cut to success, there is no miracle marketing that can make people buy properties that they do not want or cannot afford. It is always a good idea to have the right perspective, to put everything in true context, and plan strategies accordingly.

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With a well established reputation and successful track record having represented the finest properties New York City has to offer, what can wealthy clients expect when working with you?

Experience, diligence, service, efficiency, CM trustworthiness, discretion. EG EG

For further information, please visit: www.classiquesmodernes.com

Kenneth J. Moore, CoFounder & President www.executive-global.com

Loy Carlos, CoFounder & Creative Director Summer 2020 •

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Chateau Cheval Blanc

The World’s Most Expensive Wines - 1947 St Emilion From The Chateau Cheval Blanc Vineyard Sold for more than $300,000 at Christie’s auction in 2010, the 1947 French Chateau Cheval Blanc is at the very top of Bordeaux and the world’s most expensive wines.

The collectors and wine lovers are on the lookout for new lots, prepared to take expensive overseas trips to get just a glass of it at private receptions.

Let’s find out what makes them so motivated, writes Thomas Hughes. ine can be as expensive as it tastes, and the ’47 Chateau Cheval Blanc is no exception. All of its qualities, including bouquet, aromas, texture, and tannic structure, are truly unique. These combinations, created by an abnormal climate in the summer of 1947 in Saint-Emilion, where this iconic wine was made by Chateau Cheval Blanc, make modern winemakers stand in awe and are almost impossible to imitate even with all the modern technology. ’47 Cheval Blanc is fullbodied, yet fresh and elegant, with a very long aftertaste. With a very delicate tannic structure, it is extremely low in residual sugar (3%) while strong in alcohol (almost 14.4%), which has prompted wine critics to compare it to ports wines. Its tastes fruity, displaying intense aromas of blackcurrant and flowers, with hints of tobacco, vanilla, and light earthly flavours.

But what makes ’47 Cheval Blanc so well known is its heavy and thick texture, compared by some reputable connoisseurs to motor

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Photo: Trevor Smith / Alamy Stock Photo

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oil, while being velvety and almost cashmere-like at the same time.

HOW DID IT GET THERE? Born out of disaster, ’47 Cheval Blanc appeared after an abnormally hot summer month when the grape was almost roasted on the sun, affected by heat even in cellars in the absence of modern cooling technologies. Many winemakers in the region tried to save their crops by huge blocks of ice, fighting over them with local butchers, while Chateau Cheval Blanc was spared, due to a more favourable location and less heat in Saint-Emilion.

Similar to many other right-bank wines, Cheval Blanc didn’t get to the charts for many years and was considered inferior to the classic left-bank Bordeaux.

It was sold in bulk until the 1960s and was drunk carelessly to the great regret of today’s connoisseurs.

Times have changed, and on Christie’s auction in 2010, the imperial – a 6-litre bottle expected to bring $150,000 - $250,000, was sold for an astounding $304,375. With only a few bottles left at Chateau Cheval Blanc, new lots are exceptionally rare, expected to appear on auctions not more often than once in every 10-20 years.

As with many great wines, the 1947 Cheval Blanc is often faked so that even the Chateau Cheval Blanc itself has abandoned hopes to buy out existing bottles for provenance concerns. With that being said, an offer of original ’47 Cheval Blanc is a lifetime opportunity that shouldn’t be missed, while the wine could be kept for another 40-50 years due to its remarkable longevity. EG

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