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Leo Kolivakis: Financialization is Causing Inequality, Which is Lmiting Aggregate Demand Growth!

By: Gordon Long | Saturday, February 20, 2016

45 Minute Video Interview

Leo Kolivakis

Gordon T. Long, Co-Founder for the Financial Repression Authority, interviews Leo Kolivakis, Publisher and Editor of the Web Site "PensionPulse.blogspot.com". Mr. Kolivakis is an independent senior economist and pension and investment analyst with years of experience working on the buy and sell-side. He has researched and invested in traditional and alternative asset classes at two of the largest public pension funds in Canada, the Caisse de dépôt et placement du Quebec (Caisse) and the Public Sector Pension Investment Board (PSP Investments). Also Mr. Kolivakis consulted the Treasury Board Secretariat of Canada on the governance of the Federal Public Service Pension Plan (2007) and been invited to speak at the Standing Committee on Finance (2009) and the Senate Standing Committee on Banking, Commerce and Trade (2010) to discuss Canada's pension system.

You can follow his blog posts on Bloomberg terminal and follow Mr. Kolivakis on twitter @PensionPulse where he posts links about pension and investment articles.

Pension Pulse

In this 45 minute video interview Leo Kolivakis discusses the importance of a good pension system, with strong governance, being critical in insuring the average persons retirement security. Pension liabilities are going up while bond yields are going lower which is going to create a huge amount of stress on pensions!

Contributory Pensions and 401Ks have proven to be a failure compared to Defined Benefits programs. History will eventually show that the transition from Defined Benefits to Contributory Benefits was in fact is detrimental to the global economy.


Structural Issues

Leo Kolivakis believes we have entered a period of long deflation due to six major structural issues:

Each of these structural factors is significantly contributing to global deflation. Together they are a domino effect, exacerbating deflationary headwinds in the world. They are causing rates to remain ultra low and will continue to for years to come.


Rising Inequality

What is not understood and full appreciated by economists is how the dramatic rise in inequality brought on by low interest rates is limiting aggregate demand growth.


Investing in an Era of Low Aggregate Demand

Bond yields are going lower to negative and you must prepare for a lower returns, for a very long time

Question: If rates remain ultra low, won't that be good for residential and commercial real estate?

"Not necessarily. If deflation becomes entrenched, low rates will exacerbate debt and increase unemployment at the worst possible time. It can easily spiral into a debt deflation crisis and you'll see rising vacancy rates and/ or declining rental rates. In this environment, real estate is the asset class that makes me most nervous."

But it's not just real estate that will suffer if deflation becomes more entrenched.

"All asset classes will exhibit a prolonged period of low or negative returns except for...good old nominal bonds!"

Lockdown: G7 Interest Rates
Ultra Low Rates For Years?

Abstract written by Joshua Brown-Tapper

 

Author: Gordon Long

Gordon T. Long
Publisher - LONGWave

Gordon T. Long

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public.

Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada); Vice President Operations, Motorola (MISL - Canada); Vice President Engineering & Officer, Motorola (Codex - USA).

After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech start-up and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager.

In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition.

Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in Thermodynamics-Fluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Co-operative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.

Gordon T Long is not a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, he recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.

The information herein was obtained from sources which Mr. Long believes reliable, but he does not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that Mr. Long may already have invested or may from time to time invest in securities that are recommended or otherwise covered on this website. Mr. Long does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or recommendation you receive from him.

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