A Zero Hedge Exclusive: "Too Different For Comfort" - The Complete Louis-Vincent Gave E-Book

Tyler Durden's picture

Stepping back from money management for a moment, Louis-Vincent Gave takes a big picture view of ongoing global developments and the implication for investments, from his perch in Hong Kong as CIO of GaveKal.  The result is a treasure drove of wisdom on robotics, money velocity, Chinese reforms and the new asset-centric monetary system. To wit: "in the past few years, we seem to have embarked on a new paradigm in which our control engineer central bankers have decided that the value of assets must no longer be driven by a price that would be reached today, but instead by whatever best price a given asset may have reached in the past. This is a revolutionary change". 

"In all likelihood, this manipulation will fail as every attempt at price manipulation since Diocletian’s Edict on Maximum Prices in the 3rd century. The only outstanding question is one of timing".  Amidst this momentous change, a few asset classes offer some (relatively) safer harbour – "the RMB attempt to become a trading currency is potentially of the most important financial development... The creation of the dim-sum market may turn out to be a more important event than QE; even if few care and fewer still talk about it."

The attached e-book is gifted from Louis-Vincent and the GaveKal team to ZeroHedge readers, with best wishes for a profitable 2014!

Too Different For Comfort, by Louis-Vincent Gave (pdf)

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CH1's picture

This is the fall of the Roman Empire, v. 2.0

The details are all different, the large factors are all the same.

Normalcy Bias's picture

Yep, even down to the unimportant, but common failing empire peculiarity of 'Celebrity Chefs'...

lakecity55's picture

"I say, Flavius, you must visit and sample the products of my new Chef."

"I will, Mortimus. Mine was carried off by global warming barbarians."

BaBaBouy's picture

DON'T WORRY....Todays Money Chargers Have Everything Under FULL CONTROL.

BoNeSxxx's picture

They have Bitcoin too...

Nothing appears suddenly out of nowhere - it is either snuffed or co-opted before we hear (or don't hear) about it.

Caviar Emptor's picture

Yes. I deny it, but we bankers have convinced the plebes that this is a "democratic currency". :)

OutLookingIn's picture

Everything depends upon price.

Price is inherently volatile.

When values coincide, a price is struck that establishes the monetary value at that moment - and ONLY at that moment. Subject to change at the next moment. Price stability is a dream and an oxymoron at the same time!

Caviar Emptor's picture

Yes, we bankers agree on price all the time. Price also depends on the golden rule.

free_as_in_beer's picture

Do unto other before they do unto you?

Theosebes Goodfellow's picture

He who has the gold makes the rules.

Unpopular Truth's picture

Just curious: If bitcoin had already been co-opted, then why don't the banks start offering bitcoin services (and charge fees)?

The value would go up, and these powers that allegedly have co-opted it would make even more money

BoNeSxxx's picture

They will... just aren't ready yet.  It would crush the current monetary meme and it's not time for that yet.

Hegelian Dialect (their playbook) suggests that they will create a good crisis when they are ready... There will be a mad scramble for wealth preservation and massive deflation (or inflation) and guess what will be conveniently standing by as the 'people's' currency?

caShOnlY's picture

... except Bitcoin!

do you really believe they are fighting off PM's tooth and nail while another enemy walks right in?  Digital currency is the end goal of a FIAT issuing government.  All "cash" businesses will no longer be cash (taxes), black markets (narcotics, guns, etc...) almost eliminated, nothing purchased without some type of record produced.  Only bartering leaves no trail.

Accept Bitcoin! they want you too!

BoNeSxxx's picture

Correct.  The next currency WILL be global. It WILL be digital.  AND it WILL (likely) be Crypto-Based.

I differ with the 'who' behind the end goal... It isn't FIAT issuing government.  It is FIAT issuing Central Banks.  They captured the government a century ago.  Taxes are required by the government (enforcing arm) so that USARY can be paid to the central banks... nobody would turn their labor (or a percentage of it) over to some banker thugs.  But they will turn it over to the government because the government is good and will care for and protect you... Or so the fariytale goes anyway.

caShOnlY's picture

It isn't FIAT issuing government.  It is FIAT issuing Central Banks.  They captured the government a century ago.

a big green arrow upward to you, Sir.  A very good correction. 

Theosebes Goodfellow's picture

~"The next currency WILL be global. It WILL be digital.  AND it WILL (likely) be Crypto-Based."~

The next currency will be gold. If it was not the Chinese would not be buying the shit out of it. Why is this so? Tell me how much "currency" you would have after an EMP event if it was digital?

DeliciousSteak's picture

Not really. Rome didn't fall as much as it faded into irrelevance. I have a gnawing feeling the US will stick around as the superpower for a long time to come, and if it doesn't it will go out with a bang. Nuclear bang.

NoDebt's picture

We're fadin', baby!  We're fadin'!

Sure, we'll be the world's superpower for a while yet.  Helped, in part, because we'll keep redefining what a superpower is to a lower and lower standard.

Beating expecations ALL the way down.

Caviar Emptor's picture

But think of all the potential for wonderful nostalgic movies, songs, books and theme parties!

TheFourthStooge-ing's picture


This is the fall of the Roman Empire, v. 2.0

It sure seems that way.

I went straight to chapter ten (The US Shale Gas Revolution - A Game Changer?) and I'm afraid Louis-Vincent is a cornucopian believer in skittle-shitting unicorns.

If the US can meet most of its energy needs through domestic production,

It can't, not without a major reorganization away from an automobile-based economy.

will it still need to maintain a large navy and defend the world’s sea-lanes?

That's not a matter of need, but of want, and those that want it don't give a rat's ass about the opinions of the American public.

If the answer is no (as seems likely), then should we not expect another peace dividend to unfold in the US similar to the one that followed the fall of the Berlin Wall?

Another peace dividend? There wasn't even a first one. The MIC and Wall Street saw to it that new enemies were propped up as quickly as possible. Now with the War On Terra®, there's not even a clearly defined enemy which can give up and spoil the gravy train of the defense/security contractor welfare queens. The US is still in the process of losing the cold war. The Russians were smarter in this regard, as they decided to stop playing a game with no winners 25 years ago.

Better yet, current projections have US oil production rising from the current 7.5 million bpd to 9 million bpd before the end of the decade.

Apparently Louis-Vincent hasn't examined well depletion rates as they pertain to tight oil drilling in North Dakota.

While he may be correct in his conclusions in other chapters, in chapter ten he was swinging for the fences and didn't even get a foul tip.

El Vaquero's picture


Apparently Louis-Vincent hasn't examined well depletion rates as they pertain to tight oil drilling in North Dakota.

While he may be correct in his conclusions in other chapters, in chapter ten he was swinging for the fences and didn't even get a foul tip.

Exactly.  And furthermore, he doesn't even look at US oil consumption in releationship to projected US oil production.  So we're going to be producing 9mbpd of oil in 2020?  So what!  We're consuming somewhere around double that amount right now.  He also makes a big deal over shale gas.  Again, so what!  Using it as a replacement for liquid fuels, such as gasoline and diesel, means that the amount we have won't last as long, and it is also not nearly as convenient.  You can't carry around spare natural gas cans nearly as easily and more importantly, it takes energy to compress the stuff into a tank suitable for a vehicle. 


Without a technological breakthrough combined with a massive reorginization of our economy that is not going to happen by choice, we're all going to get a lot less mobile and probably a lot more hungry in the future. 

skbull44's picture

And if Chapter Ten is so off-base, one has to wonder about the other chapters and thus the conclusion. Always 'fun' to predict the future, not so much fun when it ends up being compared to the reality that eventually unfolds in ways no one could have foreseen...

El Vaquero's picture

You have to wonder, yes, but it could also be a case of the other chapters being within the realm of the author's knowledge and Chapter Ten being outside of the author's expertise.

akak's picture

Exactly.  Kind of like Karl Denninger being able to provide such a wonderfully skillful and thorough diagnosis of the ills and crimes of the contemporary American economy and political scene, and then being so outright batshit CRAZY on the subject of gold, and monetary history and theory more generally.

Sparkey's picture

If a man doesn't know about shale gas, perhaps he just gets his info from his TV? If he doesn't know about the biggest Social Engineering project in US history, What could he know?,,,really?

Read and listen to the `Experts` but do your own thinking, the only true friend you have is Yourself!

El Vaquero's picture


Read and listen to the `Experts` but do your own thinking...

While it might be folly to argue with Kip Thorne about the merits of general relativity because it takes years of study to even understand the subject, in general, this is very good advice.

janus's picture

in principal, i don't necessarily disagree with your point(s), 4thstoogin...but, on balance, i'm pitching my tent in amongst the Gave camp. but before i get to frackin, i'll say that it seems we've all-but forgotten about that nasty lil 'supplemental' energy source over-stuffing major pockets of this country's hinterlands; and although this administration and the bolsheviks backing them are everywhere doing everything they can to pretend we can wind-farm our way back to competetiveness, 'green' energy is -- yet another -- crafty ruse concocted to corrode america and further 'neutralize' our various advantages.

this 'green' garbage ain't green at all, and it ain't got shit to do with 'mother earth'; it's fuckin red, and its manifesto stipulates that you imperialist swine are to be hobbled till you're limping through life like some fly-besotted bedouin or mange infested tribesman.   

pink-o communist fuckers, santa-janus is gonna ram so much goddam coal up your frackin asses it'll be spillin out your "life-parnter's" stockings.  petro for cars; gas for heat; coal for electricity.  we gots it all; and if'n we employ a modicum of wisdom, we'll get it back...'it' being America.

anyway, 4thstoogin, it's myopic to pretend we understand the limits and/or potential of this nascent technology -- in terms of both extraction efficiency and field discovery.  similar arguments to those you've made were inserted into the petro debate way back when two-stroke engines were drivin pistons on pulleys...we've always thought we'd tap it all long before anymore could be had.  

but, to me, frackin is almost incidental compared with coal.  our coal reserves are enormous...frackin incredible.  but it's 'dirty' and 'sinful' and 'greedy' and 'thoughtless' of us to utilize this astoundingly abundant -- and rather nifty -- hardened hyrdo-carbon.


ps.  mr. gave, grazie!  janus looks forward to his free read.

btw, all you 'patriotic' corn farmers cramming DC with your do-gooder lobbyists...well, i'll be happy to see you all burn in an ethanol-fired hell.  but, look on the bright side, the heat generated by your 'renewable' fuel would barely suffice in popping whatever corn was spilled on the refinery floor. 

i think i'll keep my personal auto -- thank you very much...and, what is more, i favor V-8s.


gitty-up, gitty-up,


trader1's picture

janus, you reckless C02 emitter!

with that type of thinking on a massive scale, we'll fulfill the minimum 4 C projected rise in the next 100 years  ;-)


acetinker's picture

Methinks you're bein' a bit harsh with the fourth stooge.  You're both good guys.  I'll just leave it at that.

More to the point this Gave fellow should maybe be referred to as Captain Obvious.  The entire e-book could be condensed to a paragraph;

All you form-filler-outers and claim-processors can and will be replaced by machines.

Never mind, it only took one sentence.

supermaxedout's picture

Green Energy

Seems you are missing the developments in Germany. The so called "Energiewende" (energy turnaround) is a revolutionary development which is turning the energy markets upside down.

Simply said its a concept covering all aspects of:  Alternative  energy production, energy storage, energy saving, energy transportation, From a technical point of view many, many problems are already solved and the effeciency of alternative energy is improving constantly at a high rate. For exmple one modern "windmill" is producing enough electricity for appx 7,000 households in Europe. Or its no problem to produce cheap solar energy in Spain and transport it to Germany. The necessary high tech cables enabling to transport electricity over long distances with very little loss of energy are industrial mass produced since appx 10 years (ABBs patent).  The only obstacle why this  European Solar Energy concept is not implemented is France. The electricity lines from Spain to Germany have to pass through France. But France is still in love with nuclear energy as well as fossil fuels (Total).

To store energy is also not that difficult if one really thinks deep about it. Thre are many, many possible ways how this can be achieved. The solution is not going to be one technology it will be many. The trick is to combine these different technologies in an effecient way. There are hundreds of small companies in Germany involved in this field plus the science funding has kicked in in big style.

The decision from Frau Merkel to pour big money into the research for a new energy concept for Germany is going to have worldwide consequences. A total new industry is on the rise. I would compare this with the discovery of coal as an alternative energy to wood.  Before the "coal time" there was only wood to be used as fuel. With the consequences, that Europes forests were nearly all gone for firewood, ships and housing. Coal changed evertrhing including the massproduction of cheap metals.

The alterantive energy technologies are faszinating. For example there exists now a technology which can produce normal plastic (polyethylen, polypropylen for example) with alternative energy plus water plus carbon dioxide from the air. 

A industrial size facility is already producing methan gas (from wind energy, water and Co2) and is piping this into the existing natural gas grid in Germany.  But to make plastic from methan gas is a standard technology.  That means you dont need oil or natural gas to produce any kind of plastic material. Just wind, water and air !  But this is just one aspect and just the beginning of the "Energiewende". Its going to be a another industrial revolution affecting the whole world both positive and negative.  Germany is going to be a winner if things continue while countries depending on the export of fossil fuel are going to be big loosers.    And this was  the reason why in the past alternative energy  was not on the wishlist of the US and UK. But Frau Merkel courageously uncorked the bottle and the genie is now not going back anymore.  She as a scientist (phD in physics) was well aware what she was doing and she had the German population behind her after the Fukoshima accident. Fukoshima was the turning point.

supermaxedout's picture

correction:    One modern "windmill" is producing electricity for appx 1,000 European households not 7,000. 

graspAU's picture

“The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if the nation doesn't want to go bankrupt. People must again learn to work, instead of living on public assistance.”
- Cicero, 55 BC (Roman Philosopher, Senator, and Constitutionalist)

kchrisc's picture

"History doesn't repeat, the crimes of governmnet do."

Notarocketscientist's picture

This will be infinitely faster than the Roman collapse......   when this goes it will go in a matter of days ..... one default will set this off ...... (a Lehman type event) .... perhaps a product of severe unrest (anarchy) in a failing state ............ that will destroy CONfidence ............ and because Central Banks already used up their biggest weapons from 2008 onwards ---- there will be no way to stop the dominos from falling.

The global economy - the industrial society that we built upon cheap energy over the last 200 years ---- is going to tear --- then it is, like a steel cable pulled beyond capacity ---- snap --- and you will want to get the fuck out of the way because the frayed strands are going to lash out and destroy all in their path

IridiumRebel's picture

ZH Exclusive? I hope to see more of these as the bulk of my news comes from here.

The They's picture

you mean you don;t watch Democracy Now!?

DaddyO's picture

I would agree with your sentiment, although I do search the web for verification of stories I find on the various blogs and news sites.

My perspective is greatly influenced by the alternative news available on the web.

ZeroHedge is an important part of the overall info gathering I do each day, however ZH has succombed to its own success a bit over the last 12 months or so...

This post is a refreshing departure to what gave ZH such popularity in the limited time I've been here.


Balvan's picture

You got to read everything and try to be open minded, because there are both truths and bias in everything. The more various sources you use, closer you are to the overall truth.

MontgomeryScott's picture

Dad always taught me the following:

Listen to what everyone has to say. Apply factual analysis to their statements. Discount anything which cannot be proven scientifically or factually. Take all the rest for further analysis and possible acceptance. Never let your own bias get in the way of the Truth. You don't know the truth, either, so accept the fact that some think they do (and are mistaken, of course).

Now, I guess I will have to accept the gift of this free E-book, and read it in entirety. I find that usually the 'experts' can only predict future events based upon past events (which discounts the factor of the 'unexpected'). Some of these so-called 'experts' even tried to name this so-called factor as 'Chaos theory', in order to justify their past failed predictions. Ah, the hubris of the educated elitists...

It is NOT correct to assume that if you have 'more sources' you are 'closer to the truth'. If 99 people told you that you should touch the hot stove and it will not hurt, but one told you NOT to, would you discount the ONE in favor of the 99 that you claim are 'telling the truth'? D'ya ken, laddie?

IridiumRebel's picture

I do look for verification, but isn't that what crytical thinking is all about?

DaddyO's picture

Maybe "fact check" would be a better term...

Critical thinking is in short supply, even here on the hedge.

When I first got here to ZH, the level of discussion and hashing of ideas was breathtaking and not for those who hadn't fully thought out their ideas and positions, myself included.

I had many of my pet ideas and beliefs challenged, trashed and otherwise exposed for their bias.

The discussion has been diluted somewhat by the trolling that takes place, but ZH is still without peer in terms of really smart people discussing today's events with much clartity and unabashed opinion.

I'm sure there are many, many lurkers who would do well by joining the discussion and enlightening us low brows.


IridiumRebel's picture

Trolls are multiplying.

samsara's picture

And they feed themselves so you have to skip over large blocks instead of one troll comment. We need to call them out more maybe?

janus's picture

i hope they continue breeding...janus stays hungry and his appetites are obscene.



Notarocketscientist's picture

I do find the MSM sites very useful - what I normally do is have a look at them for explanations of various issues --- and that is helpful ---- because it means that I can rule out those explanations as truths ---  then I visit sites like ZH, Democracy Now, Testosterone Pit ---- trying to find the truth. 


Now I don't necessarily find the absolute truth on such sites - but I know with much certainty that these sites are at least making best efforts to seek the truth whereas I know for certain that the MSM is regurgitating propaganda handed to them by the various ministries of truth

q99x2's picture

Did Rome have to suffer 8 years under Caligula?

And they even knew what his real name was.

Thanks for the ebook.

Rusty Shorts's picture

Well, Washington D.C. was origianlly called Rome, Maryland... and the 7 hills...more here>> http://gnosticwarrior.com/washington-dc-rome.html