The third world war is on! PDF Print E-mail
Written by Prof. Paul Douglas Katchings   
Wednesday, 17 June 2009
The third world war is on!
Paul ‘Tan’ Katchings

The objective of this third world war is to grab global customers permanently!


A wise general said, “I am looking for the one simple piece of information that will win the war.”   This general was referring to a hard war not the soft economic war that is the third world war underway now.

Very few military officers and corporate executives across the globe are aware that this war is under way.  Even fewer are equipped with the “simple piece of information” for consultation or implementation.

When a few master the “Why the Capitalist Theory is no longer fundamentally flawed” article, then the global problems of credit, debt, interest, boom-bust cycles and unemployment poverty will start to disappear .  A “new corporate economics” will emerge in 2009-2010, literally from the desktop.

Just one new publicly traded company with the systems and discipline to incorporate a new economics, will change 235 regions forever.  The total proactive cost is pennies as compared with gargantuan losses because of the inability to act.  Enough has been seen about the current global economic crisis – the current loss of trillions from lack of correct economic information and the ability to act on this information.

Using the “top secret” Product Equity Value© and “a new customer-centered corporate model,” 235 new global public companies are needed!   They will each create one new Product Equity Value© company a day across the globe, just to equal 21% of the 407,581 new public companies needed.
 
The USA leads the way with 18,600 of the 66,631 old model public corporations.  Many countries stand to lose their economic sovereignty in this third world war where the objective of this third world war is to grab global customers permanently using Product Equity Value©!

The question is not what these new 407,581 global publicly companies will sell.

What is important is that Product Equity Value© is mastered and applied as rapidly as possible by a new breed of global business engineers who work in highly structured virtual teams from anywhere, starting in 2009-2010.  These virtual teams exhibit speed and quick sharing of experiences, thus shortening the learning curve for effective actions.

One thing is absolutely certain.  If the global disciplined elite from their countries do not grasp this once in a lifetime opportunity, the USA and China most certainly will and the under-represented public companies from other countries will shrink fast.

If anyone said in July 2008 that Russia would lose billions in stock market value in less than a year while China gained trillions, no one would believe it.  Why?  The “top secret” to instant wealth creation was not known.  Now we have a better corporate model that levels the playing field.  Mastery and action are the only criteria for success.
   
We need to know the “secret” of exactly what capitalism is.  Then we can understand this third world soft war which is just getting underway with Product Equity Value©.  China, even without first access to this new model, has had decades of preparation [from its military elite].  The 21st century customers will wage this economic war by aligning themselves where the most value is created for them.

For the decision makers, the basic fundamentals of this economic war require three sets of data.  The first is the population of the country, the second is the gross domestic product of the country and the third is the total value of the country’s stock market.  From these three pieces of data a country can determine how many publicly traded companies are required using Product Equity Value© to be in parity with the US standard.

As simple as these three sets of numbers are, this information is not integrated. This data remains an unpublished first study, thus a secret.

To the ones who are serious about this new capitalist understanding: be forewarned when asking financial experts in various serendipitous ways to verify that none of them has the slightest idea of exactly what capitalism and the stock market is.  This lack of knowledge on their part has caused the missed opportunities and undervaluation for nations whose citizenry have been harmed much more from lack of real economic knowledge than from real external threats or paper tigers.

Witness the lack of global financial awareness on the part of the world’s experts who are now scrambling for government help.

Here is a little-known fact.  Capital means to capitalize, meaning the bringing in of cash from the future for use in the present.  In the universal language of accountants, this is the “net present value based on future earnings.”  The vehicle for bringing cash from the future to the present is the publicly traded corporation by issuing shares.

This is capitalism in a nutshell – the greatest tool besides double-entry bookkeeping ever devised to eliminate poverty.  But capitalism must be understood in its entirety.  A publicly traded company can create 11, 20, 40, and over 235 times more value than a non-public company with the exact same fundamentals.  All that’s needed is a simple application of the standard accounting formula of X=(A*B)/C where X is stock price, A is revenue, B is earnings as a percentage of revenue and C is an acceptable rate of return. 

Countries practice varying degrees of capitalism.  The gross domestic product of ''purer' capitalistic countries is always less than their stock market value, thanks to this value creation formula, X=(A*B)/C.   In fact stock market value leads and creates the gross domestic product for countries with mature stock markets.  With Product Equity Value© this stock market value is about to explode by trillions of dollars!

The standard is the USA with $14.33 trillion gross domestic product and a stock market value of $19.95 trillion, per the May-June 2009 CIA Fact Book (Official Exchange Rate).

Let’s look at so-called communistic China’s gross domestic product of $4.22 trillion and its total stock market value of $6.22 trillion versus India’s figures.  The gross domestic product of India, the largest democracy is $1.237 trillion.  India’s stock market value is $620 billion. Notice the huge difference in the numbers from both countries even though they almost have the same number of citizens?

It does not matter what economic philosophy – socialism, democracy, communism, federalism, or fascism – a country practices.  If it has a stock market then it is practicing capitalism to a degree.

Countries with large numbers of publicly traded companies as a ratio of the population create more value for its citizens than countries without stock markets or with low numbers of publicly traded companies.

According to the pure goal of democracy and capitalism, the “gross domestic product” of countries with stock markets is NEVER supposed to be more than the value of its publicly traded companies.  This is the simple measure of an economy’s efficiency.

It is this [silence] creation of publicly traded corporations that is the number one reason for China’s amassing of trillions of dollars in hard currency reserves.

Since July 2008 China added $971 billion to its GDP and $1.746 trillion to its stock market while at the same time Russia went from its stock market value being 4% over its GDP to negative 74% - a whopping $872 billion drop in its stock market value plunging millions of humans into unemployment.

Yet planners refer to both countries incorrectly as communist countries. This is no indictment of China for embracing the capitalist model, where she is currently out-capitalizing the USA and the rest of the world.  Neither Russia nor India can be blamed for not mastering this capitalistic model.

The USA with 306 million citizens has 4.52% of the globe’s people and controls 28.27% of the globe’s 66,631 public corporations.  Thus the USA represents the definitive standard of capitalism and is the globe’s simple study.

The reason for the vast misuse of the global resources is not capitalism per se but the flaw in capitalistic understanding by academia.  This flawed understanding causes governments with stock markets not to understand the power of their value creation vehicles – the publicly traded companies.

At this moment the governments of Germany, France, Italy, Spain, and countries with financial difficulties have stock markets whose values are below their Gross Domestic Products.  These countries have a combined population of 253,079,082 million citizens and only have a combined total of 3,298 public corporations. (France just changed positions)

 

Table 1


     Country    Population    Public Co.
1    Germany     82,062,200    1,356
2    France        65,073,482    1,260
3    Italy           60,090,400       431
4    Spain          45,853,000       251
                      253,079,082    3,298

California with a population of 33,871,648 has 3,335 public corporations more than these four developed countries combined!

Using the USA as the standard, only 23 of the 221 sovereignties covered in my study creates more value for its citizens by its stock market being greater than their gross domestic products.

Currently India has 2,760 publicly traded companies but actually needs 67,433.  China has 3,617 (including Hong Kong) public companies but actually needs 78,488.

With a simple mastery of the greatest tool – Product Equity Value© – ever invented to eliminate poverty, my [unpublished] study reveals the following astonishing information about China and India:

a)    China will have gross domestic product and stock market values of $54.43 trillion and $62.61 trillion respectively, and
b)    India will have a gross domestic product and stock market values of $75.78 trillion and $87.16 trillion respectively.

 

•    Why the Capitalist Theory is no longer fundamentally flawed
•    The death of credit, debt, boon-bust cycles and unemployment
 By Paul Katchings All Rights Reserved Wednesday, May 20, 2009


Global systems are already in place for a controlled growth using Product Equity Value©.  Under-utilized stock exchanges are in place.  Networks of companies selling shares are in place.  Statutory listing times, such as a top-ten money center in Singapore, is in place in obvious anticipation for bringing global value to this island nation.  South Africa’s Johannesburg Stock Exchange is another.

Many global manufacturing companies exist with need-based products for villages.  The knowledge of multiple value creation and Product Equity Value© and public stock trading will bring the cash required to help expand production.

With just one simple publicly traded company set up on any global Stock Exchange [as the model for future entrepreneurs] using Product Equity Value© selling a 100% financed $65 “solar lantern” will create a $10.2 billion sample company where 31 selected persons can have a $102 million equity interest by pulling three pieces together in 2009-2010.

And yes the 14 million customer-owners of this public company using Product Equity Value© will buy the $65 “solar lantern” and have instantly $337 in their savings-stock accounts accessible via plastic!

Who wants to be a Billionaire – 235 Opportunities!

Paul Katchings
Business Engineer-Inventor
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http://productequityvalue.info

Last Updated ( Friday, 10 July 2009 )
 
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