« Iran warns of pre-emptive military strike against U.S. | Main | "Black Dog" Obama »

February 21, 2012

Comments

Lebanese and other Middle Eastern races are included under "Asian" as far as I know for Australia and England.

You are dead wrong. Ausralia is going to suffer terribly from the burst of the Chinese bubble.
The biggest real estate bubble in history will have dire consequences for China and Australia alike.

One downside issue is occasional droughts and population pressures on their resources (although overall I agree it's an excellent place to invest). I'll be interested to see how this new "Stable Population Party" fares in future elections.

http://www.populationparty.org.au/templates/pop/page/page_html_standard.php?secID=204

Australia is an artifact of American empire inherited from the British empire. Australia would not exist if not for American protection. If you lack faith in the long-term future of the USA (point 5), Australia is not the place to go, because when the dollar goes, the US military goes, and then Australia is exposed to all forms of threats and bullying or even outright annexation that could invalidate all the other reasons for investing there.

A resource-rich country with 23 million people right next to countries with several BILLION people who covet those resources is in big trouble if there is no "big brother" to guarantee the small country's freedom, independence, and prosperity.

Keep in mind though that Australia has a big property bubble.

I like the CIA World Factbook for county data:

https://www.cia.gov/library/publications/the-world-factbook/geos/as.html

Public debt:

30.3% of GDP (2011 est.)
country comparison to the world: 97
28.8% of GDP (2010 est.)

The idea of investing based on what percentage of the population is white is certainly interesting.

However, it is historically illiterate. Europe was considered relatively backward as civilizations go until the discovery of the New World, and only really emerged on top with the industrial revolution. Europe/ North American and its offshoots seem to be reverting to the mean, though this will take generations and is useless information for investors, who tend to have shorter time horizons.

----The idea of investing based on what percentage of the population is white is certainly interesting.----

Similar to the idea of short-selling companies headed by negroes. Find me one that hasn't ended their reign with the stock in the gutter (or seen it go into the gutter after their untimely "resignation")and I might change my mind.

"However, it is historically illiterate. Europe was considered relatively backward as civilizations go until the discovery of the New World,"

Rome.
Ancient Greece.

***only really emerged on top with the industrial revolution. Europe/ North American and its offshoots seem to be reverting to the mean***

You need to look at whether the population has the cognitive ability and education to maintain a modern industrial economy (see research by Heiner Rindermann, Garret Jones & W Joel Schneider). In that respect, the population demographics are useful information.

@ Ed

The blogger whiskey has an interesting take on Europe's rise. He asserts that only when Christianity was fully cemented did Europeans begin to gain an edge starting in the 10th century. He cites monogamy which is unique to the Christian world as the source of strength. Monogamy ensures that even low status men have wives which gives beta males a powerful drive to achieve. Unlike the east with it's eunuchs talented western men could pass on their skills to their sons. This in turn created new social classes and lots of disruptions to the status quo. Since the continent was united by Christianity and not on emperor worship or nobility/caste system preservation competition and creative destruction was allowed to occur. Once global power shifted to the Atlantic it took trends that were already underway and enabled them to take off and never look back.

I'm Chinese Australian.

I also think HBD-based investing is worthless given the time horizons and the information asymmetries between politically correct/HBD aware investors are slim at best.

The thrust of HS' argument is that a 92/6% white/asian population means Australia will remain a stable political and business environment to encourage future growth, compared to say the US which has a less favourable demographic trend.

While this is true, it's already priced in the market. You don't need to be HBD aware to know that Australia has a low crime rate, low welfare burden, low unemployment. You don't need to know that black IQ is lower on average than white IQ due to genetics to see that the US has high income inequality, poverty rates and poor educational outcomes.

If you could pick a contrarian investment based on HBD, that would be worth following!

@ dynkin

Greece was mostly a Mediterranean civilization and heavily influenced by the east. Rome was a basically a Greece rip off.

By and large Europe was a pretty backward place for most of it's history. It wasn't until much later did Europeans get ahead.

Yes nothing inventive happened in Europe between the fall of Rome and 1492. LOL!

As others have pointed out, Australia does have risks. I agree with the risks listed in many of the comments. I'll point out that the Australian dollar has gone from $0.65 US to $1.07 US over the last few years. Part of that is a weakening US dollar but part of that is a stronger AUS dollar. Many people do consider the AUS dollar overvalued. Then, again, experts often consider many stock prices over-valued just before they soar to new highs. Is it going to fall back or keep going? I dunno. But the two things I would look at would be their dependence on providing raw materials to China and the housing boom. Have you seen their housing prices? They're downright scary. I don't guess they're any higher than New York or California. But the difference is they have one of the highest mortgage to income ratios in the world. I personally know Australians living in million dollar homes and counting their pennies at the grocery store.

=====================

Ed writes, "However, it is historically illiterate. Europe was considered relatively backward as civilizations go until the discovery of the New World, and only really emerged on top with the industrial revolution."

Backwards compared to who? Backwards compared to where they would be 200 years later? Backwards compared to a couple of empires who were at their height at the time? Maybe. But that was their low-point and they were still ahead of most of the world. As hard as it may be to believe, they had a higher standard of living than most of the world today. Bear in mind even we may be living at a high-point right now. There's no guarantee people will be living like the "Jetsons" in 100 years. Civilizations do collapse. The impressive thing about Europe is that after the Roman Empire collapsed it was eventually able to come back.

Why not invest in Singapore?

After all, it's the only country whose leader we know for a fact believes in HBD.

Plus, China will probably protect its nationals if the Malay Muslims try to stir any trouble.

This is interesting investment advice but I am not sure I buy it.

(1) Australia's EWA index is not diversified. It is 64% basic materials (i.e. mining) and banks. The mining part at least is probably hugely dependent on forces outside of China.

(2) When it comes to stock market performance, balkanization of your country can be a good thing. Stock superstar Apple Computer creates 90% of its jobs in China and sells to the world, with nary a pang of guilt. Japanese companies take care of Japanese people, stock performance be damned. And yes, Japanese stock performance for the last 20 years has been damned.

(3) Countries that are less free can sometimes show better stock performance than countries that are more free. Compare Brazil in recent years with most Asian countries. I think Brazil and other countries in Latin America enjoy some crony capitalism where old companies destroy new ones more often than the reverse.

Good long term idea. Australia has strong demographics and will continue to attract high quality people for the foreseeable future. They also have natural barriers (an ocean)to keep out undesirables.

The concern that Australia will come under military threat from China may be true many generations from now, but not anytime soon. And in truth it may never happen, if enough high-quality people continue to emigrate there. American military strength will remain almost supernaturally strong for decades to come. China isn't going to bully Australia in our lifetimes.

And I suspect that if the US military does fade, the Australians will quietly acquire enough nuclear weapons to impose massive costs on anyone trying to bully it.

Half,
This is a spectacular post, thank you

Yes, investing in Australia makes a lot of sense, and overall I think a large percentage of anyone's portfolio should be in Australia

One other thing that you may not be aware of, not only is Australia mostly of European ancestry, but the average IQ of immigrants to Australia is higher than the Australian average. Ie the more immigrants that Australia admits, the higher the average IQ of the nation is.

You can google the Pisa scores of immigrants to Australia.

I believe that for every single other nation measured the pisa scores of the immigrants were lower than the pisa scores of of existing citizens

"until the discovery of the New World,"

Byzantium,
Renaissance Italy,

Inventing capitalism, scientific method, constitutionalism, mass printing, modern warfare before 1492 (which I guess you think was a coincidence).

Economist Gareth Jnoes has show IQ to be an extremely powerful of GDP growth, bot raw and controlling for a lot of other variables.

http://mason.gmu.edu/~gjonesb/JonesSchneIQ

If you want to add some Australian bonds, you could try the Australia New Zealand Debt ETF, AUNZ.

Duncan Idaho,

I don't think the dark ages and middle ages were totally backward, but you would have to admit, something quite bad followed the fall of Rome. I suspect that there had been dysgenic factors at work for many generations before Rome fell. So, when it finally did fall, it was a dumbed-down population that took centuries to recover.

"The study also finds that while whites, Hispanics, and blacks with higher levels of education are more likely to reject negative racial stereotypes than are their less educated peers, this pattern does not hold true for Asians. In fact, education has no effect on negative stereotyping among Asians, and many Asians at all levels of education hold negative views about blacks and Hispanics. "

http://www.sciencecodex.com/education_doesnt_increase_support_for_affirmative_action_among_whites_minorities-86537

"If you could pick a contrarian investment based on HBD, that would be worth following!"

Going by "whiteness", I would think Argentina and Chile may be underpriced relative to their racial mix.

No. Asian-Australian is pred. Caucasoid South Asia, Mongoloid East/Southeast Asian, and Mongoloid/Caucasoid Central Asian. The Middle East is not included in the definition of Asian Australian. The only difference between Asian-American and Asian-Australian is that Asian-Australian includes Central Asians too.

http://en.wikipedia.org/wiki/Asian_Australian

Australia will implode like the US, but won't implode as catastrophically, due to its Euro-Asian majority.

Bond funds can be a good HBD investment too. There are bond funds run by people who study the economic conditions of countries and buy bonds for just those countries. I've made a lot of money in a fund that invested in Australian, Canadian, Swiss, Northern European and Asian bonds. These are all countries with high IQ populations and more or less free market economies. It invested no money in buying bonds from the PIGS (Portugal, Italy, Greece and Spain) and that turned out to be a wise decision.

@Conquistador:

"He asserts that only when Christianity was fully cemented did Europeans begin to gain an edge starting in the 10th century."

Check out HBD Chick's general theory of the West:
http://hbdchick.wordpress.com/tag/general-theory-of-the-west/

"Going by "whiteness", I would think Argentina and Chile may be underpriced relative to their racial mix."

Argentina has made so many screwed-up decisions that they are a disgrace to whiteness! More importantly, they are a disaster to be avoided, not a hidden gem to be invested in. But one can expect no great competence from an Italian who speaks Spanish and thinks he's English.

Chile might be different.

Still, there is large irony in HBD-believers and NAM-haters trying to escape the Hispanification of the USA by investing in (or in extreme cases, moving to) Latin America.

@eggwhite,

"Australia has strong demographics and will continue to attract high quality people for the foreseeable future."

Unfortunately the country is run by stupid, suicidal liberals who think Australia and white Australians have no right to exist. Certainly they detest the old "white Australia" policy and plan to import as many NAMs as they can get away with.

"They also have natural barriers (an ocean)to keep out undesirables."

If you don't have a strong Navy, the ocean is a highway, not a barrier. That's how Australia got colonized in the first place (strong Royal Navy, no Aborigine navy). When the US Navy goes away, the ocean barrier between Indonesia, Southeast Asia, and Australia will become an invasion route.

"The concern that Australia will come under military threat from China may be true many generations from now, but not anytime soon. And in truth it may never happen, if enough high-quality people continue to emigrate there. American military strength will remain almost supernaturally strong for decades to come. China isn't going to bully Australia in our lifetimes."

Hope you're right, but I doubt it. Obviously Australia fears being bullied by China right now, or they wouldn't have allowed the US to base troops near Darwin.

"And I suspect that if the US military does fade, the Australians will quietly acquire enough nuclear weapons to impose massive costs on anyone trying to bully it."

Again, the Australians are suicidal liberals, and therefore they detest nuclear weapons. Moreover, Australia has no native nuclear power industry, and thus it would not be a simple or quick matter for them to obtain nuclear weapons (or delivery systems).

[HS: Nuclear weapons are a 1940s technology that any advanced nation can develop relatively easily. The only delay is that Australia would need to build a reactor that would produce plutonium.]

Invest in Australia! Do you not realize Australia's prime minister, Julia Gillard, is an evil little atheist? That it is not a nation under God? That abortion is legal? That health care coverage is universal and largely paid for by the state? That the minimum wage for workers over age 19 is a crushing $15.50 an hour!

[HS: And despite this they have prosperous corporations and very little national debt compared to the US.]

"Rome was a basically a Greece rip off. "

LOL

Mark Caplan on Australia:
"Do you not realize Australia's prime minister, Julia Gillard, is an evil little atheist?"

Australia ranks #3 in the WSJ/Heritage Index of Economic Freedom.

I love it when leftists single out a few bad economical policies from countries that are very economically conservative overall.

I'm not familiar with Australia's labor market, but I still think even $15.50 would be stingy. If the laws of economics don't apply to the labor force, then why not a $40 or $50 minimum wage?

HS: No need to invest in Australia -- Canada is the same thing and much simpler to invest in.

Did you look what there are inside EWA? Biggest part is financial sector. And then there are miners like BHP Billiton.

Do you think those companies were good investments even if investing to Australia in general would be a good idea?

"Nuclear weapons are a 1940s technology that any advanced nation can develop relatively easily. The only delay is that Australia would need to build a reactor that would produce plutonium."

Developing nuclear weapons (even 15 kT Little Boy-like weapons) requires a lot of specialized machinery and infrastructure that isn't used for a lot else. The same with long range missile technology. It would take something like 10 years for them to build it on their own.

On the other hand, if US military power disappears then there is really nothing stopping the Aussies from buying some weapons from Russia, Israel, France, South Asia, whoever. Or at least, hiring lots of experts from those countries and buying lots of the manufacturing technology on their own.

[HS: A ten-year time frame is ridiculous considering we built them in a lot less time using 1940s technology. Building nuclear weapons isn't that complicated, and any country with manufacturing can do it. But outside of the developed world, most countries are still living in the 18th century, which is why so few countries have nukes. And then there are countries like Australis that could build them easily enough if they wanted to.]

Half Sigma, do any of your readers remember that the whites of South Africa built nuclear weapons?

If a group of whites were able to build nukes, while being subject to boycotts and sanctions, it should be relatively easy for Australia to build them.

Better yet, couldn't Australia simply ask the UK to sell Australia a few nukes and long range missles?

It seems to me that if Australia aimed a few missles at Shanghai, a few at Jakarta, and a few at Beijing, Australia would be completely safe from invasion.

you have to believe that Australia with nukes is a great bet in terms of the right country to immigrate to- for those in America that think America is going to turn in to Rhodesia

One of the things this makes me think of is the value of genocide.

The English killed the aborigines wherever they went, the Spanish enslaved them. Hundreds of years later, the Anglosphere is paler and richer than the Hispanosphere.

Nice guys finish last?

"Nuclear weapons are a 1940s technology that any advanced nation can develop relatively easily."

It is hard. That's why every single country that ever developed nuclear weapons, except for the first one (the USA), had to beg for foreign assistance or steal foreign technology in order to get it done. This includes advanced countries like the UK, France, the USSR, and China. Who would help Australia develop its bomb?

"The only delay is that Australia would need to build a reactor that would produce plutonium."

Which would certainly take 10 years, considering that first they'd have to muster the political will to do so.

"A ten-year time frame is ridiculous considering we built them in a lot less time using 1940s technology."

South Africa: 13 years from 1969 startup to first deliverable bomb in 1982 - AND this was with Israeli help.

Israel: 10 years from Dimona startup to first weapon in 1967 - AND this was with extensive British and tacit US aid.

JP,

I worry about those suicidal whites in Australia too. However, let me ask you this – where are most of the NAMs likely to come from? From Indonesia? If they start encouraging immigration from Indonesia that will be a problem, however I don't think any of those nations are capable of a literal invasion, that is, overcoming the Australians by sheer force. The only ones capable of that would be the Chinese, and it would be quite a logistic feat for them as well.

When the British invaded Australia, all they had to deal with were Stone Age people, and they were sparsely populated at that.

On white self-destruction, I would say many whites publicly preen as suicidal, as long as they don't feel an imminent threat. But if the US military magically evaporated, and they saw a belligerent China, I suspect they would quietly acquire nukes.

But Australia does have a small population and would be vulnerable if the US ever totally collapses. However, such a total loss of power by the United States is unlikely for at least 100 years, until we become a totally Latino nation.

Also, it's my hope that in the next 25 years the concept of HBD will gain currency in both the Eastern and Western worlds. John Derbyshire recently wrote a piece on how the elites may turn racist and hostile to the underclass at some point in the future. If true, nations that are not already racially despoiled (like Australia) will be in an envious position.

Australia's Asian population is probably about 11% now. And Asian, as in the US, refers to East Asians (Chinese, Korean, Taiwanese, etc.) who make up the vast, vast majority of our minority population.

The current centre-left government is also the least popular in the nation's history and is set for electoral massacre, meaning Australia will have no viable leftist opposition for long time to come.

"If a group of whites were able to build nukes, while being subject to boycotts and sanctions, it should be relatively easy for Australia to build them."

Assuming of course that doing so does not bring economic boycotts and sanctions onto Australia. Which it would - the Chinese aren't stupid, they'd know they were the target.

"Better yet, couldn't Australia simply ask the UK to sell Australia a few nukes and long range missles?"

Well, there is the small matter of the UK being a member of the Nuclear Non-Proliferation Treaty, which means they can't give them to Australia. Plus Australia is a member of the NPT, so they can't receive such weapons or produce the weapons themselves. What do you think China would do if Australia announced they were withdrawing from the NPT?

"It seems to me that if Australia aimed a few missles at Shanghai, a few at Jakarta, and a few at Beijing, Australia would be completely safe from invasion."

There is much more to it than that. What is needed is a credible second-strike capability, meaning that Australia needs to be able to claim that they could nuke China even after China tried to eliminate the Australian nuclear force. That is an expensive proposition, usually involving operating nuclear submarines. Possibly Australia could trundle some mobile ICBMs around in the outback.

@eggwhite,

"where are most of the NAMs likely to come from? From Indonesia? If they start encouraging immigration from Indonesia that will be a problem, however I don't think any of those nations are capable of a literal invasion, that is, overcoming the Australians by sheer force."

The Vietnamese boat people traveled from Vietnam to the Philippines and Indonesia, a distance that is less than the distance from Indonesia to Australia. The distance from Haiti to Florida is less than the distance from Indonesia to Australia. If the Indonesians sent floods of "refugees" to Australia, this would force the Australians to choose between being overwhelmed demographically or massacring the seagoing horde.

"The only ones capable of that would be the Chinese, and it would be quite a logistic feat for them as well."

Hardly impossible if the US Navy is out of the picture and the Australians don't have nukes.

Much more likely is Chinese intimidation and economic coercion.

"When the British invaded Australia, all they had to deal with were Stone Age people, and they were sparsely populated at that."

Australia is sparsely populated compared to China, which outnumbers Australia 59 to 1.

"such a total loss of power by the United States is unlikely for at least 100 years, until we become a totally Latino nation."

I wish I had your confidence in both those timespans (our collapse and our Hispanicization).

"A ten-year time frame is ridiculous considering we built them in a lot less time using 1940s technology. Building nuclear weapons isn't that complicated, and any country with manufacturing can do it."

During the Manhattan project they had the largest industrial base funded with a blank check from the largest economy and the best scientists from Europe who hated Hitler and were incredibly motivated. Fermi said he could have had a box of diamonds delivered to him in a week if he wanted. I can't imagine Australia would be in the same situation.

Also, in WWII the US had absolute command of the air over Japan at that point of the war and were sending bombers over all the time, so they didn't need a sneaky delivery system. Any modern military would need an accurate heavy lift rocket system and a mobile platform (sub, plane, train), which is a specialized technology that would need to be developed and tested.

Creating weapons grade fission material is a unique process which requires special technology. You have to develop it, which takes lots of time, or you have to buy it. A country, like Germany or Japan, who makes a wide amount of specialized machinery could make a bomb very quickly from scratch. I'm not sure Australia is in that category of industrial ability.

JP,

My estimate for the final Hispanicization of America and its eventual collapse is of course, a pure guess. But I do think these things take longer than we imagine. I think back to Argentina being a relatively prosperous country at the beginning of the last century. It's stagnated over many decades but didn't really have a big dramatic moment of collapse. That's what I imagine the United States will experience. I don't think we see a "final collapse" in our lifetime. It will definitely be full of NAMs but I still think we will hold the whip in the world.

Great post, and solid advice.

I bought a lot of EWA three or four years ago and re-invest the dividends.

EPP is another good one that I own. In addition to Australia, it picks up New Zealand, Singapore and Hong Kong, which are all good bets.

I think HBD investing is especially useful in 2 situations:

(1) Investing in temporarily undervalued countries whose HBD fundamentals are sound. e.g. Iceland after the banking crisis. Possibly Greece also (it may well currently be undervalued vs. what HBD would predict it will look like 10 years from now. Argentina is currently doing okay, so investing at "fire sale" prices right after their debt default would have made sense.)

(2) Shorting over-valued countries. Good example here would be South Africa. Obviously there's already a lot of pessimism out there because investors can read statistics, but HBD would tell us that the long-term future of South Africa is even worse than is generally realized. Especially since the HBD stats are steadily getting worse, since white South Africans, especially if they have college degrees, can fairly easily emigrate to Australia, the UK or Canada, (and something like 800,000 have done so already since 1994).

One would think that in SA whatever Mugabe/Idi Amin eventually winds up in charge would keep the resource-extraction industries up and running so he could take his cut, but even that is not guaranteed.

Perhaps real estate investment would be a good sector for HBD. According to sailer and HS, people are really paying for the privilege to not live poor people.

Another region to short on an HBD basis would obviously be California. Sectors of the California economy may continue to flourish (Hollywood, Silicon Valley), just as e.g. Brazil has a successful aerospace industry, but the overall HBD trends of the state are deeply negative.

Again, there's obviously already a lot of investor pessimism about CA out there, but HBD would indicate that investors generally are not pessimistic enough.

A good tip-off for HBD-based shorting is white flight. If large numbers of people are willing to pack up their lives and move, with all the trouble that entails, that is a sign that things are seriously bad. See South Africa and Detroit, obviously. But CA is something new in the American experience: white flight from an entire state.

Does Yglesias read Half Sigma?

A day or two after Half Sigma's "Buy Australia" post Yglesias put up an Australia-boosting post of his own, the point of which appears to be "It's not the demographics or the immigration policies, it's the monetary policy!"

http://www.slate.com/blogs/moneybox/2012/02/24/australia_kissed_recessions_goodbye.html

Steve Sailer claims that some of David Brooks' columns can only be understood as responses to Sailer pieces, so, who knows, maybe Yglesias is a closeted Half Sigma reader.

By the way, Australia is not simply immigration restrictionist. Rather it is very SELECTIVE, according to a series of pretty sensible criteria, in only letting in people liable to be a net benefit to the country. So, for example, large numbers of white South Africans (=people extremely likely to be of net benefit to an anglosphere country) have moved there since Rainbow Nation Year I (1994).

Without the U.S., Australia becomes an economic, but not political, colony of China. Australia works well enough that China won't try to meddle, as long as Australia keeps mining things China wants.

If any *other* military threat arises (a belligerent Indonesia with an actual navy), China will put on a little show of force, and tell Australia's politicians that all it expects is a little favoritism when Australia sells its resources.

"One of the things this makes me think of is the value of genocide.

The English killed the aborigines wherever they went, the Spanish enslaved them. Hundreds of years later, the Anglosphere is paler and richer than the Hispanosphere.

Nice guys finish last?"

very interesting

Another country to short on HBD grounds: the UK, as shown by this Guardian article:

http://www.guardian.co.uk/news/datablog/2010/jun/26/non-eu-immigration-uk-statistics

Huge numbers of non-white people (top source country: India, followed by Pakistan) immigrate to the UK every year.

BUT: HUGE numbers of people also EMigrate, and these emigrants are presumably mostly white.

So there you really have what Sailer calls "race replacement": nonwhites arrive, and whites leave the country. Or you could say it's white flight from an entire country, like South Africa.

The comments to this entry are closed.