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marți, 29 ianuarie 2013

Deluviul monetar, monetaria mondiala: Misunderstanding QE

Coppola Comment: Misunderstanding QE: Yesterday I had a long conversation with someone with serious monetarist leanings, who tried hard to convince me that QE raises long bond yi...

miercuri, 23 ianuarie 2013

Adrian Mitroi: Orice leu sau euro imprumutat finanteaza doar deficitul, nu cresterea economica



Orice leu sau euro imprumutat finanteaza doar deficitul, nu cresterea economica, iar datoria publica creste nesustenabil, a precizat Adrian Mitroi, secretar general la CFA Romania in cadrul Intalnirilor Wall-Street.ro.
„Noul indicator la care m-as uita este raportul dintre dobanda reala medie ponderata (lei-euro-dolari) pe termen mediu si lung la care statul isi finanteaza deficitul - estimata de mine intre 3-4% - si cresterea economica reala pe termen mediu si lung, adica 1,5-2% din PIB. Raportul este de aproximativ 2 si asta inseamna ca orice leu sau euro imprumutat finanteaza doar deficitul, nu cresterea economica, iar datoria publica creste nesustenabil”, a declarat Mitroi.


Sursa: www.wall-street.ro; 23 ianuarie 2013; autor George Dobre

Intalnirile Wall-Street.ro: Economia si bugetul, la control! Cu ce sperante am inceput 2013

Imediat dupa publicarea bugetului si a modificarilor pe care Guvernul le-a anuntat in sfera fiscalitatii, Wall-Street.ro a luat pulsul pietei. Economistii au dezbatut plusurile si minusurile bugetului, perspectivele politicii monetare, dar si cei mai "aratosi" indicatori macroeconomici ai momentului in cadrul Intalnirilor Wall-Street.ro.

Wall-Street.ro organizeaza constant intalniri cu cei mai importanti oameni din industrii-cheie, intr-un efort asumat de sprijinire a pietelor, de educare si crestere a transparentei.
Jurnalistii Wall-Street.ro au discutat cu Eugen Sinca, analist in cadrul BCR, Florentina Cozmanca, economist la RBS Bank Romania, Dan Armeanu, profesor universitar la ASE, Adrian Mitroi, secretar general la CFA Romania si Cristian Paun, profesor de economie.

Cum am iesit din criza? Indicatorii macro care arata cel mai bine/cel mai rau


Adrian Mitroi, secretar general la CFA Romania: Noul indicator la care m-as uita este raportul dintre dobanda reala medie ponderata (lei-euro-dolari) pe termen mediu si lung la care statul isi finanteaza deficitul - estimata de mine intre 3-4% - si cresterea economica reala pe termen mediu si lung, adica 1,5-2% din PIB. Raportul este de aproximativ 2 si asta inseamna ca orice leu sau euro imprumutat finanteaza doar deficitul, nu cresterea economica, iar datoria publica creste nesustenabil.
Avem doua iesiri: ori suntem pro-crestere economica, dupa un model asiatic, ori urmam modelul BNR, adica sa controlam inflatia si sa finantam cat mai ieftin si pe termen cat mai lung deficitul bugetar. Insa, vulnerabilitatea fundamentala a economiei romanesti este data de subfinantare si de faptul ca trebuie sa-si gaseasca resurse. Solutia este reducerea costului capitalului si a inflatiei, cautarea de capital, probabil capital romanesc propriu.
Cel mai rau indicator este raportul de finantare a contului curent cu investitii straine directe (circa 30%). Daca ne-am bucurat de scaderea deficitului de cont curent, care coboara spre 4%, in acelasi timp s-a mai dus ceva in jos, investitiile straine directe.

Bugetul, sub lupa analistilor. Plusuri si minusuri

Adrian Mitroi: Ati vazut povestile de succes economice din Coreea de Sud, Turcia, Singapore sau Rusia? Ce au in spate? Au plansetele europene de vai de mine ce taxe avem si ce poate face guvernul. Ati vazut ca si americanii devin europeni si zic ce poate face guvernul pentru noi, taxele ne-au impovarat, nu mai putem.
Opinia mea este ca taxele sunt acolo unde ar trebui sa fie. Mai mult decat atat, eu cred ca exista spatiu fiscal pentru cresteri de taxe si sunt pro crestere de taxe. Sunt doua moduri de a observa fiscalitatea. Sunt convins ca pe capital, dividende taxarea este ridicata. Eu cred ca la nivel de taxe pe proprietati si auto suntem in top 5 mondial ca si ingaduinta fiscala. Romania este centrata pe doua lucruri: pe case si masini.
Marea mea dezamagire pe buget a fost ca primariile locale au indraznit sa negocieze prin intermediul televizorului amanarea impozitului legal. Daca o autoritate locala isi permite sa comenteze la televizor atunci ce o sa zica contribuabilul. Taxele sunt un must ca si cetatean. Relaxarea fiscala o poti face numai in contextul pactului fiscal, care nu este foarte permisiv.
Noi nu am folosit fonduri publice pentru bailout, ne-am imprumutat aspru pe pietele externe si iarasi avem o paradigma tipic romaneasca. Imprumutul este un succes. Nu stiu daca aveti credit la banca, eu am, si va zic ca imprumutul nu este un succes.

Politica monetara: vor fi reduceri de dobanda cheie? Va continua aprecierea leului?

Adrian Mitroi: Uitam ca pana la Barclays si JP Morgan suntem intr-un context economic favorabil de cand BCE a zis ca va face orice e necesar impotriva crizei. Foarte interesant este faptul ca investitorii au avut acces la euro ieftini pe care i-au adus in tari stabile macroeconomic, cum este Romania, unde sunt si randamente bune.


Sursa: www.wall-street.ro; 22 ianuarie 2013; autori George Dobre si Razvan Enache

marți, 22 ianuarie 2013

Ce va face leul în 2013. Estimările specialiştilor



Un poll realizat de Curierul Naţional între experţi financiari a indicat un curs de schimb pentru finalul acestui an la valori cuprinse între nivelurile de 4,30 şi 5 lei pentru un euro.
Jumătate dintre respondenţi mizează pe deprecierea monedei naţionale, iar ceilalţi anticipează o menţinere a leului între nivelurile în care s-a tranzacţionat în a doua parte a anului trecut.

Beneficiind de un climat pozitiv în pieţele financiare internaţionale, moneda naţională a început anul pe o tendinţă de întărire, ajungând în zona de 4,34 lei pentru un euro, reper important, echivalent cu limita superioară a coridorului de variaţie conturat în perioada 2009-2011. Pentru a vedea însă unde se va situa cursul de schimb la finalul anului, Curierul Naţional a realizat un poll în rândul analiştilor financiari şi brokerilor cu care colaborăm, solicitându-le să indice nu numai un palier de cotare orientativ, dar şi câţiva factori care ar putea influenţa parcursul perechii valutare euro/leu.
Jumătate dintre respondenţi au mizat pe o menţinere a monedei naţionale în raport cu euro în intervalul delimitat în a doua parte a anului trecut, în timp ce alţi cinci specialişti mizează pe slăbirea leului, în general de o manieră moderată. Cea mai agresivă ţintă, de 5 lei pentru un euro, a fost indicată de către Andrei Ciubotaru, Head of Brokerage la Tradeville. Acesta are în vedere faptul că Banca Naţională a României ar putea găsi punctul de echilibru către un alt palier.
BNR ar urma să fie protagonistă în această arenă, numele instituţiei fiind menţionat de cinci dintre respondenţi. Dincolo de starea generală a economiei româneşti, ceilalţi factori care ar putea marca traiectoria cursului în 2013 şi indicaţi în poll sunt riscurile din zona euro ce pot induce intrări reduse de capital, acordurile cu instituţiile financiare internaţionale, încasările la bugetul de stat, solvenţa debitorilor, dobânzile şi spectrul unor noi tulburări politice.
Un alt aspect adus în discuţie este acela al efortului de rambursări în contul împrumuturilor externe. Acestea au împiedicat o ajustare încă şi mai brutală a economiei româneşti şi au ameliorat deprecierea leului în anii trecuţi, dar nota de plată cade în sarcina generaţiilor viitoare. "Am luat cu toţii decizia să lăsăm în grija copiilor noştri tot ceea ce nu am făcut noi bine, toate excesele consumeriste şi investiţiile noastre greşite", a declarat analistul financiar Adrian Mitroi.
Perspectiva celor 11 respondenţi la poll-ul realizat la sfârşitul anului trecut de Curierul Naţional este una moderată asupra evoluţiei economiei naţionale. În consecinţă, şi scenariile pentru traiectoria cursului de schimb în 2013 nu includ variaţii foarte ridicate faţă de nivelul de 4,44 lei pentru un euro consemnat la sfârşitul anului precedent.

Atractivitatea leului rămâne mică într-un context de represiune financiară

Analistul financiar Adrian Mitroi include dobânzi de 6% în scenariul său pentru un nivel de 4,5-4,7 lei pe euro la finalul lui 2013. El estimează că, deşi rezerva valutară va fi mai mică, politica monetară se va înscrie, fără incidente, într-un nou trend, cu rezerve mai mici, control al lichidităţii prin preţ (operaţiuni repo), şi nu prin intervenţii directe ca până acum. "Mecanismele vor fi mai fine, mai adecvate realităţii prezente - una a reglajelor fine şi nu a celor brute (costisitoare şi greu de sterilizat)", a declarat analistul financiar.
Represiunea financiară la nivel global se va manifesta prin efectul ei secundar şi în România. Astfel, menţinându-se dobânzile mici, deponenţii au devenit finanţatori indirecţi ai deficitelor bugetare prin randamente la depozite şi investiţii care nu compensează suficient riscul investiţional (pe termen lung) şi monetar (inflaţia), mai spune Mitroi. 

Leul şi economia, salvaţi în anii trecuţi pe seama generaţiilor viitoare

Timpul cumpărat la declanşarea crizei ne costă acum. Efortul de rambursare pentru împrumuturile contractate în 2009 îşi va spune cuvântul asupra cursului de schimb. Adrian Mitroi spune că rambursările şi refinanţările datoriei externe vor lua procente bune din creşterea economică. Pe de altă parte, dacă aceste împrumuturi nu ar fi fost contractate la intrarea în recesiune, ajustările ar fi fost încă şi mai brutale. Analiştii economici nu ştiu dacă este bine, însă cert este că decizia a implicat o aruncare a problemelor în viitor. "Practic, la nivel individual, am realocat constrângerile bugetare pe care le merităm către generaţiile viitoare", ne-a declarat Mitroi.
Împrumutul masiv contractat pentru contracararea efectelor crizei rămâne pe bilanţ şi trebuie plătit. Simplificând exemplul, dacă trei ani de zile te împrumuţi cu 15% din PIB, atunci ai de fapt o contracţie reală de 15% a economiei. România are, în plus, provocarea de a găsi posibilitatea de tranziţie de la o economie consumeristă, în care fiecare vrea o slujbă la birou, în care partenerul trebuie impresionat printr-o vizită în week-end la mall, unde vizionarea unui film costă cât în America, iar gadgeturile sunt de două ori mai scumpe.  


Sursa: http://curierulnational.ro; 22 ianuarie 2013; autor Adrian Panaite

vineri, 18 ianuarie 2013

My Loss - Dereck Sivers





In one year: (2007)
  • My wife divorced me, and took my life savings.
  • 90% of my company was no longer mine, on a technicality.
  • My apartment was destroyed, so I slept and showered in the warehouse.
  • All my employees, led by my good friend and VP, led a mutiny against me. (I never returned, and never saw them again.)
  • I invested everything I had left in a very conservative fund, which fell 50% immediately, and never came back.
  • I invested everything I had left in a different conservative fund, which also fell 50%, and never came back.
  • The woman I was madly in love with married the guy she would always complain to me about.
Two weeks after that year ended, three companies called asking if I wanted to sell my company. Though I had said no to that question for ten years, this time I said yes.
I had messed up so bad, I had to walk away. I had done everything wrong, and needed to cleanse myself of all those bad decisions. I needed to take some time to learn from my mistakes, and replace my thoughts with new ones. A self-made back-to-schooling.
I look back at that year, and know it won't get much worse. If I can handle that, I can handle anything.
The company sale was announced. The first time someone said “congratulations” I said, “For what? I messed up so bad I lost my baby. That's nothing to congratulate.” (For future congratulations, I just shrug.)
We all underestimate our ability to massively change our life when it's gone off track.
Say “no” where you used to say “yes”. Say “yes” where you used to say “no”. Do the thing that scares you the most, then get up and go.
For those of you considering a massive change, I can tell you from experience:
It's awesome here on the other side. 
Entrepreneur, programmer, avid student of life. I make useful things, and share what I learn.
 Dereck Sivers
Sursa: http://sivers.org/loss

Greșeala de calcul a PIB-ului schimbată odată cu premierul


Produsul Intern Brut a fost supraestimat în anul 2012 cu 21,9 miliarde de lei în plus, ceea ce duce la un deficit de cheltuieli de un miliard de lei. A fost pentru prima oară, din anul 2005, când PIB-ul a fost calculat greșit în plus. Până acum greșeala era inversă, în minus, și ducea la adăugarea unor sume de peste opt miliarde de lei. 
În anul 2011, Emil Boc ieșea,  în calitate de premier, și anunța creșteri ale PIB-ului continue. În anul 2011, PIB-ul a crescut cu 2,9%, potrivit Institutului Național de Statistică, iar în 2012, în primele trei trimestre, cu doar 1,1%.
PIB-ul real în anul 2012 este de 556,7 miliarde de lei. El a fost calculat cu 21,9 miliarde în plus. Analistul economic Adrian Mitroi este de părere că greșeala a fost generată de modelul de calcul. “PIB-ul este un indicator al prețurilor intermediare, iar inflația un indicator al prețurilor de consum. Indicele deprecierii banilor, care servește la înlăturarea unor efecte ale inflației, poate să fie cauza prin care eroarea INS poate să fie explicată.”, a spus analistul. El a adăugat că, în economie,  sunt diferențe mari între presupuneri și rezultat.
Cu privire la măsura pe care o are în vedere Victor Ponta, de a demite coducerea INS, analistul economic Adrian Mitroi este de părere că ”La acest tip de greșeli consecințele sunt politice și de aceea procedura trebuie să fie transparentă pentru că deciziile de finanțare, relația cu UE, toate se iau în baza acestei cifre. Orice urmă de suspiciune, care nu este una legată de intenție răuvoitoare, ci de competență limitată, trebuie atent urmărită. Nu ai loc de erori aici.”  În luna iulie a anului 2012, doi vicepreședinți ai INS au fost schimbați după ce nu au vrut să dea date clare, din care să iasă cvorum la referendum.
Sursa: www.dcnews.ro; 05.01.2013; autor Roxana Covrig

Haos în impozitele locale. Autorităţile locale nu ştiu cum să le încaseze

Haos în privinţa taxelor şi impozitelor locale. Deşi, iniţial, reprezentanţii guvernului declaraseră că indexarea cu 16 procente este facultativă şi că autorităţile locale pot să o aplice sau nu, acest lucru nu mai e valabil. Lipsa unui act normativ face ca deciziile consiliilor locale, prin care taxele rămâneau la acelasi nivel cu 2012, să încalce legea.

Analistul Adrian Mitroi comenteaza la TVR NEWS - Ora de Stiri:


Sursa: www.tvrnews.ro; 07.01.2013

Apreciere puternica a leului dupa anuntul JP Morgan. Cat va mai scadea cursul?


Leul s-a apreciat ieri cu 1,21% fata de euro, pana la un curs de 4,3364 lei/euro, fiind cel mai nivel din ultimele 12 luni, ca urmare a includerii obligatiunilor Romaniei intr-un indice al JP Morgan. Economistii consultati de Wall-Street.ro spun ca tendinta este de intarire a cursului de schimb, dar ca BNR ar putea frana avansul leului.

Adrian Mitroi, secretar general CFA Romania

"Am intrat si noi in lumea civilizata (in urma introducerii bond-urilor Romaniei in indicii Barclays si JP Morgan n.r.), dar cu niste ponderi similare cu cele pentru Chile. Obligatiunile Ungariei au o pondere de 5 ori mai mare. Oricum este un pas inainte care arata ca exista interes pentru piata romaneasca si, mai mult, este o dovada ca operarea unui deficit bugetar sub 3% si a unui deficit de cont curent sub 5% schimba imaginea cu privire la o economie". 

Deprecierea monedei nationale in fata euro, regulamentul BNR privind creditarea si tendinta de scadere a dobanzilor la lei au fost principalii factori care au dus in 2012 la cresterea soldului imprumuturilor imobiliare in lei. In perioada ianuarie-noiembrie a anului trecut, totalul creditelor in lei pentru locuinte a crescut cu 17,7%, in timp ce soldul imprumuturilor in valuta a urcat cu 11,7%, arata datele BNR. Diferenta majora este pe partea de volum, intrucat totalul creditelor imobiliare in valuta este de aproape 20 de ori mai mare decat in cazul imprumuturilor in lei (35,7 mld. lei versus 1,8 mld. lei).


Sursa: www.wall-street.ro; 16 ianuarie 2013; autori George Dobre si Razvan Enache

Ce va face Bursa americană în anul 2013? O întrebare pentru un răspuns de 1.500 de puncte


Nouă dintre cei unsprezece brokeri şi analişti care au participat la un sondaj al Curierului Naţional întrevăd pentru finalul anului un nivel de 1.500 de puncte pentru indicele S&P500.
Palierul anticipat se situează marginal peste nivelurile actuale şi este echivalent cu maximul atins în două rânduri în 2000 şi în 2007.
Contextul economic şi performanţa companiilor nu vor permite depăşirea decisivă a acestui prag, spun analiştii.
Începutul de an a readus indicele S&P500 al Bursei de la New York în zona de 1.500 de puncte, reper apropiat de maximele atinse în anul 2000 şi apoi în 2007. Nivelul acesta este greu de doborât fără un avans semnificativ al economiei care deocamdată nu este întrevăzut, susţin analiştii. Dincolo de volatilitatea ridicată pe care am putea să o consemnăm şi în 2013, nu este exclus ca şi la finalul anului indicele S&P500 să se regăsească tot la nivelul de 1.500 de puncte. Este scenariul pe care merg cei mai mulţi dintre specialiştii contactaţi de Curierul Naţional.
Parcursul pieţei americane de acţiuni constituie un indicator bun al percepţiei investitorilor faţă de restul economiei, astfel încât o estimare a evoluţiei este importantă nu numai pentru participanţii activi la piaţă, dar şi pentru mediul de afaceri şi consumatori în general. Este şi motivul pentru care i-am întrebat pe brokerii şi analiştii financiari cu care colaborăm în ce zonă văd indicele S&P500 la finalul anului.  
Interesant este că 11 dintre cei 13 respondenţi au marcat nivelul de 1.500 puncte, cu doar 1,9% peste închiderea de vineri de 1.472,05 puncte.

Traiectoria Bursei americane, în mare măsură o poveste despre politică şi politică monetară

Dincolo de evoluţiile economice, deciziile din zona fiscală şi de politică monetară ar urma să fie decisive pentru parcursul Bursei de la New York şi în 2013, după cum s-a întâmplat şi anii trecuţi. Interesant este faptul că şapte dintre respondenţi au menţionat intervenţiile băncii centrale ca factor de influenţă major în mişcarea cotaţiilor bursiere, în timp ce patru dintre specialişti au indicat impactul asupra pieţei din direcţia polticii fiscal-bugetare. Analistul financiar Adrian Mitroi punctează că orice victorie de ordin politic sau monetar va fi un pas înainte pentru Bursă într-un parcurs care ar urma să aducă indicele S&P500 la nivelul de 1.500 de puncte la finalul anului 2013.

Greu la deal în 2013

Contextul este însă unul dificil pentru un avans consistent al cotaţiilor. Adrian Mitroi avertizează că banii ieftini vor exista, dar vor fi greu de găsit. Procesul de stagflaţie va fi endemic, iar Europa se va afla într-un impas politic pentru a putea impune o politică ce să pună accentul pe mai multă muncă şi mai puţine privilegii, ceea ce se va traduce printr-un transfer de nivel de trai către "serpaşii economici asiatici" care vor să trăiască mai bine. Relaxarea monetară va fi modalitatea de atenuare unor neajunsuri economice antrenate în statele industrializate occidentale de letargia investiţională şi un comportament neadecvat în privinţa muncii, mai spune Mitroi.


Sursa: www.curierulnational.ro; 14 ianuarie 2013, autor Adrian Panaite

miercuri, 16 ianuarie 2013

marți, 15 ianuarie 2013

The 48 Laws of Power


Law 1: Never Outshine the Master

Always make those above you feel comfortably superior. In your desire to please or impress them, do not go too far in displaying your talents or you might accomplish the opposite – inspire fear and insecurity. Make your masters appear more brilliant than they are and you will attain the heights of power.


Law 2: Never put too Much Trust in Friends, Learn how to use Enemies

Be wary of friends-they will betray you more quickly, for they are easily aroused to envy. They also become spoiled and tyrannical. But hire a former enemy and he will be more loyal than a friend, because he has more to prove. In fact, you have more to fear from friends than from enemies. If you have no enemies, find a way to make them.


Law 3: Conceal your Intentions

Keep people off-balance and in the dark by never revealing the purpose behind your actions. If they have no clue what you are up to, they cannot prepare a defense. Guide them far enough down the wrong path, envelope them in enough smoke, and by the time they realize your intentions, it will be too late.


Law 4: Always Say Less than Necessary

When you are trying to impress people with words, the more you say, the more common you appear, and the less in control. Even if you are saying something banal, it will seem original if you make it vague, open-ended, and sphinxlike. Powerful people impress and intimidate by saying less. The more you say, the more likely you are to say something foolish.


Law 5: So Much Depends on Reputation – Guard it with your Life

Reputation is the cornerstone of power. Through reputation alone you can intimidate and win; once you slip, however, you are vulnerable, and will be attacked on all sides. Make your reputation unassailable. Always be alert to potential attacks and thwart them before they happen. Meanwhile, learn to destroy your enemies by opening holes in their own reputations. Then stand aside and let public opinion hang them.


Law 6: Court Attention at all Cost

Everything is judged by its appearance; what is unseen counts for nothing. Never let yourself get lost in the crowd, then, or buried in oblivion. Stand out. Be conspicuous, at all cost. Make yourself a magnet of attention by appearing larger, more colorful, more mysterious, than the bland and timid masses.


Law 7: Get others to do the Work for you, but Always Take the Credit

Use the wisdom, knowledge, and legwork of other people to further your own cause. Not only will such assistance save you valuable time and energy, it will give you a godlike aura of efficiency and speed. In the end your helpers will be forgotten and you will be remembered. Never do yourself what others can do for you.


Law 8: Make other People come to you – use Bait if Necessary

When you force the other person to act, you are the one in control. It is always better to make your opponent come to you, abandoning his own plans in the process. Lure him with fabulous gains – then attack. You hold the cards.


Law 9: Win through your Actions, Never through Argument

Any momentary triumph you think gained through argument is really a Pyrrhic victory: The resentment and ill will you stir up is stronger and lasts longer than any momentary change of opinion. It is much more powerful to get others to agree with you through your actions, without saying a word. Demonstrate, do not explicate.


Law 10: Infection: Avoid the Unhappy and Unlucky

You can die from someone else’s misery – emotional states are as infectious as disease. You may feel you are helping the drowning man but you are only precipitating your own disaster. The unfortunate sometimes draw misfortune on themselves; they will also draw it on you. Associate with the happy and fortunate instead.


Law 11: Learn to Keep People Dependent on You

To maintain your independence you must always be needed and wanted. The more you are relied on, the more freedom you have. Make people depend on you for their happiness and prosperity and you have nothing to fear. Never teach them enough so that they can do without you.


Law 12: Use Selective Honesty and Generosity to Disarm your Victim

One sincere and honest move will cover over dozens of dishonest ones. Open-hearted gestures of honesty and generosity bring down the guard of even the most suspicious people. Once your selective honesty opens a hole in their armor, you can deceive and manipulate them at will. A timely gift – a Trojan horse – will serve the same purpose.


Law 13: When Asking for Help, Appeal to People’s Self-Interest, Never to their Mercy or Gratitude

If you need to turn to an ally for help, do not bother to remind him of your past assistance and good deeds. He will find a way to ignore you. Instead, uncover something in your request, or in your alliance with him, that will benefit him, and emphasize it out of all proportion. He will respond enthusiastically when he sees something to be gained for himself.


Law 14: Pose as a Friend, Work as a Spy

Knowing about your rival is critical. Use spies to gather valuable information that will keep you a step ahead. Better still: Play the spy yourself. In polite social encounters, learn to probe. Ask indirect questions to get people to reveal their weaknesses and intentions. There is no occasion that is not an opportunity for artful spying.


Law 15: Crush your Enemy Totally

All great leaders since Moses have known that a feared enemy must be crushed completely. (Sometimes they have learned this the hard way.) If one ember is left alight, no matter how dimly it smolders, a fire will eventually break out. More is lost through stopping halfway than through total annihilation: The enemy will recover, and will seek revenge. Crush him, not only in body but in spirit.


Law 16: Use Absence to Increase Respect and Honor

Too much circulation makes the price go down: The more you are seen and heard from, the more common you appear. If you are already established in a group, temporary withdrawal from it will make you more talked about, even more admired. You must learn when to leave. Create value through scarcity.


Law 17: Keep Others in Suspended Terror: Cultivate an Air of Unpredictability

Humans are creatures of habit with an insatiable need to see familiarity in other people’s actions. Your predictability gives them a sense of control. Turn the tables: Be deliberately unpredictable. Behavior that seems to have no consistency or purpose will keep them off-balance, and they will wear themselves out trying to explain your moves. Taken to an extreme, this strategy can intimidate and terrorize.


Law 18: Do Not Build Fortresses to Protect Yourself – Isolation is Dangerous

The world is dangerous and enemies are everywhere – everyone has to protect themselves. A fortress seems the safest. But isolation exposes you to more dangers than it protects you from – it cuts you off from valuable information, it makes you conspicuous and an easy target. Better to circulate among people find allies, mingle. You are shielded from your enemies by the crowd.


Law 19: Know Who You’re Dealing with – Do Not Offend the Wrong Person

There are many different kinds of people in the world, and you can never assume that everyone will react to your strategies in the same way. Deceive or outmaneuver some people and they will spend the rest of their lives seeking revenge. They are wolves in lambs’ clothing. Choose your victims and opponents carefully, then – never offend or deceive the wrong person.


Law 20: Do Not Commit to Anyone

It is the fool who always rushes to take sides. Do not commit to any side or cause but yourself. By maintaining your independence, you become the master of others – playing people against one another, making them pursue you.


Law 21: Play a Sucker to Catch a Sucker – Seem Dumber than your Mark

No one likes feeling stupider than the next persons. The trick, is to make your victims feel smart – and not just smart, but smarter than you are. Once convinced of this, they will never suspect that you may have ulterior motives.


Law 22: Use the Surrender Tactic: Transform Weakness into Power

When you are weaker, never fight for honor’s sake; choose surrender instead. Surrender gives you time to recover, time to torment and irritate your conqueror, time to wait for his power to wane. Do not give him the satisfaction of fighting and defeating you – surrender first. By turning the other check you infuriate and unsettle him. Make surrender a tool of power.


Law 23: Concentrate Your Forces

Conserve your forces and energies by keeping them concentrated at their strongest point. You gain more by finding a rich mine and mining it deeper, than by flitting from one shallow mine to another – intensity defeats extensity every time. When looking for sources of power to elevate you, find the one key patron, the fat cow who will give you milk for a long time to come.


Law 24: Play the Perfect Courtier

The perfect courtier thrives in a world where everything revolves around power and political dexterity. He has mastered the art of indirection; he flatters, yields to superiors, and asserts power over others in the mot oblique and graceful manner. Learn and apply the laws of courtiership and there will be no limit to how far you can rise in the court.


Law 25: Re-Create Yourself

Do not accept the roles that society foists on you. Re-create yourself by forging a new identity, one that commands attention and never bores the audience. Be the master of your own image rather than letting others define if for you. Incorporate dramatic devices into your public gestures and actions – your power will be enhanced and your character will seem larger than life.


Law 26: Keep Your Hands Clean

You must seem a paragon of civility and efficiency: Your hands are never soiled by mistakes and nasty deeds. Maintain such a spotless appearance by using others as scapegoats and cat’s-paws to disguise your involvement.


Law 27: Play on People’s Need to Believe to Create a Cultlike Following

People have an overwhelming desire to believe in something. Become the focal point of such desire by offering them a cause, a new faith to follow. Keep your words vague but full of promise; emphasize enthusiasm over rationality and clear thinking. Give your new disciples rituals to perform, ask them to make sacrifices on your behalf. In the absence of organized religion and grand causes, your new belief system will bring you untold power.


Law 28: Enter Action with Boldness

If you are unsure of a course of action, do not attempt it. Your doubts and hesitations will infect your execution. Timidity is dangerous: Better to enter with boldness. Any mistakes you commit through audacity are easily corrected with more audacity. Everyone admires the bold; no one honors the timid.


Law 29: Plan All the Way to the End

The ending is everything. Plan all the way to it, taking into account all the possible consequences, obstacles, and twists of fortune that might reverse your hard work and give the glory to others. By planning to the end you will not be overwhelmed by circumstances and you will know when to stop. Gently guide fortune and help determine the future by thinking far ahead.


Law 30: Make your Accomplishments Seem Effortless

Your actions must seem natural and executed with ease. All the toil and practice that go into them, and also all the clever tricks, must be concealed. When you act, act effortlessly, as if you could do much more. Avoid the temptation of revealing how hard you work – it only raises questions. Teach no one your tricks or they will be used against you.


Law 31: Control the Options: Get Others to Play with the Cards you Deal

The best deceptions are the ones that seem to give the other person a choice: Your victims feel they are in control, but are actually your puppets. Give people options that come out in your favor whichever one they choose. Force them to make choices between the lesser of two evils, both of which serve your purpose. Put them on the horns of a dilemma: They are gored wherever they turn.


Law 32: Play to People’s Fantasies

The truth is often avoided because it is ugly and unpleasant. Never appeal to truth and reality unless you are prepared for the anger that comes for disenchantment. Life is so harsh and distressing that people who can manufacture romance or conjure up fantasy are like oases in the desert: Everyone flocks to them. There is great power in tapping into the fantasies of the masses.


Law 33: Discover Each Man’s Thumbscrew

Everyone has a weakness, a gap in the castle wall. That weakness is usual y an insecurity, an uncontrollable emotion or need; it can also be a small secret pleasure. Either way, once found, it is a thumbscrew you can turn to your advantage.


Law 34: Be Royal in your Own Fashion: Act like a King to be treated like one

The way you carry yourself will often determine how you are treated; In the long run, appearing vulgar or common will make people disrespect you. For a king respects himself and inspires the same sentiment in others. By acting regally and confident of your powers, you make yourself seem destined to wear a crown.


Law 35: Master the Art of Timing

Never seem to be in a hurry – hurrying betrays a lack of control over yourself, and over time. Always seem patient, as if you know that everything will come to you eventually. Become a detective of the right moment; sniff out the spirit of the times, the trends that will carry you to power. Learn to stand back when the time is not yet ripe, and to strike fiercely when it has reached fruition.


Law 36: Disdain Things you cannot have: Ignoring them is the best Revenge

By acknowledging a petty problem you give it existence and credibility. The more attention you pay an enemy, the stronger you make him; and a small mistake is often made worse and more visible when you try to fix it. It is sometimes best to leave things alone. If there is something you want but cannot have, show contempt for it. The less interest you reveal, the more superior you seem.


Law 37: Create Compelling Spectacles

Striking imagery and grand symbolic gestures create the aura of power – everyone responds to them. Stage spectacles for those around you, then full of arresting visuals and radiant symbols that heighten your presence. Dazzled by appearances, no one will notice what you are really doing.


Law 38: Think as you like but Behave like others

If you make a show of going against the times, flaunting your unconventional ideas and unorthodox ways, people will think that you only want attention and that you look down upon them. They will find a way to punish you for making them feel inferior. It is far safer to blend in and nurture the common touch. Share your originality only with tolerant friends and those who are sure to appreciate your uniqueness.


Law 39: Stir up Waters to Catch Fish

Anger and emotion are strategically counterproductive. You must always stay calm and objective. But if you can make your enemies angry while staying calm yourself, you gain a decided advantage. Put your enemies off-balance: Find the chink in their vanity through which you can rattle them and you hold the strings.


Law 40: Despise the Free Lunch

What is offered for free is dangerous – it usually involves either a trick or a hidden obligation. What has worth is worth paying for. By paying your own way you stay clear of gratitude, guilt, and deceit. It is also often wise to pay the full price – there is no cutting corners with excellence. Be lavish with your money and keep it circulating, for generosity is a sign and a magnet for power.


Law 41: Avoid Stepping into a Great Man’s Shoes

What happens first always appears better and more original than what comes after. If you succeed a great man or have a famous parent, you will have to accomplish double their achievements to outshine them. Do not get lost in their shadow, or stuck in a past not of your own making: Establish your own name and identity by changing course. Slay the overbearing father, disparage his legacy, and gain power by shining in your own way.


Law 42: Strike the Shepherd and the Sheep will Scatter

Trouble can often be traced to a single strong individual – the stirrer, the arrogant underling, the poisoned of goodwill. If you allow such people room to operate, others will succumb to their influence. Do not wait for the troubles they cause to multiply, do not try to negotiate with them – they are irredeemable. Neutralize their influence by isolating or banishing them. Strike at the source of the trouble and the sheep will scatter.


Law 43: Work on the Hearts and Minds of Others

Coercion creates a reaction that will eventually work against you. You must seduce others into wanting to move in your direction. A person you have seduced becomes your loyal pawn. And the way to seduce others is to operate on their individual psychologies and weaknesses. Soften up the resistant by working on their emotions, playing on what they hold dear and what they fear. Ignore the hearts and minds of others and they will grow to hate you.


Law 44: Disarm and Infuriate with the Mirror Effect

The mirror reflects reality, but it is also the perfect tool for deception: When you mirror your enemies, doing exactly as they do, they cannot figure out your strategy. The Mirror Effect mocks and humiliates them, making them overreact. By holding up a mirror to their psyches, you seduce them with the illusion that you share their values; by holding up a mirror to their actions, you teach them a lesson. Few can resist the power of Mirror Effect.


Law 45: Preach the Need for Change, but Never Reform too much at Once

Everyone understands the need for change in the abstract, but on the day-to-day level people are creatures of habit. Too much innovation is traumatic, and will lead to revolt. If you are new to a position of power, or an outsider trying to build a power base, make a show of respecting the old way of doing things. If change is necessary, make it feel like a gentle improvement on the past.


Law 46: Never appear too Perfect

Appearing better than others is always dangerous, but most dangerous of all is to appear to have no faults or weaknesses. Envy creates silent enemies. It is smart to occasionally display defects, and admit to harmless vices, in order to deflect envy and appear more human and approachable. Only gods and the dead can seem perfect with impunity.


Law 47: Do not go Past the Mark you Aimed for; In Victory, Learn when to Stop

The moment of victory is often the moment of greatest peril. In the heat of victory, arrogance and overconfidence can push you past the goal you had aimed for, and by going too far, you make more enemies than you defeat. Do not allow success to go to your head. There is no substitute for strategy and careful planning. Set a goal, and when you reach it, stop.


Law 48: Assume Formlessness

By taking a shape, by having a visible plan, you open yourself to attack. Instead of taking a form for your enemy to grasp, keep yourself adaptable and on the move. Accept the fact that nothing is certain and no law is fixed. The best way to protect yourself is to be as fluid and formless as water; never bet on stability or lasting order. Everything changes.