I was surprised by the reaction to my blog “The Locational Value of North Korea” sparked. I wasn’t making any political statements or endorsing the actions of those investors that have chosen to purchase a new beautiful off the plan Trump apartments in North Korea’s pretty seaside location of Wonsan……
The point of the blog was not to say the Trump’s vision was correct or fair or that Dennis Rodman is the real economic brains behind North Korea – but to make the point as to how Donald see the world. How he thinks. It’s different you know.
He might be the president of the USA.
He might be the “Most Powerful Man in the World” – or 2nd most, if he really does work for the Kremlin?!
However, regardless of his position, title or how the rest of the world views him, “HE SEES” the world in terms of “The Economic Rent” (or Effortless Advantage).
He can’t help it.
Its who he is.
Its how he has always lived his life and just like the 5 Drivers that are embedded into our economic DNA – Trump too shares some of this double helix of bricks and mortar.
It IS part of his belief system – his cognitive biases.
Trumps personal wealth has been the source of much speculation. Forbes estimated his real estate holdings to be worth an impressive $3.5B USD in 2015. They calculated the values as;
- Commercial Properties $1.3B
- Residential Properties $410M
- Club Facilities $866M
- Other properties he doesn’t own 100% to be $940M
Real-estate and other Government Granted Licenses are at the core of Trump’s wealth and income.
As part of his financial disclosure required as a presidential candidate, he fessed up to collecting in excess of $42m in real-estate rents and over $176M from 15 golf courses alone.
The Trump name is worth millions as each year he collects a wide array of real estate licensing, branding and marketing deals and royalties. Proving the value of the Trump name, Corcoran Group showed that Trump branded condominiums sold for 36% more than other like products.
“In New York, condominiums flying the Trump name sold at a 36 percent premium over comparable properties in 2005, according to statistics compiled by the Corcoran Group.” ALEX WILLIAMS
Trump believes in building the American Brand. “let’s make America great again”.
He believes in the Power of “Real Estate”.
He believes that you need to use debt to create “wealth”.
He has been bust and nearly bust several times before.
He knows that there is a Boom-Bust cycle, but it’s likely his ego will be so inflated after he rebrands America – “TRUMP-merica” that he will believe, just like London’s own; Gordan Brown thought before him, that, he, Donald Trump, HAS tamed the economic beast and placed TRUMP-merica upon the economic gravy train for the rest of time.
This map highlights countries with properties that are either owned or licensed by the Trump Organization as of December 2016.
The market has a funny way of doing the unexpected.
When we workshopped possible ways in which this cycle could play out back in 2013/14 we came up with all sorts of possibilities. The possible impact of crypto-currencies and peer to peer lending seemed obvious. But we never in our wildest dreams envisaged America being run by an unashamedly egotistical real-estate billionaire.
Now please, if you can dream up a more bullish scenario for speculation to be encouraged through the world then I’d love to hear it.
Think about what he did in the blog “The Locational Value of North Korea”?
Go borrow some money North Korea, then build some beautiful hotels, and start collecting some rent!
Maybe this is part of some genius plan for TRUMP-merica to help North Korea out of their terrible economic state, by showing them how to enclose and capitalise the rent (of course the US would have to get their fair share of land to show them what to do) while at the same time the US just happens to obtain some strategically located military bases right on China’s door step?
Regardless of what Trump’s agenda is, we know what motivates him, we know what he sees when he looks out the window –the possibilities of “The Effortless Advantage”.