George Dorgan

Author's details

Name: George Morgen Dorgan
Date registered: August 4, 2012 6:19 am

Biography

George Morgen Dorgan is an economic advisor to the Swiss libertarian party UP Schweiz. He is just one out of many that predicted the Jan15, 2015 financial tsunami - due to excessive risk taking. Most of his 780 pages on this blog spoke about some indications. He manages a small hedge fund on global macro basis following contrarian strategies.
Dorgan is largely an Austrian economist, supply sider and fierce advocate of deflation enabled by technological progress, free trade and the global distribution of labor. He is against both the Neo Keynesian mainstream and those Austrians (incl. many in UP Schweiz) that see the hyper-inflationary collapse or a global deflation coming. The reason to oppose those Austrians are the productivity benefits of free trade, a key difference to the Great Depression. He also opposes the fraction of UP Schweiz that wants to abolish the SNB. His argument is that "as long there is the Fed we will need the SNB to protect the Swiss economy from the Fed."
His focus is on thorough examination and global comparison of balance of payments and savings/investments patterns, similar to the works of Michael Pettis. With Keynes he shares the idea of global "current account targeting" instead of targeting economic growth in the form of inflation or GDP.
The balance sheet of a central bank is an important part of the balance of payments. George is the specialist for the balance sheet and monetary data of the Swiss National Bank and Swiss economic history.
George rejects any econometric model and bases his reasoning on pure praxeology and the sociological differences among peoples globally. His view is that in many cases, e.g. in the Swiss case, the understanding of economic history leads to changes in the financial account of the balance of payments and the FX rate. This again leads to future economic developments like GDP growth, inflation or deflation. Hence the perception of economic history and FX drive the future economic development. History must repeat itself with some slightly changed parameters !

He agrees with the ideas of Tomáš Sedláček that GDP growth is currently not important, but a stabilisation of savings rates in order to "prevent irrationality". George is also influenced by Minsky and Richard Koo, but he considers fiscal intervention only when private sector savings rates are rapidly increasing. He reckons that in a long-term perspective under-utilisation of labor is extraordinarily low in the world, in particular in emerging and (previously) less privileged economies.
For him, the 2008 financial crisis was rather a balance of payments crisis in the United States. Thanks to globalisation and to fiscal expansion in China, it was only a very short-lived crisis.

Dorgan started up as Quant programmer in the FX area, he worked at UBS and Reuters. He speaks nine languages including Russian. He has a broad knowledge on (economic) history, law, computer science and business.
Apart from economic research and investments, he manages operational risk and Too Big To Fail projects in big Swiss banks.
A partial picture about Dorgan's ideas can be obtained in his presentation at the CFA society in Zurich.

His recent publications that were editor's picks in Seeking Alpha:

FX Rates, Contrarian Investment And The Misleading Concept Called GDP

The Dollar, The ISM, Buy American And Irrational Exuberance

Other often read contributions are: What Drives Government Bond Yields?

The Six Major Fundamental Factors that Determine Gold and Silver Prices

For privacy purposes George Morgen added "Dorgan" as alias to his name. One major reason was that in 2011 all Swiss political parties supported the Euro minimum exchange rate. From the beginning his blog actively opposed this measure and judged that the 1.20 was too risky for both SNB balance sheet and potential asset bubbles. Prof. Janssen, finance professor emeritus at the University of Zurich and also advisor to UP Schweiz, is one of the few well-known Swiss economists that agreed with Dorgan in 2011. With the end of the peg, the views of the SNB and the ones of Janssen and Dorgan got closer together again.
His Google Plus profile and his Twitter account.

Latest posts

  1. What Caused The SNB Financial Tsunami? Three Reasons, One Trigger, One Chain Reaction — January 20, 2015 11:28 pm
  2. (Update January 20) Where does SNB intervene against overvalued CHF and where do they sell EUR&USD? — January 15, 2015 2:09 pm
  3. Leading Swiss Monetary Policy Economist Proposes Dollar-Euro Minimum Rate Basket Instead Euro Floor — January 11, 2015 9:25 pm
  4. German Home Prices are Quickly Recovering the Gap against French ones — December 29, 2014 10:48 am
  5. Happy Xmas Lars von Trier — December 24, 2014 5:23 pm

Most commented posts

  1. Isn’t it wonderful to trade with a strong central bank behind you? — 10 comments
  2. Can The SNB Make Profit On Currency Reserves ? — 10 comments
  3. Main US Economic Indicators — 7 comments
  4. What’s this crazy movement in EUR/CHF ? SNB Floor Hike ? — 6 comments
  5. Ron Paul: Will The Swiss Vote to Get Their Gold Back? — 4 comments

Author's posts listings

What Caused The SNB Financial Tsunami? Three Reasons, One Trigger, One Chain Reaction

In this post we give our (Swiss) view for the financial tsunami on January 15.
The SNB has preferred its secondary mandate, namely financial stability, and the elimination of risks on its own balance sheet caused by ECB QE.
It will not obey its primary target, price inflation, for the next three to five years. While in the mid-term (5 -10 years) inflation should move up.
Differing perceptions between Switzerland and the Anglophone world about “price stability in the medium and long-term” is the second explanation for the financial tsunami.
The massive trade surplus of 10% of GDP is the third reason.

Permanent link to this article: http://snbchf.com/2015/01/swiss-financial-tsunami/

(Update January 20) Where does SNB intervene against overvalued CHF and where do they sell EUR&USD?

Update January 20: The EUR/CHF of 1.00 got easily broken. This makes it clear that the SNB is not selling Euros at parity. The Swiss finance minister suggested that they are happy with 1.10, moreover Jordan and the member of the board of directors Lengwiler sounded quite confident in their NZZ interviews (Jordan here and …

Continue reading »

Permanent link to this article: http://snbchf.com/2015/01/end-chf-cap-snb-intervene/

Leading Swiss Monetary Policy Economist Proposes Dollar-Euro Minimum Rate Basket Instead Euro Floor

The most important voice in Swiss monetary policy, Professor Ernst Baltensberger suggested that the Swiss National Bank (SNB) abandoned the minimum euro exchange rate and replaced it with a minimum rate basket that consists of dollars and euros.

Permanent link to this article: http://snbchf.com/2015/01/dollar-euro-minimum-rate-basket-baltensperger/

German Home Prices are Quickly Recovering the Gap against French ones

European national central banks released European household wealth reports in Spring 2013. According to that data, “median” German households were far poorer than many of their European counterparts. Based on 2012/2013 data we compared apartment prices and discovered that French prices were strongly overvalued or German ones undervalued.
We wanted to know if this is still the case in 2014 and integrated our 2012/2013 data with the one of 2014. We discovered that German home prices are quickly recovering their delay against French ones. Hence German wealth is ticking up again.

Permanent link to this article: http://snbchf.com/2014/12/german-home-prices-gap-france/

Happy Xmas Lars von Trier

Dear friends and readers, Christmas is family time. But since my blog is contrarian, you read here a contrarian family post by one my idols, Lars von Trier. I just want to thank all my loyal readers and followers for following and commenting on my blog and any discussion on Twitter. Since the blog is driven by …

Continue reading »

Permanent link to this article: http://snbchf.com/2014/12/happy-x-mas/

SNB Introduces Negative Rates, a Toothless Measure?

The Swiss National Bank has introduced negative interest rates. They apply only to sight deposits in excess of 20 times minimum reserves. Therefore they will affect hardly any bank and can be considered symbolic or even toothless. The view of the SNB is different.

Permanent link to this article: http://snbchf.com/2014/12/snb-introduces-teathless-negative-rates/

The Swiss Gold Referendum: An Analysis by George Dorgan

In a referendum the Swiss have to decide about:
1) Ecopop, a ecological-political movement that wants limit immigration to 0.2% of the population,
2) Abolish tax advantages for rich foreigners and
3) the gold initiative.
All three initiatives got rejected, the gold initiative by 78%. What does it mean for the Swiss Franc, the SNB and gold?
An analysis by George Dorgan

Permanent link to this article: http://snbchf.com/2014/12/gold-referendum-analysis/

Keith Weiner: SNB Must Keep Euro over 1.20 To Avoid Losses of Swiss Banks

The recognized Austrian economist Keith Weiner and the Wall Street Journal argue that the SNB must keep the euro over 1.20 in order maintain stability in the Swiss banking system. A rapid appreciation of the franc would create losses on the balance sheet of Swiss banks.

Permanent link to this article: http://snbchf.com/2014/11/euro-1-20-losses-swiss-banks/

Why was the gold price so low in 1999/2000?

To find further explanations as to why the gold price was weak in the late 1990s we analyze sector balances. Effectively private spending and private debt went in two different directions: a heavy increase in private spending and debt in the US against less growth in private spending and less debt in the rest of world. This combination fostered GDP growth in the US and weakened it in other countries. Real interest rates were positive. Markets thought that the debt-financed growth could continue for years; they created the dot com bubble on top of it that strengthened technology stocks and the related currency, the dollar. This rare situation led to excessively weak oil and gold prices.

Permanent link to this article: http://snbchf.com/2014/11/gold-price-low-2000/

Vier Meinungsgruppen im Schweizer Goldreferendum, eine Übersicht

Das Thema der “Abstimmungs-Arena” im Schweizer Fernsehen war „Gefährdet die Gold-Initiative die Handlungsfreiheit der SNB“? Dieser Blog versucht zu vermitteln, dass die SNB ihre Handlungsfreiheit im Sinne der Einhaltung der Preisstabilität schon im September 2011 verloren hat, als sie den Euro-Mindestkurs einführte.

Permanent link to this article: http://snbchf.com/2014/11/meinungsgruppen-goldinitiative/

Swiss Gold Referendum: Proponents Now Actively Fight SNB and Euro Floor

Latest gold referendum poll November 19: The latest poll shows 27% surely in favor of the gold initiative, 36% surely against the initiative. The most important development is the decision of the gold initiative to actively fight against the SNB’s minimum euro rate.

Permanent link to this article: http://snbchf.com/2014/11/gold-referendum-poll-snb-floor/

Peter Schiff’s Message to Switzerland: Preserve Your Wealth, Gold is Better than Pegging to the Euro

Peter Schiff, an Austrian economist who predicted the financial crisis urges the Swiss to preserve their wealth. Therefore, they should vote yes in the gold referendum. He thinks that buying gold is better than pegging to the euro. The Swiss will be better off if they possess a strong currency. Pegging to the euro implies that the Swiss Franc will become a new Italian Lira, Peseta or French Franc.

Permanent link to this article: http://snbchf.com/2014/11/peter-schiff-switzerland-gold-euro/

Swiss Gold Referendum: Opinion Polls

According to the latest polls 38% of voters would support the Swiss gold initiative, 47% are against it. The previous poll, recognized as more reliable, showed 45% pro gold and 38% against.
A win of the initiative would most probably imply a breakdown of the EUR/CHF floor.
According to the polls, low income groups are in favor. Effectively their purchasing power would increase when the CHF appreciates.
High income earners and stock owners are rather against it. If CHF improves Swiss stocks could collapse; this explains their voting intentions.

Permanent link to this article: http://snbchf.com/2014/11/swiss-gold-referendum-polls/

Place of Birth of New Ukrainian Leaders Cement the Country’s Move to the West and the EU

The place of birth of the Ukrainian leaders give us hints where the country is headed. Most of them come from the very West of Ukraine, from places that formerly were part of the Austrian-Hungarian empire, of Poland or Romania.

Permanent link to this article: http://snbchf.com/2014/10/place-birth-ukrainian-leaders-cement-countrys-move-west/

George Dorgan Presentation at the CFA Society

George Dorgan held a presentation at the CFA society in Zurich on September 1. The focus of his speech were Reasons why the EUR/CHF exchange rate will fall under 1.20 once the deflationary pressures in Europe have ended The missing link in the CFA program between its chapters on micro-economy, macro and currencies Does history repeat? From …

Continue reading »

Permanent link to this article: http://snbchf.com/2014/10/george-dorgan-cfa-society-zurich/

Ron Paul: Will The Swiss Vote to Get Their Gold Back?

On November 30th, voters in Switzerland will head to the polls to vote in a referendum on gold. On the ballot is a measure to prohibit the Swiss National Bank (SNB) from further gold sales, to repatriate Swiss-owned gold to Switzerland, and to mandate that gold make up at least 20 percent of the SNB’s …

Continue reading »

Permanent link to this article: http://snbchf.com/2014/09/ron-paul-swiss-gold-referendum/

The Dollar, the ISM, Buy American and Irrational Exuberance

In this Cross Asset Global Macro Analysis we name our reasons for the current dollar strength. The main causes are ECB’s euro “downtalk”, tight monetary policy in Emerging Markets, rising savings of the aging populations. This leads to weak global spending and growth. With the help of Fed-financed higher asset prices and falling gasoline prices, …

Continue reading »

Permanent link to this article: http://snbchf.com/2014/09/dollar-ism-irrational-exuberance/

The Best Contrarian Macro Investment: Russia?

We name thirteen macro-economic reasons why Russia is currently the best place for contrarian investments.

Permanent link to this article: http://snbchf.com/2014/08/best-contrarian-investment-russia/

SNB Results Q2/2014: Draghi’s Weak Euro Policy, a Nice Gift for the SNB, for Now

The ECB commitment to a weak euro and the maintenance of ultra-low interest rates, was a nice (temporary) gift for the Swiss National Bank (SNB). The bank earned nearly 12 billion francs in Q2/2014.

Continue reading »

Permanent link to this article: http://snbchf.com/2014/07/weak-euro-nice-gift-for-snb/

Contrarian Investment, FX Rates and the Misleading Concept Called GDP

We extended and improved our existing post to contrarian investing. It was published on Seeking Alpha. We are pleased that it was awarded the Editor’s Pick.
Gross Domestic Product(ion) is (or has become) a measurement of activity and consumption, but not of capital accumulation and production.
In many cases, GDP growth is negatively correlated to saving. Higher savings (aka austerity) leads to lower GDP growth today, but to higher GDP in the future. In its worst case, GDP growth could be completely based on credit, eliminating the capital basis of a country (example Greece).
FX rates are less driven by GDP but by savings and investments, in particular on the corporate side, by investors and micro-economic indicators.
In addition to micro-economic indicators like price to cash flow or price to book ratio, the saving rate is the best macro-economic indicator of the investment style called “contrarian investing.”

Permanent link to this article: http://snbchf.com/2014/07/fx-rates-misleading-concept-called-gdp/

Page 112345...1020...Last »