The impending Age Of Abundance was prophecied in the scriptures thousands of years ago.
Monday, July 07, 2014
Sunday, July 06, 2014
Global Finance: Still A Mess
The biggest tragedy of the 2008 recession was not the pain of the recession, painful as it was, but that the world did not rise up to the challenge and rearchitect the global financial system. Now it might be too late, because the major part of the crisis is over.
The global monetary system: Not floating, but flailing
Renewed Calls From China For a Global Super-Currency To Replace "Bretton Woods II"
The Global Importance Of Paul Volcker's Call For A 'New Bretton Woods'
The global monetary system: Not floating, but flailing
Global commerce has long faced a fundamental tension: the more certainty countries create around exchange rates, the less room they have to manage domestic economic affairs. Thirty years before Bretton Woods a war wrecked the world’s first stab at the problem—the gold standard—and the attempt to rebuild it in the 1920s led to depression and another war. The exchange-rate system agreed at Bretton Woods lasted only a generation. After 150 years of experimentation the world has yet to solve its monetary problem. ...... Developing countries also found pegs hard to resist. Fixed exchange rates can encourage monetary discipline and tame inflation—a common emerging-world problem—while reducing borrowing costs. Yet too often pegs ended painfully, as overindebted economies found it impossible to maintain the discipline needed to protect them. Markets pounced, initiating crises and forcing devaluations—most dramatically in the Asian financial crisis of 1997-8. ..... Emerging economies have instead shifted toward managed rates maintained through market intervention. China, the world’s second-largest economy, is a particularly energetic manipulator of its currency, and has at times used an outright dollar peg. As a result over half of global economic activity is concentrated within two massive single-currency blocs. ...... The aversion to floating is a puzzle. Fixed rates can reduce borrowing costs, but the result is often a debt-binge and crisis. Modern technology reduces currency transaction costs. IMF research finds that flexible exchange rates reduce vulnerability to both macroeconomic and financial crises. ...... economies with floating currencies did better in the global financial crisis and its aftermath. ..... China claims to be gradually freeing its capital account and encouraging trade denominated in yuan. That may finally bring down the curtain on the dollar era initiated by Bretton Woods. Yet in practice China is reluctant to give up the perceived safety of a managed exchange rate. Gold habits are hard to break.
Renewed Calls From China For a Global Super-Currency To Replace "Bretton Woods II"
a 'super-currency' for international trade, and not to replace any currencies for domestic use. ..... The World Bank's former chief economist wants to replace the US dollar with a single global super-currency, saying it will create a more stable global financial system. ...... expanding the basket of major reserve currencies — the dollar, the euro, the Japanese yen and pound sterling — will not address the consequences of a financial crisis. ....... Internationalizing the Chinese currency is not the answer ....... Lin urged the international community, especially the US and European Union, to play a leading role in currency and infrastructure initiatives. To boost the global economy, he proposed the launch of a "global infrastructure initiative" to remove development bottlenecks in poor and developing countries, a measure he said would also offer opportunities for advanced economies. ........ The concept of a global "super currency" tied to a basket of currencies has been periodically discussed by world leaders as well as endorsed by 2001 Nobel Memorial Prize-winner Joseph Stiglitz. ...... "A supranational currency may be a new direction for development of the global financial system. It also requires different countries to cooperate in coordinating macroeconomic policies..."
The Global Importance Of Paul Volcker's Call For A 'New Bretton Woods'
The recovery of trade, the opening of financial markets, and the lifting of controls on current accounts led in the 1950’s and 60’s to sustained growth and stability. ...... the absence of an official, rules-based cooperatively managed, monetary system has not been a great success. In fact, international financial crises seem at least as frequent and more destructive in impeding economic stability and growth........ The United States, in particular, had in the 1970’s an unhappy decade of inflation ending in stagflation. The major Latin American debt crisis followed in the 1980’s. There was a serious banking crisis late in that decade, followed by a new Mexican crisis, and then the really big and damaging Asian crisis. Less than a decade later, it was capped by the financial crisis of the 2007-2009 period and the great Recession. Not a pretty picture. ........ the fiduciary dollar standard has significantly underperformed both the Bretton Woods gold exchange standard and the classical gold standard in every major category ...... The number of banking crises per year has soared to 2.6 per year, compared to only one every ten years under Bretton WoodsThe G20 must look beyond Bretton Woods II
Brazil’s Cup
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| The Unisphere, built for the 1964 New York World's Fair, in Flushing Meadows Corona Park, Queens, New York City (Photo credit: Wikipedia) |
James (Ha-mez) of Colombia crying after losing to Brazil made my eyes wet. A Brazilian took off his shirt and gave it to James. That was perhaps the most beautiful sight of the entire tournament.
The ugliest happened only moments before that. The attack on Neymar was a knee to backbone deliberate, premeditated attack. It was an immediate red card. This was criminal behavior. The whole world saw, but the referee did not. There was not even a foul called.
Messi is methodical when slow, and magical when fast. When he is about to score, the pace of the game quickens.
Politics is my sports to watch. But I do watch World Cup Soccer, not even the Olympics so much. Brazil is the team I root for by default. It can be argued I am still rooting for Pele, the undisputed all time great.
Soccer is to Brazil that cricket is to India. It is like religion. It is such a big part of the country’s culture.
The US team to make it to the round of 16: it has come a long way. It might even win the cup by 2030. An entire generation of Americans will have to embrace the game if the country is to have a shot at the Cup. It does not come easy. You sure can not throw money at it and make it happen.
Soccer is the simplest game. You just need a ball. You can play it anywhere.
Although refereeing will have to go high tech. You can’t let a crime watched by half the world go unpunished. That sends bad signals.
There are not enough cameras in the stadium. There are not enough cameras looking at the fans. It is fun to watch people watch soccer. There are not enough cameras following the ball, and the teams. World Cup viewing is still in the age of television. It is like the Internet has not arrived yet. World Cup viewing has to be taken to the age of the Internet. The age of mishmashing of videos has arrived.
FIFA needs to brought to the 21st century. Its ways are still archaic. There is not enough fluidity at the top levels of the organization. More dynamism would help.
During the Brazil-Colombia game, the Brazilian team gave an outstanding performance. The team was liquid, especially in the first half. I don’t remember seeing soccer that good the last time. It helped that I was at a bar that seemed to have collected what felt like 1,000 Colombians. I was rooting for Brazil, but was quiet about it.
World Cup Soccer is the ultimate festival on the planet. These are movie stars dancing on our TV screens. The all time greats are still alive and kicking. Kind of like the village in Gabriel Garcia Marquez’ One Hundred Years Of Solitude where no one has died yet.
Sometimes when I watch I get flashbacks in my mind of my average soccer skills during high school days. I made it into the teams but was not a star player. I played defense. The idea would be to kick the ball hard in the other direction. That is rudimentary. You have to possess the ball, you have to pass the ball.
By now I play mental soccer. I try to think like the stars. I try to imagine scenarios.I try to stratetize. I think there is room for that.
Watching the World Cup can also give you energy for your own simple workouts. I bought a soccer ball and made a few trips to the Flushing Meadows Corona Park just to be able to dribble around. The giant globe in the park is apt metaphor for the global appeal of the game.
I hear soccer is religion in Brazil.
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