4. State of the Economy
The greatest danger is not unemployment the size of Europeans, Americans. The great recession in 1930 we have witnessed, many experience gained, many theories written, many solutions ready to be tested.
This is not about poverty, this is not about lack of funds.
This is about:
1. The number of excessive labor, India, China, is unprecedented.
2. 30 years of electronics boom has created wealth of magnitude unprecedented. With productive Chinese-Indian labor, this wealth creation is now sky rocketing[1]. This wealth will make money flooding every channel. In same report it was stated that Allan Greenspan will become the least powerful person, when interest rate is close to zero, money is freely available. He could no longer use Monetary Policy to effectively moderate market unless he ventured into negative interest rate.
3. When there is no new technological challenge, the intellects using their complex brains, created a new field, Financial Engineering. They repackage high-risk assets into sub-prime tradable. This already defies the primary principle of
a. Engineering – reduce intermediaries to improve efficiency and through put,
b. Management – Transparency & Accountability.
This complexity seduced a lot of interested parties holding real cash, wealth. Good quality assets are made to support poor quality debts. This not only insulated banks from high risk lending, this boosted the values of financial institutions. This bloated already excessive wealth into gigantic Goliath. This explained how Financial Institutions, a means for improve market efficiency, lower cost of wealth generation, eventually earn 3 times the return of real wealth generator.
The greatest danger is not unemployment the size of Europeans, Americans. The great recession in 1930 we have witnessed, many experience gained, many theories written, many solutions ready to be tested.
This is not about poverty, this is not about lack of funds.
This is about:
1. The number of excessive labor, India, China, is unprecedented.
2. 30 years of electronics boom has created wealth of magnitude unprecedented. With productive Chinese-Indian labor, this wealth creation is now sky rocketing[1]. This wealth will make money flooding every channel. In same report it was stated that Allan Greenspan will become the least powerful person, when interest rate is close to zero, money is freely available. He could no longer use Monetary Policy to effectively moderate market unless he ventured into negative interest rate.
3. When there is no new technological challenge, the intellects using their complex brains, created a new field, Financial Engineering. They repackage high-risk assets into sub-prime tradable. This already defies the primary principle of
a. Engineering – reduce intermediaries to improve efficiency and through put,
b. Management – Transparency & Accountability.
This complexity seduced a lot of interested parties holding real cash, wealth. Good quality assets are made to support poor quality debts. This not only insulated banks from high risk lending, this boosted the values of financial institutions. This bloated already excessive wealth into gigantic Goliath. This explained how Financial Institutions, a means for improve market efficiency, lower cost of wealth generation, eventually earn 3 times the return of real wealth generator.
This is garbage wrapped in pretty gift boxes.
Those who think it is Christmas, found dynamites place in their socks.
4. Globalization provided the vehicle for the eyes of the wealthy, to exert his finger of inflation, to escalate at his fancy, the price of every plot of land, every piece of arts, every head of athletics, even every cake of tea, every gram of chocolate.
These four points clearly stated today’s economy is supported by excessive labor, over-abundance of wealth, AND fabrication of wealth from debts.
Its reach is all-penetrating, its effect is excessive; its consequences are long lasting. It is not bubble.
So we must determine what is a greater danger?
Is it powerless, easily burst bubble?
Is it solid gold gilded dynamite?
It is indeed this over-abundance wealth that found no place to invest.
This over-abundance wealth is moving into every corner of the world, moving every item that can change hand, physical, virtual, real, fabricated, existing, will never exist…….
[1] US$1.2 trillion foreign exchange, increasing at $1billion every day, EIU, NY, May 25, 2007
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