Showing posts from March, 2009

A Single Global Currency, A Global New Deal, A Global Economic Council

Single Currency

The proposal on the table does not have street value. It only is to do with reserve value. The person on the street will not find a new currency in hand. The change would only affect the major institutions of global finance, primarily the central banks of the world. The very long term goal might be to end up with a single global currency that does have street value, because the market of currencies is quite a nuisance, if you think about it.

It is like this, ultimately, down the line, in the distant future, you can not have five powers wielding veto at the UN. The General Assembly, redesigned, will have to have all the power. That would make for a much more efficient global political architecture.

Even the current proposal is not meant for immediate implementation. But homework on it has to begin. Now is good time.

Global New Deal

If a stimulus plan is right for America, it is right for the world. The global economy asks for some shock therapy treatment. Something big need…

A Brighter Future Ahead

Image via WikipediaBig Crisis = Big Opportunity

I am for a second trillion dollar stimulus package. It was not the New Deal, but World War II that got America out of the flunk last time. We can't have a world war, but we sure can have a second stimulus package. And this second stimulus package has to have global dimensions.

Anatomy Of A Crisis

Money poured into America because the American banks were thought to be the safest for the elites around the world. What did they know? The American bankers did not know what to do with all this flush cash. So they started running ponzy schemes, legal ponzy schemes, subprime mortgage backed securities, credit default swaps, what have you.

The problem in the world is not too much capital, but too little. But the architecture of global finance made it look like there was too much capital, too few capital outlets. And so all that extra money went on to create a housing bubble. This was not exactly wealth creation, but it got counted as wealth crea…

Old White Men Need To Chew Gum

Obama's Reform Agenda: Is He Trying to Do Too Much? TIME Mar 11, 2009‎ Buffett was — and is — an Obama supporter, but he took to the airwaves on March 9 to try to seize the young President's attention away from health care and education and energy and refocus it back onto the economy. Warning that Obama's agenda has become too sprawling and provocative, Buffett admonished, "Job 1 is to win the war, the economic war. Job 2 is to win the economic war — and Job 3." He added, "You can't expect people to unite behind you if you're trying to jam a whole bunch of things down their throat." The oracle's verdict was quickly endorsed by Jack Welch and Andrew Grove, retired CEOs of General Electric and Intel, respectively. And from Federal ReserveChairmanBen Bernanke came this measured nudge: "Until we stabilize the financial system, a sustainable economic recovery will remain out of reach." ........ Obama fired back the same day. "I kn…

Making Sense Of A Mega Mess

What Went Wrong?

A financial 9/11 happened. The unthinkable happened. The unpredicted happened. Banks stopped lending money. The bottom fell. This is about the fourth time it has happened. Something like this seems to happen every 70 years. So it's a cycle. After each such crisis, there is major renewal and resurgence, and things are better than ever before.

What Really Went Wrong?

China lent big money to an American president to wage a war it should never have waged. It was a big time deficit war. There was flush cash in the American banking system. Elites in the not America countries seem to think money is safer on Wall Street. What did they know? Instead of investing locally they stash it away in the safe havens of Wall Street. But taking in money is only a small part of what banks do. They also have to lend money. That is how they make money. So they came up with really complex financial instruments: mortgage backed securities. So more mortgages means more such securities, more f…