Special Collage
The parties' philosophical-political "of my recent articles on economics liked, so I find it useful to combine them in a special Special for easy reading.
What makes this unique period and especially dangerous for systemic is that the speculative mania reached its zenith in sophisticated private credit, which have no transparency and moved without any formal control by committees of business ( central banks). What matters is not so much the percentage increases on the instruments traditional, but the enormous accumulation of small profit differentials (spreads) to tens of trillions of dollars of leverage in structured credit instruments. The soul of the maniacal is only Electronics and speculation over the counter, "that is outside the regulations listed markets where transit stocks, bonds, etc.. And is managed solely by powerful international banks, not by chance that tend to blend together in order to amplify the ability to make this unprecedented speculation and that is invisible to the masses.
The financial system must continue to expand more rapidly and to maintain the growing pyramid of debt underlying, supporting income and profits, ergo the real economy. As is now obvious, this type of credit expansion does nothing but add new excess dollar liquidity that already exists. The Ponzi scheme (to pay the debt by other debts) can not last forever, at some point you reach the limit: you have to borrow even to pay interest on existing debt. And while it lasts, it creates inflation. Suffice it to say that in 1980 a dollar of new debt created a new dollar of GDP today to have a new dollar of GDP, it takes $ 8 of new debt. That's why the inflation of value (gold) will continue to rise.
Therefore,
the focus must remain on the structural situation of unprecedented the world is experiencing. A report by the IMF certifies that the foreign exchange reserves of central banks as a whole increased from $ 2 trillion in 2000 to the current 5 trillion (not including another 40% of resources that might be deemed de facto reserves). The nominal value of derivatives has increased from 80 trillion to 370 trillion (to have an idea, the U.S. GDP is 12 trillion). It is no coincidence that in the meantime, the U.S. trade deficit has quadrupled. Central banks, beginning with those of emerging countries, are full of cash, which is multiplied by going through the credit system (this week, for example, it was learned that a new record of the growth has M3 also made the European Union, almost 11%). The great inflation of prices of capital assets that we are witnessing, is the effect actually visible. The synchronized growth of credit, the U.S. deficit, dollar flows, speculation lever could not have done if central banks had not taken the real interest rates to minimal levels when non-negative, and acted as buyers of last Wasghinton instance in print: in 2006 only increased their reserves of 1 trillion, and in 2007 it is traveling at a rate of +30%. In particular, the exponential boom in derivatives over the counter "could happen only through the action of recycling dollars by central banks: can count on this safety net has enhanced the ability speculative, the acceptance of ever-higher risks and therefore the elimination of the risk premium by the global system. Have eliminated the risk of borrowing in the yen exchange rate, is the clearest example of this degeneration "moral" rather than economic and financial gambling is immoral.
the focus must remain on the structural situation of unprecedented the world is experiencing. A report by the IMF certifies that the foreign exchange reserves of central banks as a whole increased from $ 2 trillion in 2000 to the current 5 trillion (not including another 40% of resources that might be deemed de facto reserves). The nominal value of derivatives has increased from 80 trillion to 370 trillion (to have an idea, the U.S. GDP is 12 trillion). It is no coincidence that in the meantime, the U.S. trade deficit has quadrupled. Central banks, beginning with those of emerging countries, are full of cash, which is multiplied by going through the credit system (this week, for example, it was learned that a new record of the growth has M3 also made the European Union, almost 11%). The great inflation of prices of capital assets that we are witnessing, is the effect actually visible. The synchronized growth of credit, the U.S. deficit, dollar flows, speculation lever could not have done if central banks had not taken the real interest rates to minimal levels when non-negative, and acted as buyers of last Wasghinton instance in print: in 2006 only increased their reserves of 1 trillion, and in 2007 it is traveling at a rate of +30%. In particular, the exponential boom in derivatives over the counter "could happen only through the action of recycling dollars by central banks: can count on this safety net has enhanced the ability speculative, the acceptance of ever-higher risks and therefore the elimination of the risk premium by the global system. Have eliminated the risk of borrowing in the yen exchange rate, is the clearest example of this degeneration "moral" rather than economic and financial gambling is immoral.
Even more important is to understand the genetic mutation of the coin and philosophy sottostante.Come a cancer cell, money - from tangible goods used to facilitate the production and trade in goods and services between people - has turned into a intangible Trust Act, which killed the mechanism autoriequilibrante precisely the link that allowed systemic production and trade. In a world based on a tangible commodity money such as gold, it would be impossible for a country to accumulate indefinitely in a trade deficit with the rest of the world, because sooner or later the gold reserves of the country end up: at that point no one
sell the goods for nothing, and the country would be forced to reduce its excess of imports, and indeed should force at all costs to sell more than buy in order to replenish the reserves in gold.
So a mechanism that tends to rebalance.
But in a world based on an intangible currency, the dollar, it is possible for the country prints accumulate a deficit indefinitely until the rest of the world continues to "trust" and as the dollars earned are returned to the country of origin in order to maximize its performance, not only is there no more balancing on the contrary it is to enhance the imbalance original (via artificially low interest rates, capital inflows, etc.).. The fact is that the perverse act depends primarily on the trustee conception of self-interest of one who does trust, rather than the merits of foster care .
And here we come to the crucial philosophical point.
From the "invisible hand" postulated by Adam Smith - a moral philosopher of the 18th century in his monumental work The Wealth Nations ("do not expect good bread from the baker's good heart, but his selfishness .."), why capitalism based on perfectly competitive general well-being produced using self-interest - we are now past the" visible hand " oligopolistic capitalism that transforms the individual interest and selfishness in general malaise. In particular, making the price of money (interest rate) subject to dirigiste decision by the issuer, and no longer subject to free the law of supply and demand, has made national interests conflict short term, with the general interest of the long term. Just think of the competitive devaluations of currencies in which all are competing to export more to devalue. The Japanese, for example, take the negative real interest rates and the exchange rate of its currency devalued because they think they do their own self-interest national (support for exports, domestic demand, etc..), But in doing so create a blatant distortion Global enormous size that it is against the public interest: the chance immorale.E 'the key point we are talking about little or nothing (and the rest who should say? the financial industry, which is the beneficiary?) . Everything else is just the surface manifestations of this reality that is deep in the bowels of the current system, and that one day you will pay the bill (salty).
Less competition, more profits. A few international centers of power: management easier and more effective. Among some no more than one mega bank worldwide. After all anyone, if it were at the top of the dome, what do you prefer? control a handful of powerful heads of households, or a lot of loose dogs more or less? It 'been so since the world and the world, in various forms, but with the same substance. Therefore, liberal capitalism, based on perfect competition and the absence of monopolies and oligopolies (the best invention of the socio-economic human thought), could not last, it was a utopia as the Sun City of Thomas More. Instead monopoly capitalism has triumphed in planning central iron regime as the case may be Communist or fascist, or disguised as "democracy" (the term most cursed the world after God) technology, as dazzling as an advertisement, to better exploit the ignorant masses.
However, if this was the winning model, more adapted to human beings, there would have to take note of that. Too bad, though, is leading the planet quickly, which is designed like a great bubble gum blowing in which all types of poisons produced by lungs full of selfishness and greed, unlimited physical self-destruction.
PS: I have never deliberately said "politics" because the tissue would like to mention about a review on the direction of Striscia la Notizia. I do not see even as a Marxian superstructure of memory (too much honor), but simply as a doormat on which the economic powers rub mud on their shoes before returning home.
PS: I have never deliberately said "politics" because the tissue would like to mention about a review on the direction of Striscia la Notizia. I do not see even as a Marxian superstructure of memory (too much honor), but simply as a doormat on which the economic powers rub mud on their shoes before returning home.
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