This is a good time to reorganize the logistics of physical deliverables for future projects and step up your game when it comes to how you view and understand how alternative energy works.
The OECD (Organization for Economic Cooperation and Development) has empirically argued that those countries where women are attaining an equal voice in legislature are leading the charge in creating a higher quality of life and healthcare reformation.
As the strongest economy on the globe, the United States is falling far behind in the war for better wellbeing. Could this failure be partially due to the United States Congress, which is comprised of 19% women out of the 535 membership?
The United States has a life expectancy gap in relation to other OECD countries. Yet we consistently tout the wellness of our current healthcare system. While it fails to address the needs and cut public funding, for the most underserved…women and children.
Amongst many in leadership, there’s a dismissal in how women can play a significant role in how healthcare providers tailor wellbeing. That path to gender fluid legislature is arduous and complicated, pebbled by male centric sovereign politics. We find ourselves part of a third world economic dysfunction when we elect few women in our legislative bodies. Alleviating this societal injury is necessary to bringing about true healthcare parity.
One country has taken great strides toward gender equality in its government, Finland.
This nation boasts a healthy 38% of female presence in its parliament and leads the world in healthcare reform. It is by far more empathetic to the needs of women and children.
Elected in 2000, Tarja Halonen was Finland’s first elected woman to the office of president. Serving in office for two terms, her legacy was to achieve a successful balanced economy. An important part of this responsible fiscal reconstruction was the reformation of their health care system.
Envisioning a robust, value driven and cost effective medical system, President Halonen embraced the principals outlined in a Harvard business thesis, “Redefining Health Care: Creating Value-Based Competition on Results”. The Harvard team of Michael Porter and Elizabeth Olmsted Teisberg authors the study. The book illustrates how most purveyors of private healthcare have failed to deliver a system of value-based care.
Normal economic ideology dictates that aggressive competition in private sector business results in a lowering of prices and an increase in the value of that service. Private and governmental run healthcare agencies in the U.S. are the costliest in the world and supply the poorest quality in its deliverance of care. Finland‘s success in providing gender parity in a valued based healthcare system, is attributed to a strong percentage of women in parliament; a healthy 38 percent.
In 2007, the United States spent $7,290 per capita for an inadequate healthcare system. This number is a staggering two and a half times the average of OECD countries. The OECD places an average of per capita healthcare expenditures at $2,984. The CIA World Factbook has ranked the Unites States 41 in infant mortality rates and 46th for total life expectancy.
This rate of infant mortality defines a healthcare system that fails to provide adequate means of preventive medicine. Poor prenatal care results in low birth weights and bleak infant survivability. What does this say about the future of our economy the future of our country?
If you think that Brexit outcomes will have little effect on small and/or mid-cap projects…consider this.
Using Forex to forecast foreign currency behavior can keep managing costs of projects agile. Coping with the unforeseen or getting to know currency market unknowable(s) in an age where the global paradigm rewards anticipators of currency shifts, is smart. But ignoring market sentiment’s influence on currency punishes those who rely on the traditional quantitative malaise. Brexit stands as an example of how social outcomes are factors that can shift project costs.
- Shadow bankinginfluences 85% of daily loan activity and is a major participant in traditional short-term commercial paper trade. Currency rates fluctuate at any moment and influence financial market behavior. Whether an upscale clothing and accessories chain or a business that provisions global services. The price of renting money to meet daily operational cost and or fund a project may change in a heartbeat due to changes in global currencies and the interpretations of Forex trading. Phenomenon like Brexit will alter the behavior of shadow banking and its partnerships.
- No matter the size of our project funds, the troubles of large global banking institutions, like Germany’s Deutsche Bank, can influence the availability and cost of preserving global liquidity.
- There is anticipation of a Brexit led relocation of banks with the accompanying brain drain from the UK. It will have a ripple effect throughout local economies.
- Contrary to current indicators of sustained economic growth, a recession will rear its head. A delimited pound will play itself out within the next year and will influence other global monies.
- Realignment of trade agreements, influences of tariffs and the costs of imports play an important role in cost of supply. Will your supplier pass that additional cost down to you?
- Even after finalization of the Article 50 agreement, the years of negotiating the messy divorce will and has diverted energy from the economy as it realigns trade agreements. Nervous businesses are already looking to reassert old trade agreements and create new ones inside and outside of the EU.
- While the Brexit event has lowered pound value, making exports cheaper, supply side economics will soon slow the pace of good news markets.
Next to the US dollar and Euro, the pound is widely used globally as legal tender for goods and services. Sovereign currencies pegged to the Euro and the sterling will experience the slowing markets first. Costs to ongoing projects will be at the whim of changes in expenditures to supply and will influence demand.
- In 2013, the EU had a population of 210 million making it the second most traded currency in the world. According to the IMF, the Eurozone has the second largest economy in the world. Because UK is a major trader within the single market, the Brexit will have implications to global monetary markets for generations. It would be pure folly to ignore Forex forecast of currency trends.
- By reciprocal agreements with larger global banks and shadow institutions, all US banks have some exposure to European financial systems. Hedging rules apply. The further out to completion of project the heavier the risks to rate changes. Forex can alert project managers of changes in the fundamentals effecting rate changes.
Think about this. A sovereign’s coin is like a living organ that is reactive to any social or political irritant. While tracking hourly journals of Forex markets will not satisfy all of your quantitative efforts, it is an excellent bell weather of how foreign currencies may influence your project scope.
The science of Forex forecasting offers the advantages of anticipating trending costs over the life of a project. That keeps a Project Manager nimble. Consider this. Market sentiment will increasingly shift global monetary performance. As in the Brexit, which has forever changed how we anticipate human economic behavior and its influence on money.
The growing phenomenon of global socialism and protectionism influences the paradigm paralysis or the failure to recognize how current models of thinking are dominating investor behavior. This has become an important component of how data models are failing at predicting asset price behavior across the globe. While age-old ideas centered on quantitative modeling, number crunching, and reviews of comparatives of past performance is still widely used. Quantitative analysts ignore the nascent economic concepts that actually drive and predict pricing. This new construct is human behavior.
Simply put. Any asset price is a function of quantitative information and human behavior. Prices and yields are predictive of quantitative fundamentals and behavioral economics.
We use Human Behavioral Economics scoring, to capture and quantify sentimental data. Our calculation methodology and its component scoring are proprietary. It behaves as an instrument that captures each overt and subtle human sentiment operational in trading markets. Human Behavior Economics is a method that quantifies the subtle differences between what investors say, think and their actions.
Investment management absent Human Behavior Analytics using rules based on standalone quantitative modeling merely represents sub substandard and outdated modes of investment management.
Earlier market traders centered on antiquated quantative correlative modeling that no longer work and are yielding abysmal returns.
In delivering alpha, traditional quant analysts follow truths based on mathematics and statistical analysis. This approach merely verifies and group together evidentiary financial shifts. It ignores the fundamental proof of Human Behavior Economics while fueling trends in pre-boxed analytics. Current methodologies of investment has reached its peak and has exhausted its outperformers or the select few.
Before considering this new investment strategy, first initialize an honest analytical compilation of your portfolio’s performance. In addition, think how the historic predictors of currency behavior was brought on by social influencers, as an unexpected Brexit. This socialistic event changed forever global investment behavior. So in order to solve for social unknowns a new approach to quantifying human behavior must translate into a viable vehicle for a sound investment strategy.
This wealth building approach starts by exploring how we quantify herd mentality that alters investment sentiment. Many strategists understand the importance of quantifying how market sentiment acts on and translates into a viable tool for investment growth. Nevertheless, many fail to produce a measurement of market sentiment that will change incrementally wealth outcomes. That approach requires the next generation in behavioral predictors.
Human behavior analysis or human psychology is that meme upon which investment behavior should be reliant on and up until now, it only represented unstructured information. To become useful this information must undergo vetting and a cleaning up of unusable statistics. Raw data becomes usable information and enabled for conversion into a myriad of valuable quantitative tools ready for investment analysis. This is where the new breed of human behavior analytics in investment planning plays an important role.
There are many investor sentiment indicators and analytical tools available, but are they able to capture the real essence of human behavior analytics. In addition, are these investment applications able to exhibit an in-depth understanding of the constant shifts in current financial sentiment?
Barbara Cerda, Editor
There are few countries unaffected by the surprise win of President Elect Donald J Trump. His campaign spared no one the divisive proclamations meant to frighten, divide to conquer and gain attention.
For millions of Progressives and Liberals of every faith and nationality there is a feeling that can only be described as a dis-ease. What other explanation can explain the sense of anxiety and hopeless malaise in anticipation of what is to come in a Trump America.
The political arc now bends toward the extreme right in Washington DC. Global tribalism has set up shop in America. Bringing with it an anticipated rolling back of decades of struggle to win policies friendly to the disenfranchised and suppression of the science of climate change. His disavowing of hard-earned trade agreements seduces the dark specter of isolationism.
As we draw closer to Inauguration day, people are increasingly convinced that the campaigner Donald Trump will make good his harsh populist promises. In the days following his election victory, each choice of cabinet appointee reinforces the need for millions of Americans to join the world in exploring places for safe harbor, a place for what Tony Blair calls the “political homeless”, or perhaps a Calexit or Calicadia.
Perceived wealth is what the PEOTUS has used to sway political power. The same holds true for the value of American currency. Wall Street is a thin-skinned warrior that takes offence at the slightest uncertainty. We are the world’s largest consumer market with the biggest most successful economic experiment. Renegotiating our export and import agreements as well as threatening the efficacy of our immigration policy threatens to rip the socio- economic fabric of states like California. Nevertheless, just a scent of a successful coming of a split between Washington and a quarter of the country and its contributing GDP will send global markets reeling. Because the states demanding release from their agreements to stay as part of the union will own a GDP placing them 5th or 6th on the list of world economies, tied to France.
We have become a nation of political hegemony.
We are no longer a country of dual political parties. We have elected the gatekeepers away. Democracy has declined. Xenophobia’s influence on our economy will soon bear the costs of following its political dictates. Middle income and impoverished Americans will feel the outcomes first as social programs intermittently experience privatization.
SCOTUS will soon have the ability to reinterpret constitutional language for a host of political reasons. So to expect a country that is largely progressive to remain silent is not realistic. If California has its way, other states sitting on the fence will be compelled to follow suit and enact their own solutions to exit the union. This will definitely create a nation of independent states that may resemble a redefined EU, each with its own ideologies and sovereign laws. The loser in the final analysis will be the United States of America. Here is why it would be so very hard to achieve a Calexit or Calicadia.
Campaign Rhetoric laced with racial animus fueled an election while dividing a country along huge fault lines between Liberal and extreme Conservative ideologies.
The GOP party’s denouncement of lenient immigration policies was a successful distraction in winning control of Washington DC. But they failed to take into account the populace views in the successful states of Silicon Valley and Washington State. They take these conservative pronouncements seriously. Comprehensive immigration feeds the wealth of talent that created the cash cows of tech industries. They also happen to be the bastions of Liberal think tanks. Loosing these states from the union would constitute a huge brain drain while dealing a hard blow to the national GDP.
If California and other states achieve an exit from the union, an added benefit would be a clear path to renegotiate their own version of TPP. Emerging markets and the EU would welcome the opportunity to reignite a new and different trade deal, if assured that a mature government and a strong emerging economy was forming. Calexit or Calicadia would become a major avenue into the globes largest and fastest growing consumer markets in Asia. There will be little to restrain negotiating open borders between Mexico and Canada.
Consider this. California is part of a group of states that lies between the Pacific Ocean and the rest of the world. Almost 62% of Californians voted for Hillary Clinton in 2016. Median Income is $61,000. Californians pay more federal taxes than any state in the union. Their GDP places them at 6th in global economies.
Their bank of technical brains bracing for the coming of a cultural regression in science and shrinking liberal democracy makes this large productive diverse culture convinced that their government holds little resemblance to the values held by its statehood. California’s exit has been in the planning for years.
The national GDP without California in 2015 was $15.5 trillion. California’s GDP is $2.4 trillion with a growth rate of 3.2%. A proposal from neighboring states to join in a succession or Calicadia would have a combined GDP, using 2015 numbers, of close to $3.2 trillion. This assures a very self-sustainable sovereign.
In order to achieve the feat of creating Camelot there must be a successful referendum vote and ratification from 38 states. But consider this. The impact on sovereign treasuries and loss of income to the United States would be hard. Only with some arbitrary leave buy out and/or a systematic reparation of loss of inherent commodities and tax incomes could we hope to unlink California and her neighboring states, not an impossibility but a strong disincentive. The US government can never willingly allow these exits to occur. Nevertheless, religious and racial tolerance has been the hallmark of our constituted group of states.
As we push our country further to an extreme regressive culture, its policies will force many to rethink where to live and survive. States that offer a more forgiving social climate will reap the economic rewards of talented and youthful communities. But the shear headwinds of creating a nascent nation’s economic policies, constitutional and social constructs and monetary policies will be dreadful to untangle from the United Sates and then reassemble. This would completely upend the US economy.
Since the end of the Civil War, no state has succeeded, let alone an entire block of states. Agreements struck at the end of the war were meant to keep sealed the union. Becoming self-governing is the easy part. Becoming a separate entity reflecting all the social nuances of Camelot is another thing altogether.
Part of the composition of what makes our country great is the maturity and stability of governance. Without that, the impact on global markets would be bad. Just a hint to the financial markets that such a thing is possible would forever change all things. The nominal value of our dollar (globally used as the currency of choice) would plummet. It would mean the end to the American powerhouse, as we know it. We have already signaled an enabling of a stronger China by threatened withdrawal from trade agreements. But the desire for an exit from the union serves as a reminder of other countries who chose a leave referendum.
At this writing, the UK’s Autumn Statement detailed the fact of an 82.6 percent to 87.3 percent increase to debt and a lowered GDP due to economic uncertainties from the Brexit.
Unexpected turns of political events driven by tribalism have become a real and present danger to global stability. Where aggressive and progressive fiscal policies have been lacking monetary policies have supported.
Bad actors are influencing our politics and the growing conservatism populace is upending economies. Is a Calicadia possible? Britons asked the same about a Brexit five years ago. Thanks to isolationists right-wingers like UKIP’s Nigel Farage, it became a reality. That same sentiment brings into stark relief all aspects of a Donald J Trump administration.
The uncertainty of isolationism haunts Europe as well with the alt-right populisms of France’s Marine Le Pen, and Francoise Fillon, Germany’s alt-right leader of Alternative für Deutschland Frauke Petry, and Austria’s Norbert Hofer promoting “Oexit”. Their isolationist movements once living on the fringe now threaten liberal democracies.
With renegotiations of tariffs, customs taxes, loss of wages, devaluing of currencies and migration of human capita. The distracting politics of xenophobia and isolationism carries a high economic price tag.
Mashable – “Today, we woke up feeling like strangers in a foreign land, because yesterday Americans expressed their views on a pluralistic and democratic society that are clearly inconsistent with the values of the people of California,” California Senate President Kevin de Leon and Assembly Speaker Anthony Rendon said in a joint statement. “We have never been more proud to be Californians.”
They added that the state would continue being a “refuge of justice and opportunity for people of all walks, talks, ages and aspirations – regardless of how you look, where you live, what language you speak, or who you love.”
“Any access to the common market comes with rules and obligations and one of those is freedom of movement for people,” Ayrault said at a press conference of Paris. “It is not a la carte.”
An argument for smart financial and economic regulation
I offered this piece to Surface Earth on Saturday, July 21, 2012. The solutions then are the solutions now. Most important it is not whether we change our policies and reconstruct our economic protocols…it is how. So far…as we enter the era of President Elect Donald Trump’s nascent administration, indicators are that those who looked to him for relief and change will be disappointed.
In those still moments of reflection we all enjoy imaging the quintessential living space that brings a smile to our lips; for many of us its hot summer nights sitting on a foot tapping porch. The night air is still with only the remnants of warm aromas of home cooking lingering in the air. In our memories are the small towns where the air rang with the rhythmic pats on foot tapping porches. To music accompanied by the harmonic twanging cords of “Salty Dog”. Soft breezes disturb the still heat that contain the smells of honey suckle. This conjures up long forgotten recollections of small towns called Mayberry that contained a Sheriff named Andy Taylor.
The fictional Mayberry R.F.D symbolizes a way of life where the simplicities of common sense economics companioned our daily lives, adding an elusive assurance that all was right.
It was the era of the 1950’s and 1960’s where Andy Griffith helped millions of us to understand that the simplicity of that life was vital and real. It was where a single dirt road led to the house of miserly Ben Weaver the fictional town’s only real estate baron and department store owner. Even Mayberry’s troublemaker Ernest T. Bass held a vital function in maintaining the delicate small rural town economic balance, in the selling and marketing of his moonshine.
When joining the savings club you got a new toaster for your trouble. The banker was your neighbor, realtor, and insurance agent, never your money broker or high finance investment advisor. The passing of Andy Griffith last week was emblematic of the death of a simpler monetary system. Andy Griffith was part of that down home Christian value system. The strong brilliant thread wove tight the fabric that cloaked our dreams. It was during this time that University of Chicago Economic Professor, Nobel Prize winner and Washington policy advisor Milton Freidman was teaching the concepts of the evils of creeping socialism.
Ernest T’s moonshine business was an example of unfettered capitalism. The government agents stalking him in the hills and woods of North Carolina was an early sign of encroaching government imposed socialism, the strangling hold of government regulation on “hooch”. Mayberry was a simplification of the economists’ model and illustration detailed by Adam Smith in his “Invisible Hand “. This concept framed much of what Mr. Friedman embraced. Let commerce reign free of regulations. The markets will dictate what quality is and what shapes the viability of a business. Mayberry was an economic model that demonstrated those concepts.
In Mayberry R.F.D. the veneers of safety, sound mortgage practices and foot-tapping porch homes holding their market value, reinforced our beliefs of future comfort.
Bank savings accounts and nest eggs would be there for generations. Decades later Savings and Loan Banks, unable to compete with the growing number of financial firms offering non-banking services and products were almost put out of business. The markets demonstrated that their viability in a changing global financial environment was not possible. Account holders heard threats of untold losses. Nevertheless, government intervention saved many nest eggs. Then came deregulation and multinational banks grew in unbelievable power.
A decade after the deregulation of banking, investment banker James “Jamie” Dimon, CEO of JP Morgan and non-resident of Main Street, admitted that through dishonesty his firm was suffering a loss of an estimated $4 billion. Then UK based Barclays, known for its clusters of banking businesses revealed cheating in mortgage indexes or LIBOR speculations. Globally dominant in both corporate and investment banking services they contain the largest group of wealth managers. Most recent disaster du jour is HSBC. It dominated business news when their monetary laundering and terrorists’ ties came to glaring light. Huge monetary exposures in the mismanagement of investment funds scandal or mortgage banking cheats have undermined the confidence of the populace in multinational or universal banks. Many politicians parrot the economic phrases of Economist Milton Freidman who spent a lifetime evaluating the reasons why banking should not be government regulated. In the event of another financial meltdown – much of the world’s wealth would be loss.
The regulation or deregulation of our financial institutions is not the only cause and effect of global economic stress.
Blame many of our economic woes on global structural unemployment. It swells liquidity artificially through social benefits like unemployment payments while not addressing the need for full employment. Nevertheless, the late Mr. Friedman shared that any intervention by any government-authorized regulator would merely strangle free enterprise. For example, he cites that when government regulatory artificially sets minimum wage for workers it hampers growth in the private sector. In allowing the job creators to set their own rate of pay, global employers like McDonalds would find it easier to hire more workers at lower hourly wages. Mr. Friedman offers that this is a means to economic stability. It is debated that as long as businesses flourishes under this aegis the society benefits. The realities that are missing are the facts of the burdens on societies in having too many marginalized and under trained laborers. This concept endangers the laborer by marginalizing through inadequate training and encouraging stagnation to upward mobility. This brings to stunning clarity today’s labor market suffering too few well-trained wage earners.
While non-regulated corporations are cultivating over paid executives and feeding a multiplying and greedy stockholder. Multinational corporations thrive.
Yet fiscal uncertainly, vis-à-vis congressional brinkmanship continues to plague projections to healthy outcomes in economic recoveries. A superficial review of Mr. Freidman’s arbitrary observations remains in question. Rather it would be better to cite that the central banks of the world must act as guardians of economies during periods where greed or mismanagement of wealth has created a downturn in economies. If in fact the world held to the views of Adam Smith and Milton Freidman, wild global market fluctuations attributed to Ben Bernanke’s chat events before congress would be non-existent. Yet even Mr. Bernanke must remind the world that he like all global economic regulators, must act within dual mandates.
The dual mandate for the non-governmental agency Federal Reserve System and its FOMC or Federal Open Market Committee is the same as all global economic regulators. In 1977, Congress amended The Federal Reserve Act. Its monetary policy objectives of the Federal Reserve were,
“The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy’s long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates.”
The science of economics is not a static concept meant to be biblically applied to humanity. Economics is generic and organic. Our system of capitalisms has created the perfect examples of the social contract. We may weave Adam Smith’s Invisible Hand into the mix of what constitutes our complicated economic system. Nonetheless, it must be argued that our current systems enjoying the benefits of a deregulated commerce, has also fabricated an intricate network of needs for socialization and government intervention.
When an economic construct no longer serves in maintaining the health of the system, it will present like boil to be expunged.
Even foot tapping porches have a place in today’s economy.
Posted by Barbara Cerda
This entry was posted on Saturday, July 21st, 2012 at 3:29 AM and is filed under AP-Business,
Posted by Barbara Cerda
This entry was posted on Sunday, November 27th, 2011 at 12:05 PM for Surface Earth
An amazing turn of global events is happening in the Euro Zone that is threatening to infect the world. Germany and her first female Chancellor Angela Merkel, is leading the efforts in economic reform in Europe. The only woman currently serving on the G8 second only to Margaret Thatcher is leading the charge that will fundamentally shape the solutions that will prove antidotal to the financial contagion that threatens a global recession. The Bundesrepublik Deutschland has become the voice of reason and substance in a European world of budding chaos and monetary want. Chancellor Angela Merkel has stood her ground and refuses to bend to quick fixes in the face of the decisions needed on how to monetize Greece and eventually Italy; an advent that few predicted a generation ago. Nor will she retreat from her stance on the moral hazards of issuing the Eurobonds with certain liabilities. It is hoped that Eurobonds and Chancellor Merkel may be the antidote to financial contagion that threatens global economies.
The issuance of Eurobonds or blue bonds is receiving split reviews amongst the players in the Euro Zone. The final decision would have the potential of acting as a global stimulus fund. Many have named this debt instrument debuting in 2013 as the “stability bonds”. Its created purpose is to sustain and make balance an economically unstable climate for investors and governments. In consideration of its impact as an instrument of debt, it will be issued in euros as a joint obligation of the 17 participating Euro Zone countries. Its biggest critics’ voice concerns of the absence of credible common governance.
As a progressive concept in monetization its lack of consensus is a result of a need for a central debt office, which is not the domain of the ECB. The primary mandate of the European Central Bank is to maintain price stability or to keep inflation low (2%) within the states of nations. The ECB does not function like our Federal Reserve. Our FOMC governs monetization in a homogenized political and financial culture.
Consensus is split over the concept of joint liabilities, which is divided into three versions within the green paper, detailing its guidelines. Chancellor Merkel struggles to narrow the crucial gap, creating a convergence of ideologies. It will mean a change in treaties or adaptations in how sovereigns may fiscally self-manage.
Diversification of the Euro Zone is more than just its charm, it is their Achilles heel. Chancellor Merkel’s largest fear is that a joint debt with shared responsibilities will only encourage some Euro Zone countries to shirk their obligations in correcting deteriorating governance and fail to institute better fiscal discipline. A case in point would be the recent unsustainable cost of borrowing money for the Italians. Presuming to borrow at such a rate, essentially on preconceived future value as a nation, is inconsistent with the actualities of having the ability to repay. Others in the world have sided with Chancellor Merkel in her unwillingness to quickly embrace Eurobonds. Making this final decision is daunting. In addition there are the private sector investors to consider.
Germany is insisting that the insurance companies, banks and general private sector investors must share in the losses resulting in the Greek bailout. This is a progressive leaning concept that has garnered some outspoken opposition from within the Euro Zone. It was part of the original agreement of the ESM (the European Stabilization Mechanism).
The Eurobonds must contain scale of maturities. The issuance is still unconstructed and the enforcement of conditionality among stakeholders is necessary. Yet perhaps Germany’s Chancellor Merkel’s antidote to the financial contagion will create the needful outcome
We are economies of unthinkable times.
Global wealth is distributing and realigning itself. Generations ago, we would think this an unthinkable Europe, an unthinkable United States, an unthinkable global economy. Our financial markets have morphed into macro economies that have become “impossibles”. Never before has this event been written or told about. It bears repeating that unless our nations learn to think forward and learn the new rules, some economies will fail completely. The paradigms shaping how we invest, how we use our monies is far different from where they were just a few decades ago. We market our businesses globally. From Wall Street to in-home labor how countries manage wealth influences us all.
Who could have thought that the elite congress of the Eurozone would be seeking to borrow from China, a country that once ranked 99th in the world for income per capita?
Who would predict that Germany, led by her first female leader Angela Merkel, would be drawing up plans for the realignment of a new Europe? Just one generation ago, Germany was a divided country, reuniting itself while seeking economic and political parity in the world.
Facing a looming fragmentation, the Eurozone is dependent upon rapidly reconstructed fiscal decisions that may be their only hope for restoration. In my opinion, the new realities are that Eurozone countries have evolved to finance dependent sovereigns, a unity of welfare states. Without the power to inflate or grow out of debt, they are suffering the throes of failing solvencies in the absence of liquidity. The global financial markets are now looking beyond Europe to China for monetization.
The structural and fiscal global calamities that are tearing apart the fundamental economic survival of countries are creating teachable moments.
The relocations of accumulating wealth and human capita are shifting the paradigms of global power. China in efforts to realign its economy from manufacturing to services and a more robust domestic consumption, is attempting to boost export liquidity. There should be little doubt that this is a currency war era. Unless we move to change how we think about our businesses therefore how we invest for our future, the road in solvency maintenance will be long and rough; for some perhaps unattainable.
Institutional economists remain so mired in the old constructs of economics, that they are unable to recognize the ever-evolving fundamentals of the new norms; of how the world’s populace is changing its wants versus its abilities to fulfill. We’re not paying attention to the fact that there is a fundamental neuroscience that is changing the way our brains are responding to how we manage business and personal wealth.
This absence of forward thinking amongst monetary regulators, policy makers and drivers of fiscal policies is causing global social upheavals that are signaling the need to recognize new norms. This economic tsunami will carry in its wake societal transformations. The United States’ success in maintaining its global leadership will depend on how well we navigate this wave and how we include ourselves in the changing global environment. The TPP (Trans Pacific Partnership) is not essential for now but is an imperative for the future.
Like any evolving organism there are paradigms that must be present in order to intelligently judge whether an economy will survive.
Has it the capability of growth? When faced with financial indebtedness a country must have the ability and agility to grow out of its debt. The engine must have a sound monetary policy to move. Instituting too severe austerity measures will only stall the recovery process.
Can it grow strength in it federal institutions? Policy makers must understand that the creation of a fiscally strong country requires new thought processes. Fiscal and monetary policies must be agile enough to grow into the new norm and trans-borders. Government maturity has become the most important factor in foreign investing.
Has it created strong and agile banking institutions? The biggest part of the EU collective crises is its lack of solvency, for a few member states. This is a watershed moment that the United States’ has yet to face; yet many economists fear the likelihood is not far away.
Does the country have the ability to distinguish the difference between having liquidity and lacking solvency? The mechanisms for cryptocurrency or blockchain technologies must be set in place to bridge moments of insolvency or bank failures especially in m1 economies.
Will a country understand the importance of building firewalls to insure that in the short term technocrats will not sabotage growth?
Social advents like Occupy Wall Street has impacted how the financial markets think then behave. The outcome of how we trade, buy and sell our markets is no longer predictable when using the same old data interpretations. The word “unlikelihood” has become the standard in calculating economic outcomes. This way of forecasting is rapidly becoming commonplace; and is penetrating deeper into our systems.
Though we struggle under a morass of mounting debt, the United States is not a cash poor country. We do not lack the resources to participate successfully in global wealth realignment. French President Sarkozy stated in a recent address that Europe must be “refounded”. The same holds true for the United States.
In my opinion, we need a national reawakening moment as well.
Is the Greek Prime Minister Alexis Tsipras, the “Sin Eater” of what has delivered his country into its current economic crisis? On the other hand, is he a pragmatic left leaning hawk seeking to ease Greece into its monetary and fiscal reformation? In truth, depending on the interested observer he is neither or both. Economists, bankers and monetary regulators have long observed Greece construct its own unique liquidity trap. Adding injury to the growing fiscal policy divide between northern and southern Europe there is a fundamental socio-political battle. This cultural divide was subject for debate prior to the Euro dollar’s official arrival on January 1, 1999.
Greece continues its deepening struggles into a messy, antiquated, and complicated economy. There remains a growing cacophony for fiscal reform. The resulting frustrations found voice in a soaring chorus of moral indignation and a too hastily constructed populace referendum. It served only to delay the inevitable assumption of new debt and hard to keep promises of governmental and economic reform. Greece’s looming pain of austerity resulting from economic reconstruction is unavoidable, whether there is a Grexit or not.
The jaws of the liquidity trap are tightening – with few considerations for those on the receiving end whose lives depend on social contracts. Bridge loans from the ECB and IMF will merely be absorbed (once again) into financial systems and its creditors. Capital management continues.
A Grexit temporary or otherwise has its faults.
Realities are that even if Greece leaves the EU – a reconstituted sovereign coin would have little or no value. This would make the already impossible – more impossible, creating additional unknowable(s). A reengineered drachma would have little to no intrinsic value. In its latest attempts to monetize, if the ECB follows through on purchasing high-risk high yield bonds, Greece will hold more debt. There must be the introduction of a flight to quality coin that is scalable to Greece’s industries. A digital currency not encumbered by the influence of sovereign politics and/or cross border regulators.
Cryptocurrency like Bitcoin maintains a market value based on demand.
The nominal value of any country’s money mirrors its political system (governing stability) and demand for its goods and services. The maturity of both is what keeps macro and microeconomic engines primed and running smoothly, in good times and bad.
At present Greece has little of either. Exiting the EU while keeping the ability to trade within the Euro monetary system is one answer. It does not repress the sense of moral hazard pervading member states. She has demonstrated that she is unable to pay back her debt. Greece’s repeated acceptance and need for regulators and member states bailout will cause her to remain EU’s welfare child.
To assuage the coming period of austerity in addition to providing breeding grounds for the return of a robust economy, there must be a sanctioned means of payment, generally accepted for goods and service across borders. Mass adoption of cryptocurrency like Bitcoin could be an answer. Block chain technology offers safety and political autonomy. It must become a trusted source of payment across borders.
Trade Ownership and Trust in Trusted Third Parties
Clearly, a multi-country trading scheme that entails an aggressive pact for purchasing Greece’s goods and services…would place its exports front and center. This would go a long way in reinventing Greek GDP. These trading pact disruptions could work especially well with developed nations whose currency rates are higher. Absent robust trading pacts VAT reforms is of little use.
Cross border VAT structures, must become progressive in ways that will endorse new trade agreements. In the face of this, broad based economic reconstructs can assuage future needs for financial restrictions or harsh capital management. To oil the monetary machine there should be a mass adoption of a currency that will circulate outside the Euro system of regulation. One stripped naked of current politics and monetary unions. The establishment of a “Cryptoconomy” is necessary.
The use of blockchain technology or Bitcoin is a way in which a system can adopt a monetary system alternative for times of challenging liquidity. So should there be a global currency of “safe haven”?
The need for Cryptoconomy is arguably one of the most valuable take away when considering that Greece must live with the Euro dollar in order to maintain economic stability. Their dependence on the Euro dollar is necessary to continue foreign trade, goodwill and a durable economy. Trading partners that are important suppliers and consumers to their markets will buy and sell almost exclusively in Euros.
In science, a hypothesis discovers validation by way of controlled studies. Cryptocurrency is the next logical step to achieving global economic parity once this tool attains the abilities to becoming “mass adopted”.
Digital currencies like Bitcoin will bypass the rocky socio-econ0mic road filled with regulations and regulators – the gatekeepers of sovereign wealth. It holds the supreme position of becoming the alternative coinage of choice for the future. Greece is a country where cash is the predominant means of transactions. Achieving nominal wealth through mass adoption of cryptocurrency will take time or a political economic means of persuasion.
Nominal Wealth is more than just an idea.
A country’s currency has a thing called nominal wealth attached to it. It is what brings about mass adoption of the coin of choice. For a cryptocurrency to become that go to money used by every segment of society. There must be assurance that the money of choice is welcome across borders and businesses. That means encouraging businesses to accept blockchain technology seamlessly as payment within the monetary system.
Greece, like many countries, is cash dependent. People pay for their day-to-day needs with cash in hand. When you take that structure out of the local economy there must be infrastructure ready to fill in the slack of downtime for transition. Once in general use Bitcoin can replace cash dependency.
Crisis is a harbinger of opportunity.
As an example, China acquired control over local businesses as it moved through Southwest Asia. Constituting its Yuan into local commerce, it targeted employee payouts while encouraging the populace to patronize businesses that accepted the Yuan. Those businesses became broad based while offering incentives to use the Chinese Yuan. Over time, the domestic currency began to devalue. Employees, commerce and those dependent on Chinese method of payment soon experienced its increased value. The Yuan became their go to monies for cash and banking transactions. The same scenario is possible for Bitcoin.
So can blockchain technology act as bridge money while creating a Cryptoconomy?
Rather than offering additional debt to liquidate stressed economies with regulatory infused currency ….blockchain technology is more agile. Its critics would argue that cryptocurrency has a gyrating unregulated market. Futures trading influence daily values of official government currencies. A sovereign coin looses or gains in market value through governmental instability and/or changes in socio-economic constructs. What blockchain technology brings to the table is a level of transaction transparency, a factor lacking in most financial institutions.
Should Greece exit the Euro zone, cryptocurrency can act as a permeable underlayment of currency. Unencumbered by the socio-economic global market, it can act as bridge financing for goods and services. In the absence of traditional capitol, Bitcoin can help maintain committed GDP growth. This could offer Greece a less expensive monetary easing.
The drachma would have time to reestablish value in a dual currency system. ~ BCSolutions
A national poll revealed that 64 percent of Americans understand that an ever expanding government is the biggest threat to the country. Just 26 percent believed that big business is the biggest threat. Yet investment bankers like Kolbert Kravis and Rogers are looking for bargains in Euroland. While deleveraging is the new vogue, American bankers are furthering their claims to a new economic sunrise that will hold future political sway in Europe.
Lack of regulation or an overseer to protect the investor was a primary cause of the market crash of the late 1920’s into the 1930’s. As a result, two southern Republicans devised the Glass-Steagall Act. Designed in 1932, it would shield the average investor and make clear the definition of a “bank”.
Then came the birthing of the FDIC
The advent of the FDIC was part of reforming and defining lending terms. This created regulations on the how a bank may do business versus a non-bank, its chief tenant. Banks were not allowed to place customer funds into high risk high yielding investments. Conversely investment firms were not allowed to act as banks. During the Clinton administration, the banking and investment industry was deregulated. Fast forward to now. The so-called “spicier fixed incomes” is now the term of choice when investing in risky sovereign bond markets (Southern EU).
How we have legislated or litigated ourselves out of economic turmoil speaks to how we are viewed according to world opinion.
The “one percenters” are still expanding their inequality beyond our shores taking lower income investors with them.
In the progressive monetary era, the economy was in its adolescence and the task was to control it. Today the economy is middle-aged; the task is to rejuvenate it. During the early days of progressive measures that drove the need to regulate – today we’re busy finding ways to regulate less. Our social programs and educational programs are costly with little return on taxpayer investments.
Given the state of global economic and political turmoil, are our banks taking the lead or buying policy.