Blindsided by crisis, economists rethink profession along with theories
http://www.iht.com/articles/2008/12/23/business/econ.php
By Drake Bennett The Boston Globe
Published: December 23, 2008 the International Herald Tribune
"・・・And now that we are in the middle of it(危機), many frankly admit that they(経済学者) are not sure how to prevent things from getting worse.・・・"
Systemic Economic Crisis: The Sequence of Global Insolvency Begins
http://www.globalresearch.ca/index.php?context=va&aid=11848
Global Research, January 17, 2009
GEAB N°31
“・・・A simple example can help to understand what is at stake. If you meet a temporary problem of cash, and if your bank or your family agrees to lend you the money you need to cross over that difficult path, their effort is mutually beneficial. Indeed, you can resume your activity, you can pay your employees and yourself, your bank or your family get their money back (with an interest in the case of the bank), and the economy in general benefited from a positive contribution. But if your problem is not due to a question of cash-flow but to the fact that your activity has ceased to be profitable and will never be again because of new economic conditions, then the effort made by your bank or family becomes all the more dangerous that it was substantial.・・・”
http://energybulletin.net/real-new-deal
Published Jan 10 2009 by Post Carbon Institute
Archived Jan 16 2009
The Real New Deal
by Richard Heinberg, Daniel Lerch, Asher Miller
“Part 5 - Requirements for Energy Transition
1. Investment and capitalization
Clearly, enormous amounts of investment capital will need to be mobilized to accomplish the energy transition. The promise of $150 billion to be spent on renewable energy over the next ten years is a welcome beginning, but it is a mere fraction of what is needed to fund the entire transition program. As noted, much of the needed investment can eventually come from the private sector, but since the private sector is currently contracting economically this puts the onus back on government.
How can enough capital be deployed? The current practice of deficit spending may not be sustainable in the context of a faltering global economy, as there may be limited demand for U.S. government IOUs.
Other options for creating the needed capital should be explored, such as direct money creation through government spending. While this practice might have adverse implications for the value of the dollar, it is constitutional and has historical precedents during the Kennedy and Lincoln presidencies. (←この付帯条件付き肯定文に注目!)“
http://www.globalresearch.ca/index.php?context=va&aid=13121
China's Proposal for a Super-sovereign Reserve Currency System
Reform the International Monetary System
by Zhou Xiaochuan
Global Research, April 9, 2009
People's Bank of China
"It's official: The government in Beijing has announced that the Yuan can now be used in international trade.
・・・・
The implication is simple: if you think that you still have some money, let's hope that you don't mean that you have something or other denominated in the US Dollar. Or that you just wrote yourself an I-owe-me."
Global systemic crisis: June 2009 - When the world steps out of a sixty-year old referential framework
http://www.europe2020.org/spip.php?article602&lang=en
へぇ〜という感じの象徴的出来事
"In April 2009, China became Brazil’s leading trade partner, an event which has always announced major changes in global leadership. This is only the second time that this has happened since the UK put an end to three centuries of Portuguese hegemony two hundred years ago. The US then supplanted UK as Brazil’s leading trade partner at the beginning of the 1930s "
Despite high oil inventories oil prices continue to rise. Some analysts say $70 oil is not high enough for suppliers cover their cost. The real reason oil is going up is the dollar is going down plus many feel the “green shoots” are giving signs the recession may over soon giving for an increase in speculation in the markets.
The dollar’s weakness is the massive deficit the U.S. government is running, and the sale of billions of dollars worth of treasury securities.
If the dollar continues to fall, more oil will be purchased and oil will continue to rise. The U.S. economy is in worse shape than it was 18 months ago and could get worse if we see $4 a gallon gas again. This takes away from consumer spending which would stop any recovery in the economy.
The U.S. Congress will not stand by and let oil prices increase driven by a falling dollar. There could be a ban on speculation. There also could be a worldwide agreement that could make the ban work.
Beijing does not need to raise money abroad since it has $2 trillion (£1.26 trillion) in reserves. The sole purpose is to prepare the way for the emergence of the yuan as a full-fledged global currency.
"It's the tolling of the bell," said Michael Power from Investec Asset Management. "We are only beginning to grasp the enormity and historical significance of what has happened."
It is this shift in China and other parts of rising Asia and Latin America that threatens dollar domination, not the pricing of oil contracts. The markets were rattled yesterday by reports – since denied – that China, France, Japan, Russia, and Gulf states were plotting to replace the Greenback as the currency for commodity sales, but it makes little difference whether crude is sold in dollars, euros, or Venetian Ducats.
What matters is where OPEC oil producers and rising export powers choose to invest their surpluses. If they cease to rotate this wealth into US Treasuries, mortgage bonds, and other US assets, the dollar must weaken over time.
"Everybody in the world is massively overweight the US dollar," said David Bloom, currency chief at HSBC. "As they invest a little here and little there in other currencies, or gold, it slowly erodes the dollar. It is like sterling after World War One. Everybody can see it's happening."
"In the US they have near zero rates, external deficits, and public debt sky-rocketing to 100pc of GDP, and on top of that they are printing money. It is the perfect storm for the dollar," he said.
"The dollar rallied last year because we had a global liquidity crisis, but we think the rules have changed and that it will be very different this time [if there is another market sell-off]" he said.
The self-correcting mechanism in the global currency system has been jammed until now because China and other Asian powers have been holding down their currencies to promote exports. The Gulf oil states are mostly pegged to the dollar, for different reasons.
This strategy has become untenable. It is causing them to import a US monetary policy that is too loose for their economies and likely to fuel unstable bubbles as the global economy recovers.
Lorenzo Bini Smaghi, a board member of the European Central Bank, said China for one needs to bite bullet. "I think the best way is that China starts adopting its own monetary policy and detach itself from the Fed's policy."
Beijing has been schizophrenic, grumbling about the eroding value of its estimated $1.6 trillion of reserves held in dollar assets while at the same time perpetuating the structure that causes them to accumulate US assets in the first place – that is to say, by refusing to let the yuan rise at any more than a glacial pace.
For all its talk, China bought a further $25bn of US Treasuries in June and $25bn in July. The weak yuan has helped to keep China's factories open – and to preserve social order – during the economic crisis, though exports were still down 23pc in August. But this policy is on borrowed time. Reformers in Beijing are already orchestrating a profound shift in China's economy from export reliance (38pc of GDP) to domestic demand, and they know that keeping the dollar peg too long will ultimately cause them to lose export edge anyway – via the more damaging route of inflation.
For the time being, Europe is bearing the full brunt of Asia's currency policy. The dollar peg has caused the yuan to slide against the euro, even as China's trade surplus with the EU grows. It reached €169bn (£156bn) last year. This is starting to provoke protectionist rumblings in Europe, where unemployment is nearing double digits.
ECB governor Guy Quaden said patience is running thin. "The problem is not the exchange rate of the dollar against the euro, but rather the relationship between the dollar and certain Asian currencies, to mention one, the Chinese Yuan. I say no more."
France's finance minister Christine Lagarde said at the G7 meeting that the euro had been pushed too high. "We need a rebalancing so that one currency doesn't take the flak for the others."
Clearly this is more than a dollar problem. It is a mismatch between the old guard – US, Europe, Japan – and the new powers that require stronger currencies to reflect their dynamism and growing wealth. The longer this goes on, the more havoc it will cause to the global economy.
The new order may look like the 1920s, with four or five global currencies as regional anchors – the yuan, rupee, euro, real – and the dollar first among equals but not hegemon. The US will be better for it.
http://heinberg.files.wordpress.com/2010/04/museletter-215.pdf
MuseLetter #215 / April 2010 by Richard Heinberg
Economic History in 10 Minutes
"・・・A few critics (primarily advocates of gold-backed currency) have
called fractional reserve banking a kind of Ponzi scheme, and there is
some truth to the claim. As long as the real economy of goods and
services within a nation is growing, an expanding money supply
seems justifiable, arguably necessary. However, a resourceconsuming
economy cannot continue to grow forever on a finite
planet. Units of currency—which exist today mostly in the form of
electronic bookkeeping entries—are essentially claims on labor and
resources; and, as those claims multiply (with the growth of the
money supply), and as resources deplete, eventually the remaining
resources will be insufficient to satisfy all of the existing monetary
claims. And so those claims will lose value, perhaps dramatically and
suddenly. When this happens, paper and electronic currency systems
based on money creation through fractional reserve banking will
produce results somewhat similar to those of a Ponzi scheme: i.e., a
few may profit, at least temporarily, but the vast majority will lose
much or all of what they have.
・・・・"