"It’s not about rabbits out of hats. This is about trying to tackle an exceptional economic crisis – far beyond the financial system – and set in place measures … that really do make a difference over the short term and the long term." [1]
Doomers please contain your enthusiasm, the "leadership" of our world obviously doesn’t have a sweet clue. More likely getting out of this mess is going to take all 195 more-or-less independent, more-or-less countries on the planet, not to mention a whole lot of stateless, exiled or displaced folk we are sharing the place with.
Brad spent the weekend striving manfully to stuff the China Gambit genie back into the bottle [2] prior to the grownups hitting London. That article is a must-read for Doomers who have been following the Zhou affair.
I am still struggling to understand precisely what motivated Governor Zhou’s white paper.
This is Doom’s Monday Open Thread. Please throw in your thoughts on this or any other issue, not to mention any information you’d like to share that might enlighten us on housing, market trends or just managing this monster that was largely born in some dark corner of America’s mortgage finance system.
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[1]: "G20 Countries Damp Expectations For April 2 Summit", by Terence Roth and Laurence Norman, Wall Street Journal, March 29, 2009.
[2]: "The PBoC’s call for a new global currency, the SDR, the US and the IMF", by Brad Setser, Council on Foreign Relations, March 29, 2009.
John,
Thanks for posting such a compelling subject.
Zhou’s white paper is fraught with mathematically impossible suppositions, such as “the issuance of a STABLE currency.”
While there are many, I want to introduce just one show stopper at a time, because…well…one is all it takes.
The world monetary system is fatally flawed by the single inclusion of compounding interest.(I did get to the bottom of this John). Compounding interest creates an exponential phantom growth of the entire money supply which automatically creates massive increasing instability.
Where does the ever increasing physical (or booked) interest come from? The answer is that the Fed and other foreign issuers of currency simply print it without backing of any nature; it is a true phantom.
But more importantly, compounding interest is the primary weapon of the worlds robber barons and in the end, perhaps more potent than the atom bomb.
I didn’t turn this into a post as I have a problem with legalizing drugs. The rest of it though, was so funny, I had to post it here: [Hat tip to Living the Scientific Life]
twist -
Living the Scientific Life blogger GrrlScientist seems nice enough. I even had part of her position-wanted ad on the sidebar for much of the weekend. I opened a mild engagement with her on Madoff yesterday, we’ll have to see where that goes.
John-
I can sympathize with her position. Most of the research opportunities available to this botanist are not paying gigs. Unfortunately, in the current economic climate, things are going to remain tough for awhile.
I wish her all the best.