I rather think that in some aspects, we already have a world currency,
in the form of energy, and particularly oil. At least, it will behave
that way, in as much as when the recession recovery progresses to a
resumed increase in the demand for oil, and collision with the
inelastic supply results in immediate rise in oil price, we will
probably see $500/barrel in a fairly short time. As oil energy is an
intrinsic component of pretty much every good and service in the global
economy, all prices will consequently reflect the oil cost, and the
effect will be an inflation rate hard linked to the rising oil price.
There is nothing anyone can do in any field which can block this
inevitability. The other half of this rapidly approaching future is the
plateauing and subsequent decline in absolute global economic output,
in simple correspondence with the plateau and decline in the delivery of
oil, despite the spiking price. This will all combine to produce a
new economic dynamic whose overall character I can't yet begin to wrap
my brain around, one which has only had a few previous instances, as
for instance the collapse of Easter Island. I rather think it will take
some pretty impressive and inspired actions to prevent things from
becoming pretty ugly over the next three decades.
-Pete V
On Fri, 4 Jun 2010, Keith Hudson wrote:
> China is never likely to become a democratic country -- at least, via the
> method that we in the West have espoused in the last 200 years whereby
> political parties have only retained, or regained, power by offering
bribes
> to this or that part of the electorate every time there's an election.
>
> All Western governments are now so deeply in debt that only someone
with no
> mathematical ability whatsoever could believe that there's any way out via
> taxation -- of our children and grandchildren as well as ourselves.
> Politicians tell us that we could grow ourselves out of the present
> impasse, but that's strictly for punters. Unfortunately, there are another
> billion people in the world with a far stronger work ethic than ourselves
> who are making most of the consumer goodies today and prospering
> therefrom. Sooner or later, a period of inflation leading to
> hyper-inflation will ensue that will reduce everyone's debts -- most of
> all, governments'.
>
> This wheeze is so much on the cards that some voices are already being
> raised against the likelihood of politicians adopting it. The Deputy
> Governor of the Bank of England, Charles Bean, said yesterday that it
> would be "severely misguided" because "a bit of inflation has a nasty
habit
> of turning into a lot of inflation". Well, we don't need him to tell
us. We
> all know that. But does he -- or any intelligent person -- think that
> politicians will be able to keep in power without more Quantitative
Easing,
> more money printing, more inflation? So that politicians still have money
> to bribe us with?
>
> Those who have saved money will be hammered. Those in debt will have been
> rewarded. But no matter, the overall experience will have been beneficial.
> Once new national currencies have been established -- as always happens
> after hyperinflation -- then lessons will have been learned and, for about
> a generation, individuals and governments will practise good housekeeping.
> That, at least, has been the repeated experience of several countries in
> Europe. But then, politicians re-learn the trick of offering bribes and
the
> process starts all over again.
>
> This is not to say that the Chinese system of selecting politicians from
> above -- not electing them -- will necessarily fare any better. They, too
> -- with their Tiananmen Square experience recently behind them -- are as
> aware as Western politicians that people have got to be kept sweet.
> Otherwise -- particularly in these days of mobile phones -- people in
their
> tens of thousands might gather in the streets and . . . well . . simply
> walk into parliamentary buildings and take over as they did in Georgia in
> 2003 (the Rose Revolution).
>
> The Chinese system of governance may not succeed either. But in terms of
> historical experience and tradition it's somewhat more likely to. After
> all, they've had a system which has been in existence on and off for about
> 10 times longer than Western electioneering -- ever since Confucius in
> 500BC. Indeed, it may even be in their genes. A long-standing culture,
> itself becoming an important part of the environment which shapes genes,
> may have had a slight selective effect on the Chinese character.
>
> At least Bruce Lahn thinks so. One of the leading geneticists in the
world,
> Chinese born but researching in America as well as in China, thinks that
> the Chinese trait of deference and the high status of scholarship in their
> country might be quite significant. He took a lot of political flak for
> suggesting this in 2005 and, because the feedback was so aggressive,
> decided to put brain gene research behind him to concentrate in other
areas.
>
> I am pretty certain that, sooner or later, the sort of electioneering we
> have in the West today -- really only an extension of little boys fighting
> in the school playground -- has got to give way to something similar to
> Western civil services of about a century ago -- when they genuinely
> believed in public service. Similar, in fact, to the Chinese system. We
> need a marriage between experts and public opinion. We need some sort of
> tiered arrangement (but not too many) between local focus groups and
> competitive debate between those fairly rare individuals who really do
have
> a high regard for intellectual understanding of problems and not scoring
> off one another as politicians do.
>
> I wrote a paper about this some 30 years ago when I was a member of the
> original organizing committee of the Social Democratic Party in the UK
> during its brief existence. I was carried away at the time by something
> David Owen (now Lord Owen) had said at the time about the need for a
> completely new method of selecting governments. I tried to put some
clothes
> on it. Unfortunately, this vigorous new idea got lost when the SDP
combined
> with the Liberals and produced a fudge. I then resigned (and,
incidentally,
> so did Owen) and I took no further interest in active politics.
>
> But I'm pretty certain that something like this will develop in due
course,
> once we've been through hyperinflation and, hopefully, a non-outbreak of
> war between America and China. Whether it will develop faster in the West
> or the East remains to be seen. Perhaps, once America and China have
agreed
> a new world currency between them, some of their political scientists
might
> start meeting together and make proposals that they can present to their
> respective governments.
>
> Keith Hudson, Saltford, England
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