For years I have regarded that strange subject called "economics" as being somewhere on a par with that other strange subject known as "theology," and tend to see economists as belonging to the same general group as bishops, witch-doctors, mullahs and snake-oil salesmen. In their areas of so-called expertise, they regularly get things wrong - and then go on to earn vast amounts as talking heads, retrospectively explaining what they failed to see coming. Carnival fortune-tellers probably have a better record of accuracy.
The ghastly thing is that these high priests of mumbo-jumbo have such power and influence. I have some (a very small amount) of sympathy for the Chinese leadership elite - they're riding a very powerful, unpredictable, and very dangerous tiger; trying to modernise and stabilize a population four times the size of the USA, most of whom are still leading a pre-modern peasant existence, the rest of whom are trying to gallop into a materialistic hyper-capitalism as fast as they can. The whole country seems to be living in a state of perpetual high tension. Whether they will succeed without the whole thing exploding around their ears remains an open question. Let's hope they do, for the alternative - China unravelling - would lead to the kind of geo-political instability which would make the Middle East look like a kindergarten squabble. I see the latest moves as part of a long, ongoing process leading to full convertability of the yuan/renminbi. Within the current (lunatic) models which economists and economic commentators use, this can only be seen globally as something positive. While it may have been very convenient for the US to have the dollar as *the *global reserve currency, this has not necessarily been good for the rest of the world. China owns a massive amount of US debt (owing the the trade imbalance between both countries) and are thus terribly vulnerable to changes in US fiscal policy. For the world generally, a basket of around half a dozen reserve currencies (dollar, euro, yuan, Swiss franc, pound sterling, yen) is a much more stable proposition. It would force the major powers to cooperate at a deeper level than they currently do. It would also reduce US hegemony globally, which might just help provide a reality check for the US political elites (particularly those on the right) - though I'm not holding my breath about that. Am Sonntag, 29. März 2015 15:28:24 UTC+2 schrieb Molly: > > The new Chinese bank established with a gold standard is gaining momentum > on the international stage. How will this effect the world economy? These > quotes from Bloomberg: > > *China’s clout has been expanding for decades, as its rapid growth allowed > it to snap up a rising share of the world’s resources, its exports > penetrated global markets, and its bulging financial assets gave it power > to make big individual loans and purchases. Now, the creation of > international lending institutions is leveraging that economic influence > closer to the political and diplomatic arenas, as U.S. allies defy America > to back China’s initiative.* > > > > *“This is the beginning of a bigger role for China in global affairs,” > said Jim O’Neill, U.K.-based former chief economist at Goldman Sachs Group > Inc., who coined the term BRICs in 2001 to highlight the rising economic > power of Brazil, Russia, India and China…* > > > > *Chinese President Xi Jinping’s vision of achieving the same great-power > status enjoyed by the U.S. received a major boost this month when the U.K., > Germany, France and Italy signed on to the Asian Infrastructure Investment > Bank. The AIIB will have authorized capital of $100 billion and starting > funds of about $50 billion.* > > > > *Canada is considering joining, which would leave the U.S. and Japan as > the only Group of Seven holdouts as they question the institution’s > governance and environmental standards.* > > > > > *China, flush with the world’s biggest foreign-exchange reserves and > anxious to convert them into “soft power”, is building an alternative > architecture. It has proposed not just the AIIB, but a New Development Bank > with its “BRICS” partners—Brazil, Russia, India and South Africa—and a Silk > Road development fund to boost “connectivity” with its Central Asian > neighbours…* > > > -- --- You received this message because you are subscribed to the Google Groups ""Minds Eye"" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. For more options, visit https://groups.google.com/d/optout.
