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Strategies & Market Trends : Currencies and the Global Capital Markets

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To: Lee who wrote (358)	7/15/1998 11:26:00 AM
From: Chip McVickar	Read Replies (1) of 3536

Lee and other readers, Excellant Link....read a few of Makin's papers. One of the most fascinating aspects to the current developments in international monetary policies....is the sheer number of "large events" occurring together. It's close to a whole restructuring of the entire system. Completly new charts are needed to map these underwater currents. ~ In 6 months the Bundesbank will essentially cease to exist. ~ In its place, a loose confederation of blingual politicians with an untested currency. ~ Russia is struggling with regulation of its' "Free Get Rich Party". ~ China has out grown its old monetary and economic system. ~ Japan faces its' tribal economic system with passivity. ~ Asia drops into a deflationary binge that may last for 10 years. ~ USA encounters the best of all economic worlds which will last forever. Have I forgotten anything..? Makin askes 2 questions that can also be applied to the whole international monitary system....1) "Will it be inflationary pressures or a sharp end to capital formation" that brings down the US market..? 2) "Is it currency or a break down of economic fundamentals" that brings down Japan..? Theoritical Economists should be required in their early studies to actually create and run a small business. Ever if it is making Salsa or a new tool. 80% of human economic activity worldwide is at this level. Simple exchange of goods. Most of the policies in place today benefit multi-national corporations and the various types financial communitties. Most of the wealth today has been created from imagination and printed paper...now also "electronic bytes"...with the connected and implied promise to make good on delivery. The biggest problem is that it is not possible to match fair payment for all the currency out there rumbling around the world. I realize this is simplistic but it serves the point to be made...when monetary policies are created, regulated and the resulting wealth is narrowly held by these same players....that system will reflect the imbalances of those players. General populations understand this and eventually turn against monopolies, just on their fundamental needs...this can be seen again and again, throughout history. Japan and Russia are the latest examples. I don't believe the international monitary systems in place today will be around in another 25 years. There basis is inherently unsound and built on sand. What will replace them is not yet clear. Japan has an inherantly sound economy based on a culture of literacy, creative energy and hard working people. The self serving policies of the ruling powers reflect their interests...not the nations working people. The problems in Japan are a result of these imbalances. I suspect Makin would agree that it is misfunctioning monitary system not a fundamental economic problem that Japan's is facing. Makin's two earlier questions are a vessel that essential carries the seed of the worlds evolving monitary complications. It is very possible that the monetary policies that have run the world since 1971 and in some respects since 1945 are coming to a distinct conclusion. The duration of this process for resloution cannot be known, but I believe not longer then the life span of the world wide "Baby Boomer Generations". But the next generation of monitary polices will have to have some fixed basis of value....floated rates cannot be sustained. What replaces the current system is what interests me. Will it be precious metals..? Currency Boards..? Basket of commodittees..? Perhaps something or some combination that has not been articulated..? Any Ideas, Chip

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