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Non-Tech : Derivatives: Darth Vader's Revenge -- Ignore unavailable to you. Want to Upgrade?

To: Frodo Baxter who wrote (691)	12/14/1998 9:35:00 AM
From: Worswick	Read Replies (3) \| Respond to of 2794

Hello! Hope you are well and thriving. I posted the following on the Asia Foruum but wanted to include it here as well, as it has to do with banking and futurism. Some years ago I was sitting in the office of the US ambassador to Korea and I expressed the idea that the Soviet Union would split up and Siberia in turn would be split off from Russia. Siberia had done this in both the revolutions of 1905 and 1917. I was greeted by blank looks then overly polite murmurs, "What an interesting thought....etc." "More coffee?" The above ideas may seem off the mark of derivatives but pay attention.... The following are thoughts expressed in the Senate hearings about US/IMF contributions. In September, 1998 the one American I know about who has spent extensive time outside the various self-contained enclaves of "...the American business and government elites ... in the wild places of the world" expressed the following ideas. Here is what he had to say. I suggest strongly you all read every single word... My best to you, Clark house.gov

To: Frodo Baxter who wrote (691)	12/17/1998 1:40:00 PM
From: Mark Adams	Read Replies (1) \| Respond to of 2794

Lawarence, I've been out of town on a rather delightful trip, thus haven't had the opportunity to respond until now. I truly didn't expect you to actually to that search, but to consider the myriad of potential outcomes possible when flooding the market(s) with liquidity. My point was that the Fed has limited power to influence the unfolding scenario. They certainly can aggravate it, but probably not remedy it. Since you expended the effort, I pulled out a reference which uses the phrase more closely to the context of my thinking- though I'd not seen this article until this morning. An extract: "At that point, the deadly spiral beckons: Each player may do what seems necessary to save itself--nations, banks and companies--but such self-protective measures simply amplify negative currents for the whole. Governments will act, one assumes, but not necessarily in convergence. Some countries are already opting out of the unregulated global financial market, and more are sure to follow if the leaders of the global system do not offer them something more than old sermons on the virtues of the Washington model. The major central banks will reduce interest rates sooner or later--and substantially--but, as with Japan, their timing matters. If gloom has already swallowed up optimism, the stimulative impact may be disappointing. Central bankers will find themselves staring at the fact that they cannot cut interest rates below zero. Paralysis in crisis is what disgraced the Federal Reserve seventy years ago and persuaded many politicians and economists to belittle the power of monetary policy as "pushing on a string." thenation.com Now I think you made excellent points about income distribution not preventing growth. I'd like to suggest that it may impact optimum growth, as not effectively deploying capital (hoarding it under the mattress instead) does have a multiplier effect. Those with little or no capital have little opportunity to effectively deploy it, so concentration of capital increases the risk that it may not be effectively deployed. Now that I think of it, I've heard arguments that capital concentration was good, specifically because those who tend to accumulate it know how to deploy it. Maybe, maybe not. My position is that we are in the midst of deflationary events, and that the appropriate response is to employ fiscal policy on mutually beneficial projects throughout the world, not drive interest rates negative, lower tax rates, margin requirements etc. I doubt we will have a serious contraction, but do consider it a possibility.