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Posts Tagged ‘monetary system’

Just requoting Paul Kedrosky’s post today:

What people don’t get about sovereign debt is that countries are sharks when it comes to debt and default. That is the real lesson of research and writing and history in this area – that countries have been messing around, defaulting and restructuring in debt markets for hundreds and hundreds of years. Defaults, busted banks and the like is what happens when you lend to countries that have much more experience and cynicism about their use of debt than you think they do.

This blogger through firsthand experience in a commercial bank’s risk and asset division, is witness to the financial wizardry the modern financial system employs to build the mountain of debt on which our capitalist societies exist on. In the news we are also witness to the horrors that mismanagement of debt and currency can create.

Kedrosky is not a lone voice here. We’ve captured the sentiments of others
like Gerald Celente, Max Kaiser, and Peter Schiff all of whom have put up credible arguments about how tentative and fragile a system based on debt is.

Not all who understand the system are speaking up vehemently against it. Our favorite speculator George Soros certainly understands the goings-on but is content to “game” the system for profit (and successfully too).

What this blogger finds interesting is despite all these critiques, the system continues unabated–notwithstanding the ever increasing magnitude of crises that recur. The arguments put forth by the pundits are actually dated–these sentiments have been around for as long as a monetary system has been around. Our favorite skeptical empiricist, Nassim Taleb, blames moral hazards for perpetuating the flawed system, but even the question of moral hazards isn’t new.

After all isn’t rewarding someone for “bad” behaviour the crux and aspiration of prosperity and decadence? The whole system is rigged to feed on itself! So far the common alternatives to the flawed system, barring a return to primitive times, propounded by the pundits range from a form of “modified capitalism” (shades of the Austrian School) to more “radical socialism” (e.g. Zeitgeist, Venus Project).

Which is why it far from surprises this blogger that “experience and cynicism” are the placeholders that Kedrosky chose to describe what underpins the motive of governments regarding debt. There are those who complain and those who game, but the last bucket are those who still choose to participate in the system–maybe in a fit of realism, maybe fatalism.

Meanwhile someone please buzz this blogger when and if we decide to let go of this monetary system and its sydstem of debt.

“Sent from my BlackBerry® wireless handheld”

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On a recent interview on Cavuto, Ron Paul describes the sorry situation of the US monetary system and its implications.

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In a similar vein as films we have featured here before such as Money as Debt, Money Masters, and criticism posed by Zeitgeist Addendum, here is a documentary featuring personalities from the Mises Institute about the nature and flaws of the present monetary system. This is Money, Banking, and the Federal Reserve.

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Pete wrote a good piece in criticism to Zeitgeist Addendum‘s proposal for a resource-based economy, and the movie’s own critique of the failings of the current fiat monetary system.

See that article here. An interesting portion on morality of money:

No system is ever moral (or immoral) – only people are. Our current fiat monetary system is based on a governmental controlled banking cartel but it is not certainly the only option available (see e.g. free banking and Free Choice of Currencies). It is far stretched leap to state that no system will work because our current one is at fault. Money is only a tool, an objective means to ends, in itself it is a neutral carrier like energy that can be utilised to constructive or destructive purposes. (see Francisco’s Money Speech)

To which I offerred my own comments (also viewable in the above article), specifically this portion: (more…)

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They say money is a perfect way of keeping score on life. Every year, Forbes magazine publishes that score for people to see, and in recent years–this list has been segmented by region (as the total list is pretty much dominated by American billionaires).

Financemanila writes:

The list of 40 takes the booby prize among the region’s rich. As a group, wealthy Filipinos are actually the poorest, when compared to their brethren in Indonesia, Malayasia, Singapore and Thailand. They had the smallest total net worth, $16 billion; fewest number of billionaires, just three; and lowest minimum net worth, a mere $25 million

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