Market Updates



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Market volatility accelerates and financial risk compounds itself over and over. Asset volatility is not allowing the global productive system to realise required sustainable efficiency.
Repeated short term cycles of financial market collapse plus bailout reveal the money sector cannot govern itself, as it currently does. Intervention, as well, is not helping productivity given the financial sector enjoys subsidies not enjoyed by  sectors.

Global economic weighting has become  financial in nature. Financial markets command a billion times more worth than all the global tangible assets put together. This dangerous imbalance increases crises also the financial sector crowds out real sustainable economic growth, worsening unemployment.

In the next few decades, good government will have to intervene and facilitate the move back to sustainable production.These policy shifts will not be painless, as the generations of tomorrow will have to pay for our carelessness today.

Global Debt Is Old Economy

Debt defines economies. Debt The First 5000 Years is a must read for all legitimately interested in the human condition. Humanity evolved from social reciprocity between neighbours. As communities grew and alliances were made, reciprocity became expressed in social and communal currencies.
Social currencies defined social structure and ensured social stability. David Graeber goes on to explain how the pillage and plunder mode of existence that persisted between groups, not sharing the same communal currency, was resolved by conquers who forced debt coinage on conquered communities.
Modern commerce grew as debt instruments expanded and became more complex. Debt The First 5000 Years gives a historical background to the well proven Hyman Minsky analysis of debt and economic cycle. About time main stream analysis also seriously took into consideration the works of Michael Hudson and Steven Keen and others who further explain the power of debt in economic dynamics.

Short Term Economic 'Recovery'

The world economy continues 'in recovery'. Concerns in some corners over potential over-heating in speculative markets are not exaggerated. Our world economy still continues to hold too much debt. Transnational industrial complexes continue to damage the environment with no consideration taken of future impacts. 

On the bright side, some economists are working to transform the thinking of future generations. Ha Joon-Chang has released another honest assessment of economics and its impact on all. The future will brighten when economics becomes more realistic and accessible to all citizens.

This recovery is not resolving any of the real endearing challenges that continue to haunt markets and the environment. This recovery remains short-sighted at best. Medium term financial  volatility will persist and this economy sits long on a position of environmental failure.

Depression continues

Statistics seem to indicate the Great Depression is behind us. This is misleading, the world economy has not grown in real terms it is only recovering past losses. 

Factoring in growing global population growth, and growing inequities, the world economy is no better than yesterday it is worse.

One lesson realized in this recession has been the failure of economics to stand up to the challenge of guiding the world through recession. John Maynard Keynes, Adam Smith, Milton Friedman, Karl Marx and other classic thinkers ensured economics was for real tangible development. Today economics has more books than ever and all these libraries indicate a study in crisis.

With more graduates than ever, and models more rigorous than before, the discipline has failed to provide inspiration and leadership during time of crisis. Economic 'knowledge' is vast and ubiquitous, but reliable economic wisdom remains scarce. True to form; common sense scarcity remains the central economic problem.

Economic Thinking

Economics attempts to make sense of the chaotic farce of resource allocation.

Articulating the process of need and want satisfaction is not an easy endeavor. In terms of economics fulfilling its task of understanding resource allocation, it fails dismally.

Resources are allocated through clandestine markets. Economics does not study real world markets. It does however, deliver a theoretical assumption based framework as to how things work within its hypothetical models.
Economic models are far from the real. Economics as a discipline expends its intellectual space musing about models and assumptions; Rome burns while the emperor of social science intellectualizes unrealistic hypotheses.

To the thinking economist, models are primitive stepping stones to deciphering the workings of markets and society. Without an eclectic approach to understanding social behavior, pure economics disciplines economists not to think outside the assumptions. Thought inspired economics, however, is what the world economy needs to resolve its challenges.

Money Credit and Banking

Economic text books sell vain hypotheses. Based on assumption and driven by ‘simple’ models, texts do not give a clear picture about the workings of money, credit and banking.

Backed by unrealistic money models, economics fails to predict crises. These crises will continue until either the empire of debt collapses, or better monetary systems are evolved. Central bank response to the last financial crisis seems to indicate the debt status quo will be preserved at any cost.

Economic texts will not be revised, any time soon. For the status quo to be maintained, these redundant economic philosophies cannot be thrown away. The tri-unity of money, credit and banking will continue in baffling both student and policy maker.

Economic Slowdown 2014

Q1 is seeing slowdown in anticipated growth from last year. Fed tapering continues to fuel upward pressure on interest rates, on top of worsening currency depreciation in developing economies.

Continuing contraction of Chinese manufacturing means 2014 will not see Asia as the engine of global economic growth.

With developing countries experiencing unmanageable currency volatility, growth in developing countrys will be inward- looking in the next trading quarters.