Archive for the Magazine Reference Category

One World Currency? (January 8, 2018)

Posted in Banks and Banking System, Cryptocurrency, Currency, Cyberactivities, Dollar - World's Reserve Currency, Magazine Reference, Money, Petrodollar, Special Drawing Rights (SDR), Universal Monetary Unit, World's Reserve Currency on January 8, 2018 by e-commentary.org

. . .

K          “Thirty years ago tomorrow, The Economist magazine uploaded an article titled ‘Get Ready for the Phoenix’ with a cover proclaiming ‘Get ready for a world currency’ and featuring a rising Phoenix.”

J          “Get ready.  The Phoenix, the Bancor, the S.D.R., the Universal Monetary Unit, the Bobcoin, the Something Else is likely to replace the PetroDollar in the near future.  Stay tuned.” 

. . .

K          “On a simple level, ‘cryptocurrencies’, etc. are digital and gold, etc. is analog.  Blockchain technology underlying ‘cryptocurrencies’ is likely to be supplanted by a fast, fair, sustainable, scalable, guaranteed Byzantine fault tolerant consensus digital technology using gossip protocols and virtual votes such as Hashgraph.  And Hashgraph is likely to be supplanted by even more advanced and sophisticated technologies.” 

J          “That’s what everyone is saying.  Get ready.  Stay tuned.”

. . .

[See a related and more recent article “One world, one money” in The Economist magazine dated September 24, 1998.  First published as a five-part series punctuated with reprints of paintings by Gustave Courbet, “Bitcoin Doesn’t Exist – The Full Story” written by “Dr. D” for “The Automatic Earth” project/site provides some perspective on the phenomenon known as ‘cryptocurrencies’.  The comments to the series and the comments on the sites that reprint the series provide some robust ideas and opinions.  Much is happening quickly.]

[See the e-commentary titled “‘Bitcoin’, ‘Ethereum’ . . . ‘Blockchain Technology’  Say What? (July 3, 2017)”, “The Mandibles, FRNs, SDRs, IMF, G20, WTD! (September 5, 2016)” and “USA + FRN/PD — > IMF + SDR — > NDB + UMU? The “Universal Monetary Unit” . . . Coming To a Planet Near You (January 2, 2017)”.]

Bumper stickers of the week:

Want to improve your love life?  Change your handle to “Blockchain”

. . .

The Economist, January 9, 1988, Vol. 306, pages 9-10; Cover:  “Get ready for a world currency”; Title of the article:  “Get Ready for the Phoenix”

THIRTY years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency.  Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix.  The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.

. . .

At the beginning of 1988 this appears an outlandish prediction.  Proposals for eventual monetary union proliferated five and ten years ago, but they hardly envisaged the setbacks of 1987.  The governments of the big economies tried to move an inch or two towards a more managed system of exchange rates – a logical preliminary, it might seem, to radical monetary reform.  For lack of co-operation in their underlying economic policies they bungled it horribly, and provoked the rise in interest rates that brought on the stock market crash of October.  These events have chastened exchange-rate reformers.  The market crash taught them that the pretence of policy co-operation can be worse than nothing, and that until real co-operation is feasible (i.e., until governments surrender some economic sovereignty) further attempts to peg currencies will flounder.

. . .

The new world economy

The biggest change in the world economy since the early 1970’s is that flows of money have replaced trade in goods as the force that drives exchange rates.  As a result of the relentless integration of the world’s financial markets, differences in national economic policies can disturb interest rates (or expectations of future interest rates) only slightly, yet still call forth huge transfers of financial assets from one country to another.  These transfers swamp the flow of trade revenues in their effect on the demand and supply for different currencies, and hence in their effect on exchange rates.  As telecommunications technology continues to advance, these transactions will be cheaper and faster still.  With unco-ordinated economic policies, currencies can get only more volatile.

. . .

In all these ways national economic boundaries are slowly dissolving.  As the trend continues, the appeal of a currency union across at least the main industrial countries will seem irresistible to everybody except foreign-exchange traders and governments.  In the phoenix zone, economic adjustment to shifts in relative prices would happen smoothly and automatically, rather as it does today between different regions within large economies (a brief on pages 74-75 explains how.)  The absence of all currency risk would spur trade, investment and employment.

. . .

The phoenix zone would impose tight constraints on national governments.  There would be no such thing, for instance, as a national monetary policy.  The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF.  The world inflation rate – and hence, within narrow margins, each national inflation rate – would be in its charge.  Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit.  With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today.  This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case.  Even in a world of more-or-less floating exchange rates, individual governments have seen their policy independence checked by an unfriendly outside world.

. . .

As the next century approaches, the natural forces that are pushing the world towards economic integration will offer governments a broad choice.  They can go with the flow, or they can build barricades.  Preparing the way for the phoenix will mean fewer pretended agreements on policy and more real ones.  It will mean allowing and then actively promoting the private-sector use of an international money alongside existing national monies.  That would let people vote with their wallets for the eventual move to full currency union.  The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today.  In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power.

. . .

The alternative – to preserve policymaking autonomy – would involve a new proliferation of truly draconian controls on trade and capital flows.  This course offers governments a splendid time.  They could manage exchange-rate movements, deploy monetary and fiscal policy without inhibition, and tackle the resulting bursts of inflation with prices and incomes polices.  It is a growth-crippling prospect.  Pencil in the phoenix for around 2018, and welcome it when it comes.

Smedley And Ernest On Our Friend “War”; The “Racket” Continues (September 7, 2015)

Posted in Banks and Banking System, Book Reference, Magazine Reference, Military, Oil, Wall Street, War on September 7, 2015 by e-commentary.org

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_          “Four score years ago this month, the world of arts and letters and the world awoke to a pair of trenchant commentaries on our friend ‘War’ written by two scholars who had spent time in the trenches and developed the ‘street cred’ to command attention and respect.  Smedley D. Butler was a United States Marine Corps major general, the highest rank authorized at that time, and at the time of his death the most decorated Marine in U.S. history who also should have won a Nobel Peace Prize.  Ernest Hemingway wrote stuff.  We should listen.”

. . .

[See the e-commentary presented on a prior Memorial Day on this Labor Day at In Memoriam (May 26, 2014).]

Bumper stickers of the week:

“I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers.  In short, I was a racketeer, a gangster for capitalism.  I helped make Mexico and especially Tampico safe for American oil interests in 1914.  I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in.  I helped in the raping of half a dozen Central American republics for the benefit of Wall Street.  I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912.  I brought light to the Dominican Republic for the American sugar interests in 1916.  I helped make Honduras right for the American fruit companies in 1903.  In China in 1927 I helped see to it that Standard Oil went on its way unmolested.  Looking back on it, I might have given Al Capone a few hints.  The best he could do was to operate his racket in three districts.  I operated on three continents.”  Smedley D. Butler in a poem in the September 1935 issue of the magazine “Common Sense” that later become an overlooked classic. 

“They wrote in the old days that it is sweet and fitting to die for one’s country.  But in modern war there is nothing sweet nor fitting in your dying.  You will die like a dog for no good reason. . . . The only way to combat the murder that is war is to show the dirty combinations that make it and the criminals and swine that hope for it and the idiotic way they run it when they get it so that an honest man will distrust it as he would a racket and refuse to be enslaved into it.”  Ernest Hemingway in “Notes on the Next War: A Serious Topical Letter,” in a September 1935 issue of the magazine “Esquire”.

Here Comes Da Judge; Dere Goes Da Justice (August 31, 2015)

Posted in Courts, Federal Courts, Judges, Judicial Arrogance, Judiciary, Law, Law School, Magazine Reference on August 31, 2015 by e-commentary.org

. . .

B-W L          “I told my client in a personal meeting face to face in the office that we were assigned a judge who would rule against us without reading any of the pleadings.  Zero percent chance of success.  An appeal was too expensive.  The client said to proceed making the arguments and angle for an angle, some angle, any angle.  You should always send a separate letter as an attachment to an e-mail and by snail mail to the client confirming your concerns that the outcome may not be favorable as discussed.  I slow rolled things playing for time with no grand plan.  Out of the blue, an entity moves and is allowed to intervene; the judge steps out of the case without comment.  New judge takes over case; new judge follows the law; client prevails.  You need to get lucky some times.”

W-E L S          “We are spending the third year trading war stories like this in the student lounge.”

B-W L          “And that part of the process is not even covered by tuition.  I told another client that we drew the right judge and could expect a favorable outcome.  Some judge gets deployed overseas to join in killing innocent folks and a new judge is assigned.  A judge who liked to use the expression ‘a no-brainer’ and met that qualification.  However, the argument required a brain.  He employed his patented ‘no brainer’ analysis.”

W-E L S          “Dead.”

B-W L          “DOA.  Upon notice of the reassignment, the first reaction was utter dread.  Game over.  A death notice from the court.  You may not realize that your state still has the death penalty in civil cases.  And not a shot was fired.  How do you explain it to a client who is utterly disgusted with the whole process.  He kept yelling that he wanted the first judge and wanted me to get the first judge back.”

. . .

B-W L          “MSU is a military expression that applies to the law.  Making Stuff Up.  The facts and the law.  No one will ask the fundamental question whether all the money, public and private, spent to indoctrinate a young law student is worth fomenting the illusion and delusion.  Is there value in the truth?”

W-E L S          “Can I get a refund on my tuition?”

. . .

B-W L          “Few if any of your law professors ever practiced law.  You are obligated to repeat and are rewarded for propagating the myth.  That is the Game.”

. . .

[B-W L: Battle-Weary Lawyer; W-E L S: Wide-Eyed Law Student]

[See the e-commentary at Playin’ The Legal Game (March 28, 2011) and Assigning Blame: The Lawyers: 50 Percent; The Non-Lawyer Public: 50 Percent; The Judges: 100 Percent (December 3, 2012).]

Bumper stickers of the week:

“Your honor, we will be filing a motion this afternoon to transfer this case to an entirely different judicial system.”  “The New Yorker” cartoon in office.

MSU:  The motto of the American judicial system

A system of men and women not a system of laws.

The first thing we do let’s banish the American-acculturated judges.