Gamesmith94134@ The Anatomy of Global Economic Uncertainty

In the search of the optimal paradigm for the four dynamics as in economic and financial or social and political, after the lender and debtor placed in growth and development we can see the clear distinctions on globalization, profitability, and balance of payments are pretty extreme; especially when the basis of the exchange in its value of currencies or durable goods like the real estate, or resources like oil changes. They do created the uncertainty on how we saw in the historical values integrated with change on the status from the globalization, profitability, and balances of payment. Perhaps, when we observe the deleveraging on the value of the economical advances or the currencies after the liquidity turned to solvency problems; and the exchange rate on the currencies made sit worsen on the restoring the historical values-----uncertainty on the value of the currencies made the foundation of the present exchange system collapsible even after the Libor rate principle is no longer relevant from the changes in globalization, profitability and the balance of payments.

At first, we would question the title of the “Consumer of the World’, America and the merging of the European Union after the 92’. It sounds as the game of monopoly in the stock and commodity markets. It was the price market that most emerging market nations attempt to catch up with the economical growth by offering its labors and cheaper currencies; and the economical giants like US and EU were taking advantages of the profitability; but they gave up the industries that utilized its human resources by prompt on the raising salaries on the high end industries they sustained, and the government themselves shared their profits with government workers like teacher, policeman and fireman, and the growth push the cost of living standard forward the most labors were benefited from the surge. When their high end jobs missed their competitions from the emerging market nations, the balance of payment was default with deficits. Since the Western world is short on the political will to adjust and deprive the inflation, the liquidity traps were set in the quantitative easing with more bonds to sell.

Perhaps, the key point was the excessiveness of the funds created after the issuance of the bonds with less of equity backings. Then, they accompanied with the financial establishment like banks boomed with the inflated pricing, hoping the emerging market nations accept its inflation by raising its currencies rates to exchange instead of harvesting the surpluses. Consequently, these issues were not purchased by investments of its people nor corresponded by the revenues of its government. Thus, it created the sovereignty debt that the foreigners must pay as the bearer of the issuance of these bonds. It went on to build up the price on stock or commodity; but the interest rate was mutated by its anemic growth in the developed nations; and inflation hit the emerging market nations with hike on the labor cost. Then, in due process, sovereignties are separated in the globalization after the fact on the political ends; while the debtor nations shirked with its debt, and the emerging market nations restricted the floating rate from inflation. It is why globalization was not a part of free trade in the sake of sovereignty under its protectionism.

However, the bond issuers had applied the liquidity instead of solvency to the deficits or create growth, in reverse, they also developed the bubble in the stock and commodity market and the exchanges rates with their suppression of the interest rate to growth variation that the funds were created had no basis for growth, and its currencies were devalued. Then profitability was questionable on the displacement of time and value as it were; when the interest rate was under the spell of monopoly, that neither dollar nor Euro was the only alternative in storage of value in free will either. Soon as the deficit surface, the secondary storage, like real estate or commodity does not reflect the value of the future. The market collapsed on the demand of the appropriate compensation with hike of interest rate. With lesser success to improve the exchange in the bonds, the credits dragged on to the financial, that most medium business structure suffered most of the credit crunch. Then, profitability is limited on the established business and the medium business lost its profitability from the cash it must store or raise more to survive rather to gain. Since the anemic growth will continue globally and inflation hit harder to the labor cost for those exposed to the profitable nations and developed establishments. ..then, the credit crunch set in for the ordinary working class too in amending the balance of payment, from his credit card to home mortgage. Eventually, his job is hanging by a thread due to the eroding job market and the other is fighting inflation with low rising income or wages.

Perhaps, we are identifying a limited set of explanatory variables in what statisticians call “a reduced-form equation”, from the changes in the value line that flip flap in the merging globalization how each is sensitive to inflation and deflation; or, how profitable is each investment we are involved whether it is stocks, commodities or bonds may not be depended on the outcome but how it would evolved relatively to others like the exchange of the currencies; or it is more depandable on the reveiws on the balance of payments from the soveriegnties, and from average working class as well, since the present political environment is much vulnarable to change whether it was keynesian or socialististic. It is hard to tell how we value on the currencies or the government is soaked in the welfare state, and is coming to drown itself. Finally, I am looking forward in the next years in the settlement of the Euro and its sovereignty debts; and how the Western world looking at the globalization by fending off China or reminbi which had already set from the watermark of the global economy, and it is not going away. However, I would expect another new world order that is much stabler than the Euro-dollar rule, in the multi-speed, and multi-currencies Zones mode, which will extended its protection on its sovereignty power and currencies in running its domestic financial and global financial; so, monopoly or hegmony is no longer relevant in our civilized community and financial world.

May the Buddha bless you?

