Tony Kinsella writes in the Irish Times :
In January, the US navy commissioned its nuclear-powered aircraft carrier USS George H Bush . A week ago the Tata corporation commercially launched its Nano, the world's cheapest car. Both are marvels of engineering. One is 333m long and cost €4.6 billion, the other is just three metres and retails for around €1,500. The carrier represents a familiar, if failing, past – the Nano our unfamiliar and challenging future.
Contributing editor of Car Magazine Ben Oliver described the Nano as “a staggeringly important, clever, exciting new thing”. In the face of threatened global economic meltdown, with the ILO predicting 51 million job losses in 2009, it at least offers hope.
The conservative economic guru Hernando de Soto Polar straddles our global rich-poor divide having spent nearly half his life in Switzerland before returning to his native Peru. He estimates there is something of the order of €10 trillion worth of cash in circulation on our planet. This is amplified by around €125 trillion of classic debt. Two highly regulated, and clearly recorded categories, neither of which poses significant problems. There is, however, a third element of wealth in circulation, and one that threatens our economic survival – derivatives and other loans.
De Soto Polar estimates these as having a paper value of between €450 trillion and €750 trillion. In the words of another leading economist, Paul Krugman of Princeton University, they resulted from a process where “Loans no longer stayed with the lender. Instead, they were sold on to others, who sliced, diced and puréed individual debts to synthesise new assets. Subprime mortgages, credit card debts, car loans – all went into the financial system's juicer.”
~ more... ~
No comments:
Post a Comment