The Forum > Article Comments > The final countdown? > Comments
The final countdown? : Comments
By James Cumes, published 6/12/2011The only people prospering at the moment are speculators, but how long before they are swallowed too?
- Pages:
-
- Page 1
-
- All
- Pages:
-
- Page 1
-
- All
The other nations went along for the ride happily.The practice allowed them to shift potential unemployment to the USA and the USA became the consumer of last resort. “Free Trade” has often been the rallying cry for those who wanted to avoid solving the real problem.
Australia lost many real assets such as Arnotts, Edgells, half of Qantas, and many other valuable assets, in exchange for some of those $USA bank balances. Money is really only a short term store of real wealth. Actual ownership of real resources is real wealth.
Those bank balances often remained in the USA banks and formed the foundation for the totally non productive financial gambling by hedge and other funds in derivatives which have no purpose other than to allow further gambling.
The solution is a return to trading in real goods and services between sovereign economies paid for using an international trading currency. That trading currency should comprise a weighted component of each sovereign currency of the individual trading nations with the weighting determined monthly based on immediate past trading history. My understanding is that that was basically JMK’s solution to the international trading problem at Bretton Woods.
The Basle Agreements have simply been efforts to push back the day of reckoning and all such efforts usually result in making the problem ultimately worse and the ultimate solution more difficult.
The USA dollar as the currency of international trade ceased to be a sensible solution once the USA’s domestic oil production peaked in the early 70’s (domestic production is now about 30% of that peak) and the USA commenced to become a debtor nation.