FX macroeconomics
serving the needs of the networked economy. Unilateral central bank actions within borders are too near sighted.
Part V: New Money
If this premise is correct, there’s no way
for an
individual nation to compete with the networked economy short of completely isolating itself; an unrealistic p r o p osit io n . What about a
competing
network? Well, c o m p e t ing e c on om i c net w o r k s do exist, for example, free trade zones. However, as evidenced in the most comprehensive, coordinated, single currency free trade zone, namely the European Union, rules and regulations create inefficiencies, thus increasing the available value stored in the networked economy.
Why
In many ways, the networked economy is raising the standard of living and quality of life for many hundreds of millions of people of the ‘third world’. Although the gap is wide beyond reason, standards of living and quality of life also seeks
52 FX TRADER MAGAZINE April - June 2016 should currency
equilibriums and the networked economy provides the conduit. However, that comes at a price. It’s
exchange
become so obviously disconnected from unconventional monetary policy?
becoming more and more difficult for citizens in the ‘first world’ to maintain their high standard. Well- paying jobs with full benefits have been replaced by lower paying jobs with fewer benefits or part time jobs with no benefits.
Nations which had the foresight to establish tax supported social programs such as health care, elder care and pensions may be only a few steps behind the less-government- supported-economies
like the
United States. The flow of value from those nations will eventually
be absorbed by the networked economy and erode the tax base. This will result in higher tax rates, fewer benefits or both. This leads to less d isc r et iona r y income, thus a lower standard of living. Co n v e rsely , less well-off emerging market e c o no m ie s, eit he r through their g ove rnment’s redistribution of imported wealth or directly having more d isc r et iona r y spending power will increase their standard of living.
have
The technology infrastructure of the networked economy has the potential to provide individual efficiencies. Technology provides a conduit for all individuals, wherever they may be, to access paths of efficiencies and cost savings. Money, that circulating memory of value, is evolving into a non-tangible digital form. Personal mobile devices have the capacity to access large digital networks at point of purchase. It’s already possible to seek out credit subnetworks to compare the best loan rates. Does the technology already exist to individualize credit
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