macroeconomics
access? In particular, is it possible to have an “app” which continually scans multiple credit sources so that each purchase made with a mobile device optimizes the value for
the
consumer? No special effort would be required on the part of the consumer. A mere scan of a barcode will access the best credit line. Payments on the short
Conclusion: Creative Destruction or Construction?
term loan simply follow the
reverse paths. For the consumer it would simply work. Such a mobile device app could replace individual fixed rate credit cards.
The networked economy technology infrastructure has the potential to individualize the optimization of value far beyond what is currently commercially available at the consumer level. In technical terms, subnetworks may be represented as a matrix; i.e., a set of linear equations. These are the type of equations computers are able to solve almost instantly. The cloud infrastructure can optimize these individual subnetwork matrices in the hundreds
of millions. A
mobile device is an end node of a subnetwork.
The point is that the networked economy technology infrastructure can carry and circulate value down to an individual level. In other words, a mobile device functions identically as does a paper note or a credit card.
Mobile devices are the new money. 1 Barter is defined as a moneyless transaction.
2 Bearer notes originated in 17th century London 3 Etymologically derived fom Italian ‘nota di banco’
4 Te sinking of the California-gold laden SS Central America in 1857 meant
that there suddenly was not nearly enough gold to back all circulating bearer banknotes, which led to a bank run, bank failures and a deep recession.
How might nations cooperate in a way to preserve efficiencies, provide for more equitable wealth distribution in such a way as to have orderly creative construction as opposed to chaotic creative destruction?
In particular, how
might a cooperative governing regime be established which doesn’t affect efficiencies in the networked economy? The task is not easy, but neither is it impossible.
The critical component for a strategy will indeed require cooperation. Perhaps part of the solution may reside at the terminal nodes of the networked economy; i.e., the endpoints. Organizations such as the OECD, World Bank, IMF WTO, WHO the UN need to establish and enforce minimum living wage standards, basic infrastructure standards and government supported social support standards for emerging markets. On the other side
of that coin, the wealthiest
economies need to increase domestic spending particularly in the upgrade and maintenance of domestic infrastructure; particularly revenue producing infrastructure. This will serve
two purposes. First, it will
create wage competition, thus wage growth within national borders (and possibly weaken support for populist
5 Scotland and Northern Ireland do not have legal tender. However, the use of the US Fed assets still include gold and US issued gold backed notes, however it’s Graph Teorist use the term ‘edge’; path is more appropriate for the context here.
various UK pound notes is not illegal! 6
small in comparison to other assets 7
8 But certainly not beyond the abilities of modern digital networked computers
to keep track of. 9
production to Mexico. 10
Mike Scrive
Currency Analyst Accendo Markets
2016. A US manufactured iPhone would cost over $1300. 11
Recently US based Carrier Corp and Mondelez have recently moved some, not all “If Donald Trump Had His Way, Your iPhone would be Insanely Pricey”, 19 January CNBC 10 March, 2016 “US Credit Card Debt Balloons to $917B: What It Means”
political movements).
FX Second,
it will create a new class of assets whose return on investment will be derived the level of activity of a client economy.
The networked economy is a real, existing competitive economy created by the demand for cost efficiencies. It is not a conscious creation but exists, nonetheless. It has everything a textbook definition requires of an economy including currencies with value, currency circulation and GDP. As it is now, resistance to the networked economy’s existence is futile and potentially destructive as evidence by the growth of populist politics; nor can it be bypassed as evidenced by the recent ‘misbehavior of markets’.
The networked economy is the next iteration of economic development. Further, it can’t be governed internally without destroying its self-managed efficiencies. It can only be governed at its terminal nodes primarily by more equitable wealth distribution. The most important point is that if it isn’t recognized and governed, from those endpoints, in a cooperative way, it will seek its own solutions, which would then present a risk of achieving efficiencies at any price.
FX TRADER MAGAZINE April - June 2016 53
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