Posted By: NepZone @ 04/28/2008 8:06:12 AM

Comment: Major Economic Scenarios


A. Pro Economic Expansionist Governments

In this day and age Governments and politicians seek only to ensure economic expansion (note: In the Clinton Years inflation data was actually manipulated to reflect lower inflation) indifferent to everything else especially Inflation & Speculation.

In some cases Governments actually unbalance the playing field by estalishing Sovereign Funds to enhance their profits and thus competing with the private sector in pushing asset prices and subsequently inflation higher.

B. Flaws of Globalization

Obsessed with growth, Governments expand free trade and encourage globalisation thus opening their countries to greater economic imbalances especially when there are sudden movements in the flow of "hot money" (ie. classic example in the 1997 Asian financial crisis). Just imagine if some countries did not protect their farmers, what would have happened in this current "food inflation crisis"? Free trade have effectively placed some economies at the mercy of others! Thus, has National Security been compromised?

C. Hyperinflation

The factors above have now pushed the world into a hyperinflationary period. The US Fed has EVEN reduced interest rates in the face of severe inflation giving birth and stoking the next bubble. See how twisted Government policies are nowadays! Luckily, we still have a responsible Euro Central Bank.

D. Increasingly Polluted World

Governments in search for economic growth have effectively forgotten the environment.