motianey - super cycles; the new economic force transforming global markets (2010)

[...]... economy over the last 20 years, the fast-motion collapse in East Asia, and the slow bleed of the manufacturing sectors of the U.S economy In each case we forestalled the most severe effects of the 1930s—in which the economy folded in on itself—because policymakers had learned from the mistakes of the past The second SuperCycle the Modern SuperCycle—which we are currently experiencing, dates to the formation... face the Second Great Depression; more likely we will face the first Great Global Malaise—where the whole world looks like Japan—or perhaps the Great Stagflation The sooner we grapple with the possibilities that the SuperCycle puts before us, the less we will have to complain about when the future gets here Schematic of Main Themes of the Book An overview of the confluence of forces that created the modern... thing; from the standpoint of the SuperCycle it is unquestionably bad This will seem counterintuitive to most readers Don’t Gold Standard countries have to adjust to the harsh price-specie-flow arrangement whereby capital outflows reduce the money supply and hence force the sector (and the economy in question) to deflate? Didn’t the in-built flaws of the Gold Standard produce the Great Depression? The answer... the upward spiral in the giant services-dominated and goods-consuming economies of the developed world, most especially the U.S and U.K economies And their bust is where we find ourselves today x I NTRO D U CTI O N There have been two major SuperCycles in history The first SuperCycle the Classical one, which stretched for more than half a century from the widespread adoption of the Gold Standard in the. .. financial markets as being the same as that of a falconer and his predator bird The essence of falconry—to catch, kill, and retrieve—is frustrated if the falcon is maimed The bird is an extension of the falconer’s capacity in the act of hunting; the relationship is almost symbiotic The financial markets are in the same way an extension of the Fed They will follow the central bank’s directives as long as their... exerting themselves to hold up a massive and broken system What has shocked these two astute and wise observers of the global economy is that the efforts of the authorities have gone far beyond the necessary and now verge on the corrupt Johnson’s frequent use of the term “oligarchs” and Leijonhufvud’s use of the word “oligopolies” betray their outrage at the turn of events Let’s hear it in the words of the. .. on the balance sheet of households in the goods-using (rather than goods-producing) economies This is the essence of the SuperCycle—a generation-long price swing that drives the world economy from high inflation to deflation and back to inflation again with potent side effects that we recognize too often after the fact as asset bubbles The curse of the Ring in Wagner’s musical dramas is analogous to the. .. events but rather as part of the fabric that is the SuperCycle, it occurs to us that problems at each stage were simply cumulating The International Monetary Fund, led in each case by the Rubin-Summers-Fisher troika, acted to enforce a program of devaluations and tight monetary policy The idea was to engineer a large real depreciation of the exchange rate in each of the crisis economies, all in the name... 1870s to the Great Depression—ended abruptly in the early 1930s in the mass liquidation of goodsproducing capacity in the gold standard economies, that is, the United States, Germany, the Scandinavian countries, and a handful of Latin American economies The modern global economy has already had its own (arguably milder) versions of the Great Depression in the off-and-on catatonic state of the Japanese... economies in the 1990s, and the near collapse of the United States, United Kingdom, and indeed the international financial system in the late first decade of the 2000s, not as separate, independent events but as successive points on the same extended pattern that is the SuperCycle The (commodities-dominated) bust in Latin America necessarily fed the (manufacturing) boom in Asia just as the bust in that . without the prior written permission of the publisher. ISBN: 97 8-0 -0 7-1 6373 8-1 MHID: 0-0 7-1 6373 8-9 The material in this eBook also appears in the print version of this title: ISBN: 97 8-0 -0 7-1 6373 7-4 , MHID:. left blank SuperCycles THE NEW ECONOMIC FORCE TRANSFORMING GLOBAL MARKETS AND INVESTMENT STRATEGY ARUN MOTIANEY New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San. Depression in the off-and-on catatonic state of the Japanese economy over the last 20 years, the fast-motion collapse in East Asia, and the slow bleed of the manufactur- ing sectors of the U.S.