The World in 2030

[konkon]

Some modifications to the original post. China's ambitions over the next two decades and beyond are a concern for me. If it seeks to take control of world wide geopolitics, it won't do it like the US does. China would not oversee all geopolitical regions and potential dangerous gaps may exist; even more of a reason to continue to support and reinforce US/allies agendas.

Major countries that are not strongly allied with the US: China, Pakistan, Russia. Iran...Careful attention was placed on allies and non-allies as this gives some sort of a blueprint as to what a major war might look like if there is a major conflict between large competing nations.

When you beat the grass, the snakes will come out. Over the past few months it has become clearer, to me, that several nations might want to stick their necks out and look at future geopolitical zones that they might be able to have some influence over. China and its desire to strengthen its military has its sights on (perhaps most geopolitical areas in two decades, and beyond) south-east Asia. It may form a strategic alliance with Burma, but not with Vietnam. Even more of a reason for countries like Thailand, the Philippines and perhaps Vietnam to form a greater alliance with the US and its allies. Vietnam is a tricky one and China and the US will probably seek its support. Luckily, no Vietnam war revisited though.

The US is still in control-mode and has survived several stock market crashes and recessions. The norm has become to not pay a huge part of one’s perpetual debt and this goes for many individuals, companies as well as countries...

Stock markets will become even more volatile with next generation algorithmic computer trades taking markets in all kinds of directions, more frequently, and with greater momentum. Added to this the greater world-wide participation of investors with short term trading mandates.

One world-wide correction resulted...by the development and implementation of quantum computing and its ability to in an instant decrypt, through even brute-force, classical computing encryptions. So financial companies, governments, internet etc had to reinvest heavily and reinvent themselves, which was costly...

This will add another complex dynamic to short-term heavy volume trading. On the issue of corrections, there will be more and more; a higher than normal historical average and for many reasons.

Europe (overall) is even more heavily in debt and is going nowhere really...

The European Union may no longer exist, or may no longer exist in the same format, for some time. An EU mark II is on the cards, but with a different focus and with initially stricter guidelines by its fellow members.

China has the world's largest economy but does not control the electronic markets; this (most of the asset classes around the world) is still under the US's control...

China will probably use Hong Kong as its financial hub and China will continue to try and direct business within its control. Buying harder assets around the world is still an important strategy for the Chinese. But trying to gain control of financial markets won't work. Using Hong Kong as a strategic (English Speaking) financial hub is a good strategy though.

Collusion and market fixing is still part of the game...

But with greater sophistication, volume and frequency.

Countries like Australia may have to militarize and further protect its borders and protect non-urban regions for fear of a possible invasion by hostile and desperate nations that need its expensive and rare resources; A long shot, but still a concern even in the next 50+ years. It will become an even bigger ally of the US.

Indeed. Hopefully, we're keeping an eye on China's slightly more aggressive stance on geopolitics in recent months. I'm sure many countries in South East Asia are doing the same.

A strong alliance will continue between the US, UK, Germany, France, Italy (Europe in general), Canada, Australia, Japan, Israel, Saudi Arabia (as long as we keep buying oil off of them), Thailand, parts of the old Soviet Union (too many to mention) etc...It's quite possible that China will not have strong ties with the US, but will remain a trading partner of course (with all countries; not much will change here). Russia will play all sides but will side with its strong (not popular in the west) trading partners. Iran is going to be a problem over the next decade, and if Glen Beck is correct, a real problem for Israel and parts of the west.

No change in opinion, but more could be said. Some other time.

China has a real problem; the demographics are skewered and do not favour an even +4% growth anymore (yes, no longer 10%). Their cities have long become the most expensive in the world (and so have many of their products!) and there still is a problem of the ultra-rich and the mega poor, and a demographic youth that has to support a growing aged population. The west still finds it hard to do business there, and there is growing unrest by a restricted and controlled people. The west may at times latently manipulate this to their advantage. Taiwan will continue to be a strategic trading partner to the west and a strong ally.

A whole lot can be said about China and the way it will continue to affect the west's inability to find its economic footing in periods of economic distress; and there will be many periods like this.

Another competing reserve currency failed to dethrown the USD, as it was initially used, accepted but ended up being manipulated on the exchange markets by the US and their highly sophisticated trading computer networks, which still controls the markets.

Not sure a competing reserve currency will take-off at all. The Federal Reserve in the US will make sure it doesn't, as long as Bernanke has his way. But Congress is, in an indirect (and unintentional) way, adding pressure for the USD to lose its reserve status. Sorry, but congress is a real problem for the US, as ironic as this sounds. At the moment, I'm convinced Bernanke wants the USD to remain the world's reserve currency. But he has lots of opposition. He won't be the Fed Chairman by 2030, obviously, so hopefully the next Chairman has the same agenda and ethos.

Wealth will still be made from lack of supply and high demand for space/land, housing, soft and hard commodities etc and not necessarily form innovative developments and innovations. So don’t expect the world to look too dissimilar to what it does today; just more populated and more expensive. A real let-down if you ask me.

One of the reasons why we're in the current mess is that the world has stopped creating and innovating. Globalization and the transfer of jobs to places like China, has meant that the middle classes have lost their competitive edge.

One of the biggest problems that countries have is an overburdening perpetuating debt crisis. Many, including the US, have no choice but to restructure their economies and even currencies. And yes, the finger was shown to countries holding and demanding payment on (unpayable) debt, more than once.

Let's just hope that wars don't break out because some country went after some other countries harder assets, predominately because debt agreements weren't honored.

The United States has the most sophisticated military by far, and has opened up its doors to next generation defence and avionics (out of this world!) technologies, to some extent or to the extent they permit!

China will be catching up at a rapid pace though, and recent publicized articles by the Pentagon have suggested this. Don't know about you, but this is a concern for me.

Two of the biggest risks are overpopulation and perpetual debt; no real surprises here...

Yes, and what to do with all this debt!

 

[konkon]

I think that to get a grasp of a better economic world (or future world) there needs to be different sets of requirements (that can be incorporated into what they already use) from rating agencies like Finch, S&P and Moody's.

What seems to be happening is rating agencies are rating countries in isolation from other countries and the global picture overall. What should be happening is the implementation of a kind of global impact scorecard, where each country also has a set of criteria to address issues like, what impact is their own economy having (good or bad, or both) on others and the global picture. The idea is to gain a net result of their global impact reading on the world's economy after you factor in all (or as many) of the variables.

So a global impact reading, measurement or rating might consist of a country's net impact on the global economy, however little or big. If the impact is a negative read (ie. the transformation of manufacturing to China or the systematic synthetic manipulation of currencies to gain economic (military even) advantages) then that particular country should have pressure on the downside to its overall rating, especially if it's clear that that country is not playing on a level playing field (no matter what the excuse).

Net imbalances should be taken seriously and addressed accordingly. A global impact reading must surely have a say in how and what other ratings are judged. So how can a county with a AAA rating, for example, keep this over the medium term if this same country is being disadvantaged by synthetic and artificial means, by another country?

A global impact reading would also strengthen the, so called, impartiality of those making those crucial judgements, by factoring in to their overall accreditative conclusions (or matrix checklist systems) a perhaps more accurate read of longer term objectives or anticipatory events.

So if you're not playing fair or not playing on a level playing field then you should be penalized.

We probably need to tame the future economic beast anyway we can and have a much better understanding of all kinds of future ratings, especially when volatility due to higher global market participation, newer and more complex trading instruments and next generation algorithmic trading computers etc, will most likely be higher on average historical terms.

 

[konkon]

I still think Turkey will continue to be a more proactive nation that wants economic etc cooperation with other nations, but Turkey, like other nations, has sovereignty that it won't want to compromise. So that might mean, Turkey will not stand for major economic and political disruptions coming from other countries; I think this would be from the east, south-east and north, and I still strongly believe it will not seek to break-off relations with Europe at large (excluding Greece, perhaps). It may have no choice to break-off relations with Europe, if wars break-out in the Middle East, but Turkey will not instigate tensions with Europe at large and the west. Turkey will want to remain 'friendly' with the west. How this plays out depends on so much. It may, like many nations and people, flip-flop on key issues etc. But Turkey will resist the possible future pressures not to side with the west. In other words, Turkey will want to remain a friend to the west, even with all the opposition.

I think Friedman is right though that Turkey may not see eye to eye with Iran. Turkey may still try repeatedly to negotiate with Iran on several issues, to keep peace at a relatively stable level in the Middle East. I certainly hope that Turkey, if it needs to take sides later on, sides with the west and not with Iran's aggressive agenda in that region. It would be in Turkey's best interest to align itself with the west if things escalate out of proportion in the Middle East later on. Or not take sides at all and just defend its own borders if it needs to. Let's just hope that a major war doesn't break-out in the Middle East.

Over the next few years, it won't be about going after someone else's harder assets. But, as is reported in the press, escalations and tensions etc(!) may come down to making sure Iran doesn't advance any further with its nuclear ambitions. A major war in the Middle East before 2030 or even 2015?! I have strong opinions on this one! I just hope for Iran's sake, it plays the odds and sees that it can NOT even come close to defeating the 'west'! I strongly agree with Israel's (and the US's) strong stance on not wanting or allowing Iran to go nuclear. Many in that region would not want Iran to achieve this either, and rightly so.

Also reports of China allying itself with Iran in more ways than one, speaks volumes about China, I think. China is making the historically classical mistake of making friends with someone that doesn't see eye to eye with the west. Sure Iran has lots and lots of oil, that may find its way into China later on at disproportionate levels. But China is making a big mistake of perhaps one day becoming an enemy to the west. I don't think we're there. China is still officially seen as a cooperating partner to the west and east. But it's likely that this will change.

India will play a strategically important role in that whole region. It's positioned nicely geographically for the west. A lot more can be said about India's key geographical position. The same can be said about Burma.

The world's debt is just getting bigger and bigger. What concerns me is the reported derivative exposures in financial markets at the +10s of trillions of dollars, and the leveraging being in the 1/25 to 1/75 level. Many of the major banks seem to be doing this too. A real and underreported risk to the stability of the financial system as a whole.

I've been reading that the IMF was developing IMF SDR bonds as a way to issue or buy-up debt in the world. This was also seen as a potential future competing world 'currency' to the USD. I think the IMF should stick to funding 3rd World debt and not sticking its neck out like this. Anyway, it won't happen. The suggestion that congress in the US should block funds to the IMF should go ahead, if the IMF sees itself as just another 'having the mandate to print money or bonds from thin air' institution.

If the IMF has a newer agenda like this, countries like Australia, the US should see it as a breach of contract, withdraw funds to the IMF and redirect the funds to ie its defense forces.

To end, I agree with those that think Sarkozy is pretty much the captain of the Titanic and is just repositioning the deck-chairs. Well done David Cameron for not wanting to compromise on GB's sovereignty. Europe is much better off not accepting more record levels of debt, bonds etc. I just hope that Sarkozy's take on the Napoleonic era wasn't just about land and guns, but included major lenders and compromising one's position.

 

[konkon]

There are lots of interesting blogs, books etc on the so called inevitability of the $US's downfall. I still don't see it happening but see the $US as an even more formidable phenomenon moving forward. Watching Bernanke's testimony to Congress (especially when it came to question time) last week, got me thinking Bernanke seems to be a lot more confident about the $US itself, when referring to it, although he did spell-out concerns about the US economy and Congress' lack of ingenuity regarding the real economy.

The Fed has many mandates and perhaps some indirect ones like making sure the $US does not begin to destruct or implode, like many academics, bloggers etc claim will happen over time. I felt that Bernanke seemed a lot more content about not only the $US's current state, but about its future in global economic affairs and the like. Treasury yields are, at the time being, much lower than when either of the QEs were in effect, and this is mostly due to the flight to safety issue the past month or so. The Fed can probably see that the $US is a more secure 'asset' to most asset classes out there, given the current turmoil in the markets. This is an important step moving forward as it may very well underlie many of the future economic risks to be taken, moving forward from here.

While we all have to endure more and more debt to tackle preexisting debt, the $US appears to be a more attractive than what those who forecast its decline would want. This does not only include many academics, bloggers, but also perhaps a central bank or two (or more!) or some type of 'world bank' (not the World Bank!). I reckon they might, in the year 2030 for example, be a little disappointed to find that the $US's influence by then has remained the most sought after currency in the world, even given the sets of economic problems we may face from now to then; even with the unprecedented sets of debts that seem to be increasing on a regular basis and probably will continue to do so.

So where does this leave the Federal Reserve, for example, in a couple of decades or so? Probably in the box seat. Having said this I would still rather prefer US defense to set up a new, independent, accountable and more transparent agency and take responsibility over what the current Federal Reserve system does overall. Reasons are spelled out in other threads and are broadly based on the overall prosperity of the United States, all its economic classes, its success moving forward as a nation, if it became a more inclusive system. This would not be a coup or the onset of a dictatorship (as this would not make any sense to any US defense organisation that would still need a dynamic capitalist model to continue to prosper too), but a better way of ensuring that the US (inclusively as a nation, not referring to multinationals here) has a more inclusively structured future with a pretty good guarantee that the strength of US treasuries on a global, macro picture can provide, moving forward. Part of what I'm saying here is that the US should have more ownership (not in a literal sense) over the most formidable asset moving forward, the $US, and the fact that its not an inclusive system, may mean that the benefits that the $US can and will continue to provide may be skewered more to elite organisations than the middle classes, military etc within the USA. This proposal would be more of a structured response and would probably do away with the (retail) banks first, the masses second ethos that is crippling growth prospects in the real economy. US defense needs and would continue to need the middle classes, for example, to prosper as their revenue is solely responsible for the strength of the military etc. So it would be a way of ensuring that the middle class system is thriving and not going backwards, like many suggest.

This aside, the (even greater) power that the Federal Reserve might have over the next few decades may decide where things are headed. One might suggest 'its' US banks will enjoy greater prosperity moving forward, as the Fed is pretty much there to support these large US banks. But I see a problem arising here, as do many; there is no ultimate support for some of the risky business practices that these large banking institutions partake in. Take the complex and risky derivatives markets for example that can land them in hot water. It probably wouldn't take much for a large bank to make extreme losses 'gambling' with some of these instruments, that would affect their share price and trigger margin calls which would put more downward pressure on trading prices. Extreme kinds of gambling seems to be gaining momentum. It's clouded in complexities and misunderstandings and this would make measurements at any given time, less reliable.

As we're well aware, the backstop to any kind of problems above tends to be the masses. But what would more and more debt mean moving forward? There seems to be growing euphoria over bailouts but these bailouts are just adding to national debts. Some central banks seem to be immune from a potential crisis of piling on to national debts. Are we paving the way for a more powerful force of central banks, that have the capacity to reinvent themselves and adjust at times like these, and broaden their influence in global matters? I think so, and although this may have been the case for decades if not a century, this has to be a first on such a grand and global scale. The ability to control (not necessarily logistically) the creation and distribution of money by some central banks, may make them the most formidable force moving forward, but unlike the background stance they would have had previously, some central banks are beginning to enjoy a more offensive, foreground presence.

I think the Federal Reserve will continue to be the most powerful of central banks, even post 2030. US debt and most debts will continue to increase on a net scale, even with periods of prosperity. Not because of the growing trend in this area, as it seems logical to follow charts that suggest this, but because of the need by most to continue to take financial risks of all kinds, to aggressively speculate and inflate all types of markets, asset classes and the ongoing perpetual debt that's set-up in such a way to continue building on previous levels of debts, just to name three. Not so good for some of the retail banks too as they draw a considerable amount of their revenue from middle class prosperity. But this may be why we are continuing to see these and other organisations speculate heavily in ie derivative markets and the like. It doesn't seem like these practices will go away any time soon, and if this is their primary way of (trying to) make money, then this game will continue even post any potential catastrophe on ie the derivatives markets. They'll probably find newer ways of making or trying to make money.

to be continued ..

 

[Nova78]

The World in 2030

 

[konkon]

By 2030, the US will still have the most sophisticated (at nearly all levels) defense organisations on the planet, and its funding will have to come via indirect intrinsic strength (and all that's associated with it) of the $US and the strong presence of the Federal Reserve System on the global economic front. The Federal Reserve cannot go at it alone, and not only will it need the US consumer to find its footing, it will require additional strength of US defense.

Any notion of a certain central bank (or more!) trying to undermine US defense in some capacity, by helping overburden US taxpayers to the point of not generating adequate funding for defense, will come to a halt, as there is little choice but for US defense to get back into the game (and recent cutbacks will end up being reversed) like it should, if for example the Federal Reserve needs to continue to reinforce its strength over time. The Federal Reserve System needs US defense, just like they both need a strong (not just in a price sense) $US. So any (non physical, of course!) battle, would be won by US defense. It will and has to come roaring back, as a sophisticated proactive phenomenon. The cut backs won't last for too long.

The uptick in non $US swaps or bilateral transactions of non $US between certain countries, is an interesting development. Sure counties are free to trade the way they like, within given market parameters etc, but I can't help thinking that this is a move to do away with trading in $US, thus trying to lessen its influence, and reinforcing strength in other currencies, some of which may be seen as potential replacements of the $US reserve currency status over time. It may just make sense for them to trade in more localised currencies. But I think, as I'm sure do many, that this may be an attempt to undermine the strength in the $US.

It won't lessen the $US reinforcement as the reserve currency. Love it or hate it, the Federal Reserve System is one of the most powerful economic system on the planet. It's not just another central bank. Analogous to a casino, the Federal Reserve would be the house and most prolific player!

Politics is politics, and the US's enhanced involvement in the Asia-Pacific region, is welcoming news to me, although not for others I'm sure. I can almost feel the bitterness.

On China: I admire the Chinese people, but not their system they happen to be 'governed' under, within China. That system as a whole is largely flawed at many levels, and it's one key reason why China will never be able to have a reserve currency, for example. Sure China is bound to be the most wealthiest nation, but it will continue to be hampered by intrinsic and unbreakable restrictions that won't enable it to progress to higher dynamic levels, that would be needed if it was to replace the USA as the dominant world economic player, and even establish a reserve currency.

China's rule by force and threats against those that challenge their system are two key factors working against them, and a communist system is still a communist system no matter how much you want to dilute it with other dynamics. It is one of the few communist countries that isn't close to bankruptcy, which is a good thing, so it may defy this form of economic logic, as it continues to build wealth (disproportionately, of course).

China's real dominance is over what it can control, and this is largely within the confines of its boundaries. It can and does get its way outside of China too, no doubt. But its internal restrictive economic practices does not transform well with freer external ones. This is going to be an increasing problem for China on at least two key fronts (and there are more than two); 1. the economic world is bound to get looser, more transparent with all forms of economic practices on multitudes of levels, and 2. the ruling communist (or call it what you like) elite (including the military etc) within China will not want to loosen their grip on all fronts, and the knots will continue to get tighter and tighter.

Add to this that the Federal Reserve System is not going away any time soon, and China is up against a really formidable set of forces, mostly from its own doings, but also from the Federal Reserve System that will continue to consolidate its positionings on the world economic stage.

The best bet for China is to really try and free up its internal systems so it can become a better net competitive player moving forward. Free up its internal markets and allow the markets to price all of the valuable things it has to offer to its own citizens and the rest of the world. Allow proper foreign business to take place within China, without all the paranoia etc. This would end up being a net positive move for China. Time is also against them as it gets harder for any reasonable change to take place, especially if the ruling elite become more adamant about their own positions.

Having said all of this, China won't change these key dynamics that the ruling elite want and need.

 

[konkon]

"China's real dominance is over what it can control, and this is largely within the confines of its boundaries. It can and does get its way outside of China too, no doubt. But its internal restrictive economic practices does not transform well with freer external ones. This is going to be an increasing problem for China on at least two key fronts (and there are more than two); 1. the economic world is bound to get looser, more transparent with all forms of economic practices on multitudes of levels, and 2. the ruling communist (or call it what you like) elite (including the military etc) within China will not want to loosen their grip on all fronts, and the knots will continue to get tighter and tighter." ...from the previous post

If the quote in bold becomes even more true, and that there's an increase in complex global market practices involving sophisticated transactions, interactions, communications and the like, and China continues to price itself out (by its ongoing restrictive market practices etc and continuing to stick to quasi communist ways, which it will) from being able to dominate these enhanced, sophisticated economic activities, and China can't get heavily involved in and control the dominance of next generation global market technological activities (ie algorithmic trading platforms), and the Fed continues along its dominant path (which it will), then this would consolidate China's secondary or non primary positioning moving forward. China may become wealthier but it won't matter as much. It would be one the first times the wealthiest country on the planet wasn't the most dominant one.

There's more to be said about this point and others.

 

[konkon]

You can spin a whole heap to try and convince others (and maybe yourself!) about where you're at and where you're heading, but if those statistics, for example, are false, misrepresenting, don't factor in everything (or most things) that should be factored in, then the illusion you've created will probably come back and impact you in more ways than was originally designed to protect and benefit you.

China can't be growing like they and others say or suggest they are. When was the last time (except for this period!) where you could trust the information that comes out of a, yes, communist and dictatorial system? Once again, nothing against the hard working and smart people of China. This has pretty much everything to do with China's inherently faulty communist (and worse) systems that will end up stifling true growth in a country that would otherwise have a great deal to offer; apart form being relied upon (by complacent and greedy westerners and the like) to provide the world with cheap labour and goods etc. There are exceptions, of course, but this is a big part of the China story that even the west has grown to love, except that now that manufacturing is pretty much dead in the water elsewhere, we're kind of looking to see which of our politicians to blame; not their fault!

We're looking at China through the capitalist kaleidoscope and believe that it can work. It won't in the long run. Some of the main reasons have been mentioned before and there's tons of information out there by economists too. But another one of the key reasons, overlooked by many I'd say, is because of every nation's experimentation with a fiat currency, and this will contribute to China's problems and may lead them in to unbelievably really high perpetual debts (disguised at first), that also won't be able to be curbed by their non capitalist systems.

China doesn't have, and won't have, a private sector or sets of them, that can pay down and generate wealth to counteract the perpetual public sector debts it is accumulating rapidly. You, and I'm sure they are, can disguise this fundamental problem for some time and convince many that this isn't happening or won't happen, especially when you have isolated and secretive systems that can not be properly audited, investigated, assessed etc.

One of the main problems with ie Greece, Spain etc is that they have a socialist system that has run up huge debts and now the focus will be on them to privatize areas that were once non profitable organizations. There are other problems too, sure, but these countries operated under the capitalist model, or were meant to, and this has become their end game for this period.

Now a country like China, that has for now, dominance in manufacturing, the problems are bound to get worse, as revenue from this, perhaps their only link to a private sector model, won't be enough to stem the perpetual debts that will continue to escalate due to their over reliance on the public sector; any internal growth in China has to become an even more burdensome problem as revenue is highly geared to a similar but much worse socialist structure to the ones Greece, Spain have, but multiplied by a hell of a lot more, considering the needs of China's public systems moving forward.

It is possible that, in the longer term future, China will one day become a bankrupt nation but not only because of these problems. The fiat currency dilemma will impact China later on too and because it doesn't have a capitalist framework the problems will probably be worse in China, even on a per capita basis, than other countries that are experiencing or will experience problems with their own (and other!) fiat currencies.

I can't flaw the core of the argument regarding fiat currencies. It's not just debts that have the economic world all messed up. The problem is with fiat currencies (including the usd, but this is a special case, and it is contributing to many of the other problems around the world; no need to 'leave' this reserve currency, like many have done or are trying to do, as this won't make a longer term positive difference - from one fiat currency to the next!).

China won't be able to tackle its inevitable fiat currency problem head on, and it won't be able to peg the yuan to gold, and establish a gold standard, for a sustainable period, even if it tried. It will continue to try and peg the yuan to the $US, but it's just piggy-backing another fiat currency. There are a lot of countries already trying this, and even range pegging their currencies to the $US.

As for gold, it will continue to go higher over time, especially in many foreign currencies, and this is already happening, even though there are plenty of gold bears that are pessimistic of gold's future. It has, like the fiat guys suggest, a real future when the printing of paper contracts like currencies cannot be grounded. More and more, yuans, usds etc will have to be printed and distributed. And by default, many other currencies will have to be in even higher circulatory numbers, than would be desired; not that they're immune from the fiat system. This is a complex future (and present) problem that will have everything thrown at it, but the end game is unavoidable, even with sets of different resets, that won't matter as much over time.

more to add soon ...

 

[Nova78]

The World in 2030

 

[konkon]

These following criticisms are not directed to those working in banking in general, like a buddy of mine, who, like nearly all, is hard working, dedicated etc and just wants to make a positive difference. However ...

Nothing worse (well there is, but anyway) than walking up and seeing five or so heads of large banks around the world, on a television program, talking utter crap about what happened, what is happening and what most likely will happen later on. The worse part is, if they truly believe what they say, then I feel that they can't be truly leading the way they should be; I was about to say 'leading the world', but this is another key problem with the culture in the sort of places they all work in. For one, stop thinking that you are all part of some revered royal unit. I do personally have admiration and respect for true Royals around the world, but not for those bankers who seem to prance around like they're part of some elite of an elite. Just distribute the (fiat) money to, yes, real businesses and let them get on with things, and don't interfere in indirect ways that have and most likely will jeopardize the world's economies. This would also include any secretive ways of getting others and other networks to gatekeep and manipulate all kinds of factors and even ensure that the 'wrong' groups or people, to you, are peddling backwards.

The risks associated with mixing two main parts of banking, not to mention the risks undertaken that are to a large extent unprecedented, have been mentioned by many. My personal view has been that as long as the $US remains in tact, the larger leading banks can take a higher degree of risk than would otherwise be the case. But this can only, I'd say, be done to some extent. There are real risks to the $US down the track if the recklessness, continued appetite for more debt (with no real realistic way of paying most of it back) and the historically low care-factor of ie rewarding poor market performances with higher valuations, more capital etc, continues down this path.

I still am a $US bull for other reasons mentioned in previous posts. But if 'Wall Street's' appetite for what would historically (even in 2007-8) have been considered ludicrous, counter-productive, dangerous and the like, continues along this trend line, then it is conceivable that there would be cracks in the sustainable strength of the $US. Let's not forget there might (probably would) be a line-up of many exploiting this, if it were to happen.

Higher perpetual debts have become the norm and it looks as though this is something we're going to have to put up with for a long time coming. There are a multitude of possible end-game scenarios that one can read, and just yesterday there were Twitter feeds on reports that banks might need to prepare themselves for a possible collapse of certain financial markets later on; I don't know how they can escape this possible vacuum, myself, but that is another issue.

If some of the negative points mentioned above about recklessness and the like continue, then I myself have a possible end-game scenario that differs a bit from some of the ones I've read before. There are certain things I'm looking at (I'll mention some later on) that may act as cues down the track. Around about this time in 2007, I was shocked to see the up-tick rule abandoned. Even though back then it made sense to many (on Wall Street), it didn't to me. I don't think the up-tick rule matters that much now, as there are easy ways around it, but it certainly did back then, when for example, there were plenty in the know that a) subprime was a serious problem, b) all types of markets were close to or at all time highs, c) packaged-up collateralized debts were incredibly risky etc. There were other problems too, like a zero-sum gain, but how could this be the case when so so many (a higher proportion than what might be allowed) were ahead!

I won't be mentioning three key 'things' I'm looking at, and have been for some time. Things have a funny way of 'changing' on you once it is revealed (and even observed; schrodinger's cat, I think on the last point)!