I hope everyone is enjoying their new year and I wanted to jump-start this blog because of the major risk and uncertainty that is accelerating in the coming months. The incoming Trump Administration has something that 44 presidents had before them in terms of a record to come off. The President-elect soon-to-be President has no record or background in politics to reference and that has a lot of people terrified. I see this as a major opportunity to open doors and destroy intellectually wasteful left/right debate in this country’s politics.
The first issue, I come to terms with not playing stupid gotcha left/right politics and creating opportunities for major reforms that are needed in the global economy because of the advancement of globalization, institutional changes to integrate new technological clusters into the economy, and consolidations needed to resolve conflict and risk. This central theme for the next post will be about creating fluid economic institutions to deal with a post gold standard economy.
The real stress is the economy that no one is talking about is the economy is expanding fastest than the present institutions can handle. To handle the major change and bring certainty and fluidity back to the market. Before we continue any further on this post. We have to define the two policies affecting the economy right now:
We need to acknowledge that we are in a shotgun wedding when it comes to the economy, treaties, and trade pacts. There is no way out of this or around it because the only autonomous nation on the planet is North Korea(they’re leveraged with food by the Chinese). We need to understand and create dialogue to address the structural shortcomings and the measures to resolve them. What I’ll love to inject into the debate is that we do not need so much tension where political showdowns and battles translate into market uncertainty which delays investments, contracts, and implementation of business decisions from the C-Suite.
The first issue I’m going to tackle is reforms of the Central Banks or commonly known as the Bretton Woods system to adapt to the current market of emerging markets, globalization, declining and evolving technological clusters, and upgrades to the current infrastructure. Basel III is the current structure of the global economy in terms of banks and the holdings they are required to have to keep the banks running. This could be the founding of Basel IV where the new changes in the tax code are updated across the world.
I don’t have an economics, finance, or high-level maths degree to work out the equations but the three areas that will explode the economy with a capital-rich environment is these three areas: capital requirements, leverage ratio, and liquidity requirements. The updated tax plan and policies suggested in this blog will help to reverse the declining clusters around the world.
The picture shows the role of the central banks in the country:
I’m proposing a consolidation of the top 8 central banks into a new central bank system with the U.S. and the U.K. The top financial cities(New York and London) are in those countries and the growth is small compares to the rest of the world. It already has the institutions within its borders and people are used to this nation-leading:
Taking the top 8 Central Banks and putting them into the U.S. Federal Reserve System and the U.K.’s Bank of England can help to resolve and bring efficiency back to the markets.
- US Federal Reserve Bank (USD)
- European Central Bank (EUR)
- Bank of England (GBP)
- Bank of Japan (JPY)
- Swiss National Bank (CHF)
- Bank of Canada (CAD)
- Reserve Bank of Australia (AUD)
- Reserve Bank of New Zealand (NZD)
Take the bottom banks and put them into the U.S. Federal Reserve System:
The same is on the bottom and will create Dual Branches of the Federal Reserve system that will reduce the number of central banks policies to contend with and make business decisions easier.
Take the bottom banks and put them into the Bank of England and it will help to reduce the danger of currency fluctuations and harmonize monetary policy around the World. Moving and splitting the Bank of International Settlements into both the U.S. and U.K. will help shake up the mix. I know what everyone is thinking (What about Brexit?)
This first series of reforms will help to create an environment to adapt to the changing world.
Founding Purpose: “We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.”
The mechanism for achieving this goal is Capitalism and Democracy.