One year ago today I wrote this blog entry. I also made and entry here discussing China. Essentially it said that China is advancing by design. Advancing because engineers are in key positions of leadership that I mention by name in the blog entry and that is what engineers do. Logically. Design to meet objectives. America is declining by default. We design to serve dysfunctional social system design and functions. That is where the money is. A monetary system is a social system structure. Money is a social media. It serves the purpose of the selected society. Money to benefit the few or money to benefit the many.
It is not a coincidence the the central bank of China is called the People's Bank of China.
Our central bank is the Federal Reserve Bank of New York.
Steve Keen talks here about when where and how things went wrong in the International Financial Order. When it was structured on the US Dollar as the Reserve Currency for the entire world.
Steve starts out his presentation with some lame jokes. Nobody laughs. This is a meeting of economists. They do not get jokes. They, in general are the joke. He talks about history and how the US dominated the decision that the dollar would be the reserve currency of the world. At about 12 minutes it gets good when he talks about the pyramid of payer, payee and bank. Then he adds the Central Bank pyramid above bank 1 and bank two. Logically, later he adds another pyramid above a nation's Central Bank which is an inter country tier single World Bank system using, of course the US Dollar as the reserve currency at 22:37. That is the problem. The US Dollar has to be replaced by a common reserve currency. It should have been done long ago but that is where it went wrong and hands us the situation we have today. Charts follow to show we are in a world of financial trouble. Duh!
At 37:00 minutes Steve talks about a diagram model that an engineer wold love. This is how things should work. At 41:20 he talks about a new architecture. He concludes that China should work with Latin America to establish a new system for international currency. At 44:29 he cites Zhou Xiaochuan, the head of the People's Bank of China that called for a new reserve currency in 2009. Zhou has an engineering education background.
I believe China is going to engineer a re-design of the the International Financial System.
Steve ends by saying Latin America could lead the way to establish a proper unit of monetary account for international trade. I would add: With China's help they could do this and open the door to worldwide adoption of that monetary unit.
Yi Gang is a very smart guy. His comments on Bitcoin today. Are things happening rapidly?
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