Here we were, having a quiet summer, and suddenly there is news! On a hot Friday heading into what might be a very long weekend for many people there is a lot to talk about. Let’s keep it light, like a salad in place of a big heavy meal. We wouldn’t want the day to feel even heavier than it already does.
Since 2008, the Federal Reserve has more or less printed over $1.6 Trillion in two rounds of “Quantitative Easing”. Many have speculated that this has to result in inflation for the simple reason that there are more US Dollars out there than ever before. That’s based on the most fundamental principle of any market, supply and demand –more of these things called “Dollars” around and the value has to drop, meaning it takes more of them to make a reasonable exchange with something real.
It hasn’t worked out that way. Inflation remains at around 2% per year as it has throughout the worst part of the Managed Depression, the financial crisis that started in 2007. How on earth can that be?
The answer is that the number of US Dollars in the world is only one part of the equation. The “velocity of money”, or the number of times they turn over in the economy, is equally important. Data since 2007 shows what every freelancer and job seeker knows – it’s a tough world out there, and people are pretty slow to let go of the dough they have.
The tidbits of popular inspiration roll through twitter and facebook in a nearly constant stream. You want your stuff retweeted or shared through the networks? Come up with a bit of folk enlightenment, maybe put it into a jpg pic as a “meme” (horrible mis-use of that word!). Keep it simple – a quick saying or maybe a set of “tips” devoid of heavy philosophy that could wear down a bizzy day. It could be a Bible verse or a simple admonishment to be a more decent person.
There’s nothing wrong with this sort of stuff, and it probably has been present throughout the history of human interaction. But the volume and popularity of these sorts of things leads me to wonder if there isn’t a hunger for spirituality and connection that is missing from the ordinary grind of the day. There appears to be a missing presence in the moment, a sense that ghosts float past our conscience whispering a calling to be a better part of the world.
The announcement came after the closing bell, after the noise of the day was over. Moody’s bond rating agency cut the rating for 15 banks in the US and Europe, hitting all of the big ones at one. JP Morgan, Goldmann Sachs, Morgan Stanley, Barclays, Credit Suisse, Deusche Bank, Société Générale – pretty much every major investment bank was hit with major downgrades.
Reaction in the press was swift. “This has been a long time coming” was one way of putting it, with speculation that “Should any major bank be considered investment grade?” The entire financial system is downgraded at once and it was something like a big yawn.
But there is a story here. True, it has been moving in slow motion for a long time, so a downgrade by Moody’s is just one event in a long chain. But it still means something, and the effects of this may ripple for a long time.
Imagine for a moment that you live in the most fair and equitable economy you can dream up. There are some very specific things that most people in the developed world, especially Americans, would think would be a part of this.
There would be upward mobility, where family circumstances do not determine the kids’ future. People could find their own way according to their own talents and choices as to what makes a good life. Money would rarely limit dreams, as a free-flowing capital market would provide funding for good ideas at reasonable rates. Most would own their own homes and have control over their own destiny. Workers would own the company they work for, banking their retirement at a reasonable age on the place that they helped build. Basics like food and access to health care would not be expensive.
Such a place is the embodiment of pieces of both the Democratic and Republican parties in odd turns. This place of the imagination is also pretty close to the perfect state envisioned by Karl Marx.