On February 6, 2014 , Jay Pelosky writes in The Wall Street Journal:
While many policymakers and investors are optimistic about the global economy, the underlying problems of the world’s major economies suggest instead that caution may be the order of the day.
In a new op-ed for the Wall Street Journal, World Economic Roundtable founding member Jay Pelosky outlines a geo-economic framework for understanding the difficulties facing the global economy. In the United States, the tapering of the Fed’s quantitative easing program in the face of a weaker-than-expected economy could chill the market. In Europe, the risk of deflation remains a big concern. In emerging markets from China to Brazil, problems range from unsustainable credit expansion to large current account deficits.
Pelosky, principal of J2Z Advisory, LLC, writes: “This framework suggests that the world economy has yet to find and implement new growth models to replace those broken in the past decade: the U.S. consumer engine, European vendor-financed growth and the emerging markets’ export-driven model. [….] The “synchronized global recovery” may be dead on arrival, replaced by the specter of deflation.”
Norman Kurland, President of the Center for Economic and Social Justice (www.cesj.org) comments:
Please check out this excellent article by Jay Pelosky in today’s Wall Street Journal on the uncertainties in the global economic system under today’s top-down economic strategies. If you like it and my comments, don’t hesitate to share it with others.
Unfortunately, all the economic gurus understand the need for faster rates of sustainable growth. But all conventional strategies presume that we need either the rich and super-rich or government to finance growth. They’re wrong. The 99 percent do not need either the rich or government for financing growth. And let’s not waste our time in attacking or begging either today’s ownership elite or government leaders and politicians. The 99 percent need to organize, find new leaders and mobilize enough “people power” to effectively demand the lifting of unjust barriers in our “social tools” to achieve both growth and full equality of ownership opportunities over new growth capital investments. This Just Third Way strategy takes no property rights over existing productive capital from today’s ownership elite. How money is created and regulated by the central bank and member commercial banks is the key to progress and more just and equal ownership opportunities. The 99 percent need to demand a comprehensive overhaul of the current monetary and tax systems of the world as proposed under the Capital Homestead Act.
The propertyless wage slaves, welfare slaves, charity slaves and consumer debt slaves among the 99 percent need to become aware that future growth does not depend on past savings, as was pointed out in 1935 by Dr. Harold Moulton, President of Brookings Institution for over 20 years, in his book The Formation of Capital. When a commercial bank finances new capital assets in a well-managed enterprises on “credit,” the bank creates a form of “money” that can be used by the enterprise to pay for new plant and equipment. The bank can back up that loan with “past savings,” but, as Moulton points out, the economic system is better off when the bank uses “pure credit.” The new money created by the bank in the form of a pure credit loan is expected to be repaid by “future savings” (that is, the future profits the company is expected to earn from the production and revenues from the expanded sale of goods and services produced by the new capital assets financed with the bank’s “pure credit” loan. Capital credit insurance can cover the risk of default on any pure credit bank loan. In other words, contrary to conventional thinking, financing new growth capital assets on the earnings of capital is an idea whose time has come.
Here’s a graphic overview describing how pure credit offers a system beyond monopoly capitalism and socialism, with key “social tools” for growing a just and balanced free enterprise economy within any country. We don’t need the rich, and there’s no point in being frustrated by current political leaders and wage system thinkers. They’re not the problem. The problem is in the system created by people in the past and can now be re-created when the 99 percent wakes up and demands “social tools” that can deliver the asset-backed money needed to build an economically classless society of citizen-owners.
Read the entire op-ed in The Wall Street Journal at http://online.wsj.com/news/articles/SB10001424052702304680904579365221405781630?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304680904579365221405781630.html.
