The Three Things

Back when I was a retail marketing analyst, I used to make formal presentations to my clients about every month or so, each aimed at different audiences within the company — buyers / merchandisers, operations, marketing / advertising and senior management (the last being more of an annual high-altitude presentation, of course).

Because of the volume of data I had on hand it was almost impossible to show all of it, so I would provide summaries, but with all the data on hand in case there were any questions requiring a deep dive into the supporting numbers.

I would then make a summary of the summary, and give each executive an action plan consisting of three, and only three things that had the highest priority with the greatest impact, with the suggestion that they tackle those three items immediately after the meeting.  (Their bosses, of course, got the list of all the departments’ action items so that they could follow up to make sure that they’d been addressed.)

That habit has stayed with me ever since, especially when, as today, I see an enormous problem that needs fixing.  What spurs me on to even greater efforts is when I see that the people who are supposed to be fixing the problem either not doing anything (a massive clue that they don’t know what to do), or are timidly tinkering around the edges of the problem when in fact, the remedies are quite simple, but usually radical.

Here’s what I’m looking at right now.  Read this article first, please, and then come back below the fold.

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Tectonic Shift

ZMan has a typically-mordant look at the global economy:

The Global American Empire has been supported for the past half century by a novel form of seigniorage. This is the difference between the value of money and the cost to produce and distribute it. In the old days, the king would make a profit from the minting of coins used in his kingdom. This was usually a tax added to the total cost of a coin on top of the cost of production. This was the king’s profit from coinage.

Since the Louvre accords in the 1980s, Washington has been able to swap securities for newly printed banknotes by the Federal Reserve. This would normally impose an inflation tax on the public, but the dollar being the reserve currency of the world spread this tax over the global economy. Inflation rates in the United States remained low, as long as global growth remained high and the world was willing to tolerate this system.

The bigger issue is that the rest of the world is losing interest in the system that profits Washington at their expense. China has been manipulating its currency for a few years as a way to prevent Washington from exporting inflation to Beijing. She has also been quietly building parallel financial structures, along with Russia and India, in order to escape the perfidious rules imposed by Washington.

Which means that if the $US is replaced by some other form of currency, we’re fucked.  The only bright side of that scenario is that other currencies are even more shaky than ours (yuan coff coff)  and a commodity-based system such as gold is impossible because quite frankly, there is no commodity on Earth large enough to replace the dollar without a radical devaluation of, well, everything.

Sobering stuff, all the same.  Read all of it.