---------- Forwarded message ----------
From: Dick Eastman <oldickeastman@q.com>
Date: Tue, Oct 5, 2010 at 11:38 PM
Subject: [bangla-vision] (1) Farrell: The Fed is Dead Maybe by 2010 (2) The Future According to World Bank President James Wolfensohn
To:
http://www.marketwatch.com/story/the-fed-is-dead-maybe-by-2012-2010-10-05
The Fed is Dead, Maybe by 2012
ARROYO GRANDE, Calif. (MarketWatch) — OK, so Nassim Nicholas Taleb, the "Black Swan" author, actually said: "The Fed won't exist in 25 years." Warning: It'll happen much sooner, fallout of the coming Second American Revolution.
It's inevitable: Wall Street banks control the Federal Reserve system , it's their personal piggy bank. They've already done so much damage, yet have more control than ever.
Warning: That's a set-up. They will eventually destroy capitalism, democracy, and the dollar's global reserve-currency status. They will self-destruct before 2035 … maybe as early as 2012 … most likely by 2020.
Last week we cheered the Tea Party for starting the countdown to the Second American Revolution. Our timeline is crucial to understanding the historic implications of Taleb's prediction that the Fed is dying, that it's only a matter of time before a revolution triggers class warfare forcing America to dump capitalism, eliminate our corrupt system of lobbying, come up with a new workable form of government, and create a new economy without a banking system ruled by Wall Street.
Let's reexamine the timeline closely:
Stage 1: The Democrats just put the nail in their coffin confirming they're wimps when they refused to force the GOP to filibuster Bush tax cuts for billionaires.
Stage 2: In the elections the GOP takes over the House, expanding its strategic war to destroy Obama with its policy of "complete gridlock" and "shutting down government."
Stage 3: Post-election Obama goes lame-duck, buried in subpoenas and vetoes.
Stage 4: In 2012, the GOP wins back the White House and Senate. Health care returns to insurers. Free-market financial deregulation returns. Lobbyists intensify their anarchy.
Stage 5: Before the end of the second term of the new GOP president, Washington is totally corrupted by unlimited, anonymous donations from billionaires and lobbyists. Wall Street's Happy Conspiracy triggers the third catastrophic meltdown of the 21st century that Robert Shiller of "Irrational Exuberance" fame predicts, resulting in defaults of dollar-denominated debt and the dollar's demise as the world's reserve currency.
Stage 6: The Second American Revolution explodes into a brutal full-scale class war with the middle class leading a widespread rebellion against the out-of-touch, out-of-control Happy Conspiracy that has been sabotaging America from within.
Stage 7: The domestic class warfare is exaggerated as the Pentagon's global warnings play out: That by 2020 "an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge" worldwide and "warfare is defining human life."
In this rapidly unfolding scenario, the Fed cannot survive. Why? Not because the Fed is at the center of America's economic problems, beyond repair, a dying institution. But because the Fed is a pawn of Wall Street's Happy Conspiracy, which is incapable of seeing the train wreck that it set up.
This out-of-control, conspiracy of greedy Wall Street bankers, corporate CEOs, corrupt politicians and Forbes 400 billionaires will, in the near future, trigger the third catastrophic meltdown of the 21st century, a collapse that paradoxically can transform America into a new, stronger post-capitalist economy … but only after a revolution and brutal class warfare. But few will talk about what's coming.
Warning: Never trust the American Treasury Secretary
So who can you trust to tell us the truth? Taleb says it's very simple. His "simple metric" was made clear at a recent "Washington Ideas Forum" in a piece by Atlantic editor Nicole Allan: Unfortunately most fail Taleb's test. Most get it wrong. Many lie, exaggerate, speak half-truths or, worse, say nothing.
Here's Taleb's "simple metric for judging whose economic opinions are worth his time: 'Did someone predict the crisis before it happened" in the past? "If the answer is no, I don't want to hear what the person says. If the person saw the crisis coming then I want to hear what they have to say" about future crises.
Taleb target No. 1: Treasury Secretary Tim Geithner, who spoke just before Taleb at the forum. Of course, experience tells us you really can't trust anyone in government. All politicians fudge the numbers, cherry-pick data to suit their personal goals, biases and political rhetoric.
Remember Hank Paulson, Wall Street's Trojan Horse inside Washington? Earlier he had made over half a billion as Goldman's CEO. Back in July 2007 before the meltdown he bragged to Fortune that this is "the strongest global economy I've seen in my business lifetime." Never trust anything "leaders" like him say. Never.
Worse, he and our clueless Fed Chairman Ben Bernanke later lied to the public that the subprime crisis was "contained." No, my friends, you cannot trust politicians and government insiders. Never.
Warning: Never trust economists and bestselling authors
Allan continues: "Other unlucky economic figures who failed Taleb's test included writers Paul Krugman and Thomas Friedman. 'You have a million people on this planet who call themselves economists,' Taleb said. 'How many people understood the risks of the system" before the crisis? Paul Krugman was not one of them.'"
Taleb warns: Nobel economist Krugman not only supports Keynesian deficit spending, he favors the "transformation of private debt, with all the moral hazard it entails, into public debt" that's toxic from a "risk standpoint." Worse, it's "immoral." Our "grandchildren should not bear the debts of the grandparents." OK, add Nobel economists to the list of people Taleb says you can't trust to speak "the truth.
Actually, using Taleb's "metric," you can't trust any economists. Why? Because all economists, even the best, are capable of making catastrophic errors: Remember Greenspan's sad apologies during congressional hearings after undermining America for 18 years. And remember Michael Boskin's classic $12 trillion error? Bush Sr's chairman of the Council of Economic Advisers, a respected Stanford economist, attempted to justify some cockamamie logic that his newfound Social Security savings would lower America's debt, giving a political boost for his party. He was $12 trillion wrong.
No, folks, you can't trust any economists, they're just average humans. Most have strong political biases. They're hired mercenaries who say whatever their employers ask them to say, pawns working for some Wall Street bank, corporation or politicians.
Yes, Allan reveals another character Taleb can't trust for economic advice. Prizewinning authors like NY Times columnist Tom Friedman who's book, The World is Flat is "very bad for society," misleading, having failed to "assess risk." So scratch celebrity authors from the list you can trust to tell you the truth about the future of America.
Warning: Never trust Congress, the Fed chairman or the president
Taleb is merciless when it comes to politicians like President Obama, Congress and The Fed chairman: You can't trust any of them. Earlier Bernanke's reappointment "stunned" Taleb: He "doesn't even know he doesn't understand how things work or that the tools he uses are not empirical," wrote Taleb in HuffPost. But it's "the Senators appointing him who are totally irresponsible ... The world has never, never been as fragile," and we're stuck with an economist running The Fed whose methods make "homeopath and alternative healers look empirical and scientific."
Obama's reappointment of Bernanke left Taleb so distraught he "withdrawing into the Platonic tranquility of my library, to work on my next book, find solace in science and philosophy, and … structure trades betting on the next mistake by Bernanke, Summers and Geithner."
Taleb's "metric" essentially warns Americans to trust no one, certainly not Washington and Wall Street insiders. The vast majority fail his simple metric, "Did someone predict the last crisis before it happened? ... If the answer is no, I don't want to hear what the person says. If the person saw the crisis coming, then I want to hear what they have to say'."
In fact, back in 2008 as the subprime credit meltdown accelerated and it was obvious to virtually everyone worldwide, we reported on the cascading bogus predictions made by well-known gurus flooding prime-time news, highlighted in BusinessWeek, Kiplinger's and USAToday, comments made even as the 2008 crash was spreading worldwide:
Bernanke: "I don't anticipate any serious failures among large internationally active banks." Wow, was he ever wrong.
Billionaire Ken Fisher: "This year will end in the plus column ... so keep buying." Main Street lost trillions on advice like this.
'Mad Money' Jim Cramer: "Bye-bye bear market, say hello to the bull."
Goldman Sachs' Abby Joseph Cohen: "The fear priced into stocks is likely to abate as recession fears fade." Soon after, Goldman was essentially bankrupt.
Congressman Barney Frank: "Freddie Mac and Fannie Mae are fundamentally sound."
Barron's: "Home prices about to bottom." Three years later they still haven't
Worth: "Emerging markets are the global investors' safe haven."
Kiplinger's: "Stock investors should beat the rush to the banks." Costly advice.
Bernie Madoff: "It's virtually impossible to violate the rules." But it'll happen again.
Bad calls? Yes, very bad. Back in mid 2008 we reviewed 20 who would meet Taleb's "metric" and earned our trust for the future. These twenty did warn America between 2000 and 2008. Although few listened: We reported on warnings from economists Gary Shilling, Marc Faber and Nouril Roubini, the St. Louis Fed president (Greenspan ignored him, just as Bernanke is ignoring the Kansas City Fed president today), former Nixon Commerce Secretary and SEC chairman, billionaires Warren Buffett and oilman Richard Rainwater, institutional portfolio managers Jeremy Grantham, Bill Gross and Robert Rodriguez, and major cover stories in Fortune, Harper's, Vanity Fair, The Economist and The Wall Street Journal.
But for every one warning back then, there were hundreds of happy-talkers inside the Happy Conspiracy's propaganda machine, conning the public, either unconsciously denying reality or consciously lying about it.
Remember: Bloomberg Markets magazine reported that even Paulson predicted a meltdown was coming. But all he did was privately warn Bush two years earlier, in 2006, then he and the Fed chairman failed to tell the truth to the public for two years. That's immoral, dishonest, a lie.
So who can you trust? Nobody, not me, not even Taleb. Why? In the final analysis the Buddha said it best: "Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense."
Unfortunately, America is losing its capacity to reason, its common sense, its values, its vision of the future. More of us need to trust Taleb's "simple metric."
Sounding more like a soothsayer than a hard-nosed investment advisor, Wolfensohn predicted a balance of power shift over the next 40 years. According to Wolfensohn, "This global power shift will see today's leading economic countries drop from having 80% of the world's income to 35%." Unlike reading entrails, he did not hold out any hope that nations like the United States will escape this eventuality. He projected further that "By 2030, two-thirds of the people in the world's middle class will be Chinese." This means the rest of the world will be stuck fighting over the remaining one-third. An astonishing statement then, but today, few doubt his clairvoyance in light of current economic realities.
Wolfensohn spent the majority of his talk stressing the importance of recognizing the impact of the coming balance of power shift to the status quo, "As population and GDP grows in countries such as China and India, they will assume a larger role in relationship to the United States and Europe. That will reduce the influence of the wealthiest countries." Hoping not to appear to be reading 'tea leaves' or 'star gazing,' Wolfensohn declared, "This will not just be a moderation trend, it will be a monumental shift, a fundamental change in the world balance of economic power. These are not trivial changes -- they are tectonic changes in the way the planet works. In my generation we didn't have to think about it. We knew we were a rich country."
He also predicted a shakeup in how the leadership of the World Bank and the International Monetary Fund will be appointed. Traditionally, the president of the former was from the United States and the latter from Europe. "The bank may be 'internationalized' in the future." Wolfensohn was not looking into a crystal ball but at the fact that the second tier of leadership at these institutions are presently from China, India, Africa and so forth.
Wolfensohn believes that under his leadership, the World Bank Group redoubled its efforts to give voice to clients living in poor communities; it sponsored a global dialogue on 'Scaling Up Poverty Reduction,' which culminated in a major conference in Shanghai in May 2004. He first broached this subject in 2003 speaking at the World Bank/IMF Annual Meeting in Dubai. Wolfensohn highlighted the growing gap between "the haves and have-nots" between and within countries. He called for 'a new global balance' with donor and developing nations both taking urgent steps to ensure the United Nations Millennium Development Goals were met.
"We must re-balance our world to give everyone the chance for life that is secure, with a right to expression, equal rights for women, and rights for the disabled and disadvantaged, the right to a clean environment, the right to learn and the right to development."
That year (2003), Wolfensohn participated in a dialogue with 100 youth leaders from 70 countries whose organizations represent more than 120 million members worldwide -- among them were rural youth, street children, children orphaned by AIDS and civil conflict, Roma youth (Gypsies), and youth with disabilities. Wolfensohn noted that while people under 25 already account for more than half the population in most developing countries, their concerns, which commonly include education and unemployment, are not being given the urgency required to build a more secure world. He advocated that the World Bank establish youth teams in Bank offices and actively engage youth to develop anti-poverty strategies.
Presenting the future according to Wolfensohn to students at Stanford, he underscored his prognostications with these comments. "Today's students will have to confront a new world in which Africa is no longer an isolated continent but the fastest-growing market for cell phones. He noted that many more students from China and India travel to the United States to study, rather than the other way around. In 2007 just 11,200 Americans studied in China, many of them aging professors. That year, more than 110,000 Chinese were studying in the United States. That's a tragedy in terms of the potential of young people that they're still being guided to look at European countries for future world growth and development." (Sources: http://gsb.stanford.edu, www.spiegel.de and www.youtube.com)
Pl Read:From: Dick Eastman <oldickeastman@q.com>
Date: Tue, Oct 5, 2010 at 11:38 PM
Subject: [bangla-vision] (1) Farrell: The Fed is Dead Maybe by 2010 (2) The Future According to World Bank President James Wolfensohn
To:
(1)
Nobel economist Krugman not only supports Keynesian deficit spending, he favors the "transformation of private debt, with all the moral hazard it entails, into public debt" . . .
'You have a million people on this planet who call themselves economists. How many understood the risks of the system" before the crisis? Paul Krugman was not one of them.'"
Paul Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
http://www.marketwatch.com/story/the-fed-is-dead-maybe-by-2012-2010-10-05
The Fed is Dead, Maybe by 2012
By Paul B. Farrell
ARROYO GRANDE, Calif. (MarketWatch) — OK, so Nassim Nicholas Taleb, the "Black Swan" author, actually said: "The Fed won't exist in 25 years." Warning: It'll happen much sooner, fallout of the coming Second American Revolution.
It's inevitable: Wall Street banks control the Federal Reserve system , it's their personal piggy bank. They've already done so much damage, yet have more control than ever.
Warning: That's a set-up. They will eventually destroy capitalism, democracy, and the dollar's global reserve-currency status. They will self-destruct before 2035 … maybe as early as 2012 … most likely by 2020.
Last week we cheered the Tea Party for starting the countdown to the Second American Revolution. Our timeline is crucial to understanding the historic implications of Taleb's prediction that the Fed is dying, that it's only a matter of time before a revolution triggers class warfare forcing America to dump capitalism, eliminate our corrupt system of lobbying, come up with a new workable form of government, and create a new economy without a banking system ruled by Wall Street.
Let's reexamine the timeline closely:
Stage 1: The Democrats just put the nail in their coffin confirming they're wimps when they refused to force the GOP to filibuster Bush tax cuts for billionaires.
Stage 2: In the elections the GOP takes over the House, expanding its strategic war to destroy Obama with its policy of "complete gridlock" and "shutting down government."
Stage 3: Post-election Obama goes lame-duck, buried in subpoenas and vetoes.
Stage 4: In 2012, the GOP wins back the White House and Senate. Health care returns to insurers. Free-market financial deregulation returns. Lobbyists intensify their anarchy.
Stage 5: Before the end of the second term of the new GOP president, Washington is totally corrupted by unlimited, anonymous donations from billionaires and lobbyists. Wall Street's Happy Conspiracy triggers the third catastrophic meltdown of the 21st century that Robert Shiller of "Irrational Exuberance" fame predicts, resulting in defaults of dollar-denominated debt and the dollar's demise as the world's reserve currency.
Stage 6: The Second American Revolution explodes into a brutal full-scale class war with the middle class leading a widespread rebellion against the out-of-touch, out-of-control Happy Conspiracy that has been sabotaging America from within.
Stage 7: The domestic class warfare is exaggerated as the Pentagon's global warnings play out: That by 2020 "an ancient pattern of desperate, all-out wars over food, water, and energy supplies would emerge" worldwide and "warfare is defining human life."
In this rapidly unfolding scenario, the Fed cannot survive. Why? Not because the Fed is at the center of America's economic problems, beyond repair, a dying institution. But because the Fed is a pawn of Wall Street's Happy Conspiracy, which is incapable of seeing the train wreck that it set up.
This out-of-control, conspiracy of greedy Wall Street bankers, corporate CEOs, corrupt politicians and Forbes 400 billionaires will, in the near future, trigger the third catastrophic meltdown of the 21st century, a collapse that paradoxically can transform America into a new, stronger post-capitalist economy … but only after a revolution and brutal class warfare. But few will talk about what's coming.
Warning: Never trust the American Treasury Secretary
So who can you trust to tell us the truth? Taleb says it's very simple. His "simple metric" was made clear at a recent "Washington Ideas Forum" in a piece by Atlantic editor Nicole Allan: Unfortunately most fail Taleb's test. Most get it wrong. Many lie, exaggerate, speak half-truths or, worse, say nothing.
Here's Taleb's "simple metric for judging whose economic opinions are worth his time: 'Did someone predict the crisis before it happened" in the past? "If the answer is no, I don't want to hear what the person says. If the person saw the crisis coming then I want to hear what they have to say" about future crises.
Taleb target No. 1: Treasury Secretary Tim Geithner, who spoke just before Taleb at the forum. Of course, experience tells us you really can't trust anyone in government. All politicians fudge the numbers, cherry-pick data to suit their personal goals, biases and political rhetoric.
Remember Hank Paulson, Wall Street's Trojan Horse inside Washington? Earlier he had made over half a billion as Goldman's CEO. Back in July 2007 before the meltdown he bragged to Fortune that this is "the strongest global economy I've seen in my business lifetime." Never trust anything "leaders" like him say. Never.
Worse, he and our clueless Fed Chairman Ben Bernanke later lied to the public that the subprime crisis was "contained." No, my friends, you cannot trust politicians and government insiders. Never.
Warning: Never trust economists and bestselling authors
Allan continues: "Other unlucky economic figures who failed Taleb's test included writers Paul Krugman and Thomas Friedman. 'You have a million people on this planet who call themselves economists,' Taleb said. 'How many people understood the risks of the system" before the crisis? Paul Krugman was not one of them.'"
Taleb warns: Nobel economist Krugman not only supports Keynesian deficit spending, he favors the "transformation of private debt, with all the moral hazard it entails, into public debt" that's toxic from a "risk standpoint." Worse, it's "immoral." Our "grandchildren should not bear the debts of the grandparents." OK, add Nobel economists to the list of people Taleb says you can't trust to speak "the truth.
Actually, using Taleb's "metric," you can't trust any economists. Why? Because all economists, even the best, are capable of making catastrophic errors: Remember Greenspan's sad apologies during congressional hearings after undermining America for 18 years. And remember Michael Boskin's classic $12 trillion error? Bush Sr's chairman of the Council of Economic Advisers, a respected Stanford economist, attempted to justify some cockamamie logic that his newfound Social Security savings would lower America's debt, giving a political boost for his party. He was $12 trillion wrong.
No, folks, you can't trust any economists, they're just average humans. Most have strong political biases. They're hired mercenaries who say whatever their employers ask them to say, pawns working for some Wall Street bank, corporation or politicians.
Yes, Allan reveals another character Taleb can't trust for economic advice. Prizewinning authors like NY Times columnist Tom Friedman who's book, The World is Flat is "very bad for society," misleading, having failed to "assess risk." So scratch celebrity authors from the list you can trust to tell you the truth about the future of America.
Warning: Never trust Congress, the Fed chairman or the president
Taleb is merciless when it comes to politicians like President Obama, Congress and The Fed chairman: You can't trust any of them. Earlier Bernanke's reappointment "stunned" Taleb: He "doesn't even know he doesn't understand how things work or that the tools he uses are not empirical," wrote Taleb in HuffPost. But it's "the Senators appointing him who are totally irresponsible ... The world has never, never been as fragile," and we're stuck with an economist running The Fed whose methods make "homeopath and alternative healers look empirical and scientific."
Obama's reappointment of Bernanke left Taleb so distraught he "withdrawing into the Platonic tranquility of my library, to work on my next book, find solace in science and philosophy, and … structure trades betting on the next mistake by Bernanke, Summers and Geithner."
Taleb's "metric" essentially warns Americans to trust no one, certainly not Washington and Wall Street insiders. The vast majority fail his simple metric, "Did someone predict the last crisis before it happened? ... If the answer is no, I don't want to hear what the person says. If the person saw the crisis coming, then I want to hear what they have to say'."
In fact, back in 2008 as the subprime credit meltdown accelerated and it was obvious to virtually everyone worldwide, we reported on the cascading bogus predictions made by well-known gurus flooding prime-time news, highlighted in BusinessWeek, Kiplinger's and USAToday, comments made even as the 2008 crash was spreading worldwide:
Bernanke: "I don't anticipate any serious failures among large internationally active banks." Wow, was he ever wrong.
Billionaire Ken Fisher: "This year will end in the plus column ... so keep buying." Main Street lost trillions on advice like this.
'Mad Money' Jim Cramer: "Bye-bye bear market, say hello to the bull."
Goldman Sachs' Abby Joseph Cohen: "The fear priced into stocks is likely to abate as recession fears fade." Soon after, Goldman was essentially bankrupt.
Congressman Barney Frank: "Freddie Mac and Fannie Mae are fundamentally sound."
Barron's: "Home prices about to bottom." Three years later they still haven't
Worth: "Emerging markets are the global investors' safe haven."
Kiplinger's: "Stock investors should beat the rush to the banks." Costly advice.
Bernie Madoff: "It's virtually impossible to violate the rules." But it'll happen again.
Bad calls? Yes, very bad. Back in mid 2008 we reviewed 20 who would meet Taleb's "metric" and earned our trust for the future. These twenty did warn America between 2000 and 2008. Although few listened: We reported on warnings from economists Gary Shilling, Marc Faber and Nouril Roubini, the St. Louis Fed president (Greenspan ignored him, just as Bernanke is ignoring the Kansas City Fed president today), former Nixon Commerce Secretary and SEC chairman, billionaires Warren Buffett and oilman Richard Rainwater, institutional portfolio managers Jeremy Grantham, Bill Gross and Robert Rodriguez, and major cover stories in Fortune, Harper's, Vanity Fair, The Economist and The Wall Street Journal.
But for every one warning back then, there were hundreds of happy-talkers inside the Happy Conspiracy's propaganda machine, conning the public, either unconsciously denying reality or consciously lying about it.
Remember: Bloomberg Markets magazine reported that even Paulson predicted a meltdown was coming. But all he did was privately warn Bush two years earlier, in 2006, then he and the Fed chairman failed to tell the truth to the public for two years. That's immoral, dishonest, a lie.
So who can you trust? Nobody, not me, not even Taleb. Why? In the final analysis the Buddha said it best: "Believe nothing, no matter where you read it or who has said it, not even if I have said it, unless it agrees with your own reason and your own common sense."
Unfortunately, America is losing its capacity to reason, its common sense, its values, its vision of the future. More of us need to trust Taleb's "simple metric."
============================
(2)
From: John Churchilly
The Future According to Wolfensohn
By John Burl Smith
Former World Bank President James Wolfensohn is one of the world's richest men and sharpest financial operatives. His opinion is sought by the Bilderberg Group, the Aspen Institute and the World Economic Forum, which are just a few of the world's high-powered movers and shakers who view his long term economic prospective as a window to future world developments. While still at the helm of the World Bank, he shared his prospective with the Stanford Graduate School of Business (2004) and today as world leaders struggle to balance new realities against old expectations his words seem prophetic.
By John Burl Smith
Former World Bank President James Wolfensohn is one of the world's richest men and sharpest financial operatives. His opinion is sought by the Bilderberg Group, the Aspen Institute and the World Economic Forum, which are just a few of the world's high-powered movers and shakers who view his long term economic prospective as a window to future world developments. While still at the helm of the World Bank, he shared his prospective with the Stanford Graduate School of Business (2004) and today as world leaders struggle to balance new realities against old expectations his words seem prophetic.
Sounding more like a soothsayer than a hard-nosed investment advisor, Wolfensohn predicted a balance of power shift over the next 40 years. According to Wolfensohn, "This global power shift will see today's leading economic countries drop from having 80% of the world's income to 35%." Unlike reading entrails, he did not hold out any hope that nations like the United States will escape this eventuality. He projected further that "By 2030, two-thirds of the people in the world's middle class will be Chinese." This means the rest of the world will be stuck fighting over the remaining one-third. An astonishing statement then, but today, few doubt his clairvoyance in light of current economic realities.
Wolfensohn spent the majority of his talk stressing the importance of recognizing the impact of the coming balance of power shift to the status quo, "As population and GDP grows in countries such as China and India, they will assume a larger role in relationship to the United States and Europe. That will reduce the influence of the wealthiest countries." Hoping not to appear to be reading 'tea leaves' or 'star gazing,' Wolfensohn declared, "This will not just be a moderation trend, it will be a monumental shift, a fundamental change in the world balance of economic power. These are not trivial changes -- they are tectonic changes in the way the planet works. In my generation we didn't have to think about it. We knew we were a rich country."
He also predicted a shakeup in how the leadership of the World Bank and the International Monetary Fund will be appointed. Traditionally, the president of the former was from the United States and the latter from Europe. "The bank may be 'internationalized' in the future." Wolfensohn was not looking into a crystal ball but at the fact that the second tier of leadership at these institutions are presently from China, India, Africa and so forth.
Wolfensohn believes that under his leadership, the World Bank Group redoubled its efforts to give voice to clients living in poor communities; it sponsored a global dialogue on 'Scaling Up Poverty Reduction,' which culminated in a major conference in Shanghai in May 2004. He first broached this subject in 2003 speaking at the World Bank/IMF Annual Meeting in Dubai. Wolfensohn highlighted the growing gap between "the haves and have-nots" between and within countries. He called for 'a new global balance' with donor and developing nations both taking urgent steps to ensure the United Nations Millennium Development Goals were met.
"We must re-balance our world to give everyone the chance for life that is secure, with a right to expression, equal rights for women, and rights for the disabled and disadvantaged, the right to a clean environment, the right to learn and the right to development."
That year (2003), Wolfensohn participated in a dialogue with 100 youth leaders from 70 countries whose organizations represent more than 120 million members worldwide -- among them were rural youth, street children, children orphaned by AIDS and civil conflict, Roma youth (Gypsies), and youth with disabilities. Wolfensohn noted that while people under 25 already account for more than half the population in most developing countries, their concerns, which commonly include education and unemployment, are not being given the urgency required to build a more secure world. He advocated that the World Bank establish youth teams in Bank offices and actively engage youth to develop anti-poverty strategies.
Presenting the future according to Wolfensohn to students at Stanford, he underscored his prognostications with these comments. "Today's students will have to confront a new world in which Africa is no longer an isolated continent but the fastest-growing market for cell phones. He noted that many more students from China and India travel to the United States to study, rather than the other way around. In 2007 just 11,200 Americans studied in China, many of them aging professors. That year, more than 110,000 Chinese were studying in the United States. That's a tragedy in terms of the potential of young people that they're still being guided to look at European countries for future world growth and development." (Sources: http://gsb.stanford.edu, www.spiegel.de and www.youtube.com)
Laurence Kotlikoff, an economics professor at Boston University talks about the state of the US economy. Kotlikoff speaks with Erik Schatzker on Bloomberg Television's Inside Track. "Let's get real. The US is bankrupt. Neither spending more nor taxing less will help the country pay its bills. What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy. Last month, the International Monetary Fund released its annual review of US economic policy. Its summary contained these bland words about US fiscal policy: "Directors welcomed the authorities' commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP." But delve deeper, and you will find that the IMF has effectively pronounced the US bankrupt. Section 6 of the July 2010 Selected Issues Paper says: "The US fiscal gap associated with today's federal fiscal policy is huge for plausible discount rates." It adds that "closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of US GDP." The fiscal gap is the value today (the present value) of the difference between projected spending (including servicing official debt) and projected revenue in all future years. To put 14 percent of gross domestic product in perspective, current federal revenue totals 14.9 percent of GDP. So the IMF is saying that closing the US fiscal gap, from the revenue side, requires, roughly speaking, an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act
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